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[Dec 04, 2017] The neoliberal framework in antitrust is based on pecifically its pegging competition to consumer welfare, defined as short-term price effects and as such s unequipped to capture the architecture of market power in the modern economy

Notable quotes:
"... This Note argues that the current framework in antitrust-specifically its pegging competition to "consumer welfare," defined as short-term price effects-is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon's dominance if we measure competition primarily through price and output. ..."
"... This Note maps out facets of Amazon's dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon's structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon's power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties. ..."
Feb 12, 2017 | economistsview.typepad.com
anne : February 11, 2017 at 11:43 AM , 2017 at 11:43 AM
http://www.yalelawjournal.org/article/amazons-antitrust-paradox

January, 2017

Amazon's Antitrust Paradox
By Lina M. Khan

Abstract

Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm's structure and conduct pose anticompetitive concerns -- yet it has escaped antitrust scrutiny.

This Note argues that the current framework in antitrust-specifically its pegging competition to "consumer welfare," defined as short-term price effects-is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon's dominance if we measure competition primarily through price and output.

Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational-even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

This Note maps out facets of Amazon's dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon's structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon's power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties.

[Dec 03, 2017] How Criminals Built Capitalism by Clive Crook

That explains why after dissolution of the USSR organized crime reached such level: this is standard capitalism development scenario.
Notable quotes:
"... In fact, the evolution of the modern economy owes more than you might think to these outlaws. That's the theme of " Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance " by Ian Klaus. It's a history of financial crimes in the 19th and early 20th centuries that traces a recurring sequence: new markets, new ways to cheat, new ways to transact and secure trust. As Klaus says, criminals helped build modern capitalism. ..."
"... Cochrane, in a way, was convicted of conduct unbecoming a man of his position. Playing the markets, let alone cheating, was something a man of his status wasn't supposed to do. Trust resided in social standing. ..."
"... The stories are absorbing and the larger theme is important: "Forging Capitalism" is a fine book and I recommend it. But I have a couple of criticisms. The project presumably began as an academic dissertation, and especially at the start, before Klaus starts telling the stories, the academic gravity is crushing. ..."
"... Nonetheless, Klaus is right: Give the markets' ubiquitous and ingenious criminals their due. They helped build modern capitalism, and they aren't going away. Just ask Bernie Madoff. ..."
Apr 05, 2015 | Bloomberg View

Whenever buyers and sellers get together, opportunities to fleece the other guy arise. The history of markets is, in part, the history of lying, cheating and stealing -- and of the effort down the years to fight commercial crime.

In fact, the evolution of the modern economy owes more than you might think to these outlaws. That's the theme of "Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance" by Ian Klaus. It's a history of financial crimes in the 19th and early 20th centuries that traces a recurring sequence: new markets, new ways to cheat, new ways to transact and secure trust. As Klaus says, criminals helped build modern capitalism.

And what a cast of characters. Thomas Cochrane is my own favorite. (This is partly because he was the model for Jack Aubrey in Patrick O'Brian's "Master and Commander" novels, which I've been reading and rereading for decades. Presumably Klaus isn't a fan: He doesn't note the connection.)

Cochrane was an aristocrat and naval hero. At the height of his fame in 1814 he was put on trial for fraud. An associate had spread false rumors of Napoleon's death, driving up the price of British government debt, and allowing Cochrane to avoid heavy losses on his investments. Cochrane complained (with good reason, in fact) that the trial was rigged, but he was found guilty and sent to prison.

The story is fascinating in its own right, and the book points to its larger meaning. Cochrane, in a way, was convicted of conduct unbecoming a man of his position. Playing the markets, let alone cheating, was something a man of his status wasn't supposed to do. Trust resided in social standing.

As the turbulent century went on, capitalism moved its frontier outward in every sense: It found new opportunities overseas; financial innovation accelerated; and buyers and sellers were ever more likely to be strangers, operating at a distance through intermediaries. These new kinds of transaction required new ways of securing trust. Social status diminished as a guarantee of good faith. In its place came, first, reputation (based on an established record of honest dealing) then verification (based on public and private records that vouched for the parties' honesty).

Successive scams and scandals pushed this evolution of trust along. Gregor MacGregor and the mythical South American colony of Poyais ("the quintessential fraud of Britain's first modern investment bubble," Klaus calls it); Beaumont Smith and an exchequer bill forging operation of remarkable scope and duration; Walter Watts, insurance clerk, theatrical entrepreneur and fraudster; Harry Marks, journalist, newspaper proprietor and puffer of worthless stocks. On and on, these notorious figures altered the way the public thought about commercial trust, and spurred the changes that enabled the public to keep on trusting nonetheless.

The stories are absorbing and the larger theme is important: "Forging Capitalism" is a fine book and I recommend it. But I have a couple of criticisms. The project presumably began as an academic dissertation, and especially at the start, before Klaus starts telling the stories, the academic gravity is crushing.

Trust, to be simple with our definition, is an expectation of behavior built upon norms and cultural habits. It is often dependent upon a shared set of ethics or values. It is also a process orchestrated through communities and institutions. In this sense, it is a cultural event and thus a historical phenomenon.

No doubt, but after a first paragraph like that you aren't expecting a page-turner. Trust me, it gets better. When he applies himself, Klaus can write. Describing the messenger who brought the false news of Napoleon's death, he says:

Removed from the dark of the street, the man could be seen by the light of two candles. He looked, a witness would later testify, "like a stranger of some importance." A German sealskin cap, festooned with gold fringes, covered his head. A gray coat covered his red uniform, upon which hung a star Neighbors and residents of the inn stirred and peered in as the visitor penned a note.

Tell me more.

My other objection is to the book's repeated suggestion that Adam Smith and other classical proponents of market economics naively underestimated the human propensity to deceive and over-credited the market's ability to promote good behavior. Klaus doesn't examine their claims at length or directly, but often says things such as:

The sociability in which Adam Smith had placed his hopes for harnessing self-interest was not a sufficient safeguard in the sometimes criminal capitalism of the ruthless free market.

Of course it wasn't. Smith didn't believe that the market's civilizing tendencies, together with humans' instinct for cooperation, were a sufficient safeguard against fraud or breach of contract or other commercial wrongs. He was nothing if not realistic about human nature. And by the way, many of the subtle adaptations to the shifting risk of fraud that Klaus describes were private undertakings, not government measures. Far from being surprised by them, Smith would have expected their development.

Nonetheless, Klaus is right: Give the markets' ubiquitous and ingenious criminals their due. They helped build modern capitalism, and they aren't going away. Just ask Bernie Madoff.

To contact the author on this story: Clive Crook at ccrook5@bloomberg.net

[Dec 01, 2017] Elite needs a kill switch for their front men and women

Notable quotes:
"... Today when we consider the major countries of the world we see that in many cases the official leaders are also the leaders in actuality: Vladimir Putin calls the shots in Russia, Xi Jinping and his top Politburo colleagues do the same in China, and so forth. However, in America and in some other Western countries, this seems to be less and less the case, with top national figures merely being attractive front-men selected for their popular appeal and their political malleability, a development that may eventually have dire consequences for the nations they lead. As an extreme example, a drunken Boris Yeltsin freely allowed the looting of Russia's entire national wealth by the handful of oligarchs who pulled his strings, and the result was the total impoverishment of the Russian people and a demographic collapse almost unprecedented in modern peacetime history. ..."
"... An obvious problem with installing puppet rulers is the risk that they will attempt to cut their strings, much like Putin soon outmaneuvered and exiled his oligarch patron Boris Berezovsky. ..."
"... One means of minimizing such risk is to select puppets who are so deeply compromised that they can never break free, knowing that the political self-destruct charges buried deep within their pasts could easily be triggered if they sought independence. I have sometimes joked with my friends that perhaps the best career move for an ambitious young politician would be to secretly commit some monstrous crime and then make sure that the hard evidence of his guilt ended up in the hands of certain powerful people, thereby assuring his rapid political rise. ..."
"... The gist is that elite need a kill switch on their front men (and women). ..."
"... McCain's father connected with the infamous Board of Inquiry which cleared Israel in that state's attack on USS LIBERTY during Israel's seizure of the Golan Heights. ..."
"... Another stunning article in which the author makes reference to his recent acquisition of what he considers to be a reliably authentic audio file of POW McCain's broadcasts from captivity. Dynamite stuff. ..."
"... Also remarkable; fantastic. It's hard to believe, and a testament to the boldness of Washington dog-and-pony shows, because this must have been well-known in insider circles in Washington – anything so damning which was not ruthlessly and professionally suppressed and simply never allowed to become part of a national discussion would surely have been stumbled upon before now. Land of the Cover-Up. ..."
marknesop.wordpress.com
Patient Observer, July 23, 2016 at 7:07 pm
An interesting article on John McCain. I disagree with the contention that McCain hid knowledge that many American POWs were left behind (undoubtedly some voluntarily choose to remain behind but not hundreds ). However, the article touched on some ideas that rang true:

Today when we consider the major countries of the world we see that in many cases the official leaders are also the leaders in actuality: Vladimir Putin calls the shots in Russia, Xi Jinping and his top Politburo colleagues do the same in China, and so forth. However, in America and in some other Western countries, this seems to be less and less the case, with top national figures merely being attractive front-men selected for their popular appeal and their political malleability, a development that may eventually have dire consequences for the nations they lead. As an extreme example, a drunken Boris Yeltsin freely allowed the looting of Russia's entire national wealth by the handful of oligarchs who pulled his strings, and the result was the total impoverishment of the Russian people and a demographic collapse almost unprecedented in modern peacetime history.

An obvious problem with installing puppet rulers is the risk that they will attempt to cut their strings, much like Putin soon outmaneuvered and exiled his oligarch patron Boris Berezovsky.

One means of minimizing such risk is to select puppets who are so deeply compromised that they can never break free, knowing that the political self-destruct charges buried deep within their pasts could easily be triggered if they sought independence. I have sometimes joked with my friends that perhaps the best career move for an ambitious young politician would be to secretly commit some monstrous crime and then make sure that the hard evidence of his guilt ended up in the hands of certain powerful people, thereby assuring his rapid political rise.

The gist is that elite need a kill switch on their front men (and women).

http://www.unz.com/runz/american-pravda-when-tokyo-rose-ran-for-president/

Cortes , July 24, 2016 at 11:16 am

Seems to be a series of pieces dealing with Vietnam POWs: the following linked item was interesting and provided a plausible explanation: that the US failed to pay up agreed on reparations

http://www.unz.com/runz/american-pravda-relying-upon-maoist-professors-of-cultural-studies/

marknesop , July 24, 2016 at 12:29 pm
Remarkable and shocking. Wheels within wheels – this is the first time I have ever seen McCain's father connected with the infamous Board of Inquiry which cleared Israel in that state's attack on USS LIBERTY during Israel's seizure of the Golan Heights.
Cortes , July 25, 2016 at 9:08 am
Another stunning article in which the author makes reference to his recent acquisition of what he considers to be a reliably authentic audio file of POW McCain's broadcasts from captivity. Dynamite stuff. The conclusion regarding aspiring untenured historians is quite downbeat:

http://www.unz.com/runz/american-pravda-will-there-be-a-spotlight-sequel-to-the-killing-fields/

marknesop , July 25, 2016 at 10:40 am
Also remarkable; fantastic. It's hard to believe, and a testament to the boldness of Washington dog-and-pony shows, because this must have been well-known in insider circles in Washington – anything so damning which was not ruthlessly and professionally suppressed and simply never allowed to become part of a national discussion would surely have been stumbled upon before now. Land of the Cover-Up.

yalensis , July 25, 2016 at 3:40 pm

So, McCain was Hanoi Jack broadcasting from the Hanoi Hilton?

[Oct 25, 2017] When will Trump voters realize they have been had

Oct 25, 2017 | www.defenddemocracy.press

See if you can put it all together from the resumes of those in President-elect Donald Trump's closest political circle so far:

  1. Treasury secretary nominee Steven Mnuchin: Goldman Sachs.
  2. Chief strategist Steve Bannon: Goldman Sachs .
  3. Transition adviser Anthony Scaramucci: Goldman Sachs.
  4. Commerce secretary nominee Wilbur Ross: Rothschild & Co.
  5. Possible budget director Gary Cohn: Goldman Sachs.

[Oct 24, 2017] When will Trump voters realize they've been had Defend Democracy Press

Oct 24, 2017 | www.defenddemocracy.press

See if you can put it all together from the resumes of those in President-elect Donald Trump's closest political circle so far:

  1. Treasury secretary nominee Steven Mnuchin: Goldman Sachs.
  2. Chief strategist Steve Bannon: Goldman Sachs .
  3. Transition adviser Anthony Scaramucci: Goldman Sachs.
  4. Commerce secretary nominee Wilbur Ross: Rothschild & Co.
  5. Possible budget director Gary Cohn: Goldman Sachs.

[Oct 24, 2017] Goldman Sachs ruling America by Gary Rivlin, Michael Hudson

Highly recommended!
Notable quotes:
"... Cohn was there to offer his views about jobs and the economy. But, like the man he was there to meet, he was at heart a salesman. ..."
"... Cohn, brash and bold, wired to attack any moneymaking opportunity, pitched a fix that would put Wall Street firms at the center: Private-industry partners could help infrastructure get fixed, saving the federal government from going deeper into debt. The way the moment was captured by the New York Times , among other publications , Trump was dumbfounded. "Is this true?" he asked. Was a trillion-dollar infrastructure plan likely to increase the deficit by a trillion dollars? Confronted by nodding heads, an unhappy president-elect said, "Why did I have to wait to have this guy tell me?" ..."
"... Within two weeks, the transition team announced that Cohn would take over as director of the president's National Economic Council. ..."
"... The conflicts between the two men were striking. Cohn ran a giant investment bank with offices in financial capitals around the globe, one deeply committed to a world with few economic borders. Trump's nationalist campaign contradicted everything Goldman Sachs and its top executives represented on the global stage. ..."
"... Even before Scaramucci, Sen. Elizabeth Warren, D-Mass., had joked that enough Goldman alum were working for the Trump administration to open a branch office in the White House. ..."
"... "There was a devastating financial crisis just over eight years ago," Warren said. "Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country's economic policy to a senior Goldman executive turns my stomach." Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six. ..."
"... There are also striking similarities in their business histories. Both have a knack for weathering scandals and setbacks and coming out on top. Trump has filed for bankruptcy four times, started a long list of failed businesses (casinos, an airline, a football team, a steak company), but managed, through his best-selling books and highly rated reality TV show, to recast himself as the world's greatest businessman. During Cohn's tenure as president, Goldman Sachs faced lawsuits and federal investigations that resulted in $9 billion in fines for misconduct in the run-up to the subprime meltdown. Goldman not only survived but thrived, posting record profits -- and Cohn was rewarded with handsome bonuses and a position at the top of the new administration. ..."
"... Like any publicly traded company, there would now be pressure on Goldman Sachs to make its quarterly numbers and "maximize shareholder value." Discarding the partner model also meant the loss of a valuable restraint on risk-taking and bad behavior. Under the old system, any losses or fines came out of the partners' pockets ..."
"... Under Cohn, the firm aggressively moved into the subprime mortgage market, using Goldman's own money and that of its customers to help stoke the housing bubble. ..."
"... In just three years, Goldman Sachs had increased its trading volume by a factor of 50, which the Wall Street Journal attributed to "Cohn's successful push to rev up risk-taking and use of Goldman's own capital to make a profit" -- what the industry calls proprietary trading, or prop trading. ..."
"... "He reshaped the culture of the mortgage department into more of a trading environment." ..."
"... With Blankfein and Cohn at the top, the transformation of Goldman Sachs was complete. By 2009, investment banking had shrunk to barely 10 percent of the firm's revenues. Richard Marin, a former executive at Bear Stearns, a Goldman competitor that wouldn't survive the mortgage meltdown, saw Cohn as "the root of the problem." Explained Marin, "When you become arrogant in a trading sense, you begin to think that everybody's a counterparty, not a customer, not a client. And as a counterparty, you're allowed to rip their face off." ..."
"... Cohn was a member of Goldman's board of directors during this critical time and second in command of the bank. At that point, Cohn and Blankfein, along with the board and other top executives, had several options. They might have shared their concerns about the mortgage market in a filing with the SEC, which requires publicly traded companies to reveal "triggering events that accelerate or increase a direct financial obligation" or might cause "impairments" to the bottom line. They might have warned clients who had invested in mortgage-backed securities to consider extracting themselves before they suffered too much financial damage. At the very least, Goldman could have stopped peddling mortgage-backed securities that its own mortgage trading desk suspected might soon collapse in value. Instead, Cohn and his colleagues decided to take care of Goldman Sachs. ..."
"... At Goldman Sachs, Cohn was known as a hands-on boss who made it his business to walk the floors, talking directly with traders and risk managers scattered throughout the firm. "Blankfein's role has always been the salesperson and big-thinker conceptualizer," said Dick Bove, a veteran Wall Street analyst who has covered Goldman Sachs for decades. "Gary was the guy dealing with the day-to-day operations. Gary was running the company." While making his rounds, Cohn would sometimes hike a leg up on a trader's desk, his crotch practically in the person's face. ..."
"... At 6-foot- 2, bullet-headed and bald with a heavy jaw and a fighter's face, Cohn cut a large figure inside Goldman. Profiles over the years would describe him as aggressive, abrasive, gruff, domineering -- the firm's "attack dog." He was the missile Blankfein launched when he needed to deliver bad news or enforce discipline. Cohn embodied the new Goldman: the man who would run through a brick wall if it meant a big payoff for the bank. ..."
"... The biggest threat to Goldman was the economic health of the American International Group. ..."
"... Goldman and its clients were looking at multibillion-dollar hits to their bottom line -- a potentially fatal blow. ..."
"... But as Goldman learned a century ago, it pays to have friends in high places. The day after Lehman went bankrupt, the Bush administration announced an $85 billion bailout of AIG in return for a majority stake in the company. ..."
"... Once free of government interference, the Goldman board (which included Cohn himself) paid him a $9 million bonus in 2009 and an $18 million bonus in 2010. ..."
"... Yet the once venerated firm was now the subject of jokes on the late-night talk shows. David Letterman broadcast a "Goldman Sachs Top 10 Excuses" list (No. 9: "You're saying 'fraud' like it's a bad thing."). ..."
"... After news leaked that the firm might pay its people a record $16.7 billion in bonuses in 2009, even President Barack Obama, for whom the firm had been a top campaign donor, began to turn against Goldman, telling " 60 Minutes ," "I did not run for office to be helping out a bunch of fat-cat bankers on Wall Street." ..."
"... The firm finally acknowledged that it had failed to conduct basic due diligence on the loans its was selling customers and, once it became aware of the hazards, did not disclose them. ..."
"... "Gary was the tip of the spear for Goldman to beat back regulatory reform," said Kelleher, the financial reform lobbyist. "I used to pass him going into different agencies. They brought him in when they wanted the big gun to finish off, to kill the wounded." ..."
"... Yet defanging the Volcker Rule remained the firm's top priority. Promoted by former Fed Chair Paul Volcker, the rule would prohibit banks from committing more than 3 percent of their core assets to in-house private equity and hedge funds in the business of buying up properties and businesses with the goal of selling them at a profit. One harbinger of the financial crisis had been the collapse in the summer of 2007 of a pair of Bear Stearns hedge funds that had invested heavily in subprime loans. That 3 percent cap would have had a big impact on Goldman, which maintained a separate private equity group and operated its own internal hedge funds. But it was the restrictions Volcker placed on proprietary trading that most threatened Goldman. ..."
"... prop trading made up 48 percent of Goldman's. By one estimate , the Volcker Rule could cost Goldman Sachs $3.7 billion in revenue a year. ..."
"... Goldman had five years to prepare for some version of a Volcker Rule. Yet a loophole granted banks sufficient time to dispose of "illiquid assets" without causing undue harm -- a loophole that might even cover the assets Goldman had only recently purchased, despite the impending compliance deadline. The Fed nonetheless granted the firm additional time to sell illiquid investments worth billions of dollars. "Goldman is brilliant at exercising access and influence without fingerprints," Kelleher said. ..."
"... Just two years later, Goldman officials were again summoned by the Senate Permanent Subcommittee on Investigations to address charges that the bank under Cohn and Blankfein had boosted its profits by building a "virtual monopoly" in order to inflate aluminum prices by as much as $3 billion. ..."
"... Trump spoke of the great financial price Cohn paid to join him in the White House during his speech in Cedar Rapids. But something like the opposite was true. A huge amount of Cohn's wealth was tied up in Goldman stock. By entering government, he could sell his stake in the firm to comply with federal ethics laws. That way he could diversify his holdings and avoid roughly $50 million in capital gains taxes -- at least until he sold the replacement assets. ..."
"... As a presidential aide, Cohn did not need Senate approval. He was part of the skeletal crew that arrived at the White House on day one, giving him a critical head start on wielding his clout and cultivating his relationship with the new president. At that point, Trump was summoning Cohn to the Oval Office for impromptu meetings as many as five times a day . ..."
"... How exactly could Cohn recuse himself from matters involving Goldman when almost every aspect of his job has the potential to either grow Goldman's profits and inflate its stock price -- or tank them both? ..."
"... Yet rather than publicly recuse himself on attempts to undo Dodd-Frank, Cohn has led the charge from inside the White House. On that matter, Cohn is a walking, talking conflict of interest . ..."
"... Beyond deregulation, two other pillars of Trump's economic plan -- cutting taxes and investing in infrastructure -- would have dramatic impacts on Goldman's bottom line. ..."
Sep 17, 2017 | www.defenddemocracy.press

Steve Bannon was in the room the day Donald Trump first fell for Gary Cohn. So were Reince Priebus, Jared Kushner, and Trump's pick for secretary of Treasury, Steve Mnuchin. It was the end of November, three weeks after Trump's improbable victory, and Cohn, then still the president of Goldman Sachs, was at Trump Tower presumably at the invitation of Kushner, with whom he was friendly. Cohn was there to offer his views about jobs and the economy. But, like the man he was there to meet, he was at heart a salesman.

On the campaign trail, Trump had spoken often about the importance of investing in infrastructure. Yet the president-elect had apparently failed to appreciate that the government would need to come up with hundreds of billions of dollars to fund his plans. Cohn, brash and bold, wired to attack any moneymaking opportunity, pitched a fix that would put Wall Street firms at the center: Private-industry partners could help infrastructure get fixed, saving the federal government from going deeper into debt. The way the moment was captured by the New York Times , among other publications , Trump was dumbfounded. "Is this true?" he asked. Was a trillion-dollar infrastructure plan likely to increase the deficit by a trillion dollars? Confronted by nodding heads, an unhappy president-elect said, "Why did I have to wait to have this guy tell me?"

Within two weeks, the transition team announced that Cohn would take over as director of the president's National Economic Council.

1. GOLDMAN ALWAYS WINS

Goldman Sachs had been a favorite cudgel for candidate Trump -- the symbol of a government that favors Wall Street over its citizenry. Trump proclaimed that Hillary Clinton was in the firm's pockets, as was Ted Cruz. It was Goldman Sachs that Trump singled out when he railed against a system rigged in favor of the global elite -- one that "robbed our working class, stripped our country of wealth, and put money into the pockets of a handful of large corporations and political entities." Cohn, as president and chief operating officer of Goldman Sachs, had been at the heart of it all. Aggressive and relentless, a former aluminum siding salesman and commodities broker with a nose for making money, Cohn had turned Goldman's sleepy home loan unit into what a Senate staffer called "one of the largest mortgage trading desks in the world." There, he aggressively pushed his sales team to sell mortgage-backed securities to unaware investors even as he watched over "the big short," Goldman's decision to bet billions of dollars that the market would collapse.

Now Cohn would be coordinating economic policy for the populist president.

The conflicts between the two men were striking. Cohn ran a giant investment bank with offices in financial capitals around the globe, one deeply committed to a world with few economic borders. Trump's nationalist campaign contradicted everything Goldman Sachs and its top executives represented on the global stage.

Trump raged against "offshoring" by American companies during the 2016 campaign. He even threatened "retribution,"­ a 35 percent tariff on any goods imported into the United States by a company that had moved jobs overseas. But Cohn laid out Goldman's very different view of offshoring at an investor conference in Naples, Florida, in November. There, Cohn explained unapologetically that Goldman had offshored its back-office staff, including payroll and IT, to Bangalore, India, now home to the firm's largest office outside New York City: "We hire people there because they work for cents on the dollar versus what people work for in the United States."

Candidate Trump promised to create millions of new jobs, vowing to be "the greatest jobs president that God ever created." Cohn, as Goldman Sachs's president and COO, oversaw the firm's mergers and acquisitions business that had, over the previous three years, led to the loss of at least 22,000 U.S. jobs, according to a study by two advocacy groups. Early in his candidacy, Trump described as "disgusting" Pfizer's decision to buy a smaller Irish competitor in order to execute a "corporate inversion," a maneuver in which a U.S. company moves its headquarters overseas to reduce its tax burden. The Pfizer deal ultimately fell through. But in 2016, in the heat of the campaign, Goldman advised on a megadeal that saw Johnson Controls, a Fortune 500 company based in Milwaukee, buy the Ireland-based Tyco International with the same goal. A few months later, with Goldman's help, Johnson Controls had executed its inversion.

With Cohn's appointment, Trump now had three Goldman Sachs alums in top positions inside his administration: Steve Bannon, who was a vice president at Goldman when he left the firm in 1990, as chief strategist, and Steve Mnuchin, who had spent 17 years at Goldman, as Treasury secretary. And there were more to come. A few weeks later, another Goldman partner, Dina Powell, joined the White House as a senior counselor for economic initiatives. Goldman was a longtime client of Jay Clayton, Trump's choice to chair the Securities and Exchange Commission; Clayton had represented Goldman after the 2008 financial crisis, and his wife Gretchen worked there as a wealth management adviser. And there was the brief, colorful tenure of Anthony Scaramucci as White House communications director: Scaramucci had been a vice president at Goldman Sachs before leaving to co-found his own investment company.

Even before Scaramucci, Sen. Elizabeth Warren, D-Mass., had joked that enough Goldman alum were working for the Trump administration to open a branch office in the White House.

"There was a devastating financial crisis just over eight years ago," Warren said. "Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country's economic policy to a senior Goldman executive turns my stomach." Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six.

Earlier this summer, Trump boasted about his team of economic advisers at a rally in Cedar Rapids, Iowa. "This is the president of Goldman Sachs. Smart," Trump said . "Having him represent us! He went from massive paydays to peanuts."

Trump waved off anyone who might question his decision to rely on the very people he had demonized. "Somebody said, 'Why did you appoint a rich person to be in charge of the economy?' I said: 'Because that's the kind of thinking we want.'" He needed "great, brilliant business minds so the world doesn't take advantage of us." How else could he get the job done? "I love all people, rich or poor, but in those particular positions, I just don't want a poor person."

"Does that make sense?" Trump asked. The crowd cheered.

Years of financial disclosure forms confirm that Cohn is indeed very rich. At the end of 2016, he owned some 900,000 shares of Goldman Sachs stock, a stake worth around $220 million on the day Trump announced his appointment. Plus, he'd sold a million more Goldman shares over the previous half-dozen years. In 2007 alone, the year of the big short, Goldman Sachs paid him nearly $73 million -- more than the firm paid CEO Lloyd Blankfein. The disclosure forms Cohn filled out to join the administration indicate he owned assets valued at $252 million to $611 million. That may or may not include the $65 million parting gift Goldman's board of directors gave him for "outstanding leadership" just days before Trump was sworn in.

Like anyone taking a top job in the Trump administration, Cohn was required to sign a pledge vowing not to participate for the next two years in any matter "that is directly and substantially related to my former employer or former clients, including regulations and contracts." But presidents have sometimes issued waivers to these requirements, and it is unclear whether the Trump administration is making such waivers public.

Sens. Warren and Tammy Baldwin, a Democrat from Wisconsin, sent Cohn a letter a few days later. They brought up the $65 million bonus and asked him to publicly recuse himself from any issue that could have a direct or "significant indirect" impact on his old firm. Cohn never responded to the letter, and if he has ever received a waiver, it has not been made available to the public or the Office of Government Ethics.

"Consistent with the Trump administration's stringent ethics rules, Mr. Cohn will recuse himself from participating in any matter directly involving his former employer, Goldman Sachs," White House spokesperson Natalie Strom said. "The White House will not comment further."

The White House declined requests to make Cohn available for an interview and declined to answer a detailed set of questions.

Cohn shared the podium with fellow Goldman alum Mnuchin (the two made partner there the same year) when the administration unveiled its new tax plan, one that, if the past is prelude, had the potential to save Goldman more than $1 billion a year in corporate taxes. The president had promised to "do a number" on financial reforms implemented after the 2008 subprime crisis, including one that threatened to cost Goldman several billion dollars a year in revenues. Under Cohn, the administration has introduced new rules easing initial public offerings -- a Goldman Sachs specialty dating back to the start of the last century, when the firm handled the IPOs of Sears, Roebuck; F. W. Woolworth; and Studebaker. As Trump's top economic policy adviser, Cohn can exert influence over regulatory agencies that have shaken billions in penalties and settlements out of Goldman Sachs in recent years. And his former colleagues inside Goldman's Public Sector and Infrastructure group likely appreciate the Trump administration's infrastructure plan, which is more or less exactly as Cohn first pitched it inside Trump Tower in November.

"It's hard to see how Gary Cohn recusing himself would solve a lot of these conflicts because nearly every major decision of his job would have a significant impact, likely billions of dollars, on Goldman Sachs and its executives," said Tyler Gellasch, an attorney and former Senate staffer who helped draft Dodd-Frank, the landmark financial reform law passed in the wake of the financial meltdown. "Goldman touches nearly every aspect of the economy, from selling U.S. treasuries to helping companies go public, and the National Economic Council advises on all of that."

In the wake of last month's white supremacist rally in Charlottesville, Virginia, Cohn confessed to the Financial Times that he has "come under enormous pressure both to resign and to remain." But the man who the Washington Post has dubbed Trump's "moderate voice" declared that neo-Nazis would not force "this Jew" to leave his job. "As a patriotic American, I am reluctant to leave my post as director of the National Economic Council," Cohn told FT. "I feel a duty to fulfill my commitment to work on behalf of the American people."

Or at least a few of them. The Trump economic agenda, it turns out, is largely the Goldman agenda, one with the potential to deliver any number of gifts to the firm that made Cohn colossally rich. If Cohn stays, it will be to pursue an agenda of aggressive financial deregulation and massive corporate tax cuts -- he seeks to slash rates by 57 percent -- that would dramatically increase profits for large financial players like Goldman. It is an agenda as radical in its scope and impact as Bannon's was.

2. ALPHA MALES

Donald Trump, the "blue-collar billionaire," has taken great pains to write grit and toughness into his privileged biography. He talks of military schools and visits to construction sites with his father and wrote in "The Art of the Deal" that in the second grade, "I actually gave a teacher a black eye. I punched my music teacher because I didn't think he knew anything about music and I almost got expelled." Yet when the authors of the book "Trump Revealed: An American Journey of Ambition, Ego, Money, and Power" spoke to several of his childhood friends, none of them recalled the incident. Trump himself crumpled when asked about the incident during the 2016 campaign: "When I say 'punch,' when you're that age, nobody punches very hard."

Gary Cohn, however, is the middle-class kid and self-made millionaire Trump imagines himself to be. It appears that Cohn actually did slug a grade-school teacher in the face. "I was being abused," Cohn told author Malcolm Gladwell, who interviewed him for his book, "David and Goliath: Underdogs, Misfits, and the Art of Battling Giants," back when Cohn was still president of Goldman Sachs. As a child, Cohn struggled with dyslexia, a reading disorder people didn't understand much about when Cohn attended school in the 1970s in a suburb outside Cleveland. "You're a 6- or 7- or 8-year-old-kid, and you're in a public-school setting, and everyone thinks you're an idiot," Cohn confessed to Gladwell. "You'd try to get up every morning and say, today is going to be better, but after you do that a couple of years, you realize that today is going to be no different than yesterday." One time when he was in the fourth grade, a teacher put him under her desk, rolled her chair close, and started kicking him, Cohn said. "I pushed the chair back, hit her in the face, and walked out."

While Trump's father was a wealthy real estate developer, Cohn's father was an electrician. When Trump sought to get into the casino business, his father loaned him $14 million. When Cohn couldn't find a job after graduating from college, all his father could do was find him one selling aluminum siding. While Trump has the instincts of a reality show producer and an eye for spectacle, Cohn prefers to operate in the shadows.

But they likely recognize much of themselves in the other. Both Cohn and Trump are alpha males -- men of action unlikely to be found holed up in an office reading through stacks of policy reports. In fact, neither seems to be much of a reader. Cohn told Gladwell it would take him roughly six hours to read just 22 pages; he ended his time with the author by wishing him luck on "your book I'm not going to read." Both have a transactional view of politics. Trump switched his voter registration between Democratic, Republican, and independent seven times between 1999 and 2012. In the 2000s, his foundation gave $100,000 to the Clinton Foundation, and he contributed $4,700 to Hillary Clinton's senatorial campaigns. He even bought and refurbished a golf course in Westchester County a few miles from the Clinton home, in part, Trump once admitted, to ingratiate himself with the Clintons. Cohn is a registered Democrat who has given at least $275,000 to Democrats over the years, including to the campaigns of Hillary Clinton and Barack Obama, but also around $250,000 to Republicans, including Senate Majority Leader Mitch McConnell and Florida Sen. Marco Rubio.

There are also striking similarities in their business histories. Both have a knack for weathering scandals and setbacks and coming out on top. Trump has filed for bankruptcy four times, started a long list of failed businesses (casinos, an airline, a football team, a steak company), but managed, through his best-selling books and highly rated reality TV show, to recast himself as the world's greatest businessman. During Cohn's tenure as president, Goldman Sachs faced lawsuits and federal investigations that resulted in $9 billion in fines for misconduct in the run-up to the subprime meltdown. Goldman not only survived but thrived, posting record profits -- and Cohn was rewarded with handsome bonuses and a position at the top of the new administration.

Cohn's path to the White House started with a tale of brass and bluster that would make Trump the salesman proud. Still in his 20s and stuck selling aluminum siding, Cohn made a play that would change his life. In the fall of 1982, while visiting the company's home office on Long Island, he stole a day from work and headed to the U.S. commodities exchange in Manhattan, hoping to talk himself into a job. He overheard an important-looking man say he was heading to LaGuardia Airport; Cohn blurted out that he was headed there, too. He jumped into a cab with the man and, Cohn told Gladwell, who devoted six pages of "David and Goliath" to Cohn's underdog rise, "I lied all the way to the airport." The man confided to Cohn that his firm had just put him in charge of a market, options, that he knew little about. Cohn likely knew even less, but he assured his backseat companion that he could get him up to speed. Cohn then spent the weekend reading and re-reading a book called "Options as a Strategic Investment." Within the week, he'd been hired as the man's assistant.

Cohn soon learned enough to venture off on his own and established himself as an independent silver trader on the floor of the New York Commodities Exchange. In 1990, Goldman Sachs, arguably the most elite firm on Wall Street, offered him a job.

Goldman Sachs was founded in the years just after the American Civil War. Marcus Goldman, a Jewish immigrant from Germany, leased a cellar office next to a coal chute in 1869. There, in an office one block from Wall Street, he bought the bad debt of local businesses that needed quick cash. His son-in-law, Samuel Sachs, joined the firm in 1882. A generation later, in 1906, the firm made its first mark, arranging for the public sale of shares in Sears, Roebuck. Goldman Sachs's influence over politics dates back at least to 1914. That year, Henry Goldman, the founder's son, was invited to advise Woodrow Wilson's administration about the creation of a central bank, mandated by the Federal Reserve Act, which had passed the previous year. Goldman Sachs men have played important roles in U.S. government ever since.

There was the occasional scandal, such as Goldman Sachs's role in the 1970 collapse of Penn Central railroad, then the largest corporate bankruptcy in U.S. history. Still, the firm built a reputation as a sober, elite partnership that served its clients ably. In 1979, when John Whitehead, a senior partner and co-chairman, set to paper what he called Goldman's "Business Principles," he began with the firm's most cherished belief: The client's interests come before all else.

Two years later, Goldman took a step that signaled the beginning of the end of that culture. In the fall of 1981, Goldman purchased J. Aron & Co., a commodities trading firm. Some within the partnership were against the acquisition, worried over how profane, often crude, trading culture would mix with Goldman's restrained, well-mannered way of doing business. "We were street fighters," one former J. Aron partner told Fortune magazine in 2008.

The J. Aron team moved into the Goldman Sachs offices in lower Manhattan, but didn't adopt its culture. Within a few years, it was producing well over $1 billion a year in profits. They were 300 employees inside a firm of 6,000, but were posting one-third of Goldman's total profits. The cultural shift, it turned out, was moving in the other direction. J. Aron, according to a book by Charles D. Ellis, a former Goldman consultant, brought to Goldman "a trading culture that would become dominant in the firm."

Lloyd Blankfein, who ascended to chairman and CEO in in 2006, started his Goldman career at J. Aron, a year after Goldman acquired the firm. "We didn't have the word 'client' or 'customer' at the old J. Aron," Blankfein told Fortune magazine two years after taking over as CEO. "We had counter-parties." Cohn joined J. Aron eight years after Blankfein did, in 1990. Four years later, Blankfein was put in charge of the firm's Fixed Income, Currency, and Commodities division, which included J. Aron. Cohn, loyal and hard-working, with an instinct for connecting with people who can help him, became Blankfein's " corporate problem solver ."

The emergence of "Bad Goldman" -- and Cohn's central role in that drama -- is really the story of the rise of the traders inside the firm. "As trading came to be a bigger part of Wall Street, I noticed that the vision changed," said Robert Kaplan, a former Goldman Sachs vice chairman, who left in 2006 after working at the firm for 23 years. "The leaders were saying the same words, but they started to change incentives away from the value-added vision and tilt more to making money first. If making money is your vision, what lengths will you not go?"

At the height of the dot-com years, a debate raged within the firm. The firm underwrote dozens of technology IPOs, including Microsoft and Yahoo, in the 1980s and 1990s, minting an untold number of multimillionaires and the occasional billionaire. Some of the companies they were bringing public generated no profits at all, while Goldman was generating up to $3 billion in profits a year. It seemed inevitable that some within Goldman Sachs began to dream of jettisoning the Goldman's century-old partnership structure and taking their firm public, too. Jon Corzine was running the firm then -- he would later go into politics in the Goldman tradition, first as a U.S. senator and then as New Jersey governor -- and was four-square in favor of going public. Corzine's second in command, Henry Paulson -- who would go on to serve as Treasury secretary -- was against the idea. But Corzine ordered up a study that supported his view that remaining private stifled Goldman's competitive opportunities and promoted Paulson to co-senior partner. Paulson soon got on board. In May 1999, Goldman sold $3.7 billion worth of shares in the company. At the end of the first day of trading, Corzine's and Paulson's stakes in the firm were each worth $205 million. Cohn's and Mnuchin's shares were each worth $112 million. And Blankfein ended up with $168 million in company stock.

Like any publicly traded company, there would now be pressure on Goldman Sachs to make its quarterly numbers and "maximize shareholder value." Discarding the partner model also meant the loss of a valuable restraint on risk-taking and bad behavior. Under the old system, any losses or fines came out of the partners' pockets. In the early 1990s, for example, the firm was involved in transactions with Robert Maxwell, a London-based media mogul who was accused of stealing hundreds of millions of pounds from his companies' pension funds. The $253 million that Goldman Sachs paid to settle lawsuits brought by pension funds over its involvement was split among the firm's 84 limited partners. Now any losses are paid by a publicly traded entity owned by shareholders, with no direct financial liability for the decision-makers themselves. In theory, Goldman could claw back bonuses in response to executives' bad behavior. But in 2016, when Goldman paid over $5 billion to settle charges brought by the Justice Department that the firm misled customers in the sale of a subprime mortgage product during Cohn's time overseeing that unit, the Goldman board declined to dock Cohn's pay. Instead, the company awarded him a $5.5 million cash bonus and another $12.6 million in company stock.

As Blankfein moved up the corporate hierarchy, Cohn rose along with him. When Blankfein was made vice chairman in charge of the firm's multibillion-dollar global commodities business and its equities division, Cohn took over as co-head of FICC, Blankfein's previous position. That meant Cohn was overseeing not just J. Aron and the firm's commodities business, but also its currency trades and bond sales. By the start of 2004, Blankfein was promoted to president and COO, and Cohn was named co-head of global securities. At that point, Cohn had authority over the mortgage-trading desk. Under Cohn, the firm aggressively moved into the subprime mortgage market, using Goldman's own money and that of its customers to help stoke the housing bubble.

Goldman was already enabling subprime predators, such as Ameriquest and New Century Financial, by providing them with the cash infusions they needed to scale up their lending to individual home buyers. Cohn would steer the firm deeper into the subprime frenzy by setting up Goldman as a patron of some of these same mortgage originators. During his tenure, Goldman snapped up loans from New Century, Countrywide, and other notorious mortgage originators and bundled them into deals with opaque names, such as ABACUS and GSAMP. Under Cohn's watchful eye, Goldman's brokers then funneled slices to customers they sold on the wisdom of holding mortgage-backed securities in their portfolios.

One such creation, GSAA Home Equity Trust 2006-2, illustrates Goldman's disregard for the quality of loans it was buying and packaging into security deals. Created in early 2006, the investment vehicle was made up of more than $1 billion in home loans Goldman had bought from Ameriquest, one of the nation's largest and most aggressive subprime lenders. By that point, the lender already had set aside $325 million to settle a probe by attorneys general and banking regulators in 49 states, who accused Ameriquest of misleading thousands of borrowers about the costs of their loans and falsifying home appraisals and other key documents. Yet GSAA Home Equity Trust 2006-2 was filled with Ameriquest loans made to more than 3,000 homeowners in Arizona, Illinois, Florida, and elsewhere. By the end of 2008, 65 percent of the roughly 1,400 borrowers whose loans remained in the deal were in default, had filed for bankruptcy, or had been targeted for foreclosure.

In just three years, Goldman Sachs had increased its trading volume by a factor of 50, which the Wall Street Journal attributed to "Cohn's successful push to rev up risk-taking and use of Goldman's own capital to make a profit" -- what the industry calls proprietary trading, or prop trading. The 2010 Journal article quoted Justin Gmelich, then the firm's mortgage chief, who said of Cohn, "He reshaped the culture of the mortgage department into more of a trading environment." In 2005, with Cohn overseeing the firm's home loan desk, Goldman underwrote $103 billion in mortgage-backed securities and other more esoteric products, such as collateralized debt obligations, which often were priced based on giant pools of home loans. The following year, the firm underwrote deals worth $131 billion.

In 2006, CEO Henry Paulson left the firm to join George W. Bush's cabinet as Treasury secretary. Blankfein, Cohn's mentor and friend, took Paulson's place. By tradition, Blankfein, a trader, should have elevated someone from the investment banking side to serve as his No. 2, so both sides of the firm would be represented in the top leadership. Instead he named Cohn, his long-time loyalist, and Jon Winkelried, who also had history on the trading side, as co-presidents and co-COOs. Winkelried, who had started at Goldman eight years before Cohn, had probably earned the right to hold those titles by himself. But Cohn had the advantage of his relationship with the CEO. Blankfein and Cohn vacationed together in the Caribbean and Mexico, owned homes near each other in the Hamptons, and their children attended the same school. Winkelreid was out in two years. The bromance between his fellow No. 2 and the top boss may have proved too much.

With Blankfein and Cohn at the top, the transformation of Goldman Sachs was complete. By 2009, investment banking had shrunk to barely 10 percent of the firm's revenues. Richard Marin, a former executive at Bear Stearns, a Goldman competitor that wouldn't survive the mortgage meltdown, saw Cohn as "the root of the problem." Explained Marin, "When you become arrogant in a trading sense, you begin to think that everybody's a counterparty, not a customer, not a client. And as a counterparty, you're allowed to rip their face off."

3. THE BIG SHORT

People inside Goldman Sachs were growing nervous. It was the fall of 2006 and, as Daniel Sparks, the Goldman partner overseeing the firm's 400-person mortgage trading department, wrote in an email to several colleagues, "Subprime market getting hit hard." The firm had lent millions to New Century, a mortgage lender dealing in the higher-risk subprime market. And now New Century was late on payments. Sparks could see that the wobbly housing market was having an impact on his department. For 10 consecutive trading days, his people had lost money. The dollar amounts were small to a behemoth like Goldman: between $5 million and $30 million a day. But the trend made Sparks jittery enough to share his concerns with the Goldman's top executives: President Gary Cohn; David Viniar, the firm's chief financial officer; and CEO Lloyd Blankfein.

Sparks, a Cohn protégé, was running the mortgage desk that his mentor, only a few years earlier, had built into a major profit center for the bank. In 2006 and 2007, a report by the Senate Permanent Subcommittee on Investigations found, the two "maintained frequent, direct contact" as Goldman worked to jettison the billions in subprime loans it had on its book. "One of my jobs at the time was to make sure Gary and David and Lloyd knew what was going on," Sparks told William Cohan, author of the 2011 book "Money and Power: How Goldman Sachs Came to Rule the World . " "They don't like surprises." Viniar summoned around 20 traders and managers to a 30th floor conference room inside Goldman headquarters in lower Manhattan. It was there, on an unseasonably warm Thursday in December 2006, that the firm decided to initiate what people inside Goldman would eventually dub "the big short."

One name tossed around during the three-hour meeting was that of John Paulson. Paulson (no relation to Goldman's former CEO) would later attain infamy when it was revealed that his firm, Paulson & Co., made roughly $15 billion betting against the mortgage market. (His personal take was nearly $4 billion.) At that point, though, Paulson was a little-known hedge fund manager who crossed Goldman's radar when he asked the firm to create a product that would allow him to take a "short position" on the real estate market -- laying down bets that a large number of mortgage investments were going to plummet in value. Goldman sold Paulson what's called a credit-default swap, essentially an insurance policy that would pay off if homeowners defaulted on their mortgages in large enough numbers. The firm would create several more swaps on his behalf in the intervening months. Eventually, as mortgage defaults began to mount, people inside Goldman Sachs came to see Paulson as more of a prophet than a patsy. Some sitting around the conference table that December day wanted to follow his lead.

"There will be big opportunities the next several months," one Goldman manager at the meeting wrote enthusiastically in an email sent shortly after it ended. Sparks weighed in by email later that night. He wanted to make sure Goldman had enough "dry powder" -- cash on hand -- to be "ready for the good opportunities that are coming." That Sunday, Sparks copied Cohn on an email reporting the firm's progress on laying down short positions against mortgage-backed securities it had put together. The trading desk had already made $1.5 billion in short bets, "but still more work to do."

Cohn was a member of Goldman's board of directors during this critical time and second in command of the bank. At that point, Cohn and Blankfein, along with the board and other top executives, had several options. They might have shared their concerns about the mortgage market in a filing with the SEC, which requires publicly traded companies to reveal "triggering events that accelerate or increase a direct financial obligation" or might cause "impairments" to the bottom line. They might have warned clients who had invested in mortgage-backed securities to consider extracting themselves before they suffered too much financial damage. At the very least, Goldman could have stopped peddling mortgage-backed securities that its own mortgage trading desk suspected might soon collapse in value. Instead, Cohn and his colleagues decided to take care of Goldman Sachs.

Goldman would not have suffered the reputational damage that it did -- or paid multiple billions in federal fines -- if the firm, anticipating the impending crisis, had merely shorted the housing market in the hopes of making billions. That is what investment banks do: spot ways to make money that others don't see. The money managers and traders featured in the film "The Big Short" did the same -- and they were cast as brave contrarians. Yet unlike the investors featured in the film, Goldman had itself helped inflate the housing bubble -- buying tens of billions of dollars in subprime mortgages over the previous several years for bundling into bonds they sold to investors. And unlike these investors, Goldman's people were not warning anyone who would listen about the disaster about to hit. As federal investigations found, the firm, which still claims "our clients' interests always come first" as a core principle, failed to disclose that its top people saw disaster in the very products its salespeople were continuing to hawk.

Goldman still held billions of mortgages on its books in December 2006 -- mortgages that Cohn and other Goldman executives suspected would soon be worth much less than the firm had paid for them. So, while Cohn was overseeing one team inside Goldman Sachs preoccupied with implementing the big short, he was in regular contact with others scrambling to offload its subprime inventory. One Goldman trader described the mortgage-backed securities they were selling as "shitty." Another complained in an email that they were being asked to "distribute junk that nobody was dumb enough to take first time around." A December 28 email from Fabrice "Fabulous Fab" Tourre, a Goldman vice president later convicted of fraud, instructed traders to focus on less astute, "buy and hold" investors rather than "sophisticated hedge funds" that "will be on the same side of the trade as we will."

At Goldman Sachs, Cohn was known as a hands-on boss who made it his business to walk the floors, talking directly with traders and risk managers scattered throughout the firm. "Blankfein's role has always been the salesperson and big-thinker conceptualizer," said Dick Bove, a veteran Wall Street analyst who has covered Goldman Sachs for decades. "Gary was the guy dealing with the day-to-day operations. Gary was running the company." While making his rounds, Cohn would sometimes hike a leg up on a trader's desk, his crotch practically in the person's face.

At 6-foot- 2, bullet-headed and bald with a heavy jaw and a fighter's face, Cohn cut a large figure inside Goldman. Profiles over the years would describe him as aggressive, abrasive, gruff, domineering -- the firm's "attack dog." He was the missile Blankfein launched when he needed to deliver bad news or enforce discipline. Cohn embodied the new Goldman: the man who would run through a brick wall if it meant a big payoff for the bank.

A Bloomberg profile described his typical day as 11 or 12 hours in the office, a bank-related dinner, then phone calls and emails until midnight. "The old adage that hard work will get you what you want is 100 percent true," Cohn said in a 2009 commencement address at American University. "Work hard, ask questions, and take risk."

There's no record of how often Cohn visited his stomping grounds after hours in the early months of 2007, but emails reveal an executive demanding -- and getting -- regular updates. On February 7, one of the largest originators of subprime loans, HSBC, reported a greater than anticipated rise in troubled loans in its portfolio, and another, New Century, restated its earnings for the previous three quarters to "correct errors." Sparks wrote an email to Cohn and others the next morning to reassure them that his team was closely monitoring the pricing of the company's "scratch-and-dent book" and already had a handle on which loans were defaults and which could still be securitized and offloaded onto customers. An impatient Cohn sent a two-word email at 5 o'clock that evening: "Any update?" The next day, an internal memo circulated that listed dozens of mortgage-backed securities with the exhortation, "Let all of the respective desks know how we can be helpful in moving these bonds." A week later, Sparks updated Cohn on the billions in shorts his firm had bought but warned that it was hurting sales of its "pipeline of CDOs," the collateralized debt obligations the firm had created in order to sell the mortgages still on its books.

In early March, Cohn was among those who received an email spelling out the mortgage products the firm still held. The stockpile included $1.7 billion in mortgage-related securities, along with $1.3 billion in subprime home loans and $4.3 billion in "Alt-A" loans that fall between prime and subprime on the risk scale. Goldman was "net short," according to that same email, with $13 billion in short positions, but its exposure to the mortgage market was still considerable. Sparks and others continued to update Cohn on their success offloading securities backed by subprime mortgages through the third quarter of 2007. One product Goldman priced at $94 a share on March 31, 2007 was worth just $15 five months later. Pension funds and insurance companies were among those losing billions of dollars on securities Goldman put together and endorsed as a safe, AAA-rated investments.

The third quarter of 2007 was ugly. A pair of Bear Stearns hedge funds failed. Merrill Lynch reported $2.2 billion in losses -- its largest quarterly loss ever. Merrill's CEO warned that the bank faced another $8 billion in potential losses due to the firm's exposure to subprime mortgages and resigned several weeks later. The roiling credit crisis also took down the CEO of Citigroup, which reported $6.5 billion in losses and then weeks later, warned of $8 billion to $11 billion in additional subprime-related write-downs.

And then there was Goldman Sachs, which reported a $2.9 billion profit that quarter. For the moment, the financial press seemed in awe of Blankfein, Cohn, and the rest of the team running the firm. Fortune headlined an article "How Goldman Sachs Defies Gravity" that said Goldman's "huge, shrewd bet" against the mortgage market "would seem to confirm the view Goldman is the nimblest, and perhaps the smartest, brokerage on Wall Street." A Goldman press release drily noted that "significant losses" in some areas -- the subprime mortgages it hadn't managed to unload -- had been "more than offset by gains on short mortgage products." A Goldman trader who played a central role in the big short was not so demure when making the case for a big bonus that year. John Paulson was "definitely the man in this space," he conceded, but he'd helped make Goldman "#1 on the street by a wide margin."

Disaster struck nine months into 2008 with the collapse of Lehman Brothers, in large part the result of its exposure to subprime losses. Hank Paulson, the Treasury secretary and former Goldman CEO, spent a weekend meeting with would-be suitors willing to take over a storied bank that on paper was now worth virtually nothing. He couldn't find a buyer. Nor could officials from the Federal Reserve, who were also working overtime to save the investment bank, founded in 1850, that was even older than Goldman Sachs. Shortly after midnight on Monday, September 15, 2008, Lehman announced that it would file for bankruptcy protection when the courts in New York opened that morning -- the largest bankruptcy in U.S. history.

Goldman Sachs wasn't immune from the crisis. The week before Lehman's fall, Goldman's stock had topped $161 a share. By Wednesday, it dropped to below $100. It had avoided some big losses by betting against the mortgage market, but the wider financial crisis was wreaking havoc on its other investments. On paper, Cohn had personally lost tens of millions of dollars. He hunkered down in an office with a view of Goldman's trading floor and worked the phone, trying to change the minds of major investors who were pulling their money from Goldman, fearful of anything riskier than stashing their cash in a mattress.

The next week, Goldman converted from a free-standing investment bank to a bank holding company, which made it, in the eyes of regulators, no different from Wells Fargo, JPMorgan Chase, or any other retail bank. That gave the firm access to cheap capital through the Fed but would also bring increased scrutiny from regulators. The bank took a $10 billion bailout from the Troubled Asset Relief Program and another $5 billion from Warren Buffett, in return for an annual dividend of 10 percent and access to discounted company stock. The firm raised additional billions through a public stock offering.

The biggest threat to Goldman was the economic health of the American International Group. Among other products, AIG sold insurance to protect against defaults on mortgage assets, which had been central to Goldman's big short. Of the $80 billion in U.S. mortgage assets that AIG insured during the housing bubble, Goldman bought protection from AIG on roughly $33 billion, according to the Wall Street Journal. When Lehman went into bankruptcy, its creditors received 11 cents on the dollar. Executives at AIG, in a frantic effort to avoid bankruptcy, had floated the idea of pushing its creditors to accept 40 to 60 cents on the dollar; there was speculation creditors like Goldman would receive as little as 25 percent. Goldman and its clients were looking at multibillion-dollar hits to their bottom line -- a potentially fatal blow.

But as Goldman learned a century ago, it pays to have friends in high places. The day after Lehman went bankrupt, the Bush administration announced an $85 billion bailout of AIG in return for a majority stake in the company. The next day, Paulson obtained a waiver regarding interactions with his former firm because, the Treasury secretary said, "It became clear that we had some very significant issues with Goldman Sachs." Paulson's calendar, the New York Times reported, showed that the week of the AIG bailout, he and Blankfein spoke two dozen times. While creditors around the globe were being forced to settle for much less than they were owed, AIG paid its counterparties 100 cents on the dollar. AIG ended up being the single largest private recipient of TARP funding. It received additional billions in rescue funds from the New York Federal Reserve Bank, whose board chair Stephen Friedman was a former Goldman executive who still sat on the firm's board. The U.S. Treasury ended up with greater than a 90 percent share of AIG, and the U.S. government, using taxpayer dollars, paid in full on the insurance policies financial institutions bought to protect themselves from steep declines in real estate prices -- chief among them, Goldman Sachs. All told, Goldman received at least $22.9 billion in public bailouts, including $10 billion in TARP funds and $12.9 billion in taxpayer-funded payments from AIG.

Goldman, once again, had come out on top.

4. THE VAMPIRE SQUID

Goldman Sachs repaid repaid its $10 billion bailout partway through 2009, less than 12 months after the loan was made. Other banks in the U.S. and abroad were still struggling but not Goldman, which reported a record $19.8 billion in pre-tax profits that year, and $12.9 billion the next. Gary Cohn went without a bonus in 2008, left to scrape by on his $600,000 salary. Once free of government interference, the Goldman board (which included Cohn himself) paid him a $9 million bonus in 2009 and an $18 million bonus in 2010.

Yet the once venerated firm was now the subject of jokes on the late-night talk shows. David Letterman broadcast a "Goldman Sachs Top 10 Excuses" list (No. 9: "You're saying 'fraud' like it's a bad thing."). Rolling Stone's Matt Taibbi described the bank as "a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money," a devastating moniker that followed Goldman into the business pages. After news leaked that the firm might pay its people a record $16.7 billion in bonuses in 2009, even President Barack Obama, for whom the firm had been a top campaign donor, began to turn against Goldman, telling " 60 Minutes ," "I did not run for office to be helping out a bunch of fat-cat bankers on Wall Street."

"They're still puzzled why is it that people are mad at the banks," Obama said. "Well, let's see. You guys are drawing down $10, $20 million bonuses after America went through the worst economic year that it's gone through in decades, and you guys caused the problem."

Goldman was also facing an onslaught of investigations and lawsuits over behavior that had helped precipitate the financial crisis. Class actions and other lawsuits filed by pension funds and other investors accused Goldman of abusing their trust, making "false and misleading statements," and failing to conduct basic due diligence on the loans underlying the products it peddled. At least 25 of these suits named Cohn as a defendant.

State and federal regulators joined the fray. The SEC accused Goldman of deception in its marketing of opaque investments called "synthetic collateralized debt obligations," the values of which were tied to bundles of actual mortgages. These were the deals Goldman had arranged in 2006 on behalf of John Paulson so he could short the U.S. housing market. Goldman, it turned out, had allowed Paulson to cherry-pick poor-quality loans at the greatest risk of defaulting -- a fact Goldman did not share with potential investors. "Goldman wrongly permitted a client that was betting against the mortgage market to heavily influence which mortgage securities to include in an investment portfolio," the SEC's enforcement director at the time said, "telling other investors that the securities were selected by an independent, objective third party."

Suddenly, Cohn and other Goldman officials were downplaying the big short. In June 2010, Cohn testified before the Financial Crisis Inquiry Commission, created by Congress to investigate the causes of the nation's worst economic collapse since the Great Depression. Cohn asked the commissioners how anyone could claim the firm had bet against its clients when "during the two years of the financial crisis, Goldman Sachs lost $1.2 billion in its residential mortgage-related business"? His statement was technically true, but Cohn failed to mention the billions of dollars the firm pocketed by betting the mortgage market would collapse. Senate investigators later calculated that, at its peak, Goldman had $13.9 billion in short positions that would only pay off in the event of a steep drop in the mortgage market, positions that produced a record $3.7 billion in profits.

Two weeks after Cohn's testimony, Goldman agreed to pay the SEC $550 million to settle charges of securities fraud -- then the largest penalty assessed against a financial services firm in the agency's history. Goldman admitted no wrongdoing, acknowledging only that its marketing materials "contained incomplete information." Goldman paid $60 million in fines and restitution to settle an investigation by the Massachusetts attorney general into the financial backing the firm had offered to predatory mortgage lenders. The bank set aside another $330 million to assist people who lost their homes thanks to questionable foreclosure practices at a Goldman loan-servicing subsidiary. Goldman agreed to billions of dollars in additional settlements with state and federal agencies relating to its sale of dicey mortgage-backed securities. The firm finally acknowledged that it had failed to conduct basic due diligence on the loans its was selling customers and, once it became aware of the hazards, did not disclose them.

In the final report produced by the Senate's Permanent Subcommittee on Investigations, Goldman Sachs was mentioned an extraordinary 2,495 times, and Gary Cohn 89 times. A Goldman Sachs representative declined to respond to queries on the record.

The investigations and fines were a blow to Goldman's reputation and its bottom line, but the regulatory reforms being debated had the potential to threaten Goldman's entire business model. Even before the 2008 crash, the firm's lobbying spending had grown under Lloyd Blankfein and Cohn. By 2010, the year financial reforms were being drafted, Goldman spent $4.6 million for the services of 49 lobbyists. Their ranks included some of the most well-connected figures in Washington, including Democrat Richard Gephardt, a former House majority leader, and Republican Trent Lott, a former Senate majority leader, who had stepped down from the Senate two years earlier.

Despite all those lobbyists on the payroll, Goldman made its case primarily through proxies during the debate over financial reform. "The name Goldman Sachs was so radioactive it worked to their disadvantage to be tied to an issue," said Marcus Stanley, then a staffer for Democratic Sen. Barbara Boxer and now policy director of Americans for Financial Reform. Instead, Goldman lobbied through industry groups.

Goldman's people likely knew that all of Wall Street's lobbying might could not stop the passage of the sprawling 2010 legislative package dubbed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Obama was putting his muscle behind reform -- "We simply cannot accept a system in which hedge funds or private equity firms inside banks can place huge, risky bets that are subsidized by taxpayers," he said in one speech -- and the Democrats enjoyed majorities in both houses of Congress. "For Goldman Sachs, the battle was over the final language," said Dennis Kelleher of Better Markets, a Washington, D.C., lobby group that pushes for tighter financial reforms. "That way they at least had a fighting chance in the next round, when everyone turned their attention to the regulators."

There was a lot for Goldman Sachs to dislike about Dodd-Frank. There were small annoyances, such as "say on pay," which ordered companies to give shareholders input on executive compensation, a source of potential embarrassment to a company that gave out $73 million in compensation for a single year's work -- as Goldman paid Cohn in 2007. There were large annoyances, such as the requirement that financial institutions deemed too big to fail, like Goldman, create a wind-down plan in case of disaster. There were the measures that would interfere with Goldman's core businesses, such as a provision instructing the Commodity Futures Trading Commission to regulate the trading of derivatives. And yet nothing mattered to Goldman quite like the Volcker Rule, which would protect banks' solvency by limiting their freedom to make speculative trades with their own money. Unless Goldman could initiate what Stanley called the "complexity two-step" -- win a carve-out so a new rule wouldn't interfere with legitimate business and then use that carve-out to render a rule toothless -- Volcker would slam the door shut on the entire direction in which Blankfein and Cohn had taken Goldman.

It was 5:30 a.m. on Friday, June 25, 2010, when a joint House-Senate conference committee approved the final language of Dodd-Frank. By Sunday, an industry attorney named Annette Nazareth -- a former top SEC official whose firm counts Goldman Sachs among its clients -- had already sent off a heavily annotated copy of the 848-page bill to colleagues at her old agency. It was just the first salvo in a lobbying juggernaut.

Within a few months, Cohn himself was in Washington to meet with a governor of the Federal Reserve, one of the key agencies charged with implementing Volcker. The visitors log at the CFTC, the agency Dodd-Frank put in charge of derivatives reform, shows that Cohn traveled to D.C. to personally meet with CFTC staffers at least six times between 2010 and 2016. Cohn also came to the capital for meetings at the SEC, another agency responsible for the Volcker Rule. There, he met with SEC chair Mary Jo White and other commissioners. "I seem to be in Washington every week trying to explain to them the unintended consequences of overregulation," Cohn said in a talk he gave to business students at Sacred Heart University in 2015.

"Gary was the tip of the spear for Goldman to beat back regulatory reform," said Kelleher, the financial reform lobbyist. "I used to pass him going into different agencies. They brought him in when they wanted the big gun to finish off, to kill the wounded."

Democrats lost their majority in the House that November, and Goldman threw its weight behind the spate of Republican bills that followed, aimed at taking apart Dodd-Frank piece by piece. Goldman spent more than $4 million for the services of 45 lobbyists in 2011 and $3.5 million a year in 2012 and 2013. Its lobbying spending was nearly as high in the years after passage of Dodd-Frank as it was the year the bill was introduced.

Goldman lobbyists dug in on a range of issues that would become top priorities for Republicans in the wake of Donald Trump's electoral victory. Records from the Center for Responsive Politics show that Goldman lobbyists worked to promote corporate tax cuts, such as on the Tax Increase Prevention Act of 2014 and Senate legislation aimed at extending some $200 billion in tax cuts for individuals and businesses. Goldman lobbied for a bill to fund economically critical infrastructure projects, presumably on behalf of its Public Sector and Infrastructure group. Goldman had seven lobbyists working on the JOBS Act, which would make it easier for companies to go public, another bottom-line issue to a company that underwrote $27 billion in IPOs last year. In 2016, Goldman had eight lobbyists dedicated to the Financial CHOICE Act, which would have undone most of Dodd-Frank in one fell swoop -- a bill the House revived in April.

Yet defanging the Volcker Rule remained the firm's top priority. Promoted by former Fed Chair Paul Volcker, the rule would prohibit banks from committing more than 3 percent of their core assets to in-house private equity and hedge funds in the business of buying up properties and businesses with the goal of selling them at a profit. One harbinger of the financial crisis had been the collapse in the summer of 2007 of a pair of Bear Stearns hedge funds that had invested heavily in subprime loans. That 3 percent cap would have had a big impact on Goldman, which maintained a separate private equity group and operated its own internal hedge funds. But it was the restrictions Volcker placed on proprietary trading that most threatened Goldman.

Prop trading was a profit center inside many large banks, but nowhere was it as critical as at Goldman. A 2011 report by one Wall Street analyst revealed that prop trading accounted for an 8 percent share of JPMorgan Chase's annual revenues, 9 percent of Bank of America's, and 27 percent of Morgan Stanley's. But prop trading made up 48 percent of Goldman's. By one estimate , the Volcker Rule could cost Goldman Sachs $3.7 billion in revenue a year.

When regulators finalized a new Volcker Rule in 2013, Better Markets declared it a "major defeat for Wall Street." Yet the victory for reformers was precarious. "Just changing a few words could dramatically change the scope of the rule -- to the tune of billions of dollars for some firms," said former Senate staffer Tyler Gellasch, who helped write the rule. Volcker gave banks until July 2015 -- the five-year anniversary of Dodd-Frank -- to bring themselves into compliance. Yet apparently the Volcker Rule had been written for other financial institutions, not elite firms like Goldman Sachs. "Goldman Sachs has been on a shopping spree with its own money," began a New York Times article in January 2015. The bank used its own funds to buy a mall in Utah, apartments in Spain, and a European ink company. Paul Volcker expressed disappointment that banks were still making big proprietary bets, as did the two senators most responsible for writing the rule into law. That June, Cohn appeared to reassure investors that Goldman would find a workaround. Speaking at an investor conference, he said Goldman was "transforming our equity investing activities to continue to meet client needs while complying with Volcker."

Goldman had five years to prepare for some version of a Volcker Rule. Yet a loophole granted banks sufficient time to dispose of "illiquid assets" without causing undue harm -- a loophole that might even cover the assets Goldman had only recently purchased, despite the impending compliance deadline. The Fed nonetheless granted the firm additional time to sell illiquid investments worth billions of dollars. "Goldman is brilliant at exercising access and influence without fingerprints," Kelleher said.

By mid-2016, Goldman, along with Morgan Stanley and JPMorgan Chase, was petitioning the Fed for an additional five years to comply with Volcker -- which would take the banks well into a new administration. All Blankfein and Cohn had to do was wait for a new Congress and a new president who might back their efforts to flush all of Dodd-Frank. Then Goldman could continue the risky and lucrative habits it had adopted since traders like Cohn had taken over the firm -- the financial crisis be damned -- and continue raking in billions in profits each year.

Goldman's political giving changed in the wake of Dodd-Frank. Dating back to at least 1990, according to the Center for Responsive Politics, people associated with the firm and its political action committees contributed more to Democrats than Republicans. Yet in the years since financial reform, Goldman, once Obama's second-largest political donor, shifted its campaign contributions to Republicans. During the 2008 election cycle, for instance, Goldman's people and PACs contributed $4.8 million to Democrats and $1.7 million to Republicans. By the 2012 cycle, the opposite happened, with Goldman giving $5.6 million to Republicans and $1.8 million to Democrats. Cohn's personal giving followed the same path. Cohn gave $26,700 to the Democratic Senatorial Campaign Committee in 2006 and $55,500 during the 2008 election cycle, and none to its GOP equivalent. But Cohn donated $30,800 to the National Republican Senatorial Committee in 2012 and another $33,400 to the National Republican Congressional Committee in 2015, without contributing a dime to the DSCC. Cohn gave $5,000 to Massachusetts Republican Scott Brown weeks after news broke that Elizabeth Warren -- an outspoken critic of Goldman and other Wall Street players -- might try to capture his U.S. Senate seat, which she did in 2012.

Goldman Sachs, under Cohn and Blankfein, was hardly chastened, continuing to play fast and loose with existing rules even as it plunged millions of dollars into fending off new ones. In 2010, the SEC ran a sting operation looking for banks willing to trade favorable assessments by its stock analysts for a piece of a Toys R Us IPO if the company went public. Goldman took the bait, for which they would pay a $5 million fine. An employee working out of Goldman's Boston office drafted speeches, vetted a running mate, and negotiated campaign contracts for the state treasurer during his run for Massachusetts governor in 2010, despite a rule forbidding municipal bond dealers from making significant political contributions to officials who can award them business. According to the SEC, Goldman had underwritten $9 billion in bonds for Massachusetts in the previous two years, generating $7.5 million in fees. Goldman paid $12 million to settle the matter in 2012.

Just two years later, Goldman officials were again summoned by the Senate Permanent Subcommittee on Investigations to address charges that the bank under Cohn and Blankfein had boosted its profits by building a "virtual monopoly" in order to inflate aluminum prices by as much as $3 billion.

The last few years have brought more unwanted attention. In 2015, the U.S. Justice Department launched an investigation into Goldman's role in the alleged theft of billions of dollars from a development fund the firm had helped create for the government of Malaysia. Federal regulators in New York state fined Goldman $50 million because its leaders failed to effectively supervise a banker who leaked stolen confidential government information from the Fed, which hit the firm with another $36.3 million in penalties. In December, the CFTC fined Goldman $120 million for trying to rig interest rates to profit the firm.

Politically, 2016 would prove a strange year for Goldman. Bernie Sanders clobbered Hillary Clinton for pocketing hundreds of thousands of dollars in speaking fees from Goldman, while Trump attacked Ted Cruz for being "in bed with" Goldman Sachs. (Cruz's wife Heidi was a managing director in Goldman's Houston office until she took leave to work on her husband's presidential campaign.) Goldman would have "total control" over Clinton, Trump said at a February 2016 rally, a point his campaign reinforced in a two-minute ad that ran the weekend before Election Day. An image of Blankfein flashed across the screen as Trump warned about the global forces that "robbed our working class."

Goldman's giving in the presidential race appears to reflect polls predicting a Clinton win and the firm's desire for a political restart on deregulation. People who identified themselves as Goldman Sachs employees gave less than $5,000 to the Trump campaign compared to the $341,000 that the firm's people and PACs contributed to Clinton. Goldman Sachs is relatively small compared to retail banking giants.

Yet, according to the Center for Responsive Politics , no bank outspent Goldman Sachs during the 2016 political cycle. Its PACs and people associated with the firm made $5.6 million in political contributions in 2015 and 2016. Even including all donations to Clinton, 62 percent of Goldman's giving ended up in the coffers of Republican candidates, parties, or conservative outside groups.

5. TROJAN HORSE

There's ultimately no great mystery why Donald Trump selected Gary Cohn for a top post in his administration, despite his angry rhetoric about Goldman Sachs. There's the high regard the president holds for anyone who is rich -- and the instant legitimacy Cohn conferred upon the administration within business circles. Cohn's appointment reassured bond markets about the unpredictable new president and lent his administration credibility it lacked among Fortune 100 CEOs, none of whom had donated to his campaign. Ego may also have played a role. Goldman Sachs would never do business with Trump, the developer who resorted to foreign banks and second-tier lenders to bankroll his projects. Now Goldman's president would be among those serving in his royal court.

Who can say precisely why Cohn, a Democrat, said yes when Trump asked him to be his top economic aide? No doubt Cohn has been asking himself that question in recent weeks. But he'd hit a ceiling at Goldman Sachs. In September 2015, Goldman announced that Blankfein had lymphoma, ramping up speculation that Cohn would take over the firm. Yet four months later, after undergoing chemotherapy, Blankfein was back in his office and plainly not going anywhere. Cohn was 56 years old when he was invited to Trump Tower. An influential job inside the White House meant a face-saving exit -- and one offering a huge financial advantage.

Trump spoke of the great financial price Cohn paid to join him in the White House during his speech in Cedar Rapids. But something like the opposite was true. A huge amount of Cohn's wealth was tied up in Goldman stock. By entering government, he could sell his stake in the firm to comply with federal ethics laws. That way he could diversify his holdings and avoid roughly $50 million in capital gains taxes -- at least until he sold the replacement assets.

A job in the White House might also prove an outlet for his frustrations with politicians and regulators intent on reining in the worst impulses of Wall Street. Trump was Trump, but he had also vowed to dismantle financial reform. "Dodd-Frank has made it impossible for bankers to function," Trump said during the campaign. The new president had the potential to serve as a vessel for Goldman's corporate interests.

"Maybe the one thing that holds this administration together is a belief that markets know best, and the least regulation is the best regulation," said Dennis Kelleher of Better Markets. "Goldman's interests fit with that very nicely."

Trump had given Steve Mnuchin, his campaign finance chair, the grander title. But taking over as Treasury secretary meant being confirmed by the Senate. Mnuchin's confirmation vote was delayed after it was revealed that he'd neglected to list $95 million in assets (including homes in New York, Los Angeles, and the Hamptons) on his Senate Finance Committee disclosure forms and failed to disclose his ties to an offshore hedge fund registered in the Cayman Islands. Mnuchin was not confirmed until mid-February. The president's pick for commerce secretary, Wilbur Ross, a financier who had bailed out several of Trump's casinos a few decades earlier, was not confirmed until the end of February.

As a presidential aide, Cohn did not need Senate approval. He was part of the skeletal crew that arrived at the White House on day one, giving him a critical head start on wielding his clout and cultivating his relationship with the new president. At that point, Trump was summoning Cohn to the Oval Office for impromptu meetings as many as five times a day .

In early February, Trump signed an executive order giving his Treasury secretary 120 days to give him a hit list of regulations the administration could eliminate. But with Mnuchin yet to be confirmed, the task appeared to land in Cohn's eager hands. He was standing at the president's shoulder when Trump said, "We expect to be cutting a lot out of Dodd-Frank." Shares in Goldman Sachs, which had jumped by 28 percent after the election, rose another $6 a share that day. Soon Cohn was coordinating Trump's plans not only for rolling back regulations, but also for creating jobs and slashing taxes. He met with a health care specialist, along with House Speaker Paul Ryan and other Republican leaders, to discuss alternatives to the Affordable Care Act.

Proximity is power inside any White House, especially in this one, where policy often seems shaped by Trump's last conversation. Treasury is several blocks away, while Cohn's office was in the West Wing, directly across the hall from Bannon's. Operating within a chaotic administration, Cohn was reportedly energized and focused, working around the clock. Cohn is a tenacious practitioner who, after ascending to the heights of Goldman Sachs, could teach a master class on the art of seizing a leadership vacuum and building alliances. On day 39 of the new administration, the White House sent out a press release introducing the "best-in-class team" Cohn had assembled "to drive President Trump's bold plan for job creation and economic growth." The 13 advisers included familiar figures who had worked for George W. Bush or his father, but they also included at least three former lobbyists so conflicted they would need an ethics waiver to work in the White House. For instance, Michael Catanzaro , the man Cohn chose to oversee energy policy, was until last year a lobbyist for such oil, gas, and coal companies as Devon Energy and Talen Energy. Shahira Knight had been a lobbyist for Fidelity, the mutual fund giant, before joining Cohn's team.

Cohn's strategy in those early months was to make himself indispensable to the new president. Cohn emerged as one of the few people around Trump comfortable interrupting him during a meeting or openly disagreeing on points of policy. The New York Times reported that Trump often turned to Cohn during a meeting and asked him directly, "What do you want to do?" Early on, Trump referred to Cohn as "one of my geniuses" -- a quote Reuters attributed to a "source close to Cohn."

Soon, major media were painting Cohn as a leading centrist inside the Trump White House because he had staked out positions on immigration, international alliances, and global warming at odds with Bannon's hard-right nationalism. Bannon and his allies only bolstered this narrative by characterizing "Carbon Tax Cohn" and his allies, Jared Kushner and Ivanka Trump, as interlopers -- "the Democrats," as some inside the White House called them. "Within Trump's Inner Circle, a Moderate Voice Captures the President's Ear," read the headline of a Cohn profile in the Washington Post.

"Led by Gary Cohn and Dina Powell -- two former Goldman Sachs executives often aligned with Trump's elder daughter and his son-in-law -- the group and its broad network of allies are the targets of suspicion, loathing and jealousy from their more ideological West Wing colleagues," the Washington Post reported. Fueling the rage of the ideologues, Cohn and his allies were largely winning. Trump dropped Bannon from the National Security Council and elevated Powell to deputy national security adviser. When, after Charlottesville, false reports leaked that Cohn was so disgusted with the president he was resigning, blue-chip stocks slid down. Instead, Bannon was out. Cohn, despite reports that he invoked Trump's wrath for critical remarks to the Financial Times, was still in and expected to deliver the president a win on corporate taxes.

On the day it was announced that he was joining the Trump administration, Cohn said on a goodbye podcast for Goldman Sachs, "You look at the size of our capital. You look at the size of our balance sheet. You look at the size of our people -- it's just enormous." More than $40 billion had flowed into the bank in 2016, bringing the bank's assets under management to a record $1.38 trillion. That meant pressure to find ways to put that money to work -- an enormous challenge if regulators finally shut down Goldman's prop trading arm.

How exactly could Cohn recuse himself from matters involving Goldman when almost every aspect of his job has the potential to either grow Goldman's profits and inflate its stock price -- or tank them both?

"To the extent Goldman Sachs is a direct party in a matter, Gary will recuse himself," a source familiar with the situation said. But, the source added, "As NEC director, Gary is going to touch on matters on the day-to-day economy as a whole and Goldman Sachs is a participant in the economy, thus Gary will indirectly touch on things that affect Goldman Sachs along with other banks and institutions."

Yet rather than publicly recuse himself on attempts to undo Dodd-Frank, Cohn has led the charge from inside the White House. On that matter, Cohn is a walking, talking conflict of interest .

While at Goldman, Cohn had personally met with officials at the Commodity Futures Trading Commission to discuss the derivatives reform plank of Dodd-Frank, an arena in which Goldman is a dominant player. He had taken issue with rules imposed by Dodd-Frank that require banks to keep more capital on hand. Requiring banks to hold more money in reserve made them "unequivocally" safer than before 2008, he said in a 2015 interview while still Goldman's president, but he complained that Goldman was now able to lend less money, hurting profits. And then there's the Volcker Rule. Cohn, while still president of the firm, had traveled to D.C. at least twice to personally lobby regulators about its implementation.

These days, it can be hard to tell whether Cohn is speaking as a high-ranking White House official or a former Goldman Sachs executive.

In the wake of Trump's February call for a rollback in financial regulations, Cohn vowed in an interview with Bloomberg TV, "We're going to attack all aspects of Dodd-Frank." The first example he gave: the Volcker Rule, which he cast as harmful to the country's competitive advantage. In an interview that same day with Fox Business, he homed in on another Goldman obsession: Dodd-Frank's capital requirements. "Banks are forced to hoard money because they are forced to hoard capital, and they can't take any risks," he said. Mortgage, auto, credit card lending, and commercial lending are all up since 2010. Yet Cohn told Fox viewers, "We need to get banks back in the lending business, that's our No. 1 objective."

Roy Smith, a former Goldman partner now teaching at the NYU Stern School of Business, argues that Cohn should avoid the administration's effort to unwind Dodd-Frank altogether, but "at a very minimum he has to excuse himself whenever the discussion turns to Volcker." But Smith said he has trouble imagining Cohn leaving the room when Volcker comes up. "The hard part for someone like Cohn is that he knows where all the pain points are with Volcker and other parts of Dodd-Frank," Smith said. "His every instinct would be to get involved."

Beyond deregulation, two other pillars of Trump's economic plan -- cutting taxes and investing in infrastructure -- would have dramatic impacts on Goldman's bottom line.

Thanks to loopholes, many Fortune 500 corporations pay little or no corporate income tax at all. By contrast, Goldman Sachs typically pays taxes near the official 35 percent federal tax rate. In 2014, for instance, Goldman paid $3.9 billion in taxes on profits of $12.4 billion, or 31 percent. Last year, the firm's tax bill was $2.7 billion on profits of $10.3 billion, or 28 percent. In that same Fox Business interview, Cohn said that "lower corporate taxes" was the White House's "starting point" on tax reform; cuts to personal income taxes were a secondary concern.

Under the plan Cohn and Mnuchin announced last spring, what Cohn called "one of the biggest tax cuts in the American history," corporate taxes would be capped at 15 percent. If Cohn succeeds, Goldman will save massive sums: At that rate, Goldman would have paid $2 billion less in taxes in 2014, $1.4 billion less in 2015, and $1.4 billion less in 2016. The Koch brothers' network of political groups has already spent millions of dollars to promote the proposal. Even Blankfein, who the Trump campaign singled out in the commercial it ran in the final days of the campaign, acknowledged in a voicemail to employees that Trump's commitment to tax cuts, deregulation, and infrastructure "will be good for our clients and our firm."

The details of the president's "$1 trillion" infrastructure plan are similarly favorable to Goldman. As laid out in the administration's 2018 budget, the government would spend only $200 billion on infrastructure over the coming decade. By structuring "that funding to incentivize additional non-Federal funding" -- tax breaks and deals that privatize roads, bridges, and airports -- the government could take credit for "at least $1 trillion in total infrastructure spending," the budget reads.

It was as if Cohn were still channeling his role as a leader of Goldman Sachs when, at the White House in May, he offered this advice to executives: "We say, 'Hey, take a project you have right now, sell it off, privatize it, we know it will get maintained, and we'll reward you for privatizing it.'" "The bigger the thing you privatize, the more money we'll give you," continued Cohn. By "we," he clearly meant the federal government; by "you," he appeared to be speaking, at least in part, about Goldman Sachs, whose Public Sector and Infrastructure group arranges the financing on large-scale public sector deals. "Goldman Sachs is one of the largest infrastructure fund managers globally," according to infrastructure advisory firm InfraPPP Partners , "having raised more than $10 billion of capital since the inception of the business in 2006." Lost in the infamous press conference the president gave in the lobby of Trump Tower a few days after Charlottesville, with Cohn and Mnuchin visibly uncomfortable at his right flank, were Trump's remarks on infrastructure, the ostensible purpose of the event. The thrust was that the president would grease the wheels for project approvals by signing an executive order rolling back environmental impact requirements and other elements of an "overregulated permitting process."

In countless other ways, Cohn is positioned to help the firm that has been so good to him over the years. The country's National Economic Council adviser might caution a president against running too large a deficit, especially amid a healthy economy. But Goldman Sachs is in the business of finding investors to underwrite government debt. An economic adviser might caution a populist president that corporate inversions often cost jobs and tax revenue. Instead, Trump has ordered a review of policies Obama put in place to discourage them -- good news for Cohn's former colleagues. Transparency has been a watchword of initial public offerings dating back at least to the Securities and Exchange Act of 1934, but easing those rules, a step Goldman has sought, could potentially generate hundreds of millions of dollars in fees for investment banks such as Goldman. The SEC announced in June that it would allow any company going public to withhold details of its finances and strategies, an exemption previously available only to firms with under $1 billion in revenue -- more good tidings for Goldman. Just loosening the rules for IPOs, said Tyler Gellasch, the former Senate staffer, "could mean hundreds of millions of dollars more to Goldman."

In June, the Treasury Department released a statement of principles about the administration's approach to financial regulation focused on promoting "liquid and vibrant markets." Not surprisingly, the report included a call to ease capital requirements and substantially amend the Volcker Rule.

It's Cohn's influence over the country's regulators that worries Dennis Kelleher, the financial reform lobbyist. "To him, what's good for Wall Street is good for the economy," Kelleher said of Cohn. "Maybe that makes sense when a guy has spent 26 years at Goldman, a company who has repaid his loyalties and sweat with a net worth in the hundreds of millions." Kelleher recalls those who lost a home or a chunk of their retirement savings during a financial crisis that Cohn helped precipitate. "They're still suffering," he said. "Yet now Cohn's in charge of the economy and talking about eliminating financial reform and basically putting the country back to where it was in 2005, as if 2008 didn't happen. I've started the countdown clock to the next financial crash, which will make the last one look mild."

This article was reported in partnership with The Investigative Fund at The Nation Institute.

[Oct 23, 2017] Neoliberalism as Creative Destruction David Harvey, 2007

This article is 10 year old but the analysis presented still remain by-and-large current.
You can read full article in Neoliberalism As Creative Destruction - David Harvey by Open Critique - issue
Notable quotes:
"... Neoliberalism is a theory of political economic practices proposing that human well-being can best be advanced by the maximization of entrepreneurial freedoms within an institutional framework characterized by private property rights, individual liberty, unencumbered markets, and free trade. ..."
"... Furthermore, if markets do not exist (in areas such as education, health care, social security, or environmental pollution), then they must be created, by state action if necessary. ..."
"... State interventions in markets (once created) must be kept to a bare minimum because the state cannot possibly possess enough information to second-guess market signals (prices) and because powerful interests will inevitably distort and bias state interventions (particularly in democracies) for their own benefit. ..."
"... State after state, from the new ones that emerged from the collapse of the Soviet Union to old-style social democracies and welfare states such as New Zealand and Sweden, have embraced, sometimes voluntarily and sometimes in response to coercive pressures, some version of neoliberal theory and adjusted at least some of their policies and practices accordingly. Post apartheid South Africa quickly adopted the neoliberal frame and even contemporary China appears to be headed in that direction. Furthermore, advocates of the neoliberal mindset now occupy positions of considerable influence in education (universities and many "think tanks"), in the media, in corporate board rooms and financial institutions, in key state institutions (treasury departments, central banks), and also in those international institutions such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) that regulate global finance and commerce. Neoliberalism has, in short, become hegemonic as a mode of discourse and has pervasive effects on ways of thought and political-economic practices to the point where it has become incorporated into the commonsense way we interpret, live in, and understand the world. ..."
"... Neoliberalization has in effect swept across the world like a vast tidal wave of institutional reform and discursive adjustment. While plenty of evidence shows its uneven geographical development, no place can claim total immunity (with the exception of a few states such as North Korea). Furthermore, the rules of engagement now established through the WTO (governing international trade) and by the IMF (governing international finance) instantiate neoliberalism as a global set of rules. All states that sign on to the WTO and the IMF (and who can afford not to?) agree to abide (albeit with a "grace period" to permit smooth adjustment) by these rules or face severe penalties. ..."
"... For any system of thought to become dominant, it requires the articulation of fundamental concepts that become so deeply embedded in commonsense understandings that they are taken for granted and beyond question. For this to occur, not any old concepts will do. A conceptual apparatus has to be constructed that appeals almost naturally to our intuitions and instincts, to our values and our desires, as well as to the possibilities that seem to inhere in the social world we inhabit. The founding figures of neoliberal thought took political ideals of individual liberty and freedom as sacrosanct -- as the central values of civilization. And in so doing they chose wisely and well, for these are indeed compelling and greatly appealing concepts. Such values were threatened, they argued, not only by fascism, dictatorships, and communism, but also by all forms of state intervention that substituted collective judgments for those of individuals set free to choose. They then concluded that without "the diffused power and initiative associated with (private property and the competitive market) it is difficult to imagine a society in which freedom may be effectively preserved." 1 ..."
"... The U.S. answer was spelled out on September 19, 2003, when Paul Bremer, head of the Coalition Provisional Authority, promulgated four orders that included "the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi U.S. businesses, full repatriation of foreign profits . . . the opening of Iraq's banks to foreign control, national treatment for foreign companies and . . . the elimination of nearly all trade barriers." 4 The orders were to apply to all areas of the economy, including public services, the media, manufacturing, services, transportation, finance, and construction. Only oil was exempt. A regressive tax system favored by conservatives called a flat tax was also instituted. The right to strike was outlawed and unions banned in key sectors. An Iraqi member of the Coalition Provisional Authority protested the forced imposition of "free market fundamentalism," describing it as "a flawed logic that ignores history." 5 Yet the interim Iraqi government appointed at the end of June 2004 was accorded no power to change or write new laws -- it could only confirm the decrees already promulgated. ..."
"... The redistributive tactics of neoliberalism are wide-ranging, sophisticated, frequently masked by ideological gambits, but devastating for the dignity and social well-being of vulnerable populations and territories. The wave of creative destruction neoliberalization has visited across the globe is unparalleled in the history of capitalism. Understandably, it has spawned resistance and a search for viable alternatives. ..."
Oct 23, 2017 | journals.sagepub.com

Neoliberalism has become a hegemonic discourse with pervasive effects on ways of thought and political-economic practices to the point where it is now part of the commonsense way we interpret, live in, and understand the world. How did neoliberalism achieve such an exalted status, and what does it stand for? In this article, the author contends that neoliberalism is above all a project to restore class dominance to sectors that saw their fortunes threatened by the ascent of social democratic endeavors in the aftermath of the Second World War. Although neoliberalism has had limited effectiveness as an engine for economic growth, it has succeeded in channeling wealth from subordinate classes to dominant ones and from poorer to richer countries. This process has entailed the dismantling of institutions and narratives that promoted more egalitarian distributive measures in the preceding era.

Neoliberalism is a theory of political economic practices proposing that human well-being can best be advanced by the maximization of entrepreneurial freedoms within an institutional framework characterized by private property rights, individual liberty, unencumbered markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to be concerned, for example, with the quality and integrity of money. It must also set up military, defense, police, and juridical functions required to secure private property rights and to support freely functioning markets. Furthermore, if markets do not exist (in areas such as education, health care, social security, or environmental pollution), then they must be created, by state action if necessary. But beyond these tasks the state should not venture. State interventions in markets (once created) must be kept to a bare minimum because the state cannot possibly possess enough information to second-guess market signals (prices) and because powerful interests will inevitably distort and bias state interventions (particularly in democracies) for their own benefit.

For a variety of reasons, the actual practices of neoliberalism frequently diverge from this template. Nevertheless, there has everywhere been an emphatic turn, ostensibly led by the Thatcher/Reagan revolutions in Britain and the United States, in political-economic practices and thinking since the 1970s. State after state, from the new ones that emerged from the collapse of the Soviet Union to old-style social democracies and welfare states such as New Zealand and Sweden, have embraced, sometimes voluntarily and sometimes in response to coercive pressures, some version of neoliberal theory and adjusted at least some of their policies and practices accordingly. Post apartheid South Africa quickly adopted the neoliberal frame and even contemporary China appears to be headed in that direction. Furthermore, advocates of the neoliberal mindset now occupy positions of considerable influence in education (universities and many "think tanks"), in the media, in corporate board rooms and financial institutions, in key state institutions (treasury departments, central banks), and also in those international institutions such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) that regulate global finance and commerce. Neoliberalism has, in short, become hegemonic as a mode of discourse and has pervasive effects on ways of thought and political-economic practices to the point where it has become incorporated into the commonsense way we interpret, live in, and understand the world.

Neoliberalization has in effect swept across the world like a vast tidal wave of institutional reform and discursive adjustment. While plenty of evidence shows its uneven geographical development, no place can claim total immunity (with the exception of a few states such as North Korea). Furthermore, the rules of engagement now established through the WTO (governing international trade) and by the IMF (governing international finance) instantiate neoliberalism as a global set of rules. All states that sign on to the WTO and the IMF (and who can afford not to?) agree to abide (albeit with a "grace period" to permit smooth adjustment) by these rules or face severe penalties.

The creation of this neoliberal system has entailed much destruction, not only of prior institutional frameworks and powers (such as the supposed prior state sovereignty over political-economic affairs) but also of divisions of labor, social relations, welfare provisions, technological mixes, ways of life, attachments to the land, habits of the heart, ways of thought, and the like. Some assessment of the positives and negatives of this neoliberal revolution is called for. In what follows, therefore, I will sketch in some preliminary arguments as to how to both understand and evaluate this transformation in the way global capitalism is working. This requires that we come to terms with the underlying forces, interests, and agents that have propelled the neoliberal revolution forward with such relentless intensity. To turn the neoliberal rhetoric against itself, we may reasonably ask, In whose particular interests is it that the state take a neoliberal stance and in what ways have those interests used neoliberalism to benefit themselves rather than, as is claimed, everyone, everywhere?

In whose particular interests is it that the state take a neoliberal stance, and in what ways have those interests used neoliberalism to benefit themselves rather than, as is claimed, everyone, everywhere?

The "Naturalization" of Neoliberalism

For any system of thought to become dominant, it requires the articulation of fundamental concepts that become so deeply embedded in commonsense understandings that they are taken for granted and beyond question. For this to occur, not any old concepts will do. A conceptual apparatus has to be constructed that appeals almost naturally to our intuitions and instincts, to our values and our desires, as well as to the possibilities that seem to inhere in the social world we inhabit. The founding figures of neoliberal thought took political ideals of individual liberty and freedom as sacrosanct -- as the central values of civilization. And in so doing they chose wisely and well, for these are indeed compelling and greatly appealing concepts. Such values were threatened, they argued, not only by fascism, dictatorships, and communism, but also by all forms of state intervention that substituted collective judgments for those of individuals set free to choose. They then concluded that without "the diffused power and initiative associated with (private property and the competitive market) it is difficult to imagine a society in which freedom may be effectively preserved." 1

Setting aside the question of whether the final part of the argument necessarily follows from the first, there can be no doubt that the concepts of individual liberty and freedom are powerful in their own right, even beyond those terrains where the liberal tradition has had a strong historical presence. Such ideals empowered the dissident movements in Eastern Europe and the Soviet Union before the end of the cold war as well as the students in Tiananmen Square. The student movement that swept the world in 1968 -- from Paris and Chicago to Bangkok and Mexico City -- was in part animated by the quest for greater freedoms of speech and individual choice. These ideals have proven again and again to be a mighty historical force for change.

It is not surprising, therefore, that appeals to freedom and liberty surround the United States rhetorically at every turn and populate all manner of contemporary political manifestos. This has been particularly true of the United States in recent years. On the first anniversary of the attacks now known as 9/11, President Bush wrote an op-ed piece for the New York Times that extracted ideas from a U.S. National Defense Strategy document issued shortly thereafter. "A peaceful world of growing freedom," he wrote, even as his cabinet geared up to go to war with Iraq, "serves American long-term interests, reflects enduring American ideals and unites Americas allies." "Humanity," he concluded, "holds in its hands the opportunity to offer freedom s triumph over all its age-old foes," and "the United States welcomes its responsibilities to lead in this great mission." Even more emphatically, he later proclaimed that "freedom is the Almighty's gift to every man and woman in this world" and "as the greatest power on earth [the United States has] an obligation to help the spread of freedom." 2

So when all of the other reasons for engaging in a preemptive war against Iraq were proven fallacious or at least wanting, the Bush administration increasingly appealed to the idea that the freedom conferred upon Iraq was in and of itself an adequate justification for the war. But what sort of freedom was envisaged here, since, as the cultural critic Matthew Arnold long ago thoughtfully observed, "Freedom is a very good horse to ride, but to ride somewhere." 3 To what destination, then, were the Iraqi people expected to ride the horse of freedom so selflessly conferred to them by force of arms?

The U.S. answer was spelled out on September 19, 2003, when Paul Bremer, head of the Coalition Provisional Authority, promulgated four orders that included "the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi U.S. businesses, full repatriation of foreign profits . . . the opening of Iraq's banks to foreign control, national treatment for foreign companies and . . . the elimination of nearly all trade barriers." 4 The orders were to apply to all areas of the economy, including public services, the media, manufacturing, services, transportation, finance, and construction. Only oil was exempt. A regressive tax system favored by conservatives called a flat tax was also instituted. The right to strike was outlawed and unions banned in key sectors. An Iraqi member of the Coalition Provisional Authority protested the forced imposition of "free market fundamentalism," describing it as "a flawed logic that ignores history." 5 Yet the interim Iraqi government appointed at the end of June 2004 was accorded no power to change or write new laws -- it could only confirm the decrees already promulgated.

What the United States evidently sought to impose upon Iraq was a full-fledged neoliberal state apparatus whose fundamental mission was and is to facilitate conditions for profitable capital accumulation for all comers, Iraqis and foreigners alike. The Iraqis were, in short, expected to ride their horse of freedom straight into the corral of neoliberalism. According to neoliberal theory, Bremers decrees are both necessary and sufficient for the creation of wealth and therefore for the improved well-being of the Iraqi people. They are the proper foundation for an adequate rule of law, individual liberty, and democratic governance. The insurrection that followed can in part be interpreted as Iraqi resistance to being driven into the embrace of free market fundamentalism against their own will

It is useful to recall, however, that the first great experiment with neoliberal state formation was Chile after Augusto Pinochet s coup almost thirty years to the day before Bremers decrees were issued, on the "little September 11th" of 1973. The coup, against the democratically elected and leftist social democratic government of Salvador Allende, was strongly backed by the CIA and supported by U.S. Secretary of State Henry Kissinger. It violently repressed all left-of-center social movements and political organizations and dismantled all forms of popular organization, such as community health centers in poorer neighborhoods. The labor market was "freed" from regulatory or institutional restraints -- trade union power, for example. But by 1973, the policies of import substitution that had formerly dominated in Latin American attempts at economic regeneration, and that had succeeded to some degree in Brazil after the military coup of 1964, had fallen into disrepute. With the world economy in the midst of a serious recession, something new was plainly called for. A group of U.S. economists known as "the Chicago boys," because of their attachment to the neoliberal theories of Milton Friedman, then teaching at the University of Chicago, were summoned to help reconstruct the Chilean economy. They did so along free-market lines, privatizing public assets, opening up natural resources to private exploitation, and facilitating foreign direct investment and free trade. The right of foreign companies to repatriate profits from their Chilean operations was guaranteed. Export-led growth was favored over import substitution. The subsequent revival of the Chilean economy in terms of growth, capital accumulation, and high rates of return on foreign investments provided evidence upon which the subsequent turn to more open neoliberal policies in both Britain (under Thatcher) and the United States (under Reagan) could be modeled. Not for the first time, a brutal experiment in creative destruction carried out in the periphery became a model for the formulation of policies in the center. 6

The fact that two such obviously similar restructurings of the state apparatus occurred at such different times in quite different parts of the world under the coercive influence of the United States might be taken as indicative that the grim reach of U.S. imperial power might lie behind the rapid proliferation of neoliberal state forms throughout the world from the mid-1970s onward. But U.S. power and recklessness do not constitute the whole story. It was not the United States, after all, that forced Margaret Thatcher to take the neoliberal path in 1979. And during the early 1980s, Thatcher was a far more consistent advocate of neoliberalism than Reagan ever proved to be. Nor was it the United States that forced China in 1978 to follow the path that has over time brought it closer and closer to the embrace of neoliberalism. It would be hard to attribute the moves toward neoliberalism in India and Sweden in 1992 to the imperial reach of the United States. The uneven geographical development of neoliberalism on the world stage has been a very complex process entailing multiple determinations and not a little chaos and confusion. So why, then, did the neoliberal turn occur, and what were the forces compelling it onward to the point where it has now become a hegemonic system within global capitalism?

Why the Neoliberal Turn?

Toward the end of the 1960s, global capitalism was falling into disarray. A significant recession occurred in early 1973 -- the first since the great slump of the 1930s. The oil embargo and oil price hike that followed later that year in the wake of the Arab-Israeli war exacerbated critical problems. The embedded capitalism of the postwar period, with its heavy emphasis on an uneasy compact between capital and labor brokered by an interventionist state that paid great attention to the social (i.e., welfare programs) and individual wage, was no longer working. The Bretton Woods accord set up to regulate international trade and finance was finally abandoned in favor of floating exchange rates in 1973. That system had delivered high rates of growth in the advanced capitalist countries and generated some spillover benefits -- most obviously to Japan but also unevenly across South America and to some other countries of South East Asia -- during the "golden age" of capitalism in the 1950s and early 1960s. By the next decade, however, the preexisting arrangements were exhausted and a new alternative was urgently needed to restart the process of capital accumulation. 7 How and why neoliberalism emerged victorious as an answer to that quandary is a complex story. In retrospect, it may seem as if neoliberalism had been inevitable, but at the time no one really knew or understood with any certainty what kind of response would work and how.

The world stumbled toward neoliberalism through a series of gyrations and chaotic motions that eventually converged on the so-called 'Washington Consensus" in the 1990s. The uneven geographical development of neoliberalism, and its partial and lopsided application from one country to another, testifies to its tentative character and the complex ways in which political forces, historical traditions, and existing institutional arrangements all shaped why and how the process actually occurred on the ground.

There is, however, one element within this transition that deserves concerted attention. The crisis of capital accumulation of the 1970s affected everyone through the combination of rising unemployment and accelerating inflation. Discontent was widespread, and the conjoining of labor and urban social movements throughout much of the advanced capitalist world augured a socialist alternative to the social compromise between capital and labor that had grounded capital accumulation so successfully in the postwar period. Communist and socialist parties were gaining ground across much of Europe, and even in the United States popular forces were agitating for widespread reforms and state interventions in everything ranging from environmental protection to occupational safety and health and consumer protection from corporate malfeasance. There was. in this, a clear political threat to ruling classes everywhere, both in advanced capitalist countries, like Italy and France, and in many developing countries, like Mexico and Argentina.

Beyond political changes, the economic threat to the position of ruling classes was now becoming palpable. One condition of the postwar settlement in almost all countries was to restrain the economic power of the upper classes and for labor to be accorded a much larger share of the economic pie. In the United States, for example, the share of the national income taken by the top 1 percent of earners fell from a prewar high of 16 percent to less than 8 percent by the end of the Second World War and stayed close to that level for nearly three decades. While growth was strong such restraints seemed not to matter, but when growth collapsed in the 1970s, even as real interest rates went negative and dividends and profits shrunk, ruling classes felt threatened. They had to move decisively if they were to protect their power from political and economic annihilation.

The coup d'état in Chile and the military takeover in Argentina, both fomented and led internally by ruling elites with U.S. support, provided one kind of solution. But the Chilean experiment with neoliberalism demonstrated that the benefits of revived capital accumulation were highly skewed. The country and its ruling elites along with foreign investors did well enough while the people in general fared poorly. This has been such a persistent effect of neoliberal policies over time as to be regarded a structural component of the whole project. Dumenil and Levy have gone so far as to argue that neoliberalism was from the very beginning an endeavor to restore class power to the richest strata in the population. They showed how from the mid-1980s onwards, the share of the top 1 percent of income earners in the United States soared rapidly to reach 15 percent by the end of the century. Other data show that the top 0.1 percent of income earners increased their share of the national income from 2 percent in 1978 to more than 6 percent by 1999. Yet another measure shows that the ratio of the median compensation of workers to the salaries of chief executive officers increased from just over thirty to one in 1970 to more than four hundred to one by 2000. Almost certainly, with the Bush administrations tax cuts now taking effect, the concentration of income and of wealth in the upper echelons of society is continuing apace. 8

And the United States is not alone in this: the top 1 percent of income earners in Britain doubled their share of the national income from 6.5 percent to 13 percent over the past twenty years. When we look further afield, we see extraordinary concentrations of wealth and power within a small oligarchy after the application of neoliberal shock therapy in Russia and a staggering surge in income inequalities and wealth in China as it adopts neoliberal practices. While there are exceptions to this trend -- several East and Southeast Asian countries have contained income inequalities within modest bounds, as have France and the Scandinavian countries -- the evidence suggests that the neoliberal turn is in some way and to some degree associated with attempts to restore or reconstruct upper-class power.

We can, therefore, examine the history of neoliberalism either as a utopian project providing a theoretical template for the reorganization of international capitalism or as a political scheme aimed at reestablishing the conditions for capital accumulation and the restoration of class power. In what follows, I shall argue that the last of these objectives has dominated. Neoliberalism has not proven effective at revitalizing global capital accumulation, but it has succeeded in restoring class power. As a consequence, the theoretical utopianism of the neoliberal argument has worked more as a system of justification and legitimization. The principles of neoliberalism are quickly abandoned whenever they conflict with this class project.

Neoliberalism has not proven effective at revitalizing global capital accumulation, but it has succeeded in restoring class power.

Toward the Restoration of Class Power

If there were movements to restore class power within global capitalism, then how were they enacted and by whom? The answer to that question in countries such as Chile and Argentina was simple: a swift, brutal, and self-assured military coup backed by the upper classes and the subsequent fierce repression of all solidarities created within the labor and urban social movements that had so threatened their power. Elsewhere, as in Britain and Mexico in 1976, it took the gentle prodding of a not yet fiercely neoliberal International Monetary Fund to push countries toward practices -- although by no means policy commitment -- to cut back on social expenditures and welfare programs to reestablish fiscal probity. In Britain, of course, Margaret Thatcher later took up the neoliberal cudgel with a vengeance in 1979 and wielded it to great effect, even though she never fully overcame opposition within her own party and could never effectively challenge such centerpieces of the welfare state as the National Health Service. Interestingly, it was only in 2004 that the Labour Government dared to introduce a fee structure into higher education. The process of neoliberalization has been halting, geographically uneven, and heavily influenced by class structures and other social forces moving for or against its central propositions within particular state formations and even within particular sectors, for example, health or education. 9

It is informative to look more closely at how the process unfolded in the United States, since this case was pivotal as an influence on other and more recent transformations. Various threads of power intertwined to create a transition that culminated in the mid-1990s with the takeover of Congress by the Republican Party. That feat represented in fact a neoliberal "Contract with America" as a program for domestic action. Before that dramatic denouement, however, many steps were taken, each building upon and reinforcing the other.

To begin with, by 1970 or so, there was a growing sense among the U.S. upper classes that the anti-business and anti-imperialist climate that had emerged toward the end of the 1960s had gone too far. In a celebrated memo, Lewis Powell (about to be elevated to the Supreme Court by Richard Nixon) urged the American Chamber of Commerce in 1971 to mount a collective campaign to demonstrate that what was good for business was good for America. Shortly thereafter, a shadowy but influential Business Round Table was formed that still exists and plays a significant strategic role in Republican Party politics. Corporate political action committees, legalized under the post-Watergate campaign finance laws of 1974, proliferated like wildfire. With their activities protected under the First Amendment as a form of free speech in a 1976 Supreme Court decision, the systematic capture of the Republican Party as a class instrument of collective (rather than particular or individual) corporate and financial power began. But the Republican Party needed a popular base, and that proved more problematic to achieve. The incorporation of leaders of the Christian right, depicted as a moral majority, together with the Business Round Table provided the solution to that problem. A large segment of a disaffected, insecure, and largely white working class was persuaded to vote consistently against its own material interests on cultural (anti-liberal, anti-Black, antifeminist and antigay), nationalist and religious grounds. By the mid-1990s, the Republican Party had lost almost all of its liberal elements and become a homogeneous right-wing machine connecting the financial resources of large corporate capital with a populist base, the Moral Majority, that was particularly strong in the U.S. South. 10

The second element in the U.S. transition concerned fiscal discipline. The recession of 1973 to 1975 diminished tax revenues at all levels at a time of rising demand for social expenditures. Deficits emerged everywhere as a key problem. Something had to be done about the fiscal crisis of the state; the restoration of monetary discipline was essential. That conviction empowered financial institutions that controlled the lines of credit to government. In 1975, they refused to roll over New York's debt and forced that city to the edge of bankruptcy. A powerful cabal of bankers joined together with the state to tighten control over the city. This meant curbing the aspirations of municipal unions, layoffs in public employment, wage freezes, cutbacks in social provision (education, public health, and transport services), and the imposition of user fees (tuition was introduced in the CUNY university system for the first time). The bailout entailed the construction of new institutions that had first rights to city tax revenues in order to pay off bond holders: whatever was left went into the city budget for essential services. The final indignity was a requirement that municipal unions invest their pension funds in city bonds. This ensured that unions moderate their demands to avoid the danger of losing their pension funds through city bankruptcy.

Such actions amounted to a coup d'état by financial institutions against the democratically elected government of New York City, and they were every bit as effective as the military overtaking that had earlier occurred in Chile. Much of the city's social infrastructure was destroyed, and the physical foundations (e.g., the transit system) deteriorated markedly for lack of investment or even maintenance. The management of New York's fiscal crisis paved the way for neoliberal practices both domestically under Ronald Reagan and internationally through the International Monetary Fund throughout the 1980s. It established a principle that, in the event of a conflict between the integrity of financial institutions and bondholders on one hand and the well-being of the citizens on the other, the former would be given preference. It hammered home the view that the role of government was to create a good business climate rather than look to the needs and well-being of the population at large. Fiscal redistributions to benefit the upper classes resulted in the midst of a general fiscal crisis.

Whether all the agents involved in producing this compromise in New York understood it at the time as a tactic for the restoration of upper-class power is an open question. The need to maintain fiscal discipline is a matter of deep concern in its own right and does not have to lead to the restitution of class dominance. It is unlikely, therefore, that Felix Rohatyn, the key merchant banker who brokered the deal between the city, the state, and the financial institutions, had the reinstatement of class power in mind. But this objective probably was very much in the thoughts of the investment bankers. It was almost certainly the aim of then-Secretary of the Treasury William Simon who, having watched the progress of events in Chile with approval, refused to give aid to New York and openly stated that he wanted that city to suffer so badly that no other city in the nation would ever dare take on similar social obligations again. 11

The third element in the U.S. transition entailed an ideological assault upon the media and upon educational institutions. Independent "think tanks" financed by wealthy individuals and corporate donors proliferated -- the Heritage Foundation in the lead -- to prepare an ideological onslaught aimed at persuading the public of the commonsense character of neoliberal propositions. A flood of policy papers and proposals and a veritable army of well-paid hired lieutenants trained to promote neoliberal ideas coupled with the corporate acquisition of media channels effectively transformed the discursive climate in the United States by the mid-1980s. The project to "get government off the backs of the people" and to shrink government to the point where it could be "drowned in a bathtub" was loudly proclaimed. With respect to this, the promoters of the new gospel found a ready audience in that wing of the 1968 movement whose goal was greater individual liberty and freedom from state power and the manipulations of monopoly capital. The libertarian argument for neoliberalism proved a powerful force for change. To the degree that capitalism reorganized to both open a space for individual entrepreneurship and switch its efforts to satisfy innumerable niche markets, particularly those defined by sexual liberation, that were spawned out of an increasingly individualized consumerism, so it could match words with deeds.

This carrot of individualized entrepreneurship and consumerism was backed by the big stick wielded by the state and financial institutions against that other wing of the 1968 movement whose members had sought social justice through collective negotiation and social solidarities. Reagan's destruction of the air traffic controllers (PATCO) in 1980 and Margaret Thatchers defeat of the British miners in 1984 were crucial moments in the global turn toward neoliberalism. The assault upon institutions, such as trade unions and welfare rights organizations, that sought to protect and further working-class interests was as broad as it was deep. The savage cutbacks in social expenditures and the welfare state, and the passing of all responsibility for their well-being to individuals and their families proceeded apace. But these practices did not and could not stop at national borders. After 1980, the United States, now firmly committed to neoliberalization and clearly backed by Britain, sought, through a mix of leadership, persuasion -- the economics departments of U.S. research universities played a major role in training many of the economists from around the world in neoliberal principles -- and coercion to export neoliberalization far and wide. The purge of Keynesian economists and their replacement by neoliberal monetarists in the International Monetary Fund in 1982 transformed the U.S.-dominated IMF into a prime agent of neoliberalization through its structural adjustment programs visited upon any state (and there were many in the 1980s and 1990s) that required its help with debt repayments. The Washington Consensus that was forged in the 1990s and the negotiating rules set up under the World Trade Organization in 1998 confirmed the global turn toward neoliberal practices. 12

The new international compact also depended upon the reanimation and reconfiguration of the U.S. imperial tradition. That tradition had been forged in Central America in the 1920s, as a form of domination without colonies. Independent republics could be kept under the thumb of the United States and effectively act, in the best of cases, as proxies for U.S. interests through the support of strongmen -- like Somoza in Nicaragua, the Shah in Iran, and Pinochet in Chile -- and a coterie of followers backed by military assistance and financial aid. Covert aid was available to promote the rise to power of such leaders, but by the 1970s it became clear that something else was needed: the opening of markets, of new spaces for investment, and clear fields where financial powers could operate securely. This entailed a much closer integration of the global economy with a well-defined financial architecture. The creation of new institutional practices, such as those set out by the IMF and the WTO, provided convenient vehicles through which financial and market power could be exercised. The model required collaboration among the top capitalist powers and the Group of Seven (G7), bringing Europe and Japan into alignment with the United States to shape the global financial and trading system in ways that effectively forced all other nations to submit. "Rogue nations," defined as those that failed to conform to these global rules, could then be dealt with by sanctions or coercive and even military force if necessary. In this way, U.S. neoliberal imperialist strategies were articulated through a global network of power relations, one effect of which was to permit the U.S. upper classes to exact financial tribute and command rents from the rest of the world as a means to augment their already hegemonic control. 13

Neoliberalism as Creative Destruction

In what ways has neoliberalization resolved the problems of flagging capital accumulation? Its actual record in stimulating economic growth is dismal. Aggregate growth rates stood at 3.5 percent or so in the 1960s and even during the troubled 1970s fell to only 2.4 percent. The subsequent global growth rates of 1.4 percent and 1.1 percent for the 1980s and 1990s, and a rate that barely touches 1 percent since 2000, indicate that neoliberalism has broadly failed to

In what ways has neoliberalization resolved the problems of flagging capital accumulation? Its actual record in stimulating economic growth is dismal. Aggregate growth rates stood at 3.5 percent or so in the 1960s and even during the troubled 1970s fell to only 2.4 percent. The subsequent global growth rates of 1.4 percent and 1.1 percent for the 1980s and 1990s, and a rate that barely touches 1 percent since 2000, indicate that neoliberalism has broadly failed to stimulate worldwide growth. 14 Even if we exclude from this calculation the catastrophic effects of the collapse of the Russian and some Central European economies in the wake of the neoliberal shock therapy treatment of the 1990s, global economic performance from the standpoint of restoring the conditions of general capital accumulation has been weak.

Despite their rhetoric about curing sick economies, neither Britain nor the United States achieved high economic performance in the 1980s. That decade belonged to Japan, the East Asian "Tigers," and West Germany as powerhouses of the global economy. Such countries were very successful, but their radically different institutional arrangements make it difficult to pin their achievements on neoliberalism. The West German Bundesbank had taken a strong monetarist line (consistent with neoliberalism) for more than two decades, a fact suggesting that there is no necessary connection between monetarism per se and the quest to restore class power. In West Germany, the unions remained strong and wage levels stayed relatively high alongside the construction of a progressive welfare state. One of the effects of this combination was to stimulate a high rate of technological innovation that kept West Germany well ahead in the field of international competition. Export-led production moved the country forward as a global leader.

In Japan, independent unions were weak or nonexistent, but state investment in technological and organizational change and the tight relationship between corporations and financial institutions (an arrangement that also proved felicitous in West Germany) generated an astonishing export-led growth performance, very much at the expense of other capitalist economies such as the United Kingdom and the United States. Such growth as there was in the 1980s (and the aggregate rate of growth in the world was lower even than that of the troubled 1970s) did not depend, therefore, on neoliberalization. Many European states therefore resisted neoliberal reforms and increasingly found ways to preserve much of their social democratic heritage while moving, in some cases fairly successfully, toward the West German model. In Asia, the Japanese model implanted under authoritarian systems of governance in South Korea, Taiwan, and Singapore also proved viable and consistent with reasonable equality of distribution. It was only in the 1990s that neoliberalization began to pay off for both the United States and Britain. This happened in the midst of a long-drawn-out period of deflation in Japan and relative stagnation in a newly unified Germany. Up for debate is whether the Japanese recession occurred as a simple result of competitive pressures or whether it was engineered by financial agents in the United States to humble the Japanese economy.

So why, then, in the face of this patchy if not dismal record, have so many been persuaded that neoliberalization is a successful solution? Over and beyond the persistent stream of propaganda emanating from the neoliberal think tanks and suffusing the media, two material reasons stand out. First, neoliberalization has been accompanied by increasing volatility within global capitalism. That success was to materialize somewhere obscured the reality that neoliberalism was generally failing. Periodic episodes of growth interspersed with phases of creative destruction, usually registered as severe financial crises. Argentina was opened up to foreign capital and privatization in the 1990s and for several years was the darling of Wall Street, only to collapse into disaster as international capital withdrew at the end of the decade. Financial collapse and social devastation was quickly followed by a long political crisis. Financial turmoil proliferated all over the developing world, and in some instances, such as Brazil and Mexico, repeated waves of structural adjustment and austerity led to economic paralysis.

On the other hand, neoliberalism has been a huge success from the standpoint of the upper classes. It has either restored class position to ruling elites, as in the United States and Britain, or created conditions for capitalist class formation, as in China, India, Russia, and elsewhere. Even countries that have suffered extensively from neoliberalization have seen the massive reordering of class structures internally. The wave of privatization that came to Mexico with the Salinas de Gortari administration in 1992 spawned unprecedented concentrations of wealth in the hands of a few people (Carlos Slim, tor example, who took over the state telephone system and became an instant billionaire).

With the media dominated by upper-class interests, the myth could be propagated that certain sectors failed because they were not competitive enough, thereby setting the stage for even more neoliberal reforms. Increased social inequality was necessary to encourage entrepreneurial risk and innovation, and these, in turn, conferred competitive advantage and stimulated growth. If conditions among the lower classes deteriorated, it was because they failed for personal and cultural reasons to enhance their own human capital through education, the acquisition of a protestant work ethic, and submission to work discipline and flexibility. In short, problems arose because of the lack of competitive strength or because of personal, cultural, and political failings. In a Spencerian world, the argument went, only the fittest should and do survive. Systemic problems were masked under a blizzard of ideological pronouncements and a plethora of localized crises.

If the main effect of neoliberalism has been redistributive rather than generative, then ways had to be found to transfer assets and channel wealth and income either from the mass of the population toward the upper classes or from vulnerable to richer countries. I have elsewhere provided an account of these processes under the rubric of accumulation by dispossession. 15 By this, I mean the continuation and proliferation of accretion practices that Marx had designated as "primitive" or "original" during the rise of capitalism. These include

(1) the commodification and privatization of land and me forceful expulsion or peasant populations {as in Mexico and India in recent times);

(2) conversion of various forms of property rights (common, collective, state, etc.) into exclusively private property rights;

(3) suppression of rights to the commons;

(4) commodification of labor power and the suppression of alternative (indigenous) forms of production and consumption;

(5) colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); (6) monetization of exchange and taxation, particularly of land;

(7) the slave trade (which continues, particularly in the sex industry); and

(8) usury, the national debt, and, most devastating of all, the use of the credit system as radical means of primitive accumulation.

The state, with its monopoly of violence and definitions of legality, plays a crucial role in backing and promoting these processes. To this list of mechanisms, we may now add a raft of additional techniques, such as the extraction of rents from patents and intellectual property rights and the diminution or erasure of various forms of communal property rights -- such as state pensions, paid vacations, access to education, and health care -- won through a generation or more of social democratic struggles. The proposal to privatize all state pension rights (pioneered in Chile under Augusto Pinochet s dictatorship) is, for example, one of the cherished objectives of neoliberals in the United States.

In the cases of China and Russia, it might be reasonable to refer to recent events in "primitive" and "original" terms, but the practices that restored class power to capitalist elites in the United States and elsewhere are best described as an ongoing process of accumulation by dispossession that grew rapidly under neoliberalism. In what follows, I isolate four main elements.

1. Privatization

The corporatization, commodification, and privatization of hitherto public assets have been signal features of the neoliberal project. Its primary aim has been to open up new fields for capital accumulation in domains formerly regarded off-limits to the calculus of profitability. Public utilities of all lands (water, telecommunications, transportation), social welfare provision (public housing, education, health care, pensions), public institutions (such as universities, research laboratories, prisons), and even warfare (as illustrated by the "army" of private contractors operating alongside the armed forces in Iraq) have all been privatized to some degree throughout the capitalist world.

Intellectual property rights established through the so-called TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement within the WTO defines genetic materials, seed plasmas, and all manner of other products as private property. Rents for use can then be extracted from populations whose practices had played a crucial role in the development of such genetic materials. Bio-piracy is rampant, and the pillaging of the worlds stockpile of genetic resources is well under way to the benefit of a few large pharmaceutical companies. The escalating depletion of the global environmental commons (land, air, water) and proliferating habitat degradations that preclude anything but capital-intensive modes of agricultural production have likewise resulted from the wholesale commodification of nature in all its forms. The commodification (through tourism) of cultural forms, histories, and intellectual creativity entails wholesale dispossessions (the music industry is notorious for the appropriation and exploitation of grassroots culture and creativity). As in the past, the power of the state is frequently used to force such processes through even against popular will. The rolling back of regulatory frameworks designed to protect labor and the environment from degradation has entailed the loss of rights. The reversion of common property rights won through years of hard class struggle (the right to a state pension, to welfare, to national health care) into the private domain has been one of the most egregious of all policies of dispossession pursued in the name of neoliberal orthodoxy.

The corporatization, commodification, and privatization of hitherto public assets have been signal features of the neoliberal project.

All of these processes amount to the transfer of assets from the public and popular realms to the private and class-privileged domains. Privatization, Arundhati Roy argued with respect to the Indian case, entails "the transfer of productive public assets from the state to private companies. Productive assets include natural resources: earth, forest, water, air. These are the assets that the state holds in trust for the people it represents. ... To snatch these away and sell them as stock to private companies is a process of barbaric dispossession on a scale that has no parallel in history." 16

2. Financialization

The strong financial wave that set in after 1980 has been marked by its speculative and predatory style. The total daily turnover of financial transactions in international markets that stood at $2.3 billion in 1983 had risen to $130 billion by 2001. This $40 trillion annual turnover in 2001 compares to the estimated $800 billion that would be required to support international trade and productive investment flows. 17 Deregulation allowed the financial system to become one of the main centers of redistributive activity through speculation, predation, fraud, and thievery. Stock promotions; Ponzi schemes; structured asset destruction through inflation; asset stripping through mergers and acquisitions; and the promotion of debt incumbency that reduced whole populations, even in the advanced capitalist countries, to debt peonage -- to say nothing of corporate fraud and dispossession of assets, such as the raiding of pension hinds and their decimation by stock and corporate collapses through credit and stock manipulations -- are all features of the capitalist financial system.

The emphasis on stock values, which arose after bringing together the interests of owners and managers of capital through the remuneration of the latter in stock options, led, as we now know, to manipulations in the market that created immense wealth for a few at the expense of the many. The spectacular collapse of Enron was emblematic of a general process that deprived many of their livelihoods and pension rights. Beyond this, we also must look at the speculative raiding carried out by hedge funds and other major instruments of finance capital that formed the real cutting edge of accumulation by dispossession on the global stage, even as they supposedly conferred the positive benefit to the capitalist class of spreading risks.

3. The management and manipulation of crises

Beyond the speculative and often fraudulent froth that characterizes much of neoliberal financial manipulation, there lies a deeper process that entails the springing of the debt trap as a primary means of accumulation by dispossession. Crisis creation, management, and manipulation on the world stage has evolved into the fine art of deliberative redistribution of wealth from poor countries to the rich. By suddenly raising interest rates in 1979, Paul Volcker, then chairman of the U.S. Federal Reserve, raised the proportion of foreign earnings that borrowing countries had to put to debt-interest payments. Forced into bankruptcy, countries like Mexico had to agree to structural adjustment. While proclaiming its role as a noble leader organizing bailouts to keep global capital accumulation stable and on track, the United States could also open the way to pillage the Mexican economy through deployment of its superior financial power under conditions of local crisis. This was what the U.S. Treasury/Wall Street/IMF complex became expert at doing everywhere. Volker s successor, Alan Greenspan, resorted to similar tactics several times in the 1990s. Debt crises in individual countries, uncommon in the 1960s, became frequent during the 1980s and 1990s. Hardly any developing country remained untouched and in some cases, as in Latin America, such crises were frequent enough to be considered endemic. These

debt crises were orchestrated, managed, and controlled both to rationalize the system and to redistribute assets during the 1980s and 1990s. Wade and Veneroso captured the essence of this trend when they wrote of the Asian crisis -- provoked initially by the operation of U.S.-based hedge funds -- of 1997 and 1998:

Financial crises have always caused transfers of ownership and power to those who keep their own assets intact and who are in a position to create credit, and the Asian crisis is no exception . . . there is no doubt that Western and Japanese corporations are the big winners. . . . The combination of massive devaluations pushed financial liberalization, and IMF-facilitated recovery may even precipitate the biggest peacetime transfer of assets from domestic to foreign owners in the past fifty years anywhere in the world, dwarfing the transfers from domestic to U.S. owners in Latin America in the 1980s or in Mexico after 1994. One recalls the statement attributed to Andrew Mellon: "In a depression assets return to their rightful owners." 18

The analogy to the deliberate creation of unemployment to produce a pool of low-wage surplus labor convenient for further accumulation is precise. Valuable assets are thrown out of use and lose their value. They lie fallow and dormant until capitalists possessed of liquidity choose to seize upon them and breathe new life into them. The danger, however, is that crises can spin out of control and become generalized, or that revolts will arise against the system that creates them. One of the prime functions of state interventions and of international institutions is to orchestrate crises and devaluations in ways that permit accumulation by dispossession to occur without sparking a general collapse or popular revolt. The structural adjustment program administered by the Wall Street/Treasury/ IMF complex takes care of the first function. It is the job of the comprador neoliberal state apparatus (backed by military assistance from the imperial powers) to ensure that insurrections do not occur in whichever country has been raided. Yet signs of popular revolt have emerged, first with the Zapatista uprising in Mexico in 1994 and later in the generalized discontent that informed anti-globalization movements such as the one that culminated in Seattle in 1999.

4. State redistributions

The state, once transformed into a neoliberal set of institutions, becomes a prime agent of redistributive policies, reversing the flow from upper to lower classes that had been implemented during the preceding social democratic era. It does this in the first instance through privatization schemes and cutbacks in government expenditures meant to support the social wage. Even when privatization appears as beneficial to the lower classes, the long-term effects can be negative. At first blush, for example, Thatchers program for the privatization of social housing in Britain appeared as a gift to the lower classes whose members could now convert from rental to ownership at a relatively low cost, gain control over a valuable asset, and augment their wealth. But once the transfer was accomplished, housing speculation took over particularly in prime central locations, eventually bribing or forcing low-income populations out to the periphery in cities like London and turning erstwhile working-class housing estates into centers of intense gentrification. The loss of affordable housing in central areas produced homelessness for many and extraordinarily long commutes for those who did have low-paying service jobs. The privatization of the ejidos (indigenous common property rights in land under the Mexican constitution) in Mexico, which became a central component of the neoliberal program set up during the 1990s, has had analogous effects on the Mexican peasantry, forcing many rural dwellers into the cities in search of employment. The Chinese state has taken a whole series of draconian measures through which assets have been conferred upon a small elite to the detriment of the masses.

The neoliberal state also seeks redistributions through a variety of other means such as revisions in the tax code to benefit returns on investment rather than incomes and wages, promotion of regressive elements in the tax code (such as sales taxes), displacement of state expenditures and free access to all by user fees (e.g., on higher education), and the provision of a vast array of subsidies and tax breaks to corporations. The welfare programs that now exist in the United States at federal, state, and local levels amount to a vast redirection of public moneys for corporate benefit (directly as in the case of subsidies to agribusiness and indirectly as in the case of the military-industrial sector), in much the same way that the mortgage interest rate tax deduction operates in the United States as a massive subsidy to upper-income home owners and the construction of industry. Heightened surveillance and policing and, in the case of the United States, the incarceration of recalcitrant elements in the population indicate a more sinister role of intense social control. In developing countries, where opposition to neoliberalism and accumulation by dispossession can be stronger, the role of the neoliberal state quickly assumes that of active repression even to the point of low level warfare against oppositional movements (many of which can now conveniently be designated as terrorist to garner U.S. military assistance and support) such as the Zapatistas in Mexico or landless peasants in Brazil.

In effect, reported Roy, "India's rural economy, which supports seven hundred million people, is being garroted. Farmers who produce too much are in distress, farmers who produce too little are in distress, and landless agricultural laborers are out of work as big estates and farms lay off their workers. They're all flocking to the cities in search of employment." 19 In China, the estimate is that at least half a billion people will have to be absorbed by urbanization over the next ten years if rural mayhem and revolt is to be avoided. What those migrants will do in the cities remains unclear, though the vast physical infrastructural plans now in the works will go some way to absorbing the labor surpluses released by primitive accumulation.

The redistributive tactics of neoliberalism are wide-ranging, sophisticated, frequently masked by ideological gambits, but devastating for the dignity and social well-being of vulnerable populations and territories. The wave of creative destruction neoliberalization has visited across the globe is unparalleled in the history of capitalism. Understandably, it has spawned resistance and a search for viable alternatives.

[Oct 10, 2017] Harsh punishment for financial crimes in Vietnam including the death penalty

Sep 39, 2017 | marknesop.wordpress.com

Harsh punishment for financial crimes in Vietnam including the death penalty:

https://www.yahoo.com/news/vietnam-court-sentences-death-petrovietnam-ex-chairman-mass-062532598–finance.html

One could think that financial crimes would be treated with harsh punishment in a capitalist economy where the rules of fair competition would be the 11th commandment. However, and no need to cite references, the most egregious economic crimes (think 2008) go unpunished. Yet, microscopic economic crimes (e.g. shoplifting) often involve jail time in harsh facilities. I suspect that Vietnam is the exact opposite in that regard.

No great revelation here but the difference between the two countries is that the US has a class based system whereas Vietnam does not.

The combination of a communist party and capitalism could be a practical way to obtain the benefits of capitalism/competition with the party enforcing the law and guiding the overall direction of the economy. Perhaps that is a major reason for China's stunning economic growth. If China's success continues, that model could take root (under a different name and modified for local circumstances) in developing countries that do not have the baggage of the Western class system. Hope so.

Northern Star , September 30, 2017 at 1:36 pm
"The combination of a communist party and capitalism could be a practical way to obtain the benefits of capitalism/competition with the party enforcing the law and guiding the overall direction of the economy."

Ummm.. I thought that capitalism and communism are operationally fundamentally incompatible:
https://www.quora.com/Is-Communism-compatible-with-Capitalism
https://www.quora.com/Why-couldnt-capitalism-and-communism-coexist

Some of the Quora comments are well thought out and instructive ..

For Stooge Quants or Logicians:
https://www.researchgate.net/post/What_has_become_of_the_Axiomatic_method_of_economics
https://larspsyll.wordpress.com/2014/12/28/axiomatic-economics-total-horseshit/

OTOH you can just cut to the chase and read this with plenty of Vodka
http://www.angelfire.com/un/corosus/books/Asimov_the_foundation.pdf

Patient Observer , September 30, 2017 at 4:01 pm
The communists (or people or wise and sage rulers or religious leadership) set the stage, the laws and enforce compliance. The capitalists act within the confines of those laws without opportunity to evade or subvert. No family accumulation of capital would be permitted (no dynasties) and corporation ownership would be distributed on a broad base. It would be a utopian world that may not be achievable but still possible. China has found a formula that seems to work and it could work for other countries with a similar cultural experience.
Jen , October 1, 2017 at 5:06 am
Whether capitalism and Communism can co-exist or be made to co-exist would depend very much on how the society in question defines private property and private property ownership, and how its laws regulate and police ownership and transfers of ownership. Would individuals and companies be allowed to own land or only be able to lease it from governments or communities? If someone dies or if a company is liquidated or bought by another company, should any land that person or company was holding at the time be returned to the government or the community? Can any decision to return the land be challenged? These are some questions that would have to be addressed and resolved for the two ideologies to co-exist.
Patient Observer , October 1, 2017 at 4:43 pm
By any realistic definition, China is ruled by the Communist party yet China has large numbers of billionaire and huge numbers of millionaires so one can say that communism, when it is in charge of the country , can tolerate a capitalistic element. I doubt that the reverse would be possible given the mandate of capitalism to endless expand, acquire and control.

Land can only be leased I believe. I do not know about inheritance laws but I would suppose creation of capitalistic dynasties would be frowned upon.

[Oct 08, 2017] On the history and grand duplicity of neoliberalism

Highly recommended!
Notable quotes:
"... Generally speaking, neoliberalism is a set of social, cultural, and political-economic forces that puts competition at the center of social life. According to neoliberalism, government's charge is not the care and security of citizens, but rather the promotion of market competition. In the neoliberal imagination, public social infrastructures (such as social security, unemployment benefits, public education) are believed to squash entrepreneurialism and individualism and breed dependency and bureaucracy. ..."
"... 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. ..."
"... 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 tow ard the new' end of expanding private markets. ..."
"... At this point, neoliberalism was still swimming upstream, as the postwar era ushered in a new' conjuncture that David Harvey calls embedded liberalism. ..."
"... Embedded liberalism was premised on a "class compromise" between the interests of workers and those of capitalists. In the name of peace, general prosperity, and global capitalism, a hegemonic consensus emerged "that the state should focus on full employment, economic growth, and the welfare of its citizens, and that state power should be freely deployed, alongside of or, if necessary, intervening in or even substituting for market processes to achieve these ends." 4 ..."
"... Neoliberalism developed largely as a coordinated political response to the hegemony of embedded liberalism. As Harvey explains, it was a project "to disembed capital from these constraints." 6 Indeed, the struggle for neoliberal hegemony waged a robust and successful class war on the "compromise" of embedded liberalism by developing, promoting, and implementing a new version of individual-liberty liberalism. ..."
"... As the system of embedded liberalism was taking root and establishing its dominance in national and international affairs, neoliberals were working on the ground: creating think tanks, forging political alliances, and infiltrating universities. During this second phase, neoliberalism emerged as a "thought collective": a "multilevel, multiphase, multi-sector approach to the building of political capacity to incubate, critique, and promulgate ideas." 7 ..."
"... The Neoliberal Thought Collective, as Philip Mirowski coined it, was a vertically integrated network of organizations and people focused on radically shifting the [concensus. ] ..."
Oct 08, 2017 | www.amazon.com

Quote from the book is courtesy of Amazon preview of the book Neoliberalism (Key Ideas in Media & Cultural Studies)

Generally speaking, neoliberalism is a set of social, cultural, and political-economic forces that puts competition at the center of social life. According to neoliberalism, government's charge is not the care and security of citizens, but rather the promotion of market competition. In the neoliberal imagination, public social infrastructures (such as social security, unemployment benefits, public education) are believed to squash entrepreneurialism and individualism and breed dependency and bureaucracy.

Competition, on the other hand, is heralded to ensure efficiency and incite creativity. Spurred by competition, individuals, organizations, companies, and even the government itself, will seek to optimize and innovate, creating a truly free social world where the best people and ideas come out on top. Put a little differently, neoliberalism aims to create a market-based society, where there are only competing private enterprises.

Since the late 1970s, neoliberal ideas have increasingly guided the policies and practices of governments and other social institutions, and as a result, we have come to live in competition with ourselves, others, and our social world.

...In a neoliberal society, the capitalist market is no longer imagined as a distinct arena where goods are valued and exchanged; rather, the market is, or ideally should be, the basis for all human activities.

...We are necessarily interdependent beings, vulnerable and connected to one another, as our lives are supported and made possible by a number of infrastructures (e.g., schools, roads and bridges, communication) that bring us into relation with one another.

We need each other. We need social cooperation and a commitment to a common, collective good if we are all going to make it in this world.

Neoliberalism and its diffusion of competition throughout society make the infrastructures that undergird our lives profoundly unstable, while simultaneously diminishing our senses of interdependence and social connection. As we will see, living in competition paradoxically undercuts what enables our lives -- that is, our social connections and infrastructures -- while telling us to assume more and more responsibility through self-enclosed individualism, thereby squashing our capacities for coming together, trusting and caring for each other, and organizing for social change.

... ... ...

In a culture composed ot anxious, sell-enclosed individuals, where market competition defines all of social life, we need now, more than ever, to see the social constructedness of our identities, worlds, and everyday lives. For neoliberalism's culture of living in competition is so entrenched that only a cultural studies perspective can produce the forms of knowledge we need to imagine and build new worlds. Indeed, a cultural studies perspective understands that possibilities of resistance and transformation are everywhere. As Grossberg puts it,

power is never able to totalize itself. There are always fissures and fault lines that may become the active sites of change. Power never quite accomplishes everything it might like to everywhere, and there is always the possibility of changing the structures and organization of power.7

See, here's the thing; there's a gigantic paradox at the heart of neoliberal culture. On one hand, as we will see, neoliberalism presents itself as a totalizing situation where resistance and transformation seem impossible, as living in competition has come to define all aspects of our lives. On the other hand, though, neoliberalism's power over our lives is incredibly tenuous; for, as mentioned earlier, I am convinced that most of us are yearning for a vastly different world, one that is built upon and nurtures our interdependencies and shared vulnerabilities, not self-enclosed individualism and living in competition.

... ... ...

1 should note that, within academia, neoliberalism is a controversial term. Scholars continue to debate its usefulness. On one hand, for some, neoliberalism is a buzzword, a catchphrase; it is a term that is so often repeated and invoked that it has lost its meaning. According to these critiques, neoliberalism is presented as a scary monster that is everywhere and nowhere all at once. It has come to figure as shorthand for everything that is evil in our world, and as a result, it ends up teaching us very little about what specifically is wrong, how exactly we got here, and what actually can be done to change course. Thus, many scholars advocate not using the term at all. On the other hand, other scholars prefer not to use the term because they argue that it is misleading. For them, neoliberalism is simply an advanced form of liberal capitalism. There's nothing really new or neo here, so why overstate and confuse things with the prefix?

However, despite these critiques, I hang onto the term neoliberalism. My wager in doing so is that writing this book as a critical study of neoliberal culture gives us a way to map our current conjuncture. It allows us to hold together the "specific ensemble of social, cultural, and economic forces" at work in our world and, thus, to locate our lives in interrelation with those of others. Indeed, I have found during my work with students over the years that studying neoliberalism enables us to see our interconnectedness and the new ways of living that sensing our interconnectedness opens up. We all suffer when we're forced to live in competition as self-enclosed individuals. Studying the neoliberal conjuncture allows us to clearly identify the roots of our suffering, and to tr ace our connections with others who are also suffering, although often in variegated ways. In other words, when w'e map our conjuncture, we can see how our different lives are lived on common ground, which is a crucial step to creating a world beyond competition.

... ... ...

A NEW HEGEMON

THE RISE OF NEOLIBERALISM

CHAPTER OVERVIEW

At this point, you might have a sense of what neoliberalism is, but you're probably still fuzzy on the details. This chapter starts to clear things up by charting the making of our neoliberal conjuncture. By tracing the history and development of neoliberalism, we will leant how competition came to be the driving force in our everyday lives. Specifically, we will examine the rise of neoliberal hegemony in four phases.

Table 1.1 Four Phases of Neoliberalism

As we will see, neoliberalism is far from natur and necessary; rather, it represents a clear political project that was organized, struggled for, and won.

A NEW HEGEMONY

We begin our investigation with a historical account of the rise of neoliberal hegemony. Hegemony is a concept developed by Italian Marxist Antonio Gramsci. Gramsci was keen to account for the definitive role that culture played in legitimizing and sustaining capitalism and its exploitation of the working classes. In our own context of extreme economic inequality, 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.

In other words, if we want to really understand why and how phenomena like inequality and exploitation exist, we have to attend to the particular, contingent, and often contradictory ways in which culture gets mobilized to forward the interests and power of the ruling classes. 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 tow ard 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.

It is important to see that the gradual shift from liberal to neoliberal hegemony was not inevitable or natural, nor was it easy. Rather, what we now r call neoliberalism is the effect of a sustained hegemonic struggle over the course of the twentieth and twentyfirst centuries to construct and maintain a new political equilibrium. Simply put, neoliberalism was, and continues to be, struggled over, fought for, and w'on.

In Masters of the Universe: Hayek, Friedman, and the Birth of Neoliheral Politics, Daniel Stedman Jones charts the history of the neoliberal project in three phases. The first phase saw the development of neoliberal ideas and philosophies in Europe during the years between World War I and World War II, as a relatively small group of economists (including most notably those from Austria, Germany, and France), wrestling with the rise of fascism, communism, and socialism, sought to envision a new liberal society that would protect individual liberties and free markets. The second phase w as a period of institution building, knowledge production, and organizing that enabled neoliberalism to cultivate a powerful base in culture and politics, especially in the U.S. and United Kingdom. During this phase, neoliberalism developed into a "thought collective" and full-fledged political movement. In the third phase, neoliberal ideas migrated from the margins to the center of political life as they came to shape global trade and development suggested by the theory of hegemony, none of these phases were neat and clean; each was shot through with struggle and contingency.

1 am adding a fourth phase, which is the focus of this book. Here neoliberalism is not only a set of economic policies and political discourses, but also a deeply entrenched sensibility of w ho we are and can become and of what is possible to do, both individually and collectively. It is what Raymond Williams called "a structure of feeling." Thanks to a convergence of different social, economic, and cultural forces, which we will explore throughout the following chapters, competition has become fully embedded in our lifeworlds: it is our culture, our conjuncture, the air we breathe. More specifically, this fourth phase is characterized by widespread precarity, where crisis becomes ordinary, a constant feature of everyday life. As we will learn in coming chapters, we are prompted to confront the precarity neoliberalism brings to our lives with more neoliberalism, that is, with living in competition and self-enclosed individualism.

PHASE I: THEORETICAL INNOVATION

The Crisis of Liberalism and the Birth of the Social Welfare State

Neoliberalism emerged out of the crisis of liberalism that ultimately came to a head in the early twentieth century. It is crucial to understand that liberal hegemony was never a coherent, unified phenomenon. Rather, it developed around a central political antagonism. On one side were those who championed individual liberty (especially private property rights and free markets) above all else. They argued against government intervention in private life, especially in the market. On the other side, social reformers believed that government should be pursued for the common good and not just for individual liberties. In the decades leading up to the Great Depression, it became clear that the individual-liberty side, which had long been dominant, was inadequate for managing huge transformations in capitalism that were underway. These transformations included industrialization, urbanization, and internationalization, as well as the rise of large-scale corporate firms that squeezed smaller market actors. Huge gaps formed between the political-economic elite, the middle classes, and the poor. Simply put, liberalism was in crisis.

During this time of social, cultural, and economic upheaval, those espousing the common good gained political ground. Specifically, the misery and devastation of the Great Depression solidified the gains for social reformers, opening a new era where a new, common-good liberalism began to prevail. In the United States, President Franklin

Roosevelt's administration passed a comprehensive set of social policies designed to protect individuals from the unpredictable and often brutal operations of capitalism. These included the following:

  1. Reforming banking: The Glass-Steagall Act of 1933 set up regulatory agencies to provide oversight to the stock markets and financial sector, while enforcing the separation of commercial banking and speculative investment. Simply put, banks couldn't gamble with your savings and future.
  2. Strengthening labor: In 1935, the National Recovery Administration and the National Labor Relations Act were passed to recognize labor unions and the rights of workers to organize. At the same time, the administration spurred employment through the Public Works Administration, the Civil Works Administration, and the Works Progress Administration, while guaranteeing workers a dignified retirement with the Social Security Act of 1935.
  3. Promoting housing: A range of programs, policies, and agencies were established, including the Federal Housing Administration and the U.S. Housing Authority, to encourage homeownership and provide housing to the poor and homeless. 1

Taken together, these policies marked the birth of the so-called social welfare state, albeit one that was limited in scope and often highly exclusionary in practice. For example, a universal health care program was never realized. Many social groups, including African-Americans, migrant farm workers, and women, were prohibited by law from receiving federal benefits such as social security or unemployment. 3 Additionally, institutional racism plagued (as it still does) housing and banking institutions.

The Walter Lippmann Colloquium and the Birth of Neoliberalism

It is helpful to trace the emergence of our neoliberal conjuncture back to this moment where the common good was starting to win the day via the establishment of a limited and exclusionary social welfare state. For, despite the fact that these social welfare policies effectively "saved" capitalism from destroying itself, the individual-liberty side was deeply troubled. They feared that a new and established the Mont Pelerin Society (MPS) in 1947 to continue the work of dreaming up a new individual-liberty liberalism.

At this point, neoliberalism was still swimming upstream, as the postwar era ushered in a new' conjuncture that David Harvey calls embedded liberalism.

Embedded liberalism was premised on a "class compromise" between the interests of workers and those of capitalists. In the name of peace, general prosperity, and global capitalism, a hegemonic consensus emerged "that the state should focus on full employment, economic growth, and the welfare of its citizens, and that state power should be freely deployed, alongside of or, if necessary, intervening in or even substituting for market processes to achieve these ends." 4

A central piece of the embedded liberal compromise was the Bretton Woods Accord, which attempted to stabilize the global economy by re-fixing currency rates to the gold standard. The idea was that national economies shouldn't be threatened by currency speculation in the financial markets. All this meant that an infrastructure emerged to protect citizens' economic and social security. To ensure the common good, capitalism must be embedded within "a web of social and political constraints." 5

Neoliberalism developed largely as a coordinated political response to the hegemony of embedded liberalism. As Harvey explains, it was a project "to disembed capital from these constraints." 6 Indeed, the struggle for neoliberal hegemony waged a robust and successful class war on the "compromise" of embedded liberalism by developing, promoting, and implementing a new version of individual-liberty liberalism.

The Neoliberal Thought Collective

As the system of embedded liberalism was taking root and establishing its dominance in national and international affairs, neoliberals were working on the ground: creating think tanks, forging political alliances, and infiltrating universities. During this second phase, neoliberalism emerged as a "thought collective": a "multilevel, multiphase, multi-sector approach to the building of political capacity to incubate, critique, and promulgate ideas." 7

The Neoliberal Thought Collective, as Philip Mirowski coined it, was a vertically integrated network of organizations and people focused on radically shifting the [concensus. ]

[Oct 07, 2017] Goldman Sachs' Abacus Program had its banksters create designed-to-fail financial products for customers (they were called 'muppets'), so that GS could then bet against them!

Oct 07, 2017 | discussion.theguardian.com

KSurin -> Elysiumfire , 1 Jan 2014 19:12

I wondered how a bank could sell toxic assets to another financial institution, and even more, that other institutions would buy them.

Or flogging designed to fail financial products to one's own customers?

Goldman Sachs' Abacus Program had its banksters create designed-to-fail financial products for customers (they were called 'muppets'), so that GS could then bet against them!

[Oct 05, 2017] How Billionaires become Billionaires

Notable quotes:
"... A small number of the financial swindlers, including executives from Wall Street's leading banks (Goldman Sachs, J. P. Morgan etc), paid fines – but no one went to prison for the gargantuan fraud that drove millions of Americans into misery. ..."
Oct 05, 2017 | www.unz.com

Through favorable legal rulings and illegal foreclosures, the bankers evicted 9.3 million families. Over 20 million individuals lost their properties, often due to illegal or fraudulent debts.

A small number of the financial swindlers, including executives from Wall Street's leading banks (Goldman Sachs, J. P. Morgan etc), paid fines – but no one went to prison for the gargantuan fraud that drove millions of Americans into misery.

There are other swindler bankers, like the current Secretary of Treasury Steve Mnuchin, who enriched themselves by illegally foreclosing on thousands of homeowners in California. Some were tried; all were exonerated, thanks to the influence of Democratic political leaders during the Obama years.

[Oct 04, 2017] The Trump-Goldman Sachs Tax Cut for the Rich by Jack Rasmus

Notable quotes:
"... The Trump Plan is actually the product of the former Goldman-Sachs investment bankers who have been in charge of Trump's economic policy since he came into office. Steve Mnuchin, the Treasury Secretary, and Gary Cohn, director of Trump's economic council, are the two authors of the Trump tax cuts. They put it together. They are also both former top executives of the global shadow bank called Goldman Sachs. ..."
"... Given that economic policy under Trump is being driven by bankers, it's not surprising that the CEO of the biggest US banks, Morgan Stanley, admitted just a few months ago that a reduction of the corporate nominal income tax rate from the current 35% nominal rate to a new nominal rate of 20% will provide the bank an immediate windfall gain of 15%-20% in earnings. ..."
"... Big multinational companies like Apple, i.e. virtually all the big tech companies, big Pharma corporations, banks and oil companies, pay no more than 12-13% effective tax rates today -- not the 35% nominal rate. ..."
"... Tech, big Pharma, banks and oil companies are the big violators of offshore cash hoarding/tax avoidance schemes. Microsoft's effective global tax rate last year was only 12%. IBM's even less, at 10%. The giant drug company, Pfizer paid 18% and the oil company, Chevron 14%. One of the largest US companies in the world, General Electric, paid only 1%. When their nominal rate is reduced to 20% under the Trump plan, they'll pay even less, likely in the single digits, if that. ..."
"... Tax cutting for business classes and the 1% has always been a fundamental element of Neoliberal economic policy ever since the Reagan years (and actually late Jimmy Carter period). Major tax cut legislation occurred in 1981, 1986, and 1997-98 under Clinton. George W. Bush then cut taxes by $3.4 trillion in 2001-04, 80% of which went to the wealthiest households and businesses. He cut taxes another $180 billion in 2008. Obama cut another $300 billion in his 2009 so-called recovery program. When that faltered, it was another $800 billion at year end 2010. He then extended the Bush tax cuts that were scheduled to expire in 2011 two more years. That costs $450 billion each year. And in 2013, cutting a deal with Republicans called the 'fiscal cliff' settlement, he extended the Bush tax cuts of the prior decade for another ten years. That cost a further $5 trillion. Now Trump wants even more. He promised $5 trillion in tax cuts during his election campaign. So the current proposal is only half of what he has in mind perhaps. ..."
"... Neoliberal tax cutting in the US has also been characterized by the 'tax cut shell game'. The shell game is played several ways. ..."
"... To cover the shell game, an overlay of ideology covers up what's going on. There's the false argument that 'tax cuts create jobs', for which there's no empirical evidence. There's the claim US multinational corporations pay a double tax compared to their competitors, when in fact they effectively pay less. There's the lie that if corporate taxes are cut they will automatically invest the savings, when in fact what they do is invest offshore, divert the savings to stock and bond and other financial markets, boost their dividend and stock buybacks, or stuff the savings in their offshore subsidiaries to avoid paying taxes. ..."
"... All these neoliberal false claims, arguments, and outright lies continue today to justify the Trump-Goldman Sachs tax plan -- which is just the latest iteration of neoliberal tax policy and tax offensive in the US. The consequences of the Trump plan, if it is passed, will be the same as the previous tax giveaways to the 1% and their companies: it will redistribute income massively from the middle and working classes to the rich. Income inequality will continue to worsen dramatically. ..."
"... Nothing will change so long as the Corporate Party of America is allowed to continue its neoliberal tax giveaways, its tax cutting 'shell games', and is allowed to continue to foment its ideological cover up. ..."
Oct 04, 2017 | www.counterpunch.org

Contradicting Trump, the independent Tax Policy Center has estimated in just the first year half of the $2 trillion plus Trump cuts will go to the wealthiest 1% households that annually earn more than $730,000. That's an immediate income windfall to the wealthiest 1% households of 8.5%, according to the Tax Policy Center. But that's only in the first of ten years the cuts will be in effect. It gets worse over time.

According to the Tax Policy Center, "Taxpayers in the top one percent (incomes above $730,000), would receive about 50 percent of the total tax benefit [in 2018]". However, "By 2027, the top one percent would get 80 percent of the plan's tax cuts while the share for middle-income households would drop to about five percent." By the last year of the cuts, 2027, on average the wealthiest 1% household would realize $207,000, and the even wealthier 0.1% would realize an income gain of $1,022,000.

When confronted with these facts on national TV this past Sunday, Trump's Treasury Secretary, Steve Mnuchin, quickly backtracked and admitted he could not guarantee every middle class family would see a tax cut. Right. That's because 15-17 million (12%) of US taxpaying households in the US will face a tax hike in the first year of the cuts. In the tenth and last year, "one in four middle class families would end up with higher taxes".

The US Economic 'Troika'

The Trump Plan is actually the product of the former Goldman-Sachs investment bankers who have been in charge of Trump's economic policy since he came into office. Steve Mnuchin, the Treasury Secretary, and Gary Cohn, director of Trump's economic council, are the two authors of the Trump tax cuts. They put it together. They are also both former top executives of the global shadow bank called Goldman Sachs. Together with the other key office determining US economic policy, the US central bank, held by yet another ex-Goldman Sachs senior exec, Bill Dudley, president of the New York Federal Reserve bank, the Goldman-Sachs trio of Mnuchin-Cohn-Dudley constitute what might be called the 'US Troika' for domestic economic policy.
The Trump tax proposal is therefore really a big bankers tax plan -- authored by bankers, in the interest of bankers and financial investors (like Trump himself), and overwhelmingly favoring the wealthiest 1%.

Given that economic policy under Trump is being driven by bankers, it's not surprising that the CEO of the biggest US banks, Morgan Stanley, admitted just a few months ago that a reduction of the corporate nominal income tax rate from the current 35% nominal rate to a new nominal rate of 20% will provide the bank an immediate windfall gain of 15%-20% in earnings. And that's just the nominal corporate rate cut proposed by Trump. With loopholes, it's no doubt more.

The Trump-Troika's Triple Tax-Cut Trifecta for the 1%

The Trump Troika has indicated it hopes to package up and deliver the trillions of $ to their 1% friends by Christmas 2017. Their gift will consist of three major tax cuts for the rich and their businesses. A Trump-Troika Tax Cut 'Trifecta' of $ trillions.

1.The Corporate Tax Cuts

The first of the three main elements is a big cut in the corporate income tax nominal rate, from current 35% to 20%. In addition, there's the elimination of what is called the 'territorial tax' system, which is just a fancy phrase for ending the fiction of the foreign profits tax. Currently, US multinational corporations hoard a minimum of $2.6 trillion of profits offshore and refuse to pay US taxes on those profits. In other words, Congress and presidents for decades have refused to enforce the foreign profits tax. Now that fiction will be ended by officially eliminating taxes on their profits. They'll only pay taxes on US profits, which will create an even greater incentive for them to shift operations and profits to their offshore subsidiaries. But there's more for the big corporations.

The Trump plan also simultaneously proposes what it calls a 'repatriation tax cut'. If the big tech, pharma, banks, and energy companies bring back some of their reported $2.6 trillion (an official number which is actually more than that), Congress will require they pay only a 10% tax rate -- not the current 35% rate or even Trump's proposed 20%–on that repatriated profits. No doubt the repatriation will be tied to some kind of agreement to invest the money in the US economy. That's how they'll sell it to the American public. But that shell game was played before, in 2004-05, under George W. Bush. The same 'repatriation' deal was then legislated, to return the $700 billion then stuffed away in corporate offshore subsidiaries. About half the $700 billion was brought back, but US corporations did not invest it in jobs in the US as they were supposed to. They used the repatriated profits to buy up their competitors (mergers and acquisitions), to pay out dividends to stockholders, and to buy back their stock to drive equity prices and the stock market to new heights in 2005-07. The current Trump 'territorial tax repeal/repatriation' boondoggle will turn out just the same as it did in 2005.

2. Non-Incorporate Business Tax Cuts

The second big business class tax windfall in the Trump-Goldman Sachs tax giveaway for the rich is the proposal to reduce the top nominal tax rate for non-corporate businesses, like proprietorships and partnerships, whose business income (aka profits) is treated like personal income. This is called the 'pass through business income' provision.

That's a Trump tax cut for unincorporated businesses -- like doctors, law firms, real estate investment partnerships, etc. 40% of non-corporate income is currently taxed at 39.6% (the top personal income tax rate). Trump proposes to reduce that nominal rate to 25%. So non-incorporate businesses too will get an immediately 14.6% cut, nearly matching the 15% rate cut for corporate businesses.

In the case of both corporate and non-corporate companies we're talking about 'nominal' tax rate cuts of 14.6% and 15%. The 'effective' tax rate is what they actually pay in taxes -- i.e. after loopholes, after their high paid tax lawyers take a whack at their tax bill, after they cleverly divert their income to their offshore subsidiaries and refuse to pay the foreign profits tax, and after they stuff away whatever they can in offshore tax havens in the Cayman Islands, Switzerland, and a dozen other island nations worldwide.

For example, Apple Corporation alone is hoarding $260 billion in cash at present -- 95% of which it keeps offshore to avoid paying Uncle Sam taxes. Big multinational companies like Apple, i.e. virtually all the big tech companies, big Pharma corporations, banks and oil companies, pay no more than 12-13% effective tax rates today -- not the 35% nominal rate.

Tech, big Pharma, banks and oil companies are the big violators of offshore cash hoarding/tax avoidance schemes. Microsoft's effective global tax rate last year was only 12%. IBM's even less, at 10%. The giant drug company, Pfizer paid 18% and the oil company, Chevron 14%. One of the largest US companies in the world, General Electric, paid only 1%. When their nominal rate is reduced to 20% under the Trump plan, they'll pay even less, likely in the single digits, if that.

Corporations and non-corporate businesses are the institutional conduit for passing income to their capitalist owners and managers. The Trump corporate and business taxes means companies immediately get to keep at least 15% more of their income for themselves -- and more in 'effective' rate terms. That means they get to distribute to their executives and big stockholders and partners even more than they have in recent years. And in recent years that has been no small sum. For example, just corporate dividend payouts and stock buybacks have totaled more than $1 trillion on average for six years since 2010! A total of more than $6 trillion.

But all that's only the business tax cut side of the Trump plan. There's a third major tax cut component of the Trump plan -- i.e. major cuts in the Personal Income Tax that accrue overwhelmingly to the richest 1% households.

3. Personal Income Tax Cuts for the 1%

There are multiple measures in the Trump-Troika proposal that benefits the 1% in the form of personal income tax reductions. Corporations and businesses get to keep more income from the business tax cuts, to pass on to their shareholders, investors, and senior managers. The latter then get to keep more of what's passed through and distributed to them as a result of the personal income tax cuts.

The first personal tax cut boondoggle for the 1% wealthiest households is the Trump proposal to reduce the 'tax income brackets' from seven to three. The new brackets would be 35%, 25%, and 12%.

Whenever brackets are reduced, the wealthiest always benefit. The current top bracket, affecting households with a minimum of $418,000 annual income, would be reduced from the current 39.6% to 35%. In the next bracket, those with incomes of 191,000 to 418,000 would see their tax rate (nominal again) cut from 28% to 25%. However, the 25% third bracket would apply to annual incomes as low as $38,000. That's the middle and working class. So households with $38,000 annual incomes would pay the same rate as those with more than $400,000. Tax cuts for the middle class, did Trump say? Only tax rate reductions beginning with those with $191,000 incomes and the real cuts for those over $418,000!

But the cuts in the nominal tax rate for the top 1% to 5% households are only part of the personal income tax windfall for the rich under the Trump plan. The really big tax cuts for the 1% come in the form of the repeal of the Inheritance Tax and the Alternative Minimum Tax, as well as Trump's allowing the 'carried interest' tax loophole for financial speculators like hedge fund managers and private equity CEOs to continue.

The current Inheritance Tax applies only to those with estates of $11 million or more, about 0.2 of all the taxpaying households. So its repeal is clearly a windfall for the super rich. The Alternative Minimum Tax is designed to ensure the super rich pay something, after they manipulate the tax loopholes, shelter their income offshore in tax havens, or simply engage in tax fraud by various other means. Now that's gone as well under the Trump plan. 'Carried interest', a loophole, allows big finance speculators, like hedge fund managers, to avoid paying the corporate tax rate altogether, and pay a maximum of 20% on their hundreds of millions and sometimes billions of dollars of income every year.
Who Pays?

As previously noted, folks with $91,000 a year annual income get no tax rate cuts. They still will pay the 25%. And since that is what's called 'earned' (wage and salary) income, they don't get the loopholes to manipulate, like those with 'capital incomes' (dividends, capital gains, rents, interest, etc.). What they get is called deductions. But under the Trump plan, the deductions for state and local taxes, for state sales taxes, and apparently for excess medical costs will all disappear. The cost of that to middle and working class households is estimated at $1 trillion over the decade.

Trump claims the standard deduction will be doubled, and that will benefit the middle class. But estimates reveal that a middle class family with two kids will see their standard deduction reduced from $28,900 to $24,000. But I guess that's just 'Trump math'.

The general US taxpayer will also pay for the trillions of dollars that will be redistributed to the 1% and their companies. It's estimated the federal government deficit will increase by $2.4 trillion over the decade as a result of the Trump plan. Republicans in Congress have railed over the deficits and federal debt, now at $20 trillion, for years. But they are conspicuously quiet now about adding $2.4 trillion more -- so long as it the result of tax giveaways to themselves, their 1% friends, and their rich corporate election campaign contributors.

And both wings of the Corporate Party of America -- aka Republicans and Democrats -- never mention the economic fact that since 2001, 60% of US federal government deficits, and therefore the US debt of $20 trillion, are attributable to tax cuts by George W. Bush and Barack Obama: more than $3.5 trillion under Bush and more than $7 trillion under Obama. (The remaining $10 trillion of the US debt due to war and defense spending, price gouging by the medical industry and big pharma driving up government costs for Medicare, Medicaid, and other government insurance, bailouts of the big banks in 2008-09, and interest payments on the debt).

The 35-Year Neoliberal Tax Offensive

Tax cutting for business classes and the 1% has always been a fundamental element of Neoliberal economic policy ever since the Reagan years (and actually late Jimmy Carter period). Major tax cut legislation occurred in 1981, 1986, and 1997-98 under Clinton. George W. Bush then cut taxes by $3.4 trillion in 2001-04, 80% of which went to the wealthiest households and businesses. He cut taxes another $180 billion in 2008. Obama cut another $300 billion in his 2009 so-called recovery program. When that faltered, it was another $800 billion at year end 2010. He then extended the Bush tax cuts that were scheduled to expire in 2011 two more years. That costs $450 billion each year. And in 2013, cutting a deal with Republicans called the 'fiscal cliff' settlement, he extended the Bush tax cuts of the prior decade for another ten years. That cost a further $5 trillion. Now Trump wants even more. He promised $5 trillion in tax cuts during his election campaign. So the current proposal is only half of what he has in mind perhaps.

Neoliberal tax cutting in the US has also been characterized by the 'tax cut shell game'. The shell game is played several ways.

In the course of major tax cut legislation, the elites and their lobbyists alternate their focus on cutting rates and on correcting tax loopholes. They raise rates but expand loopholes. When the public becomes aware of the outrageous loopholes, they then eliminate some loopholes but simultaneously reduce the tax rates on the rich. When the public complains of too low tax rates for the rich, they raise the rates but quietly expand the loopholes. They play this shell game so the outcome is always a net gain for corporations and the rich.

Since Reagan and the advent of neoliberal tax policy, the corporate income tax share of total US government revenues has fallen from more than 20% to single digits well below 10%. Conversely, the payroll tax has doubled from 22% to more than 40%. A similar shift within the personal income tax, steadily around 40% of government revenues, has also occurred. The wealthy pay less a share of the total and the middle class pays more. Along the way, token concessions to the very low end of working poor are introduced, to give the appearance of fairness. But the middle class, the $38 to $91,000 nearly 100 million taxpaying households foot the bill for both the 1% and the bottom. This pattern was set in motion under Reagan. His proposed $752 billion in tax cuts in 1981-82 were adjusted in 1986, but the net outcome was more for the rich and their corporations. That pattern has continued under Clinton, Bush, Obama and now proposed under Trump.

To cover the shell game, an overlay of ideology covers up what's going on. There's the false argument that 'tax cuts create jobs', for which there's no empirical evidence. There's the claim US multinational corporations pay a double tax compared to their competitors, when in fact they effectively pay less. There's the lie that if corporate taxes are cut they will automatically invest the savings, when in fact what they do is invest offshore, divert the savings to stock and bond and other financial markets, boost their dividend and stock buybacks, or stuff the savings in their offshore subsidiaries to avoid paying taxes.

All these neoliberal false claims, arguments, and outright lies continue today to justify the Trump-Goldman Sachs tax plan -- which is just the latest iteration of neoliberal tax policy and tax offensive in the US. The consequences of the Trump plan, if it is passed, will be the same as the previous tax giveaways to the 1% and their companies: it will redistribute income massively from the middle and working classes to the rich. Income inequality will continue to worsen dramatically. US multinational corporations will begin again to divert profits, and investment, offshore; profits brought back untaxed will result in mergers and acquisitions, dividend payouts, and financial markets investment. No real jobs will be created in the US. The wealthy will continue to pump their savings into financial asset markets, causing further bubbles in stocks, exchange traded funds, bonds, derivatives and the like. The US economy will continue to slow and become more unstable financially. And there will be another financial crash and great recession -- or worse. Only this time, the vast majority of US households -- i.e. the middle and working classes -- will be even worse off and more unable to weather the next economic storm.

Nothing will change so long as the Corporate Party of America is allowed to continue its neoliberal tax giveaways, its tax cutting 'shell games', and is allowed to continue to foment its ideological cover up. More articles by: Jack Rasmus

Jack Rasmus is the author of ' Systemic Fragility in the Global Economy ', Clarity Press, 2015. He blogs at jackrasmus.com . His website is www.kyklosproductions.com and twitter handle, @drjackrasmus.

[Oct 04, 2017] Martha Stewart Details Her 'Horrifying' Prison Experience 'No One Should Have to Go Through That'

Oct 04, 2017 | www.msn.com

Martha Stewart is opening up about her five month stint at West Virginia's Alderson Federal Prison Camp in 2004, calling the experience "horrifying."

"It was horrifying and no one, no one, should have to go through that kind of indignity really except for murderers, and there are a few other categories, but no one should have to go through that," she told Katie Couric in an exclusive clip for a new episode of Couric's self-titled podcast. "It's a very, very awful thing."

Since it's been 13 years since Stewart was sentenced for lying about the sale of a stock, Couric wondered whether the domestic guru felt it was a growth experience for her after all this time.

"[Did I feel] that 'you can make lemons out of lemonade' and 'what hurts you makes you stronger'? No. None of those adages fit at all," she said on the podcast, which has also hosted stars like Alec Baldwin, Ina Garten and Julia Louis-Dreyfus. "It's a horrible experience, nothing is good about it, nothing."

Stewart, now 76, was placed in minimum security prison, but assured Couric that it was no walk in the park. "There are lots and lots of disturbing things that go on in an incarceration like that," she said. "In minimum security you still couldn't walk out the gate or cross the river. There's still guards and it's still nasty."

The home cook also credited her negative experience to "being taken away from your family, being maligned, and being treated the way you were treated," she said. "It's horrible and especially when one does not feel one deserves such a thing."

But with her ever-expanding empire, like the release of her 89th cookbook, Martha Stewart's Slow Cooker, and the success of her show Martha & Snoop's Potluck Dinner Party, Stewart refuses to let those unbearable five months define her.

"One thing I do not ever want is to be identified or I don't want that to be the major thing of my life," she said. "It's just not fair. It's not a good experience and it doesn't make you stronger. I was a strong person to start with and thank heavens I was and I can still hold my head up high and know that I'm fine."

The full interview with Stewart is available through the Katie Couric podcast on Thursday.

[Oct 01, 2017] Bulletproof Neoliberalism by Paul Heideman

Highly recommended!
Notable quotes:
"... Mirowski identifies three basic aspects of neoliberalism that the Left has failed to understand: the movement's intellectual history, the way it has transformed everyday life, and what constitutes opposition to it. Until we come to terms with them, Mirowski suggests, right-wing movements such as the Tea Party (a prominent player in the book) will continue to reign triumphant. ..."
"... Joining a long line of thinkers, most famously Karl Polanyi, Mirowski insists that a key error of the Left has been its failure to see that markets are always embedded in other social institutions. Neoliberals, by contrast, grasp this point with both hands -- and therefore seek to reshape all of the institutions of society, including and especially the state, to promote markets. Neoliberal ascendancy has meant not the retreat of the state so much as its remaking. ..."
"... he also recognizes that the neoliberals themselves have been canny about keeping the real nature of their project hidden through a variety of means. Neoliberal institutions tend to have what he calls a "Russian doll" structure, with the most central ones well hidden from public eyes. Mirowski coins an ironic expression, "the Neoliberal Thought Collective," for the innermost entities that formulate the movement's doctrine. The venerable Mont Pelerin Society is an NTC institution. Its ideas are frequently disseminated through venues which, formally at least, are unconnected to the center, such as academic economics departments. Thus, neoclassical economists spread the gospel of the free market while the grand project of remaking the state falls to others. ..."
"... At the same time as neoliberal commonsense trickles down from above, Mirowski argues that it also wells up from below, reinforced by our daily patterns of life. Social networking sites like Facebook encourage people to view themselves as perpetual cultural entrepreneurs, striving to offer a newer and better version of themselves to the world. Sites like LinkedIn prod their users to present themselves as a fungible basket of skills, adjustable to the needs of any employer, without any essential characteristics beyond a requisite subservience. Classical liberalism always assumes the coherent individual self as its basic unit. Neoliberalism, by contrast, sees people as little more than variable bundles of human capital, with no permanent interests or even attributes that cannot be remade through the market. For Mirowski, the proliferation of these forms of everyday neoliberalism constitute a "major reason the neoliberals have emerged from the crisis triumphant." ..."
"... Finally, Mirowski argues that the Left has too often been sucked in by neoliberalism's loyal opposition. Figures like Joseph Stiglitz or Paul Krugman, while critical of austerity and supportive of the welfare state, accept the fundamental neoclassical economic precepts at the heart of neoliberal policy. Mirowski argues that we must ditch this tradition in its entirety. Even attempts to render its assumptions more realistic -- as in the case of behavioral economics, for example, which takes account of the ways real people diverge from the hyperrationality of homo economicus -- provide little succor for those seeking to overturn the neoliberals. ..."
"... Mirowski's insistence on the centrality of the state to the neoliberal project helps correct the unfortunate tendency of many leftists over the past decade to assent to neoliberal nostrums about the obsolescence of the state. Indeed, Mirowski goes further than many other critics who have challenged the supposed retreat of the state under neoliberalism. ..."
"... Loïc Wacquant, for instance, has described the "centaur state" of neoliberalism, in which a humanist liberalism reigns for the upper classes, while the lower classes face the punitive state apparatus in all its bestiality. ..."
"... Mirowski shows us that the world of the rich under neoliberalism in no way corresponds to the laissez-faire of classical liberalism. The state does not so much leave the rich alone as actively work to reshape the world in their interests, helping to create markets for the derivatives and securities that made (and then destroyed) so many of the fortunes of the recent past. The neoliberal state is an eminently interventionist one, and those mistaking it for the austere nightwatchman of libertarian utopianism have little hope of combating it. ..."
"... Mirowski's concern to disabuse his readers of the notion that the wing of neoliberal doctrine disseminated by neoclassical economists could ever be reformed produces some of the best sections of the book. His portrait of an economics profession in haggard disarray in the aftermath of the crisis is both comic and tragic, as the amusement value of the buffoonery on display diminishes quickly when one realizes the prestige still accorded to these figures. Reading his comprehensive examination of the discipline's response to the crisis, one is reminded of Freud's famous broken kettle. The professional economists' account of their role in the crisis went something like (a) there was no bubble and (b) bubbles are impossible to predict but (c) we knew it was a bubble all along. ..."
"... Though Krugman and Stiglitz have attacked concepts like the efficient markets hypothesis (which holds that prices in a competitive financial market reflect all relevant economic information), Mirowski argues that their attempt to do so while retaining the basic theoretical architecture of neoclassicism has rendered them doubly ineffective. ..."
"... First, their adoption of the battery of assumptions that accompany most neoclassical theorizing -- about representative agents, treating information like any other commodity, and so on -- make it nearly impossible to conclusively rebut arguments like the efficient markets hypothesis. ..."
Oct 01, 2017 | www.jacobinmag.com

To understand how a body of thought became an era of capitalism requires more than intellectual history.

"What is going to come after neoliberalism?" It was the question on many radicals' lips, present writer included, after the financial crisis hit in 2008. Though few were so sanguine about our prospects as to repeat the suicidal optimism of previous radical movements ("After Hitler, Our Turn!"), the feeling of the day was that the era of unfettered marketization was coming to a close. A new period of what was loosely referred to as Keynesianism would be the inevitable result of a crisis caused by markets run amok.

Five years later, little has changed. What comes after neoliberalism? More neoliberalism, apparently. The prospects for a revived Left capable of confronting it appear grim.

Enter Philip Mirowski's Never Let a Serious Crisis Go to Waste: How Neoliberalism Survived the Financial Meltdown . Mirowski maintains that the true nature of neoliberalism has gone unrecognized by its would-be critics, allowing the doctrine to flourish even in conditions, such as a massive financial crisis, that would seem to be inimical to its survival. Leftists keep busy tilting at the windmill of deregulation as the giants of neoliberalism go on pillaging unmolested.

Mirowski identifies three basic aspects of neoliberalism that the Left has failed to understand: the movement's intellectual history, the way it has transformed everyday life, and what constitutes opposition to it. Until we come to terms with them, Mirowski suggests, right-wing movements such as the Tea Party (a prominent player in the book) will continue to reign triumphant.

The book begins with the war of ideas -- a conflict in which, Mirowski argues, the Left has been far too generous in taking neoliberals at their word, or at least their best-publicized word. We have, in effect, been suckered by kindly old Milton Friedman telling us how much better off we'd all be if the government simply left us "free to choose." But neoliberals have at times been forthright about their appreciation for the uses of state power. Markets, after all, do not simply create themselves. Joining a long line of thinkers, most famously Karl Polanyi, Mirowski insists that a key error of the Left has been its failure to see that markets are always embedded in other social institutions. Neoliberals, by contrast, grasp this point with both hands -- and therefore seek to reshape all of the institutions of society, including and especially the state, to promote markets. Neoliberal ascendancy has meant not the retreat of the state so much as its remaking.

If Mirowski is often acidic about the Left's failure to understand this point, he also recognizes that the neoliberals themselves have been canny about keeping the real nature of their project hidden through a variety of means. Neoliberal institutions tend to have what he calls a "Russian doll" structure, with the most central ones well hidden from public eyes. Mirowski coins an ironic expression, "the Neoliberal Thought Collective," for the innermost entities that formulate the movement's doctrine. The venerable Mont Pelerin Society is an NTC institution. Its ideas are frequently disseminated through venues which, formally at least, are unconnected to the center, such as academic economics departments. Thus, neoclassical economists spread the gospel of the free market while the grand project of remaking the state falls to others.

At the same time as neoliberal commonsense trickles down from above, Mirowski argues that it also wells up from below, reinforced by our daily patterns of life. Social networking sites like Facebook encourage people to view themselves as perpetual cultural entrepreneurs, striving to offer a newer and better version of themselves to the world. Sites like LinkedIn prod their users to present themselves as a fungible basket of skills, adjustable to the needs of any employer, without any essential characteristics beyond a requisite subservience. Classical liberalism always assumes the coherent individual self as its basic unit. Neoliberalism, by contrast, sees people as little more than variable bundles of human capital, with no permanent interests or even attributes that cannot be remade through the market. For Mirowski, the proliferation of these forms of everyday neoliberalism constitute a "major reason the neoliberals have emerged from the crisis triumphant."

Finally, Mirowski argues that the Left has too often been sucked in by neoliberalism's loyal opposition. Figures like Joseph Stiglitz or Paul Krugman, while critical of austerity and supportive of the welfare state, accept the fundamental neoclassical economic precepts at the heart of neoliberal policy. Mirowski argues that we must ditch this tradition in its entirety. Even attempts to render its assumptions more realistic -- as in the case of behavioral economics, for example, which takes account of the ways real people diverge from the hyperrationality of homo economicus -- provide little succor for those seeking to overturn the neoliberals.

For Mirowski, these three failures of the Left go a long way toward explaining how neoliberals have largely escaped blame for a crisis they created. The Left persistently goes after phantoms like deregulation or smaller government, which neoliberals easily parry by pointing out that the regulatory apparatus has never been bigger. At the same time, we ignore the deep roots of neoliberal ideology in everyday life, deceiving ourselves as to the scale of the task in front of us.

Whatever criticisms of Mirowski's analysis are in order, much of it is compelling, particularly in regard to the intellectual history of the NTC. Mirowski's insistence on the centrality of the state to the neoliberal project helps correct the unfortunate tendency of many leftists over the past decade to assent to neoliberal nostrums about the obsolescence of the state. Indeed, Mirowski goes further than many other critics who have challenged the supposed retreat of the state under neoliberalism.

Loïc Wacquant, for instance, has described the "centaur state" of neoliberalism, in which a humanist liberalism reigns for the upper classes, while the lower classes face the punitive state apparatus in all its bestiality. But Mirowski shows us that the world of the rich under neoliberalism in no way corresponds to the laissez-faire of classical liberalism. The state does not so much leave the rich alone as actively work to reshape the world in their interests, helping to create markets for the derivatives and securities that made (and then destroyed) so many of the fortunes of the recent past. The neoliberal state is an eminently interventionist one, and those mistaking it for the austere nightwatchman of libertarian utopianism have little hope of combating it.

It's here that we begin to see the strategic genius of neoliberal infrastructure, with its teams of college economics professors teaching the wondrous efficacy of supply and demand on the one hand, and the think tanks and policy shops engaged in the relentless pursuit of state power on the other. The Left too often sees inconsistency where in fact there is a division of labor.

Mirowski's concern to disabuse his readers of the notion that the wing of neoliberal doctrine disseminated by neoclassical economists could ever be reformed produces some of the best sections of the book. His portrait of an economics profession in haggard disarray in the aftermath of the crisis is both comic and tragic, as the amusement value of the buffoonery on display diminishes quickly when one realizes the prestige still accorded to these figures. Reading his comprehensive examination of the discipline's response to the crisis, one is reminded of Freud's famous broken kettle. The professional economists' account of their role in the crisis went something like (a) there was no bubble and (b) bubbles are impossible to predict but (c) we knew it was a bubble all along.

Incoherence notwithstanding, however, little in the discipline has changed in the wake of the crisis. Mirowski thinks that this is at least in part a result of the impotence of the loyal opposition -- those economists such as Joseph Stiglitz or Paul Krugman who attempt to oppose the more viciously neoliberal articulations of economic theory from within the camp of neoclassical economics. Though Krugman and Stiglitz have attacked concepts like the efficient markets hypothesis (which holds that prices in a competitive financial market reflect all relevant economic information), Mirowski argues that their attempt to do so while retaining the basic theoretical architecture of neoclassicism has rendered them doubly ineffective.

First, their adoption of the battery of assumptions that accompany most neoclassical theorizing -- about representative agents, treating information like any other commodity, and so on -- make it nearly impossible to conclusively rebut arguments like the efficient markets hypothesis. Instead, they end up tinkering with it, introducing a nuance here or a qualification there. This tinkering causes their arguments to be more or less ignored in neoclassical pedagogy, as economists more favorably inclined toward hard neoliberal arguments can easily ignore such revisions and hold that the basic thrust of the theory is still correct. Stiglitz's and Krugman's arguments, while receiving circulation through the popular press, utterly fail to transform the discipline.

Mirowski also heaps scorn on the suggestion, sometimes made in leftist circles, that the problem at the heart of neoclassical economics is its assumption of a hyperrational homo economicus , relentlessly comparing equilibrium states and maximizing utility. Though such a revision may be appealing to a certain radical romanticism, Mirowski shows that a good deal of work going on under the label of behavioral economics has performed just this revision, and has come up with results that don't differ substantively from those of the mainstream. The main problem with neoclassicism isn't its theory of the human agent but rather its the theory of the market -- which is precisely what behavioral economics isn't interested in contesting.

In all, Mirowski's indictment of the state of economic theory and its imbrication with the neoliberal project is devastating. Unfortunately, he proves much less successful in explaining why things have turned out as they have. The book ascribes tremendous power to the Neoliberal Thought Collective, which somehow manages to do everything from controlling the economics profession to reshaping the state to forging a new sense of the human self. The reader is left wondering how the NTC came to acquire such power. This leads to the book's central flaw: a lack of any theory of the structure of modern capitalism. Indeed, the NTC seems to operate in something of a vacuum, without ever confronting other institutions or groups, such as the state or popular movements, with interests and agendas of their own.

To be fair, Mirowski does offer an explanation for the failure of popular movements to challenge neoliberalism, largely through his account of "everyday" neoliberalism. At its strongest, the book identifies important strategic failures, such as Occupy's embrace of "a mimicry of media technologies as opposed to concerted political mobilization." However, Mirowski extends the argument well beyond a specific failure of the Occupy movement to propose a general thesis that developments like Facebook and reality TV have transmitted neoliberal ideology to people who have never read Friedman and Hayek. In claiming that this embodied or embedded ideology plays an important role in the failure of the Left, he places far more explanatory weight on the concept of everyday neoliberalism than it is capable of bearing.

At the simplest level, it's just not clear that everyday neoliberalism constitutes the kind of block to political action that Mirowski thinks it does. No doubt, many people reading this article right now simultaneously have another browser tab open to monster.com or LinkedIn, where they are striving to present themselves as a fungible basket of skills to any employer that will have them. In this economy, everyone has to hustle, and that means using all available means. That many of these same readers have probably also done things like organize against foreclosures should give pause to any blurring of the distinction between using various media technologies and embracing the ideology Mirowski sees embodied in them.

Indeed, the ubiquity of participation in such technologies by people who support, oppose, or are apathetic about neoliberalism points to a larger phenomenon on which Mirowski is silent: the labor market. Put bluntly, it is difficult to imagine anyone engaging in the painfully strained self-advertisement facilitated by LinkedIn in a labor market with, say, 2-percent unemployment. In such a market, in which employers were competing for comparatively scarce workers, there would be very little need for those workers to go through the self-abasing ritual of converting themselves into fungible baskets of skills. In our current situation, by contrast, where secure and remunerative employment is comparatively scarce, it is no surprise that people turn to whatever technologies are available to attempt to sell themselves. As Joan Robinson put it, the only thing worse than being exploited by capitalism is not being exploited by it.

In evaluating the role of everyday neoliberalism, it is also helpful to move, for the moment, beyond the perspective of the United States, where the NTC has clearly had great success, and adopt that of countries where resistance is significantly more developed, such as Venezuela or South Africa. Especially in the former, popular movements have been notably successful in combating neoliberal efforts to take over the state and reshape the economy, and have instead pushed the country in the opposite direction. Is it really plausible that a main reason for this difference is that everyday neoliberalism is more intense in the United States? I doubt it. For one thing, the strength of Venezuela's radical movements, in comparison with the US, clearly antedates the developments (social media, Here Comes Honey Boo Boo , and so on) that Mirowski discusses.

Moreover, it is just as plausible that the entrepreneurial culture he describes is even more extensive in the slums of the global South, where neoliberal devastation has forced many poor households to rely on at least one family member engaging in semi-legal arbitrage in goods salvaged from garbage or made at home. Surely such activities provide a firmer foundation for commercial subjectivity than having a 401(k). That resistance has grown in such circumstances suggests that looking to malignant subjectivities to explain popular passivity is an analytic dead-end.

If everyday neoliberalism doesn't explain the comparative weakness of the US left, what does? This is, of course, the key question, and I can do no more than gesture at an answer here. But I would suggest that the specific histories of the institutions of the American left, from the Communist Party to Students for a Democratic Society to labor unions, and the histories of the situations they confronted, provide us with a more solid foundation for understanding our current weakness than the hegemony of neoliberal culture does. Moreover, with a theory of capitalism that emphasizes the way the structure of the system makes it both necessary and very difficult for most people to organize to advance their interests, it becomes very easy to explain the persistence of a low level of popular mobilization against neoliberalism in the context of a weakened left.

If Mirowski's account doesn't give us a good basis for explaining why popular resistance has been so lacking in the US, it nonetheless suggests why he is so concerned with explaining the supposed dominance of neoliberal ideology among the general population. From the beginning, he raises the specter of right-wing resurgence, whether in the form of Scott Walker surviving the recall campaign in Wisconsin, the Tea Party mania of 2010, or the success of right-wing parties in Europe. However, much of this seems overstated, especially from a contemporary perspective. The Tea Party has, for all intents and purposes, disappeared from the front lines of American politics, and the Republican Party, while capable of enacting all kinds of sadistic policies on the state level, has remained in a state of disarray on the national level since the 2006 congressional elections.

More fundamentally, the argument that the voting public embraces neoliberalism doesn't square well with recent research by political scientists like Larry Bartels and Martin Gilens emphasizing the profound disconnect between the policy preferences of the poor and what transpires in Washington. What appears to be happening is less the general populace's incorporation into neoliberalism than their exclusion from any institutions that would allow them to change it. Importantly, this alternative explanation does not rely on the Left conceit that rebellion lurks perpetually just below the placid social surface, ready to explode into radical insurgency at any moment. It simply contends that the political passivity of neoliberalism's victims reflects a real diminution of their political options.

Mirowski's failure to address these larger institutional and structural dynamics vitiates much of the explanatory power of his book. On a purely descriptive level, the sections on the intellectual history of neoliberalism and the non-crisis of neoclassical economics illuminate many of the hidden corners of neoliberal ideology. However, if Mirowski is right to suggest that we need to understand neoliberalism better to be successful in fighting it -- and he surely is -- then much more is needed to explain neoliberal success and Left failure.

To understand how a body of thought became an era of capitalism requires more than intellectual history. It demands an account of how capitalism actually works in the period in question, and how the ideas of a small group of intellectuals came to be the policy preferences of the rich. Mirowski has given us an excellent foundation for understanding the doctrine, but it will remain for others to explain its actual development.

https://staticxx.facebook.com/connect/xd_arbiter/r/Z2duorNoYeF.js?version=42#channel=f1c0e2812ec10f6&origin=https%3A%2F%2Fwww.jacobinmag.com

[Sep 26, 2017] Richard Posner has finally become a pragmatist

Sep 26, 2017 | crookedtimber.org

by Henry on September 14, 2017 This exit interview with Richard Posner, who is retiring as a judge, is interesting.

"About six months ago," Judge Posner said, "I awoke from a slumber of 35 years." He had suddenly realized, he said, that people without lawyers are mistreated by the legal system, and he wanted to do something about it. He had become concerned with the plight of litigants who represented themselves in civil cases, often filing handwritten appeals. Their grievances were real, he said, but the legal system was treating them impatiently, dismissing their cases over technical matters. "These were almost always people of poor education and often of quite low level of intelligence," he said. "I gradually began to realize that this wasn't right, what we were doing."

Judge Posner said he hoped to work with groups concerned with prisoners' rights, with a law school clinic and with law firms, to bring attention and aid to people too poor to afford lawyers.

In one of his final opinions, Judge Posner, writing for a three-judge panel, reinstated a lawsuit from a prisoner, Michael Davis, that had been dismissed on technical grounds. "Davis needs help ! needs it bad ! needs a lawyer desperately," he wrote.

On the phone, Judge Posner said that opinion was a rare victory. "The basic thing is that most judges regard these people as kind of trash not worth the time of a federal judge," he said

I don't want to be snarky – it is unqualifiedly great that someone of Posner's stature on the right is taking up this cause. I do want to point out though, that it can be interpreted as a partial completion of something that was incomplete before – Posner's commitment to pragmatism as an approach to understanding the law.

As the NYT piece notes in passing, Posner is famous for his argument that law should be interpreted pragmatically, as an exercise in problem solving. Yet as Jack Knight and Jim Johnson pointed out twenty years ago, in a response to Posner's major book on pragmatism, he left out all of the political arguments that were part of the web and woof of pragmatist thinking in the early twentieth century. John Dewey, for example, saw pragmatism as tied up with democracy, and democracy with a commitment to radical equality, in which 'publics' would be able to solve problems without interference from Old Corruption.

Knight and Johnson quote a bit from Posner's argument back then:

Today's legal pragmatism is so dominated by persons of liberal or radical persuasion as to make the movement itself seem (not least in their eyes) a school of left-wing thought. Yet not only has pragmatism no inherent political valence, but those pragmatists who attack pieties of the right while exhibiting a wholly uncritical devotion to the pieties of the left (such as racial and sexual equality, the desirability of a more equal distribution of income and wealth, and the pervasiveness of oppression and injustice in modern Western society) are not genuine pragmatists; they are dogmatists in pragmatist clothing.

As Knight and Johnson point out, Posner's efforts to divorce pragmatist problem solving from considerations of power simply do not make sense.

Posner rightly affirms the central importance of unforced inquiry to pragmatism. Dewey made this theme central to his conception of democratic politics. He also made it central to his writings on law.62 Thus Posner correctly recognizes that "from a pragmatist perspective the main concern is with the danger of premature closure of legal debate." But he then wavers considerably regarding the seemingly obvious political consequences of this statement. Unforced inquiry entails reasoned deliberation. If we are to avoid "premature closure," however, it also seemingly entails free and equal access for relevant actors to all relevant arenas of deliberation, debate, and decision. While Posner readily accepts the first of these implications, he remains very reluctant to accept the second. This is especially clear in his remarks both on the diversity of the legal establishment and on the barrier that economic inequality presents with respect to access to the courts."

More specifically:

He concedes that asymmetries of wealth or political power distort free and open inquiry in the American legal system. The adversary system does not much resemble the concept of unforced inquiry that is the pragmatists' ideal and the scientists' ethic. Furthermore, the competitors in our privatized competitive system of justice often have markedly and irremediably unequal resources. Most criminal defendants lack the resources to hire counsel equal in skill and experience to the public prosecutor, and public subvention of the cost of counsel for indigent criminal defendants has not been sufficiently generous to close the gap. Having identified another serious barrier to free and equal access, however, Posner once again falters. He finds "troublesome" suggestions that the remedy for these distortions of unforced inquiry "may require redistributing wealth or continually intervening in the marketplace of ideas."

It would appear that in the intervening decades, Posner has changed his mind, and has done so in an eminently pragmatist fashion, as the result of practical experience. Again, I'm not looking to score points here – if someone like Posner picks up this cause, it is likely to resonate with people who would dismiss or ignore similar arguments from the left. Instead, I'm pleased that he's developing his commitment to pragmatism, in the ways that Knight and Johnson advocated, rather than leaving it in a stunted condition.

20 comments

Matt 09.14.17 at 2:54 am

It's hard to know what to make of Posner's transformation over the years, other than, I suppose, to welcome it,(or if it makes up for the real damage he and those inspired by him did for a long time) but in fairness, his pragmatism was always more of the individualist sort inspired by Holmes (and in some ways James) than the more Hegelian sort found in Dewey. If you read Holmes's _The Path of Law_, you can see a lot of Posner's views set out there already. That's a consistent enough strand of pragmatism to warrant the name, I think.

TM 09.14.17 at 7:18 pm

Posner: "These were almost always people of poor education and often of quite low level of intelligence,"

Mostly they are just poor. I'm glad Posner got around to the insight that people without lawyers shouldn't be treated with contempt by the legal system, but he didn't also have to insult their intelligence.

This legal system, its inaccessibility and unfairness, is America's eternal shame.

J-D 09.15.17 at 1:27 am

"The basic thing is that most judges regard these people as kind of trash not worth the time of a federal judge," he said

In other words, he's saying that his colleagues ! at least, most of them ! don't believe in equal protection of the laws, no matter what it says in the Fourteenth Amendment.

Is such frankness as unusual as it seems to me?

b9n10nt 09.15.17 at 3:09 am

J-D @10

The ideological rationalizations that provide cognitive consonance for judges (just like parents and professionals of all types who wield immediate social power) are likely rooted in the practice of more immediate and perplexing dilemnas that the judge is required to resolve.

Like perhaps she knows that her jurisdiction can't handle a certain volume of cases that are left at her doorstep and she either formally or tacitly must filter yadda yadda . I'm not saying it's that but typically there's some felt, situational pragmatism in beaurocratic cruelty.

And also, who can believe (in spirit, beyond the reach of rationalizing!) in equal protection in this society? She's a US federal judge circa 2020. She's have to see it, practice it, it would be expected of her. If she's a federal judge she believes in equal protection by practicing "recreational" politics off hours. Because if the polity really did allow judges to practice equal protection, wow this would be an amazing, perhaps self-propelling step toward actual egalitarianism.

J-D 09.15.17 at 8:29 am ( 12 )

In the article I read:

He called his approach to judging pragmatic. His critics called it lawless. "I pay very little attention to legal rules, statutes, constitutional provisions," Judge Posner said. "A case is just a dispute. The first thing you do is ask yourself ! forget about the law ! what is a sensible resolution of this dispute?"

The next thing, he said, was to see if a recent Supreme Court precedent or some other legal obstacle stood in the way of ruling in favor of that sensible resolution. "And the answer is that's actually rarely the case," he said. "When you have a Supreme Court case or something similar, they're often extremely easy to get around."

In The Tyranny Of Words , by Stuart Chase, published in 1938, I read:

Chancellor Kent of New York State, a great legal authority, in a charming burst of frankness once wrote: 'I saw where justice lay, and the moral issue decided the court half the time. I then sat down to search the authorities. I might once in a while be embarrased by a technical rule, but I almost always found principles suited to my view of the case.' The learned judge used his best judgement, came to a decision, and then ransacked the fat books for authority to support him. He almost always found it. I would be willing to take his decision, if he were a good judge, without the ornament of citations. The decision constitutes the reality of legal machinery; the citations contribute to the magic.

b9n10nt 09.17.17 at 2:36 am ( 19 )
Bloix @19

The problem is not one of the federal courts or of the attitude of judges

Shouldn't we nevertheless assume that the attitude of judges will be warped by the cognitive dissonance between "I'm good at my job" and "I know the system is screwing the poor"? Shouldn't we expect attitudes like "they're trash anyway" to take root and inevitably make the fundamental problem worse?

I'm projecting what I know of educators and social workers onto the legal system

Alternatively, judges as a class are heroes of self-reflection and self-discipline.

TM 09.18.17 at 11:25 am ( 20 )
One reason why I'm skeptical of the legalistic line of justification – the judge just has to stick with the rules even if they feel the rules are unjust – is the fact that judges in reality often do not stick with the rules. For example the NY courts have basically redefined the concept of calendar time in order to practically ignore the constitutional "speedy trial" requirement ( http://www.nytimes.com/2013/04/14/nyregion/justice-denied-bronx-court-system-mired-in-delays.html ).

But I agree it's a political problem as well as a legal one. A few years ago the NYT published a well researched series about the failures of the US legal system that I found just devastating, maybe someone can find the link? Also The Divide by Matt Taibbi should really be an eye-opener. An interesting observation of Taibbi's is that many public defenders share the system's resentment against their indigent clients. It's truly a class-based system of justice.

[Sep 19, 2017] Neoliberalism: the deep story that lies beneath Donald Trumps triumph: How a ruthless network of super-rich ideologues killed choice and destroyed people s faith in politics by George Monbiot

Highly recommended!
Notable quotes:
"... The book was The Constitution of Liberty by Frederick Hayek . Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism . It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone. ..."
"... But by the time Hayek came to write The Constitution of Liberty, the network of lobbyists and thinkers he had founded was being lavishly funded by multimillionaires who saw the doctrine as a means of defending themselves against democracy. Not every aspect of the neoliberal programme advanced their interests. Hayek, it seems, set out to close the gap. ..."
"... He begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour of the wealthy and powerful, intrude on the absolute freedom from coercion he demands. ..."
"... The general thrust is about the gradual hollowing out of the middle class (or more affluent working class, depending on the analytical terms being used), about insecurity, stress, casualisation, rising wage inequality. ..."
"... So Hayek, I feel, is like many theoreticians, in that he seems to want a pure world that will function according to a simple and universal law. The world never was, and never will be that simple, and current economics simply continues to have a blindspot for externalities that overwhelm the logic of an unfettered so-called free market. ..."
"... J.K. Galbraith viewed the rightwing mind as predominantly concerned with figuring out a way to justify the shift of wealth from the immense majority to an elite at the top. I for one regret acutely that he did not (as far as I know) write a volume on his belief in progressive taxation. ..."
"... The system that Clinton developed was an inheritance from George H.W. Bush, Reagan (to a large degree), Carter, with another large assist from Nixon and the Powell Memo. ..."
"... What's changed is the distribution of the gains in GDP growth -- that is in no small part a direct consequence of changes in policy since the 1970s. It isn't some "market place magic". We have made major changes to tax laws since that time. We have weakened collective bargaining, which obviously has a negative impact on wages. We have shifted the economy towards financial services, which has the tendency of increasing inequality. ..."
"... Wages aren't stagnating because people are working less. Wages have stagnated because of dumb policy choices that have tended to incentives looting by those at the top of the income distribution from workers in the lower parts of the economy. ..."
"... "Neoliberalism" is entirely compatible with "growth of the state". Reagan greatly enlarged the state. He privatized several functions and it actually had the effect of increasing spending. ..."
"... When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market. ..."
"... As for the rest, it's the usual practice of gathering every positive metric available and somehow attributing it to neoliberalism, no matter how tenuous the threads, and as always with zero rigour. Supposedly capitalism alone doubled life expectancy, supports billions of extra lives, invented the railways, and provides the drugs and equipment that keep us alive. As though public education, vaccines, antibiotics, and massive availability of energy has nothing to do with those things. ..."
"... I think the damage was done when the liberal left co-opted neo-liberalism. What happened under Bill Clinton was the development of crony capitalism where for example the US banks were told to lower their credit standards to lend to people who couldn't really afford to service the loans. ..."
Nov 16, 2017 | www.theguardian.com

The events that led to Donald Trump's election started in England in 1975. At a meeting a few months after Margaret Thatcher became leader of the Conservative party, one of her colleagues, or so the story goes, was explaining what he saw as the core beliefs of conservatism. She snapped open her handbag, pulled out a dog-eared book, and slammed it on the table . "This is what we believe," she said. A political revolution that would sweep the world had begun.

The book was The Constitution of Liberty by Frederick Hayek . Its publication, in 1960, marked the transition from an honest, if extreme, philosophy to an outright racket. The philosophy was called neoliberalism . It saw competition as the defining characteristic of human relations. The market would discover a natural hierarchy of winners and losers, creating a more efficient system than could ever be devised through planning or by design. Anything that impeded this process, such as significant tax, regulation, trade union activity or state provision, was counter-productive. Unrestricted entrepreneurs would create the wealth that would trickle down to everyone.

This, at any rate, is how it was originally conceived. But by the time Hayek came to write The Constitution of Liberty, the network of lobbyists and thinkers he had founded was being lavishly funded by multimillionaires who saw the doctrine as a means of defending themselves against democracy. Not every aspect of the neoliberal programme advanced their interests. Hayek, it seems, set out to close the gap.

He begins the book by advancing the narrowest possible conception of liberty: an absence of coercion. He rejects such notions as political freedom, universal rights, human equality and the distribution of wealth, all of which, by restricting the behaviour of the wealthy and powerful, intrude on the absolute freedom from coercion he demands.

Democracy, by contrast, "is not an ultimate or absolute value". In fact, liberty depends on preventing the majority from exercising choice over the direction that politics and society might take.

He justifies this position by creating a heroic narrative of extreme wealth. He conflates the economic elite, spending their money in new ways, with philosophical and scientific pioneers. Just as the political philosopher should be free to think the unthinkable, so the very rich should be free to do the undoable, without constraint by public interest or public opinion.

The ultra rich are "scouts", "experimenting with new styles of living", who blaze the trails that the rest of society will follow. The progress of society depends on the liberty of these "independents" to gain as much money as they want and spend it how they wish. All that is good and useful, therefore, arises from inequality. There should be no connection between merit and reward, no distinction made between earned and unearned income, and no limit to the rents they can charge.

Inherited wealth is more socially useful than earned wealth: "the idle rich", who don't have to work for their money, can devote themselves to influencing "fields of thought and opinion, of tastes and beliefs". Even when they seem to be spending money on nothing but "aimless display", they are in fact acting as society's vanguard.

Hayek softened his opposition to monopolies and hardened his opposition to trade unions. He lambasted progressive taxation and attempts by the state to raise the general welfare of citizens. He insisted that there is "an overwhelming case against a free health service for all" and dismissed the conservation of natural resources. It should come as no surprise to those who follow such matters that he was awarded the Nobel prize for economics .

By the time Thatcher slammed his book on the table, a lively network of thinktanks, lobbyists and academics promoting Hayek's doctrines had been established on both sides of the Atlantic, abundantly financed by some of the world's richest people and businesses , including DuPont, General Electric, the Coors brewing company, Charles Koch, Richard Mellon Scaife, Lawrence Fertig, the William Volker Fund and the Earhart Foundation. Using psychology and linguistics to brilliant effect, the thinkers these people sponsored found the words and arguments required to turn Hayek's anthem to the elite into a plausible political programme.

Thatcherism and Reaganism were not ideologies in their own right: they were just two faces of neoliberalism. Their massive tax cuts for the rich, crushing of trade unions, reduction in public housing, deregulation, privatisation, outsourcing and competition in public services were all proposed by Hayek and his disciples. But the real triumph of this network was not its capture of the right, but its colonisation of parties that once stood for everything Hayek detested.

Bill Clinton and Tony Blair did not possess a narrative of their own. Rather than develop a new political story, they thought it was sufficient to triangulate . In other words, they extracted a few elements of what their parties had once believed, mixed them with elements of what their opponents believed, and developed from this unlikely combination a "third way".

It was inevitable that the blazing, insurrectionary confidence of neoliberalism would exert a stronger gravitational pull than the dying star of social democracy. Hayek's triumph could be witnessed everywhere from Blair's expansion of the private finance initiative to Clinton's repeal of the Glass-Steagal Act , which had regulated the financial sector. For all his grace and touch, Barack Obama, who didn't possess a narrative either (except "hope"), was slowly reeled in by those who owned the means of persuasion.

As I warned in April, the result is first disempowerment then disenfranchisement. If the dominant ideology stops governments from changing social outcomes, they can no longer respond to the needs of the electorate. Politics becomes irrelevant to people's lives; debate is reduced to the jabber of a remote elite. The disenfranchised turn instead to a virulent anti-politics in which facts and arguments are replaced by slogans, symbols and sensation. The man who sank Hillary Clinton's bid for the presidency was not Donald Trump. It was her husband.

The paradoxical result is that the backlash against neoliberalism's crushing of political choice has elevated just the kind of man that Hayek worshipped. Trump, who has no coherent politics, is not a classic neoliberal. But he is the perfect representation of Hayek's "independent"; the beneficiary of inherited wealth, unconstrained by common morality, whose gross predilections strike a new path that others may follow. The neoliberal thinktankers are now swarming round this hollow man, this empty vessel waiting to be filled by those who know what they want. The likely result is the demolition of our remaining decencies, beginning with the agreement to limit global warming .

Those who tell the stories run the world. Politics has failed through a lack of competing narratives. The key task now is to tell a new story of what it is to be a human in the 21st century. It must be as appealing to some who have voted for Trump and Ukip as it is to the supporters of Clinton, Bernie Sanders or Jeremy Corbyn.

A few of us have been working on this, and can discern what may be the beginning of a story. It's too early to say much yet, but at its core is the recognition that – as modern psychology and neuroscience make abundantly clear – human beings, by comparison with any other animals, are both remarkably social and remarkably unselfish . The atomisation and self-interested behaviour neoliberalism promotes run counter to much of what comprises human nature.

Hayek told us who we are, and he was wrong. Our first step is to reclaim our humanity.

justamug -> Skytree 16 Nov 2016 18:17

Thanks for the chuckle. On a more serious note - defining neoliberalism is not that easy since it is not a laid out philosophy like liberalism, or socialism, or communism or facism. Since 2008 the use of the word neoliberalism has increased in frequency and has come to mean different things to different people.

A common theme appears to be the negative effects of the market on the human condition.

Having read David Harvey's book, and Phillip Mirowski's book (both had a go at defining neoliberalism and tracing its history) it is clear that neoliberalism is not really coherent set of ideas.

ianfraser3 16 Nov 2016 17:54

EF Schumacher quoted "seek first the kingdom of God" in his epilogue of "Small Is Beautiful: a study of economics as if people mattered". This was written in the early 1970s before the neoliberal project bit in the USA and the UK. The book is laced with warnings about the effects of the imposition of neoliberalism on society, people and the planet. The predictions have largely come true. New politics and economics needed, by leaders who place at the heart of their approach the premise, and fact, that humans are "by comparison with any other animals, are both remarkably social and remarkably unselfish". It is about reclaiming our humanity from a project that treats people as just another commodity.


Filipio -> YouDidntBuildThat 16 Nov 2016 17:42

Whoa there, slow down.

Your last post was questioning the reality of neoliberalism as a general policy direction that had become hegemonic across many governments (and most in the west) over recent decades. Now you seem to be agreeing that the notion does have salience, but that neoliberalism delivered positive rather than negative consequences.

Well, its an ill wind that blows nobody any good, huh?

Doubtless there were some positive outcomes for particular groups. But recall that the context for this thread is not whether, on balance, more people benefited from neoliberal policies than were harmed -- an argument that would be most powerful only in very utilitarian style frameworks of thought (most good for the many, or most harm for only the few). The thread is about the significance of the impacts of neoliberalism in the rise of Trump. And in specific relation to privatisation (just one dimension of neoliberalism) one key impact was downsizing (or 'rightsizing'; restructuring). There is a plethora of material, including sociological and psychological, on the harm caused by shrinking and restructured work-forces as a consequence of privatisation. Books have been written, even in the business management sector, about how poorly such 'change' was handled and the multiple deleterious outcomes experienced by employees.

And we're still only talking about one dimension of neoliberalism! Havn't even touched on deregulation yet (notably, labour market and financial sector).

The general thrust is about the gradual hollowing out of the middle class (or more affluent working class, depending on the analytical terms being used), about insecurity, stress, casualisation, rising wage inequality.

You want evidence? I'm not doing your research for you. The internet can be a great resource, or merely an echo chamber. The problem with so many of the alt-right (and this applies on the extreme left as well) is that they only look to confirm their views, not read widely. Open your eyes, and use your search engine of choice. There is plenty out there. Be open to having your preconceptions challenged.

RichardErskine -> LECKJ3000 16 Nov 2016 15:38

LECKJ3000 - I am not an economist, but surely the theoretical idealised mechanisms of the market are never realised in practice. US subsidizing their farmers, in EU too, etc. And for problems that are not only externalities but transnational ones, the idea that some Hayek mechanism will protect thr ozone layer or limit carbon emissions, without some regulation or tax.

Lord Stern called global warming the greatest market failure in history, but no market, however sophisticated, can deal with it without some price put on the effluent of product (the excessive CO2 we put into the atmosphere).

As with Montreal and subsequent agreements, there is a way to maintain a level playing field; to promote different substances for use as refrigerants; and to address the hole in ozone layer; without abandoning the market altogether. Simple is good, because it avoids over-engineering the interventions (and the unintended consequences you mention).

The same could/ should be true of global warming, but we have left it so late we cannot wait for the (inevitable) fall of fossil fuels and supremacy of renewables. We need a price on carbon, which is a graduated and fast rising tax essentially on its production and/or consumption, which has already started to happen ( http://www.worldbank.org/content/dam/Worldbank/document/SDN/background-note_carbon-tax.pdf ), albeit not deep / fast / extensive enough, or international in character, but that will come, if not before the impacts really bite then soon after.

So Hayek, I feel, is like many theoreticians, in that he seems to want a pure world that will function according to a simple and universal law. The world never was, and never will be that simple, and current economics simply continues to have a blindspot for externalities that overwhelm the logic of an unfettered so-called free market.

LionelKent -> greven 16 Nov 2016 14:59

And persistent. J.K. Galbraith viewed the rightwing mind as predominantly concerned with figuring out a way to justify the shift of wealth from the immense majority to an elite at the top. I for one regret acutely that he did not (as far as I know) write a volume on his belief in progressive taxation.

RandomLibertarian -> JVRTRL 16 Nov 2016 09:19

Not bad points.

When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market.

Do not forget that the USG, in WW2, took the deliberate step of allowing employers to provide health insurance as a tax-free benefit - which it still is, being free even from SS and Medicare taxes. In the post-war boom years this resulted in the development of a system with private rooms, almost on-demand access to specialists, and competitive pay for all involved (while the NHS, by contrast, increasingly drew on immigrant populations for nurses and below). Next, the large sums of money in the system and a generous court system empowered a vast malpractice industry. So to call our system in any way a consequence of a free market is a misnomer.

Entirely state controlled health care systems tend to be even more cost-effective.

Read Megan McArdle's work in this area. The US has had similar cost growth since the 1970s to the rest of the world. The problem was that it started from a higher base.

Part of the issue is that privatization tends to create feedback mechanism that increase the size of spending in programs. Even Eisenhower's noted "military industrial complex" is an illustration of what happens when privatization really takes hold.

When government becomes involved in business, business gets involved in government!

Todd Smekens 16 Nov 2016 08:40

Albert Einstein said, "capitalism is evil" in his famous dictum called, "Why Socialism" in 1949. He also called communism, "evil", so don't jump to conclusions, comrades. ;)

His reasoning was it distorts a human beings longing for the social aspect. I believe George references this in his statement about people being "unselfish". This is noted by both science and philosophy.

Einstein noted that historically, the conqueror would establish the new order, and since 1949, Western Imperialism has continued on with the predatory phase of acquiring and implementing democracy/capitalism. This needs to end. As we've learned rapidly, capitalism isn't sustainable. We are literally overheating the earth which sustains us. Very unwise.

Einstein wrote, "Man is, at one and the same time, a solitary being and a social being. As a solitary being, he attempts to protect his own existence and that of those who are closest to him, to satisfy his personal desires, and to develop his innate abilities. As a social being, he seeks to gain the recognition and affection of his fellow human beings, to share in their pleasures, to comfort them in their sorrows, and to improve their conditions of life. Only the existence of these varied, frequently conflicting, strivings accounts for the special character of a man, and their specific combination determines the extent to which an individual can achieve an inner equilibrium and can contribute to the well-being of society."

Personally, I'm glad George and others are working on a new economic and social construct for us "human beings". It's time we leave the predatory phase of "us versus them", and construct a new society which works for the good of our now, global society.

zavaell -> LECKJ3000 16 Nov 2016 06:28

The problem is that both you and Monbiot fail to mention that your "the spontaneous order of the market" does not recognize externalities and climate change is outside Hayek's thinking - he never wrote about sustainability or the limits on resources, let alone the consequences of burning fossil fuels. There is no beauty in what he wrote - it was a cold, mechanical model that assumed certain human behaviour but not others. Look at today's money-makers - they are nearly all climate change deniers and we have to have government to reign them in.

aLERNO 16 Nov 2016 04:52

Good, short and concise article. But the FIRST NEOLIBERAL MILESTONE WAS THE 1973 COUP D'ETAT IN CHILE, which not surprisingly also deposed the first democratically-elected socialist government.

accipiter15 16 Nov 2016 02:34

A great article and explanation of the influence of Hayek on Thatcher. Unfortunately this country is still suffering the consequences of her tenure and Osborne was also a proponent of her policies and look where we are as a consequence. The referendum gave the people the opportunity to vent their anger and if we had PR I suspect we would have a greater turn-out and nearly always have some sort of coalition where nothing gets done that is too hurtful to the population. As for Trump, again his election is an expression of anger and desperation. However, the American voting system is as unfair as our own - again this has probably been the cause of the low turn-out. Why should people vote when they do not get fair representation - it is a waste of time and not democratic. I doubt that Trump is Keynsian I suspect he doesn't have an economic theory at all. I just hope that the current economic thinking prevailing currently in this country, which is still overshadowed by Thatcher and the free market, with no controls over the city casino soon collapses and we can start from a fairer and more inclusive base!

JVRTRL -> Keypointist 16 Nov 2016 02:15

The system that Clinton developed was an inheritance from George H.W. Bush, Reagan (to a large degree), Carter, with another large assist from Nixon and the Powell Memo.

Bill Clinton didn't do it by himself. The GOP did it with him hand-in-hand, with the only resistance coming from a minority within the Democratic party.

Trump's victory was due to many factors. A large part of it was Hillary Clinton's campaign and the candidate. Part of it was the effectiveness of the GOP massive resistance strategy during the Obama years, wherein they pursued a course of obstruction in an effort to slow the rate of the economic recovery (e.g. as evidence of the bad faith, they are resurrecting a $1 trillion infrastructure bill that Obama originally proposed in 2012, and now that they have full control, all the talk about "deficits" goes out the window).

Obama and the Democratic party also bear responsibility for not recognizing the full scope of the financial collapse in 2008-2009, passing a stimulus package that was about $1 trillion short of spending needed to accelerate the recovery by the 2010 mid-terms, combined with a weak financial regulation law (which the GOP is going to destroy), an overly complicated health care law -- classic technocratic, neoliberal incremental policy -- and the failure of the Obama administration to hold Wall Street accountable for criminal misconduct relating to the financial crisis. Obama's decision to push unpopular trade agreements didn't help either. As part of the post-mortem, the decision to continuing pushing the TPP may have cost Clinton in the rust belt states that went for Trump. The agreement was unpopular, and her shift on the policy didn't come across as credible. People noticed as well that Obama was trying to pass the measure through the lame-duck session of Congress post-election. With Trump's election, the TPP is done too.

JVRTRL daltonknox67 16 Nov 2016 02:00

There is no iron law that says a country has to run large trade deficits. The existence of large trade deficits is usually a result of policy choices.

Growth also hasn't gone into the tank. What's changed is the distribution of the gains in GDP growth -- that is in no small part a direct consequence of changes in policy since the 1970s. It isn't some "market place magic". We have made major changes to tax laws since that time. We have weakened collective bargaining, which obviously has a negative impact on wages. We have shifted the economy towards financial services, which has the tendency of increasing inequality.

The idea too that people will be "poorer" than in the 1920s and 1930s is just plain ignorant. It has no basis in any of the data. Wages in the bottom quartile have actually decreased slightly since the 1970s in real terms, but those wages in the 1970s were still exponentially higher than wages in the 1920s in real terms.

Wages aren't stagnating because people are working less. Wages have stagnated because of dumb policy choices that have tended to incentives looting by those at the top of the income distribution from workers in the lower parts of the economy. The 2008 bailouts were a clear illustration of this reality. People in industries rigged rules to benefit themselves. They misallocated resources. Then they went to representatives and taxpayers and asked for a large no-strings attached handout that was effectively worth trillions of dollars (e.g. hundreds of billions through TARP, trillions more through other programs). As these players become wealthier, they have an easier time buying politicians to rig rules further to their advantage.

JVRTRL -> RandomLibertarian 16 Nov 2016 01:44

"The tyranny of the 51 per cent is the oldest and most solid argument against a pure democracy."

"Tyranny of the majority" is always a little bizarre, given that the dynamics of majority rule are unlike the governmental structures of an actual tyranny. Even in the context of the U.S. we had minority rule due to voting restrictions for well over a century that was effectively a tyranny for anyone who was denied the ability to participation in the elections process. Pure majorities can go out of control, especially in a country with massive wealth disparities and with weak civic institutions.

On the other hand, this is part of the reason to construct a system of checks and balances. It's also part of the argument for representative democracy.

"Neoliberalism" is entirely compatible with "growth of the state". Reagan greatly enlarged the state. He privatized several functions and it actually had the effect of increasing spending.

When it comes to social safety net programs, e.g. in health care and education -- those programs almost always tend to be more expensive and more complicated when privatized. If the goal was to actually save taxpayer money, in the U.S. at least, it would have made a lot more sense to have a universal Medicare system, rather than a massive patch-work like the ACA and our hybrid market.

Entirely state controlled health care systems tend to be even more cost-effective. Part of the issue is that privatization tends to create feedback mechanism that increase the size of spending in programs. Even Eisenhower's noted "military industrial complex" is an illustration of what happens when privatization really takes hold.

daltonknox67 15 Nov 2016 21:46

After WWII most of the industrialised world had been bombed or fought over with destruction of infrastructure and manufacturing. The US alone was undamaged. It enjoyed a manufacturing boom that lasted until the 70's when competition from Germany and Japan, and later Taiwan, Korea and China finally brought it to an end.

As a result Americans born after 1950 will be poorer than the generation born in the 20's and 30's.

This is not a conspiracy or government malfunction. It is a quirk of history. Get over it and try working.

Arma Geddon 15 Nov 2016 21:11

Another nasty neoliberal policy of Reagan and Thatcher, was to close all the mental hospitals, and to sweeten the pill to sell to the voters, they called it Care in the Community, except by the time those hospitals closed and the people who had to relay on those institutions, they found out and are still finding out that there is very little care in the community left any more, thanks to Thatcher's disintegration of the ethos community spirit.

In their neoliberal mantra of thinking, you are on your own now, tough, move on, because you are hopeless and non productive, hence you are a burden to taxpayers.

Its been that way of thinking for over thirty years, and now the latest group targeted, are the sick and disabled, victims of the neoliberal made banking crash and its neoliberal inspired austerity, imposed of those least able to fight back or defend themselves i.e. vulnerable people again!

AlfredHerring GimmeHendrix 15 Nov 2016 20:23

It was in reference to Maggie slapping a copy of Hayek's Constitution of Liberty on the table and saying this is what we believe. As soon as you introduce the concept of belief you're talking about religion hence completeness while Hayek was writing about economics which demands consistency. i.e. St. Maggie was just as bad as any Stalinist: economics and religion must be kept separate or you get a bunch of dead peasants for no reason other than your own vanity.

Ok, religion based on a sky god who made us all is problematic but at least there's always the possibility of supplication and miracles. Base a religion on economic theory and you're just making sausage of your neighbors kids.

TanTan -> crystaltips2 15 Nov 2016 20:10

If you claim that the only benefit of private enterprise is its taxability, as you did, then why not cut out the middle man and argue for full state-directed capitalism?

Because it is plainly obvious that private enterprise is not directed toward the public good (and by definition). As we have both agreed, it needs to have the right regulations and framework to give it some direction in that regard. What "the radical left" are pointing out is that the idea of private enterprise is now completely out of control, to the point where voters are disenfranchised because private enterprise has more say over what the government does than the people. Which is clearly a problem.

As for the rest, it's the usual practice of gathering every positive metric available and somehow attributing it to neoliberalism, no matter how tenuous the threads, and as always with zero rigour. Supposedly capitalism alone doubled life expectancy, supports billions of extra lives, invented the railways, and provides the drugs and equipment that keep us alive. As though public education, vaccines, antibiotics, and massive availability of energy has nothing to do with those things.

As for this computer being the invention of capitalism, who knows, but I suppose if one were to believe that everything was invented and created by capitalism and monetary motives then one might believe that. Energy allotments referred to the limit of our usage of readily available fossil fuels which you remain blissfully unaware of.

Children have already been educated to agree with you, in no small part due to a fear of the communist regimes at the time, but at the expense of critical thinking. Questioning the system even when it has plainly been undermined to its core is quickly labelled "radical" regardless of the normalcy of the query. I don't know what you could possibly think left-wing motives could be, but your own motives are plain to see when you immediately lump people who care about the planet in with communist idealogues. If rampant capitalism was going to solve our problems I'm all for it, but it will take a miracle to reverse the damage it has already done, and only a fool would trust it any further.

YouDidntBuildThat -> Filipio 15 Nov 2016 20:06

Filipo

You argue that a great many government functions have been privatized. I agree. Yet strangely you present zero evidence of any downsides of that happening. Most of the academic research shows a net benefit, not just on budgets but on employee and customer satisfaction. See for example.

And despite these privitazation cost savings and alleged neoliberal "austerity" government keeps taking a larger share of our money, like a malignant cancer. No worries....We're from the government, and we're here to help.

Keypointist 15 Nov 2016 20:04

I think the damage was done when the liberal left co-opted neo-liberalism. What happened under Bill Clinton was the development of crony capitalism where for example the US banks were told to lower their credit standards to lend to people who couldn't really afford to service the loans.

It was this that created too big to fail and the financial crisis of 2008. Conservative neo-liberals believe passionately in competition and hate monopolies. The liberal left removed was was productive about neo-liberalism and replaced it with a kind of soft state capitalism where big business was protected by the state and the tax payer was called on to bail out these businesses. THIS more than anything else led to Trump's victory.

[Sep 19, 2017] Neoliberalism: the idea that swallowed the world by Stephen Metcalf

Highly recommended!
Notable quotes:
"... The word ["neoliberalism"] has become a rhetorical weapon, but it properly names the reigning ideology of our era – one that venerates the logic of the market and strips away the things that make us human. ..."
"... Last summer, researchers at the International Monetary Fund settled a long and bitter debate over "neoliberalism": they admitted it exists. Three senior economists at the IMF, an organisation not known for its incaution, published a paper questioning the benefits of neoliberalism ..."
"... 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. ..."
"... In the aftermath of the 2008 financial crisis, it was a way of assigning responsibility for the debacle, not to a political party per se, but to an establishment that had conceded its authority to the market. For the Democrats in the US and Labour in the UK, this concession was depicted as a grotesque betrayal of principle. Bill Clinton and Tony Blair, it was said, had abandoned the left's traditional commitments, especially to workers, in favour of a global financial elite and the self-serving policies that enriched them; and in doing so, had enabled a sickening rise in inequality. ..."
"... Peer through the lens of neoliberalism and you see more clearly how the political thinkers most admired by Thatcher and Reagan helped shape the ideal of society as a kind of universal market ..."
"... Of course the goal was to weaken the welfare state and any commitment to full employment, and – always – to cut taxes and deregulate. But "neoliberalism" indicates something more than a standard rightwing wish list. It was a way of reordering social reality, and of rethinking our status as individuals. ..."
"... In short, "neoliberalism" is not simply a name for pro-market policies, or for the compromises with finance capitalism made by failing social democratic parties. It is a name for a premise that, quietly, has come to regulate all we practise and believe: that competition is the only legitimate organising principle for human activity. ..."
"... No sooner had neoliberalism been certified as real, and no sooner had it made clear the universal hypocrisy of the market, than the populists and authoritarians came to power ..."
"... Against the forces of global integration, national identity is being reasserted, and in the crudest possible terms. What could the militant parochialism of Brexit Britain and Trumpist America have to do with neoliberal rationality? ..."
"... It isn't only that the free market produces a tiny cadre of winners and an enormous army of losers – and the losers, looking for revenge, have turned to Brexit and Trump. There was, from the beginning, an inevitable relationship between the utopian ideal of the free market and the dystopian present in which we find ourselves; ..."
"... That Hayek is considered the grandfather of neoliberalism – a style of thought that reduces everything to economics – is a little ironic given that he was such a mediocre economist. ..."
"... This last is what makes neoliberalism "neo". It is a crucial modification of the older belief in a free market and a minimal state, known as "classical liberalism". In classical liberalism, merchants simply asked the state to "leave us alone" – to laissez-nous faire. Neoliberalism recognised that the state must be active in the organisation of a market economy. The conditions allowing for a free market must be won politically, and the state must be re-engineered to support the free market on an ongoing basis. ..."
"... Hayek had only his idea to console him; an idea so grand it would one day dissolve the ground beneath the feet of Keynes and every other intellectual. Left to its own devices, the price system functions as a kind of mind. And not just any mind, but an omniscient one: the market computes what individuals cannot grasp. Reaching out to him as an intellectual comrade-in-arms, the American journalist Walter Lippmann wrote to Hayek, saying: "No human mind has ever understood the whole scheme of a society At best a mind can understand its own version of the scheme, something much thinner, which bears to reality some such relation as a silhouette to a man." ..."
"... The only social end is the maintenance of the market itself. In its omniscience, the market constitutes the only legitimate form of knowledge, next to which all other modes of reflection are partial, in both senses of the word: they comprehend only a fragment of a whole and they plead on behalf of a special interest. Individually, our values are personal ones, or mere opinions; collectively, the market converts them into prices, or objective facts. ..."
"... According to the logic of Hayek's Big Idea, these expressions of human subjectivity are meaningless without ratification by the market ..."
"... ociety 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. ..."
"... What began as a new form of intellectual authority, rooted in a devoutly apolitical worldview, nudged easily into an ultra-reactionary politics ..."
Aug 18, 2017 | www.theguardian.com

The word ["neoliberalism"] has become a rhetorical weapon, but it properly names the reigning ideology of our era – one that venerates the logic of the market and strips away the things that make us human.

Last summer, researchers at the International Monetary Fund settled a long and bitter debate over "neoliberalism": they admitted it exists. 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.

Neoliberalism is an old term, dating back to the 1930s, but it has been revived as a way of describing our current politics – or more precisely, the range of thought allowed by our politics . In the aftermath of the 2008 financial crisis, it was a way of assigning responsibility for the debacle, not to a political party per se, but to an establishment that had conceded its authority to the market. For the Democrats in the US and Labour in the UK, this concession was depicted as a grotesque betrayal of principle. Bill Clinton and Tony Blair, it was said, had abandoned the left's traditional commitments, especially to workers, in favour of a global financial elite and the self-serving policies that enriched them; and in doing so, had enabled a sickening rise in inequality.

Neoliberalism: the idea that swallowed the world – podcast

Over the past few years, as debates have turned uglier, the word has become a rhetorical weapon, a way for anyone left of centre to incriminate those even an inch to their right. (No wonder centrists say it's a meaningless insult: they're the ones most meaningfully insulted by it.) But "neoliberalism" is more than a gratifyingly righteous jibe. It is also, in its way, a pair of eyeglasses.

Peer through the lens of neoliberalism and you see more clearly how the political thinkers most admired by Thatcher and Reagan helped shape the ideal of society as a kind of universal market (and not, for example, a polis, a civil sphere or a kind of family) and of human beings as profit-and-loss calculators (and not bearers of grace, or of inalienable rights and duties). Of course the goal was to weaken the welfare state and any commitment to full employment, and – always – to cut taxes and deregulate. But "neoliberalism" indicates something more than a standard rightwing wish list. It was a way of reordering social reality, and of rethinking our status as individuals.

Still peering through the lens, you see how, no less than the welfare state, the free market is a human invention. You see how pervasively we are now urged to think of ourselves as proprietors of our own talents and initiative, how glibly we are told to compete and adapt. You see the extent to which a language formerly confined to chalkboard simplifications describing commodity markets (competition, perfect information, rational behaviour) has been applied to all of society, until it has invaded the grit of our personal lives, and how the attitude of the salesman has become enmeshed in all modes of self-expression.

In short, "neoliberalism" is not simply a name for pro-market policies, or for the compromises with finance capitalism made by failing social democratic parties. It is a name for a premise that, quietly, has come to regulate all we practise and believe: that competition is the only legitimate organising principle for human activity.

No sooner had neoliberalism been certified as real, and no sooner had it made clear the universal hypocrisy of the market, than the populists and authoritarians came to power. In the US, Hillary Clinton, the neoliberal arch-villain, lost – and to a man who knew just enough to pretend he hated free trade . So are the eyeglasses now useless? Can they do anything to help us understand what is broken about British and American politics? Against the forces of global integration, national identity is being reasserted, and in the crudest possible terms. What could the militant parochialism of Brexit Britain and Trumpist America have to do with neoliberal rationality? What possible connection is there between the president – a freewheeling boob – and the bloodless paragon of efficiency known as the free market?

It isn't only that the free market produces a tiny cadre of winners and an enormous army of losers – and the losers, looking for revenge, have turned to Brexit and Trump. There was, from the beginning, an inevitable relationship between the utopian ideal of the free market and the dystopian present in which we find ourselves; between the market as unique discloser of value and guardian of liberty, and our current descent into post-truth and illiberalism.

Moving the stale debate about neoliberalism forward begins, I think, with taking seriously the measure of its cumulative effect on all of us, regardless of affiliation. And this requires returning to its origins, which have nothing to do with Bill or Hillary Clinton. There once was a group of people who did call themselves neoliberals, and did so proudly, and their ambition was a total revolution in thought. The most prominent among them, Friedrich Hayek, did not think he was staking out a position on the political spectrum, or making excuses for the fatuous rich, or tinkering along the edges of microeconomics.

He thought he was solving the problem of modernity: the problem of objective knowledge. For Hayek, the market didn't just facilitate trade in goods and services; it revealed truth. How did his ambition collapse into its opposite – the mind-bending possibility that, thanks to our thoughtless veneration of the free market, truth might be driven from public life altogether?


When the idea occurred to Friedrich Hayek in 1936, he knew, with the conviction of a "sudden illumination", that he had struck upon something new. "How can the combination of fragments of knowledge existing in different minds," he wrote, "bring about results which, if they were to be brought about deliberately, would require a knowledge on the part of the directing mind which no single person can possess?"

This was not a technical point about interest rates or deflationary slumps. This was not a reactionary polemic against collectivism or the welfare state. This was a way of birthing a new world. To his mounting excitement, Hayek understood that the market could be thought of as a kind of mind.

Adam Smith's "invisible hand" had already given us the modern conception of the market: as an autonomous sphere of human activity and therefore, potentially, a valid object of scientific knowledge. But Smith was, until the end of his life, an 18th-century moralist. He thought the market could be justified only in light of individual virtue, and he was anxious that a society governed by nothing but transactional self-interest was no society at all. Neoliberalism is Adam Smith without the anxiety.

That Hayek is considered the grandfather of neoliberalism – a style of thought that reduces everything to economics – is a little ironic given that he was such a mediocre economist. He was just a young, obscure Viennese technocrat when he was recruited to the London School of Economics to compete with, or possibly even dim, the rising star of John Maynard Keynes at Cambridge.

The plan backfired, and Hayek lost out to Keynes in a rout. Keynes's General Theory of Employment, Interest and Money, published in 1936, was greeted as a masterpiece. It dominated the public discussion, especially among young English economists in training, for whom the brilliant, dashing, socially connected Keynes was a beau idéal . By the end of the second world war, many prominent free-marketers had come around to Keynes's way of thinking, conceding that government might play a role in managing a modern economy. The initial excitement over Hayek had dissipated. His peculiar notion that doing nothing could cure an economic depression had been discredited in theory and practice. He later admitted that he wished his work criticising Keynes would simply be forgotten.

... Hayek built into neoliberalism the assumption that the market provides all necessary protection against the one real political danger: totalitarianism. To prevent this, the state need only keep the market free.

This last is what makes neoliberalism "neo". It is a crucial modification of the older belief in a free market and a minimal state, known as "classical liberalism". In classical liberalism, merchants simply asked the state to "leave us alone" – to laissez-nous faire. Neoliberalism recognised that the state must be active in the organisation of a market economy. The conditions allowing for a free market must be won politically, and the state must be re-engineered to support the free market on an ongoing basis.

That isn't all: every aspect of democratic politics, from the choices of voters to the decisions of politicians, must be submitted to a purely economic analysis. The lawmaker is obliged to leave well enough alone – to not distort the natural actions of the marketplace – and so, ideally, the state provides a fixed, neutral, universal legal framework within which market forces operate spontaneously. The conscious direction of government is never preferable to the "automatic mechanism of adjustment" – ie the price system, which is not only efficient but maximises liberty, or the opportunity for men and women to make free choices about their own lives.

As Keynes jetted between London and Washington, creating the postwar order, Hayek sat pouting in Cambridge. He had been sent there during the wartime evacuations; and he complained that he was surrounded by "foreigners" and "no lack of orientals of all kinds" and "Europeans of practically all nationalities, but very few of real intelligence".

Stuck in England, without influence or respect, Hayek had only his idea to console him; an idea so grand it would one day dissolve the ground beneath the feet of Keynes and every other intellectual. Left to its own devices, the price system functions as a kind of mind. And not just any mind, but an omniscient one: the market computes what individuals cannot grasp. Reaching out to him as an intellectual comrade-in-arms, the American journalist Walter Lippmann wrote to Hayek, saying: "No human mind has ever understood the whole scheme of a society At best a mind can understand its own version of the scheme, something much thinner, which bears to reality some such relation as a silhouette to a man."

It is a grand epistemological claim – that the market is a way of knowing, one that radically exceeds the capacity of any individual mind. Such a market is less a human contrivance, to be manipulated like any other, than a force to be studied and placated. Economics ceases to be a technique – as Keynes believed it to be – for achieving desirable social ends, such as growth or stable money. The only social end is the maintenance of the market itself. In its omniscience, the market constitutes the only legitimate form of knowledge, next to which all other modes of reflection are partial, in both senses of the word: they comprehend only a fragment of a whole and they plead on behalf of a special interest. Individually, our values are personal ones, or mere opinions; collectively, the market converts them into prices, or objective facts.

... ... ...

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.

... ... ...

More than anyone, even Hayek himself, it was the great postwar Chicago economist Milton Friedman who helped convert governments and politicians to the power of Hayek's Big Idea. But first he broke with two centuries of precedent and declared that economics is "in principle independent of any particular ethical position or normative judgments" and is "an 'objective' science, in precisely the same sense as any of the physical sciences". Values of the old, mental, normative kind were defective, they were "differences about which men can ultimately only fight". There is the market, in other words, and there is relativism.

Markets may be human facsimiles of natural systems, and like the universe itself, they may be authorless and valueless. But the application of Hayek's Big Idea to every aspect of our lives negates what is most distinctive about us. That is, it assigns what is most human about human beings – our minds and our volition – to algorithms and markets, leaving us to mimic, zombie-like, the shrunken idealisations of economic models. Supersizing Hayek's idea and radically upgrading the price system into a kind of social omniscience means radically downgrading the importance of our individual capacity to reason – our ability to provide and evaluate justifications for our actions and beliefs.

As a result, the public sphere – the space where we offer up reasons, and contest the reasons of others – ceases to be a space for deliberation, and becomes a market in clicks, likes and retweets. The internet is personal preference magnified by algorithm; a pseudo-public space that echoes the voice already inside our head. Rather than a space of debate in which we make our way, as a society, toward consensus, now there is a mutual-affirmation apparatus banally referred to as a "marketplace of ideas". What looks like something public and lucid is only an extension of our own pre-existing opinions, prejudices and beliefs, while the authority of institutions and experts has been displaced by the aggregative logic of big data. When we access the world through a search engine, its results are ranked, as the founder of Google puts it, "recursively" – by an infinity of individual users functioning as a market, continuously and in real time.

... ... ...

According to the logic of Hayek's Big Idea, these expressions of human subjectivity are meaningless without ratification by the market – as Friedman said, they are nothing but relativism, each as good as any other. When the only objective truth is determined by the market, all other values have the status of mere opinions; everything else is relativist hot air. But Friedman's "relativism" is a charge that can be thrown at any claim based on human reason. It is a nonsense insult, as all humanistic pursuits are "relative" in a way the sciences are not. They are relative to the (private) condition of having a mind, and the (public) need to reason and understand even when we can't expect scientific proof. When our debates are no longer resolved by deliberation over reasons, then the whimsies of power will determine the outcome.

This is where the triumph of neoliberalism meets the political nightmare we are living through now. "You had one job," the old joke goes, and Hayek's grand project, as originally conceived in 30s and 40s, was explicitly designed to prevent a backslide into political chaos and fascism. But the Big Idea was always this abomination waiting to happen. It was, from the beginning, pregnant with the thing it was said to protect against. 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.

... ... ...

What began as a new form of intellectual authority, rooted in a devoutly apolitical worldview, nudged easily into an ultra-reactionary politics. What can't be quantified must not be real, says the economist, and how do you measure the benefits of the core faiths of the enlightenment – namely, critical reasoning, personal autonomy and democratic self-government? When we abandoned, for its embarrassing residue of subjectivity, reason as a form of truth, and made science the sole arbiter of both the real and the true, we created a void that pseudo-science was happy to fill.

... ... ...

[Sep 19, 2017] Con Of The Century by Rod Dreher

Notable quotes:
"... Within the next 18 months, US Steel announced that the nation's largest steel producer was also shutting down 16 plants across the nation including their Ohio Works in Youngstown, a move that eliminated an additional 4,000 workers here. That announcement came one day before Jones and Laughlin Steel Corp. said they were cutting thousands of jobs at their facilities in the Mahoning Valley, too. ..."
"... Within a decade 40,000 jobs were gone. Within that same decade, 50,000 people had left the region, and by the next decade that number was up to 100,000. Today the 22 miles of booming steel mills and the support industries that once lined the Mahoning River have mostly disappeared -- either blown up, dismantled or reclaimed by nature. ..."
"... Candidate Trump promised to create millions of new jobs, vowing to be "the greatest jobs president that God ever created." Cohn, as Goldman Sachs's president and COO, oversaw the firm's mergers and acquisitions business that had, over the previous three years, led to the loss of at least 22,000 U.S. jobs, according to a study by two advocacy groups. Early in his candidacy, Trump described as "disgusting" Pfizer's decision to buy a smaller Irish competitor in order to execute a "corporate inversion," a maneuver in which a U.S. company moves its headquarters overseas to reduce its tax burden. The Pfizer deal ultimately fell through. But in 2016, in the heat of the campaign, Goldman advised on a megadeal that saw Johnson Controls, a Fortune 500 company based in Milwaukee, buy the Ireland-based Tyco International with the same goal. A few months later, with Goldman's help, Johnson Controls had executed its inversion. ..."
"... "There was a devastating financial crisis just over eight years ago," Warren said. "Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country's economic policy to a senior Goldman executive turns my stomach." Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six. ..."
"... The Trump economic agenda, it turns out, is largely the Goldman agenda, one with the potential to deliver any number of gifts to the firm that made Cohn colossally rich. ..."
"... If Cohn stays, it will be to pursue an agenda of aggressive financial deregulation and massive corporate tax cuts -- he seeks to slash rates by 57 percent -- that would dramatically increase profits for large financial players like Goldman. It is an agenda as radical in its scope and impact as Bannon's was. ..."
"... The story tracks Gary Cohn's impressive rise from an aluminum siding salesman to a Goldman Sachs top leader. In the mid-2000s, Goldman saw that the housing market was a bubble waiting to pop, and arranged its position to take advantage of the coming collapse ..."
"... Politically, 2016 would prove a strange year for Goldman. Bernie Sanders clobbered Hillary Clinton for pocketing hundreds of thousands of dollars in speaking fees from Goldman, while Trump attacked Ted Cruz for being "in bed with" Goldman Sachs. (Cruz's wife Heidi was a managing director in Goldman's Houston office until she took leave to work on her husband's presidential campaign.) Goldman would have "total control" over Clinton, Trump said at a February 2016 rally, a point his campaign reinforced in a two-minute ad that ran the weekend before Election Day. An image of Blankfein flashed across the screen as Trump warned about the global forces that "robbed our working class." ..."
"... It's Cohn's influence over the country's regulators that worries Dennis Kelleher, the financial reform lobbyist. "To him, what's good for Wall Street is good for the economy," Kelleher said of Cohn. "Maybe that makes sense when a guy has spent 26 years at Goldman, a company who has repaid his loyalties and sweat with a net worth in the hundreds of millions." Kelleher recalls those who lost a home or a chunk of their retirement savings during a financial crisis that Cohn helped precipitate. "They're still suffering," he said. "Yet now Cohn's in charge of the economy and talking about eliminating financial reform and basically putting the country back to where it was in 2005, as if 2008 didn't happen. I've started the countdown clock to the next financial crash, which will make the last one look mild." ..."
"... Trump ( and the GOP generally) are running the William Henry Harrison routine. Talk about the plain common working people, mix in some log cabins and hard cider, describe anyone who wants to raise wages as an effete elitist, and the downsize, merge, consolidate, offshore, the better to profit from the misery of others. ..."
"... I don't think the Establishment has any idea of the level of dissatisfaction and discontent there is in the electorate, as their plan is short to mid-term doom. ..."
Sep 17, 2017 | www.theamericanconservative.com
Michele Paccione/Shutterstock Salena Zito has a moving NYPost piece about the day that began the destruction of Youngstown, Ohio, and "sowed the seeds of Trump." Excerpts:

From then on, this date in 1977 would be known as Black Monday in the Steel Valley, which stretches from Mahoning and Trumbull counties in Ohio eastward toward Pittsburgh. It is the date when Youngstown Sheet and Tube abruptly furloughed 5,000 workers all in one day.

The bleeding never stopped.

Within the next 18 months, US Steel announced that the nation's largest steel producer was also shutting down 16 plants across the nation including their Ohio Works in Youngstown, a move that eliminated an additional 4,000 workers here. That announcement came one day before Jones and Laughlin Steel Corp. said they were cutting thousands of jobs at their facilities in the Mahoning Valley, too.

Within a decade 40,000 jobs were gone. Within that same decade, 50,000 people had left the region, and by the next decade that number was up to 100,000. Today the 22 miles of booming steel mills and the support industries that once lined the Mahoning River have mostly disappeared -- either blown up, dismantled or reclaimed by nature.

If a bomb had hit this region, the scar would be no less severe on its landscape.

More:

The events of Black Monday forever changed not only the Steel Valley, but her people and eventually American culture and politics. Just last year the reverberations were felt in the presidential election when many hard-core Democrats from this area broke from their party to vote for Donald Trump, a Republican who promised to bring jobs back to the Heartland.

Even today, after the election, the Washington establishment still hasn't processed or properly dissected its effects. Economic experts predicted that the service industry would be the employment of the future. Steel workers were retrained to fill jobs in that sector, which was expected to sustain the middle class in the same way that manufacturing did.

It did not. According to a study done by the Midwest Center for Research the average salary of a steel worker in the late 1970s was $24,772.80. Today, according to the most recent Bureau of Labor statistics, the medium household income in the Mahoning Valley is $24,133.

Now that they have the working man's champion in the White House, what's he doing for them? Here are Gary Rivlin and Michael Hudson, writing in The Intercept , about how Goldman Sachs more or less runs the Trump administration. Excerpts:

Trump raged against "offshoring" by American companies during the 2016 campaign. He even threatened "retribution,"­ a 35 percent tariff on any goods imported into the United States by a company that had moved jobs overseas. But [Gary] Cohn laid out Goldman's very different view of offshoring at an investor conference in Naples, Florida, in November. There, Cohn explained unapologetically that Goldman had offshored its back-office staff, including payroll and IT, to Bangalore, India, now home to the firm's largest office outside New York City: "We hire people there because they work for cents on the dollar versus what people work for in the United States."

Candidate Trump promised to create millions of new jobs, vowing to be "the greatest jobs president that God ever created." Cohn, as Goldman Sachs's president and COO, oversaw the firm's mergers and acquisitions business that had, over the previous three years, led to the loss of at least 22,000 U.S. jobs, according to a study by two advocacy groups. Early in his candidacy, Trump described as "disgusting" Pfizer's decision to buy a smaller Irish competitor in order to execute a "corporate inversion," a maneuver in which a U.S. company moves its headquarters overseas to reduce its tax burden. The Pfizer deal ultimately fell through. But in 2016, in the heat of the campaign, Goldman advised on a megadeal that saw Johnson Controls, a Fortune 500 company based in Milwaukee, buy the Ireland-based Tyco International with the same goal. A few months later, with Goldman's help, Johnson Controls had executed its inversion.

With Cohn's appointment [as his economic adviser], Trump now had three Goldman Sachs alums in top positions inside his administration: Steve Bannon, who was a vice president at Goldman when he left the firm in 1990, as chief strategist, and Steve Mnuchin, who had spent 17 years at Goldman, as Treasury secretary. And there were more to come. A few weeks later, another Goldman partner, Dina Powell, joined the White House as a senior counselor for economic initiatives. Goldman was a longtime client of Jay Clayton, Trump's choice to chair the Securities and Exchange Commission; Clayton had represented Goldman after the 2008 financial crisis, and his wife Gretchen worked there as a wealth management adviser. And there was the brief, colorful tenure of Anthony Scaramucci as White House communications director: Scaramucci had been a vice president at Goldman Sachs before leaving to co-found his own investment company.

Even before Scaramucci, Sen. Elizabeth Warren, D-Mass., had joked that enough Goldman alum were working for the Trump administration to open a branch office in the White House.

"There was a devastating financial crisis just over eight years ago," Warren said. "Goldman Sachs was at the heart of that crisis. The idea that the president is now going to turn over the country's economic policy to a senior Goldman executive turns my stomach." Prior administrations often had one or two people from Goldman serving in top positions. George W. Bush at one point had three. At its peak, the Trump administration effectively had six.

Ex-Goldmanista Steve Bannon's White House agenda was not in Goldman's interest, though. But now he's gone. More:

The Trump economic agenda, it turns out, is largely the Goldman agenda, one with the potential to deliver any number of gifts to the firm that made Cohn colossally rich.

If Cohn stays, it will be to pursue an agenda of aggressive financial deregulation and massive corporate tax cuts -- he seeks to slash rates by 57 percent -- that would dramatically increase profits for large financial players like Goldman. It is an agenda as radical in its scope and impact as Bannon's was.

The story tracks Gary Cohn's impressive rise from an aluminum siding salesman to a Goldman Sachs top leader. In the mid-2000s, Goldman saw that the housing market was a bubble waiting to pop, and arranged its position to take advantage of the coming collapse. The Intercept continues:

Cohn was a member of Goldman's board of directors during this critical time and second in command of the bank. At that point, Cohn and Blankfein, along with the board and other top executives, had several options. They might have shared their concerns about the mortgage market in a filing with the SEC, which requires publicly traded companies to reveal "triggering events that accelerate or increase a direct financial obligation" or might cause "impairments" to the bottom line. They might have warned clients who had invested in mortgage-backed securities to consider extracting themselves before they suffered too much financial damage. At the very least, Goldman could have stopped peddling mortgage-backed securities that its own mortgage trading desk suspected might soon collapse in value.

Instead, Cohn and his colleagues decided to take care of Goldman Sachs.

Goldman would not have suffered the reputational damage that it did -- or paid multiple billions in federal fines -- if the firm, anticipating the impending crisis, had merely shorted the housing market in the hopes of making billions. That is what investment banks do: spot ways to make money that others don't see. The money managers and traders featured in the film "The Big Short" did the same -- and they were cast as brave contrarians. Yet unlike the investors featured in the film, Goldman had itself helped inflate the housing bubble -- buying tens of billions of dollars in subprime mortgages over the previous several years for bundling into bonds they sold to investors. And unlike these investors, Goldman's people were not warning anyone who would listen about the disaster about to hit. As federal investigations found, the firm, which still claims "our clients' interests always come first" as a core principle, failed to disclose that its top people saw disaster in the very products its salespeople were continuing to hawk.

What follows is an amazing, very detailed story about how Goldman maneuvered successfully through the rubble of the economic collapse, and came out on top. And then, get this:

Politically, 2016 would prove a strange year for Goldman. Bernie Sanders clobbered Hillary Clinton for pocketing hundreds of thousands of dollars in speaking fees from Goldman, while Trump attacked Ted Cruz for being "in bed with" Goldman Sachs. (Cruz's wife Heidi was a managing director in Goldman's Houston office until she took leave to work on her husband's presidential campaign.) Goldman would have "total control" over Clinton, Trump said at a February 2016 rally, a point his campaign reinforced in a two-minute ad that ran the weekend before Election Day. An image of Blankfein flashed across the screen as Trump warned about the global forces that "robbed our working class."

So Trump won -- and staffed up with Goldman machers -- Gary Cohn most important of all:

There's ultimately no great mystery why Donald Trump selected Gary Cohn for a top post in his administration, despite his angry rhetoric about Goldman Sachs. There's the high regard the president holds for anyone who is rich -- and the instant legitimacy Cohn conferred upon the administration within business circles. Cohn's appointment reassured bond markets about the unpredictable new president and lent his administration credibility it lacked among Fortune 100 CEOs, none of whom had donated to his campaign. Ego may also have played a role. Goldman Sachs would never do business with Trump, the developer who resorted to foreign banks and second-tier lenders to bankroll his projects. Now Goldman's president would be among those serving in his royal court.

Finally:

It's Cohn's influence over the country's regulators that worries Dennis Kelleher, the financial reform lobbyist. "To him, what's good for Wall Street is good for the economy," Kelleher said of Cohn. "Maybe that makes sense when a guy has spent 26 years at Goldman, a company who has repaid his loyalties and sweat with a net worth in the hundreds of millions." Kelleher recalls those who lost a home or a chunk of their retirement savings during a financial crisis that Cohn helped precipitate. "They're still suffering," he said. "Yet now Cohn's in charge of the economy and talking about eliminating financial reform and basically putting the country back to where it was in 2005, as if 2008 didn't happen. I've started the countdown clock to the next financial crash, which will make the last one look mild."

Read the whole thing. Please, do. It is staggering to think that here we are, a decade after the crash, and here we are.

Tonight (Sunday), PBS begins airing Ken Burns' and Lynn Novick's long Vietnam War documentary. I'll write more about it this week. I've watched it, and to call it landmark television is to vastly undersell it. It comes to mind reading the Goldman-Trump piece because it revealed, however inadvertently, how little we Americans learned from the Vietnam experience when it came time to invade Iraq.

Twenty, thirty years from now, don't be surprised if some American president proposes a "this time, it's different" invasion of another foreign country. And don't be surprised if we the people cheer for him. We're suckers for this kind of thing. Here's Kevin Williamson, on Trump's epic flip-flop on immigration and DACA:

What did they expect? Trump is a serial bankrupt who has betrayed at least two-thirds of the wives he's had and who lies compulsively -- who invented an imaginary friend to lie to the press on his behalf. He has screwed over practically everyone who has ever trusted him or done business with him, and his voters were just another in a long series of marks. They gave him that 280ZX with no down payment -- and no prospect of repossessing it until 2020 at the earliest. Poor Ann Coulter is somewhere weeping into her gin: "I bet on a loser," she explains.

It was a dumb bet.

With no market-oriented health-care reform and no hawkish immigration reform and the prospects of far-reaching tax reform looking shaky -- even though Republicans exist for no obvious purpose other than cutting taxes -- Trump is still looking for his big win. Even those who were willing to suspend the fully formed adult parts of their brains and give him the benefit of the doubt are coming around to the realization that he has no beliefs and no principles, and that he will sell out any ally, cause, or national interest if doing so suits his one and only true master in this life: his vanity. He didn't get rolled by Pelosi and Schumer: His voters got rolled by him. That's the real deal.

Cheers to you, Youngstown!

When Youngstown (so to speak) figures out what's been done to it, politics in this country is going to get very, very interesting. In the meantime:

Some of Trump's base is happy to let him cut deals with Pelosi and Schumer so long as he tweets gifs of Hillary and CNN logos. WWE BS.

! Ben Shapiro (@benshapiro) September 17, 2017

//platform.twitter.com/widgets.js 116 Responses to Con Of The Century ← Older Comments Newer Comments →

grumpy realist , says: September 18, 2017 at 10:30 am

Given Trump's history of betraying everyone he's been involved with (wives, businesses, family members) why are people surprised?

And no, I don't suspect Trump supporters to ever turn on him. Whatever he does, they'll find a way to excuse it and cast the blame of "the media", "those liberals", "those people", and "them" instead. It's easier for them to allow themselves to be ripped off, over and over again, than to admit to themselves that they were fools who fell victim to a con man.

(And no, I don't place much credence in Ann Coulter's hissy fit. She's just trying to keep the TV cameras on her as long as possible. Like usual.)

Roy Fassel , says: September 18, 2017 at 10:32 am
The world has changed. It used to be ."what is good for General Motors is good for America."

Multinational corporations tend to have most of their revenue growth outside of the USA today. Some companies like Apple manufacture their phones overseas, and most sales are overseas. This complicates all historical comparisons. The world is much more interconnected these days and we are all "God's children" living in all parts of the globe. Nationalism that is practiced by Trump eventually ends with a 1930s in Europe. BLAME creates hatred which then becomes to great uniter.

This all will not end on the plus side.

Sam M , says: September 18, 2017 at 10:33 am
Matt W

"Be charitable. It's VERY hard for someone to admit that they were fooled. It will be interesting to see all the mechanisms of denial."

Will it be interesting? Or entirely predictable? We have a model: All the ostensibly progressive people who for years voted Democrat and essentially ended up with a huge bait and switch. Which is not the divide in the Democratic Party, with the social justice left now ascendant and angry, because they got an awful lot of Dont Ask, Don't Tell and Clinton-era mass incarceration for their loyalty. While the union-wing got Goldman Sachs stuff.

All those people got rolled the same way Trump is rolling people now. So now we have BLM and Bernie Sanders and basically nothing in between.

So yeah. That's what we will get on the right.

Roger II , says: September 18, 2017 at 10:39 am
Trump has always been an ethically-challenged con man. I would still like to hear someone identify an actual policy that would help Youngstown. The truth is that steel industry jobs are gone, and they aren't coming back. Illegal immigration had nothing (or next to nothing) to do with that and has next to nothing to do with the fact that Youngstown has not developed other jobs for its citizens. Trump never proposed any concrete solutions, but quite frankly neither has JD Vance. Democrats have -- Obamacare, training programs, increased minimum wage, financial aid, more support for unions -- but by and large the white working class has rejected those policies. So maybe Youngstown should figure out what it wants from Trump or anyone else.
Allen , says: September 18, 2017 at 10:51 am
"The faithful man has perished from the earth, and there is no one upright among men. They all lie in wait for blood; every man hunts his brother with a net. That they may successfully do evil with both hands-the prince asks for gifts, the judge seeks a bribe, and the great man utters his evil desire; so they scheme together." Micah 7:2-3 (NKJV)

The more things change, the more they stay the same.

collin , says: September 18, 2017 at 11:14 am
Trump raged against "offshoring" by American companies during the 2016 campaign. He even threatened "retribution,"­ a 35 percent tariff on any goods imported into the United States by a company that had moved jobs overseas.

Again, can somebody explain to me how in the hell this is going to be done as free trade is 50%+ popular and any changes in a deal, such as NAFTA, will have serious negative economic consequences in certain parts of the nation. Rip up NAFTA, Iowas LOSES BIG!

Also, in terms of employment the steel industry is not that large anymore. It has about 80K workers today which is significantly about 90% less in the 1980s. And we produce almost (about ~95%) as much steel today as in the 1980s. So steel tariffs will increase steel jobs by 10% which is 8K workers and construction will lose 1% of 730K which is almost 8K workers. So somebody has to show me the benefit of steel tariffs as I don't see it.

Purple Tortoise , says: September 18, 2017 at 11:29 am
[NFR: But that's not really the point. The point is that Trump *specifically* ran against Goldman Sachs and what it represents. And now look. It simply won't do to say, "But Hillary would have been worse." Maybe so, but at this point, that strikes me as a way of rationalizing Trump's failure to keep his promises. -- RD]

Actually, I see it as rationalizing on the part of the NeverTrumpers for why they were justified in offering the voters a sh*t sandwich and why the voters were wrong to go with Trump in the hope of not being forced to eat a sh*t sandwich. Now that Trump has gone back on his promises, the NeverTrumpers are rationalizing that it proves they were right all along because the voters didn't escape the promised sh*t sandwich.

Jeff R , says: September 18, 2017 at 11:35 am
I would dearly love to help them out, and rebuild their cities. It would be the right thing to do. But as long as they keep voting for republicans (and yes, republicans are more corporate and Wall Street friendly then the democrats, Hillary Clinton notwithstanding), they are going to continue to decline.

As a Baltimore resident, I find this statement hilarious.

BlairBurton , says: September 18, 2017 at 11:37 am
http://www.thedailybeast.com/i-told-you-so-trump-is-a-conman-in-chief

"As members of the reviled Never Trump movement, it's not just an end-zone celebration play to say we warned you. We warned you over and over that Trump's brand isn't success; it's betrayal. We warned you that he believes in nothing, and so he will break any promise, shaft any ally, and abandon any position. Hate us all you want, but if you think this is the last time he'll shank his faithful, you might want to review the last 40 years of his personal and business behavior."

Donald , says: September 18, 2017 at 11:37 am
"There is a subset of voters who look upon their politician in an unhealthy God-like/3rd world fashion; much more tangible on the Left, but there on the Right as well."

This is correct, except for that ludicrous claim that it is worse on the Left. It's obvious on both sides and it's been that way forever.

I despise Trump. I am glad he is making deals with Democrats, but the Goldman Sachs thing is horrible. There was always a faint chance he could have governed as a populist, pushing massive infrastructure projects to create jobs, for instance. I thought that would appeal to his vanity as someone who builds things. No such luck.

Sawbuck , says: September 18, 2017 at 12:02 pm
It isn't just the steel industry. You underestimate the level of rage out there in flyover country – and the towns where the service workers live next to the towns where the 1% live because the workers cannot afford the uptown costs – they really will be fine if the whole system burns to ash.

They are used to being poor and will last longer.

Richard Morton , says: September 18, 2017 at 12:05 pm
VikingLS (at 10:19pm) hits the mark, IMO. I'd be interested to hear more. Playing the "con man" card gets stale & tiresome fast. Thanks also to Rob G for recommended reading (at 7:08am). So, Rod, won't a good shot of Ben Op faith and virtue also help make America industrious again? It is hard work, but is it impossible to imagine or too complex to do? If you think so, I think you underestimate us–and our Lord.
Captain P , says: September 18, 2017 at 12:15 pm
So long as the Clintonistas don't find a new figurehead, bet on Sanders winning in 2020. If anyone's a true opponent of neoliberal economic policies, he is.
Phillip , says: September 18, 2017 at 12:16 pm
Yes, Trump is bad, is going back on promises, etc. etc.

But what's the freaking alternative?

Give me an actual name that is not worse.

Siarlys Jenkins , says: September 18, 2017 at 12:31 pm
Trump ( and the GOP generally) are running the William Henry Harrison routine. Talk about the plain common working people, mix in some log cabins and hard cider, describe anyone who wants to raise wages as an effete elitist, and the downsize, merge, consolidate, offshore, the better to profit from the misery of others.

Now, what could have been done in 1977? That was the beginning of Jimmy Carter's term, his first year in office. At the time, he was a conservative southern Democrat, America's first born-again Christian president, despised by liberals, who tried to run Ted Kennedy against him in the 1980 Democratic primary, producing plenty of material for Ronald Reagan campaign commercials in the general election.

It would have taken a VERY comprehensive plan and some long-term investments. The steel plants were aging and uncompetitive. The companies laid off thousands because they didn't think it worth investing billions in new plants, new technology, etc. A few plants that employees pooled their hard-earned savings to buy turned out to be unsustainable too. A good stop TOWARD a more sensible socialist economy would have been a law providing that IF a company employing more than 1000 workers wanted to shut a plant, a government agency has first option to buy, at a price no greater than original investment minus all depreciation taken on corporate tax returns (that is, next to nothing).

Then it would have taken billions in federal financing to do the upgrade. Why do this? Well, considering the economic and social costs of all the crime, drug networks, drug treatment, alcoholism, etc. in the forty years since, it might have been a net cost savings. This is how socialism becomes a paying proposition, rather than "running out of other people's money."

But a sustainable program has to be geared to production people will actually need and use and want and buy. Production of stuff that piles up because there is no market for it is not sustainable. Something could have been done, but there was no will. Democrats were, then as now, afraid of their own shadow, and addicted to putting band-aids on long-term problems. Republicans, then as now, were addicted to "market forces," which, of course, are what triggered the catastrophe. What passed for a "left" at that time was too busy debating whether Deng or the Gang of Four were the true heroes of proletarian revolution and holding May Day picnics where 90 percent of participants were college graduates. They weren't reading the business pages.

It is also the case that Hillary Clinton was in bed with Goldman.

True, and relevant, but hardly in contradiction with what Dux Bellorum said.

Dux Bellorum, Austinopole , says: September 18, 2017 at 12:33 pm

[NFR: This is simplistic trolling and you know it. It is also the case that Hillary Clinton was in bed with Goldman. Remember the private Wall Street speech she gave, released by Wikileaks, in which she talked about how one needed to have "a public and a private position"? We would have been equally screwed by a Clinton.2 presidency, and a conventional Republican one. My anger at Trump over this is that he promised to be something different -- and, being fabulously wealthy, he didn't depend on the largesse of financial titans to make his living. He was in a position to change things -- yet on economic issues, he's turned out to be as bad or worse than those he ran against in both parties. -- RD]

It would be trolling if we were describing a single election, sure, but the comment refers to the very, very long alliance between social conservatives and business conservatives, which, in the south, goes back to the nineteenth century. Institutional Christian powers have been taking money and power from business interests to enforce their particular visions of what everyone should live like, and it's had the effect of giving them more and more power over an ever-shrinking and ever more miserable kingdom.

There's that lovely idea that by their fruits shall one know ideas, I think that Youngstown, in synecdoche, is a great example of the fruits of that particular idea.

$0.02,

DBA

Weldon , says: September 18, 2017 at 12:44 pm
The problem with this line of thought is that it would lead you to expect that Trump won Rust Belt voters whose chief concern was jobs and the economy. But he didn't; Clinton (narrowly) did. Trump won Rust Belt voters whose chief concern was "cultural decline".

Somehow the economic narrative got way off from what the data actually show: on election day, Trump underperformed recent Republican candidates in every economic cohort *except* households making $70K-$100K. This is the group you need to look at to explain his appeal.

Donald , says: September 18, 2017 at 12:45 pm
"Just shocking that a politician went back on a campaign promise. Throw the bum out. Shocking."

And this silly sort of cynicism is exactly why politicians think they can get away with breaking any and every promise they make.

Deplorable MD , says: September 18, 2017 at 12:50 pm
These can be true:

1. I am unhappy with certain (even "many") Trump decisions.
2. I remain happy I voted for Trump over Clinton.

What would it take for me to instead have wished I voted Clinton over Trump?..some combination of the following:

1. An increase in taxes on the working and professional class.
2. An offensive ground invasion of foreign country.
3. The nomination and Senate approval of a doctrinaire Liberal to the Supreme Court.
4. Policies that would lead to increased working class and poor immigrants to our country.

I imagine there are more, but these are some of the important points. I can muddle through a temporary ill mannered President and don't have a problem getting dirty to avoid the above.

BD , says: September 18, 2017 at 12:54 pm
Judging from the reaction of Trumpers in this comment thread it's pretty clear that there is literally nothing he could do that would cause them to abandon him. They will rationalize anything he does.

During the campaign, some of them said "well if he betrayed us on immigration then we'd leave him" and the biggest crimes committed by the Rubios of the world was that they cut deals far better (from restrictionist points of view) than this. So it's clear how they react to a betrayal–simply pretend it's not a betrayal, or that any non-Trump alternative would have been worse.

It's looking like they have become a cult.

Venice , says: September 18, 2017 at 12:56 pm
I'm always amazed at how loyal Trump supporters are. At times he was voted in to totally disrupt Washington, at other times he was supposed to make deals to keep the peace.
Look, Trump was always part of Wall Street. This was always going to happen. I don't think it's a bad thing but I do feel bad for the people who voted for him expecting anything different.
BD , says: September 18, 2017 at 1:01 pm
"It's not whether he makes deals. It's on whether they are good deals. The DACA deal would not be a good one if it follows what has been outlined."

That's not true. It's an excellent deal for the Democrats and Republican immigration doves.

For immigration restrictionists? Well, for them this puts them next on the long list of people who made the mistake of trusting Donald Trump.

BD , says: September 18, 2017 at 1:06 pm
"It's easy to criticize but a lot more difficult to say what they should have done. So tell me, who should they have supported? And don't say "Anybody but Trump" – that's not an answer."

This is a fair question, but they easily could have organized around another candidate who represented what they believed in (surely Trump is not the only person in the world who favored cutting back immigration–it's a very popular position in the GOP grass roots). Pat Buchanan ran on it in the '90s.

But to say "let's get behind the guy whose track record practically screams at you that you're going to get backstabbed" seems worse than even staying home. What are the chances now that next time a candidate runs on those issues anyone is going to believe him?

TR , says: September 18, 2017 at 1:13 pm
I suggest taking Wes seriously ("Could be better, could be much worse"). I have a suspicion his position is probably the norm.

In any case, some politicians pay for their "sins," some don't. I have an awful feeling, Trump will fall into the latter category.

TR , says: September 18, 2017 at 1:22 pm
A side note: John_M's correction of the steel plant closures makes sense. At the time they happened, it was not unusual to point out that American steel was uncompetitive even in a fair market (which didn't exist). Failure to modernize was a big factor.

And even if evil capitalism and elitist government may have been behind the closings, one should point out that a lot of less bright capitalists lost their shirts.

Potato , says: September 18, 2017 at 1:30 pm
They know they're getting screwed, in Youngstown and elsewhere. For some reason they don't care. They'll stick with Trump to the bitter end.
EngineerScotty , says: September 18, 2017 at 1:33 pm
And the standards keep getting lower and lower
Loudon is a Fool , says: September 18, 2017 at 1:46 pm
+1000 @ Old West

Any legislation. Congress doesn't need to pass some thing. They could pass any thing. Except they can't pass any thing. Not a single thing. They're incapable of governing. It's thoroughly depressing. As Williamson has noted previously, the wily McConnell is just the wrong man for the job. Trump's broken promises are nearly 100% McConnell's leadership failures. Could any other GOP president overcome McConnell's incompetence? Maybe. But that's a lot of incompetence to overcome. The Democrats are terrible human beings. But they know how to pass legislation. So if you want to pass some legislation and your choices are the Democrats or McConnell do you really have a choice as to the party you're going to approach?

Rosita , says: September 18, 2017 at 2:11 pm
Have to agree with all the Trump voters and supporters on this thread. None of them voted on principles; as they have stated, more on emotion, affinity and bread and butter issues. Your points about Trump's betrayals ring hollow. Everybody understood that Trump's positions are malleable and that was part of the package. Even when his policies begin to hurt his supporters, that will be a necessary evil to shore up the cultural and social solidarity that Trump represents. Plain and simple.
Polichinello , says: September 18, 2017 at 2:16 pm
All of this info was there–and being spouted loudly by the left–during the campaign.

This is the deal you (not you, Rod, since you didn't vote for him..) made for Gorsuch. We'll all get to see how bad a deal it was in the next years.

Given the Left's attitude to free speech these days and judicial overreach, totally worth it. Totally.

Hound of Ulster , says: September 18, 2017 at 2:23 pm
Everyone who voted for Trump based on ANYTHING he said during the campaign is a sucker. We warned you, but you wouldn't listen and just wanted to watch the 'libtards' cry.

Fools

Polichinello , says: September 18, 2017 at 2:25 pm
To be honest, I never understood how Trump was going to bring these jobs back as automation was the primary cause and the connection of Illegal Immigrants was not significant. Please show the direct lines of DACA Immigrants to manufacturing jobs in the Rust Belt?

They increase the labor pool that will compete with those people whose jobs have been eliminated by automation. Moreover, they require the same public spending (actually more), so now those people affected by automation are left with less government succour, as resource now have to be diverted to people who entered the country illegally.

I, for one, understand that some sort of compromise solution will need to be reached to deal with the Dacaritos, but let's not wave our hands and pretend this is all the fault of Skynet and that inflating the number of no- to low-skilled people in the pool will have no effect.

Be aware, too, that we're NOT discussing just a few hundred thousand people here, as the deals being thrown around will go up into the millions, once you factor in chain migration, as well as the knock on effect of encouraging yet more illegal immigration with the promise of future amnesties.

Alex Curbelo , says: September 18, 2017 at 2:26 pm
Mr. Dreher routinely gets into the pitfall of context denial when it comes to Trump.

Given the state of the country, and especially what the Republican and Democratic parties have given us for the last 40 years, no one (including Mr. Dreher) will ever be able to make the case that supporting Trump was not the rational way to go despite the risks. It was the right way to go under the circumstances and given the horrid alternatives that the GOP gave us in the primaries and the Democratic Party gave us for the general.

More importantly, just because Trump may be fake doesn't mean he did not tap into real issues. The reason Trump won is that, again, he tapped into very real issues.

YM , says: September 18, 2017 at 2:31 pm
Since I discovered your blog, Rod, I have wondered, why would you have your blog on such a lame website. Now I know – its your way or the highway. No choosing between imperfect choices.
ludo , says: September 18, 2017 at 2:39 pm
Just as the Clinton campaign disintegrated into a vacuous, visionless, vapor which the ultimately voters did not care to inhale, so too the Trump administration is in the premature process of decay into an amorphous, gelatinously unrecognizable politico-administrative life-form ("neither fish nor foul," "because you are lukewarm!neither hot nor cold "), perhaps to better camouflage and disguise the creedless (nihilistic) plutocratic pillaging of what remains of the non-oligarchically captured corpse (or, at least, despoiled and desecrated body) of a once proud and productively positive Middle Class government and state.
The Color of Celery , says: September 18, 2017 at 2:46 pm
Maybe Elizabeth Warren needs to be president if there is going to be something done about Goldman Sachs.

[NFR: If she weren't so fanatically down-the-line liberal on social issues, I'd strongly consider voting for her. -- RD]

Alex Curbelo , says: September 18, 2017 at 2:48 pm
A deal with Pelosi/Schumer would make sense on infrastructure but not DACA. Trump will not survive this betrayal on DACA. People aren't stupid.

There is a debate in the informed pro-Trump community -- is Trump a con artist, sell out, traitor, or man who means well but whose hands are tied. On one side, you have people bending over backwards to defend pretty transparently treacherous moves by Trump's on the grounds that he has little real choice. The argument is that because Trump's Jacksonian agenda is being monolithically and implacably opposed by the top leadership of both parties, the courts, the military, the IC, the banks and big corps, etc. (our true rulers), Trump has to bide his time, cut deals, and play Nth dimensional chess until he can move forward with his real populist agenda.

The other side of the argument is that Trump is just a con artist. When pro-Trump people try to argue to me that Trump's hands are tied, I also counter by pointing out the factors that are under Trump's control. Trump can't control Ryan, McConnell, etc. but what can he control. Trump can certainly control who works for him! Which means the strongest evidence that Trump never meant it can be found just by looking at who he has working for him. He gave top jobs to establishment figures like McMaster, Kelly and Cohn.

I can understand the claim that CIA and other deep state figures, McConnell, etc. won't go along with Trump and have been working overtime to sabotage Trump -- those things are true -- but what then is Trump's excuse for giving jobs to people like McMaster and Cohn?

Kushner and Cohn (and really most likely Lloyd Blankfein himself) have mostly neutralized Trump's economic, immigration and trade agenda in areas where the president has a lot to autonomy to act independent of the courts and Congress, while McMaster has done the same on the foreign policy front. And John Kelly, by all accounts, now has Trump under de facto house arrest, having reportedly cut off Trump from all of his remaining advisors that support the original MAGA agenda.

These are dark days for anyone who recognizes that the issues that propelled Trump to victory are real. Nothing ever changes because our true rulers are not the people we elect.

Finally, the idea that Trump pulled off the con of the century does not hold up. That honor belongs to the post-1980 Republican party for pulling off the longest and greatest con over the largest number of people ever. Trump can't come close.

Noah172 , says: September 18, 2017 at 2:52 pm
Who did Kevin Williamson favor in the 2016 primaries? Jeb? Rubio? Cruz?

Here is the reality that Williamson and his ilk refuse to acknowledge. If any of Trump's Republican rivals were in his position now:

The federal government would not be appreciably smaller.

Obamacare would not be fully repealed/replaced.

A bigger amnesty would be at least under consideration, if not already enacted.

The personal income tax would not be abolished or turned into a flat tax.

We'd be in a regime change war with Assad (and thus Putin).

Paul Ryan-ish "entitlement reform" would not be enacted.

Latinos and millenials would not love the Republican Party.

Homosexual marriage would not be rolled back.

These other Republicans (most to all of whom would have lost to HRC) would not have been so successful enacting the movement con agenda, which is unpopular and internally contradictory.

Voucherize Medicare + open borders + neocon wars + free trade + PC pandering = balanced budgets, prosperity for all, and a "permanent Republican majority"?

And Trump is the con man?

walking horse , says: September 18, 2017 at 2:54 pm
"Just shocking that a politician went back on a campaign promise. Throw the bum out. Shocking."

This is in fact shocking. It's shocking at least on the order of Bush the Elder's reversal of "read my lips: no new taxes", which cost him a second term.

I see that Trump has opened a US military base in Israel, the first ever, which is one of the stupidest acts in recent American history.

all of which suggests that Trump will soon be history himself

swb , says: September 18, 2017 at 2:59 pm
Given the comment section, there is no indication that his voters are judging his progress based on any criteria that is usually applied to normal politicians. Real benefits are not actually a criterion used by his voters. If trump can find enough scapegoats to blame for things, I believe that qualifies as progress for his voters because that makes them feel better. Since he is adapt at generating controversy and thereby creating appropriate new groups to blame I do not really see reason why this virtuous cycle could not continue for two terms.

I mean seriously, bush junior sent off their sons and daughters to vacation in the desert and thousands of them did not come back and he got two terms. Trumps voters are not going to be upset just because he lies to them.

lllurker , says: September 18, 2017 at 3:00 pm
"Or cancelling Obama regulations such as the one that required any buildings re-built with federal money needs to take rising sea levels into account?"

I didn't even know that was a thing. (The regs themselves.)

As I followed the Houston and then FL news, once I would get past all the human suffering my mind always seemed to end up in the same place: "We're not really so stupid that we're actually gonna rebuild in these same low-lying places?"

I know this only applies to certain areas, and that the storm over Houston was pretty freakish and perhaps a one-of-a-kind. But some of these areas are destined to flood so much over the coming decades that they will eventually have to be abandoned, at least as building sites. So in the meantime how many billions are we going to put on Uncle Sam's credit card, to be paid by coming generations, for rebuilding doomed structures?

I hope there are controls in place that at least force the people who in the worst places to move elsewhere.

Mike Alexander , says: September 18, 2017 at 3:05 pm
Kronstein1963 writes:
It's easy to criticize but a lot more difficult to say what they should have done. So tell me, who should they have supported?

They should have voted for Sanders in the primaries and then the GOP nominee in the general. By doing this they would have helped further the economic nationalist message by demonstrating significant support for a serious anti-Wall street message. By putting Trump in there they established empirically that

populist economic nationalism = Goldman Sachs.

Populist economic nationalism is now a dead letter

Noah172 , says: September 18, 2017 at 3:18 pm
I'm in holding mode on Trump right now. I'm wait-and-see on where DACA negotiations go, and I'll call my Representative and Senators to voice my opposition to amnesty (and support for some of the restrictionist bills pending). Here's the possibilities of what the past week's DACA drama means to me:

Looks, quacks like a duck: Trump sincerely wanted to agree to amnesty, with little in return, with the Democrats, got blowback from his troops, and backtracked by seeming to insist on tougher demands.

Total sellout: Trump will go for amnesty, with no meaningful concessions, base voters (and small donors) be damned.

4D chess: Trump was using talk of amnesty and delaying a fight over the wall to lure the Democrats into negotiation so he could then drop tougher demands on them (end to chain migration), which he knows they will reject, setting them up to look like extremists and have a government shutdown fight (which, e.g., Congressman Luis Gutierrez openly wants) right before Christmas.

In the first possibility, I'm upset and undecided for 2020, but at least Trump listened to his troops after only a few days of Breitbart and Twitter screaming at him. That's more than you can say for GWB, John McCain, or Paul Ryan.

In the second possibility, I'm through with Trump, for good.

In the third, I'm OK with political chess-playing in principle, but you gotta do it right. It's dangerous, especially for Trump, hated as he is by all TPTB, even in his own party, to demoralize and confuse your core fan base (and small donation base, I repeat) in attempt to lure the opposition into a political trap.

I can't tell if possibility 1 or 3 is the truth (2 is unlikely but frighteningly possible). In any case, I don't see a DACA amnesty happening because too few Republicans will risk it, Trump seems to be offering a trade which the Democrats will never ever accept (only DACA applicants for RAISE Act and maybe wall or some interior enforcement), and some Democrats (Gutierrez and company) are so stupid and greedy and fanatical that they think they are entitled to a massive amnesty with literally nothing in return, not even fake border enforcement (Schumer and Pelosi are trying to talk sense into their backbenchers, we'll see to what avail).

Rusty , says: September 18, 2017 at 3:23 pm
It's almost as though the last 40 years of Youngstown citizens felt *entitled* to having those good jobs replaced, in their town, w/o having to move or re-invent themselves.
cdugga , says: September 18, 2017 at 3:38 pm
I am not buying the we were fooled thing in the least. Like, the don is putting health care and DACA in the hands of republican legislators and all they have to do is legislate. They have not and cannot. Now we are reading about the don's betrayal of labor on TAC? This is not any sort of news whatsoever. Someday, maybe after some environmental disaster in appalachia, we will read about how the don betrayed the amerian people by crippleing regulations designed to protect their air and water. As if that was something new too. No, what we are seeing here is what I have been seeing since the rise of the don. If he is successful, it is because we supported and voted for him. If he does what anyone paying attention saw him doing already, then we can say, well, he never was a true conservative anyway. All this, is just more of the same ole lies of omission and lies to deny responsibility and place blame on anyone but ourselves. How many columns have I read here about how the don was the fault, not of the people that actually voted for him, but the fault of those gay transgender mexican muslim blacks and their secularist enablers. And the beat goes on.
Oh, and I was mortified when trump was elected but not at all surprised. He followed every standard GOP strategy including the tried and true decisive pander to the NRA. If he did do anything different, it was to claim in a much more outright manner that we were being victimized by immigrants and all those other non-deserving people. He even set the bait for people like me, by saying he would go after wall street and the hedge funds that shorted the whole world in the financial collapse.
But in this pile on, we should give the don credit where it is due. He has successfully exposed the republican party for what it has always been about. And putting healthcare and DACA into republican legislator's hands is going to be much more revealing about who has been fooling the fools than anything the don himself has done.
lllurker , says: September 18, 2017 at 3:39 pm
"Steel workers were retrained to fill jobs in that sector, which was expected to sustain the middle class in the same way that manufacturing did.

It did not. According to a study done by the Midwest Center for Research the average salary of a steel worker in the late 1970s was $24,772.80. Today, according to the most recent Bureau of Labor statistics, the medium household income in the Mahoning Valley is $24,133."

There seems to be some misperceptions regarding the wages that were paid in old-line manufacturing industries vs modern service jobs. The most important thing to understand is that the once strong wages and benefits in the steel and auto and other similar industries had nothing to do with the sort of work the people were doing. The pay and benefits were a direct result of the employees having strong unions and the unions having favorable federal legislation in place.

The truth is that the jobs themselves were often awful, especially in steel. And dangerous. But the jobs didn't require any more experience or ability from a new hire than the fast food industry requires today.

It is just a quirk of the way the industrialization of the country played out that the industrial sector ended up, at least for awhile, with employee-friendly compensation packages. In fact had it all gone the other way, and the service sector grown first, before manufacturing, many of the problems the non-college educated crowd face today wouldn't even exist. Manufacturing has become especially sensitive to labor costs because companies can choose to build factories in other countries where salaries are low. Most of the country's service industry isn't like that.

VikingLS , says: September 17, 2017 at 8:59 pm
"When Youngstown (so to speak) figures out what's been done to it, politics in this country is going to get very, very interesting."

Rod what are you going to do to change this? The Ben Op doesn't help.

[NFR: I dunno, Viking, I guess I'm waiting on you to tell me what to do. You know perfectly well that the Benedict Option is not about changing American politics, but about the life of the church. Besides, it is not the case that I or anybody else has to have a "solution" to offer before we can criticize what we see. I doubt very much you apply that standard to your own judgments of the world. -- RD]

Planet Albany , says: September 17, 2017 at 9:03 pm
Since I voted for Trump and you did not, doesn't that put me in a better position to judge whether Trump's willingness to make deals with Dems on DACA, taxes and infrastructure amounts to betrayal? Answer: It doesn't. It's what I want him to do. He campaigned on making deals, including with Russia, which I also want to see to keep the peace. Just hold the line on social issues, and we're good.
Trey , says: September 17, 2017 at 9:08 pm
But I thought we were a bunch of hicks that did not understand the constitutional checks and balances and the need for compromise and when we found out Trump was not able to be a dictator we would turn on him.
Corwin , says: September 17, 2017 at 9:35 pm
The problem is Youngstown won't figure it out. They, and so many other small and industrial towns across the country, are looking for a solution on their terms. They have had the last 30 plus years to update, and some have, like Pittsburgh. Meanwhile, the people who have figured this out left for greener pastures a long time ago.

I would dearly love to help them out, and rebuild their cities. It would be the right thing to do. But as long as they keep voting for republicans (and yes, republicans are more corporate and Wall Street friendly then the democrats, Hillary Clinton notwithstanding), they are going to continue to decline.

Francis E Blangeard , says: September 17, 2017 at 9:36 pm
To a large extent Goldman Sachs is the 'Deep State'.
Adamant , says: September 17, 2017 at 9:40 pm
I was in Youngstown just the other week. You could no more thoroughly destroy a city than if you had the Air Force flyover and reduce it to rubble via saturation bombing. You could say the exact same thing about 1000 other towns here in the Rust Belt. The main source of economic activity is methamphetamine production and heroin trafficking, and the ruination of generations yet unborn is baked in.

"So Trump won -- and staffed up with Goldman machers -- Gary Cohn most important of all"

As did Obama, and Bush, and Clinton, and on and on unti the heat death of the universe. Wall. Street. Always. Wins. Like the Military Industrial Complex always wins.

And they will continue to win until we can decide as a people to put our cultural distinctions and differences aside and defeat them. Because they are going to exsanguinate your tribe of traditionalist Christian conservatives as surely as they will my tribe. Say what you want about the political praxis of Occupy Wall Street, at least they were yelling at the right buildings.

I'd like to bring an old word back into our political currency: solidarity.

Wes , says: September 17, 2017 at 10:17 pm
Still a happy Trump supporter here; unphased by the presence of Goldman Sachs employees (the horror!) or of deals with Democrats. Could be better, could be much worse.
VikingLS , says: September 17, 2017 at 10:19 pm
[NFR: I dunno, Viking, I guess I'm waiting on you to tell me what to do. You know perfectly well that the Benedict Option is not about changing American politics, but about the life of the church. Besides, it is not the case that I or anybody else has to have a "solution" to offer before we can criticize what we see. I doubt very much you apply that standard to your own judgments
of the world. -- RD]

Actually I do try and hold myself to a standard along those lines. People don't always like my suggestions, but I do have them. I wouldn't have asked you that question if I didn't have an idea what I think you, or at least somebody at TAC, needs to do.

Someone needs to talk about what Trump getting elected as a Republican with his platform says about the voters, even if he himself seems to have pulled a bait and switch. Not what liberals say it means ("Clinton was a bad candidate" at best "America is racist" at worst.) This is conference worthy.

Nothing against you and Larrison, you're both fine writers, but is it possible to get the other writers here to write more? What's the difference between yourself and say, Bill Kaufman in TAC's structure?

Someone, it doesn't have to be you, but someone, needs to spend serious time looking at the Conservative movement in new media. That's looking like where the future is, not the New York Times op-ed page. There really are people who supported Trump who are both aware that Trump isn't keeping his campaign promises, and are discussing what their next move is going to be.

Try and resist the temptation to write variations of "Trump voters must feel stupid now". As opposed to what? Having Clinton as president? Do you honestly think if Clinton was president you wouldn't be writing some version of "Wow, I knew Clinton was going to be bad, but I didn't realize she'd be THIS bad." In a little over 3 years, it will be a different story, but for a lot of people a Clinton presidency where she kept her promises would be worse.

I am going to write you a personal email. I actually have taken a pretty serious personal professional hit because of this election, and I STILL don't regret my vote. This is not all academic for me.

Old West , says: September 17, 2017 at 10:41 pm
Trump would have signed any legislation a GOP controlled House and Senate passed.

ANY.

It wouldn't even need to have been good.

Making a deal with the Dems is his way of punishing the GOP for being incompetent.

At this point I'm still feeling betrayed by them. But I reserve the option of adding him to the list.

Sam M , says: September 17, 2017 at 10:42 pm
It's hilarious how selective people are about economics. Nothing to be done about the steel industry. Just how markets work. Too bad so sad Youngsville.

Unless you are cool. Like Amazon. And cities will slobber all over themselves to say to hell with the market, we need to subsidize development. And give the richest guy in the world free stuff:

https://www.google.com/amp/s/mobile.nytimes.com/2017/09/07/technology/amazon-headquarters-north-america.amp.html

Elon Musk has received at least $5 billion in subsidies:

https://www.google.com/amp/www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story,amp.html

Hmm. It's almost like it's only poor schmucks who have to suffer the ups and downs of the free market.

collin , says: September 17, 2017 at 10:51 pm
I am sorry but this happened almost 40 years ago and I remember when conservatives like Reagan were dancing on the death of union graves in the 1980s. Conservative loved when Reagan fired union air traffic controllers. And one reason why I voted for Bill Clinton because in 1992 he campaigned on the jobs of tomorrow as was honest to the American people that many of these jobs were not coming. (And the second fall in manufacturing was occurring in 1992 as well.) To be honest, I never understood how Trump was going to bring these jobs back as automation was the primary cause and the connection of Illegal Immigrants was not significant. Please show the direct lines of DACA Immigrants to manufacturing jobs in the Rust Belt?

Agreed, as long as he rub in his Grand Victory over HRC, conservatives will take anything from Trump.

The Sicilian Woman , September 17, 2017 at 11:16 pm
Just hold the line on social issues, and we're good.

Such was/is the hope of social conservatives with whom I share the same values but who voted for Trump and whom I suspect will be badly betrayed.

Purple Tortoise , September 17, 2017 at 11:16 pm
I didn't vote for or against Trump -- the election winner was foreordained in my state -- but I am surprised to hear these "I told you sos". Despite Trump's betrayals, I am not at all convinced that the situation would be any better now had Hillary Clinton or an establishment Republican been elected. In fact, being cozy with Wall Street and immigration amnesty is exactly what Hillary Clinton or an establishment Republican would have done. So I can see how Trump is now and always has been a worse alternative from the viewpoint of the Republican establishment, but I can't see how Trump even now is a worse alternative than the Republican establishment or Hillary Clinton from the viewpoint of the typical Trump voter.

[NFR: But that's not really the point. The point is that Trump *specifically* ran against Goldman Sachs and what it represents. And now look. It simply won't do to say, "But Hillary would have been worse." Maybe so, but at this point, that strikes me as a way of rationalizing Trump's failure to keep his promises. -- RD]

The Owners , says: September 17, 2017 at 11:19 pm
@Planet Albany – "Since I voted for Trump [ ] Trump's willingness to make deals with Dems on DACA, taxes and infrastructure amounts to betrayal? Answer: It doesn't. It's what I want him to do. He campaigned on making deals, including with Russia, which I also want to see to keep the peace. Just hold the line on social issues, and we're good."

I voted for him too. Making deals witn Dems on DACA isn't "holding the line on social issues", obviously.

Trump's a total prisoner of DC, Wall Street, and Silicon Valley now. We need a new president. Thanks for Neil Gorsuch, Donnie. 'Bye.

Kronsteen1963 , September 17, 2017 at 11:19 pm
So, who were the people of Youngstown supposed to support? Hillary Clinton and a Democratic party that is visciously hostile to their social values? Jeb Bush and a Republican Party that's indifferent to their plight, and considers them to be lazy losers? Both parties support immigration and trade policies that are killing these people because it benefits their corporate and Chamber of Commerce contributors. Only one guy spoke to their situation: Donald Trump.

I don't like Trump – never have. And I didn't vote for him. I lived in Maryland – Clinton was going to win that state easily. My vote didn't matter so I voted 3rd party as a protest vote. But, I understand why people voted for Trump. They were desperate and he was THE ONLY CANDIDATE in either party that talked to their struggles. This is not a failure of the voters. It's the criminally negligent failure of both political parties to address the problems facing ordinary America.

It's easy to criticize but a lot more difficult to say what they should have done. So tell me, who should they have supported? And don't say "Anybody but Trump" – that's not an answer.

Walter Sobchak , September 17, 2017 at 11:24 pm
Shapiro is right. Planet Albany is one of the Trumpeters who love the personality, and who would not care if Trump shot somebody in the middle of Fifth Avenue. Their problem is that Trump can flip the Bird at the Media and the Cultural elite all he wants, but he will not affect system in the slightest, because he has no understanding of its structure and no plane to affect it in any way.
Glaivester , says: September 17, 2017 at 11:32 pm
Since I voted for Trump and you did not, doesn't that put me in a better position to judge whether Trump's willingness to make deals with Dems on DACA, taxes and infrastructure amounts to betrayal? Answer: It doesn't. It's what I want him to do.

It's not whether he makes deals. It's on whether they are good deals. The DACA deal would not be a good one if it follows what has been outlined.

John_M , says: September 17, 2017 at 11:47 pm
Trump is taking his supporters for a ride.

When I got out of graduate school I was offered a job by a steel company research lab – so yes, I was somewhat of a steel metallurgist. I went into micro-electronics instead. When I turned down their job offer, I told them that they would survive the Japanese competition, but that I thought that the mini-mills would decimate them.

The research lab closed down 3 years later as the steel company restructured.

Even without import competition, the steel industry we knew in the 1970's was doomed. The facilities were antique and the development of the basic oxygen furnace and the sophisticated electric arc remelt furnaces obsoleted much of the existing infrastructure. If you look at a Nucor mill now, you won't see many employees.

Even without any import issues, there would not have been many employees left.

Imports were – and are – a problem. But the carnage was done by technology and automation. The politicians do not seem to be very willing to discuss this – automation doesn't give the simple villain of the Chinese, Indians, Ukrainians, .

Philly guy , says: September 17, 2017 at 11:53 pm
If you look at the present day, we are still fighting over theVietnam war, as the pro and con sides are roughly the same as 40 years ago, middle class hippies vs "working class whites".
ANDREW ALLADIN , September 17, 2017 at 11:53 pm
Hillary Clinton would have easily defeated Ted Cruz, Marco Rubio, or Jeb Bush. Cruz is still stuck in his Reagan impersonation; Rubio wants to go to war with Russia over Ukraine, Crimea, Georgia, Syria, etc; and Jeb couldn't even bring himself to criticize the war in Iraq because of family loyalty.

Ben Shapiro charges $10,000 to give the same speech over and over again to college students. It's always the same: SJWs are whiny children, Millennials need to grow up, socialism sucks, the Alt-Right are losers, blah! blah! blah! A nice living if you can get it and he's got it.

Trump was and is still the lesser of two evils. I think of Trump the same way Christians in Syria think of Assad. Or Christians in Iraq thought about Saddam Hussein. There's always someone worse waiting to take over.

Some fellow Christians are facing bankruptcy because they refuse to provide services for a gay wedding. This isn't some whiny college campus SJW showdown. That's where my concern is. I really couldn't care less about Goldman Sachs. I don't earn enough to care. Don't care about DACA or The Wall either. Sorry.

Christian liberty is the only issue I'm voting on. And Trump will always be the lesser of two evils. Always. Always. Always.

Alex Brown , says: September 17, 2017 at 11:54 pm
So Trump is a crook, and Hillary too. I suspect much of 'Youngstown' knew that. When other choice did the system offered, from 150 millions eligible potential candidates?

Yes, things may get even more interesting. Haven't tried Sanderistas yet, have we?

ADC Wonk , says: September 18, 2017 at 12:44 am
Just hold the line on social issues, and we're good.

@Planet Albany -- how do you feel about tax "reform" that blows the budget even more, and gives the bulk of the benefit to the top 1%-ers? Or cancelling Obama regulations such as the one that required any buildings re-built with federal money needs to take rising sea levels into account? Or p!ssing off Mexico so much that that they are turning to Argentina and Brazal to purchase their wheat and corn (NAFTA uncertainties).

cecelia , says: September 18, 2017 at 2:10 am
good Rod get angry see what is happening maybe when people see how they have been betrayed then maybe they will be open to something honest
KS , says: September 18, 2017 at 2:13 am
@planet Albany,

What would Trump have to do that would make you feel he has betrayed you? Don't worry he will do it, but somehow I suspect you and the rest of the Trump faithful will stick by him anyway. This is a cult, not a political following. He is one of 'you' and so anything he does is ok.

Dux Bellorum, Austinopole , says: September 18, 2017 at 3:09 am
Those people who are dying in Youngstown because of a government working in cooperation with corporate interests to enrich shareholders no matter the cost of American lives may take great solace in the knowledge that the people making those decisions and benefitting from them said some words sometimes about how gay relationships are objectively disordered, and those outside of the zones of suffering may feel sad for those deaths, but must understand that they are martyrs who gave their lives in the war to prevent gay people from getting health insurance for their families.

$0.02,

DBA

[NFR: This is simplistic trolling and you know it. It is also the case that Hillary Clinton was in bed with Goldman. Remember the private Wall Street speech she gave , released by Wikileaks, in which she talked about how one needed to have "a public and a private position"? We would have been equally screwed by a Clinton.2 presidency, and a conventional Republican one. My anger at Trump over this is that he promised to be something different -- and, being fabulously wealthy, he didn't depend on the largesse of financial titans to make his living. He was in a position to change things -- yet on economic issues, he's turned out to be as bad or worse than those he ran against in both parties. -- RD]

Deplorable MD , September 18, 2017 at 6:51 am
Con? We are always being conned by politicians. There is a subset of voters who look upon their politician in an unhealthy God-like/3rd world fashion; much more tangible on the Left, but there on the Right as well.

I voted Trump fully expecting to be conned, hopeful that one or two promises would become reality. So far I am pleased with the level of duplicity.

Ping Lin , says: September 18, 2017 at 6:55 am

Twenty, thirty years from now, don't be surprised if some American president proposes a "this time, it's different" invasion of another foreign country. And don't be surprised if we the people cheer for him.

20 or 30 years?? Try three. We're barreling towards war with North Korea and half the country will be cheering the President (whoever it is) on.

Sam (A Different One) , says: September 18, 2017 at 6:59 am
So because Trump has failed to deliver on promises to the working class, said working class should abandon Trump for whom? The Liberals, who hate them? The GOP types, like Williamson, who also hate them?
Rob G , says: September 18, 2017 at 7:08 am
re: Youngstown, etc., The New Minority by Justin Gest is worth a read. It's a sociological study of the white working class in two comparable areas, Youngstown and East London, and what happened when industry failed. The book was written before DT won the GOP nomination, but it does take Trump's primary run into consideration. The work that Gest did is based on survey results and interviews he conducted with residents during time spent as an "embedded" researcher.
Liam , says: September 18, 2017 at 7:18 am
None of which should be a surprise to anyone who paid even a modicum of critical attention.
markw , says: September 18, 2017 at 7:33 am
For many years we have heard U.S. politicians sanctimoniously intoning that Chinese politicians legitimacy depended on their creating jobs. This last election Jeb Bush and others found out this applies to them also, to their astonishment. Trump has the wind at his back on this front with the economy going forward, but can't count on this continuing thru the next election.
Michelle , says: September 18, 2017 at 7:34 am
For those of us who always thought Trump was a huckster with no principles other than self-aggrandizement, his behavior as president comes as no surprise. He's never made a promise he couldn't break. But, like all successful hucksters, he knows his mark and knows, on an instinctive level, how to appeal to their hopes and fears to close the sale. I'm not sure what it would take to break through the rationalizations of his base, but it would have to be something pretty spectacular.
markw , says: September 18, 2017 at 7:35 am
The comment that stuck with me in the first PBS segment was that Diem owned us. This seems to apply today to Israel, probably Saudi, and who else?
Matt W , says: September 18, 2017 at 7:38 am
Be charitable. It's VERY hard for someone to admit that they were fooled.

It will be interesting to see all the mechanisms of denial. I suspect that the reality of Trump will be dismissed in the same way as the reality of Climate Change.

1. God would never allow such a terrible event to happen to His beloved USA
2. It's all the fault of (NON-WHITE) foreigners
3. FAKE NEWS!
4. It's actually a good thing

Philly guy , says: September 18, 2017 at 7:40 am
As during the Vietnam war, the real battle continues, middle class hippies vs white working class.
Jack B. Nimble , September 18, 2017 at 7:42 am
' When Youngstown (so to speak) figures out what's been done to it, politics in this country is going to get very, very interesting .'

Republicans know what they are doing, and as long as there are more scapegoats available and more vote suppression techniques to be tried, they aren't worried about losing elections. Consider this example:

Mr. Dreher's own senior US senator is pushing a last-ditch ACA repeal and replace bill, called GCHJ, that would strip federal $$ from states like Louisiana that expanded Medicaid on the federal dime. How much money is involved?

In 2026 alone, La. would lose $3.2 billion while Texas, Mississippi and Alabama would collectively gain 11.3 billion in new federal $$. Put another way, La. with its 1.4% of the US population would shoulder 4% of the total cuts mandated by GCHJ in 2026. Then a tidal wave of more federal cuts arrives in 2027.

Why would Dr. Bill Cassidy, who formerly worked in Louisiana's notorious charity hospital system before entering politics and reaching the US Senate, seek to hurt his own constituents this way? In brief, many in Louisiana oppose Medicaid and food stamps because they see the federal benefits going mostly to 'those people.' If voters in La. are conned, it is because they have conned themselves.

Source: https://www.cbpp.org/research/health/like-other-aca-repeal-bills-cassidy-graham-plan-would-add-millions-to-uninsured

MH - Secular Misanthropist , says: September 18, 2017 at 7:54 am

When Youngstown (so to speak) figures out what's been done to it, politics in this country is going to get very, very interesting.

It will be Snowball's fault!

[NFR: Perfect! -- RD]

Prof. Woland , says: September 18, 2017 at 8:31 am
If any of this is surprising to people on the right, it's because of willful denial during the campaign.

All of this info was there–and being spouted loudly by the left–during the campaign.

This is the deal you (not you, Rod, since you didn't vote for him..) made for Gorsuch. We'll all get to see how bad a deal it was in the next years.

PS–Trump's base will never leave him. If he were to eat a live baby on TV, they'd find a way to justify it.

connecticut farmer , September 18, 2017 at 8:40 am
" how little we Americans learned from the Vietnam experience when it came time to invade Iraq."

Amen! As in the lyrics of that Pete Seeger song "Where Have All The Flowers Gone"?":

"When will they ever learn? When will they ever learn?"

Polichinello , says: September 18, 2017 at 9:06 am
He didn't get rolled by Pelosi and Schumer: His voters got rolled by him. That's the real deal.

This is the part where the Never-Trumpers are overplaying their hand. They act as if they were offering a better alternative. They were not. On trade, immigration and foreign policy, all other 16 candidates were worse–significantly worse. Each promised to re-run the Bush Administration, except they'd make Putin the new Saddam Hussein.

It's as if they were the team that lost conference championship, and then gloated when the the team that won it went on to lose the Super Bowl. How about they spend a little more time looking at their own positions and trying to figure out why a significant plurality (often a large majority in a number of states) outright rejected them?

None of them have done this. They dare not anger their Boomer donors, I guess. Got to keep those cruises going!

Again, even if everything they say about Trump is true, he is still better than them.

Philip Martin , September 18, 2017 at 9:12 am
The money power of Wall Street infiltrated and changed the Democratic Party sometime after the LBJ years. As a result, we have a one-party-system with a lib and a con wing. The wings differ on social issues, and they sweep the crumbs off the table to different constituencies.

However, after 40 years of this BS, can we really expect the children and grandchildren of displaced steelworkers (who symbolize all the outsourced, discarded workers in the U.S.) to rise in anger with torches and pitchforks? Sad to say, but the victims of this betrayal so far are passively standing by. I am not calling for violent revolution, but instead for a party that puts the needs and aspirations of the average person at the head of the table. If the Democratic Party won't do it, and yet won't go away, then a serious effort needs to made to foster a new party.

Polichinello , says: September 18, 2017 at 9:13 am
It's worth noting, too, that the Trump base has been melting down phone lines in Washington protesting Amnesty.

Obviously, it's your blog, Rod, so you can do what you like with it, but why not take a look at this issue itself instead of post after post taking victory laps about that Horrible Mr. Trump? What do you think would be a good deal? Should there be some limited amnesty (which I favor)?

Uncle Billy , says: September 18, 2017 at 9:19 am
Goldman Sachs is the fourth branch of government. They are indeed "too big to fail." Perhaps we should stop fighting them and try to somehow get them working for the common good. I don't know how this could be done, but it is worth a try.
Wes , says: September 18, 2017 at 9:20 am
[NFR: But that's not really the point. The point is that Trump *specifically* ran against Goldman Sachs and what it represents. And now look. It simply won't do to say, "But Hillary would have been worse." Maybe so, but at this point, that strikes me as a way of rationalizing Trump's failure to keep his promises. -- RD]

Putting things into context is precisely the point.

ROB , says: September 18, 2017 at 9:23 am
Just shocking that a politician went back on a campaign promise. Throw the bum out. Shocking.
KD , says: September 18, 2017 at 9:33 am
No Quarter, Rod!
Sheldon , says: September 18, 2017 at 9:36 am
I'm not remotely surprised to read in these precincts that the Democrats, particularly Clinton, are just as much in the bag for Wall Street as Trump and the Republicans. Too bad it's completely untrue. Even if Clinton were so inclined, which she certainly wouldn't be to nearly the same extent, major elements in the Democratic party and Congress would be pushing for policies far removed from the plutocratic – as they have for years, for increased financial and antitrust regulation, higher taxes on the 1%, limits on CEO pay, environmental controls, minimum wage, and on and on and on. There is no such significant political element among Republican officeholders, either at the state or federal level. The argument that "Democrats (especially evil Hillary) are just as bad" – all evidence to the contrary – is really just an after-the-fact rationalization to justify one's prior support for what is clearly one of the most financially and morally corrupt administrations in our history.
KingP , says: September 18, 2017 at 9:44 am
It is amazing how much research and
socio-political commentary is necessary in order to prove that an amoral, egomaniac MTV-era pseudo-celebrity apparently intends to govern the country like an amoral, egomaniac MTV-era pseudo-celebrity. In other words, he is a narcissistic goofball who will tell anyone anything in order to get press or money.

Who knew? Apparently not enough of us to prevent the cartoon presidency.

Daniel R. Baker , September 18, 2017 at 9:56 am
And when the people of Youngstown realize Trump has betrayed them, they will turn left, and turn hard. The next Bernie Sanders cannot be stopped, for the same reason Trump couldn't be stopped: because he will simply take the party away from the establishment. As I said last year, when you elect Marius, Sulla follows.

I'm not surprised that Trump can't see this coming. I am a bit surprised that Goldman Sachs apparently doesn't either.

KD , says: September 18, 2017 at 9:58 am
The politics of immigration restriction is interesting. The restrictionists have clear and strong preferences.

"Popular opinion" may be against restrictionism (or not given the media lens), but at the end of the day, most of public against restrictionism has a soft level of support mostly for virtue signalling purposes. They don't actually care.

The business lobby cares a lot, and the ethnonationalist/racialist wing of the Democrats, and that is about all.

Playing games with DACA is going to open the GOP to nasty primary battles, which judging from 2016, the Establishment candidates will be vulnerable. Also, supporting these schlock sentimental policies aren't going to win them any votes, anymore than giving money to refugee assistance or homeless shelters.

I don't think the Establishment has any idea of the level of dissatisfaction and discontent there is in the electorate, as their plan is short to mid-term doom. (Polling has 9% of Americans identifying as "Alt-Right" post-Charlottesville, and about another 30% you can describe as "Alt-Lite". These are mostly the people who will vote in GOP Primaries in 2018.)

[Sep 19, 2017] Time for a Conservative Anti-Monopoly Movement by Daniel Kishi

Sep 19, 2017 | www.theamericanconservative.com

Amazon, Facebook and Google: The new robber barons?

Amazon CEO Jeff Bezos in 2010. Credit: /CreativeCommons/SteveJurvetson Earlier this month Amazon, announced its plans to establish a second headquarters in North America. Rather than simply reveal which city would become its second home, the Seattle-based tech company opted instead to open a bidding war. In an eight page document published on its website, Amazon outlined the criteria for prospective suitors, and invited economic developers to submit proposals advocating for why their city or region should be the host of the new location.

Its potential arrival comes with the claim that the company will invest more than $5 billion in construction and generate up to 50,000 "high paying jobs." Mayors and governors, hard at work crafting their bids, are no doubt salivating at the mere thought of such economic activity. Journalists and editorial teams in eligible metropolises are also playing their parts, as newspapers have published a series of articles and editorials making the case for why their city should be declared the winner.

Last Tuesday Bloomberg reported that Boston was the early frontrunner, sending a wave of panic across the continent. Much to the relief of the other contenders, Amazon quickly discredited the report as misinformation, announcing in a series of tweets on Wednesday that it is "energized by the response from cities across [North America]" and that, contrary to the rumors, there are currently no front-runners on their "equal playing field."

That Amazon is "energized" should come as no surprise. Most companies would also be energized by the taxpayer-funded windfall that is likely coming its way. Reporters speculate that the winner of the sweepstakes!in no small part to the bidding war format!could be forced to cough up hundreds of millions of dollars in state and local subsidies for the privilege of hosting Amazon's expansion.

Amazon has long been the beneficiary of such subsidies, emerging in recent years as a formidable opponent to Walmart as the top recipient of corporate welfare. According to Good Jobs First, a Washington, D.C. organization dedicated to corporate and government accountability, Amazon has received more than $1 billion in local and state subsidies since 2000. With a business plan dedicated to amassing long-term market share in lieu of short-term profits, Amazon, under the leadership of its founder and chief executive, Jeff Bezos, operates on razor-thin profit margins in most industries, while actually operating at a loss in others. As such, these state and local subsidies have played an instrumental role in Amazon's growth

Advocates of free market enterprise should be irate over the company's crony capitalist practices and the cities and states that enable it. But more so than simply ruffling the feathers of the libertarian-minded, Amazon's shameless solicitation for subsidies capped off a series of summer skirmishes in the Democratic left's emerging war against monopolies.

Earlier this summer when Amazon announced its $13.7 billion purchase of Whole Foods, antitrust advocates called upon the Department of Justice and the Federal Trade Commission's Antitrust Division to block the sale and update the United States government's legal definition of monopoly. Although the acquisition!which was approved in August!only gives Amazon a 1.5 percent market share in the grocery industry, it more importantly provides the tech giant with access to more than 450 brick-and-mortar Whole Foods locations. Critics say that these physical locations will prove invaluable to its long term plan of economic dominance, and that it is but the latest advance in the company's unprecedented control of the economy's underlying infrastructure.

Google also found itself in the crosshairs of the left's anti-monopoly faction when, in late June, the European Union imposed a $2.7 billion fine against the tech company for anti-competitive search engine manipulation in violation of its antitrust laws. The Open Markets Program of the New America Foundation subsequently published a press release applauding the EU's decision. Two months later, the Open Markets Program was axed . The former program director Barry Lynn claims that his employers caved to pressure from a corporation that has donated more than $21 million to the New America Foundation. The fallout emboldened journalists to share their experiences of being silenced by the tech giant, and underscores the influence Google exerts over think tanks and academics

Most recently, Facebook faced criticism after it was discovered that a Russian company with ties to the Kremlin purchased $100,000 in ads from the social media company in an effort to influence the 2016 presidential election. Facebook, as a result, has become the latest subject of interest in Robert Mueller's special investigation into Russian interference in last fall's election. But regardless of whether the ads influenced the outcome, the report elicited demands for transparency and oversight in a digital ad marketplace that Facebook, along with Google, dominates . By using highly sophisticated algorithms, Facebook and Google receive more than 60 percent of all digital ad revenue, threatening the financial solvency of publishers and creating a host of economic incentives that pollute editorial autonomy.

While the Democratic left!in an effort to rejuvenate its populist soul !has been at the front lines in the war against these modern-day robber barons, Stacy Mitchell, co-director of the Institute of Local Self-Reliance, suggests that opposition to corporate consolidation need not be a partisan issue. In a piece published in The Atlantic , Mitchell traces the bipartisan history of anti-monopoly sentiment in American politics. She writes :

If "monopoly" sounds like a word from another era, that's because, until recently, it was. Throughout the middle of the 20th century, the term was frequently used in newspaper headlines, campaign speeches, and State of the Union addresses delivered by Republican and Democratic presidents alike. Breaking up too-powerful companies was a bipartisan goal and on the minds of many voters. But, starting in the 1970s, the word retreated from the public consciousness. Not coincidentally, at the same time, the enforcement of anti-monopoly policy grew increasingly toothless.

Although the modern Republican Party stands accused of cozying up with corporate interests, the history of conservative thought has a rich intellectual tradition of being skeptical!if not hostile!towards economic consolidation. For conservatives and libertarians wedded to the tenets of free market orthodoxy!or for Democrats dependent on campaign contributions from a donor class of Silicon Valley tycoons!redefining the legal definition of monopoly and rekindling a bipartisan interest in antitrust enforcement are likely non-starters.

But for conservatives willing to break from the principles of free market fundamentalism, the papal encyclicals of the Roman Catholic Church, the distributist thought of Hilaire Belloc and G.K. Chesterton, the social criticism of Christopher Lasch, and the observations of agrarian essayist Wendell Berry provide an intellectual framework from which conservatives can critique and combat concentrated economic power. With a respect for robust and resilient localities and a keen understanding of the moral dangers posed by an economy perpetuated by consumerism and convenience, these writers appeal to the moral imaginations of the reader, issuing warnings about the detrimental effects that economic consolidation has on the person, the family, the community, and society at large.

The events of this summer underscore the immense political power wielded by our economy's corporate giants. To those who recognize the dangers posed by our age of consolidation, the skirmishes from this summer could serve as a rallying cry in a bipartisan war for independence from our corporate crown.

Daniel Kishi is an editorial assistant at The American Conservative . Follow him on Twitter at @DanielMKishi

[Aug 30, 2017] The President of Belgian Magistrates - Neoliberalism is a form of Fascism by Manuela Cadelli

Highly recommended!
Notable quotes:
"... By Manuela Cadelli, President of the Magistrates' Union of Belgium ..."
"... Every totalitarianism starts as distortion of language, as in the novel by George Orwell. Neoliberalism has its Newspeak and strategies of communication that enable it to deform reality. In this spirit, every budgetary cut is represented as an instance of modernization of the sectors concerned. If some of the most deprived are no longer reimbursed for medical expenses and so stop visiting the dentist, this is modernization of social security in action! ..."
"... translated from French by Wayne Hall ..."
Aug 30, 2017 | www.defenddemocracy.press

By Manuela Cadelli, President of the Magistrates' Union of Belgium

The time for rhetorical reservations is over. Things have to be called by their name to make it possible for a co-ordinated democratic reaction to be initiated, above all in the public services.

Liberalism was a doctrine derived from the philosophy of Enlightenment, at once political and economic, which aimed at imposing on the state the necessary distance for ensuring respect for liberties and the coming of democratic emancipation. It was the motor for the arrival, and the continuing progress, of Western democracies.

Neoliberalism is a form of economism in our day that strikes at every moment at every sector of our community. It is a form of extremism.

Fascism may be defined as the subordination of every part of the State to a totalitarian and nihilistic ideology.

I argue that neoliberalism is a species of fascism because the economy has brought under subjection not only the government of democratic countries but also every aspect of our thought.

The state is now at the disposal of the economy and of finance, which treat it as a subordinate and lord over it to an extent that puts the common good in jeopardy.

The austerity that is demanded by the financial milieu has become a supreme value, replacing politics. Saving money precludes pursuing any other public objective. It is reaching the point where claims are being made that the principle of budgetary orthodoxy should be included in state constitutions. A mockery is being made of the notion of public service.

The nihilism that results from this makes possible the dismissal of universalism and the most evident humanistic values: solidarity, fraternity, integration and respect for all and for differences.

There is no place any more even for classical economic theory: work was formerly an element in demand, and to that extent there was respect for workers; international finance has made of it a mere adjustment variable.

Every totalitarianism starts as distortion of language, as in the novel by George Orwell. Neoliberalism has its Newspeak and strategies of communication that enable it to deform reality. In this spirit, every budgetary cut is represented as an instance of modernization of the sectors concerned. If some of the most deprived are no longer reimbursed for medical expenses and so stop visiting the dentist, this is modernization of social security in action!

Read also: The only real way to stop atrocities like the Manchester attack is to end the wars which allow extremism to grow

Abstraction predominates in public discussion so as to occlude the implications for human beings.

Thus, in relation to migrants, it is imperative that the need for hosting them does not lead to public appeals that our finances could not accommodate. Is it In the same way that other individuals qualify for assistance out of considerations of national solidarity?

The cult of evaluation

Social Darwinism predominates, assigning the most stringent performance requirements to everyone and everything: to be weak is to fail. The foundations of our culture are overturned: every humanist premise is disqualified or demonetized because neoliberalism has the monopoly of rationality and realism. Margaret Thatcher said it in 1985: "There is no alternative." Everything else is utopianism, unreason and regression. The virtue of debate and conflicting perspectives are discredited because history is ruled by necessity.

This subculture harbours an existential threat of its own: shortcomings of performance condemn one to disappearance while at the same time everyone is charged with inefficiency and obliged to justify everything. Trust is broken. Evaluation reigns, and with it the bureaucracy which imposes definition and research of a plethora of targets, and indicators with which one must comply. Creativity and the critical spirit are stifled by management. And everyone is beating his breast about the wastage and inertia of which he is guilty.

The neglect of justice

The neoliberal ideology generates a normativity that competes with the laws of parliament. The democratic power of law is compromised. Given that they represent a concrete embodiment of liberty and emancipation, and given the potential to prevent abuse that they impose, laws and procedures have begun to look like obstacles.

Read also: EU lies on Cyprus, Ireland, Portugal and Greece

The power of the judiciary, which has the ability to oppose the will of the ruling circles, must also be checkmated. The Belgian judicial system is in any case underfunded. In 2015 it came last in a European ranking that included all states located between the Atlantic and the Urals. In two years the government has managed to take away the independence given to it under the Constitution so that it can play the counterbalancing role citizens expect of it. The aim of this undertaking is clearly that there should no longer be justice in Belgium.

A caste above the Many

But the dominant class doesn't prescribe for itself the same medicine it wants to see ordinary citizens taking: well-ordered austerity begins with others. The economist Thomas Piketty has perfectly described this in his study of inequality and capitalism in the twenty-first century (French edition, Seuil, 2013).

In spite of the crisis of 2008 and the hand-wringing that followed, nothing was done to police the financial community and submit them to the requirements of the common good. Who paid? Ordinary people, you and me.

And while the Belgian State consented to 7 billion-euro ten-year tax breaks for multinationals, ordinary litigants have seen surcharges imposed on access to justice (increased court fees, 21% taxation on legal fees). From now on, to obtain redress the victims of injustice are going to have to be rich.

All this in a state where the number of public representatives breaks all international records. In this particular area, no evaluation and no costs studies are reporting profit. One example: thirty years after the introduction of the federal system, the provincial institutions survive. Nobody can say what purpose they serve. Streamlining and the managerial ideology have conveniently stopped at the gates of the political world.

The security ideal

Read also: DEMOCRATIC MENTAL HEALTH SOLIDARITY NETWORK

Terrorism, this other nihilism that exposes our weakness in affirming our values, is likely to aggravate the process by soon making it possible for all violations of our liberties, all violations of our rights, to circumvent the powerless qualified judges, further reducing social protection for the poor, who will be sacrificed to "the security ideal".

Salvation in commitment

These developments certainly threaten the foundations of our democracy, but do they condemn us to discouragement and despair?

Certainly not. 500 years ago, at the height of the defeats that brought down most Italian states with the imposition of foreign occupation for more than three centuries, Niccolo Machiavelli urged virtuous men to defy fate and stand up against the adversity of the times, to prefer action and daring to caution. The more tragic the situation, the more it necessitates action and the refusal to "give up" (The Prince, Chapters XXV and XXVI).

This is a teaching that is clearly required today. The determination of citizens attached to the radical of democratic values is an invaluable resource which has not yet revealed, at least in Belgium, its driving potential and power to change what is presented as inevitable. Through social networking and the power of the written word, everyone can now become involved, particularly when it comes to public services, universities, the student world, the judiciary and the Bar, in bringing the common good and social justice into the heart of public debate and the administration of the state and the community.

Neoliberalism is a species of fascism. It must be fought and humanism fully restored.

Published in the Belgian daily Le Soir, 3.3.2016

translated from French by Wayne Hall
Le néolibéralisme est un fascisme, par Manuela Cadelli

[Aug 28, 2017] Countdown To War On Venezuela - Step II Trump Imposes More Sanctions

Aug 28, 2017 | www.moonofalabama.org

A month ago we warned of the upcoming war on Venezuela . Such a war could blow up huge in many nations of the region .

The U.S. trained and financed opposition has tried to create violent chaos in the streets but failed to gain traction with the majority of the people. The only support it has inside the country is from the richer bourgeois in the major cities which despises the government's social justice program. Workers and farmers are better off under the social-democratic policies of first Hugo Chavez and now Nicolas Maduro. The coup attempt as step one of a U.S. takeover of Venezuela has failed.

Last month a new constitutional assembly was voted in and it is ready to defend the state. The opposition boycotted the election to the assembly but is now complaining that it has no seats in it. One of the assemblies first moves was to fire the renegade General Prosecutor Luisa Ortega Diaz. She had condemned the government for its resistance to the coup attempts. She now has fled the country together with her husband. The Miami Herald admits that she is on the U.S. payroll:

Ortega, a longtime government insider who became chief prosecutor in 2007, is likely safeguarding some of the administration's most damning legal secrets. And she's thought to be working with U.S. law enforcement at a time when Washington is ratcheting up sanctions on Caracas.

Word is that Ortega's husband was blackmailed by the U.S. after he was involved in large illegal transactions.

U.S. President Trump threatened to use military force should the dully elected President Maduro not give up his position. The CIA head Pompeo recently visited countries neighboring Venezuela "trying to help them understand the things they might do". Did he suggest weapon supplies to some proxy forces or an outright invasion?

Today the Trump administration imposed severe sanctions on Venezuela:

The sanctions Trump signed by executive order prohibit financial institutions from providing new money to the government or state oil company PDVSA. It would also restrict PDVSA's U.S. subsidiary, Citgo, from sending dividends back to Venezuela as well as ban trading in two bonds the government recently issued to circumvent its increasing isolation from western financial markets.

Venezuela was prepared for at least some of these sanctions. A few moth ago the Russian oil giant Rosneft acquired a share of PDVSA and at least some oil sales are routed through that company:

Russian oil firm Rosneft has struck deals with several buyers for almost its entire quota of Venezuelan crude for the remainder of the year, traders told Reuters on Wednesday, the first time it has conducted such a large sale of the OPEC member's oil.
...
Venezuela's oil deliveries to the United States have declined in recent years amid falling production, commercial issues, and sanctions on Venezuelan officials.

The White House statement calls Maduro a "dictator" and his Presidency "illegitimate". Both descriptions are laughable. Maduro was elected in free and fair elections. The former U.S. president Jimmy Carter called the election system in Venezuela the best in the world . The new sanctions will likely increase the support for the current government.

The White House hinted at further economic measures:

In a call to brief reporters on the measures, the [senior Trump] official said the United States has significant influence over Venezuela's economy but does not want to wield it in an irresponsible manner that could further burden the already-struggling Venezuelan people.

Venezuela will now have some troubling times. But unless the U.S. launches an outright military attack on the country -by proxy of its neighbors, through mercenaries or by itself- the country will easily survive the unjust onslaught.

With 300 billion barrels the proven oil-reserves of Venezuela are the largest of the world. They are the reason why the U.S. wants to subjugate the country. But neither Russia nor China nor anyone else wants to see those reserves under U.S. control.

Posted by b on August 25, 2017 at 02:21 PM | Permalink

ben | Aug 25, 2017 2:41:41 PM | 1

A very timely and highly relevant article, thanks b.

Another uni-polar vs. multi-polar confrontation. Maduro should immediately seek alliances with China as well as Russia.

Viva Venezuela, and the Venezuelan workers!

chet380 | Aug 25, 2017 2:41:46 PM | 2
Treacherous, slimy Uncle Sam in its relentless mission for world domination .. the unfortunate price that Chavez and Maduro have had to pay for telling Uncle to F*ck Off.
Pnyx | Aug 25, 2017 3:03:10 PM | 3
Tronald probably thinks, a Venezuela war could be a better possibility for a decisive turning point in his presidency than one in North Corea or Syria or Ukraine. Not as risky. For that reason it is tremendously important that China and Russia react swiftly in favor of Venenzuala making clear the costs would be high and the outcome uncertain.
Piotr Berman | Aug 25, 2017 3:18:36 PM | 4
I know that elections can be boring, but calling someone "dully elected" is a bit too much.

BTW, once I asked in Germany if I could get a savings account with interest, and the young clerk could not understand why I am bored with my account with zero "zinsen".

Ragheb | Aug 25, 2017 3:20:01 PM | 5
Inflation in Venezuala has reached Weimar Germany levels. US policies undoubtedly a key reason. But whatever the cause no government can last long unless hyperinflation bought under control.
Fidelios Automata | Aug 25, 2017 3:25:01 PM | 6
As much as I want the US intervention to fail, it will be tough going for Venezuela given Maduro's heavy-handed and incompetent governance. His finger-pointing at the merchant class is a sure sign of a demagogue. Pure command economies don't work, that's why both Russia and China reformed theirs. The best thing that could happen would be a coup from the center left to reboot the currency, free up the economy and make peace with the upper classes. And yes, ally with Russia.
psychohistorian | Aug 25, 2017 3:30:22 PM | 7
Thank you for keeping this part of the whirling dervish of late empire in focus b.

I agree that Venezuela needs to buddy up to the China/Russia alliance and continue to follow their anti-oligarch direction.

Any here who have not read The Shock Doctrine by Naomi Klein should do so as background to the R2P that the US continues to do to South America....and the rest of the 3rd world.

james | Aug 25, 2017 4:00:12 PM | 8
thanks b... the usa will do anything for exxon... they have the full backing of all the important industries - financial and military.. same story everywhere..
virgile | Aug 25, 2017 4:45:48 PM | 9
Poor Venezuela. US machiavelism is at work to undermine it.
Will the Venezuelians realize that the USA policy in South America is dictated by greed and only greed.
Makutwa Omutiti | Aug 25, 2017 4:57:14 PM | 10
It is only idiots who think that this is about America caring for the freedom, democracy,and well-being of Venezuelans. Such idiots should update themselves on the history of American foreign policy in Latin America. As b correctly points out: pay attention to the Grand Chessboard.
Jen | Aug 25, 2017 4:58:43 PM | 11
It would seem that with the collapse of ISIS in Syria and Iraq, combined with the prospect of ISIS takfirists returning to their countries of origin, that the US and the EU would opt to use these people as mercenaries and fly them to Colombia, Brazil and Guyana to form a base of terrorists to undermine Venezuela. These people could be trained to attack or hold hostage indigenous groups or rural communities in Venezuela. These would be some of the most vulnerable groups in that country and their treatment would certainly attract the attention of the Western MSM news propaganda networks.
Makutwa Omutiti | Aug 25, 2017 5:08:04 PM | 12
It is tragic to see so many idiots fall for the American and western canards about promoting "freedom", "democracy" and "human rights". My fellow barflies, please I recommend you go to medium.com and read Nassim Nicholas Taleb's blockbuster essay "Intellectual-Yet-Idiot" to understand the stupidity of the American neo-imperialists who are blinded by imperial hubris to even understand their long term objective interests.
karlof1 | Aug 25, 2017 7:28:30 PM | 13
The recent election of the Constituent Assembly tends to confuse people--particularly Outlaw US Empire Neoliberalcons plus Trump, who just falsely accused Maduro of being a dictator--and what it's designed to accomplish. This article explains it all very clearly--it's potential power is potent and has the US-backed opposition backed into a deep hole since it boycotted the election and has no delegates, which is why Trump just upped the sanctions and aggressive rhetoric, https://venezuelanalysis.com/analysis/13313

In counterpoise to that explanatory article, we have an analysis of the Outlaw US Empire's Propaganda System's coverage of what is in fact a very small d democratic act that's mandated by the current constitution, https://venezuelanalysis.com/analysis/13329 As you'll see, the rhetoric hasn't changed one iota since Bu$hCo and Obomber. The article's parent site--TelesurEnglish--and republication site--Venezuelanalysis--IMO, are the two best English language sources for following events there. Yes, there are others, but they tend to be slower in reporting current events.

I strongly echo Cooke's recommendations.

Yul | Aug 25, 2017 8:09:43 PM | 14
Citgo buffed up its ties to Trump before and after his election. Now, it gets exempted from a new round of Venezuela sanctions.

http://www.thedailybeast.com/donald-trump-just-gave-a-big-carve-out-to-citgo-an-oil-giant-repped-by-his-ex-aides

How to grease the hands!

Anon | Aug 25, 2017 8:57:03 PM | 15
The point of the war is to do to Spanish South America what was done to the Middle East, that is to plunge the region into perpetual chaos and make it impossible for any government to emerge that is able to resist the will of the Empire.

Very dark days ahead for our Latin friends.

frances | Aug 25, 2017 9:00:35 PM | 16
b-thank you, very timely!
I found an excellent and relatively short video on ZeroHedge(in the comments) just done onsite in Venezula re truth/hype on food shortages, political activism, food shortages, black market. It is really good, recommend to all: https://www.youtube.com/watch?v=GHc7yegaCmc
frances | Aug 25, 2017 9:02:46 PM | 17
comment 16 edit
Sorry all, that second "food shortages" in my post should have been "paper shortages"
likklemore | Aug 25, 2017 9:03:52 PM | 18
And another hands in his resignation to Trump – over foreign policy -
Sebastian Gorka is resigning his post as Deputy Assistant to President Trump, multiple sources familiar with the situation have told The Federalist.

In a blunt resignation letter, the national security and counterterrorism expert expressed dissatisfaction with the current state of the Trump administration. "[G]iven recent events, it is clear to me that forces that do not support the MAGA promise are – for now – ascendant within the White House," Gorka wrote. "As a result, the best and most effective way I can support you, Mr. President, is from outside the People's House."

Gorka's letter expressed unhappiness with the direction the Trump administration's foreign policy has taken, as signaled by the president's recent speech on Afghanistan: [.]

"Just as worrying, when discussing our future actions in the region, the speech listed operational objectives without ever defining the strategic victory conditions we are fighting for. This omission should seriously disturb any national security professional, and any American who is unsatisfied with the last 16 years of disastrous policy decisions which have led to thousands of Americans killed and trillions of taxpayer dollars spent in ways that have not brought security or victory."[.]

http://thefederalist.com/2017/08/25/breaking-sebastian-gorka-resigns-from-trump-administration/


virgile | Aug 25, 2017 9:45:40 PM | 19
The loss of Sebastian Gorka and Steve Bannon are making Trump's position very weak. If Trump continues to be the puppet of the neo-cons and the zionists then they will keep him on, otherwise they will kick him out.
Gorka and Bannon will fight against these forces outside the WH, it is yet to see if they will succeed.
Tannenhouser | Aug 25, 2017 9:51:45 PM | 20
It's beginning to look like Chinese for sure and hopefully Russian assets on the ground in a real big way ASAP might be the only way to put a stop to this nonsense.
Robert Beal | Aug 25, 2017 10:51:28 PM | 21
what is MAGA in rightspeak?
Robert Beal | Aug 25, 2017 10:53:13 PM | 22
oh, yeah, nevermind--they still say that? don't they know it was a campaign (is it a) meme?
Hoarsewhisperer | Aug 25, 2017 11:25:59 PM | 23
If this Yankee plot were to be boiled down to its basics it could be articulated as...

AmeriKKKa's Greedy Idle Rich bought and own the US Govt. Venezuela's Greedy Idle Rich, being too cheap and unimaginative to buy Venezuela's Govt, have now accepted a US Govt offer to help them to steal it; at gun point if necessary.

Miguel | Aug 25, 2017 11:39:10 PM | 24
Sorry Moon of Alabama but this article is full of lies and propaganda.

Maduro is a murderer, tyrant, corrupt and totally inept. The National Constituent Assembly is fraudulent and illegitimate, as only one million people (out of 16 million) voted for it. 90% of Venezuela people hate Maduro, the only reason he is still in power is that the regime corrupted the Army and most of the patriotic officers are in prison or in exile. The role of cuban agents/spies is also well known as they are the ones controlling the upper level of the Army. I welcome anything that helps defeat the thugs that control Venezuela government, they only brought misery to my people.

psychohistorian | Aug 25, 2017 11:40:17 PM | 25
@ Hoarsewhisperer

During the (s)election process Trump said multiple times that to the victor go the spoils. How will the rest of the world react if the US takes over Venezuela like Hawaii and says the oil now belongs to the US?

Venezuela's Greedy Idle Rich will be the caretakers.

V. Arnold | Aug 26, 2017 1:00:05 AM | 26
"When the idle poor become the idle rich; how you going to tell, who is which?"
Finian's Rainbow
V. Arnold | Aug 26, 2017 1:10:32 AM | 27
Well, well; as the worm turns, we here in LOS live under a military junta, just like you, there in the U.S..
And both soft coups; little blood shed, mostly in the U.S..
Peter AU 1 | Aug 26, 2017 1:14:27 AM | 28
Back to business as usual for the US. Regime change in Venezuela, running drugs and setting up ISIS in Afghanistan, and going after the oil wells in Deir Ezzor to set up their Kurdish state.
https://www.almasdarnews.com/article/us-backed-forces-push-hasakah-deir-ezzor/
V. Arnold | Aug 26, 2017 2:02:50 AM | 29
Peter AU 1 | Aug 26, 2017 1:14:27 AM | 28

Interesting, this article (link) says SAA is on the verge of winning Deir Ezzor.
Jon Hellevig is the writer at Russia Insider;
http://tinyurl.com/ydxx7w8j

Peter AU 1 | Aug 26, 2017 2:23:26 AM | 30
V. Arnold 29

SAA will take Deir Ezzor city, but the US are going for the Omar oilfiels east of the Euphrates in Deir Ezzor province. The US need this to finance their Kurdish state, and Syria needs it for their own needs plus some export income. The Omar fields are the main developed oilfields in Syria.
This link to wikimap should show it.
http://wikimapia.org/#lang=en&lat=35.005253&lon=40.806656&z=11&m=b

V. Arnold | Aug 26, 2017 2:57:29 AM | 31
Peter AU 1 | Aug 26, 2017 2:23:26 AM | 30

Got it, thanks. Good map also.
Syria is like Thailand; I live in Ratchaburi Province, not Ratchaburi the province's main city.

tantin | Aug 26, 2017 3:03:07 AM | 32
@24 Miguel
Sorry my friend you are delusional, maybe you should migrate to South Carolina and get a job as a cleaner and live the American dream, isn't that what most uninformed Venezuelans do when they are against their own country.
Laguerre | Aug 26, 2017 7:15:34 AM | 33
Posted by: Peter AU 1 | Aug 26, 2017 2:23:26 AM | 28

Yeah, well if you think the US and the Kurds are going for the Omari oil-fields (as indeed b himself recently said on Sic Semper Tyrannis), there's a small wrinkle which you and he may not have noticed (and almost certainly not the US commanders). The report says that it is 7 Arab tribal units of the SDF who are doing the job. Of course, because the area is inhabited by their relatives. But they are a numerically weak element of the SDF. Rather more significantly, I remember a videoed interview with one of their leaders a year or two back, in which he said quite clearly that the reason they were joining the SDF was to end up reuniting Syria under Bashshar al-Asad! They may have conveniently forgotten to mention this to the Yanks; I know I would have done, had it been me. So the real issue may be, if they do succeed in taking the oil-fields before the Syrians get there (not certain), will they hand them over to the Kurds or the Syrians?

BRF | Aug 26, 2017 10:32:31 AM | 34
Sanctions and their increases are economic warfare, and war is war. The government of Venezuela needs to declare a national emergency of overt economic warfare against the nation and its people. Once on a war footing the state can move to clamp down on sedition while ensuring that at the least the minimum needs of the people are met. Medicines, food, clothing shelter and that normal life carries on as much as possible, schooling, law and order and that any hoarding, the warehousing of goods, by the oligarchs and black marketing of essential and vital goods is stamped out as much as possible. Venezuela must also reach out to any allies it has in seeking assistance under some mutual defense treaty such as NATO's clause 5 as together they are stronger and not as liable to be picked off separately. Russia has her hands full so China needs to step up to the plate, but will she?
daffyDuct | Aug 26, 2017 10:53:38 AM | 35
Venezuela is a repeat of the same US playbook, especially in the CIA era. Too many examples to list.

1) Fund an opposition or exploit an existing fault line
2) Find some civilian shock-troops (contras, neoNazis in Ukraine, street gangs in Venezuela)
3) Count on the US media to promote your faked events.
4) Make neighboring countries knuckle under or bribe them.
5) Provoke government over-reaction
6) Intervene forcefully or trigger a prepared military coup
7) Walk away
8) Rinse and repeat

Victor J | Aug 26, 2017 11:09:08 AM | 36
Suddenly the guarimbas (violent protest) stopped. because the money payments stopped? So much for ¨popular protests¨. Also Trump´s threats had the opposite effect; the opposition now cannot hide their real intentions.
fudmier | Aug 26, 2017 2:48:39 PM | 37
Responding to 8, 10, and 35..

http://www.blacklistednews.com/CIA's_Secret_Spy_Tool_Steals_Biometric_Data_From_Other_Intelligence_Agencies/60531/0/38/38/Y/M.html Wars. <= traceable according to gas and oil location.. Tillerson Sec of State?


Foreign policy <=Government Subsidies for private for profit business?
locate the oil and gas, identify the war?

https://en.wikipedia.org/wiki/List_of_LNG_terminals#United_States_2


Can you find Qatar in the above list, they are the world's largest producer of LNG.
https://www.qp.com.qa/en/AboutQP/Pages/CEOsMessage.aspx

https://en.wikipedia.org/wiki/Natural_Gas_in_Qatar


These numbers explain so much.. about wars, sanctions and regime changes.
Leadership exploitation [LE] model Where a nation forces[taxes] its hard working citizens (taxpayers) to finance corporate access, control, and possession of resources-natural[AC_PORN] [oil, gas, precious metals, etc. ], the leadership directs needed TAX PAYER funds from personal and homeland needs to subsidize corporation activities . These subsidies lower cost of obtaining, producing and marketing resources-natural (COPM] and such subsidies make the task of establishing competition-free, corporate-owed monopolies EASY. Hence, corporations have come to expect national leaders to use the wealth of the people of the nations they lead, to guarantee corporate owners "monopoly powers" and subsidized flows of capital. LE subsidies are usually well hidden in war, regime change, and sanction activities, but subsidy form does not change the corruption. It allows the leadership of a nation to fund and license corporations to be stronger than the host nation itself/>.

I believe it is time to stop being surprised by what it was said actually happened, and instead, to devise a model that allows to detect and predict wrongful government subsidy and government leadership self-serving support of corporate monopoly power.

A method needs to be developed to allow the public to uncouple its leadership from corporate subsidy activity and corporate monopoly support. It will take a lot of people from all over the world to evolve that model but in this era of false flag propaganda, fake news, denial of speech, and information hiding, nothing else seems to have a chance to restore citizen level democracy.

PavewayIV | Aug 26, 2017 2:48:50 PM | 38
Miguel@24 -

"...Maduro is a murderer, tyrant, corrupt and totally inept..."

I agree 100! But he's an amateur compared to our Bushes and Obama. Trump? Give him time... Ridding your country of Maduro will change NOTHING. Explain to me how you're going to prevent the next power-seeking psychopaths (and their relatives) from exploiting Venezuela?

"...The National Constituent Assembly is fraudulent and illegitimate, as only one million people (out of 16 million) voted for it..."

So you're arguing illigitimacy and fraud based on what? Broken voting process? Check. No state will to enforce the law when breaking it benefits them? Check. Violating the terms or spirit of your consitution? Check. So the next psychopaths running Venezuela are going to magically obey the constitution, hold the powerful to the same laws as the little people and not exploit 'voting' to legitimize the people they select anyway? You sound just like an American now!

"...90% of Venezuela people hate Maduro..."

Just think of what a paradise your country will be when that bastard Maduro is gone! Ask any Ukrainian about the euphoria they are experiencing after booting that rat, Yanukovyych. What Libyan would still want to live under the cruel dictatorship of that nutjob Ghadaffi rather than the blissful utopia Lybia has become after 'freedomization'? Iraq was an oil-rich country like yours run by the corrupt, murdering despot Saddam Hussein - it is now the shining jewel of stability in Middle Eastern liberty and democracy. Iraqis are thrilled! The US is still working on Assad, but don't all Syrians deserve the nirvana that the US will create by getting rid of him? Or are you suggesting an indigenous Venezuelan do-it-yourselfer project without foreign backers? You know it never works like that!

If nothing else, any opposition that appears to be "US-backed" should be a red flag that you're not ever getting anything close to what they're selling and there will always be strings attached.

"...the only reason he is still in power is that the regime corrupted the Army and most of the patriotic officers are in prison or in exile..."

a) See above
b) This will be the exact same situation under any new Venezuelan leader that replaces him, and the next on that replaces the replacement, and on and on and on.
c) Armies are meant to protect the interests of the leadership and ruling elite. It's just a happy coincidence that - at times - those interests occasionally seem to involve protecting the little people.

"...The role of cuban agents/spies is also well known as they are the ones controlling the upper level of the Army..."

Just the Army? Let me tell you about how the real pros do it: Israeli/Saudi influence on the US Congress, the Department of Defense, US Intelligence Community, Department of Homeland Security,...

"...I welcome anything that helps defeat the thugs that control Venezuela government, they only brought misery to my people..."

Same here! We call the fronts for the biggest ones 'Democrats' and 'Republicans'. Tell me how you're going to prevent a new flavor of psychopaths from replacing the current ones besides worshipping the magical (but non-existent) powers of your intentionally broken tools of democracy - 'voting' and 'the law'? We repeatedly try this in the US and it doesn't seem to fix anything. Us little people seem delighted with the little red steering wheel , but it only seems to take us in the direction we turn it some of the time - and that seems pretty random at best. The old one we had with the blue steering wheel worked the same way - what the hell is up with these things?

[Aug 19, 2017] Vassal Aristocracies Increasingly Resist Control by US Aristocracy by Eric Zuesse

Notable quotes:
"... the ultimate driving force behind today's international news is the aristocracy that the MIC represents, the billionaires behind the MIC, because theirs is the collective will that drives the MIC ..."
"... The MIC is their collective arm, and their collective fist. It is not the American public's global enforcer; it is the American aristocracy's fist, around the world. ..."
"... The MIC (via its military contractors such as Lockheed Martin) also constitutes a core part of the U.S. aristocracy's wealth (the part that's extracted from the U.S. taxpaying public via the U.S. government), and also (by means of those privately-owned contractors, plus the taxpayer-funded U.S. armed forces) it protects these aristocrats' wealth in foreign countries. Though paid by the U.S. government, the MIC does the protection-and-enforcement jobs for the nation's super-rich. ..."
"... So, the MIC is the global bully's fist, and the global bully is the U.S. aristocracy -- America's billionaires, most especially the controlling stockholders in the U.S.-based international corporations. These are the people the U.S. government actually represents . The links document this, and it's essential to know, if one is to understand current events. ..."
"... This massacre didn't play well on local Crimean television. Immediately, a movement to secede and to again become a part of Russia started, and spread like wildfire in Crimea. (Crimea had been only involuntarily transferred from Russia to Ukraine by the Soviet dictator Khrushchev in 1954; it had been part of Russia for the hundreds of years prior to 1954. It was culturally Russian.) Russia's President, Vladimir Putin, said that if they'd vote for it in a referendum, then Russia would accept them back into the Russian Federation and provide them protection as Russian citizens. ..."
"... The latest round of these sanctions was imposed not by Executive Order from a U.S. President, but instead by a new U.S. law, "H.R.3364 -- Countering America's Adversaries Through Sanctions Act" , which in July 2017 was passed by 98-2 in the Senate and 419-3 in the House , and which not only stated outright lies (endorsed there by virtually everyone in Congress), but which was backed up by lies from the U.S. Intelligence Community that were accepted and endorsed totally uncritically by 98 Senators and 419 Representatives . (One might simply assume that all of those Senators and Representatives were ignorant of the way things work and were not intentionally lying in order to vote for these lies from the Intelligence Community, but these people actually wouldn't have wrangled their ways into Congress and gotten this far at the game if they hadn't already known that the U.S. Intelligence Community is designed not only to inform the President but to help him to deceive the public and therefore can't be trusted by anyone but the President . ..."
"... Good summary of where we're at, but please don't call the ruling goons aristocrats. The word, "aristocrat," is derived from the Ancient Greek ἄριστος (áristos, "best"), and the ruling thugs in this country have never been the best at anything except lies, murder and theft ..."
"... I realize that calling them violent bloodthirsty sociopathic parasites is a mouthful, and that "plutacrats" doesn't have quite the appropriate sting, but perhaps it's more accurate. ..."
"... They also -- through the joint action of Rating Agencies, the Anglosaxon media, the vassal vassal states' media, make national debt's yield spreads skyrocket. It's been the way to make entire governments tumble in Europe, as well as force ministers for economics to resign. After obeisance has been restored -- and an "ex Goldman Sachs man" put on the presidential/ministerial chair, usually -- investors magically find back their trust in the nation's economic stability, and yield spreads return to their usual level. ..."
"... First, he delineates the American Elites well. The USA forged by Abe Lincoln is not a real democracy, not a real republic. It is the worst kind of oligarchy: one based on love of money almost exclusively (because if a man does not love money well enough to be bribed, then he cannot be trusted by plutocrats) while proclaiming itself focused on helping all the little guys of the world overcome the power of the rich oppressors. ..."
Aug 14, 2017 | www.unz.com

The tumultuous events that dominate international news today cannot be accurately understood outside of their underlying context, which connects them together, into a broader narrative -- the actual history of our time . History makes sense, even if news-reports about these events don't. Propagandistic motivations cause such essential facts to be reported little (if at all) in the news, so that the most important matters for the public to know, get left out of news-accounts about those international events.

The purpose here will be to provide that context, for our time.

First, this essential background will be summarized; then, it will be documented (via the links that will be provided here), up till the present moment -- the current news: America's aristocracy controls both the U.S. federal government and press , but (as will be documented later here) is facing increasing resistance from its many vassal (subordinate) aristocracies around the world (popularly called "America's allied nations"); and this growing international resistance presents a new challenge to the U.S. military-industrial complex (MIC), which is controlled by that same aristocracy and enforces their will worldwide. The MIC is responding to the demands of its aristocratic master. This response largely drives international events today (which countries get invaded, which ones get overthrown by coups, etc.), but the ultimate driving force behind today's international news is the aristocracy that the MIC represents, the billionaires behind the MIC, because theirs is the collective will that drives the MIC. The MIC is their collective arm, and their collective fist. It is not the American public's global enforcer; it is the American aristocracy's fist, around the world.

The MIC (via its military contractors such as Lockheed Martin) also constitutes a core part of the U.S. aristocracy's wealth (the part that's extracted from the U.S. taxpaying public via the U.S. government), and also (by means of those privately-owned contractors, plus the taxpayer-funded U.S. armed forces) it protects these aristocrats' wealth in foreign countries. Though paid by the U.S. government, the MIC does the protection-and-enforcement jobs for the nation's super-rich.

Furthermore, the MIC is crucial to them in other ways, serving not only directly as their "policeman to the world," but also indirectly (by that means) as a global protection-racket that keeps their many subordinate aristocracies in line, under their control -- and that threatens those foreign aristocrats with encroachments against their own territory, whenever a vassal aristocracy resists the master-aristocracy's will. (International law is never enforced against the U.S., not even after it invaded Iraq in 2003.) So, the MIC is the global bully's fist, and the global bully is the U.S. aristocracy -- America's billionaires, most especially the controlling stockholders in the U.S.-based international corporations. These are the people the U.S. government actually represents . The links document this, and it's essential to know, if one is to understand current events.

For the first time ever, a global trend is emerging toward declining control of the world by America's billionaire-class -- into the direction of ultimately replacing the U.S. Empire, by increasingly independent trading-blocs: alliances between aristocracies, replacing this hierarchical control of one aristocracy over another. Ours is becoming a multi-polar world, and America's aristocracy is struggling mightily against this trend, desperate to continue remaining the one global imperial power -- or, as U.S. President Barack Obama often referred to the U.S. government, "The United States is and remains the one indispensable nation. That has been true for the century passed and it will be true for the century to come." To America's aristocrats, all other nations than the U.S. are "dispensable." All American allies have to accept it. This is the imperial mindset, both for the master, and for the vassal. The uni-polar world can't function otherwise. Vassals must pay (extract from their nation's public, and then transfer) protection-money, to the master, in order to be safe -- to retain their existing power, to exploit their given nation's public.

The recently growing role of economic sanctions (more accurately called "Weaponization of finance" ) by the United States and its vassals, has been central to the operation of this hierarchical imperial system, but is now being increasingly challenged from below, by some of the vassals. Alliances are breaking up over America's mounting use of sanctions, and new alliances are being formed and cemented to replace the imperial system -- replace it by a system without any clear center of global power, in the world that we're moving into. Economic sanctions have been the U.S. empire's chief weapon to impose its will against any challengers to U.S. global control, and are thus becoming the chief locus of the old order's fractures .

This global order cannot be maintained by the MIC alone; the more that the MIC fails (such as in Vietnam, Iraq, Afghanistan, Syria, ), the more that economic sanctions rise to become the essential tool of the imperial masters. We are increasingly in the era of economic sanctions. And, now, we're entering the backlash-phase of it.

A turning-point in escalating the weaponization of finance was reached in February 2014 when a Ukrainian coup that the Obama Administration had started planning by no later than 2011, culminated successfully in installing a rabidly anti-Russian government on Russia's border, and precipitated the breakaway from Ukraine of two regions (Crimea and Donbass) that had voted overwhelmingly for the man the U.S. regime had just overthrown . This coup in Ukraine was the most direct aggressive act against Russia since the Cold War had 'ended' (it had actually ended on the Russian side, but not on the American side, where it continues ) in 1991. During this coup in Kiev, on February 20th of 2014, hundreds of Crimeans, who had been peacefully demonstrating there with placards against this coup (which coup itself was very violent -- against the police, not by them -- the exact opposite of the way that "the Maidan demonstrations" had been portrayed in the Western press at the time), were attacked by the U.S.-paid thugs and scrambled back into their buses to return home to Crimea but were stopped en-route in central Ukraine and an uncounted number of them were massacred in the Ukrainian town of Korsun by the same group of thugs who had chased them out of Kiev .

This massacre didn't play well on local Crimean television. Immediately, a movement to secede and to again become a part of Russia started, and spread like wildfire in Crimea. (Crimea had been only involuntarily transferred from Russia to Ukraine by the Soviet dictator Khrushchev in 1954; it had been part of Russia for the hundreds of years prior to 1954. It was culturally Russian.) Russia's President, Vladimir Putin, said that if they'd vote for it in a referendum, then Russia would accept them back into the Russian Federation and provide them protection as Russian citizens.

On 6 March 2014, U.S. President Obama issued "Executive Order -- Blocking Property of Certain Persons Contributing to the Situation in Ukraine" , and ignored the internationally recognized-in-law right of self-determination of peoples (though he recognized that right in Catalonia and in Scotland), and he instead simply declared that Ukraine's "sovereignty" over Crimea was sacrosanct (even though it had been imposed upon Crimeans by the Soviet dictator -- America's enemy -- in 1954, during the Soviet era, when America opposed, instead of favored and imposed, dictatorship around the world, except in Iran and Guatemala, where America imposed dictatorships even that early). Obama's Executive Order was against unnamed "persons who have asserted governmental authority in the Crimean region without the authorization of the Government of Ukraine." He insisted that the people who had just grabbed control of Ukraine and massacred Crimeans (his own Administration's paid far-right Ukrainian thugs, who were racist anti-Russians ), must be allowed to rule Crimea, regardless of what Crimeans (traditionally a part of Russia) might -- and did -- want. America's vassal aristocracies then imposed their own sanctions against Russia when on 16 March 2014 Crimeans voted overwhelmingly to rejoin the Russian Federation . Thus started the successive rounds of economic sanctions against Russia, by the U.S. government and its vassal-nations . (As is shown by that link, they knew that this had been a coup and no authentic 'democratic revolution' such as the Western press was portraying it to have been, and yet they kept quiet about it -- a secret their public would not be allowed to know.)

The latest round of these sanctions was imposed not by Executive Order from a U.S. President, but instead by a new U.S. law, "H.R.3364 -- Countering America's Adversaries Through Sanctions Act" , which in July 2017 was passed by 98-2 in the Senate and 419-3 in the House , and which not only stated outright lies (endorsed there by virtually everyone in Congress), but which was backed up by lies from the U.S. Intelligence Community that were accepted and endorsed totally uncritically by 98 Senators and 419 Representatives . (One might simply assume that all of those Senators and Representatives were ignorant of the way things work and were not intentionally lying in order to vote for these lies from the Intelligence Community, but these people actually wouldn't have wrangled their ways into Congress and gotten this far at the game if they hadn't already known that the U.S. Intelligence Community is designed not only to inform the President but to help him to deceive the public and therefore can't be trusted by anyone but the President .

It's basic knowledge about the U.S. government, and they know it, though the public don't.) The great independent columnist Paul Craig Roberts headlined on August 1st, "Trump's Choices" and argued that President Donald Trump should veto the bill despite its overwhelming support in Washington, but instead Trump signed it into law on August 2nd and thus joined participation in the overt stage -- the Obama stage -- of the U.S. government's continuation of the Cold War that U.S. President George Herbert Walker Bush had secretly instituted against Russia on 24 February 1990 , and that, under Obama, finally escalated into a hot war against Russia. The first phase of this hot war against Russia is via the "Weaponization of finance" (those sanctions). However, as usual, it's also backed up by major increases in physical weaponry , and by the cooperation of America's vassals in order to surround Russia with nuclear weapons near and on Russia's borders , in preparation for a possible blitz first-strike nuclear attack upon Russia -- preparations that the Russian people know about and greatly fear, but which are largely hidden by the Western press, and therefore only very few Westerners are aware that their own governments have become lying aggressors.

Some excellent news-commentaries have been published about this matter, online, by a few 'alternative news' sites (and that 'alt-news' group includes all of the reliably honest news-sites, but also includes unfortunately many sites that are as dishonest as the mainstream ones are -- and that latter type aren't being referred to here), such as (and only the best sites and articles will be linked-to on this):

All three of those articles discuss how these new sanctions are driving other nations to separate themselves, more and more, away from the economic grip of the U.S. aristocracy, and to form instead their own alliances with one-another, so as to defend themselves, collectively, from U.S. economic (if not also military) aggression. Major recent news-developments on this, have included (all here from rt dot com):

"'US, EU meddle in other countries & kill people under guise of human rights concerns' – Duterte", and presented Philippine President Rodrigo Duterte explaining why he rejects the U.S. aristocracy's hypocritical pronouncements and condemnations regarding its vassals among the world's poorer and struggling nations, such as his. Of course, none of this information is publishable in the West -- in the Western 'democracies'. It's 'fake news', as far as The Empire is concerned. So, if you're in The (now declining) Empire, you're not supposed to be reading this. That's why the mainstream 'news'media (to all of which this article is being submitted for publication, without fee, for any of them that want to break their existing corrupt mold) don't publish this sort of news -- 'fake news' (that's of the solidly documented type, such as this). You'll see such news reported only in the few honest newsmedia. The rule for the aristocracy's 'news'media is: report what happened, only on the basis of the government's lies as to why it happened -- never expose such lies (the official lies). What's official is 'true' . That, too, is an essential part of the imperial system.

The front cover of the American aristocracy's TIME magazine's Asian edition, dated September 25, 2016, had been headlined "Night Falls on the Philippines: The tragic cost of President Duterte's war on drugs" . The 'news'-story, which was featured inside not just the Asian but all editions, was "Inside Philippine President Rodrigo Duterte's War On Drugs" , and it portrayed Duterte as a far-right demagogue who was giving his nation's police free reign to murder anyone they wished to, especially the poor. On 17 July 2017, China's Xinhua News Agency bannered "Philippines' Duterte enjoys high approval rating at 82 percent: poll" , and reported: "A survey by Pulse Asia Inc. conducted from June 24 to June 29 showed that 82 percent of the 1,200 people surveyed nationwide approved the way Duterte runs the country. Out of all the respondents, the poll said 13 percent were undecided about Duterte's performance, while 5 percent disapproved Duterte's performance. Duterte, who assumed the presidency in June last year, ends his single, six-year term in 2022." Obviously, it's not likely that the TIME cover story had actually been honest. But, of course, America's billionaires are even more eager to overthrow Russia's President, Putin.

Western polling firms can freely poll Russians, and do poll them on lots but not on approval or disapproval of President Putin , because he always scores above 80%, and America's aristocrats also don't like finding that confirmed, and certainly don't want to report it. Polling is routinely done in Russia, by Russian pollsters, on voters' ratings of approval/disapproval of Putin's performance. Because America's aristocrats don't like the findings, they say that Russians are in such fear of Putin they don't tell the truth about this, or else that Russia's newsmedia constantly lie about him to cover up the ugly reality about him.

However, the Western academic journal Post-Soviet Affairs (which is a mainstream Western publication) included in their January/February 2017 issue a study, "Is Putin's Popularity Real?" and the investigators reported the results of their own poll of Russians, which was designed to tap into whether such fear exists and serves as a distorting factor in those Russian polls, but concluded that the findings in Russia's polls could not be explained by any such factor; and that, yes, Putin's popularity among Russians is real. The article's closing words were: "Our results suggest that the main obstacle at present to the emergence of a widespread opposition movement to Putin is not that Russians are afraid to voice their disapproval of Putin, but that Putin is in fact quite popular."

The U.S. aristocracy's efforts to get resistant heads-of-state overthrown by 'democratic revolutions' (which usually is done by the U.S. government to overthrow democratically elected Presidents -- such as Mossadegh, Arbenz, Allende, Zelaya, Yanukovych, and attempted against Assad, and wished against Putin, and against Duterte -- not overthrowing dictators such as the U.S. government always claims) have almost consistently failed, and therefore coups and invasions have been used instead, but those techniques demand that certain realities be suppressed by their 'news'media in order to get the U.S. public to support what the government has done -- the U.S. government's international crime, which is never prosecuted. Lying 'news' media in order to 'earn' the American public's support, does not produce enthusiastic support, but, at best, over the long term, it produces only tepid support (support that's usually below the level of that of the governments the U.S. overthrows). U.S. Presidents never score above 80% except when they order an invasion in response to a violent attack by foreigners, such as happened when George W. Bush attacked Afghanistan and Iraq in the wake of 9/11, but those 80%+ approval ratings fade quickly; and, after the 1960s, U.S. Presidential job-approvals have generally been below 60% .

President Trump's ratings are currently around 40%. Although Trump is not as conservative -- not as far-right -- as the U.S. aristocracy wants him to be, he is fascist ; just not enough to satisfy them (and their oppostion isn't because he's unpopular among the public; it's more the case that he's unpopular largely because their 'news'media concentrate on his bads, and distort his goods to appear bad -- e.g., suggesting that he's not sufficiently aggressive against Russia). His fascism on domestic affairs is honestly reported in the aristocracy's 'news'media, which appear to be doing all they can to get him replaced by his Vice President, Mike Pence. What's not reported by their media is the fascism of the U.S. aristocracy itself, and of their international agenda (global conquest). That's their secret, of which their public must be (and is) constantly kept ignorant. America's aristocracy has almost as much trouble contolling its domestic public as it has controlling its foreign vassals. Investigative historian Eric Zuesse is the author, most recently, of They're Not Even Close: The Democratic vs. Republican Economic Records, 1910-2010 , and of CHRIST'S VENTRILOQUISTS: The Event that Created Christianity .

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Fidelios Automata > , August 19, 2017 at 2:22 am GMT

Fascism is defined as a system that combines private monopolies and despotic government power. It is sometimes racist but not necessarily so. By the correct definition, every President since at least Herbert Hoover has been fascist to some degree.

exiled off mainstreet > , August 19, 2017 at 4:21 am GMT

One bit of silver lining in the deep-state propaganda effort to destabilise the Trump regime is the damage to the legitimacy of the yankee imperium it confers, making it easier for vassal states to begin to jump ship. The claims of extraterritorial power used for economic warfare might confer a similar benefit, since the erstwhile allies will want to escape the dominance of the yankee dollar to be able to escape the economic extortion practised by the yankee regime to achieve its control abroad.

WorkingClass > , August 19, 2017 at 4:43 am GMT

Good news – The beast is dying. Bad news – We Americans are in its belly.

Wally > , August 19, 2017 at 6:00 am GMT

"America's aristocracy" = lying Israel First Zionists. Why doesn't Eric Zuesse just say the truth? What is he afraid of?

Must read:

jilles dykstra > , August 19, 2017 at 6:31 am GMT

" America's aristocracy has almost as much trouble controlling its domestic public as it has controlling its foreign vassals. "

These foreign vassals had a cozy existence as long as the USA made it clear it wanted to control the world. Dutch minister of Foreign Affairs Ben Bot made this quite clear whan the Netherlands did not have a USA ambassador for three months or so, Ben Bot complained to the USA that there should be a USA ambassador.
He was not used to take decisions all by himself.

Right now Europe's queen Merkel has the same problem, unlike Obama Trump does not hold her hand.

Grandpa Charlie > , August 19, 2017 at 6:38 am GMT

Fidelios,

Yes, of course. I don't know about before Herbert Hoover, but certainly during the 50s, business -- monopolistic or oligopolistic (like the old Detroit auto industry) -- and government (including the MIC) were closely integrated. Such was, indeed, as aspect of progressivism. It was considered by most to be a good thing, or at least to be the natural and normal state of affairs. Certainly, the system back then included what amounted to price-fixing as a normal business practice.

On the other hand, the "despotic" thing is less clear. Some assert that since FDR was effectively a dictator during World War II, that therefore the Democratic Party represented despotism ever since FDR (or maybe ever since Wilson).

Having lived through that period of time, I have to say that I am not so sure about that: if it was despotism, it was a heavily democratic and beneficent despotism. However, it is evident that there was a fascist skein running through the entirety of USA's political history throughout the 20th Century.

jilles dykstra > , August 19, 2017 at 6:40 am GMT

@Fidelios Automata

Fascism originates from Mussolini's Italy. It was anti socialist and anti communist, it of course was pro Italian, Italy's great deeds in antiquity, the Roman empire, were celebrated.

One can see this as racist, but as Italy consisted of mostly Italians, it was not racist in the present meaning of the word at all. Italy was very hesitant in persecuting jews, for example. Hitler depised Mussolini, Mussolini was an ally that weakened Germany. Hitler and Mussolini agreed in their hatred of communism.

Calling Hitler a fascist just creates confusion. All discussions of what nowadays fascism is, our could mean, end like rivers in the desert.

Priss Factor > , August 19, 2017 at 7:52 am GMT

Come on

'Aristocracy' and 'fascist' are all weasel words. (I'm the only true fascist btw, and it's National Humanism, National Left, or Left-Right.)

US is an ethnogarchy, and that really matters. The Power rules, but the nature of the Power is shaped by the biases of the ruling ethnic group.

It is essentially ruled by Jewish Supremacists.

Now, if not for Jews, another group might have supreme power, and it might be problematic in its own way. BUT, the agenda would be different.

Suppose Chinese-Americans controlled much of media, finance, academia, deep state, and etc. They might be just as corrupt or more so than Jews, BUT their agenda would be different. They would not be hateful to Iran, Russia, Syria, or to Palestinians. And they won't care about Israel.

They would have their own biases and agendas, but they would still be different from Jewish obsessions.

Or suppose the top elites of the US were Poles. Now, US policy may be very anti-Russian BUT for reasons different from those of Jews.

So, we won't learn much by just throwing words like 'fascist' or 'aristocrat' around.

We have to be more specific. Hitler was 'fascist' and so was Rohm. But Hitler had Rohm wiped out.

Surely, a Zionist 'fascist' had different goals than an Iranian 'fascist'.

One might say the Old South African regime was 'fascist'. Well, today's piggish ANC is also 'fascist', if by 'fascist' we mean power-hungry tyrants. But black 'fascists' want something different from what white 'fascists' wanted.

It's like all football players are in football. But to understand what is going on, we have to know WHICH team they play for.

Jewish Elites don't just play for power. They play for Jewish power.

jacques sheete > , August 19, 2017 at 11:42 am GMT

Good summary of where we're at, but please don't call the ruling goons aristocrats. The word, "aristocrat," is derived from the Ancient Greek ἄριστος (áristos, "best"), and the ruling thugs in this country have never been the best at anything except lies, murder and theft.

I realize that calling them violent bloodthirsty sociopathic parasites is a mouthful, and that "plutacrats" doesn't have quite the appropriate sting, but perhaps it's more accurate.

Or maybe we should get into the habit of calling them the "ruling mafiosi." I'm open to suggestions.

"Goonocrats"?

Anon > , Disclaimer August 19, 2017 at 12:56 pm GMT

and that threatens those foreign aristocrats with encroachments against their own territory, whenever a vassal aristocracy resists the master-aristocracy's will.

They also -- through the joint action of Rating Agencies, the Anglosaxon media, the vassal vassal states' media, make national debt's yield spreads skyrocket. It's been the way to make entire governments tumble in Europe, as well as force ministers for economics to resign. After obeisance has been restored -- and an "ex Goldman Sachs man" put on the presidential/ministerial chair, usually -- investors magically find back their trust in the nation's economic stability, and yield spreads return to their usual level.

jacques sheete > , August 19, 2017 at 1:42 pm GMT

@jilles dykstra

These foreign vassals had a cozy existence

No doubt about it. That's how thugs rule; there are plenty of quivering sell outs to do the rulers' bidding. Look at the sickening standing ovations given to Netanyahoo by supposed "US" congresscreeps.

Jake > , August 19, 2017 at 1:46 pm GMT

@Fidelios Automata Abraham Lincoln's economic policy was to combine private monopolies with the Federal Government under a President like him: one who ordered the arrests of newspaper editors/publishers who opposed his policies and more 'despotic' goodies.

Joe Hide > , August 19, 2017 at 1:47 pm GMT

While the article favorably informs, and was written so as to engage the reader, it lacks reasonable solutions to its problems presented. One solution which I never read or hear about, is mandated MRI's, advanced technology, and evidence supported psychological testing of sitting and potential political candidates. The goal would be to publicly reveal traits of psychopathy, narcissism, insanity, etc. Of course, the most vocal opposition would come from those who intend to hide these traits. The greatest evidence for the likelyhood of this process working, is the immense effort those who would be revealed have historically put into hiding what they are.

SolontoCroesus > , August 19, 2017 at 3:04 pm GMT

@jacques sheete

"ruling mafiosi."

No way. How about Jewish terrorists ? Very few Italians in the ruling "aristocracy." Lots of Jews.

Jake > , August 19, 2017 at 3:05 pm GMT

Eric Zuesse is a nasty, hardcore leftist in the senses that matter most. Often, he reveals his Leftism to be based on his hatred of Christianity and his utter contempt for white Christians. But there is that dead clock being correct twice per day matter. In this article, Zuesse gets a good deal right.

First, he delineates the American Elites well. The USA forged by Abe Lincoln is not a real democracy, not a real republic. It is the worst kind of oligarchy: one based on love of money almost exclusively (because if a man does not love money well enough to be bribed, then he cannot be trusted by plutocrats) while proclaiming itself focused on helping all the little guys of the world overcome the power of the rich oppressors.

It is the Devil's game nearly perfected by the grand alliance of WASPs and Jews, with their Saudi hangers-on.

Second, it is fair to label America's Deep State fascist , Elite Fascist. And we should never forget that while Jews are no more than 3% of the American population, they now are at least 30% (my guess would be closer to 59%) of the most powerful Deep Staters. That means that per capita Jews easily are the fascist-inclined people in America.

The most guilty often bray the loudest at others in hope of getting them blamed and escaping punishment. And this most guilty group – Deep State Elites evolved from the original WASP-Jewish alliance against Catholics – is dead-set on making the majority of whites in the world serfs.

Third, the US 'weaponization of finance' seems to have been used against the Vatican to force Benedict XVI to resign so that Liberal Jesuit (sorry for the redundancy) Jorge Bergolgio could be made Pope. The Jesuits are far and away the most Leftist and gay part of the Catholic Church, and the American Deep State wanted a gay-loving, strongly pro-Jewish, strongly pro-Moslem 'immigrant' as Pope.

Fourth, that America's Leftists of every stripe, America's Neocons, and America's 'compassionate conservatives' all hate Putin is all you should need to know that Putin is far, far better for Russia's working class, Russia's non-Elites, than our Elites are for us.

jacques sheete > , August 19, 2017 at 3:36 pm GMT

@Brabantian Good comments.They apply to a few others around here as well, particularly this.

who mixes some truth with big lies

Priss Factor > , Website August 19, 2017 at 3:44 pm GMT

Charlottesville, Occupy Wall St And The Neoliberal Police State. Charlottesville was a Neoliberal ambush designed to crush the Alt Right once and for all. This story must be told.

https://altright.com/2017/08/19/charlottesville-occupy-wall-st-and-the-neoliberal-police-state/

jacques sheete > , August 19, 2017 at 3:46 pm GMT

@SolontoCroesus

"ruling mafiosi."
No way. How about Jewish terrorists ? Very few Italians in the ruling "aristocracy." Lots of Jews.

Very few Italians in the ruling "aristocracy."

Another common misconception is to associate the mafia with Italians mostly. The Italian mafiosi are pikers compared to the American ones of Eastern European descent. The real bosses are not the Italians.

Bugsy Siegel, Louis "Lepke" Buchalter, Longy Zwillman, Moe Dalitz, Meyer Lansky and many many others.

Even the Jewish Virtual Library admits to some of it.

http://www.jewishvirtuallibrary.org/jewish-gangsters-in-america

New York, Chicago, Las Vegas, LA, Miami, and many others all dominated by non-Italian mobsters, not to mention the US government.

[Aug 15, 2017] Jeff Sessions Endorses Theft

Notable quotes:
"... Civil asset theft is a multi-billion dollar a year moneymaker for all levels of government. Police and prosecutors receive more than their "fair share" of the loot. According to a 2016 study by the Institute for Justice, 43 states allow police and prosecutors to keep at least half of the loot they got from civil asset theft. ..."
"... The Tenaha police are not the only ones targeting those carrying large sums of cash. Anyone traveling with "too much" cash runs the risk of having it stolen by a police officer, since carrying large amounts of cash is treated as evidence of involvement in criminal activity ..."
"... My brother confided that asset forfeiture filled in the budget deficits for his office and the local police department. He also related that defendants pled guilty in more than 90% of his cases because, as a practical matter, the justice system does not have the resources for trial-by-jury as guaranteed in the Constitution. ..."
"... When he could, he used asset forfeiture to avoid trials and force guilty pleas. For example, a man is arrested on drug charges. He is offered a deal: Plead guilty or the prosecutor's office will seize the family house, throwing the defendant's family out on the street. Make a choice: a destitute family or a guilty plea. ..."
"... Money, or a boat or other property (inanimate objects all) is presumed "guilty" of acting (to commit a crime.) This is sophistry of the worst, most childish or evil sort. Guns don't shoot people. Money doesn't buy drugs. ..."
"... An honest system is funded via HONEST and open debate and resolution to these questions. Civil Asset Forfeiture is the epitome of Newspeak, torturing the very meaning of words in order to rationalize what the powerful desire. Civil Asset Forfeiture is nothing but turning the "law enforcement apparatus" into a highwayman robbing people simply because he can. ..."
Aug 15, 2017 | www.unz.com

Attorney General Jeff Sessions recently ordered the Justice Department to increase the use of civil asset forfeiture, thus once again endorsing an unconstitutional, authoritarian, and increasingly unpopular policy.

Civil asset forfeiture, which should be called civil asset theft, is the practice of seizing property believed to be involved in a crime. The government keeps the property even if it never convicts, or even charges, the owner of the property.

Police can even use civil asset theft to steal from people whose property was used in criminal activity without the owners' knowledge. Some have even lost their homes because a renter or houseguest was dealing drugs on the premises behind the owners' backs.

Civil asset theft is a multi-billion dollar a year moneymaker for all levels of government. Police and prosecutors receive more than their "fair share" of the loot. According to a 2016 study by the Institute for Justice, 43 states allow police and prosecutors to keep at least half of the loot they got from civil asset theft.

Obviously, this gives police an incentive to aggressively use civil asset theft, even against those who are not even tangentially involved in a crime. For example, police in Tenaha, Texas literally engaged in highway robbery -- seizing cash and other items from innocent motorists -- while police in Detroit once seized every car in an art institute's parking lot. The official justification for that seizure was that the cars belonged to attendees at an event for which the institute had failed to get a liquor license.

The Tenaha police are not the only ones targeting those carrying large sums of cash. Anyone traveling with "too much" cash runs the risk of having it stolen by a police officer, since carrying large amounts of cash is treated as evidence of involvement in criminal activity .

Civil asset theft also provides an easy way for the IRS to squeeze more money from the American taxpayer. As the growing federal debt increases the pressure to increase tax collections without raising tax rates, the IRS will likely ramp up its use of civil asset forfeiture.

Growing opposition to the legalized theft called civil asset forfeiture has led 24 states to pass laws limiting its use. Sadly, but not surprisingly, Attorney General Jeff Sessions is out of step with this growing consensus. After all, Sessions is a cheerleader for the drug war, and civil asset theft came into common usage as a tool in the drug war.

President Trump could do the American people a favor by naming a new attorney general who opposes police state policies like the drug war and police state tactics like civil asset theft.

exiled off mainstreet > , August 8, 2017 at 6:21 am GMT

The obvious corruption and the extra-legality of such programs is obvious. It is unfortunate that courts no longer seem to be able to hold the regime accountable in any meaningful way.

Anonymous > , • Disclaimer August 8, 2017 at 10:24 am GMT

My brother was a prosecuting attorney for decades. His stories suggest our justice system is rotten to the core.

My brother confided that asset forfeiture filled in the budget deficits for his office and the local police department. He also related that defendants pled guilty in more than 90% of his cases because, as a practical matter, the justice system does not have the resources for trial-by-jury as guaranteed in the Constitution.

When he could, he used asset forfeiture to avoid trials and force guilty pleas. For example, a man is arrested on drug charges. He is offered a deal: Plead guilty or the prosecutor's office will seize the family house, throwing the defendant's family out on the street. Make a choice: a destitute family or a guilty plea.

These tactics did not bother my brother. He said he had a special gift the ability to know when someone was innocent or when he was guilty. He was once counseled by a judge for his overly aggressive prosecution style. Then, his career came to an end when he aggressively prosecuted a prominent fellow attorney on a drug charge. My brother knew he was guilty. The case fell apart when it was uncovered the drugs were planted by a police officer having an affair with the attorney's wife.

dc.sunsets > , August 9, 2017 at 6:03 pm GMT

Civil Asset Forfeiture is the same as "gun crime."

Money, or a boat or other property (inanimate objects all) is presumed "guilty" of acting (to commit a crime.) This is sophistry of the worst, most childish or evil sort. Guns don't shoot people. Money doesn't buy drugs.

The state will get its pound of flesh. The ONLY questions of relevance are:
1. How much?
2. Who pays?
3. Who decides?

An honest system is funded via HONEST and open debate and resolution to these questions. Civil Asset Forfeiture is the epitome of Newspeak, torturing the very meaning of words in order to rationalize what the powerful desire. Civil Asset Forfeiture is nothing but turning the "law enforcement apparatus" into a highwayman robbing people simply because he can.

Ironically, this is perfectly expected. Social trust grew these past decades (if not centuries) to a pathological level. Nature is cyclical, and so trust must drain from society.

Turning cops into de facto muggers and politicians (and bureaucrats) into open looters is a perfect case of people VOLUNTEERING to destroy the very basis for their authority.

Trust is poised to evaporate. That means people will pull inward and the vast labyrinth of economic, social and political systems will collapse of its own accord.

This is both unfortunate and natural. Nirvana (Utopia) was never an option. I like(d) a lot of our present times. But disposing of the bad without harming the good was never an option. It's all linked. The future has much chaos already baked in.

Kyle McKenna > , August 13, 2017 at 8:58 am GMT

@Anonymous Ahh Justice. Gotta love it, amirite?

"The State is the Enemy of the People"

(Nietzsche, paraphrased)

Kyle McKenna > , August 13, 2017 at 9:00 am GMT

President Trump could do the American people a favor by naming a new attorney general who opposes police state policies like the drug war and police state tactics like civil asset theft.

Definitely dispiriting to know these things about Mr Sessions, and there are several more just as dismaying. But virtually anyone who replaces him will be 'careless' shall we say on the immigration issue, and if the immigration issue isn't managed, yesterday, nothing else–even this–matters. It's right down the sewer for all of us.

GondwanaMan > , August 13, 2017 at 10:31 pm GMT

Surprised Ron Paul is attacking Jeff Sessions like this. I guess it shows his principles to go after anyone if they're violating our liberties?

jtgw > , August 14, 2017 at 1:36 pm GMT

@GondwanaMan Why are you surprised? I can't remember ever seeing RP say something favorable about Sessions.

Negrolphin Pool > , August 15, 2017 at 10:19 am GMT

@dc.sunsets Civil Asset Forfeiture is the same as "gun crime."

Money, or a boat or other property (inanimate objects all) is presumed "guilty" of acting (to commit a crime.) This is sophistry of the worst, most childish or evil sort. Guns don't shoot people. Money doesn't buy drugs.

The state will get its pound of flesh. The ONLY questions of relevance are:
1. How much?
2. Who pays?
3. Who decides?

An honest system is funded via HONEST and open debate and resolution to these questions. Civil Asset Forfeiture is the epitome of Newspeak, torturing the very meaning of words in order to rationalize what the powerful desire. Civil Asset Forfeiture is nothing but turning the "law enforcement apparatus" into a highwayman robbing people simply because he can.

Ironically, this is perfectly expected. Social trust grew these past decades (if not centuries) to a pathological level. Nature is cyclical, and so trust must drain from society.

Turning cops into de facto muggers and politicians (and bureaucrats) into open looters is a perfect case of people VOLUNTEERING to destroy the very basis for their authority.

Trust is poised to evaporate. That means people will pull inward and the vast labyrinth of economic, social and political systems will collapse of its own accord.

This is both unfortunate and natural. Nirvana (Utopia) was never an option. I like(d) a lot of our present times. But disposing of the bad without harming the good was never an option. It's all linked. The future has much chaos already baked in.

I live in a shitty neighborhood with lots of welfare people and felons. That group's actually not so bad.

But I stopped saying hi to random neighbors a long time ago. It was leading to too many physical confrontations and near misses. This place would be the Superdome if Katrina even winked at it.

There's no social trust here

[Jun 18, 2017] Amazon is monopolist which just became bigger

Jun 18, 2017 | economistsview.typepad.com

Fred C. Dobbs , June 17, 2017 at 01:59 AM

(Is this anything?)

The Amazon-Walmart Showdown That Explains the Modern
Economy https://nyti.ms/2sxhIkx via @UpshotNYT
NYT - Neil Irwin - June 16

With Amazon buying the high-end grocery chain Whole Foods, something retail analysts have known for years is now apparent to everyone: The online retailer is on a collision course with Walmart to try to be the predominant seller of pretty much everything you buy.

Each one is trying to become more like the other - Walmart by investing heavily in its technology, Amazon by opening physical bookstores and now buying physical supermarkets. But this is more than a battle between two business titans. Their rivalry sheds light on the shifting economics of nearly every major industry, replete with winner-take-all effects and huge advantages that accrue to the biggest and best-run organizations, to the detriment of upstarts and second-fiddle players.

That in turn has been a boon for consumers but also has more worrying implications for jobs, wages and inequality.

To understand this epic shift, you can look not just to the grocery business, but also to my closet, and to another retail acquisition announced Friday morning. ...

Walmart to Buy Bonobos, Men's Wear Company, for $310 Million https://nyti.ms/2tuGhf9

paine - , June 17, 2017 at 08:10 AM
When you lose confidence in your
existing biz you buy bizes
Fred C. Dobbs - , June 17, 2017 at 10:19 AM
It turns out Neil Irwin has
a thing for fine dress shirts.
pgl - , June 17, 2017 at 10:41 AM
WTF? Amazon has not lost confidence in creating a monopsony for buying and selling stuff. It just expanded their empire to groceries.
Paine - , June 17, 2017 at 12:35 PM
Cornering as many markets as possible
is a fools mission

The problem
corporations get to keep their cash flow

Review the nonsense oil companies got into when rolling in cash
Thanks to OPEC

pgl - , June 17, 2017 at 02:38 PM
WTF? You clearly never looked at Amazon's income statement.
JohnH - , June 17, 2017 at 04:28 PM
Amazon's business model is to become the dominant intermediary between producers and consumers.

Whole Foods positions it to ideally serve this role in every local market in America...one stop shopping, whether you're buying from China or from the local Chinatown.

When a company like Amazon is capturing market share, profits don't matter, as its stock price shows.

And Bezos ownerships of the Washington Post gives him a powerful bully pulpit against anyone with thoughts about anti-trust...that and his deep pockets.

cm - , June 17, 2017 at 12:38 PM
I wouldn't call it confidence. Any line or mode of business can be grown only to a certain size. At some point S-curve effects and scale complexity lead to diminishing returns, even if the business is managed as well as it can be. Also in some cases there may simply not be enough demand for the one or few things the company does.

Then companies have to branch out into other ways of business, typically outside their current activities. Sometimes there is synergy, sometimes not, and it's just about buying market and revenue with the imagination one can manage it better to a higher rate of profit.

Paine - , June 17, 2017 at 01:31 PM
Or

They can turn into passive cash cows

cm - , June 17, 2017 at 04:40 PM
Yes, though usually there is a growth mandate imposed by management or "investors".
Paine - , June 18, 2017 at 07:11 AM
Now we are in the heart of darkness

Growth mandates
Where growth is earnings
Or revenues or market shares or

And indeed too often
management v stock holders mandates overt or tacit obtain

Gibbon1 - , June 17, 2017 at 10:19 PM
Comment over brunch: Must be getting late in the cycle. Amazon shrewdly using it's internet valuation to buy tangible things.
Paine - , June 18, 2017 at 07:11 AM
True

[May 30, 2017] The tendency toward monopoly among data gathering disrupters

May 26, 2017 | economistsview.typepad.com/economistsview
point May 26, 2017 at 05:55 AM
https://promarket.org/big-data-competition/

An enlightening discussion on the tendency toward monopoly among data gathering disrupters. Especially important seems to be the possibility of fine-grained price discrimination. While saying not all price discrimination is considered negative by economists without studying it, it does seem discrimination should be taken as prima facie evidence of monopoly.

While the article talks about monopoly and capture in this area, let me reiterate that looking around the more regular corporate ecosystem there is increasing concentration among buyers and often among suppliers that seems not to attract anti-trust attention as long as the final consumer seems to be not harmed. "Not harmed" does not include missing out on falling prices no longer competed for.

[May 27, 2017] "Markets Today Are Radically Different Than What We Believe - We Have the Façade of Competition -

May 27, 2017 | promarket.org

Valletti, who is also a Professor of Economics at the Imperial College Business School and the University of Rome Tor Vergata, discussed the EC's investigation into the Facebook-WhatsApp merger during the panel. Facebook, he said, had "lied" to European regulators about its ability to absorb WhatsApp's user data, but the larger issue was market definition.

"Would the decision on the merger have changed had the Commission known that information at the time?" asked Valletti, who joined theEC in 2016. "At the time, the Commission defined the relevant market as non-search advertising. This is a huge market. In that ocean, even Facebook doesn't have a lot of market power. If instead the market definition had been, for instance, advertising on social networks, [it's]likely theywould have concluded that Facebook would have been dominant in that particular market, and that integrating that useful information from [WhatsApp] could have enhanced its market power." Valletti also stressedthe importance of having individual-level data when discussing issues like competition at the advertising market, and not just looking at market shares.

Pasquale and Taplin, meanwhile, criticized U.S. antitrust authorities, with Taplin saying that digital platforms have "done very well because they have a certain regulatory capture" and Pasquale remarkingthat "U.S. antitrust policy is rapidly becoming a pro-trust policy."

As an example of this "pro-trust" policy, Pasquale cited the FTC's lawsuit against online contact lens retailer 1-800 Contacts . 1-800 Contacts was sued by the FTC last yearfor having reached agreements with 14 other online contact lens sellers that they would not advertise to customers who had searched for 1-800 Contacts online."You would imagine that given the power of these [companies], and given the activity in Europe and many other nations, our enforcers would be extremely concerned about these platforms. They are-they're concerned about little companies hurting the platforms," he said.

The FTC, added Pasquale, had pursued the 1-800 Contacts case aggressively. "I'm not here to comment on the merits of this case, but I think that the choice of this enforcement target speaks volumes. What does it say? It says that if small firms arebeing exploited or hurt by a big digital behemoth, or think [they]are, don't try in any way to coordinate or maintain your independence. What you should do is all combine and merge and become a giant, say, contacts firm. In the media, they should all combine and merge and maybe all be bought by Comcast, so that then they can negotiate with Google in a way that they are relatively of the same size and power. That's the pro-trust message we're getting under current non-enforcement U.S. antitrust policy."

[Apr 28, 2017] Monopolization Amazon-style

Notable quotes:
"... Eros the bittersweet ..."
Apr 28, 2017 | www.nakedcapitalism.com
Carla , April 26, 2017 at 4:11 pm

You mean if Borders had become Barnes & Noble? Well, B&N is struggling, too.

Just like Walmart, Amazon's business model ELIMINATES the competition. In my view, every Amazon purchase is a rock thrown through the window of a local retailer, large or small. Personally, if I ever throw rocks, they're going to be aimed bigger and better targets than that.

Octopii , April 26, 2017 at 7:55 pm

B&N closed their Georgetown (DC) store a couple of years ago, IIRC right before the xmas season got started. It was an oasis on a side of town that would rather sell you a $500 pair of pants dotted with embroidered lobsters. The building was a nicely reclaimed three-floor warehouse space with coffee and lounging areas, and it had become a nice excuse to go into DC and hang out.

jrs , April 26, 2017 at 4:12 pm

because noone can afford what a new (dead tree) book costs. I get everything used for a few bucks a book.

RUKidding , April 26, 2017 at 4:14 pm

but but but used books have to start as new books sometime

Uahsenaa , April 26, 2017 at 5:34 pm

I'm not sure this is entirely true. Just as an example, a trade paperback I bought in 1998 for a cover price of $12.95 (Anne Carson's Eros the bittersweet ) now has a cover price of $13.95, only a dollar more. The BLS's CPI calculator says the book should cost $19.54 in today's dollars.

That doesn't strike me as unaffordable. It's possible that if I went out and bought a copy of the book now, the printing might be worse, or the paper of a lower quality, but I cannot imagine it being much worse than the copy I already own.

Tertium Squid , April 26, 2017 at 7:31 pm

Use interlibrary loan and never buy another book at all.

[Apr 06, 2017] Inequality and the Lake Wobegon Effect

Apr 06, 2017 | economistsview.typepad.com
"Our Efforts to Deal With Tech Firms' Market Dominance in the U.S. Have Been an Abject Failure" : ...Q: The five largest internet and tech companies-Apple, Google, Amazon, Facebook, and Microsoft-have outstanding market share in their markets. Are current antitrust policies and theories able to deal with the potential problems that arise from the dominant positions of these companies and the vast data they collect on users?
Our efforts to deal with the problems in the United States have been an abject failure. ...I might note that Facebook's dominant position in the market is due in part to its role as an innovator and partly to "network externalities"... Microsoft's dominant position is also attributable in part to network externalities...
But the antitrust agencies have not taken sufficient measures to remedy abuses of this advantage.
Q: Is there a connection between the growing inequality in the U.S. and concentration, dominant firms, and winner-take-all markets?
I believe there is. The evidence of rising wealth inequality, especially through the work of Piketty and co-authors, is compelling. Less well known is evidence compiled at M.I.T. of strongly rising inequality of compensation, especially at the top executive levels. The nexus has not to my knowledge been fully articulated.
Here's my hypothesis: In recent decades, most publicly-traded corporations, at least in the United States, have embraced executive compensation consultants to advise the board of directors on executive compensation levels. Those consultants provide data on compensation averages and distributions for companies in peer industries. But then the Lake Wobegon effect goes to work. The boards say, "Surely, our guy isn't below average," to the average reported by the compensation consultants becomes the minimum standard for compensation. If each top executive receives at least the minimum reported pay and often more, the average rises steadily.
Indeed, and here I tread on weaker ground, those compensation costs are built into the costs considered by companies in their product pricing decisions (in a kind of rent-seeking model), and so price levels rise to accommodate rising compensation. I might note that this dynamic applies not only for chief executives, but trickles down to embrace most of companies' management personnel. ...
JohnH , March 22, 2017 at 11:04 AM
As I said a couple days ago, "Good to see economists finally addressing issues that John Kenneth Galbraith raised 50 years ago...but were largely ignored since then by 'librul' economists who didn't want to cross the folks who had funded their academic chairs."

For the past 40 years, corporate strategic planning has been all about market dominance. Back in the late 1970s Harvard Business School professor Michael Porter was all the rage along with the Boston Consulting Group, Mitt Romney's Bain Capital, and GE's Jack Welch. the mantra was that if you couldn't dominate a market, best get out. Weaker players were tolerated mostly to allay anti-trust intrusion.

Meanwhile, Republicans tacitly supported it, Democrats turned a blind eye, and 'librul' economists were off doing whatever they do.

Maximilian , March 22, 2017 at 12:44 PM
Evidence in support of Sherer's hypothesis can be found in Tom DiPrete et al's 2010 article in AJS: Compensation Benchmarking, Leapfrogs, and the Surge in Executive Pay. They write: "Scholars frequently argue whether the sharp rise in chief executive officer (CEO) pay in recent years is "efficient" or is a consequence of "rent extraction" because of the failure of corporate governance in individual firms. This article argues that governance failure must be conceptualized at the market rather than the firm level because excessive pay increases for even relatively few CEOs a year spread to other firms through the cognitively and rhetorically constructed compensation networks of "peer groups," which are used in the benchmarking process to negotiate the compensation of CEOs. Counterfactual simulation based on Standard and Poor's ExecuComp data demonstrates that the effects of CEO "leapfrogging" potentially explain a considerable fraction of the overall upward movement of executive compensation since the early 1990s."
https://academiccommons.columbia.edu/catalog/ac%3A139538
point , March 22, 2017 at 01:08 PM
The story told is nearly exactly the one Warren Buffett has been telling since 95, maybe earlier, so I do not know who was prior.

[Mar 22, 2017] Taibbi: Trump Pick Jay Clayton Will Be Most Conflicted SEC Chair Ever

Mar 22, 2017 | www.rollingstone.com

America's incoming top cop on finance is literally married to industry

Clayton is already an unusual choice, given that he's slated to be a primary regulator of Wall Street while a chunk of his family income will continue to come from Goldman Sachs, where his wife Gretchen works . Although he will have to recuse himself from enforcement cases involving Goldman, he will not have to sit out of a broad range of other regulatory decisions that affect the company. This is already notable.

But Public Citizen has stumbled onto some other oddities about Clayton's personal holdings.

In Clayton's absurdly baroque Form 278 financial disclosure – if you want to feel like your financial life is meager and uncomplicated, take a look at this staggeringly long list of income sources for the former Sullivan and Cromwell mainstay – he lists, under "other assets and income," a series of entries involving a company called WMB Holdings.

WMB Holdings, he explains in a verbose and unhelpful endnote, is a Delaware-based entity that provides "business, financial, and representational services."

According to Clayton, WMB secures business licenses, files UCC forms, creates special purpose vehicles (you might remember these little financial Frankensteins from the Enron story), engages in "compliance support services," secures data storage and helps with "anti-counterfeiting services," among other things.

This sounds harmless enough. But WMB, and a company called CSC – with which it appears to have a connection – is a company of a very particular type, known well to white-collar investigators.

"It's a corporate formation company," says Jack Blum , an expert on white-collar crime and money laundering who is best known for his investigation of the BCCI scandal. "You call them up, and 20 minutes later you've got a Delaware corporation. I'm exaggerating, of course, but that's what they do."

These firms can be used to create chains of legal entities, sometimes ending in offshore accounts, that make tracing financial transactions difficult, if not impossible. "They can make the ownership of anything completely impenetrable," says Blum, speaking generally and not necessarily about Clayton's firm. "If you want to launder money, evade tax or hide assets from a spouse, you can do it."

Clayton's family seems to have a serious interest in this firm. He lists a series of family trusts containing WMB holdings, most producing high annual dividends.

If you add up each of the dividends – some of which are listed as generating over $1 million a year, while others are listed at $100,000-$1,000,000, etc. – the total annual value of these holdings comes out to over $4 million annually, at least.

The endnote claims Clayton has no beneficial interest or control in these holdings, but that his wife and/or children have a "beneficial interest."

Given that the company would appear to be subject to SEC oversight, it's worth asking the nature of his family's involvement with WMB, and moreover to learn more about what his attitude is toward such companies in general.

Clayton has pledged to divest from WMB when his wife has "directly held financial interests" in the company, but not where his wife or his children are "solely a beneficiary."

Public Citizen for a variety of reasons believes that WMB "may also be the parent of Corporation Service Co. (CSC)," another large business services firm with offices in "Delaware, Australia, France, Hong Kong, Singapore, Sweden, and the United Kingdom."

Among other things, WMB was for some time listed as the parent of a company called CSC Trust Co., now called Delaware Trust Co.

CSC Global claims 2,500 employees as well as 180,000 corporate customers, while also representing 10,000 law firms. The company appears to do more or less the same things that Clayton says WMB does, dealing with creating legal business entities, management of licenses, upkeep of filings, dealing with service of process, etc.

Interestingly, and to Blum's point, Clayton's disclosure does not list any interest in CSC. So although he gives some information about what appears to be a holding company with little to no public profile, the company that boasts of its connections to 180,000 corporations is not mentioned in the disclosure form.

Neither CSC nor Clayton have responded to requests for comment.

The real issue with companies like these is the vast array of tools they can offer big companies and high-net-worth individuals to complicate their financial profiles. The worst-case scenario is a string of shell companies that end in an opaque offshore haven.

"That's when the trail becomes impossible to follow," says Blum. Investigators who try to follow money into offshore banking havens have almost no hope of getting answers there, he says.

"You need a formal mutual legal request that may or may not be honored in the lifetime of the investigator," says Blum.

Interestingly, when Public Citizen ran the names of WMB and CSC through the Panama Papers database, they found nothing. But when they ran the address common to both companies – 2711 Centerville Rd., Wilmington – through the database, they found it connected with numerous firms whose agent was the infamous Mossack Fonseca, many of them offshore companies.

In its letter to the Senate Banking Committee, Public Citizen asked the Senate to ask Clayton what this means. Did either WMB or CSC do business with Mossack Fonseca? Have either of those companies provided services to Mossack Fonseca clients?

Even if WMB and CSC are completely above-board, it's a strange sort of investment for the top cop on the financial beat. It will be interesting to see if he sheds some light on his holdings when he's questioned this week.

[Mar 22, 2017] Market power in the U.S. economy today

Notable quotes:
"... Labor market anyone -- where market power also translates to political power -- if labor has decent market power? Toothless (as in no penalty for crushing unions for 80 years) institutions are the reality. ..."
"... Do you guys ever talk about anything other but what the other guys talk about? ..."
Mar 22, 2017 | economistsview.typepad.com
Overview The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions. The surprising conjunction of the exercise of market power with well-established antitrust norms, precedents, and enforcement institutions is the central paradox of U.S. competition policy today. Market power in the U.S. economy today : As this policy brief explains, the harms from the exercise of firms' market power may extend beyond individual markets affected to include slower overall economic growth and increased economic inequality. The implications for future economic productivity and welfare are troubling, but before detailing these consequences, it is necessary to understand why market power is a major issue despite well-established antitrust enforcement institutions and legal precedents. ...

anne : , March 20, 2017 at 11:34 AM

https://promarket.org/convincing-evidence-concentration-rising/

March 19, 2017

"There Is Convincing Evidence That Concentration Has Been Rising"
Interview of John E. Kwoka

mulp : , March 20, 2017 at 12:26 PM
Five Walmarts competing with each other would not raise worker wages above the wages Walmart pays. In fact, it would lower wages.

I remember Milton Friedman's Newsweek columns circa 1970 which are deep behind a paywall so I can't even find a date and title.

I remember one where he argued for utility deregulation and introduction of competition to lower prices of electricity and telephone service.

He argued that the PUC was captured by the utility that by regulation made a business profit only on ROIC plus a small rent on operating costs. By regulation, capital was always depreciating, thus a power plant or the wires and poles distributing power were constantly falling in value. The depreciation was an expense plus the labor costs which determined the base rate, with a 8-10% return on capital, the original labor costs of the power plant and wires and poles minus depreciation and a rent on operating labor.

So, how does a utility earn higher profit?

It must pay workers with capital to build more assets, more power plants, more and better power wires and poles. And it must pay more to workers to operate the utility.

In other words, profit increased the more paid to labor. The PUC had to approve these labor costs as prudent, but paying prevailing union wages was prudent. Thus, the utility could meet the demands of unions for higher wages, for more people on the job.

Worse, the PUC would get hammered with complaints if the utility was unreliable, so most regulators approved utility requests to build redundant power plants and build redundant power lines, plus hire redundant workers who could be put to work recovering from storm damage.

Thus, in Milton Friedman's view, government sanctioning a monopoly resulted in too much, too reliable service that paid too many workers too much money at the expense of all customers, especially customers who did not need the reliability.

Worse, the utilities were constantly trying to get customers to buy more to justify building more capital assets to increase profits.

And even worse, too many workers were paid too much which resulted in too much consumption, thus too much production, and that created too much demand for labor, driving up wages and increasing the number of workers, driving up I incomes and consumption.

He noted that the rush to build nuclear power plants was driven by their high capital costs and nearly purely utility labor operating costs - the utility did not pay for coal for which it got no business profit.

Thus his efforts to deregulate utilities: cutting labor costs, cutting business profits. He argued for fewer workers operating utilities and building capital assets, with economic profits driving investment decisions. Ie, a 20% profit would drive more investment, but a 5% profit would drive layoffs and cuts in reliability. Any individual who needed reliability would simply pay more to get higher reliability.

And as utilities were deregulated as he called or as best as it could be done, we have seen job losses, pay cuts, higher unreliability, sometimes bankruptcy, and other times extremely high profits, often both at the same time. When PURPA was implemented by States and utilities forced to sell power generation, then nuclear power plants were sold below the book capital cost, by these forced sales were deemed takings, so the losses from sales became stranded costs added to the rate base as depreciation. Meanwhile, as investment in new power plants fell, nuclear power plants became very profitable as market prices rose. So, the utility was going bankrupt after forced to sell assets while the assets were generating 20% or more on purchase price returns, but less than 10% on construction cost.

Friedman made the same argument for passenger airlines. Airlines paid high wages and had large cabin crews and most were profitable enough to work hard to increase customer demand. They got approval to offer low fares at the last minute to students and other classes of non-customers. Thanks to regulation. Then deregulation happened, and every airline but one went bankrupt, service quality declined, worker wages slashed, crews in the air and on the ground cut.

Friedman argued that everyone benefits from competition and is harmed by monopoly, especially regulated monopoly, because too many workers are paid too much, and those workers consume too much, and everyone is forced to pay too much to live.

Thus the creation of free lunch economics: Driving down prices but increasing profits will make everyone better off as those evil workers get less pay, costing consumers much less.

Workers are not valued consumers. Valued consumers are not workers.

Milton Friedman was not a worker, but a valued intellectual and consumer.

pgl -> mulp... , March 20, 2017 at 01:09 PM
"Five Walmarts competing with each other would not raise worker wages above the wages Walmart pays. In fact, it would lower wages."

So you accept the Economism view of labor markets where monopsony power does not exist? Sorry but the labor market evidence questions this perfectly competitive view of labor markets.

JohnH : , March 20, 2017 at 01:09 PM
Good to see economists finally addressing issues that John Kenneth Galbraith raised 50 years ago...but were largely ignored since then by 'librul' economists who didn't want to cross the folks who had funded their academic chairs.
pgl -> JohnH... , March 20, 2017 at 01:10 PM
So John Kenneth Galbraith was a right winger? Could you please stop this silly parade that liberal economists have never talked about what they often talk about. It is beyond pointless.
JohnH -> pgl... , March 20, 2017 at 01:45 PM
Oh, please. 'Librul' economists have mostly ignored monopoly and oligopoly for years. And Galbraith was definitely NOT a conservative, but academic economists largely ignored his valuable contributions.

Pay attention!

JohnH -> JohnH... , March 20, 2017 at 01:52 PM
As a measure of 'librul' concern about monopoly and oligopoly, Krugman talks about this even less than he talks about inequality...less than twice a year.
JohnH -> pgl... , March 20, 2017 at 07:05 PM
Market concentration, monopoly, and oligopoly aren't even listed as categories at economistsview!

Yet pgl tries to assure us that 'librul' economists take this issue seriously...guffaw, guffaw.

Flat Eric -> JohnH... , March 21, 2017 at 06:58 AM
Nor are labor economics, trade or public economics. So what?

Competition economics is still a huge and very active topic within the discipline. Indeed, the last but one Nobel winner, Jean Tirole, works extensively in this area.

Denis Drew : , March 20, 2017 at 02:08 PM
"Overview The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions."

Labor market anyone -- where market power also translates to political power -- if labor has decent market power? Toothless (as in no penalty for crushing unions for 80 years) institutions are the reality.

Do you guys ever talk about anything other but what the other guys talk about?

point : , March 20, 2017 at 05:54 PM
"The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions. The surprising conjunction of the exercise of market power with well-established antitrust norms, precedents, and enforcement institutions is the central paradox of U.S. competition policy today."

Left off the subsequent list of possible explanations is that the first above statement just may be false.

point -> point... , March 20, 2017 at 09:46 PM
Thinking especially about the "notwithstanding our strong and extensive antitrust institutions" part.

[Jan 16, 2017] Bernie Madoff manipulated the market for hot cocoa mix at his prison

Jan 16, 2017 | www.nakedcapitalism.com
MtnLife , January 15, 2017 at 9:43 am

Bernie Madoff manipulated the market for hot cocoa mix at his prison

Grifters gotta grift.

Paid Minion , January 15, 2017 at 9:45 am

Incurable disease.

Corey , January 15, 2017 at 12:18 pm

This makes a cute story, but I seriously doubt its accuracy. I did three years in Federal prison (1999-2002) and I recall that commissary purchases were regulated quite strictly. It would have been nearly impossible to buy up all of the hot chocolate mix, or anything else for that matter. Further, there were restrictions on the types and amounts of items that were permitted be kept in an inmate's cell or cube. It would have been impractical to purchase and store up a large quantity of an item, and attempting to corner a market in a popular product and exploit the consumers could very well prove – ahem – hazardous to one's well-being. The FCI commissary order list confirms my recollection. Inmate purchases of drink mixes are limited to 1 each:

FCI Commissary List

Cute story. Former billionaire financier now small-time hustler in prison. But almost certainly false.

nechaev , January 15, 2017 at 1:36 pm

your comment interesting, esp. in light of reports in the past decade that canned mackerel had replaced cigarettes as barter currency within federal prisons: see, f. ex: http://www.wsj.com/articles/SB122290720439096481 .

How then are / were quantities accumulated if the limits on canned fish is 5 cans per inmate. Ditto cigs back in the day when smokes were allowed?

alex morfesis , January 15, 2017 at 3:09 pm

Madoff made off with all the cash with the help of a not so little firm named fiserv, which seemed to be the go to firm for corporate criminals as its software was "malleable" maybe his old friends at fiserv handle the BOP accounting system and magically the magic is back ??

Continued

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