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[Jun 17, 2019] Student Loan Debt Is the Enemy of Meritocracy

In 1980, the states subsidized 70% of the cost per student. Today it is less than 30% and the amount of grants and scholarships has likewise declined. Tax cuts for rich people and conservative hatred for education are the biggest problem.
Notable quotes:
"... "easy" student loans are a subsidy to colleges, ..."
"... 1965 median family income was $6900, more than 200% of the cost of a year at NU. Current median family income is about 75% of a year at NU. ..."
"... Allowing young adults to avoid challenging and uncomfortable and difficult subjects under the guise of compassion is the enemy of meritocracy. Financial illiteracy is the enemy of meritocracy. ..."
"... The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget. ..."
"... JUST HAD AN IDEA THAT MIGHT LIMIT THE DAMAGE OF THESE PHONEY ONLINE COLLEGES (pardon shouting, but I think it's justified): ..."
"... of-paying) IF a built for that purpose government agency APPROVES said loan. What do you think? ..."
"... Kaplan Ed is among the worst of the worst of internet federal loan and grant sucking diploma mills. ..."
"... Because every event in today's economy is the wish of the wealthy. Do you see why they suddenly wish to deeply educate the proles? ..."
economistsview.typepad.com
Thomas Piketty on a theme I've been hammering lately, student debt is too damn high!:
Student Loan Debt Is the Enemy of Meritocracy in the US: ...the amount of household debt and even more recently of student debt in the U.S. is something that is really troublesome and it reflects the very large rise in tuition in the U.S. a very large inequality in access to education. I think if we really want to promote more equal opportunity and redistribute chances in access to education we should do something about student debt. And it's not possible to have such a large group of the population entering the labor force with such a big debt behind them. This exemplifies a particular problem with inequality in the United States, which is very high inequality and access to higher education. So in other countries in the developed world you don't have such massive student debt because you have more public support to higher education. I think the plan that was proposed earlier this year in 2015 by President Obama to increase public funding to public universities and community college is exactly justified.
This is really the key for higher growth in the future and also for a more equitable growth..., you have the official discourse about meritocracy, equal opportunity and mobility, and then you have the reality. And the gap between the two can be quite troublesome. So this is like you have a problem like this and there's a lot of hypocrisy about meritocracy in every country, not only in the U.S., but there is evidence suggesting that this has become particularly extreme in the United States. ... So this is a situation that is very troublesome and should rank very highly in the policy agenda in the future in the U.S.

DrDick -> Jeff R Carter:

"college is heavily subsidized"

Bwahahahahahahaha! *gasp*

In 1980, the states subsidized 70% of the cost per student. Today it is less than 30% and the amount of grants and scholarships has likewise declined. Tax cuts for rich people and conservative hatred for education are the biggest problem.

cm -> to DrDick...

I don't know what Jeff meant, but "easy" student loans are a subsidy to colleges, don't you think? Subsidies don't have to be paid directly to the recipient. The people who are getting the student loans don't get to keep the money (but they do get to keep the debt).

DrDick -> to cm...

No I do not agree. If anything, they are a subsidy to the finance industry (since you cannot default on them). More basically, they do not make college more affordable or accessible (his point).

cm -> to DrDick...

Well, what is a subsidy? Most economic entities don't get to keep the money they receive, but it ends up with somebody else or circulates. If I run a business and somebody sends people with money my way (or pays me by customer served), that looks like a subsidy to me - even though I don't get to keep the money, much of it paid for operational expenses not to forget salaries and other perks.

Just because it is not prearranged and no-strings (?) funding doesn't mean it cannot be a subsidy.

The financial system is involved, and benefits, whenever money is sloshing around.

Pinkybum -> to cm...

I think DrDick has this the right way around. Surely one should think of subsidies as to who the payment is directly helping. Subsidies to students would lower the barrier of entry into college. Subsidies to colleges help colleges hire better professors, offer more classes, reduce the cost of classes etc. Student loans are no subsidy at all except to the finance industry because they cannot be defaulted on and even then some may never be paid back because of bankruptcies.

However, that is always the risk of doing business as a loan provider. It might be interesting to assess the return on student loans compared to other loan instruments.

mrrunangun -> to Jeff R Carter...

The cost of higher education has risen relative to the earning power of the student and/or the student's family unless that family is in the top 10-20% wealth or income groups.

50 years ago it was possible for a lower middle class student to pay all expenses for Northwestern University with his/her own earnings. Tuition was $1500 and room + board c $1000/year. The State of Illinois had a scholarship grant program and all you needed was a 28 or 29 on the ACT to qualify for a grant that paid 80% of that tuition. A male student could make $2000 in a summer construction job, such as were plentiful during those booming 60s. That plus a low wage job waiting tables, night security, work-study etc could cover the remaining tuition and expense burden.

The annual nut now is in excess of $40,000 at NU and not much outside the $40,000-50,000 range at other second tier or elite schools.

The state schools used to produce the bedrock educated upper middle class of business and professional people in most states west of the seaboard. Tuition there 50 years ago was about $1200/year and room and board about $600-800 here in the midwest. Again you could put yourself through college waiting tables part-time. It wasn't easy but it was possible.

No way a kid who doesn't already possess an education can make the tuition and expenses of a private school today. I don't know what the median annual family income was in 1965 but I feel confident that it was well above the annual nut for a private college. Now it's about equal to it.

mrrunangun -> to mrrunangun...

1965 median family income was $6900, more than 200% of the cost of a year at NU. Current median family income is about 75% of a year at NU.

anne -> to 400 ppm CO2...

Linking for:

http://theeconomiccollapseblog.com/wp-content/uploads/2015/03/Presentation-National-Debt.png

Click on "Share" under the graph that is initially constructed and copy the "Link" that appears:

http://research.stlouisfed.org/fred2/graph/?g=13Ew

March 22, 2015

Federal debt, 1966-2014

This allows a reader to understand how the graph was constructed and to work with the graph.

ilsm:

The US spends half the money the entire world spends on war, that is success!

Massive student debt, huge doses poverty, scores of thousands [of annual neglect related] deaths from the wretched health care system etc are not failure!

tew:

Poor education is the enemy of meritocracy. Costly, bloated administrations full of non-educators there to pamper and pander to every possible complaint and special interest - that is the enemy of meritocracy.

Convincing kids to simple "follow their dreams" regardless of education cost and career potential is the enemy of meritocracy. Allowing young adults to avoid challenging and uncomfortable and difficult subjects under the guise of compassion is the enemy of meritocracy. Financial illiteracy is the enemy of meritocracy.

Manageable student debt is no great enemy of meritocracy.

cm -> to tew...

This misses the point, aside frm the victim blaming. Few people embark on college degrees to "follow their dream", unless the dream is getting admission to the middle class job market.

When I was in elementary/middle school, the admonitions were of the sort "if you are not good in school you will end up sweeping streets" - from a generation who still saw street cleaning as manual labor, in my days it was already mechanized.

I estimate that about 15% or so of every cohort went to high school and then college, most went to a combined vocational/high school track, and some of those then later also went college, often from work.

This was before the big automation and globalization waves, when there were still enough jobs for everybody, and there was no pretense that you needed a fancy title to do standard issue work or as a social signal of some sort.

Richard H. Serlin:

Student loans and college get the bulk of the education inequality attention, and it's not nearly enough attention, but it's so much more. The early years are so crucial, as Nobel economist James Heckman has shown so well. Some children get no schooling or educational/developmental day care until almost age 6, when it should start in the first year, with preschool starting at 3. Others get high quality Montessori, and have had 3 years of it by the time they enter kindergarten, when others have had zero of any kind of education when they enter kindergarten.

Some children spend summers in high quality summer school and educational programs; others spend three months digressing and learning nothing. Some children get SAT prep programs costing thousands, and high end educational afterschool programs; others get nothing after school.

All these things should be available in high quality to any child; it's not 1810 anymore Republicans, the good old days of life expectancy in the 30s and dirt poverty for the vast majority. We need just a little more education in the modern world. But this also makes for hugely unequal opportunity.

Observer -> to Observer...

Data on degree by year ...

http://en.wikipedia.org/wiki/Educational_attainment_in_the_United_States

Observer -> to Syaloch...

One needs to differentiate between costs (total dollars spent per student credit hour or degree, or whatever the appropriate metric is) and price (what fraction of the cost is allocated to the the end-user student).

Note that the level of state funding impacts price, not cost; that discussion is usually about cost shifting, not cost reduction.

I'd say that the rate of increase in costs is, more or less, independent of the percent of costs borne by the state. You can indeed see this in the increase in private schools, the state funding is small/nil (particularly in schools without material endowments, where actual annual fees (prices) must closely actual match annual costs). Price discounts and federal funding may both complicate this analysis.

I think much more effort should be spent on understanding and controlling costs. As with health care, just saying "spend more money" is probably not the wise or even sustainable path in the long term.

Costs were discussed at some length here a year(?) or so ago. There is at least one fairly comprehensive published analysis of higher education costs drivers. IIRC, their conclusion was that there were a number of drivers - its not just food courts or more administrators. Sorry, don't recall the link.

Syaloch -> to cm...

Actually for my first job out of college at BLS, I basically was hired for my "rounded personality" combined with a general understanding of economic principles, not for any specific job-related skills. I had no prior experience working with Laspeyres price indexes, those skills were acquired through on-the-job training. Similarly in software development there is no degree that can make you a qualified professional developer; the best a degree can do is to show you are somewhat literate in X development language and that you have a good understanding of general software development principles. Most of the specific skills you'll need to be effective will be learned on the job.

The problem is that employers increasingly want to avoid any responsibility for training and mentoring, and to shift this burden onto schools. These institutions respond by jettisoning courses in areas deemed unnecessary for short-term vocational purposes, even though what you learn in many of these courses is probably more valuable and durable in the long run than the skills obtained through job-specific training, which often have a remarkably short shelf-life. (How valuable to you now is all that COBOL training you had back in the day?)

I guess the question then is, is the sole purpose of higher education to provide people with entry-level job skills for some narrowly-defined job description which may not even exist in a decade? A lot of people these days seem to feel that way. But I believe that in the long run it's a recipe for disaster at both the individual and the societal level.

Richard H. Serlin -> to Observer...

"Observer"

The research is just not on you side, as Heckman has shown very well. Early education and development makes a huge difference, and at age 5-7 (kindergarten) children are much better off with more schooling than morning to noon. This is why educated parents who can afford it pay a lot of money for a full day -- with afterschool and weekened programs on top.

Yes, we're more educated than 1810, but I use 1810 because that's the kind of small government, little spending on education (you want your children educated you pay for it.) that the Republican Party would love to return us to if they thought they could get away with it. And we've become little more educated in the last 50 years even though the world has become much more technologically advanced.

anne:

http://research.stlouisfed.org/fred2/graph/?g=14T9

January 30, 2015

Student Loans Outstanding as a share of Gross Domestic Product, 2007-2014


http://research.stlouisfed.org/fred2/graph/?g=14Ta

January 30, 2015

Student Loans Outstanding, 2007-2014

(Percent change)

anne:

As to increasing college costs, would there be an analogy to healthcare costs?

http://krugman.blogs.nytimes.com/2009/07/25/why-markets-cant-cure-healthcare/

July 25, 2009

Why Markets Can't Cure Healthcare
By Paul Krugman

Judging both from comments on this blog and from some of my mail, a significant number of Americans believe that the answer to our health care problems - indeed, the only answer - is to rely on the free market. Quite a few seem to believe that this view reflects the lessons of economic theory.

Not so. One of the most influential economic papers of the postwar era was Kenneth Arrow's "Uncertainty and the Welfare Economics of Health Care," * which demonstrated - decisively, I and many others believe - that health care can't be marketed like bread or TVs. Let me offer my own version of Arrow's argument.

There are two strongly distinctive aspects of health care. One is that you don't know when or whether you'll need care - but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor's office; and very, very few people can afford to pay major medical costs out of pocket.

This tells you right away that health care can't be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can't just trust insurance companies either - they're not in business for their health, or yours.

This problem is made worse by the fact that actually paying for your health care is a loss from an insurers' point of view - they actually refer to it as "medical costs." This means both that insurers try to deny as many claims as possible, and that they try to avoid covering people who are actually likely to need care. Both of these strategies use a lot of resources, which is why private insurance has much higher administrative costs than single-payer systems. And since there's a widespread sense that our fellow citizens should get the care we need - not everyone agrees, but most do - this means that private insurance basically spends a lot of money on socially destructive activities.

The second thing about health care is that it's complicated, and you can't rely on experience or comparison shopping. ("I hear they've got a real deal on stents over at St. Mary's!") That's why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.

You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don't trust them - they're profit-making institutions, and your treatment is their cost.

Between those two factors, health care just doesn't work as a standard market story.

All of this doesn't necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number of successful healthcare systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn't work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.

* http://www.who.int/bulletin/volumes/82/2/PHCBP.pdf

anne -> to anne...

http://data.bls.gov/timeseries/CUUR0000SEEB01?output_view=pct_12mths

January 30, 2015

College tuition and fees, 1980–2015

(Percentage change)

1980 ( 9.4)
1981 ( 12.4) Reagan
1982 ( 13.4)
1983 ( 10.4)
1984 ( 10.2)

1985 ( 9.1)
1986 ( 8.1)
1987 ( 7.6)
1988 ( 7.6) Bush
1989 ( 7.9)

1990 ( 8.1)
1991 ( 10.2)
1992 ( 10.7) Clinton
1993 ( 9.4)
1994 ( 7.0)

1995 ( 6.0)
1996 ( 5.7)
1997 ( 5.1)
1998 ( 4.2)
1999 ( 4.0)

2000 ( 4.1)
2001 ( 5.1) Bush
2002 ( 6.8)
2003 ( 8.4)
2004 ( 9.5)

2005 ( 7.5)
2006 ( 6.7)
2007 ( 6.2)
2008 ( 6.2)
2009 ( 6.0) Obama

2010 ( 5.2)
2011 ( 5.0)
2012 ( 4.8)
2013 ( 4.2)
2014 ( 3.7)

January

2015 ( 3.6)


Syaloch -> to anne...

I believe so, as I noted above. The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget.

Another interesting feature of both health care and college education is that there are many proffered explanations as to why their cost is rising so much relative to other areas, but a surprising lack of a really authoritative explanation based on solid evidence.

anne -> to Syaloch...

Another interesting feature of both health care and college education is that there are many proffered explanations as to why their cost is rising so much relative to other areas, but a surprising lack of a really authoritative explanation based on solid evidence.

[ Look to the paper by Kenneth Arrow, which I cannot copy, for what is to me a convincing explanation as to the market defeating factors of healthcare. However, I have no proper explanation about education costs and am only speculating or looking for an analogy. ]

anne -> to Syaloch...

The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget.

[ Nicely expressed. ]

Peter K. -> to anne...

"As to increasing college costs, would there be an analogy to healthcare costs?"

Yes, exactly. They aren't normal markets. There should be heavy government regulation.

Denis Drew:

JUST HAD AN IDEA THAT MIGHT LIMIT THE DAMAGE OF THESE PHONEY ONLINE COLLEGES (pardon shouting, but I think it's justified):

Only allow government guaranteed loans (and the accompanying you-can-never-get-out-of-paying) IF a built for that purpose government agency APPROVES said loan. What do you think?

Denis Drew -> to cm...

A big reason we had the real estate bubble was actually the mad Republican relaxation of loan requirements -- relying on the "free market." So, thanks for coming up with a good comparison.

By definition, for the most part, people taking out student loans are shall we say new to the world and more vulnerable to the pirates.
* * * * * * * * * *
[cut and paste from my comment on AB]
Jeff Bezos bought the Washington Post.

According to an article in the Huffington Post At Kaplan University, 'Guerrilla Registration' Leaves Students Deep In Debt, Kaplan Ed is among the worst of the worst of internet federal loan and grant sucking diploma mills. Going so far as to falsely pad bills $5000 or so dollars at diploma time - pay up immediately or you will never get your sheepskin; you wasted your time. No gov agency will act.

According to a lovely graph which I wish I could patch in here the Post may actually be currently be kept afloat only by purloined cash from Kaplan:

earnings before corporate overhead

2002 - Kaplan ed, $10 mil; Kaplan test prep, $45 mil: WaPo, $100 mil
2005 - Kaplan ed, $55 mil; Kaplan test prep, $100 mil; WaPo, $105 mil
2009 - Kaplan ed, $255 mil; Kaplan test prep, $5 mil; WaPo negative $175 mil

http://www.huffingtonpost.com/2010/12/22/kaplan-university-guerilla-registration_n_799741.html

Wonder if billionaire Bezos will reach out to make Kaplan Ed victims whole. Will he really continue to use Kaplan's pirated money to keep WaPo whole -- if that is what is going on?

Johannes Y O Highness:

"theme I've been hammering lately, student debt is too damn high!: "

Too damn high
but why?

Because! Because every event in today's economy is the wish of the wealthy. Do you see why they suddenly wish to deeply educate the proles?

Opportunity cost! The burden of the intelligentsia, the brain work can by carried by robots or humans. Choice of the wealthy? Humans, hands down. Can you see the historical background?

Railroad was the first robot. According to Devon's Paradox, it was overused because of its increment of efficiency. Later, excessive roadbeds were disassembled. Rails were sold as scrap.

The new robots are not heavy lifters. New robots are there to do the work of the brain trust. As first robots replaced lower caste jokers, so shall new robots replace upper caste jokers. Do you see the fear developing inside the huddle of high rollers? Rollers now calling the play?

High rollers plan to educate small time hoods to do the work of the new robots, then kill the new robots before the newbie 'bot discovers how to kill the wealthy, to kill, to replace them forever.

Terrifying fear
strikes

Observer:

Good bit of data on education costs here

http://centerforcollegeaffordability.org/

This chart shows state spending per student and tuition ...

" overall perhaps the best description of the data is something along the lines of "sometimes state appropriations go up and sometimes they go down, but tuition always goes up." "

http://centerforcollegeaffordability.org/2012/12/04/chart-of-the-week-state-appropriations-and-public-tuitions/

[Jun 17, 2019] Student Loan Debt Is the Enemy of Meritocracy

In 1980, the states subsidized 70% of the cost per student. Today it is less than 30% and the amount of grants and scholarships has likewise declined. Tax cuts for rich people and conservative hatred for education are the biggest problem.
Notable quotes:
"... "easy" student loans are a subsidy to colleges, ..."
"... 1965 median family income was $6900, more than 200% of the cost of a year at NU. Current median family income is about 75% of a year at NU. ..."
"... Allowing young adults to avoid challenging and uncomfortable and difficult subjects under the guise of compassion is the enemy of meritocracy. Financial illiteracy is the enemy of meritocracy. ..."
"... The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget. ..."
"... JUST HAD AN IDEA THAT MIGHT LIMIT THE DAMAGE OF THESE PHONEY ONLINE COLLEGES (pardon shouting, but I think it's justified): ..."
"... of-paying) IF a built for that purpose government agency APPROVES said loan. What do you think? ..."
"... Kaplan Ed is among the worst of the worst of internet federal loan and grant sucking diploma mills. ..."
"... Because every event in today's economy is the wish of the wealthy. Do you see why they suddenly wish to deeply educate the proles? ..."
economistsview.typepad.com
Thomas Piketty on a theme I've been hammering lately, student debt is too damn high!:
Student Loan Debt Is the Enemy of Meritocracy in the US: ...the amount of household debt and even more recently of student debt in the U.S. is something that is really troublesome and it reflects the very large rise in tuition in the U.S. a very large inequality in access to education. I think if we really want to promote more equal opportunity and redistribute chances in access to education we should do something about student debt. And it's not possible to have such a large group of the population entering the labor force with such a big debt behind them. This exemplifies a particular problem with inequality in the United States, which is very high inequality and access to higher education. So in other countries in the developed world you don't have such massive student debt because you have more public support to higher education. I think the plan that was proposed earlier this year in 2015 by President Obama to increase public funding to public universities and community college is exactly justified.
This is really the key for higher growth in the future and also for a more equitable growth..., you have the official discourse about meritocracy, equal opportunity and mobility, and then you have the reality. And the gap between the two can be quite troublesome. So this is like you have a problem like this and there's a lot of hypocrisy about meritocracy in every country, not only in the U.S., but there is evidence suggesting that this has become particularly extreme in the United States. ... So this is a situation that is very troublesome and should rank very highly in the policy agenda in the future in the U.S.

DrDick -> Jeff R Carter:

"college is heavily subsidized"

Bwahahahahahahaha! *gasp*

In 1980, the states subsidized 70% of the cost per student. Today it is less than 30% and the amount of grants and scholarships has likewise declined. Tax cuts for rich people and conservative hatred for education are the biggest problem.

cm -> to DrDick...

I don't know what Jeff meant, but "easy" student loans are a subsidy to colleges, don't you think? Subsidies don't have to be paid directly to the recipient. The people who are getting the student loans don't get to keep the money (but they do get to keep the debt).

DrDick -> to cm...

No I do not agree. If anything, they are a subsidy to the finance industry (since you cannot default on them). More basically, they do not make college more affordable or accessible (his point).

cm -> to DrDick...

Well, what is a subsidy? Most economic entities don't get to keep the money they receive, but it ends up with somebody else or circulates. If I run a business and somebody sends people with money my way (or pays me by customer served), that looks like a subsidy to me - even though I don't get to keep the money, much of it paid for operational expenses not to forget salaries and other perks.

Just because it is not prearranged and no-strings (?) funding doesn't mean it cannot be a subsidy.

The financial system is involved, and benefits, whenever money is sloshing around.

Pinkybum -> to cm...

I think DrDick has this the right way around. Surely one should think of subsidies as to who the payment is directly helping. Subsidies to students would lower the barrier of entry into college. Subsidies to colleges help colleges hire better professors, offer more classes, reduce the cost of classes etc. Student loans are no subsidy at all except to the finance industry because they cannot be defaulted on and even then some may never be paid back because of bankruptcies.

However, that is always the risk of doing business as a loan provider. It might be interesting to assess the return on student loans compared to other loan instruments.

mrrunangun -> to Jeff R Carter...

The cost of higher education has risen relative to the earning power of the student and/or the student's family unless that family is in the top 10-20% wealth or income groups.

50 years ago it was possible for a lower middle class student to pay all expenses for Northwestern University with his/her own earnings. Tuition was $1500 and room + board c $1000/year. The State of Illinois had a scholarship grant program and all you needed was a 28 or 29 on the ACT to qualify for a grant that paid 80% of that tuition. A male student could make $2000 in a summer construction job, such as were plentiful during those booming 60s. That plus a low wage job waiting tables, night security, work-study etc could cover the remaining tuition and expense burden.

The annual nut now is in excess of $40,000 at NU and not much outside the $40,000-50,000 range at other second tier or elite schools.

The state schools used to produce the bedrock educated upper middle class of business and professional people in most states west of the seaboard. Tuition there 50 years ago was about $1200/year and room and board about $600-800 here in the midwest. Again you could put yourself through college waiting tables part-time. It wasn't easy but it was possible.

No way a kid who doesn't already possess an education can make the tuition and expenses of a private school today. I don't know what the median annual family income was in 1965 but I feel confident that it was well above the annual nut for a private college. Now it's about equal to it.

mrrunangun -> to mrrunangun...

1965 median family income was $6900, more than 200% of the cost of a year at NU. Current median family income is about 75% of a year at NU.

anne -> to 400 ppm CO2...

Linking for:

http://theeconomiccollapseblog.com/wp-content/uploads/2015/03/Presentation-National-Debt.png

Click on "Share" under the graph that is initially constructed and copy the "Link" that appears:

http://research.stlouisfed.org/fred2/graph/?g=13Ew

March 22, 2015

Federal debt, 1966-2014

This allows a reader to understand how the graph was constructed and to work with the graph.

ilsm:

The US spends half the money the entire world spends on war, that is success!

Massive student debt, huge doses poverty, scores of thousands [of annual neglect related] deaths from the wretched health care system etc are not failure!

tew:

Poor education is the enemy of meritocracy. Costly, bloated administrations full of non-educators there to pamper and pander to every possible complaint and special interest - that is the enemy of meritocracy.

Convincing kids to simple "follow their dreams" regardless of education cost and career potential is the enemy of meritocracy. Allowing young adults to avoid challenging and uncomfortable and difficult subjects under the guise of compassion is the enemy of meritocracy. Financial illiteracy is the enemy of meritocracy.

Manageable student debt is no great enemy of meritocracy.

cm -> to tew...

This misses the point, aside frm the victim blaming. Few people embark on college degrees to "follow their dream", unless the dream is getting admission to the middle class job market.

When I was in elementary/middle school, the admonitions were of the sort "if you are not good in school you will end up sweeping streets" - from a generation who still saw street cleaning as manual labor, in my days it was already mechanized.

I estimate that about 15% or so of every cohort went to high school and then college, most went to a combined vocational/high school track, and some of those then later also went college, often from work.

This was before the big automation and globalization waves, when there were still enough jobs for everybody, and there was no pretense that you needed a fancy title to do standard issue work or as a social signal of some sort.

Richard H. Serlin:

Student loans and college get the bulk of the education inequality attention, and it's not nearly enough attention, but it's so much more. The early years are so crucial, as Nobel economist James Heckman has shown so well. Some children get no schooling or educational/developmental day care until almost age 6, when it should start in the first year, with preschool starting at 3. Others get high quality Montessori, and have had 3 years of it by the time they enter kindergarten, when others have had zero of any kind of education when they enter kindergarten.

Some children spend summers in high quality summer school and educational programs; others spend three months digressing and learning nothing. Some children get SAT prep programs costing thousands, and high end educational afterschool programs; others get nothing after school.

All these things should be available in high quality to any child; it's not 1810 anymore Republicans, the good old days of life expectancy in the 30s and dirt poverty for the vast majority. We need just a little more education in the modern world. But this also makes for hugely unequal opportunity.

Observer -> to Observer...

Data on degree by year ...

http://en.wikipedia.org/wiki/Educational_attainment_in_the_United_States

Observer -> to Syaloch...

One needs to differentiate between costs (total dollars spent per student credit hour or degree, or whatever the appropriate metric is) and price (what fraction of the cost is allocated to the the end-user student).

Note that the level of state funding impacts price, not cost; that discussion is usually about cost shifting, not cost reduction.

I'd say that the rate of increase in costs is, more or less, independent of the percent of costs borne by the state. You can indeed see this in the increase in private schools, the state funding is small/nil (particularly in schools without material endowments, where actual annual fees (prices) must closely actual match annual costs). Price discounts and federal funding may both complicate this analysis.

I think much more effort should be spent on understanding and controlling costs. As with health care, just saying "spend more money" is probably not the wise or even sustainable path in the long term.

Costs were discussed at some length here a year(?) or so ago. There is at least one fairly comprehensive published analysis of higher education costs drivers. IIRC, their conclusion was that there were a number of drivers - its not just food courts or more administrators. Sorry, don't recall the link.

Syaloch -> to cm...

Actually for my first job out of college at BLS, I basically was hired for my "rounded personality" combined with a general understanding of economic principles, not for any specific job-related skills. I had no prior experience working with Laspeyres price indexes, those skills were acquired through on-the-job training. Similarly in software development there is no degree that can make you a qualified professional developer; the best a degree can do is to show you are somewhat literate in X development language and that you have a good understanding of general software development principles. Most of the specific skills you'll need to be effective will be learned on the job.

The problem is that employers increasingly want to avoid any responsibility for training and mentoring, and to shift this burden onto schools. These institutions respond by jettisoning courses in areas deemed unnecessary for short-term vocational purposes, even though what you learn in many of these courses is probably more valuable and durable in the long run than the skills obtained through job-specific training, which often have a remarkably short shelf-life. (How valuable to you now is all that COBOL training you had back in the day?)

I guess the question then is, is the sole purpose of higher education to provide people with entry-level job skills for some narrowly-defined job description which may not even exist in a decade? A lot of people these days seem to feel that way. But I believe that in the long run it's a recipe for disaster at both the individual and the societal level.

Richard H. Serlin -> to Observer...

"Observer"

The research is just not on you side, as Heckman has shown very well. Early education and development makes a huge difference, and at age 5-7 (kindergarten) children are much better off with more schooling than morning to noon. This is why educated parents who can afford it pay a lot of money for a full day -- with afterschool and weekened programs on top.

Yes, we're more educated than 1810, but I use 1810 because that's the kind of small government, little spending on education (you want your children educated you pay for it.) that the Republican Party would love to return us to if they thought they could get away with it. And we've become little more educated in the last 50 years even though the world has become much more technologically advanced.

anne:

http://research.stlouisfed.org/fred2/graph/?g=14T9

January 30, 2015

Student Loans Outstanding as a share of Gross Domestic Product, 2007-2014


http://research.stlouisfed.org/fred2/graph/?g=14Ta

January 30, 2015

Student Loans Outstanding, 2007-2014

(Percent change)

anne:

As to increasing college costs, would there be an analogy to healthcare costs?

http://krugman.blogs.nytimes.com/2009/07/25/why-markets-cant-cure-healthcare/

July 25, 2009

Why Markets Can't Cure Healthcare
By Paul Krugman

Judging both from comments on this blog and from some of my mail, a significant number of Americans believe that the answer to our health care problems - indeed, the only answer - is to rely on the free market. Quite a few seem to believe that this view reflects the lessons of economic theory.

Not so. One of the most influential economic papers of the postwar era was Kenneth Arrow's "Uncertainty and the Welfare Economics of Health Care," * which demonstrated - decisively, I and many others believe - that health care can't be marketed like bread or TVs. Let me offer my own version of Arrow's argument.

There are two strongly distinctive aspects of health care. One is that you don't know when or whether you'll need care - but if you do, the care can be extremely expensive. The big bucks are in triple coronary bypass surgery, not routine visits to the doctor's office; and very, very few people can afford to pay major medical costs out of pocket.

This tells you right away that health care can't be sold like bread. It must be largely paid for by some kind of insurance. And this in turn means that someone other than the patient ends up making decisions about what to buy. Consumer choice is nonsense when it comes to health care. And you can't just trust insurance companies either - they're not in business for their health, or yours.

This problem is made worse by the fact that actually paying for your health care is a loss from an insurers' point of view - they actually refer to it as "medical costs." This means both that insurers try to deny as many claims as possible, and that they try to avoid covering people who are actually likely to need care. Both of these strategies use a lot of resources, which is why private insurance has much higher administrative costs than single-payer systems. And since there's a widespread sense that our fellow citizens should get the care we need - not everyone agrees, but most do - this means that private insurance basically spends a lot of money on socially destructive activities.

The second thing about health care is that it's complicated, and you can't rely on experience or comparison shopping. ("I hear they've got a real deal on stents over at St. Mary's!") That's why doctors are supposed to follow an ethical code, why we expect more from them than from bakers or grocery store owners.

You could rely on a health maintenance organization to make the hard choices and do the cost management, and to some extent we do. But HMOs have been highly limited in their ability to achieve cost-effectiveness because people don't trust them - they're profit-making institutions, and your treatment is their cost.

Between those two factors, health care just doesn't work as a standard market story.

All of this doesn't necessarily mean that socialized medicine, or even single-payer, is the only way to go. There are a number of successful healthcare systems, at least as measured by pretty good care much cheaper than here, and they are quite different from each other. There are, however, no examples of successful health care based on the principles of the free market, for one simple reason: in health care, the free market just doesn't work. And people who say that the market is the answer are flying in the face of both theory and overwhelming evidence.

* http://www.who.int/bulletin/volumes/82/2/PHCBP.pdf

anne -> to anne...

http://data.bls.gov/timeseries/CUUR0000SEEB01?output_view=pct_12mths

January 30, 2015

College tuition and fees, 1980–2015

(Percentage change)

1980 ( 9.4)
1981 ( 12.4) Reagan
1982 ( 13.4)
1983 ( 10.4)
1984 ( 10.2)

1985 ( 9.1)
1986 ( 8.1)
1987 ( 7.6)
1988 ( 7.6) Bush
1989 ( 7.9)

1990 ( 8.1)
1991 ( 10.2)
1992 ( 10.7) Clinton
1993 ( 9.4)
1994 ( 7.0)

1995 ( 6.0)
1996 ( 5.7)
1997 ( 5.1)
1998 ( 4.2)
1999 ( 4.0)

2000 ( 4.1)
2001 ( 5.1) Bush
2002 ( 6.8)
2003 ( 8.4)
2004 ( 9.5)

2005 ( 7.5)
2006 ( 6.7)
2007 ( 6.2)
2008 ( 6.2)
2009 ( 6.0) Obama

2010 ( 5.2)
2011 ( 5.0)
2012 ( 4.8)
2013 ( 4.2)
2014 ( 3.7)

January

2015 ( 3.6)


Syaloch -> to anne...

I believe so, as I noted above. The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget.

Another interesting feature of both health care and college education is that there are many proffered explanations as to why their cost is rising so much relative to other areas, but a surprising lack of a really authoritative explanation based on solid evidence.

anne -> to Syaloch...

Another interesting feature of both health care and college education is that there are many proffered explanations as to why their cost is rising so much relative to other areas, but a surprising lack of a really authoritative explanation based on solid evidence.

[ Look to the paper by Kenneth Arrow, which I cannot copy, for what is to me a convincing explanation as to the market defeating factors of healthcare. However, I have no proper explanation about education costs and am only speculating or looking for an analogy. ]

anne -> to Syaloch...

The specific market dynamics of health care expenditures are obviously different, but as categories of expenses they have some things in common. First, both are very expensive relative to most other household expenditures. Second, unlike consumer merchandise, neither lends itself very well to cost reduction via offshoring or automation. So in an economy where many consumer prices are held down through a corresponding suppression of real wage growth, they consume a correspondingly larger chunk of the household budget.

[ Nicely expressed. ]

Peter K. -> to anne...

"As to increasing college costs, would there be an analogy to healthcare costs?"

Yes, exactly. They aren't normal markets. There should be heavy government regulation.

Denis Drew:

JUST HAD AN IDEA THAT MIGHT LIMIT THE DAMAGE OF THESE PHONEY ONLINE COLLEGES (pardon shouting, but I think it's justified):

Only allow government guaranteed loans (and the accompanying you-can-never-get-out-of-paying) IF a built for that purpose government agency APPROVES said loan. What do you think?

Denis Drew -> to cm...

A big reason we had the real estate bubble was actually the mad Republican relaxation of loan requirements -- relying on the "free market." So, thanks for coming up with a good comparison.

By definition, for the most part, people taking out student loans are shall we say new to the world and more vulnerable to the pirates.
* * * * * * * * * *
[cut and paste from my comment on AB]
Jeff Bezos bought the Washington Post.

According to an article in the Huffington Post At Kaplan University, 'Guerrilla Registration' Leaves Students Deep In Debt, Kaplan Ed is among the worst of the worst of internet federal loan and grant sucking diploma mills. Going so far as to falsely pad bills $5000 or so dollars at diploma time - pay up immediately or you will never get your sheepskin; you wasted your time. No gov agency will act.

According to a lovely graph which I wish I could patch in here the Post may actually be currently be kept afloat only by purloined cash from Kaplan:

earnings before corporate overhead

2002 - Kaplan ed, $10 mil; Kaplan test prep, $45 mil: WaPo, $100 mil
2005 - Kaplan ed, $55 mil; Kaplan test prep, $100 mil; WaPo, $105 mil
2009 - Kaplan ed, $255 mil; Kaplan test prep, $5 mil; WaPo negative $175 mil

http://www.huffingtonpost.com/2010/12/22/kaplan-university-guerilla-registration_n_799741.html

Wonder if billionaire Bezos will reach out to make Kaplan Ed victims whole. Will he really continue to use Kaplan's pirated money to keep WaPo whole -- if that is what is going on?

Johannes Y O Highness:

"theme I've been hammering lately, student debt is too damn high!: "

Too damn high
but why?

Because! Because every event in today's economy is the wish of the wealthy. Do you see why they suddenly wish to deeply educate the proles?

Opportunity cost! The burden of the intelligentsia, the brain work can by carried by robots or humans. Choice of the wealthy? Humans, hands down. Can you see the historical background?

Railroad was the first robot. According to Devon's Paradox, it was overused because of its increment of efficiency. Later, excessive roadbeds were disassembled. Rails were sold as scrap.

The new robots are not heavy lifters. New robots are there to do the work of the brain trust. As first robots replaced lower caste jokers, so shall new robots replace upper caste jokers. Do you see the fear developing inside the huddle of high rollers? Rollers now calling the play?

High rollers plan to educate small time hoods to do the work of the new robots, then kill the new robots before the newbie 'bot discovers how to kill the wealthy, to kill, to replace them forever.

Terrifying fear
strikes

Observer:

Good bit of data on education costs here

http://centerforcollegeaffordability.org/

This chart shows state spending per student and tuition ...

" overall perhaps the best description of the data is something along the lines of "sometimes state appropriations go up and sometimes they go down, but tuition always goes up." "

http://centerforcollegeaffordability.org/2012/12/04/chart-of-the-week-state-appropriations-and-public-tuitions/

In Defense of Difficulty By Steve Wasserman

March 18, 2015 | The American Conservative

A phony populism is denying Americans the joys of serious thought.

... ... ...

Universities, too, were at fault. They had colonized critics by holding careers hostage to academic specialization, requiring them to master the arcane tongues of ever-narrower disciplines, forcing them to forsake a larger public. Compared to the Arcadian past, the present, in this view, was a wasteland.

It didn't have to be this way. In the postwar era, a vast project of cultural uplift sought to bring the best that had been thought and said to the wider public. Robert M. Hutchins of the University of Chicago and Mortimer J. Adler were among its more prominent avatars. This effort, which tried to deepen literacy under the sign of the "middlebrow," and thus to strengthen the idea that an informed citizenry was indispensable for a healthy democracy, was, for a time, hugely successful. The general level of cultural sophistication rose as a growing middle class shed its provincialism in exchange for a certain worldliness that was one legacy of American triumphalism and ambition after World War II. College enrollment boomed, and the percentage of Americans attending the performing arts rose dramatically. Regional stage and opera companies blossomed, new concert halls were built, and interest in the arts was widespread. TV hosts Steve Allen, Johnny Carson, and Dick Cavett frequently featured serious writers as guests. Paperback publishers made classic works of history, literature, and criticism available to ordinary readers whose appetite for such works seemed insatiable.

Mass circulation newspapers and magazines, too, expanded their coverage of books, movies, music, dance, and theater. Criticism was no longer confined to such small but influential journals of opinion as Partisan Review, The Nation, and The New Republic. Esquire embraced the irascible Dwight Macdonald as its movie critic, despite his well-known contempt for "middlebrow" culture. The New Yorker threw a lifeline to Pauline Kael, rescuing her from the ghetto of film quarterlies and the art houses of Berkeley. Strong critics like David Riesman, Daniel Bell, and Leslie Fiedler, among others, would write with insight and pugilistic zeal books that often found enough readers to propel their works onto bestseller lists. Intellectuals such as Susan Sontag were featured in the glossy pages of magazines like Vogue. Her controversial "Notes on Camp," first published in 1964 in Partisan Review, exploded into public view when Time championed her work. Eggheads were suddenly sexy, almost on a par with star athletes and Hollywood celebrities. Gore Vidal was a regular on Johnny Carson. William F. Buckley Jr.'s "Firing Line" hosted vigorous debates that often were models of how to think, how to argue, and, at their best, told us that ideas mattered.

As Scott Timberg, a former arts reporter for the Los Angeles Times, puts it in his recent book Culture Crash: The Killing of the Creative Class, the idea, embraced by increasing numbers of Americans, was that

drama, poetry, music, and art were not just a way to pass the time, or advertise one's might, but a path to truth and enlightenment. At its best, this was what the middlebrow consensus promised. Middlebrow said that culture was accessible to a wide strat[um] of society, that people needed some but not much training to appreciate it, that there was a canon worth knowing, that art was not the same as entertainment, that the study of the liberal arts deepens you, and that those who make, assess, and disseminate the arts were somehow valuable for our society regardless of their impact on GDP.

So what if culture was increasingly just another product to be bought and sold, used and discarded, like so many tubes of toothpaste? Even Los Angeles, long derided as a cultural desert, would by the turn of the century boast a flourishing and internationally respected opera company, a thriving archipelago of museums with world-class collections, and dozens of bookstores selling in some years more books per capita than were sold in the greater New York area. The middlebrow's triumph was all but assured.

The arrival of the Internet by century's end promised to make that victory complete. As the Wall Street Journal reported in a front-page story in 1998, America was "increasingly wealthy, worldly, and wired." Notions of elitism and snobbery seemed to be collapsing upon the palpable catholicity of a public whose curiosities were ever more diverse and eclectic and whose ability to satisfy them had suddenly and miraculously expanded. We stood, it appeared, on the verge of a munificent new world-a world in which technology was rapidly democratizing the means of cultural production while providing an easy way for millions of ordinary citizens, previously excluded from the precincts of the higher conversation, to join the dialogue. The digital revolution was predicted to empower those authors whose writings had been marginalized, shut out of mainstream publishing, to overthrow the old monastic self-selecting order of cultural gatekeepers (meaning professional critics). Thus would critical faculties be sharpened and democratized. Digital platforms would crack open the cloistered and solipsistic world of academe, bypass the old presses and performing-arts spaces, and unleash a new era of cultural commerce. With smart machines there would be smarter people.

Harvard's Robert Darnton, a sober and learned historian of reading and the book, agreed. He argued that the implications for writing and reading, for publishing and bookselling-indeed, for cultural literacy and criticism itself-were profound. For, as he gushed in The Case for Books: Past, Present, and Future, we now had the ability to make "all book learning available to all people, or at least those privileged enough to have access to the World Wide Web. It promises to be the ultimate stage in the democratization of knowledge set in motion by the invention of writing, the codex, movable type, and the Internet." In this view, echoed by innumerable worshippers of the New Information Age, we were living at one of history's hinge moments, a great evolutionary leap in the human mind. And, in truth, it was hard not to believe that we had arrived at the apotheosis of our culture. Never before in history had more good literature and cultural works been available at such low cost to so many. The future was radiant.

Others, such as the critics Evgeny Morozov and Jaron Lanier, were more skeptical. They worried that whatever advantages might accrue to consumers and the culture at large from the emergence of such behemoths as Amazon, not only would proven methods of cultural production and distribution be made obsolete, but we were in danger of being enrolled, whether we liked it or not, in an overwhelmingly fast and visually furious culture that, as numerous studies have shown, renders serious reading and cultural criticism increasingly irrelevant, hollowing out habits of attention indispensable for absorbing long-form narrative and sustained argument. Indeed, they feared that the digital tsunami now engulfing us may even signal an irrevocable trivialization of the word. Or, at the least, a sense that the enterprise of making distinctions between bad, good, and best was a mug's game that had no place in a democracy that worships at the altar of mass appeal and counts its receipts at the almighty box office.

... ... ...

...Today, America's traditional organs of popular criticism-newspapers, magazines, journals of opinion-have been all but overwhelmed by the digital onslaught: their circulations plummeting, their confidence eroded, their survival in doubt. Newspaper review sections in particular have suffered: jobs have been slashed, and cultural coverage vastly diminished. Both the Los Angeles Times and the Washington Post have abandoned their stand-alone book sections, leaving the New York Times as the only major American newspaper still publishing a significant separate section devoted to reviewing books.

Such sections, of course, were always few. Only a handful of America's papers ever deemed book coverage important enough to dedicate an entire Sunday section to it. Now even that handful is threatened with extinction, and thus is a widespread cultural illiteracy abetted, for at their best the editors of those sections tried to establish the idea that serious criticism was possible in a mass culture. In the 19th century, Margaret Fuller, literary editor of the New York Tribune and the country's first full-time book reviewer, understood this well. She saw books as "a medium for viewing all humanity, a core around which all knowledge, all experience, all science, all the ideal as well as all the practical in our nature could gather." She sought, she said, to tell "the whole truth, as well as nothing but the truth."

The arrival of the Internet has proved no panacea. The vast canvas afforded by the Internet has done little to encourage thoughtful and serious criticism. Mostly it has provided a vast Democracy Wall on which any crackpot can post his or her manifesto. Bloggers bloviate and insults abound. Discourse coarsens. Information is abundant, wisdom scarce. It is a striking irony, as Leon Wieseltier has noted, that with the arrival of the Internet, "a medium of communication with no limitations of physical space, everything on it has to be in six hundred words." The Internet, he said, is the first means of communication invented by humankind that privileges one's first thoughts as one's best thoughts. And he rightly observed that if "value is a function of scarcity," then "what is most scarce in our culture is long, thoughtful, patient, deliberate analysis of questions that do not have obvious or easy answers." Time is required to think through difficult questions. Patience is a condition of genuine intellection. The thinking mind, the creating mind, said Wieseltier, should not be rushed. "And where the mind is rushed and made frenetic, neither thought nor creativity will ensue. What you will most likely get is conformity and banality. Writing is not typed talking."

The fundamental idea at stake in the criticism of culture generally is the self-image of society: how it reasons with itself, describes itself, imagines itself. Nothing in the excitements made possible by the digital revolution banishes the need for the rigor such self-reckoning requires. It is, as Wieseltier says, the obligation of cultural criticism to bear down on what matters.

♦♦♦

Where is such criticism to be found today? We inhabit a remarkably arid cultural landscape, especially when compared with the ambitions of postwar America, ambitions which, to be sure, were often mocked by some of the country's more prominent intellectuals. Yes, Dwight Macdonald famously excoriated the enfeeblements of "mass cult and midcult," and Irving Howe regretted "This Age of Conformity," but from today's perspective, when we look back at the offerings of the Book-of-the-Month Club and projects such as the Great Books of the Western World, their scorn looks misplaced. The fact that their complaints circulated widely in the very midcult worlds Macdonald condemned was proof that trenchant criticism had found a place within the organs of mass culture. One is almost tempted to say that the middlebrow culture of yesteryear was a high-water mark.

The reality, of course, was never as rosy as much of it looks in retrospect. Cultural criticism in most American newspapers, even at its best, was almost always confined to a ghetto. You were lucky at most papers to get a column or a half-page devoted to arts and culture. Editors encouraged reporters, reviewers, and critics to win readers and improve circulation by pandering to the faux populism of the marketplace. Only the review that might immediately be understood by the greatest number of readers would be permitted to see the light of day. Anything else smacked of "elitism"-a sin to be avoided at almost any cost.

This was a coarse and pernicious notion, one that lay at the center of the country's longstanding anti-intellectual tradition. From the start of the republic, Americans have had a profoundly ambivalent relationship to class and culture, as Richard Hofstadter famously observed. He was neither the first nor the last to notice this self-inflicted wound. As even the vastly popular science-fiction writer Isaac Asimov understood, "Anti-intellectualism has been a constant thread winding its way through our political and cultural life, nurtured by the false notion that democracy means that 'my ignorance is just as good as your knowledge.'"

... ... ...

When did "difficulty" become suspect in American culture, widely derided as anti-democratic and contemptuously dismissed as evidence of so-called elitism? If a work of art isn't somehow immediately "understood" or "accessible" by and to large numbers of people, it is often ridiculed as "esoteric," "obtuse," or even somehow un-American. We should mark such an argument's cognitive consequences. A culture filled with smooth and familiar consumptions produces in people rigid mental habits and stultified conceptions. They know what they know, and they expect to find it reinforced when they turn a page or click on a screen. Difficulty annoys them, and, having become accustomed to so much pabulum served up by a pandering and invertebrate media, they experience difficulty not just as "difficult," but as insult. Struggling to understand, say, Faulkner's stream-of-consciousness masterpiece The Sound and the Fury or Alain Resnais's Rubik's Cube of a movie "Last Year at Marienbad" needn't be done. The mind may skip trying to solve such cognitive puzzles, even though the truth is they strengthen it as a workout tones the muscles.

Sometimes it feels as if the world is divided into two classes: one very large class spurns difficulty, while the other very much smaller delights in it. There are readers who, when encountering an unfamiliar word, instead of reaching for a dictionary, choose to regard it as a sign of the author's contempt or pretension, a deliberate refusal to speak in a language ordinary people can understand. Others, encountering the same word, happily seize on it as a chance to learn something new, to broaden their horizons. They eagerly seek a literature that upends assumptions, challenges prejudices, turns them inside out and forces them to see the world through new eyes.

The second group is an endangered species. One reason is that the ambitions of mainstream media that, however fitfully, once sought to expose them to the life of the mind and to the contest of ideas, have themselves shrunk. We have gone from the heyday of television intellection which boasted shows hosted by, among others, David Susskind and David Frost, men that, whatever their self-absorptions, were nonetheless possessed of an admirable highmindedness, to the pygmy sound-bite rants of Sean Hannity and the inanities of clowns like Stephen Colbert. Once upon a time, the ideal of seriousness may not have been a common one, but it was acknowledged as one worth striving for. It didn't have to do what it has to today, that is, fight for respect, legitimate itself before asserting itself. The class that is allergic to difficulty now feels justified in condemning the other as "elitist" and anti-democratic. The exercise of cultural authority and artistic or literary or aesthetic discrimination is seen as evidence of snobbery, entitlement and privilege lording it over ordinary folks. A perverse populism increasingly deforms our culture, consigning some works of art to a realm somehow more rarified and less accessible to a broad public. Thus is choice constrained and the tyranny of mass appeal deepened in the name of democracy.

... ... ...

Steve Wasserman, former literary editor of the Los Angeles Times, is editor-at-large for Yale University Press.

This essay is adapted with permission from his chapter in the forthcoming The State of the American Mind: Sixteen Critics on the New Anti-Intellectualism, edited by Adam Bellow and Mark Bauerlein, to be published by Templeton Press in May 2015.

[Sep 24, 2018] Why this Ukrainian revolution may be doomed, too

Blast from the past...
Notable quotes:
"... Kiev has become an accidental, burdensome ally to the West. The North Atlantic Treaty Organization only paid lip service to future Ukrainian membership, while the EU, which never had any intention of taking in Ukraine, pushed an association agreement out of bureaucratic habit more than strategic vision. ..."
"... The least charitably inclined claim that Poroshenko prosecuted the war in eastern Ukraine as a way of delaying reform. What's undeniable is that the shaky ceasefire leaves the Kiev government at the mercy of Putin and his proxies. Should anything start going right for Poroshenko, the fighting could flare back up at any moment. ..."
"... Everybody in Kiev understands that there's no way of reconquering lost territory by force. Ukrainian politicians publicly pledge to win back breakaway regions through reform and economic success. What they hope for is that sanctions will cause enough problems inside Russia that the Kremlin will run out of resources to sabotage Ukraine. Wishful thinking won't replace the painful reforms ahead. ..."
May 19, 2015 | http://blogs.reuters.com/great-debate/2015/05/17/why-this-ukrainian-revolution-may-be-doomed-too/

At home, there is the possibility of more protests, a paralyzed government, and the rise of politicians seeking accommodation with Putin. "Slow and unsuccessful reforms are a bigger existential threat than the Russian aggression," said Oleksiy Melnyk, a security expert at Kiev's Razumkov Center. Even if Ukrainians don't return to the street, they'll get a chance to voice their discontent at the ballot box. Local elections are due in the fall - and the governing coalition between Poroshenko and Prime Minister Arseniy Yatsenyuk is so shaky that nobody can rule out an early parliamentary vote.

In its international relations, Ukraine is living on borrowed time - and money. A dispute over restructuring $23 billion in debt broke into the open last week with the Finance Ministry accusing foreign creditors of not negotiating in good faith ahead of a June deadline. An EU summit this week is likely to end in more disappointment, as Western European countries are reluctant to grant Ukrainians visa-free travel.

Kiev has become an accidental, burdensome ally to the West. The North Atlantic Treaty Organization only paid lip service to future Ukrainian membership, while the EU, which never had any intention of taking in Ukraine, pushed an association agreement out of bureaucratic habit more than strategic vision.

... ... ...

The least charitably inclined claim that Poroshenko prosecuted the war in eastern Ukraine as a way of delaying reform. What's undeniable is that the shaky ceasefire leaves the Kiev government at the mercy of Putin and his proxies. Should anything start going right for Poroshenko, the fighting could flare back up at any moment.

Ukrainian security officials say that the enemy forces gathering in the separatist regions are at their highest capability yet. The most alarming observation is that the once ragtag band of rebels - backed up by regular Russian troops in critical battles - is increasingly looking like a real army thanks to weapons and training provided by Russia.

... ... ...

Everybody in Kiev understands that there's no way of reconquering lost territory by force. Ukrainian politicians publicly pledge to win back breakaway regions through reform and economic success. What they hope for is that sanctions will cause enough problems inside Russia that the Kremlin will run out of resources to sabotage Ukraine. Wishful thinking won't replace the painful reforms ahead.

[Dec 27, 2017] Russian military to order major research to counter color revolutions

Jun 22, 2015 | rt.com

Russian Defense Minister Sergey Shoigu has told reporters that the military will sponsor a major research of coups conducted through mass protest – so called 'color revolutions' – to prevent the situations that Russia faced in 1991 and 1993.

"Some people say that the military should not be involved in political processes, some say the direct opposite. We will order a study on the phenomenon of color revolutions and the military's role in their prevention,"

Shoigu told the participants of the Army-2015 political forum Friday.

"We have no right to allow the repetitions of the collapses of 1991 and 1993," he said. "How to do it is another story, but it is clear that we must deal with the situation. We must understand how to prevent this and how to teach the younger generation so that it supported the calm and gradual development of our country."

The minister added that the consequences of color revolutions can be now observed in many Arab nations and also in Serbia. He also said that the Ukrainian crisis that started in 2014 also was "a major tragedy in the row of color revolutions."

In March this year the head of Russia's Security Council, Nikolai Patrushev promised that this body would develop a detailed plan of action aimed at preventing color revolutions or any other attempts of forceful change of lawfully elected authorities through mass street protest. He also said that the Security Council had prepared a list of proposed measures that could negate the possible threat, including some steps against "network protest activities" and propaganda work against "romantic revolutionary stereotype."

Also in March, President Vladimir Putin addressed the dangers of color revolutions in his speech to the Interior Ministry.

"The extremists' actions become more complicated," he said. "We are facing attempts to use the so called 'color technologies' in organizing illegal street protests to open propaganda of hatred and strife on social networks."

In the same month, the Interior Ministry drafted a bill containing amendments to the law on rallies that covered car protests and sit-ins. The ministry experts said that the move would circumvent legal ambiguity in the interest of society as a whole.

In November, Putin blasted color revolutions as a main tool used by destructive forces in the geopolitical struggle.

"In the modern world, extremism is used as a geopolitical tool for redistribution of spheres of interest. We can see the tragic consequences of the wave of the so-called color revolutions, the shock experienced by people in the countries that went through the irresponsible experiments of hidden, or sometimes brute and direct interference with their lives,"

the Russian leader said.

In January, a group of Russian conservative activists, uniting war veterans, nationalist bikers and pro-Christian politicians launched an "anti-Maidan" political movement in Moscow to oppose any attempts to thwart the stable development of the country. Its first rallies were held on the same days as some anti-government protests and according to law enforcers the conservatives outnumbered the pro-revolution activists by almost 10-fold.

Read more

[Sep 21, 2016] There are still a lot of "handshakable" (created by kreacks for kreakls) mass media outlets in Russia despite cries of neoliberal MSM about absence of "free press" in Russia

"Handshakable" is Soviet dissidents times term meaning a person not too in bed with "despicable" regime. Now used mainly in satical sense with the meaning almost identical to kreakls" -- useless person with strong opinions about everything and very active on the Internet.
Lyttenburgh, July 21, 2015 at 2:39 am

I've found this little gem 2 days ago and I'm still… "overjoyed" by it.

Despite Manichean claims of the Free and Independent ™ Western Media that in Russia "there are no free press", that everything is controlled by Kremlin and Putin, and only [Radio] Ekho Moskvy, Novaya Gazeta [Newspaper] and Dozhd [TV] are the few remaining honest sources of truth and independent journalism ™, there are still a lot of "handshakable" outlets created for kreakls by kreakls.

In one such handshakeble paper, the "Snob" [well, at least they are honest with themselves and their readers] recently was published this interview with another extremely handshakable, ah, "person", who used to be the Chief Editor of the "KommmersantЪ" paper in it's [even more] handshakable heyday. This particular excerpt seems especially "meaty" (translation is mine):

Snob: And when do you think the era of the "rich cooperators'" of the 90s came to an end?

AV: I think it happened when they arrested Khodorkovsky. Then not only the era of cooperators came to an end, the society in this country was finished also.

Snob: Why is society so easily reconciled with this and it's own end?

AV: And because it could not be otherwise! Because there are no such country – Russia! This is a huge geopolitical mistake … I do not know whose, Lord God's or Darwin's. This country never existed, don't exist now and never will be. This country is bad.

Snob: Even if it is so bad, it does not mean that it doesn't exist.

AV: Well, fuck with it! Here's my answer. Fuck with it, that it exists! I wish it to be healthy! But this is not interesting for me. It is a cancer on the body of the world! What, should I fight with it? I'm not a professor Pirogov, I will not cut out this tumor, I just do not know how. Honestly, I don't know how.

Snob: What are the symptoms of this cancer?

AV: There are two evidences of this cancer. Never in my life Russia and its people had any other national ideas then "we are surrounded by enemies" and "Russia for the Russians!". With such two fundamental attributes there can't be country. This is just savagery. Can you give me somw other Russian national ideas?

Snob: Empire from sea to sea.

AV: This is just "We are surrounded by enemies" and "Russia for the Russians!" in other words. It's just combined in a beautiful word "empire". Nothing else! And with such fundamental principles country of course, some country might even exist, but who needs it? I do not! It is necessary to those inside.

Needless to say, Andrey Vasiliev now is a proud and free emigre.

So, after reading this little interview I got a proverbial train of thoughts going in my head at a top speed,finally arriving to it's destination. Now I can say that I "understand" (as in "understand what makes them tic") all of them – liberasts, Byelarussian zmagars, Ukrainian svidomites, pint-sized Baltic patriots, sausage emigrants forming Brighton Beach Bitching Brigade etc.

But that's the topic for another post

ThatJ, July 21, 2015 at 2:50 am

Does Andrey Vasiliev live in Brighton Beach now?

yalensis, July 21, 2015 at 3:24 am

No, Vasiliev lives in Geneva, Switzerland.

And, no, he is not Jewish, in case that's what you are trying to get at.

He is of Russian ethnicity.

yalensis, July 21, 2015 at 3:27 am

Dear Lyttenburgh:

Thanks for this find.

These Fifth Columnists are all the same, aren't they?

For them, the true litmus test was, and always has been, Khodorkovsky.

They longed for a world in which Khodorkovsky owned every single thing in Russia that wasn't nailed down; and everybody else, including these kreakls, just getting crumbs from his table.

But the kreakls receiving bigger crumbs, plus an honored place at the master's side.

Moscow Exile, July 21, 2015 at 3:35 am
I regularly ask Russians – ordinary work-a-day Russians, be they of the working or the professional classes – if they could imagine leaving Russia forever, if they could consider emigrating, never intending to return. They all say they couldn't. They say they'd like to travel, but they always feel they would want to come "home".

I have never yet met one Russian person who speaks as does Vasiliev, no one who says "I hate this place and my fellow countrymen so much: it's a shithole; it's a dump; it's full of morons etc., etc….", though I often hear them speaking loudly and clearly in that way from afar through the bullhorn of the Western mass media.

I ask my children regularly if they would like to live in England. I get a resounding "No!" off them. They speak English fluently now (except the youngest) and say they like visiting the place, that it's "cool" and, curiously enough, all their pals think it's "cool" that they are "half-English". My children do as well, not least because I suspect they can already sense the great advantage that their bilingualism has given them – but they categorically state they are Russian and that Russia is their Motherland, their rodina, the land that "bore" them, their "Mother Russia".

My wife is the same.

None of them are nationalistic, but they are very, very patriotic.

People such as Vasiliev are a small yet vociferous minority that, I suspect, suffers from some psychological aberration.

I am so glad that many of them leap at the first opportunity to fuck off away from here.

Pavlo Svolochenko, July 21, 2015 at 3:46 am
The type is not unique to Russia.

America has a whole university set aside for people who hate America. A sort of open-air loonybin.

Your Russian anti-patriots can be corralled and stowed out of sight in the same way, if you wish. Market it right, and they'll do it entirely of their own accord.

yalensis, July 21, 2015 at 3:55 am
Dear Pavlo: Which open-air university is that? Berkeley?? :)
Pavlo Svolochenko, July 21, 2015 at 4:11 am
Naturally.
Moscow Exile, July 21, 2015 at 4:19 am
Why is Berkeley "open-air"?
Pavlo Svolochenko, July 21, 2015 at 4:23 am
In that nothing prevents the inmates from escaping but fear of employment.
Moscow Exile , July 21, 2015 at 4:28 am
I should add that I know many who have chosen to leave Russia in search of fame and fortune, education, a better standard of living etc., but none of them left because they loathe the land and its people.

I also have over the years come across a few who have returned: some because, having achieved success, they preferred to live out the rest of their lives in their Mother Russia; others because they could not adapt to an alien culture ("No 'soul' in the USA!" I have often heard such folk say; and others simply because they were homesick.

Interestingly, and unbeknownst to me, my sister emailed my wife last week when I was in the UK and told her that I was clearly "homesick".

I was: for Russia and my wife and children

Home is where the heart is.

[Dec 31, 2015] Absolutely Mr. Celik. Absolutely!

marknesop.wordpress.com
Northern Star, December 30, 2015 at 3:11 pm
http://www.ndtv.com/world-news/moscow-demands-arrest-of-rebel-for-murder-of-russian-warplane-pilot-1260805

"Revenge is the most natural right," Celik said in the interview, while refraining from claiming the pilot's death"

Absolutely Mr. Celik Absolutely! ..

yalensis , December 30, 2015 at 5:53 pm
Ooo, this explains a mystery to me. I noticed on my own blog today there was an unusual spike of views for an older story, from November 29, which happened to be about this particular guy, Alparslan Çelik.
People must have googled his name, and maybe my story came up in the search results.

[Dec 31, 2015] Absolutely Mr. Celik. Absolutely!

marknesop.wordpress.com
Northern Star, December 30, 2015 at 3:11 pm
http://www.ndtv.com/world-news/moscow-demands-arrest-of-rebel-for-murder-of-russian-warplane-pilot-1260805

"Revenge is the most natural right," Celik said in the interview, while refraining from claiming the pilot's death"

Absolutely Mr. Celik Absolutely! ..

yalensis , December 30, 2015 at 5:53 pm
Ooo, this explains a mystery to me. I noticed on my own blog today there was an unusual spike of views for an older story, from November 29, which happened to be about this particular guy, Alparslan Çelik.
People must have googled his name, and maybe my story came up in the search results.

[Dec 31, 2015] Absolutely Mr. Celik. Absolutely!

marknesop.wordpress.com
Northern Star, December 30, 2015 at 3:11 pm
http://www.ndtv.com/world-news/moscow-demands-arrest-of-rebel-for-murder-of-russian-warplane-pilot-1260805

"Revenge is the most natural right," Celik said in the interview, while refraining from claiming the pilot's death"

Absolutely Mr. Celik Absolutely! ..

yalensis , December 30, 2015 at 5:53 pm
Ooo, this explains a mystery to me. I noticed on my own blog today there was an unusual spike of views for an older story, from November 29, which happened to be about this particular guy, Alparslan Çelik.
People must have googled his name, and maybe my story came up in the search results.

[Dec 31, 2015] Absolutely Mr. Celik. Absolutely!

marknesop.wordpress.com
Northern Star, December 30, 2015 at 3:11 pm
http://www.ndtv.com/world-news/moscow-demands-arrest-of-rebel-for-murder-of-russian-warplane-pilot-1260805

"Revenge is the most natural right," Celik said in the interview, while refraining from claiming the pilot's death"

Absolutely Mr. Celik Absolutely! ..

yalensis , December 30, 2015 at 5:53 pm
Ooo, this explains a mystery to me. I noticed on my own blog today there was an unusual spike of views for an older story, from November 29, which happened to be about this particular guy, Alparslan Çelik.
People must have googled his name, and maybe my story came up in the search results.

[Dec 31, 2015] Absolutely Mr. Celik. Absolutely!

marknesop.wordpress.com
Northern Star, December 30, 2015 at 3:11 pm
http://www.ndtv.com/world-news/moscow-demands-arrest-of-rebel-for-murder-of-russian-warplane-pilot-1260805

"Revenge is the most natural right," Celik said in the interview, while refraining from claiming the pilot's death"

Absolutely Mr. Celik…Absolutely!……..

yalensis , December 30, 2015 at 5:53 pm
Ooo, this explains a mystery to me. I noticed on my own blog today there was an unusual spike of views for an older story, from November 29, which happened to be about this particular guy, Alparslan Çelik.
People must have googled his name, and maybe my story came up in the search results.

[Dec 30, 2015] Ukrainian economy in depression: exports fall by about a third in 2015

Recession in Russia was the last nail on the coffin...
izvestia.ru

Exports of goods and services of Ukrainian production in 2015 will fall by about a third. And this is not surprising: as a result of "reforms" in the country almost died the industry lost its main Russian market, where Ukraine has supplied products with high added value. The cumulative figure of industrial production YTD is approximately -15%. The main export product of Ukraine for the first time since the pre-industrial era were products of agriculture. In the first place - corn.

[Dec 30, 2015] Ukrainian economy in depression: exports fall by about a third in 2015

Recession in Russia was the last nail on the coffin...
izvestia.ru

Exports of goods and services of Ukrainian production in 2015 will fall by about a third. And this is not surprising: as a result of "reforms" in the country almost died the industry lost its main Russian market, where Ukraine has supplied products with high added value. The cumulative figure of industrial production YTD is approximately -15%. The main export product of Ukraine for the first time since the pre-industrial era were products of agriculture. In the first place - corn.

[Dec 30, 2015] Ukrainian economy in depression: exports fall by about a third in 2015

Recession in Russia was the last nail on the coffin...
izvestia.ru

Exports of goods and services of Ukrainian production in 2015 will fall by about a third. And this is not surprising: as a result of "reforms" in the country almost died the industry lost its main Russian market, where Ukraine has supplied products with high added value. The cumulative figure of industrial production YTD is approximately -15%. The main export product of Ukraine for the first time since the pre-industrial era were products of agriculture. In the first place - corn.

[Dec 30, 2015] Oil down more than 3 percent on U.S. crude build; Brent near 2004 low

Why MSM and those people try to push oil lower at the end of the year? Are they oblivious to the destiny of the US shale companies. Collateral damage ? The Saudi's have finally admitted that they longer limit production, i.e., they're producing flat out, in other words, they have no spare capacity.
Notable quotes:
"... Ali al-Naimi, oil minister of OPEC leader Saudi Arabia, said the kingdom will not limit production, the Wall Street Journal reported. ..."
news.yahoo.com

Stockpiles hit record highs at the Cushing, Oklahoma delivery hub for U.S. crude's West Texas Intermediate (WTI) futures. Gasoline and heating oil also posted larger-than-expected stock builds.

"In all the years I have been doing this, I have never seen builds in the last week of December," said Tariq Zahir, crude futures trader at Tyche Capital Advisors in Long Island, New York.

"At least for tax consequence reasons, refiners always ramp up runs at the year-end, and there's a draw. This is a first for me."

Ali al-Naimi, oil minister of OPEC leader Saudi Arabia, said the kingdom will not limit production, the Wall Street Journal reported.

[Dec 30, 2015] Syrian troops backed by Russian jets enters rebel-held southern town army

Notable quotes:
"... Rebels still control large parts of the region, that also borders Israel, but have been largely on the defensive since their failed offensive in June to take the government-controlled part of Deraa city. ..."
"... In the course of actions aimed to cut terrorists' sources of income, the Russian aircraft eliminate large number of oil production, storing and transportation facilities on the ISIS-controlled territories in Syria. ..."
"... Russian Su-34 bomber performed a strike on the target and eliminated more than 20 oil trucks, which had been used by the ISIS for illegal oil transportation, two off-roaders equipped with ZU-23 AD systems. ..."
"... It is necessary to pay attention to the statement made by representative of the US State Department. Time is changed. Situation is changed. Representatives of the State Department are changed. However, speech writers are not. ..."
"... All these impersonal claims without evidences about performing strikes on civilian objects by allegedly Russian aviation in Syria close resemble performances held by hypnotists or chapiteau. ..."
"... It is about absurd: there are serious accusations referring to some "reputable non-governmental organizations". However, there is no information about the exact name of these organizations and who they are reputable for. ..."
"... All this is happening while actions and, the most important, results of the US air bombardment in this region are keeping absolute silent. ..."
"... If this continue the Syrian military will regain control of all Syrian cities and all these terrorist islamic groups supported by foreign countries will be defeated and expelled from Syria. ..."
"... Well thats interesting. A "mainstream anti Assa armed group", yet they go through all that without actually revealing the name. ..."
"... Is there any question now that the WH was simply letting Syria get demolished in the hopes Assad would fall? ..."
"... Theres a lot of people that support Assad. The WH knows this. The WH stated that Assad hasent a chance in hell of getting re elected. Well if thats the case, why does the WH refuse to see his name on a ballot. ..."
"... They are "Islamist" and the Christian genocide would continue on and on and on. Dont forget, not one of these guys came to power without holding on to a gun. Does that sound like someone you would vote for? ..."
"... hilarious, while this silly article says the syrin army is making gains only after the Russian bombing. They slipped an wrote that the terrorists lost in June against the syrian army!! The russians only got involved in october!! propaganda always has its draw back....the truth!! ..."
"... Until DC provides the list of Moderate Rebels that don't have any Islamic reference they ALL will be viewed as Islamic Terrorists Organizations. And until that list is provided let the Russians bomb the Hell out of them. ..."
"... Let's get this straight... IS militants are all TERRORISTS. Any rebel groups that are fighting alongside with the IS group are also part of the terrorist group. And if those so-called rebel groups are supported by the US or NATO or Turkey, it means that those nations are directly or indirectly supporting the ISIS or TERRORISTS. ..."
"... Sheikh Meskeen is vital and strategic due to its location along the second most important highway in the Dara'a province; it is also the key to the cities of Nawa and Jassim. ..."
"... The Russians are doing this right, get rid of all terrorist groups including the one Israel and the U.S. are supporting, funding and arming. ..."
"... Terrorists are no longer terrorists but are now called rebels? That would mean the Paris slaughter was done by rebels. ..."
"... Somebody please tell to these so called moderate rebels and their brothers in ISIS that their heydays are over. Run while you can. ..."
"... Wonder what the US response would be to Russian airdropping thousands of RPG's and millions of rifles and ammunition to the #$%$, Aryan Nation, Nation of Islam and various militia group in the US who feel they are being oppressed? ..."
"... Since there wasn't a single mention of ISIS in this article, then the emphasis should have been Obama's Syrian "rebel" allies are getting the krap kicked out of them by the Russians. ..."
"... But Reuters, being an Obama support group would only mention them as "backed by Western Powers". ..."
"... Does anyone see the connection between the terrorists, who are backed by the West, and the outright Lies the media tries to pass off as the truth. One other note here, they keep recycling parts of this article which appear almost verbatim in several other reports on Yahoo about Syria. ..."
"... The US is guilty of arming rebels against a government with representation at the United Nations. That is a crime. ..."
"... All the US resources are wasted on misguided and ill-convince military adventures that support corporations than its own citizens. ..."
"... Just like in the north of Syria....ALL the "rebel" groups in the south fight under Al-Nusra's umbrella and command structure. Al-Nusra plans ALL of their offensives, as well as ALL of their defense. You can call them moderate if you want. but ALL the "rebel" groups in Syria work hand-in-hand with the Salafist and Takfiri. ..."
"... Personally I think it's heartwarming the way Western governments and the 'free' press has lined up behind the radical Islamists against Russia and the secular regime in Syria where women can do such evil things as go outside without a sheet over their heads and men can drink beer and etc! This is madness! Russia is evil! ..."
"... stop this nonsense, no one believes it ny more... moderate rebels, barrel bombs ...they are all islamic terorrists, and very well funded and equipped by saudi arabia and qater and trained and supplied by turkey and the u.s. clear as day light ,they are all sunni muslim terrorists! ..."
"... I seriously doubt the "moderate" rebels would approve of anything Christmas-related. Assad looks a lot more moderate to me than the US-backed "moderates". ..."
news.yahoo.com
Rebels still control large parts of the region, that also borders Israel, but have been largely on the defensive since their failed offensive in June to take the government-controlled part of Deraa city.

Vladimir

Here's the latest from Russia's General Staff, with some interesting info about the US Air Force activities.

In the course of last two days, since December 28, aircraft of the Russian Aerospace Forces in the Syrian Arab Republic have performed 121 combat sorties engaging 424 terrorists' objects

In the course of last two days, since December 28, aircraft of the Russian Aerospace Forces in the Syrian Arab Republic have performed 121 combat sorties engaging 424 terrorists' objects in the Aleppo, Idlib, Latakia, Hama, Homs, Damascus, Daraa, Raqqah and Deir ez-Zor provinces.

Near Mahin (Homs province), Russian Su-34 performed a strike on a large terrorists' base of the ISIS. A hangar with military hardware, depots with weapons, materiel and munitions of terrorists were destroyed. Five off-road vehicles equipped with large-caliber machine guns, an infantry fighting vehicle, and four trucks loaded with munitions were eliminated.

Near Shawarighat al-Arz (Aleppo province), Russian Su-25 destroyed a terrorists' strong point. Direct hits caused elimination of a tank and three off-road vehicles equipped with large-caliber machine guns.

Near Lahaya (Hama province), a Su-25 of the Russian Aerospace Forces eliminated two artillery guns and an ammunition depot.

In suburbs of al-Khadr (Latakia province), Su-25 carried out a strike on a large strong point of terrorists and eliminated 2 pieces of hardware.

Command staff of the Russian aviation group continues receiving information about objects of the ISIS and other terrorist groups active in Syria from representatives of patriotic opposition forces.

Therefore, on Monday, Russian party received information from representatives of one of the Syrian opposition detachments active in northeastern Syria concerning a planned meeting of the ISIS field commanders in the suburbs of Raqqah.

The Russian Defence Ministry organized a day-and-night air observation of the object. After receiving confirmation on arriving of militants' leaders to the assigned point, Russian Su-34 bomber performed a strike on the building, where the meeting was taking place. As a result of direct hit with guided missile, the building was destroyed with all its contents.

Several days ago, representatives of a patriotic opposition formation active in the Idlib province presented information to the Russian Defence Ministry about location of a large ammunition depot of the Jabhat al-Nusra near al-Zerba.

After making research on the aerial photographs of the region and checking reconnaissance data, Russian Su-24M hit the target. Objective monitoring data confirmed elimination of the object.

Means of intelligence detected a hidden reinforced concrete shelter of the AD complex Osa. A Su-34 bomber received an order to liquidate the target. Direct hits of BETAB-500 air bombs caused destruction of the building with all its contents.

In the course of actions aimed to cut terrorists' sources of income, the Russian aircraft eliminate large number of oil production, storing and transportation facilities on the ISIS-controlled territories in Syria.

In the course of last two days, the Russian aviation group destroyed six objects of oil trafficking in the Deir ez-Zor and Aleppo provinces.

In the course of the aerial intelligence operation near Kafr Nabl (Idlib province), the Russian aircraft detected concentration of oil tankers moving to the Syrian-Turkish borders. They were escorted by off-roaders equipped with anti-aircraft systems.

Russian Su-34 bomber performed a strike on the target and eliminated more than 20 oil trucks, which had been used by the ISIS for illegal oil transportation, two off-roaders equipped with ZU-23 AD systems.

***

It is necessary to pay attention to the statement made by representative of the US State Department. Time is changed. Situation is changed. Representatives of the State Department are changed. However, speech writers are not.

All these impersonal claims without evidences about performing strikes on civilian objects by allegedly Russian aviation in Syria close resemble performances held by hypnotists or chapiteau.

It is about absurd: there are serious accusations referring to some "reputable non-governmental organizations". However, there is no information about the exact name of these organizations and who they are reputable for.

All this is happening while actions and, the most important, results of the US air bombardment in this region are keeping absolute silent.

However, every day aircraft and strike UAV's of the US Air Force carry out from six to twenty combat sorties with performing missile and bomb strikes on ground targets.

Therefore, all the public community learns information about effectiveness of operations held by the US Air Force, when their "flights" had caused mass killing. It is impossible to be hide or shift responsibility to any party.


kingn500

Russia carpet bombing is winning the war for the Syrian military that is a strong army that was losing due to lack of air force power and lack of cities war fare experience needed during the attack and defense of Syrian cities, Syrian military was not trained for guerrilla warfare inside the cities but with Russia carpet bombing and Russia retraining the Syrian military in cities warfare they begin to regain Syrian cities and defeating these terrorist rebels If this continue the Syrian military will regain control of all Syrian cities and all these terrorist islamic groups supported by foreign countries will be defeated and expelled from Syria. Good for the Syrian people that most of them don't want an islamic state in Syria. Go Russia go .

smlslk

Rebels from another mainstream anti-Assad armed opposition alongside some Islamist groups"

Well thats interesting. A "mainstream anti Assa armed group", yet they go through all that without actually revealing the name.

Is there any question now that the WH was simply letting Syria get demolished in the hopes Assad would fall?

Theres a lot of people that support Assad. The WH knows this. The WH stated that Assad hasent a chance in hell of getting re elected. Well if thats the case, why does the WH refuse to see his name on a ballot.

So lets get this strait. All the people that now back Assad including all the people that would now vote for him would then become the terrorist if the WH appointed one of these nameless "armed mainstream anti Assad terrorist groups". They are "Islamist" and the Christian genocide would continue on and on and on. Dont forget, not one of these guys came to power without holding on to a gun. Does that sound like someone you would vote for?

Ramsis

hilarious, while this silly article says the syrin army is making gains only after the Russian bombing. They slipped an wrote that the terrorists lost in June against the syrian army!! The russians only got involved in october!! propaganda always has its draw back....the truth!!

stefan

Until DC provides the list of Moderate Rebels that don't have any Islamic reference they ALL will be viewed as Islamic Terrorists Organizations. And until that list is provided let the Russians bomb the Hell out of them.

J M

Let's get this straight... IS militants are all TERRORISTS. Any rebel groups that are fighting alongside with the IS group are also part of the terrorist group. And if those so-called rebel groups are supported by the US or NATO or Turkey, it means that those nations are directly or indirectly supporting the ISIS or TERRORISTS.

DAVID

The Syrian Army announced minutes ago that its troops alongside the popular forces drove the militant groups back from the entire districts of the key town of Sheikh Meskeen North of Dara'a after killing, wounding and capturing a large number of the terrorists. "Sheikh Meskeen is now under the full control of the Syrian government forces," the army said.

"The militant groups have suffered a heavy death toll. Most of the militants in the town have been killed or wounded. In addition, a large number of the militants have surrendered, while the rest preferred to flee the war zone," the army added.

"The Syrian army is fortifying its positions in the town now," it went on to say.

"Pro-government troops are patrolling the town to find the rest of the militants," the army added.

"The Syrian soldiers are transferring the captured and injured militants to safer areas behind the frontline," the army went on to say.

"The engineering units of the army are defusing the Improvised Explosive Devices (IED) planted by the terrorists groups across the government buildings," the army said.

Reports said earlier that the Syrian government forces' rapid advances in the town of Sheikh Meskeen have forced the militant groups to start pulling back forces and fleeing the battlefield to evade more casualties.

"The Syrian army and the National Defense Forces (NDF) have continued to push back the militant groups from different districts of the town, including the residential area of the military forces and one of the main roundabouts of the strategic town," the army said.

"The militant groups, who have witnessed the heavy attacks of the Syria forces and the collapse of their defense lines in the Northeastern, Northern and Eastern parts of the city, have started to withdraw from more districts," the sources said.

"In the meantime, large groups of militants are fleeing the town in order to evade more casualties," the sources added.

"The militant groups have sustained a heavy death toll and are hopeless. The terrorists' commanders have called for fresh militants but have received no response from their comrades in other parts of the province thus far," the sources said.

"The government forces have completed their control over the Eastern part of the town, Pharmacy Street, al-Ra'esi Roundabout in the middle of the town, and Jame'a al-Omari and are advancing against the militants' strongholds," the sources said.

"The Syria forces also have surrounded the militant group of al-Wila Seif al-Sham in the city and are hunting them one by one," the sources said.

Reports said that the Russian and Syrian Air Forces' joint combat sorties over the militant groups' positions in Sheikh Meskeen North of Dara'a claimed the lives of large groups of terrorists and destroyed their military grid.

"The Russian and Syrian fighter jets, in over 25 sorties, massively bombed the militant positions in Sheikh Meskeen, which left many terrorists dead or wounded," the army sources said.

"The aerial coverage created by the Russian and Syrian fighter jets in Sheikh Meskeen battlefield was one the most important causes of the Syrian ground forces' advances against the militant groups on Tuesday," the army added.

The Syrian army and its allies have been significantly advancing against the militant groups in the province in the recent weeks, particularly in Sheikh Meskeen.

Army announced on Tuesday that its troops and their popular allies advanced in the Northern battlefronts of Sheikh Meskeen rapidly and pushed the militants back from more positions.

"Following the capture of Battalion 82 base and Tal al-Hish, the Syrian government forces captured the Sheikh Meskeen's Pool Facility, killing over 15 enemy combatants from the Free Syrian Army (FSA), the army said.

"The Syrian army, the National Defense Forces and other popular fighters are on a roll in the Dara'a province after launching a massive assault on the strategic town of Sheikh Meskeen over 72 hours ago," the army added.

Sheikh Meskeen is vital and strategic due to its location along the second most important highway in the Dara'a province; it is also the key to the cities of Nawa and Jassim.

Bill

MY FELLOW AMERICANS, the first "War on Terror" was during Jefferson's presidency. For nearly fifteen centuries the world has faced the disease of Islam, but our nation faced it head on when Thomas Jefferson, serving as the ambassador to France, and John Adams, servicing as the ambassador to Britain, went to London to meet with Ambassador Abdrahaman, the Dey of Tripoli's ambassador to Britain. Of course they met with Abdrahaman to negotiate a peace treaty, but keep in mind that in Islam, the only peace is submission to Islam.

After independence, however, pirates often captured U.S. merchant ships, pillaged cargoes and enslaved or held crew members for ransom. Jefferson had opposed paying tribute to the Barbary States since as far back as 1785, and in 1801, he authorized a U.S. Navy fleet under Commodore Richard Dale to make a show of force in the Mediterranean, the first American naval squadron to cross the Atlantic ...this lead to the "First Barbary Wars".

America, though this victory proved only temporary, according to Wood, "many Americans celebrated it as a vindication of their policy of spreading free trade around the world and as a great victory for liberty over tyranny." My fellow Americans, I am a veteran, I have fought against terror for over a decade (2001 to 2011). These radicalists have been like this from generation to generation to as far back as the 7th century. I'm concerned on what we will leave behind for our next generation and the future of this great nation! So I say onto you, my fellow Americans, LET NO ONE -AND I MEAN NO ONE- COME INTO OUR HOUSE AND PUSH US AROUND!

Paul

The Russians are doing this right, get rid of all terrorist groups including the one Israel and the U.S. are supporting, funding and arming.


The

Terrorists are no longer terrorists but are now called rebels? That would mean the Paris slaughter was done by rebels.

Kevin

Somebody please tell to these so called moderate rebels and their brothers in ISIS that their heydays are over. Run while you can.

Detritus of Sloth

Wonder what the US response would be to Russian airdropping thousands of RPG's and millions of rifles and ammunition to the #$%$, Aryan Nation, Nation of Islam and various militia group in the US who feel they are being oppressed?

Vicious

Since there wasn't a single mention of ISIS in this article, then the emphasis should have been Obama's Syrian "rebel" allies are getting the krap kicked out of them by the Russians.

But Reuters, being an Obama support group would only mention them as "backed by Western Powers".

RT

insurgents on the ground told Reuters........you mean Terrorists don't you? This is a constant source of the media information, the terrorists themselves. We know what color pajamas the Jihadists wear to bed at night, and every move they make, and why, but our military seems to have missed this.......

Does anyone see the connection between the terrorists, who are backed by the West, and the outright Lies the media tries to pass off as the truth. One other note here, they keep recycling parts of this article which appear almost verbatim in several other reports on Yahoo about Syria.

jane

Who know, maybe in 2016 all "Sunni moderate rebels" and ISIS will be expelled. Then Syria will see peace and its refugees can return home. But I bet the blood-thirsty US Snake Department and the CIA probably will prefer continued bloodshed.

Peetie

The US is guilty of arming rebels against a government with representation at the United Nations. That is a crime.

Hezbollah:

Let's look at so-called "moderate rebels" supported by American taxpayers. Example: Jeysh Al-Islam:

- It means "Army of Islam"
- Its leader called for extermination of all minorities in Damascus
- Its leader called Alawites "more infidel than Jews and Christians"
- Is directly financed by Saudis
- Has clearly shown its support for Islamic Caliphate and vehemently opposes democracy
- Been involved in series of tortures, beheadings, murders and disappearances

Yep, "moderate rebels" all right.

J. de Molay

The two super powers, China and Russia, maneuvered on the global stage for supremacy while the US citizens politically in-fight with no clear future oriented goals or plans. Sadly, the US is slowly dissolving away from what is was supposed to be that was framed by the founders a mere 235+ years ago. All the US resources are wasted on misguided and ill-convince military adventures that support corporations than its own citizens.

Davin

Just like in the north of Syria....ALL the "rebel" groups in the south fight under Al-Nusra's umbrella and command structure. Al-Nusra plans ALL of their offensives, as well as ALL of their defense. You can call them moderate if you want. but ALL the "rebel" groups in Syria work hand-in-hand with the Salafist and Takfiri.

Relja

Seems 'the rebels' are regular troops from jordan and turkey. President Asad lost large teritorry because of turkish, joprdan and saudi 'rebels' loved by west/Us.

Reyter

Personally I think it's heartwarming the way Western governments and the 'free' press has lined up behind the radical Islamists against Russia and the secular regime in Syria where women can do such evil things as go outside without a sheet over their heads and men can drink beer and etc! This is madness! Russia is evil!

CRL

"Rebels from another mainstream anti-Assad armed opposition alongside some Islamist groups said they shelled the city of Izraa, a main government held town"

How many innocent civilians were killed? Did not see the number in the press.

Ramsis

stop this nonsense, no one believes it ny more... moderate rebels, barrel bombs ...they are all islamic terorrists, and very well funded and equipped by saudi arabia and qater and trained and supplied by turkey and the u.s. clear as day light ,they are all sunni muslim terrorists!

Mark

There is a news report "Christmas and New Year carnival in Damascus- Video" on SANA news website. I seriously doubt the "moderate" rebels would approve of anything Christmas-related. Assad looks a lot more moderate to me than the US-backed "moderates".

TruthMonger

Why our media is viewing Syrian events from the terrorists' perspective, never from the legitimate government's??

Scott

That GGAADDAAMMMM IDIOT BUSH & The AFFLUENZA Party (Republican Party) are 100% to Blame......for Creating ISIS....and The Whole Mess in Middle East.......Says RAND PAUL & TED CRUZ........92% of Americans Agree

analogy

I keep on reading "rebels , freedom fighters, moderates" that this means the Paris attackers and the ones that brought down the towers are one of the above?

[Dec 30, 2015] Putin rules out reconciliation with Turkey

Notable quotes:
"... On Thursday, Putin went as far as to say that the Islamic State group was a "secondary issue" in Syria as it was created as "cannon fodder under Islamist slogans" to protect economic interests of other players, although he did not name Turkey. ..."
news.yahoo.com

Moscow (AFP) - Russian President Vladimir Putin fired off an angry tirade against Turkey on Thursday, ruling out any reconciliation with its leaders and accusing Ankara of shooting down a Russian warplane to impress the United States.

In comments littered with crude language, Putin dismissed the possibility that the downing of the warplane over the Turkey-Syria border last month was an accident, calling it a "hostile act".

"We find it difficult if not impossible to come to an agreement with the current leadership of Turkey," the Kremlin strongman said at his annual news conference.

"On the state level, I don't see any prospects of improving relations with the Turkish leadership," he said of Turkish counterpart Recep Tayyip Erdogan.

Ties between Russia and the NATO member have hit rock bottom since the November 24 incident, which led to deaths of two Russian military officers.

Turkey has said the Russian jet strayed into its airspace and ignored repeated warnings, but Moscow insists it never left Syrian territory.

Putin said he did not rule out that Ankara was acting with tacit approval from Washington, possibly so that the United States would look the other way to let Turkey "go onto Iraqi territory and occupy part of it".

"I don't know if there was such a trade-off, maybe there was," Putin said.

"If somebody in the Turkish leadership decided to lick the Americans in one place... I don't know, if they did the right thing," he added.

"Did they think we would run away now? Russia is not that kind of country," Putin said, speaking of Moscow's increased military presence in Syria.

"If Turkey flew there all the time before, breaching Syrian airspace, well, let's see how they fly now."

Turkey has voiced concern about Russian air raids in northern Syria because of the Turkmen minority in the area, a Turkic-speaking people who have had an uneasy relationship with the regime of President Bashar al-Assad.

But Putin declared: "I've never heard anything about these so-called Turkmen.

"I know that there are our Turkmen, living in Turkmenistan," he said, referring to the ex-Soviet Central Asian country.

Putin also accused Turkey's leaders of overseeing a "creeping Islamisation" of the country "which would probably cause (modern Turkey's founding father Mustafa Kemal) Ataturk to turn in his grave."

- Not an 'enemy state' -

Putin and Erdogan have been locked in a war of words since the plane downing, and Moscow has even accused Erdogan's family of engaging in oil smuggling operations with Islamic State jihadists.

On Thursday, Putin went as far as to say that the Islamic State group was a "secondary issue" in Syria as it was created as "cannon fodder under Islamist slogans" to protect economic interests of other players, although he did not name Turkey.

However, he said he does not consider Turkey an enemy state. "They committed an enemy act against our aviation, but to say that we view Turkey as enemy state -- that is not the case."

Russia has imposed a number of sanctions on Turkey but Putin brushed aside questions from journalists about raids against Turkish firms and expulsions of Turkish students from Russian universities.

Putin said that had the downing of the plane been an accident, Turkish leaders should have tried to "pick up the phone and explain themselves".

Erdogan attempted to call Putin on the day of the incident, but the Kremlin ignored his request to speak to the Russian leader.

[Dec 30, 2015] Moscow demands arrest of rebel for 'murder' of Russian warplane pilot

Please note the AFP does not mentions that killing parachuted pilot is a war crime.
Notable quotes:
"... Zakharova said that the publication of Celik's comments in a major Turkish newspaper had angered and surprised Moscow, and accused the media outlet of being a "platform where terrorists and murderers brag about their crimes and spread hate of Russia and the Russian people through nationalist ideology." ..."
"... She added that Celik's comments constituted an admission of his "direct involvement in the murder of the Russian pilot". ..."
news.yahoo.com

Moscow (AFP) - Moscow on Wednesday called for Ankara to arrest a rebel it claims killed the pilot of the Russian jet downed by Turkey last month on the Syrian border.

"We demand that the Turkish authorities take immediate steps to apprehend Alparslan Celik and his accomplices and bring them to justice for the murder of the Russian pilot," foreign ministry spokeswoman Maria Zakharova said in a statement.

In an interview published Sunday in Turkish newspaper Hurriyet, Celik -- a Turkmen rebel and citizen of Turkey -- said that his "conscience cannot be bothered by a person who threw bombs at Turkmen civilians every day," referring to the slain Russian pilot.

Both pilots aboard the downed Su-24 jet ejected and parachuted to the ground on the Syrian side of the border, one of whom was killed by gun fire from the ground.

"Revenge is the most natural right," Celik said in the interview, while refraining from claiming the pilot's death.

Moscow and Ankara have been locked in a bitter spat over the downing of the Su-24 jet on November 24, with the Kremlin imposing a raft of economic sanctions against Turkey.

Zakharova said that the publication of Celik's comments in a major Turkish newspaper had angered and surprised Moscow, and accused the media outlet of being a "platform where terrorists and murderers brag about their crimes and spread hate of Russia and the Russian people through nationalist ideology."

She added that Celik's comments constituted an admission of his "direct involvement in the murder of the Russian pilot".

Turkish authorities have accused Russia of "ethnic cleansing" in Syria, targeting Turkmen and Sunni population that oppose the regime of Syrian President Bashar al-Assad, Moscow's long-time ally.

Turkey says the Russian jet strayed into its airspace and ignored repeated warnings, while Moscow insisted it did not cross over from Syria and accused Ankara of a planned provocation.

[Dec 28, 2015] Collection of Vladimir Putins most notable speeches published

Walker, as usual, is just doing his paid job ;-). Bots have no Christmas vacations by definition: MTavernier, Metronome151, psygone, Alderbaran, MentalToo, Hektor Uranga, and one interesting new one Chukuriuk are all on duty. A deep observation by one of the commenters: "Interesting how all the trolling comments, such as yours, seem to be against Putin..."
What some people doe not understand is that Putin represents a countervailing force to the US imperial expansionism (and neoliberal expansionism in general). As there is an inherent value in existence of countervailing force (neocons thing otherwise ;-) Putin deserve some level of support even if one does not agree with everything he is doing. In a way Putin is more valuable to the USA then to Russia as he prevents the USA elite from doing extremely stupid thing which were done during Yeltsin rule which led to overstretching of the US empire and contains seeds its subsequent decline.
Notable quotes:
"... For all his sins you have to admire Putin. He is a man of conviction that actually believes in something that is worth saving, and will stop at nothing to achieve it. ..."
"... Battling against hostility from the West Putin has reformed the nations economy, and continues to work on behalf of his peoples interests. Its hard to imagine how Russia could ever replace Putin, or indeed what the new Russia would even look like without Putin at the helm. But for now the people are clearly grateful to have a strong decisive leader, as indeed are many other leaders across the globe who find Putin's honesty and conviction a breath of fresh air in a world of deception and double dealing. I guess with Putin you get what it says on the tin. ..."
"... Russian military requested by Assad to assist him in protecting his government. All others including America, British, French, Australian,Canadian, etc are there in contravention of International law ..."
"... Murdoch and Thatcher as a model of the free press? ..."
"... The Guardian and its puppet-masters hate the Russian people don't they? But they can't bring themselves to say that, so it's Putin they attempt to ridicule. ..."
"... Give me one Putin over a hundred Cameron's any day of the week. I've listened to a couple of those speeches, they are excellent, I don't bother listening to Mr Cameron. ..."
"... I know a few 'Russians' who have lived in the 'west' for 15/20 years. They had no illusions about their soviet upbringing, but knew the qualities of life - health care, education, housing - that it brought. They are generally agreed that the wonderland that was supposed to exist beyond their borders was an illusion. But they're hard working people, and they do OK. ..."
"... Russia has been able, in just 20 years, without wars and other troubles, to go from a semi-colony up to a world stage recognized leader. All Putin's risk-taking decisions have been successes or are still playing out and have good potential for ending in success. ..."
"... All this, quietly and imperceptibly, without tanks or strategic aviation, has been achieved by the Russian diplomacy, directed in a difficult confrontation with the block of the most powerful militarily and economically countries, while starting from a much lower position. ..."
"... Crimea would never have happened without the illegal coup backed by the west. We could choose to believe the western media's opinion on the state of Russia, or we could listen to the people who live there. ..."
"... What's that Shaun?.. Someone's publishing a book of Putin quotes?.. I've got a similar book by that other respected world leader and statesman.. You know.. Short, fat, speech impediment, drunk most of the time ... what's his name?..oh yeah, Churchill. ..."
"... This is what many in the west said too. Putin is just one of the few people with serious power to publically state the same. Western officials including Tony Blair admit that IS arose out of the chaos in Iraq. Its not even up for debate. The abomination that is IS is the chaos he warned us of. ..."
"... However, in the USA, Presidents tend to have Library Centers to archive their words of wisdom. Bush Junior's is located on the campus of Southern Methodist University (SMU) in University Park, Texas, opened on April 25, 2013. ..."
"... Interesting how all the trolling comments, such as yours, seem to be against Putin... ..."
"... The MSM has brainwashed the western world and they don't know anything else but what they are fed. ..."
"... If you understand that the leader's image is so important for the well-being of the population you wouldn't be criticizing him. After the drunken years of Yeltsin the Russians needed a different role model. There is a reason for Obama (a heavy smoker) not to do it ( at least not in front of the cameras) ..."
"... They might have added his habit of speaking the truth. Best chance of finding out what's actually going on in Syria + the Middle East generally is to listen to Putin. ..."
The Guardian

Words That Change the World is a 400-page compilation of Vladimir Putin's most notable speeches, and has been sent out to all Russian MPs and other political figures as a gift from the presidential administration ahead of the country's new year holiday.

Anton Volodin of the pro-Kremlin youth group Network, which published the book, told the Guardian: "A year ago we noticed when reading one of his early speeches that it was exactly right in its predictions, so we decided to check all of his other speeches. And it turns out basically everything he said has either already come true or is in the process of coming true at this very moment."

There are 19 articles and speeches collected in the book, starting from 2003 and ending with Putin's speech to the UN general assembly earlier this year. Volodin said: "If you read through them all, you can see a clear pattern in his rhetoric and thoughts. A lot of people say he's unpredictable or untruthful, but actually everything he says is transparent, clear and fully formed."

Alderbaran -> Popeyes 28 Dec 2015 16:21

China's GDP is roughly five times that of Russia and China is already leasing land in Russia's east. I'm also assuming it is getting a pretty good deal on oil at the moment too - Don't expect an equal partnership

Russia needs the West, just as the West needs Russia. Do you agree?

Laurence Johnson 28 Dec 2015 16:19

For all his sins you have to admire Putin. He is a man of conviction that actually believes in something that is worth saving, and will stop at nothing to achieve it.

Battling against hostility from the West Putin has reformed the nations economy, and continues to work on behalf of his peoples interests. Its hard to imagine how Russia could ever replace Putin, or indeed what the new Russia would even look like without Putin at the helm. But for now the people are clearly grateful to have a strong decisive leader, as indeed are many other leaders across the globe who find Putin's honesty and conviction a breath of fresh air in a world of deception and double dealing. I guess with Putin you get what it says on the tin.

KoreyD -> dyst1111 28 Dec 2015 16:19

Russian military requested by Assad to assist him in protecting his government. All others including America, British, French, Australian,Canadian, etc are there in contravention of International law

Popeyes 28 Dec 2015 16:18

"If those who had been present at the UN general assembly had listened to Putin's words, the world would be a very different place. Hundreds of thousands of people would still be alive and Europe would not be full of refugees from the middle east."
Of course he was right but of course he wasn't the only one saying these things at the time. Such a shame our witless leaders didn't listen and perhaps we wouldn't be in the mess we are now.

Popeyes 28 Dec 2015 15:54

Russia is slowly moving out of the dollar system and Western sanctions will eventually have little impact on the Russian economy. Russia and China can easily survive and prosper without the dollar. Unfortunately Europe will lose out massively due to Russia's response to the sanctions and will continue banning imports from the EU, agricultural produce, as well as manufactured goods, leaving hundreds of thousands of jobs at risk. Just think what Putin has done even before he started bombing ISIS. He protects his country, his management of Russia's economy despite international sanctions are feats that are to be admired. Is it any wonder he is hated and feared by the West.

Fallowfield -> MTavernier 28 Dec 2015 16:16

I'm trying to work this out. Come on, you're not really saying that we have a free press in the west are you?

I believe it happened once, Watergate and all that. Murdoch and Thatcher as a model of the free press?

No, you're taking the piss. I'll stop there.

Fallowfield -> Alderbaran 28 Dec 2015 16:10

The people I know were 'the younger generation'. Their illusions about the west were quickly shattered. Different mafias, you see.
Putin's message? How very unlike our own dear Queen's Speech.

Alderbaran -> SHappens 28 Dec 2015 16:03

A very fair point but you have to admit that a forum saturated with meaningless posts is frustrating for those who actually want to discuss the article. I feel compelled to challenge a number of these posters.

Personally I feel that Russia started on a very different track following Putin's return as president in 2012 and following the Bolotnaya square demonstrations - He was shaken by this!

I see a cult of personality blinding many Russians, including many of the commentators on this forum and it seems that in Russia what is important is not the facts but nationalism and a shared identity. This helps to protect Putin from criticism ans shores up his position but it is worrying when a government relies so much on one man and that there is nothing to indicate that Putin intends to change this. The publication of a book of speeches by "Network" is yet another indication of the reliance on this personality cult and to be very frank, it disturbs and saddens me.

Does any of this concern you too, or do you think that this is the best that Russia should hope for at the moment?

Equidom 28 Dec 2015 16:02

The Guardian and its puppet-masters hate the Russian people don't they? But they can't bring themselves to say that, so it's Putin they attempt to ridicule.

Rantalot 28 Dec 2015 15:42

Give me one Putin over a hundred Cameron's any day of the week. I've listened to a couple of those speeches, they are excellent, I don't bother listening to Mr Cameron.

Fallowfield 28 Dec 2015 15:29

I know a few 'Russians' who have lived in the 'west' for 15/20 years. They had no illusions about their soviet upbringing, but knew the qualities of life - health care, education, housing - that it brought. They are generally agreed that the wonderland that was supposed to exist beyond their borders was an illusion. But they're hard working people, and they do OK.

They support Putin. Why? KGB indoctrination? Far from it, these are the people who wanted to get away. And they - just like you - love their homeland. And who protects their homeland? The President of the USA? The PM of the UK? You must be joking.
Putin. Nobody else.

SHappens -> apacheman 28 Dec 2015 15:26

Russia has been able, in just 20 years, without wars and other troubles, to go from a semi-colony up to a world stage recognized leader. All Putin's risk-taking decisions have been successes or are still playing out and have good potential for ending in success.

All this, quietly and imperceptibly, without tanks or strategic aviation, has been achieved by the Russian diplomacy, directed in a difficult confrontation with the block of the most powerful militarily and economically countries, while starting from a much lower position.

This is part of Putin, and Lavrov's great achievements. Might be worth for you to read this book after all, you might be learning something.


Alderbaran -> WalterCronkiteBot 28 Dec 2015 15:20

Who said you were Russian and why did you suggest that you might be if Putin has a lot of support outside the country?

What surprised me is your apparently unsupportable notion that Putin is trying to make Russia look amicable. Your post also brought up topics far from the bounds of this article, yet you state that you don't know what to believe in.

If you are sincere in wanting to understand Russia better, David Remnick's excellent book on Russia is a great start - see Lenin's Tomb. Chrystia freeland's 'Sale of the Century' brilliantly describes the Yeltsin years and the power struggles taking place following the fall of the wall. I'd also recommend listing to Mark Galeotti on the sublect of Russia, and he is a regular conrtibutor to both RT and RFERL.

Peter Evans -> Alderbaran 28 Dec 2015 15:10

Crimea would never have happened without the illegal coup backed by the west. We could choose to believe the western media's opinion on the state of Russia, or we could listen to the people who live there.

Fallowfield -> CoinBiter 28 Dec 2015 15:09

After the USA, UK and other allied countries had invaded Russia in 1919 the eventual Soviet Republic did what it could to protect itself I suppose. And Russia still does. Ask where the USA bases are, and compare their distribution to those of Russia.

The USA didn't fancy one in Cuba, did they? A perfectly lawful international agreement. They threatened nuclear destruction as an ultimatum.

WalterCronkiteBot -> Alderbaran 28 Dec 2015 15:04

Yes I'm an evil Russian. I can't possibly be from the west.

To answer your question though, I don't know what to believe hence me stating "What I don't get with Putin is...". I don't understand the actual situation because I don't have inside knowledge.

I'm saying on the face of it he appears to speak for those in the west against war in the ME, which is good, but we shouldnt trust him entirely.

If that makes me a Kremlin shill so be it.

Not4TheFaintOfHeart 28 Dec 2015 14:59

Can somebody please tell Shaun to come in from the cold... It's over Shaun: Syria saved from a Libya/Iraq fate x2, ISIS degraded very nicely, thank you, Crimea voted to be part of the RF, Mistrals now sold to Egept, BRICS bank created, colour revolution in Georgia thwarted...

What's that Shaun?.. Someone's publishing a book of Putin quotes?.. I've got a similar book by that other respected world leader and statesman.. You know.. Short, fat, speech impediment, drunk most of the time ... what's his name?..oh yeah, Churchill.


Fallowfield -> Metronome151 28 Dec 2015 14:49

Well we certainly jailed members of the WSPU for wanting to vote. 14 Northern Irish civil rights protest marchers, legal and unarmed, were shot dead on the street by British troops in 1972, as I remember. Striking workers have been jailed, and many more have had cases against them dropped in court for 'lack of evidence', ie when the police evidence presented was so obviously falsified. I wonder where the KGB got their ideas from?

apacheman -> Fallowfield 28 Dec 2015 14:48

And the Soviet people could thank the West for the Lend-Lease supplies that allowed them to withstand the Nazi juggernaut, without which they would have collapsed.

WalterCronkiteBot 28 Dec 2015 14:46

"Putin was correct to predict chaos in international affairs if the UN and other institutions of international law are ignored."

This is what many in the west said too. Putin is just one of the few people with serious power to publically state the same. Western officials including Tony Blair admit that IS arose out of the chaos in Iraq. Its not even up for debate. The abomination that is IS is the chaos he warned us of.

In 2013 Putin accused Kerry of lying when he told a senate hearing that AQ are not in Syria and as such pose no threat in that region. He warned us but noone listened. Now we have Syria overran by AQ affiliated groups toting US made weaponry.

What I don't get with Putin is the apparent naivety. As his speeches show he is well aware of the machinations of the western powers, yet puts faith in them time and time again. Hes either very naive or just wants to ensure that Russia look as amicable as possible in the history books.


Peter Evans 28 Dec 2015 14:34

The US loved Yeltsin, a weak leader, they do not like a strong Russian leader who does the best for his country.


mgeary -> rcil2003 28 Dec 2015 14:33

Oh, the results in the USA are the same as in Russia, the only difference being that they have a ruling elite there, who promote different faces every election for the Presidency.

This and the fact that, in contrast to Russia, they are being subtle about it...


Chuckman 28 Dec 2015 14:25

The most able leader of our generation. Simply a remarkable man.

Readers may enjoy:

https://chuckmanwords.wordpress.com/2014/03/04/vladimir-putin-the-worlds-last-true-statesman/

presstheredbutton 28 Dec 2015 14:14

This got me pondering on what an equivalent publication for George W Bush would contain. Chapter One - reading "My Pet Goat".

However, in the USA, Presidents tend to have Library Centers to archive their words of wisdom. Bush Junior's is located on the campus of Southern Methodist University (SMU) in University Park, Texas, opened on April 25, 2013. The janitor wasn't best pleased; he had to find a new broom cupboard...

rcil2003 -> euphoniumbrioche 28 Dec 2015 14:16

western leaders are nothing but interchangeable game show hosts. Behind them is the real power, wielded in secret by utterly evil characters like Dick Cheney, who would have been right at home in the Third Reich.

presstheredbutton -> nonanon1 28 Dec 2015 14:15

Interesting how all the trolling comments, such as yours, seem to be against Putin...

Parangaricurimicuaro -> Metronome151 28 Dec 2015 14:20

Now you are giving me the reason. The MSM has brainwashed the western world and they don't know anything else but what they are fed.

Parangaricurimicuaro -> hermionegingold 28 Dec 2015 14:01

If you understand that the leader's image is so important for the well-being of the population you wouldn't be criticizing him. After the drunken years of Yeltsin the Russians needed a different role model. There is a reason for Obama (a heavy smoker) not to do it ( at least not in front of the cameras)

greatapedescendant -> Strummered 28 Dec 2015 13:46

They might have added his habit of speaking the truth. Best chance of finding out what's actually going on in Syria + the Middle East generally is to listen to Putin.

ID7586903 28 Dec 2015 13:45

Putin is the savior of Europe, and its culture

[Dec 27, 2015] 2016 will be a year of living dangerously for the global economy

Notable quotes:
"... WW I happened after 20 yrs during which the the superpower Britain had been blatantly replacing their dwindling economic influence by demonstrations of military powers. Now which nation today is siphoning off by ever more military means the products and raw materials of others, while not even caring a bit about welfare for the majority of their own citizens? ..."
"... But it's so much easier to make propaganda against Mr Putin's public appearances than seriously address the point that this guy is genuinely popular at home precisely because he refuses his country to be a sellout to USA's 1O %. ..."
Dec 27, 2015 | The Guardian

marketingexpert -> HorseCart 27 Dec 2015 14:38

If the big borrower nations like GB and USA were honest, it would be electoral suicide because all they could promise is massive reduction in living standards back to a level we can afford

And that will happen either by progressive erosion or catastrophic bubble burst and economiccollapse.

But It is so much easier Lefty fashion to promise jam today for everyone, and invent bogus bogeymen to pay for it all, or pretend you can borrow or print to prosperity. Anyone north of a five year old can see through such nonsense from the day they trade mars bars for marbles,

Buy gold, or farmland.

lingyai -> SrdeAth 27 Dec 2015 14:25

that's what the US has all those military bases around the world for.. can't have the world reserve currency being threatened...

KillerMarmot -> Lafcadio1944 27 Dec 2015 14:25

Neoliberalism is going to provide prosperity when clear-eyed analysis shows Neoliberalism to be little more than subjugation to oligarch rule and the most egregious inequity the world has ever known.

Actually the world is more prosperous than it has ever been. Over the last few decades, billions of people have been lifted out of abject poverty into something resembling a modern lifestyle. Infant mortality has been falling steadily. Life expectancy has been raising steadily. It is resounding triumph, but one that is little recognized,

Marjallche -> gilesjuk 27 Dec 2015 13:02

Yes I actually think it is, as dependencies breed fear of being exploited, breeds distrust as to whether the other side does or does not threaten with blackmail etc. I got the idea from Keynes, who saw stability in self-reliance of nations and instability in population import, which threw the balance in favour of big capital.

Marjallche -> JudiHoskyn885 27 Dec 2015 12:57

WW I happened after 20 yrs during which the the superpower Britain had been blatantly replacing their dwindling economic influence by demonstrations of military powers. Now which nation today is siphoning off by ever more military means the products and raw materials of others, while not even caring a bit about welfare for the majority of their own citizens?

But it's so much easier to make propaganda against Mr Putin's public appearances than seriously address the point that this guy is genuinely popular at home precisely because he refuses his country to be a sellout to USA's 1O %. Another pre WWI parallel. PS it seems to be a very anglo-saxon notion that the upper 10% belong to a better and preferable breed of humans. The rest being granted the "freedom" to crawl in the dirt and die in the name of "freedom" for the preservation of their "democratic" 1%ers privilege.

Iconoclastick 27 Dec 2015 12:54

It was bad in 2012, it's got far worse.

as the chart below shows, if there is anything the global financial system needs, is for the rating agencies, bond vigilantes, and lastly, general public itself, to realize that the UK's consolidated debt (non-financial, financial, government and household) to GDP is... just under 1000%. That's right: the UK debt, when one adds to its more tenable sovereign debt tranche all the other debt carried on UK books (and thus making the transfer of private debt to the public balance sheet impossible), is nearly ten times greater than the country's GDP. To call that "game over" is an insult to game overs everywhere.


http://www.zerohedge.com/news/psssst-france-here-why-you-may-want-cool-it-britain-bashing-uks-950-debt-gdp

Sammy Johnston -> gilesjuk 27 Dec 2015 12:41

All political parties follow the will of the banking families and corporate elites. The economy is in it's intended state, gearing up for the third world war, the formation of world government and the eventual digitalization of currency world wide.

To state that cameron has any control is naive. To say corbyn can be effective to oppose it is naive. We need to eliminate our current elite and start a new paradigm to have any sense of freedom again.

MancuMan -> eveofchange 27 Dec 2015 12:50

Aye, a few million people got murdered by the Communists but apart from that and the lack of joy in life for the survivors it all went very well indeed and we should give it another go.

ldopas -> eveofchange 27 Dec 2015 12:37

I see you have been studying the socialist comics again.

Evidence tells us, evidence, that capitalism has problems. Lots of them. But it does work for the most part, and the model of capitalism also when there is a disruption mostly recovers like a cut in the skin that heals. Socialism wherever tried ALWAYS has produced poor if not catastrophic results, and once a downward spiral is established there is nothing to stop it, no mechanism in place to heal it like capitalism.

So my money, pun intended, is with capitalism.

Look if you are fed up of our capitalist first world services, infrastructure and healthcare there are still a few deluded places where some sort of socialism exists; Cuba for example where everyone is equal in poverty and their infrastructure is non existent, perhaps N Korea?

Ask yourself this. when a country that is poor and gets the chance for democracy, why do they always go more capitalistic?

eveofchange -> jonsnow92 27 Dec 2015 12:25

I have told you what would happen if capitalism continues.

I opposed Stalin and his ilk, and his corruption of socialism. But under even he, Russia escaped the economic collapse of the thirties, and was invaded by a country that had been ravaged by capitalism's collapse . Russia even emerged stronger.

The nationalised economy worked perfectly, and defeated capitalist Germany (although Hitler himself,introduced aspects of socialism--as did the UK and US). But without a workers and working class democracy, nationalisation will not work for any length of time .

jonsnow92 -> eveofchange 27 Dec 2015 12:17

unless consciously overthrown by a working class takeover for socialism, would still carry on. What do you want?

It didn't work in USSR did it? The working class took over and it didn't end up in milk and honey on the streets. Same for East Germany - apart from the genius of Trabant not much else going on until the people started voting with their feet jumping walls and going to capitalism. And I didn't mention Albania, Cuba, North Korea and other great success stories from socialism.

BTW - in socialist countries you couldn't have a strike as the working class was in power and as Stalin said: "why would the working class strike if they are in power?"

eveofchange 27 Dec 2015 12:02

The problem is capitalism, as Marx correctly pointed out and analysed. One "solution" always leads to a worse problem---and it cannot be resolved,or solved Eventually there is either a major war, between desperate capitalist states fighting over shrinking markets, or there is a gigantic crash.--or both.This literally wipes out productive capacity, and thus the problem of "overproduction" is temporarily "solved". The same cycle is then repeated, to it's inevitable conclusion--again.
Millions, throughout the world, even in the UK, are made destitute by this, or even die--but capitalism, unless consciously overthrown by a working class takeover for socialism, would still carry on. What do you want?

> newsfreak 27 Dec 2015 13:33

The ambiguity of economic and financial forecasters tend to reach proverbial limits. They make a living out of ambiguity and what later end up being frustrated expectations: "2016 will be a year of living dangerously for the global economy" yet "there will be no explosion in 2016, but a fuse will be lit." How dangerous is a lit fuse? The whole financial world system is a sham based on printing currencies with no backing standard. At some point there will be a wake up call, a reality check, and a devastating free fall.

ID7829806 27 Dec 2015 11:58

Economic forecasting is a mug's game.

But a lot of people get paid a lot of money to do it. Forecasting is of course, at best, an inexact and purely speculative effort (I nearly wrote 'an inexact science', but there is nothing scientific about it, at all).

Those who have the confidence/cheek/arrogance to predict, tend to stick close to the average of an (emerging) consensus, if there is one. Commentators keep looking around and over their shoulders - no one wants to look silly - and so feed-on and affirm each other. Few stick their necks out - but then, if they do, they are likely unknown or a maverick, and does anyone therefore notice, or care?

A broken clock is right twice a day, but who wants to predict that the clock will fall off the wall (unless they have inside knowledge)?

Larry, you may be right. Or you may be wrong. 2016 is an Election Year in the US, which suggests 'nothing to see here' for the next 12 months. But then again, it didn't stop the last crash happening.

But the feeling in your water could be right, precisely because we are in unknown and unprecedented territory. The historic economic 'rule-book' hasn't so much been torn-up in recent years, rather - quietly - put back on the shelve, and self-consciously ignored.

These are unprecedented times. So: who knows what might happen? An unprecedented economic implosion round about 2017 is possible. Or not. But on a balance of probabilities: something without precedent is likely to happen (for good or ill): and none of us will have predicted it.

Dan_de_Macy 27 Dec 2015 11:58

Prediction:

Going South: Why Britain will have a Third World Economy by 2014 Paperback – 14 Jun 2012

http://www.amazon.co.uk/Going-South-Britain-Third-Economy/dp/0230392547

Reality:

http://www.theguardian.com/politics/2015/apr/17/imf-chief-praises-british-governments-handling-of-economy

Iconoclastick 27 Dec 2015 11:50

Other stuff building up a storm on the horizon...

Forget About Junk Bonds, This Is the New Credit-Equity Disconnect Investors Should Be Watching
Can contagion spread to stocks?

http://www.bloomberg.com/news/articles/2015-12-15/forget-about-junk-bonds-this-is-the-new-credit-equity-disconnect-investors-should-be-watching

This Junk Bond Derivative Index Is Saying Something Scary About Defaults. Markit's CDX index is pricing in a 2008-like selloff.

http://www.bloomberg.com/news/articles/2015-12-16/this-junk-bond-derivative-index-is-saying-something-scary-about-defaults

[Dec 27, 2015] Summer Rerun Why America Will Need Some Elements of a Welfare State

Notable quotes:
"... Wolf concludes that America cannot do without some form of a welfare state, specifically improved training, education, and universal health care. ..."
"... Our problem is that we are asking for concessions that are beyond the acceptable limit for elites in any historical epoch. We're asking the powerful and the rich to give up their money and power for the greater good of all mankind. This is not likely to happen unless a powerful enough segment of the elite comes to the inescapable conclusion that they're literally dead meat if they don't and therefore opts for survival over position. ..."
"... Welfare etc are social services that can only be funded through the world-wide looting operation of the American empire ..."
Dec 27, 2015 | naked capitalism

An excellent column by Martin Wolf in the Financial Times, where he is the lead economics editor. Starting with principles put forward by Ben Bernanke in his recent speech on income inequality, Wolf concludes that America cannot do without some form of a welfare state, specifically improved training, education, and universal health care.

James Levy, December 26, 2015 at 4:32 pm

I have no idea if Marx was right, in the long run, or wrong–the verdict is still out on the long-term viability of industrial capitalism, which is less than 250 years old and creaking mightily as I write this. It may be that when Rosa Luxemburg said that the choice was between Socialism and Barbarism, she underestimated how likely barbarism was. What I do know is that capitalism today isn't just too ugly to tolerate, it is downright murderous. Its imperatives are driving the despoliation of the planet. It's love of profit over all else is cutting corners and creating externalities that are lethal. But it has made a few percent of the global population comfortable and powerful, and they are holding onto that comfort and that power come hell or high water (and, ironically, if things continue apace both are on the menu).

Our problem is that we are asking for concessions that are beyond the acceptable limit for elites in any historical epoch. We're asking the powerful and the rich to give up their money and power for the greater good of all mankind. This is not likely to happen unless a powerful enough segment of the elite comes to the inescapable conclusion that they're literally dead meat if they don't and therefore opts for survival over position. I am not enthusiastic that this will happen before it is way too late to save more than a fraction of the current world population, and send those people back to the lifestyles and thought patterns of 30 Year's War Europe.

    1. digi_owl

      Its a generational thing. Right after WW2, many of the elite had just that epiphany that unless they have the common people behind them, they are toast. But now they are dead or dying, and their grandkids are basically once more thinking that they can go it alone. This because they have not had the required experiences that help develop the wisdom.

      Reply
  1. Paul Tioxon

    What Marx saw long ago, we can see today, and without relegating ourselves to his analysis, come to our own conclusions. Contradictions, summed up well by Lincoln as a house divided against itself cannot stand is just as true today. Millions of guns to protect the citizenry from tyranny have only resulted in a 1/4 million murders and 5 times as many shootings since Jan 1, 2000, some placing people in wheel chairs and other crippling gunshot afflictions, and more and more institutionalized state oppression, economic exploitation and miserable lives propped up in an alcoholic haze until the liver or brain gives out. We have more food than we know what to do with so we throw away almost as much as we eat. And we have eaten ourselves into morbid obesity, diabetes and heart disease. The contradictions abound from the kitchen table to the kitchen cabinet of the White House where there seems to be nothing passed so freely as bad advice.

    The Welfare State arose from the sacrifices of the population in giving their sweat, blood and tears to defend their nation during war, to be rewarded for their sacrifices, rewards which were demands for power sharing and more in the paycheck, more benefits and more time to enjoy the life spent in a more prosperous world. It seems to me that Obamacare is not simply in death spiral all of its own making, but even more so, because it is the best attempt capitalism can produce in an America that is the most capitalist of societies down to the marrow its bones. Little competition from the Church or the social relations between nobles and subjects set for in the laws that were disestablished to free markets for commodification and money making. Money making enterprises structured the laws from slavery, to the voting franchise with little from the state to cushion any of the hardships of life in America.

    Health care is the largest industry we have. It is approaching 20% of the GNP. I remember the great national freak out in the late 1970s when congress realized it was approaching 10%. Nothing seems to be stopping the costs from spiraling upward and onward. No risk of deflation here where nothing is spared to save a life, operate on some poor little afflicted child, or buy a piece of equipment the size of an office building that shoots a proton beam at cancer, one cancer cell at a time.

    When Obama Care becomes a clear burden to even the democrats who can point to it now as some sort of accomplishment, and it is an accomplishment for the people who finally get to see a doctor, get into a hospital, get that operation or diagnosis that saves their lives, when even those accomplishments number in the millions, it will be part of a health care industry for which $Trillions of dollars can no longer be justified or even funded. As that financial collapse approaches, it would be better for politicians to declare the defeat of a program better rolled into one universal single payer system currently operating as Medicare, than try to reform, shore up or the old tried and true public lie, get rid of its waste and corruption.

    Declare victory with Medicare as the solution and put everyone into it. The only paper work left should be each person's medical history with diagnosis and healing as the happy ending to the story.

    Reply
  2. jgordon

    There is a fundamental error in perception in the Western world that is so pervasive that people can't even see it. As a most basic component of a healthy society people need to be able to survive at a local community level without outside support. Only after that is taken care of should people concern themselves with luxuries, inter-community and international relations.

    Welfare–not to mention other government services–can appear to have positive impacts if one only looks at their effects in isolation, however I think there is a devastating and pernicious impact on people's ability to form community bonds and have local resilience with things like welfare.

    Also, let's also not forget that Americans consume far more of the earth's precious resources than any other group in the world. Welfare etc are social services that can only be funded through the world-wide looting operation of the American empire. Do these recipients of empire benefits have a moral right to share in the loot of empire? Perhaps instead of domestic welfare it would be more ethical for the American empire to provide social benefits for the indigenous peoples who are forced from their lands to work like slaves for the empire's benefit. Although admittedly if the American empire used it's loot for the benefit of the foreign peoples whose lives it destroyed then there'd probably be nothing left to spread around to the military, or to pacify and police the domestic population. So I suppose that's not a serious proposal.

    Reply
    1. Left in Wisconsin

      Welfare etc are social services that can only be funded through the world-wide looting operation of the American empire

      This is obviously not true. Unless every social democratic country in the world is considered as a piece of the American empire. And even then, I would argue that we can easily afford a generous welfare state with a small shift in priorities away from (globally destabilizing) defense spending to social productive spending on human development.

      Reply
      1. jgordon

        Obvious to who? America lavishes so much money on its military not only because of corruption, but also because it has the world reserve currency and is a guarantor of the safety of international shipping. These facts are inextricably linked to the America's status as the world hegemon. The empire provides order and structure, and enforces the extraction of resources from the periphery to the center. The bread and circuses are inextricably linked to the empire's military activities and trying to tease them apart will only lead to collapse of the entire system sooner than it will otherwise happen.

        "Social Democratic"–now that's an interesting phrase. Did you know that Syria is a democracy, and was an extremely prosperous and well-education nation prior to 2011?

        Reply
        1. Vatch

          "Did you know that Syria is a democracy"

          Here's a telling paragraph from the Wikipedia article about Syria:

          Hafez al-Assad died on 10 June 2000. His son, Bashar al-Assad, was elected President in an election in which he ran unopposed.[68] His election saw the birth of the Damascus Spring and hopes of reform, but by autumn 2001 the authorities had suppressed the movement, imprisoning some of its leading intellectuals.[84] Instead, reforms have been limited to some market reforms.

          [Dec 27, 2015] The Sneaky Way Austerity Got Sold to the Public Like Snake Oil

          Notable quotes:
          "... When children don't get good educations, the production of knowledge falls into private control. Power gets consolidated. The official theoretical frameworks that benefit the most powerful get locked in. ..."
          "... Not only were the politicians worried about votes but also the welfare state was a way to head off a left wing revolution. ..."
          "... the change began in 1976 with the election of Rockefeller-funded Jimmy Carter, who immediately launched an austerity program. Support for Keynesian economics was further eroded by the 70's stagflation which we now know was caused by Mid East oil but at the time the "left" were like deer in the headlights, with no clue what to do. ..."
          "... The final nail in the coffin was the fall of the Berlin Wall and the collapse of the USSR, discrediting communism. After that, "there was no alternative" to corporate capitalism. Or more accurately, the left was slow to formulate an alternative and to this day is still struggling with an alternative as we have observed with Syriza. It's not enough to oppose austerity, you have to have a constructive plan to fix things. ..."
          Dec 27, 2015 | naked capitalism
          LP: You indicate that this approach to budgeting was invented as a way of making the New Deal acceptable to the business community. How did that work? Over time, who has benefitted from it? Who has lost?

          OC: Back in the 1940s, workers were fighting for their rights, class struggle was heating up, and soldiers would soon be returning from the fronts. At that point, a new business organization, the Committee for Economic Development (CED), came together. Led by Beardsley Ruml and other influential business figures, the CED played a crucial role in developing a conservative approach to Keynesian economics that helped make policies that would help put all Americans to work acceptable to the business community.

          The idea was that more consumers would translate into more profits - which is good for business. After all, the economic experts and budget technicians said so, not just the politicians. And the business leaders were told that economic growth and price stability would go along with this, which they liked.

          But things changed progressively over the 1970s and early 1980s. Firms went global. They became financialized. The balance of power between workers and owners started to shift more towards the owners, the capitalists. People were told they needed to sacrifice, to accept cuts to social spending and fewer rights and benefits on the job - all in the name of economic science and capitalism. The CAB was turned into a tool for preventing excessive spending - or justifying selected cuts.

          Middle class folks were afraid that inflation would erode their savings, so they were more keen to approve draconian measures to cut wages and reduce public budgets. People on the lower rungs of the economic ladder felt the pain first. But eventually the middle class fell on the wrong side of the fence, too. Most of them became relatively poorer.

          I suppose this shows the limits of democracy when information, knowledge, and ultimately power are unequally distributed.

          LP: You're really talking about birth of austerity and the way lies about public spending and budgets have been sold to the public. Why is austerity such a powerful idea and why do politicians still win elections promoting it?

          OC: Austerity is so powerful today because it feeds off of itself. It makes people uncertain about their lives, their debts, and their jobs. They become afraid. It's a strong disciplinary mechanism. People stop joining forces and the political status quo gets locked down.

          Even the
          name of this tool, the "cyclically adjusted budget," carries an aura of respect. It diverts our attention. We don't question it. It creates a barrier between the individual and the political realm: it undermines democratic participation itself. This obscure theory validates, with its authority, a big economic mistake that sounds like common sense but is actually snake oil - the notion that the federal government budget is like a household budget. Actually, it isn't. Your household doesn't collect taxes. It doesn't print money. It works very differently, yet the nonsense that it should behave exactly like a household budget gets repeated by politicians and policymakers who really just want to squeeze ordinary people.

          LP: How does all this play out in the U.S. and in Europe?

          OC: The European Union requires its members to comply with something called a cyclically adjusted budget constraint. Each country has to review its economic and fiscal plans with the European Commission and prove that those are compatible with the Pact. It's a ceiling on a country's deficit, but it's also much more than that.

          Thanks to the estimate, the governments of Italy or Spain, for example, are supposed to force the economy toward some ideal economic condition, the definition of which is obviously quite controversial and has so far rewarded those countries that have implemented labor market deregulation, cut pensions, and even changed the way elections happen. Again, it's a control mechanism.

          In the U.S. this scenario plays out, too, although less strictly. Talk about the budget often relies on the same shifty and politically-shaded statistical tools to support one argument or the other. Usually we hear arguments that suggest we have to cut social programs and workers' rights and benefits or face economic doom. Tune in to the presidential debates and you'll hear this played out - and it isn't strictly limited to one party.

          LP: How do we stop powerful players from co-opting economics and budgets for their own purposes?

          OC: Our education system is increasingly unequal and deprived of public resources. This is true in the U.S. but also in Europe, where the crisis accelerated a process that was already underway. When children don't get good educations, the production of knowledge falls into private control. Power gets consolidated. The official theoretical frameworks that benefit the most powerful get locked in.

          In the economic field, we need to engage different points of view and keep challenging dominant narratives and frameworks. One day, human curiosity will save us from intellectual prostitution.

          craazyboy, December 25, 2015 at 10:10 am

          Most people don't eat, go to college, use healthcare, rent or buy housing on the east or west coast, or purchase military equipment (except perhaps small time stuff like assault rifles), so the BLS greatly underweights(or hedonics prices, or just pulls rent data outta their butts) these things in the inflation data they create. The Fed then goes into a tizzy if the data comes in a few tenths of a percent below 2%, even if the data spent years above 2%, and floods the country in liquidity so our job creators – banks and large corporations – will hire us and give us raises, and once they finish doing that, the BLS will signal that inflation is 2% and the Fed will then know all our problems are solved. It just takes time.

          See the book "Treasure Island" for how things are going on the revenue side. But more tax breaks for large corporations and the wealthy are needed so we don't force them to do any illegal tax avoidance stuff and they will then happily pay whatever they think their fair should be. Might be zero. They will then have money to buy stuff too, which is a big plus as well, when you think about it.

          So clearly, you can see why deficit spending almost seems inevitable.

          Then the next problem is we still have unemployment, and something needs to be done about that. For instance, lots of room for more government contracts for social purposes. Take Obamacare. Place a single source contract, now estimated between $1 and $2 billion, with a Canadian systems company that employs independent contractor Indian programmers. Eventually, we have Obamacare!

          We can do this if we just get serious about this and say "No More Austerity In America!"

          likbez, December 27, 2015 at 9:31 pm

          Emperor Severus is famously said to have given the advice to his sons: "Be harmonious, enrich the soldiers, and scorn all other men"

          Brooklin Bridge

          Can education provide the solution?

          I suspect that the educational bias occurs at all levels in the sense that much the same misinformation is provided regardless of neighborhood but progressively wrapped in more elegant pedagogical flim-flam-ery for the owner class. Basically, the bias changes, but not the message, as one goes from poor (austerity – this is your lot in life) to wealthy (austerity – you were born to make the tough decisions, it's in your genes – and you'll just have to accept the rewards, man up to your destiny and toss em a quarter on Sundays). The upper class does get a far better education, but the bias is or becomes unconscious over time.

          Basically, aristocracy is a nasty brutish cycle that keeps upping the ante of consequences.

          washunate, December 26, 2015 at 8:09 am

          Yves, INET and NEP and others have been lecturing that topic for years. How many trillions of dollars do we have to deficit spend before the failure of things to improve indicts the hypothesis itself?

          Maybe what matters is not the amount of the spending, but rather, the distribution.

          And what is so bad about deflation? The attachment of moral judgment to inflation and deflation is rather bizarre outside of establishment monetary economics. The basic monetary problem confronting the bottom 80% or so of American households is inflation, not deflation.


          Dan Lynch, December 25, 2015 at 11:27 am

          I don't buy the article's historical narrative.

          Conservatives have ALWAYS opposed spending on social programs and ALWAYS used the deficit as an excuse (unless the deficit was due to war or tax cuts for the rich). This was true during the New Deal; FDR himself was a deficit hawk.

          Nonetheless for years the public supported social programs and no politician dared to cut them. Not only were the politicians worried about votes but also the welfare state was a way to head off a left wing revolution.

          What changed? I would say the change began in 1976 with the election of Rockefeller-funded Jimmy Carter, who immediately launched an austerity program. Support for Keynesian economics was further eroded by the 70's stagflation which we now know was caused by Mid East oil but at the time the "left" were like deer in the headlights, with no clue what to do.

          The final nail in the coffin was the fall of the Berlin Wall and the collapse of the USSR, discrediting communism. After that, "there was no alternative" to corporate capitalism. Or more accurately, the left was slow to formulate an alternative and to this day is still struggling with an alternative as we have observed with Syriza. It's not enough to oppose austerity, you have to have a constructive plan to fix things.

          Vatch, December 25, 2015 at 12:40 pm

          History teaches us that peacetime austerity can be horribly disastrous. Some examples:

          British austerity during the 19th century included the Great Irish Famine of 1845-1849: The Irish population was about 8 million people in 1841, and the death toll of the famine was at least a million. This is a huge percentage loss of life. Due to the combination of deaths with emigration and births that did not occur, the 1851 population of 6.5 million was estimated to be about 2.5 million lower than expected. Since food was exported during the famine, this was definitely an extreme case of austerity.

          Soviet austerity during the 1930s: Millions died, and food was exported during the famine period of 1931-1933. Austerity is often associate with conservatives, so I guess conservative austerity enthusiasts must be pleased with the performance of the eminent conservative Josef Stalin.

          Chinese austerity during the Great Leap Forward of 1958-1962: Tens of millions died - perhaps as many as 45 million. The same irony about conservatives and Stalin is true about conservatives and Mao, but on a far greater scale.

          Merry Christmas.

          ben chifley

          july 24 2015: Krugman:Ignore the 'MIT gang' at US economy's peril Paul Krugman says while economists of the '70s discarded Keynes, he never went away at MIT.‏
          http://www.chron.com/opinion/outlook/article/Krugman-Ignore-the-MIT-gang-at-US-economy-s-6404243.php

          MIT: Libertarian Haven | Independent Political Report‏
          http://www.independentpoliticalreport.com/2011/01/mit-libertarian-haven/

          Soros | MIT Global Education & Career Development‏
          https://gecd.mit.edu/go-abroad/distinguished-fellowships/explore-fellowships/soros

          washunate

          This is a pretty remarkable piece of rambling drivel. To the extent coherent points can be taken away from this, it appears there are at least two major flaws:

          1) There is absolutely no link between public opinion and CAB. Germany chooses to have national healthcare, passenger rail, and renewable energy. The US chooses to have national security, predatory medicine, and car-dependent sprawl.

          2) There is absolutely no link between austerity and concentration of wealth and power. France has a much more equal distribution of wealth than the US. Yet the US has run enormous deficits while France is supposedly constrained by the techno mumbo jumbo nonsense of the EU.

          The notion that 'austerity' is sold to the public is just a blatant falsehood. Americans don't support the budget priorities in Washington. It's a collective action problem, not a public opinion problem.

        2. [Dec 24, 2015] The Fed Has Created A Monster And Just Made A Dangerous Mistake, Stephen Roach Warns

          Zero Hedge
          Stephen Roach is worried that the Fed has set the world up for another financial market meltdown.

          Lower for longer rates and the proliferation of unconventional monetary policy have created "a breeding ground for asset bubbles, credit bubbles, and all-too frequent crises, so the Fed is really a part of the problem of financial instability rather than trying to provide a sense of calm in an otherwise unstable world," Roach told Bloomberg TV in an interview conducted a little over a week ago.

          To be sure, Roach's sentiments have become par for the proverbial course. That is, it may have taken everyone a while (as in five years or so) to come to the conclusion we reached long ago, namely that central banks are setting the world up for a crisis that will make 2008 look like a walk in the park, but most of the "very serious" people are now getting concerned. Take BofAML for instance, who, in a note we outlined on Wednesday, demonstrated the prevailing dynamic with the following useful graphic:

          Perhaps Jeremy Grantham put it best: "..in the Greenspan/ Bernanke/Yellen Era, the Fed historically did not stop its asset price pushing until fully- fledged bubbles had occurred, as they did in U.S. growth stocks in 2000 and in U.S. housing in 2006."

          Indeed. It's with that in mind that we bring you the following excerpts from a new piece by Roach in which the former Morgan Stanley chief economist and Yale fellow recounts the evolution of the Fed and how the FOMC ultimately became "beholden to the monster it had created".

          * * *

          From "The Perils of Fed Gradualism" as posted at Project Syndicate

          By now, it's an all-too-familiar drill. After an extended period of extraordinary monetary accommodation, the US Federal Reserve has begun the long march back to normalization.

          A majority of financial market participants applaud this strategy. In fact, it is a dangerous mistake. The Fed is borrowing a page from the script of its last normalization campaign – the incremental rate hikes of 2004-2006 that followed the extraordinary accommodation of 2001-2003. Just as that earlier gradualism set the stage for a devastating financial crisis and a horrific recession in 2008-2009, there is mounting risk of yet another accident on what promises to be an even longer road to normalization.

          The problem arises because the Fed, like other major central banks, has now become a creature of financial markets rather than a steward of the real economy. This transformation has been under way since the late 1980s, when monetary discipline broke the back of inflation and the Fed was faced with new challenges.

          The challenges of the post-inflation era came to a head during Alan Greenspan's 18-and-a-half-year tenure as Fed Chair. The stock-market crash of October 19, 1987 – occurring only 69 days after Greenspan had been sworn in – provided a hint of what was to come. In response to a one-day 23% plunge in US equity prices, the Fed moved aggressively to support the brokerage system and purchase government securities.

          In retrospect, this was the template for what became known as the "Greenspan put" – massive Fed liquidity injections aimed at stemming financial-market disruptions in the aftermath of a crisis. As the markets were battered repeatedly in the years to follow – from the savings-and-loan crisis (late 1980s) and the Gulf War (1990-1991) to the Asian Financial Crisis (1997-1998) and terrorist attacks (September 11, 2001) – the Greenspan put became an essential element of the Fed's market-driven tactics.

          The Fed had, in effect, become beholden to the monster it had created. The corollary was that it had also become steadfast in protecting the financial-market-based underpinnings of the US economy.

          Largely for that reason, and fearful of "Japan Syndrome" in the aftermath of the collapse of the US equity bubble, the Fed remained overly accommodative during the 2003-2006 period. The federal funds rate was held at a 46-year low of 1% through June 2004, before being raised 17 times in small increments of 25 basis points per move over the two-year period from mid-2004 to mid-2006. Yet it was precisely during this period of gradual normalization and prolonged accommodation that unbridled risk-taking sowed the seeds of the Great Crisis that was soon to come.

          Today's Fed inherits the deeply entrenched moral hazard of the Asset Economy. The longer the Fed remains trapped in this mindset, the tougher its dilemma becomes – and the greater the systemic risks in financial markets and the asset-dependent US economy.

          Full post here

          * * *

          Roach goes on to say that we're already seeing the beginnings of what may very well turn out to be a dramatic unwind as high yield rolls over and the emerging world struggles to cope with a soaring dollar (remember, even though EM has largely avoided "original sin" i.e. borrowing in dollars, at the sovereign level, corporates are another story).

          As an aside, those interested in a comprehensive account of what Roach covers in the article cited above are encouraged to reach David Stockman's "The Great Deformation."

          [Dec 24, 2015] Israeli-made air-to-air missile may have downed MH17

          Notable quotes:
          "... "fragments of the pilots' cockpit have suffered specific damages in the form of localized puncture holes and surface dents typical for hypervelocity impacts with compact and hard objects," ..."
          "... "intricate shape" ..."
          "... "most probably incorrect." ..."
          Dec 24, 2015 | RT News

          A report on Malaysian Airlines MH17 air disaster in Ukraine last year by a group of old-hand aviation security experts maintains that the Boeing might have been downed by an Israeli Python air-to-air missile.

          Trends: Malaysia MH17 plane crash, Ukraine turmoil

          The report was leaked via the private LiveJournal account of Albert Naryshkin (aka albert_lex) late on Tuesday and has already been widely discussed by social media communities in Russia.

          The authors of the investigative report have calculated the possible detonation initiation point of the missile that hit the passenger aircraft and approximate number and weight of strike elements, which in turn designated the type and presumed manufacturer of the weapon.

          ©http://albert-lex.livejournal.com

          ©http://albert-lex.livejournal.com

          Malaysian Airline Boeing 777-200 performing flight MH17 from Amsterdam to Kuala Lumpur on July 17, 2014, crashed on the territory of Ukraine near the village of Grabovo, killing all 283 passengers and 15 crewmembers aboard.

          The aircraft disintegrated in the air and the debris of MH17 were scattered across an area of about 50 sq. km.

          The external view of MH17 hull pieces indicates that "fragments of the pilots' cockpit have suffered specific damages in the form of localized puncture holes and surface dents typical for hypervelocity impacts with compact and hard objects," the report says, stressing that similar damage could be found on the inner side of the cockpit.

          The report specifically points out that chips of the body coat around the holes in the fragment are typical of wave effects created by hypervelocity impacts.

          ©http://albert-lex.livejournal.com

          ©http://albert-lex.livejournal.com

          Some damage, though larger and less clustered, could be found near the air-scoop of the left-wing engine of the aircraft.

          The nature of the damage allows for the identification of the source as a high-explosive fragmentation warhead from a modern anti-aircraft weapon, claims the report.

          Apart from the large puncture holes, the debris of the nose and the cockpit of the aircraft bear a large number of scattered micro-craters resulting from the impact of high-velocity dust and tiny debris, such as an unburnt blasting agent and elements of the ordnance that accompany a shock wave from a blast that occurred very close to the target. In the case of MH17, the pilots' cockpit.

          The report says that as a rule, the initial speed of the striking elements of modern anti-aircraft weapons vary between 1,500 and 2,500 meters per second.

          ©http://albert-lex.livejournal.com

          ©http://albert-lex.livejournal.com

          Altogether, the experts considered photos of five fragments of the cockpit and left port of the flight MH17, on which they counted some 230 "battle-damage" holes and punctures.

          All this considered, the experts claim that the exact zone of the blast impact could be established with a fair degree of accuracy.

          The warhead of the missile exploded very close to the cockpit, to its left side at a distance of 0.8-1.6 meters from the cockpit windows, exactly opposite the sliding window of the aircraft commander.

          ©http://albert-lex.livejournal.com

          ©http://albert-lex.livejournal.com

          The dimensions and character of the puncture holes left by the strike elements allegedly allow their size and form factor to be established, which in its turn makes it possible to identify the type of weapon used in a particular case.

          The cross dimension of absolute majority, 86 percent, of the 186 hull holes studied by experts measure between 6 and 13mm, with explicit maximum of them having cross dimension of 8mm.

          ©http://albert-lex.livejournal.com

          ©http://albert-lex.livejournal.com

          This fact brought the expert group to a conclusion about the size of the strike elements of the warhead. If the warhead had been armed with two types of strike elements, the majority of the holes would have been of two types, the reports notes.

          The strike element has been established of being a rectangular block measured 8mm x 8mm x 6mm, with margin of error of 0.5 mm, a high probability it was made of steel and an estimated weight of 3 grams each. The total number of such elements should have varied between 2,000 and 4,000.

          The bulk of the strike elements are estimated between 4.88 – 14.8 kilograms.

          @ http://albert-lex.livejournal.com

          @ http://albert-lex.livejournal.com

          The report confutes the argument of Russia's Almaz-Antey military concern that early claimed that "intricate shape" double-t steel fragments, similar to those used in warheads of surface-to-air Buk missile systems, have been extracted from the debris of MH17 flight.

          Howwever, the double-t strike elements of a Buk missile weigh 8.1 grams, more than twice as much as a single damage fragment among those that pierced MH17's hull. Thus, according to the report, the hypothesis about a Buk missile system being involved in the crash is "most probably incorrect."

          With 95 percent probability, the group of experts estimates the weight of the missile's warhead (explosives plus strike elements) that shot down MH17 of being between 10 and 40kg.

          ©http://albert-lex.livejournal.com

          ©http://albert-lex.livejournal.com

          This led the experts to determine the exact type of the weapon used against Malaysian Airlines flight MH17.

          The report says that that Soviet- and Russian-made surface-to-air missile systems use more powerful warheads than the established maximum 40kg, as is the case with MH17.

          Moreover, Soviet- and Russian-made air-to-air missiles which have a similar 10-40kg warhead capability use other types of strike elements within one warhead - obviously not the case with MH17.

          A whole range of existing foreign air-to-air missiles have corresponding warhead characteristics, yet lack of physical elements of the missile used against MH17 prevented experts from establishing the exact type of the weapon used.

          Still, the circumstances and conditions of the assault allowed experts to make certain assumptions.

          ©http://albert-lex.livejournal.com

          ©http://albert-lex.livejournal.com

          The missile that attacked MH17 had a passive radar homing head, which explains why the missile exploded so close to the cockpit. Under the radar-transparent nosecone of a Boeing 777-200 there is a surveillance radar station operable during the flight, so most likely the missile homed on to this radar as the target.

          Apart from a radar homing head, the missile could also be equipped with an advanced, matrix type, imaging IR seeker, which enables the missile to determine the size and the type of the target and choose for attack its most vital element. For a huge Boeing aircraft, that's the cockpit.

          A simulation of the missile attack has proved that missiles with that type of guidance choose to attack a big passenger plane from the front hemisphere.

          There are four air-to-air missiles that fit the description established by the experts, namely: French Magis-2, Israeli Shafrir, American AIM-9 and Israeli Python – all short-range.

          The first three have been struck off the list for various reasons, including type of warhead or guidance system specifications. The Python deserved a closer look.

          The Python is equipped with a matrix-imaging IR seeker. It enables a relatively moderate power warhead to effectively engage big aircrafts. The warhead is armed with a set of ready strike elements. Even more importantly, some open military sources suggest that in early 2000s a number of Sukhoi Su-25 assault fighter jets we refurbished to use fourth and fifth generation Python missiles, which look very similar to the Su-25's standard air-to-air R-60 missile.

          @ http://albert-lex.livejournal.com

          @ http://albert-lex.livejournal.com

          The unofficial report leaked in LiveJournal has become yet another one among many other unofficial versions presented over the year that has passed since the catastrophe occurred on July 17, 2014.

          The Dutch Safety Board that has been heading an international investigation into the cause of the crash is due to release its official report in October.

          [Dec 24, 2015] Is The Russian-Turkish Standoff An Opportunity For The West

          Notable quotes:
          "... apparently, two USAF F-15C Eagle air superiority fighters (which had been deployed to Incirlik Air Force Base, Turkey, in November 2015) were in the air as back-up to the Türk Hava Kuvvetleri (Turkish Air Force: THK) F-16s, one of which shot down the Su-24. ..."
          "... At best, Russia may now move to cover its tactical operations in northern Syria more effectively by offering its own deterrence of top cover by advanced fighters while the ground attack aircraft, such as the Su-24s, do their job. It is also clear that any further Turkish incursions into Syrian airspace were now at-risk, but the Turks already knew that. ..."
          Dec 14, 2015 | OilPrice.com

          It was, in this latest incident, Turkey, working with the U.S. Government of President Barack Obama, which planned and executed the November 24, 2015, interception of the Russian Air Force Su-24. The event was not a spontaneous occurrence, and, apparently, two USAF F-15C Eagle air superiority fighters (which had been deployed to Incirlik Air Force Base, Turkey, in November 2015) were in the air as back-up to the Türk Hava Kuvvetleri (Turkish Air Force: THK) F-16s, one of which shot down the Su-24. USAF sources subsequently said that the U.S. was taken by surprise when the THK shot down the Sukhoi, but that hardly squares with the historical Turkish practice of coordinating such actions with Washington. Moreover, the Turkish narrative that it "warned" the Russian aircraft several times over a period of five minutes before the THK F-16 shot it down also does not square with reality.

          And in this particular ground attack operation, the two Su-24s - including the one which was destroyed - were engaged on missions which did not require them to enter Turkish airspace, even though an acci-dental entry into it was conceivable. Their targets were in the area of northern Syria: pro-Ankara Turkmen militia engaged in supporting the massive cross-border operations of ISIS (asad- Dawlah al-Islamiyah fi al-'Iraq wash-Sham, or Islamic State) moving oil, fighters, and weapons across the Syria-Turkish border.

          Dave Majumdar, Defense Editor at the U.S. blogsite, The National Interest, on December 7, 2015, noted: "The United States and Turkey are working on an agreement that would allow the US Air Force F-15Cs to defend Turkish airspace. However, the precise rules of engagement and procedures have yet to be ironed out." It is possible that Turkey wanted to illustrate to the US that its airspace was, in fact, threatened. But what has been clear is that no credible Russian military threat to Turkey existed.

          At best, Russia may now move to cover its tactical operations in northern Syria more effectively by offering its own deterrence of top cover by advanced fighters while the ground attack aircraft, such as the Su-24s, do their job. It is also clear that any further Turkish incursions into Syrian airspace were now at-risk, but the Turks already knew that.

          Recently-retired U.S. Defense Intelligence Agency Director Lt.-Gen. Michael Flynn publicly said in Moscow on December 10, 2015, that there was no possibility that the Turkish shootdown was undertaken without the express permission and direction of "the highest authority" in Turkey.

          Indeed, Turkey has traditionally played the role of aggressor in terms of airspace violation. Not only did the THK lose an RF-4E Phantom II reconnaissance aircraft well into Syrian airspace on June 22, 2012, as a result of surface-to-air missile fire, it continues to consistently invade the airspace of fellow NATO member and neighbor Greece in a manner far more hostile than the penetration of Turkish airspace it alleged Russia undertook (for 17 seconds). THK F-16s entered Greek airspace some 2,200 times in 2014 alone. Moreover, Turkey consistently has violated Cypriot air-, sea, and land-space since its 1974 invasion and occupation of the northern 37 percent of Cyprus.1

          So Turkey is hardly the victim. [Indeed, by deliberately starting the "civil war" to remove Pres. Bashar al-Assad from power in Syria, Turkey only incurred a "refugee problem" as a result of its own actions, and has subsequently sought to push those refugees onward into Europe as quickly as possible, seeking political rewards from Europe as the only power capable of stopping the refugee flows.]

          In any event, Pres. Erdogan, three years ago said that "a short- term border violation can never be a pre-text for an attack". But that, of course, was when a THK aircraft was shot down by Syria when the THK F-4E deliberately and for some time penetrated Syrian airspace on a mission against Syria.

          ... .... ....

          Turkey, too, will not remain inactive. It will resume its support for anti-Russian terrorism, including support for jihadist movements in the Caucasus. These have included such groups as Kvadrat (Quadrant), a Bos-nia-based Wahhabist unit, which had "laundered" its operations through Turkish-occupied Northern Cy-prus, thence into Turkey and on into the Russian Caucasus.4 But the reactivation of Turkish-backed terror-ism in the Russian Caucasus will be far wider than just Kvadrat: Turkey works extensively, even now, with Chechen and other Caucasus groups inside ISIS and in the jihadi operations in Syria.

          Significantly, by early December 2015, President Erdogan assumed that the crisis had passed sufficiently for Turkey to expand its activities in the area. There was no indication that Turkey and ISIS had diminished their extensive and integrated operations in terms of oil transactions, the supply of weapons to ISIS via Turkey, and the use of Turkey as a medical support arena for ISIS wounded. But Turkey went further and deployed Turkish Army troops into northern Iraq near the ISIS-held city of Mosul in early December 2015. Iraqi Prime Minister Haider al-Abadi led calls for Turkish troops to be withdrawn immediately; they had not been withdrawn by the time this report went to press.

          ... ... ...

          The path, however, is open for a great Russian cooperation with the Kurdish forces, as well as with other regional allies which are concerned about Turkey's strategic adventurism. The Kurds, particularly those led by the majority Kurdish force (under the PKK: Partiya Karkerên Kurdistan, the Kurdish Workers' Par-ty), are now well underway in responding to Ankara. The civil war is underway inside Turkey, and it re-mains literally out-of-bounds to the international media. What is significant is that the Kurds have thus far not agreed to cooperate with Russia, but are awaiting a nod from their principal ally, Israel, before trust-ing Russia.

          Thus Israel's position becomes critical in this debate.

          Much of the Israeli leadership still hopes that a rapprochement might be achievable with Turkey, but that hope is fading. On the other hand, Israeli planners have to consider whether a broken Turkey - perhaps replaced by a patchwork of states, and with no non-Arab player other than Iran to monitor the region - is worse than a troublesome Turkey. There is also the question of whether unqualified Israeli support for the Kurdish "big push" against Turkey would then jeopardize Israeli strategic relations with Saudi Arabia, which is apparently undecided on whether, or how much, it favors a continuation of the Turkish state.

          Without Turkey, according to the Saudi rationale, who would be the counterweight to Iran?

          Israel is also not immune to this argument, although for Israel the prospect exists for an eventual reunion with Tehran, after the clerical leadership goes, or modifies.

          So Russia is left with three potential regional allies - apart from Syria, Iraq, and Iran - against Ankara: Greece, Egypt, and Jordan. And Cyprus and Armenia to the limited extent that they can assist.

          ... ... ...

          Articles 10 to 18 are the articles which allow for various states, including Russia, to transit military ships through the straits. In short, if Turkey invoked either Article 20 or Article 21, Russia would be legally blocked from moving any naval vessel through the Straits.

          Moscow has clearly long gamed out this scenario, which accounts for President Putin's commitment to a measured response to Ankara. Thus it must be a proxy response, for the most part, as well as an economic one. But while it demonstrates the delicacy needed by Moscow, it also demonstrates the reality that Russia cannot continue to be strategically constrained by an increasingly hostile and ambitious Turkey.

          So where Turkey is vulnerable is in its economy.

          The effects of Russian economic embargoes against Turkey are far more significant than would seem to be the case because the Turkish economy is more vulnerable than it has been portrayed. It is far more leveraged with borrowings than at any time in the recent past. It has a discreet outflow of domestic capital and is heavily reliant on discreet financial injections, probably coming from Qatar, and possible Saudi Arabia. But Saudi Arabia's ability to prop up Turkey is becoming limited.

          ...while Turkey may not be regarded as an entirely stable partner for the PRC in the region, Beijing would be wary of acting precipitously against it.

          ...Iran - like Russia - is constrained to act cautiously and indirectly against Turkey. Moreover, Iran cannot risk that its own Kurdish population could join with Syrian, Iraqi, and Turkish Kurds to form a new Kurdish state.

          ...And in the short-term, this all has hardened Ankara's position on remaining in control of the northern 37 percent of Cyprus, which it has occupied militarily since 1974.

          ...There is no doubt that Pres. Erdogan believes that continued brinkmanship will be possible, although he is not perhaps aware that he is losing the information war, or the psychological war.

          Amvet on December 15 2015 said:

          Thank you Mr. Copley for a well researched, honest, and very interesting article. Any chance of getting this published in any US mainstream
          newspaper or magazine ?? .

          Jim on December 15 2015 said:

          ...Nice information actually, most mainstream media doesn't even come close. Thanks. definitely a deliberate and pre-approved escalation of the conflict, pointing fingers back to Washington, D.C.

          Chris on December 15 2015 said:

          A great article that brings together much of what has been reported and provides a coherent framework for understanding it. This piece should be in a general interest publication such as the NY Times so that more Americans could understand what is really going on in the Middle East.

          [Dec 23, 2015] The antipathy the Russian kreakly bear toward Matthew Lee

          Notable quotes:
          "... the antipathy the Russian kreakly ..."
          "... the Russian intelligentsia ..."
          marknesop.wordpress.com
          Moscow Exile, December 20, 2015 at 3:09 am
          Russian "oppositionist" tweets – don't you just love 'em?

          Colonel Matt Lee receiving instructions from his superiors

          No doubt the person who posted the above tweet thinks Psaki, Harf, Trudeau, Rear-Admiral Kirby et al. have all been unfairly tested by this Russian FSB colonel Matt Lee and he should not have been allowed to take part in the Dept. of State press briefings because he is an agent of the Dark Lord, whilst the above mentioned Dept. of State spokespersons are all on the side of righteousness.

          marknesop , December 20, 2015 at 11:38 am
          I do love them, actually. For anyone who is not stupid, the antipathy the Russian kreakly bear toward Matthew Lee and anyone like him who questions the pat and Manichean State Department narrative bespeaks an admiration for the way the United States government operates. Quite apart for an unhealthy devotion to 'Murkan nationalism and a clear belief that when America seizes something, it should be grateful because it is a compliment if America wants it, it is a preview of how they would govern if they had power. Russia's 'intellectuals' are great admirers of the disinformation and manipulation of the public consciousness with which the State Department gets about its daily work.

          It is noteworthy that Matt Lee has never at any time expressed any gratuitous admiration for Russia or Putin or the way Russia conducts global affairs. He merely questions the State Department when its lies get too big or when it purports something as incontestable fact which it has gleaned from social media and Syrian activists. But the Russian intelligentsia view him as an impediment to a unipolar world ruled by America The Great And Good.

          [Dec 23, 2015] How America Lost the Rest of the World

          Notable quotes:
          "... I'm still trying to think through the implications but they are certainly disquieting. Without trying to hard I'd summarize that "the masks are coming off." ..."
          "... The question then is, what happens after "the masks come off?" ..."
          "... Short-sighted western pundits will still be penning deadline copy headlined "How Putin lost Ukraine" while those with real vision will be putting the finishing touches on "How America Lost the Rest of the World" ..."
          marknesop.wordpress.com
          Cortes, December 18, 2015 at 3:38 am
          Michael Hudson on IMF manoeuvres

          http://www.counterpunch.org/2015/12/18/the-imf-changes-its-rules-to-isolate-china-and-russia/

          Tim Owen, December 18, 2015 at 6:24 am
          Hard to overstate the importance of this article. Thanks for spotting it.

          There's a lot here but this passage is kind of free-standing in its value by simply condensing how the IMF has contorted itself:

          "The IMF thus is breaking four rules:

          1. Not lending to a country that has no visible means to pay back the loan breaks the "No More Argentinas" rule adopted after the IMF's disastrous 2001 loan.
          2. Not lending to countries that refuse in good faith to negotiate with their official creditors goes against the IMF's role as the major tool of the global creditors' cartel.
          3. And the IMF is now lending to a borrower at war, indeed one that is destroying its export capacity and hence its balance-of-payments ability to pay back the loan.
          4. Finally, the IMF is lending to a country that has little likelihood of refuse carrying out the IMF's notorious austerity "conditionalities" on its population – without putting down democratic opposition in a totalitarian manner. Instead of being treated as an outcast from the international financial system, Ukraine is being welcomed and financed."

          I'm still trying to think through the implications but they are certainly disquieting. Without trying to hard I'd summarize that "the masks are coming off."

          The question then is, what happens after "the masks come off?"

          … war.

          (Sometimes it's best just to blurt out what's worrying you.)

          marknesop, December 18, 2015 at 10:36 am
          Short-sighted western pundits will still be penning deadline copy headlined "How Putin lost Ukraine" while those with real vision will be putting the finishing touches on "How America Lost the Rest of the World".

          [Dec 23, 2015] The Big Short Every American Should See This Movie

          Notable quotes:
          "... Enjoyed the movie, but in typical Hollywood fashion, the role of the Federal Reserve and government in pushing housing down to those unable to afford it was not even mentioned once. ..."
          Zero Hedge
          The Big Short opens nationwide today. But it happened to have one showing last night at a theater near me. My youngest son and I hopped in the car and went to see it. I loved the book by Michael Lewis. The cast assembled for the movie was top notch, but having the director of Anchorman and Talledaga Nights handle a subject matter like high finance seemed odd.

          The choice of Adam McKay as director turned out to be brilliant. The question was how do you make a movie about the housing market, mortgage backed securities, collateralized debt obligations, collateralized debt swaps, and synthetic CDOs interesting for the average person. He succeeded beyond all expectations.

          Interweaving pop culture icons, music, symbols of materialism, and unforgettable characters, McKay has created a masterpiece about the greed, stupidity, hubris, and arrogance of Wall Street bankers gone wild. He captures the idiocy and complete capture of the rating agencies (S&P, Moodys). He reveals the ineptitude and dysfunction of the SEC, where the goal of these regulators was to get a high paying job with banks they were supposed to regulate. He skewers the faux financial journalists at the Wall Street Journal who didn't want to rock the boat with the truth about the greatest fraud ever committed.

          ...Ultimately, it is a highly entertaining movie with the right moral overtone, despite non-stop profanity that captures the true nature of Wall Street traders. This is a dangerous movie for Wall Street, the government, and the establishment in general. They count on the complexity of Wall Street to confuse the average person and make their eyes glaze over. That makes it easier for them to keep committing fraud and harvesting the nation's wealth.

          This movie cuts through the crap and reveals those in power to be corrupt, greedy weasels who aren't really as smart as they want you to think they are. The finale of the movie is sobering and infuriating. After unequivocally proving that Wall Street bankers, aided and abetted by the Federal Reserve, Congress, the SEC, and the mainstream media, destroyed the global financial system, put tens of millions out of work, got six million people tossed from their homes, and created the worst crisis since the Great Depression, the filmmakers are left to provide the depressing conclusion.

          No bankers went to jail. The Too Big To Fail banks were not broken up – they were bailed out by the American taxpayers. They actually got bigger. Their profits have reached new heights, while the average family has seen their income fall. Wall Street is paying out record bonuses, while 46 million people are on food stamps. Wall Street and their lackeys at the Federal Reserve call the shots in this country. They don't give a fuck about you. And they're doing it again.

          Every American should see this movie and get fucking pissed off. The theater was deathly silent at the end of the movie. The audience was stunned by the fact that the criminals on Wall Street got away with the crime of the century, and they're still on the loose. I had a great discussion with my 16 year old son on the way home. At least there is one millennial who understand how bad his generation is getting screwed.

          wee-weed up

          I read the book last year... It is outstanding! Highest recommendation. If you have not read this book, you cannot understand how today's market really works.

          JRobby

          This subject matter has to be put in a form that can be understood by the masses. Hopefully the popular actors and this director is a step in that direction.

          Main stream Hollywood as an informer? Hmmmmm? This adds to the current assumptions and rumors of fractures among the elite groups.

          We are reasonable people. If the banking elite is sacrificed and the other corporate oligarchs come into a more socially acceptable line, we may be satisfied. However, the banking elite must be sacrificed. There is no negotiation on that point.

          Of course some will say I am over optimistic, they are throwing it in our faces to make $$$ and it ends up a total police state so enjoy your "entertainment" for now.

          Time goes on. Time will tell.

          chunga

          First you'd have to believe that politicians give a fuck about any damn thing but themselves. REAL concern for minorities or communities LOL! Then you'd have to believe banks were forced to do *anything* they don't want.

          Then, you'd have to fall right to sleep and miss the part where all this crap was sold on Wall Street while at the same time betting against all the "shitty deals" they made, then the whole thing getting bailed out @ par. With par being at the absurd fraudulent property appraisals that were made by the lenders or their agents. It's just nuts.

          This was all planned, beginning with Greenspan. AIG's Greenberg KNEW their CDS paper was no damn good, but didn't care because the also KNEW there would be a bailout. The only problem for him was Paulson and Blankfein conspired to steal the bailout money...and they did!

          That's why all this money went looking for people...it was all planned.

          chunga

          Hundreds of scandals have gone by since then, thoroughly unpunished, so I wonder why this movie is coming out now. I looked into some of the cronies calling the shots at the GSE's back then and saved it. A lot is outdated by now. Seems like a fairly bi-partisan effort.

          FRANKLIN RAINES [D] – FNMA CEO (1999 – 2004) Raines accepted "early retirement" from his CEO position while the SEC pretended to investigate accounting irregularities. Fannie's own OHFHEO also accused him of abetting widespread accounting errors, including the shifting of losses, so he and his fellow execs could "earn" large bonuses. The WSJ reported back in 2008 that Raines was one of several cronies that received below market rates for mortgages from Countrywide. Raines alone receive loans for over $3 million while CEO of FNMA. Raines' compensation for his "work" at FNMA - $90 million.

          RAINES GRADE – F

          DANIEL MUDD [R] – FNMA CEO (2005 – 2008) Before becoming CEO of FNMA, Mudd worked at the Office of the Secretary of Defense, was an advisor to Asia-Pacific Economic Corp., "served" on the board of the Council of Foreign Relations, "consulted" at the World Bank, and held many positions at GE Capital including president and CEO. Mudd was dismissed as CEO of FNMA when FHFA became conservator in 2008. In 2011 Mudd and other GSE execs were charged by SEC with securities fraud. After his career at FNMA Mudd became CEO of a NYC hedge fund named "Fortress". Fortress invested in purchasing tax liens on delinquent property taxes from local governments under many benign corporate names such as "Pleasant Valley Capital" and "Travis Farm Investments". Cozy. Mudd's compensation for his "work" at FNMA - $80 million.

          MUDD GRADE – F

          NEEL KASHKARI [R] – FNMA CEO (Tenure is murky) Kashkari was a former investment banker for Goldman Sachs, was tapped by Hank "The Shank" Paulson to lend his skills over at TARP HQ, and now rather ironically, continues God's work as a Managing Director at PIMCO. Kashkari's compensation for his "work" at FNMA is also murky; I'll just assume it was too much.

          KASHKARI GRADE - F

          HERB ALLISON [D] – FNMA CEO (2008 – 2009) The esteemed Mr. Allison was quickly whisked off to oversee the wildly successful TARP program. I didn't find much on his compensation during his brief stint as FNMA CEO. Allison served in various positions at Merrill Lynch and became a member of the board in 1997. He was a director of the NYSE from 2003 – 2005.

          ALLISON GRADE – F

          MICHAEL WILLIAMS [?] – FNMA CEO (2009 – Jan 1, 2012) Mr. Williams is a 20 year veteran at FNMA. While "serving" as FNMA CEO, Williams managed to scrape by on less than $6 million in 2011 alone. This could and should be considered a hardship, given the complexities involved in purloining ~ $60 billion of Fed bailout money.

          WILLIAMS GRADE – F

          FANNIE'S MAJOR DANCE PARTNER, FREDDIE MAC, HAS ALSO PERFORMED VERY POORLY.

          Charles (my friends call me "Ed") Haldeman has announced his retirement plans but intends to be a good sport and stay on with insolvent FHLMC until another crony can be found to fill his wing-tips.

          That might take a while. "Serving" as CEO of the ultimate backstops for the lion's share of the MBS Ponzi is very stressful.

          We'll have to accept former Freddie exec David Kellermann's testimony posthumously. Mr. Kellermann was found hanging by the neck in the basement of his posh Vienna, VA home in the affluent suburb of Washington. D.C. way back in April of 2009. It is presumed he had no help and local police have stated there was no evidence of foul play.

          Urban Redneck

          GREED is non-partisan. And all sides agreed MOAR "home ownership" was desirable. The left got its SJW colorblind automation, while the underwriters were able to increase volumes by thousands of percent while reducing overall headcount. Securitization wasn't actually "automated" since the fuckwits were using MS-Excel, but it was commoditized with Blackrock's pricing model.

          These were the days of the original algorithms of mass financial destruction, which were primitive and largely FICO-centric, but everyone wanted to minimize the cost (of logic coding and external data sources) so they coding decisioning based solely on information contained in the mortgage application and the applicant's electronic credit report.

          khakuda

          Enjoyed the movie, but in typical Hollywood fashion, the role of the Federal Reserve and government in pushing housing down to those unable to afford it was not even mentioned once.

          Keynesians

          Wall Street is laughing at all the clowns who think this movie will "wake up America". It would have never came out if it was any kind of danger to Wall Street, the FED, or the establishment.

          Agent P

          Directed by Adam McKay (Anchorman, Step Brothers, The Other Guys....), so ... yeah I'm going to go see it. Remember the end credits for The Other Guys? He hates Wall Street....

          GoldenDonuts

          Perhaps you should read the book. These are real characters from a non fiction book. They may have changed a name or two but these are real people. I will lend you my copy if you can't afford one.

          conraddobler

          Yeah I can't imagine a commercially successful movie out of this that would actually tell the truth and make it to the screens.

          What someone should do is write one of those fantastical novels where everything is a symbol for something else and jazz it up, put some romance, danger, intrigue and of course big boobs in it.

          The real message ala the olden days usually had to be hidden to avoid the wrath of those it was really aimed at.

          [Dec 23, 2015] The antipathy the Russian kreakly bear toward Matthew Lee

          Notable quotes:
          "... the antipathy the Russian kreakly ..."
          "... the Russian intelligentsia ..."
          marknesop.wordpress.com
          Moscow Exile, December 20, 2015 at 3:09 am
          Russian "oppositionist" tweets – don't you just love 'em?

          Colonel Matt Lee receiving instructions from his superiors

          No doubt the person who posted the above tweet thinks Psaki, Harf, Trudeau, Rear-Admiral Kirby et al. have all been unfairly tested by this Russian FSB colonel Matt Lee and he should not have been allowed to take part in the Dept. of State press briefings because he is an agent of the Dark Lord, whilst the above mentioned Dept. of State spokespersons are all on the side of righteousness.

          marknesop , December 20, 2015 at 11:38 am
          I do love them, actually. For anyone who is not stupid, the antipathy the Russian kreakly bear toward Matthew Lee and anyone like him who questions the pat and Manichean State Department narrative bespeaks an admiration for the way the United States government operates. Quite apart for an unhealthy devotion to 'Murkan nationalism and a clear belief that when America seizes something, it should be grateful because it is a compliment if America wants it, it is a preview of how they would govern if they had power. Russia's 'intellectuals' are great admirers of the disinformation and manipulation of the public consciousness with which the State Department gets about its daily work.

          It is noteworthy that Matt Lee has never at any time expressed any gratuitous admiration for Russia or Putin or the way Russia conducts global affairs. He merely questions the State Department when its lies get too big or when it purports something as incontestable fact which it has gleaned from social media and Syrian activists. But the Russian intelligentsia view him as an impediment to a unipolar world ruled by America The Great And Good.

          [Dec 22, 2015] Destruction of the financial system of Ukraine is complete

          Essentially it got "below junk" rating...
          Notable quotes:
          "... How could Ukraine's government deficit only be 4.1% when its currency has crashed, it has lost most of its sources of income and it has just defaulted on its debt? What the fuck are they talking about? ..."
          "... First, there is no way on God's green earth that there is a negative difference of only 4.1% between Ukraine's annual revenues and its annual expenditures, especially since it has almost no revenues except from taxation. ..."
          marknesop.wordpress.com

          marknesop, December 19, 2015 at 6:43 pm

          According to Madame Jaresko, their decision not to pay the $3 Billion bond to Russia has set Ukraine free, free as a bird, and allowed it to now be in full compliance with the financing requirements of the IMF program.

          Start shovelin' in the money, IMF, because Ukraine has the magic formula – just refuse to pay what you owe, call it a 'temporary suspension of payments' instead of 'a default', and reap the reward for your display of responsibility.

          I foresee the mileage Russia is going to get out of this will far exceed the value of the $3 Billion.

          marknesop, December 19, 2015 at 8:47 pm

          How could Ukraine's government deficit only be 4.1% when its currency has crashed, it has lost most of its sources of income and it has just defaulted on its debt? What the fuck are they talking about?

          "The proposed budget would work to reduce the government's deficit from 4.1% to 3.7%, with measures including an increase in revenue by widening the tax base."

          First, there is no way on God's green earth that there is a negative difference of only 4.1% between Ukraine's annual revenues and its annual expenditures, especially since it has almost no revenues except from taxation.

          And now the IMF expects to realize more revenue from widening the tax base – yes, I can imagine what a popular initiative that is. Now you know how Yushchenko felt, Yatsie, when the IMF denied him a second big loan because he refused to eliminate the gas subsidies to residents.

          Now the IMF has finally realized that triumph through a different leader, and it wants to see even more tax revenue. You are about to be as popular as a turd in the punch bowl; have fun with that.

          kirill, December 20, 2015 at 12:58 pm

          I would not trust any GDP numbers from the Kiev regime either. They lost 25% of the economy in the Donbas alone not counting Crimea. This has knock on effects to the rest of Banderastan. Yet they are yapping about some 12% contraction in 2015 after a 7% contraction in 2014. I see no clear indication that they are counting the GDP only for regime controlled Banderastan.

          As for the budget, according to regime officials, Banderastan lost 30% of its hard currency revenues with the loss of the Donbass. I estimate the tax loss to Kiev to be about 30% as well.

          The Donbass was the industrialized part of the country while western Banderastan is primarily agrarian. So talk about 4% shortfalls in revenue is utter rubbish. In most countries the money making parts of the economy subsidize the rest and sure as hell it was not western Banderastan that was subsidizing the Donbass. That was just virulent blood libel such as the claim that Russians settled eastern Ukraine only after the Holodomor.

          marknesop, December 20, 2015 at 1:13 pm

          Europe deserves Ukraine. Let them have it, the quicker the better. It's fine when Yats is selling that stinking mess to his simple-minded constituents, but European policymakers will see through it right away. Unfortunately, Brussels knows better than to bring Ukraine any closer into the fold, because if they get a visa-free regime, the place will empty out in a week as Ukrainians flee throughout Europe (which is already, everyone must know, full of refugees) looking for jobs.

          [Dec 22, 2015] Americas Double Standard on Trade

          Dec 22, 2015 | naked capitalism
          Yves here. If you followed the TransPacific Partnership negotiations closely, you may recall that Japan looked like it was going along only to placate Washington, and then it signed up only because the US allowed it to drop its "defense only" posture (remember that Japan is a military protectorate of the US) and gave major concession on agriculture (Japan's farmers are a famously powerful voting block). But even then, Japan is not firmly in the US fold. It has made clear that the US needs to get a deal done pronto.

          By contrast, this post describes the US foot-dragging and gamesmanship to protect US agricultural interests from competition from developing economies.

          Yesterday, U.S. Trade Representative Michael Froman delivered his plenary statement to the trade ministers gathered in Nairobi for the World Trade Organization's tenth ministerial conference. His statement, which calls for the abandonment of the Doha Development Round in favor of negotiations on new issues of more strategic interest to the United States, deserve a response from a countryman.

          Mr. Froman calls on trade representatives "to move beyond the cynical repetition of positions designed to produce deadlock." Yet this is precisely what Mr. Froman has come to Nairobi to repeat: U.S. positions designed to produce deadlock.

          He decries the lack of progress in the last 15 years of Doha negotiations, yet he fails to acknowledge that the United States has been, and remains, the principal reason for that failure. Since 2008, when negotiations broke down, the U.S. has refused to continue negotiating on the key issues central to the development agenda – reducing agricultural subsidies, allowing developing countries special protection measures for agriculture, eliminating export subsidies and credits, and a host of other issues.

          Those issues remain critical to developing countries, and U.S. intransigence in addressing those concerns is the main reason Doha has stagnated. In addition, the U.S. has introduced new issues to create further obstacles to progress, such as its objection to India's ambitious and laudable public stockholding program to provide food security to fully two-thirds of its people.

          The draft declaration on agriculture in Nairobi offers no progress on resolving this issue, despite the explicit commitment in Bali and later in Geneva to find a permanent solution that can allow India and other countries to pursue such programs.

          That is not the only developing country issue left unaddressed. The declaration offers nothing to developing countries to allow them to protect sensitive sectors from unfair or sudden import surges, the Special Safeguard Mechanism. It offers no meaningful cuts in U.S. export credits, which have favored U.S. exporters to Africa with some $1.25 billion in credits over the last six years.

          Perhaps most notably, the declaration makes no mention of the key issue in the Doha Round: reductions in rich country agricultural subsidies and supports. With crop prices low and a new Farm Bill authorizing rising levels of support to U.S. farmers and exporters, this omission is a direct blow to those developing countries which see their farmers and export prospects harmed by underpriced U.S. exports.

          Nor does Mr. Froman mention cotton subsidies, an issue which the United States and the WTO membership committed to address "expeditiously" ten long years ago in Hong Kong. The issue remains unresolved, and the draft agriculture text fails to offer anything to Africa's C-4 cotton producing countries, which have millions of poor farmers desperately in need of relief.

          Instead, the U.S. Farm Bill promises further price suppression. According to a recent study, cotton subsidies could total $1.5 billion, increasing U.S. exports 29% and suppressing prices by 7%. All cotton producers in the rest of the world will suffer an estimated $3.3 billion in annual losses, with India projected to lose $800 million per year.

          The C-4 countries as a group stand to lose $80 million a year in reduced income, a huge blow to struggling farmers in low-income countries.

          Mr. Froman touts the ways U.S. policy has moved forward beyond Doha. He says the United States extended the African Growth and Opportunity Act by a decade, "the longest extension in that program's history." That limited extension of trade preferences to African countries last year provided a paltry $264,000 in benefits to the C-4 countries. The projected losses from U.S. cotton dumping are 300 times greater.

          Mr. Froman concludes that with a new approach that abandons the development round while taking up issues of investment, procurement, and other matters of priority to the United States, "we can ensure that global trade will drive development and prosperity as strongly this century as it did in the last."

          The U.S. Trade Representative seems to have conveniently forgotten that the Doha Development Round he wants to sweep aside was a direct response to the fact that global trade rules in the last century failed to drive development and prosperity, at least for many developing countries.

          As a U.S. researcher long engaged with the issues of concern to developing countries, I find Mr. Froman's approach shameful. Multilateralism demands engagement and compromise, particularly in a "development round" designed to address past inequities. Mr. Froman is unfortunately offering nothing more than "the cynical repetition of positions designed to produce deadlock." The latest in a steady stream of U.S. hypocrisy.

          By Timothy Wise, Director of the Research and Policy Program at the Global Development and Environment Institute, Tufts University. Originally published in The Standard (Nairobi, Kenya)

          [Dec 22, 2015] Orwells Nightmare Is Here - China Just Gamified Obedience To The State (And Soon Itll Be Mandatory)

          That's something new and pretty Orwelian : computerized score of "political correctness" made similar for FICO score and based on data about you in social media.
          Notable quotes:
          "... Among the things that will hurt a citizen's score are posting political opinions without prior permission, or posting information that the regime does not like, such as about the Tiananmen Square massacre that the government carried out to hold on to power, or the Shanghai stock market collapse. ..."
          "... "Imagine the social pressure against disobedience or dissent that this will create." ..."
          "... "very ambitious in scope, including scrutinizing individual behavior and what books people read. It's Amazon's consumer tracking with an Orwellian political twist." ..."
          "... "Coming soon to a New World Order near you: social credit! Earn points by behaving like the government wants you to behave! Get penalized if you don't act like a doubleplusgood citizen! What could be more fun?" ..."
          "... Applying for a passport? Buy my book and learn how to boost your patriotism score by 400 points in 6 months! We can even give you a spambot to do the work for you! ..."
          "... At this point, any good developer can write a program that reads Twitter/Facebook/Renren/WeChat feeds, gives the posts to IBM's Watson (or some simpler algorithm), and have the program spit out a score. And this program would take at most a month to make. I know, I write similar stuff ;) ..."
          "... What scares me is how the initial assumptions that go into querying data can give you radically different results at the end, and these intelligence agencies do not exactly explain what methods they are using to determine who is a 'bad guy.' ..."
          "... Patriot Points. ..."
          "... The article has taken some real, some proposed and some imaginary credit tracking programs and smushed them into one 'terrifying', freedom-destroying blob. In other words, it's irresponsible b.s. intended to make the Chinese government look even more diabolical and oppressive than our own. ..."
          "... The underlying cultural truth, though, is that Chinese are willing to cooperate with – and trust – their government much more than we are. They've always respected and looked up to their national leaders and expected those leaders to actually lead – morally and practically. It works for them, as we see. ..."
          "... Digital will end up being our worse nightmare and our undoing. It is the Perfect tool for the crazed sociopaths around us and the insane psychopaths that want to control our every breath (literally). ..."
          "... The social networks are piped right into governments security complex. ..."
          Dec 22, 2015 | Zero Hedge

          As if further proof were needed Orwell's dystopia is now upon us, China has now gamified obedience to the State. Though that is every bit as creepily terrifying as it sounds, citizens may still choose whether or not they wish to opt-in - that is, until the program becomes compulsory in 2020. "Going under the innocuous name of 'Sesame Credit,' China has created a score for how good a citizen you are," explains Extra Credits' video about the program. "The owners of China's largest social networks have partnered with the government to create something akin to the U.S. credit score - but, instead of measuring how regularly you pay your bills, it measures how obediently you follow the party line."

          Zheping Huang, a reporter for Quartz, chronicled his own experience with the social control tool in October, saying that

          "in the past few weeks I began to notice a mysterious new trend. Numbers were popping up on my social media feeds as my friends and strangers on Weibo [the Chinese equivalent to Twitter] and WeChat began to share their 'Sesame Credit scores.' The score is created by Ant Financial, an Alibaba-affiliated company that also runs Alipay, China's popular third-party payment app with over 350 million users. Ant Financial claims that it evaluates one's purchasing and spending habits in order to derive a figure that shows how creditworthy someone is."

          However, according to a translation of the "Planning Outline for the Construction of a Social Credit System," posted online by Oxford University's China expert, Rogier Creemers, it's nightmarishly clear the program is far more than just a credit-tracking method. As he described it,

          "The government wants to build a platform that leverages things like big data, mobile internet, and cloud computing to measure and evaluate different levels of people's lives in order to create a gamified nudging for people to behave better."

          While Sesame Credit's roll-out in January has been downplayed by many, the American Civil Liberties Union, among others, urges caution, saying:

          "The system is run by two companies, Alibaba and Tencent, which run all the social networks in China and therefore have access to a vast amount of data about people's social ties and activities and what they say. In addition to measuring your ability to pay, as in the United States, the scores serve as a measure of political compliance.

          Among the things that will hurt a citizen's score are posting political opinions without prior permission, or posting information that the regime does not like, such as about the Tiananmen Square massacre that the government carried out to hold on to power, or the Shanghai stock market collapse. It will hurt your score not only if you do these things, but if any of your friends do them."

          And, in what appears likely the goal of the entire program, added, "Imagine the social pressure against disobedience or dissent that this will create."

          Social pressure, of course, can be highly effective given the right circumstances. China seems to have found exactly that in the intricate linking of people's scores to their contacts, which can be seen publicly by anyone - and then upping the ante through score-based incentives and rewards. Rick Falkvinge pointed out a startling comparison:

          "The KGB and the Stasi's method of preventing dissent from taking hold was to plant so-called agents provocateurs in the general population, people who tried to make people agree with dissent, but who actually were arresting them as soon as they agreed with such dissent. As a result, nobody would dare agree that the government did anything bad, and this was very effective in preventing any large-scale resistance from taking hold. The Chinese way here is much more subtle, but probably more effective still."

          As Creemers described to Dutch news outlet, de Volkskrant,

          "With the help of the latest internet technologies, the government wants to exercise individual surveillance. The Chinese aim […] is clearly an attempt to create a new citizen."

          Chinese internet specialist at the Swedish Institute of International Affairs, Johan Lagerkvist, said the system is

          "very ambitious in scope, including scrutinizing individual behavior and what books people read. It's Amazon's consumer tracking with an Orwellian political twist."

          James Corbett has been tracking the implementation of Sesame Credit for some time. Introducing the ubiquitous tracking system for a recent episode of the Corbett Report, he mused:

          "Coming soon to a New World Order near you: social credit! Earn points by behaving like the government wants you to behave! Get penalized if you don't act like a doubleplusgood citizen! What could be more fun?"

          Indeed, because mandatory enrollment in Sesame Credit is still a few years away, its true effectiveness won't be measurable for some time. But even a reporter's usual wariness appears knocked off-kilter, as Zheping Huang summarized his personal experience,

          "Even if my crappy credit score doesn't mean much now, it's in my best interest I suppose to make sure it doesn't go too low."

          And that, of course, is precisely why gamifying State obedience is so terrifying.

          Cornfedbloodstool

          We just have FICO scores in the US, that measures how obidient you are to the banks, the true rulers of the country.

          ToSoft4Truth

          And Facebook 'Likes'. Can't get laid without the Likes, man.

          CAPT DRAKE

          It is already here. There is a thing called an "NSA Score", based on your habits, contacts, and email/posts. Fortunately, porn surfing, even addiction, is not a negative. Only anti state stuff counts, and no, most of the posts on ZH don't count as they are seen as venting and not actionable intel.

          knukles

          I love Big Brother...

          Miffed Microbiologist

          "The children and adults, including his own parents, tiptoe nervously around him, constantly telling him how everything he does is "good," since displeasing him can get them wished away into a mystical "cornfield", an unknown place, from which there is no return. At one point, a dog is heard barking angrily. Anthony thinks the dog is "bad" and doesn't "like [him] at all," and wishes it into the cornfield. His father and mother are horrified, but they dare not show it."

          Welcome to the Twilight Zone.

          Miffed

          Old Poor Richard

          You beat me to it on FICO score. If you're off the grid, out of the electronic money system or not paying sufficient fealty to banksters, you are NOT being obedient to the state.

          NoDebt

          I'm as off the grid as you can get and still live a middle class lifestyle with electricity and a cell phone. I assure you they still score me and I'm usually over 800. I don't use credit much these days but what I use says nothing but "pays as agreed".

          Now, if you start to factor in the "slightly to the right of the John Burke Society" shit I post on ZH I'd be down around -500.

          Uchtdorf

          http://qz.com/519737/all-chinese-citizens-now-have-a-score-based-on-how-...

          Dated October 9th of this year.

          savagegoose

          thats it, in the communist version of facebook you can vote on gov post's, ie you can like them.

          Government needs you to pay taxes

          Cmon its China, where numbers are faked everyday. Ya think this number will be any different? And even if its effective in China, when the US .govbots roll this out, how effective can it be when US .gov employees 'at the wheel'?

          The US .gov can fuck ANYTHING up.

          roisaber

          It will be funny to see who gets a low citizen loyalty oath score for unpredictable reasons, or from hacks, and their increasing radicalization as their honest efforts to try to get themselves back into good standing only makes them register as more anti-social.

          techpriest

          The other question is, how many services are going to pop up to help you boost your score, just like there are books, guides, and services for your credit score currently?

          "Applying for a passport? Buy my book and learn how to boost your patriotism score by 400 points in 6 months! We can even give you a spambot to do the work for you!"

          SgtShaftoe

          China doesn't have enough enforcers to control the population. They will lose control. That is only a matter of time. They may be able to delay the inevitable for a while but eventually reality will arrive. Keep pushing that volatility into the tail and see what happens. When it goes, it will blow your fucking socks off.

          Tick tock motherfuckers, and that goes for the US as well...

          tarabel

          That is the (evil) genius of this scheme. It is collectively enforced by the proletarians themselves. If you do anti-social things, that will reflect badly on your friends and family so they will excoriate you and, if necessary, shun you until you get with the program. Really, it's just a crowd-sourced Communist Block Warden program gone digital.

          I don't worry about the Chinese. They're fooked any which way you slice it. But China invents nothing, merely imitates. So where did they get this idea from, hmmm?

          techpriest

          At this point, any good developer can write a program that reads Twitter/Facebook/Renren/WeChat feeds, gives the posts to IBM's Watson (or some simpler algorithm), and have the program spit out a score. And this program would take at most a month to make. I know, I write similar stuff ;)

          With that in mind, what would you be able to accomplish with a team of 40-50 developers and several months? What scares me is how the initial assumptions that go into querying data can give you radically different results at the end, and these intelligence agencies do not exactly explain what methods they are using to determine who is a 'bad guy.'


          cherry picker

          "I have nothing to hide"

          Well, the bozos who coined the above term, have fun. You think keeping up with mortgage, car payments, Obama Care, taxes, raising kids and keeping a spouse happy is stressful, wait til .gov does a 'test' on you.

          Me, I'm not worried. I'm a non conformist, live in the boonies and am too old. I tell my children and grandchildren they need to get rid of this 'evil eye' government encroachment.

          They think I am crazy now, but I think they may be coming around.

          techpriest

          I would love to turn that "You shouldn't be afraid if you have nothing to hide" around by pointing out that the Fed shouldn't be afraid of an audit if they have nothing to hide.

          Amish Hacker

          Patriot Points.

          Bopper09

          Is this not what assface is? (facebook for people plugged in). I admit I went on it for the simple fact I couldn't find anything better for talking to my Russian fiance. But even a year before she got here, I said fuck it. Tried cancelling, but if you click a link that has something to do with facebook, your profile becomes active again. Fucking criminals. I left a computer for 3 weeks (not that I haven't done that before. TRY IT, no cell phone or computer for ONE WEEK. Take vacation days and see what's important in your life. Seriously, I've never owned a cell phone. Where I work I don't need one. Cell phones do not 'save your life'.

          Consuelo

          Interesting the references to FB, especially when one considers who's at the head and his position on censorship. Then again, what happened in Mao's China descended from the likes of Trotsky, so it kinda sorta follows...

          Gantal

          The article has taken some real, some proposed and some imaginary credit tracking programs and smushed them into one 'terrifying', freedom-destroying blob. In other words, it's irresponsible b.s. intended to make the Chinese government look even more diabolical and oppressive than our own.

          The underlying cultural truth, though, is that Chinese are willing to cooperate with – and trust – their government much more than we are. They've always respected and looked up to their national leaders and expected those leaders to actually lead – morally and practically. It works for them, as we see.

          The underlying lie is that the Chinese government needs to repress its people. It doesn't. Anyone purporting to be China 'experts' like Messrs. Lagerkvist and Creemers, should know that China's government is the most popular, most trusted government on earth.

          By why let facts get in the way of a good story?

          Fuku Ben

          The score is created by Ant Financial

          https://www.youtube.com/watch?v=8lcUHQYhPTE#t=36s

          FedFunnyMoney

          Ein Volk, Ein Reich, Ein Fuhrer...Chinese style.

          rejected

          Digital will end up being our worse nightmare and our undoing. It is the "Perfect" tool for the crazed sociopaths around us and the insane psychopaths that want to control our every breath (literally).

          Sure, it's cool, you can play games and other useless crap but even a blind man could see how governments are going to be useing it. The social networks are piped right into governments security complex. Wouldn't surprise me if everything we post even here on ZH is stored on some digital crap machine somewhere.

          For sure it's on ZH servers and thus available to any Tom, Dick or Harry LEO. I myself am very close to going dark. This stuff isn't laughable anymore. It's getting DEADLY serious.

          [Dec 21, 2015] Ignorance is Strength

          Notable quotes:
          "... " it's also a person who kills journalists, political opponents, and invades countries" ..."
          "... It's okay to bullshit if the Culturally Superior Westerner ™ is dissing with libelious claims Inferior Non-Westerner. See, who needs any proof that "Putin kills journalists"? No one! Not even trump or their auditory – They Know It For Fact ™. ..."
          marknesop.wordpress.com
          et Al, December 19, 2015 at 11:02 am
          Butnits Insider: Donald Trump left Joe Scarborough stunned after being asked about Vladimir Putin killing journalists
          https://uk.finance.yahoo.com/news/donald-trump-praises-vladimir-putin-125622048.html

          …Scarborough pointed to Putin's status as a notorious strongman.

          "Well, I mean, it's also a person who kills journalists, political opponents, and invades countries. Obviously that would be a concern, would it not?" Scarborough asked.

          "He's running his country, and at least he's a leader," Trump replied. "Unlike what we have in this country."

          "But again: He kills journalists that don't agree with him," Scarborough said.

          The Republican presidential front-runner said there was "a lot of killing going on" around the world and then suggested that Scarborough had asked him a different question.

          "I think our country does plenty of killing, also, Joe, so, you know," Trump replied. "There's a lot of stupidity going on in the world right now, Joe. A lot of killing going on. A lot of stupidity. And that's the way it is. But you didn't ask me [that] question, you asked me a different question. So that's fine."

          Scarborough was left visibly stunned.

          "I'm confused," the MSNBC host said. "So I mean, you obviously condemn Vladimir Putin killing journalists and political opponents, right?"

          "Oh sure, absolutely," Trump said…

          …But Friday during his "Morning Joe" interview, Trump said he always "felt fine" about Putin and touted the Russian president's poll numbers. Putin's position in his country is bolstered by the Russian government's control over much of the Russian news media.

          "I always felt fine about Putin," Trump said. "I think that he's a strong leader. He's a powerful leader … He's actually got a popularity within his country. They respect him as a leader."

          Trump contrasted Putin's numbers with President Obama's.

          "I think he's up in the 80s. You see where Obama's in the 30s and low 40s. And he's up in the 80s," Trump said. "And I don't know who does the polls. Maybe he does the polls, but I think they're done by American companies, actually."
          ####

          When I read stuff like this, I'm so glad the US is so far away. Damn modern technology.

          Lyttenburgh, December 19, 2015 at 11:50 am
          " it's also a person who kills journalists, political opponents, and invades countries"

          It's okay to bullshit if the Culturally Superior Westerner ™ is dissing with libelious claims Inferior Non-Westerner. See, who needs any proof that "Putin kills journalists"? No one! Not even trump or their auditory – They Know It For Fact ™.

          P.S. "Ignorance is Strength"

          [Dec 21, 2015] Journalists are really mouthpieces for political factions within their own government power structure but the best journalists choose faction that actually embraces reality

          "... Regarding Patrick Lang, I noticed that he posted a quite vehement attack against conspiracy theorists postings on his blog who were – if I recall correctly – claiming that the military were involved in the subterfuge to arm extremists in Syria. (Probably cocked up the details but too tired to check.) It struck me as noteworthy as it suggested an internecine intra-Washington struggle between Military / CIA who was going to "own" the debacle in Syria at the very least. It is utterly reminiscent of the struggle between Dulles / CIA power structure (think: institutional group think) and the incoming JFK administration / New Frontiersman during and after the Cuban Missile Crisis. ..."
          "... Of course it's worth noting that Hersh had to revert to publishing this "intimate" conversation between American power structures in a foreign publication. What does that tell you about the "freedom index"? Samizdat here we come! ..."
          marknesop.wordpress.com

          Tim Owen, December 20, 2015 at 1:53 pm

          Sy Hersh's latest via M of A:

          http://www.lrb.co.uk/v38/n01/seymour-m-hersh/military-to-military

          marknesop, December 20, 2015 at 7:58 pm
          Washington does not care who assumes power in Syria – whether it be feuding warlords or an Islamic mullah or Assad's cat. Washington knows that Islamic State needs money to survive and keep power, as does any individual or group who will rule, and that to remain in power, it will sell oil. Good enough, as far as Washington is concerned. If the place remains a seething cauldron of destabilizing hatreds, so much the better.
          Tim Owen, December 20, 2015 at 8:50 pm
          I read this carefully earlier today and wish I had made some notes.

          It's an interesting article just in what it says about the politics of American journalism at this point in time almost regardless of the subject matter in a kind of Kremlinology vein. It almost reads like a ransom note. My impression is that Hersh is pulling punches at some key points in order not to overplay his hand.

          My suggestion: don't get bogged down in the details. From my recollection of the piece from earlier today Hersh is basically championing a few figures and – most importantly – their perspectives here:

          • Michael Flynn, who led the DIA revolt against Syria policy
          • Dempsey, a pragmatic cold warrior who is allergic to making the enemy into a cardboard super-villan (good enough for this Putinista)
          • Patrick Lang (more below)
          • and that wonderfully clear-headed Hawaiin congress-critter (can't be arsed to look her up)

          It's worth remembering that Hersh's articles on the Ghoutta attack immediately predated the great stand-down by Obama from all out air-war to destroy Syria.

          Given that it's axiomatic that journalists are really mouthpieces for political factions within their own government power structure and that the BEST journalists – like Hersh – actually embrace this reality, what does the appearance of this article augur?

          I especially like the sign off:

          "The Joint Chiefs and the DIA were constantly telling Washington's leadership of the jihadist threat in Syria, and of Turkey's support for it. The message was never listened to. Why not?"

          That sounds kind of threatening. In a good way.

          * Regarding Patrick Lang, I noticed that he posted a quite vehement attack against conspiracy theorists postings on his blog who were – if I recall correctly – claiming that the military were involved in the subterfuge to arm extremists in Syria. (Probably cocked up the details but too tired to check.) It struck me as noteworthy as it suggested an internecine intra-Washington struggle between Military / CIA who was going to "own" the debacle in Syria at the very least. It is utterly reminiscent of the struggle between Dulles / CIA power structure (think: institutional group think) and the incoming JFK administration / New Frontiersman during and after the Cuban Missile Crisis.

          In other words: we, the west, have basically made no progress fighting for reform of our leadership and political structures. Meanwhile the Russians seem to have gone "right round the horn" – as the dinosaur in Toy Story might put it.

          Tim Owen, December 20, 2015 at 9:08 pm
          Of course it's worth noting that Hersh had to revert to publishing this "intimate" conversation between American power structures in a foreign publication. What does that tell you about the "freedom index"? Samizdat here we come!

          [Dec 21, 2015] Australians has doubts about Dutch safety board conclusion about the type of monitions that destroyed the aircraft

          Notable quotes:
          "... "initial information that the aircraft was shot down by a [Buk] surface to air missile" did not meet the Australian or international standard of evidence …." ..."
          "... What will happen to the resolve of the holdouts if the narrative on MH17 begins to veer away from rock-solid Russian ownership of the tragedy? Because that was the whole backbone of the sanctions – Crimea was not enough to get Germany and France on board, and they still needed the little push that MH17 provided. If that rationale vanished, or even if serious doubt was introduced, the whole EU position on sanctions could fall apart. ..."
          "... It's bigger than I thought – there is some sort of internal power struggle going on, and West refuses to change his findings – which still point to Russia for responsibility – in spite of Donoghoe's testimony. ..."
          marknesop.wordpress.com
          Jen, December 19, 2015 at 7:12 pm
          Wooooh, this news is a doozy:

          http://johnhelmer.net/?p=14787
          http://investmentwatchblog.com/mh17-australia-say-russia-not-to-blame-evidence-tampered-with/

          First two paragraphs:
          "The Australian Federal Police and Dutch police and prosecutors investigating the cause of the crash of Malaysian Airlines MH17 believe the Dutch Safety Board (DSB) has failed to provide "conclusive evidence" of what type of munition destroyed the aircraft, causing the deaths of 283 passengers and 15 crew on board.

          Testifying for the first time in an international court, Detective Superintendent Andrew Donoghoe, the senior Australian policeman in the international MH17 investigation, said a "tougher standard than the DSB report" is required before the criminal investigation can identify the weapon which brought the aircraft down, or pinpoint the perpetrators.

          Their criminal investigation will continue into 2016, Donoghoe told the Victorian Coroners Court (lead image) on Tuesday morning. He and other international investigators are unconvinced by reports from the US and Ukrainian governments, and by the DSB, of a Buk missile firing. "Dutch prosecutors require conclusive evidence on other types of missile," Donoghoe said, intimating that "initial information that the aircraft was shot down by a [Buk] surface to air missile" did not meet the Australian or international standard of evidence …."

          marknesop, December 19, 2015 at 7:31 pm
          Great catch, Jen!! Wow, you're right – this is big, especially in view of the wavering by some EU members on sanctions. I wonder what Merkel has up her sleeve; she says Germany – while going ahead with Nord Stream II, which is "first and foremost a business proposition" – is "seeking ways to ensure that Ukraine is not completely excluded as a transit country".

          Ummm…what role would that be? Because if, in exchange for pushing ahead on Nord Stream, Russia is maneuvered into still sending gas through Ukraine so that Ukraine can collect transit fees, the project would be self-defeating. I trust the business minds in Russia are sharp enough to stay ahead of that one. Ukraine will still receive gas from Russia, if it wants it and can pay in advance for it, but it will be for domestic supplies only and consequently not subject to transit fees. Russia must not weaken on this, because the EU still hopes to rebuild Ukraine using Russian money, and it cannot do it without Russian help and support. If that is withheld, Russia only needs to wait them out.

          Needless to say, Tusk supports Renzi's position, not because he is an Italiophile but because he supports Ukraine and would like to see it remain a transit country, and pocketing $2 Billion a year in Russian cash.

          What will happen to the resolve of the holdouts if the narrative on MH17 begins to veer away from rock-solid Russian ownership of the tragedy? Because that was the whole backbone of the sanctions – Crimea was not enough to get Germany and France on board, and they still needed the little push that MH17 provided. If that rationale vanished, or even if serious doubt was introduced, the whole EU position on sanctions could fall apart.

          marknesop, December 19, 2015 at 8:37 pm

          It's bigger than I thought – there is some sort of internal power struggle going on, and West refuses to change his findings – which still point to Russia for responsibility – in spite of Donoghoe's testimony. There were revelations in the original post such as that Australia had sought permission from the Novorossiyan authorities to collect evidence and artifacts, as well as Kiev – thereby implicitly recognizing Novorossiya – and that when it solicited witnesses to testify, some agreed only on the condition their names would not be revealed, that the Ukrainian authorities would not be involved and that the investigators would protect them. Sure sounds like they want to say something they know the Ukrainian government will punish them for saying, if it can identify them. This whole inquiry just got interesting again.

          At the moment it looks like a faction of the Australian investigation disagrees with the pat finding of the Dutch, but the Victorian state coroner is totally on board with the "Russia did it" scenario and is determined to have his way no matter how foolish it makes him look. This one could go anywhere from here.

          Moscow Exile, December 19, 2015 at 11:28 pm

          Clearly that Aussie cop is in the pocket of the Evil One!

          Isn't he the one who said earlier that the Russian-backed terrorists at the MH-17 crash site behaved like decent human beings and treated the crash victims' remains with dignity and did not loot their belongings?

          I mean, what a ludicrous thing to say!

          Everyone knows that these Russian beasts are ….blah, blah, blah ...

          davidt, December 20, 2015 at 2:03 pm

          Donoghue is not the only AFP cop speaking up for the crash site locals. Their sensitivity and humanity is a rather at odds with a disparaging comment about the AFP on these pages over a year ago (and which I objected to at the time). I noticed last week that Patrick Armstrong is now reconsidering the Sukhoi did it scenario because of an apparent lack of fragments from a Buk warhead.

          This has always been a serious concern to the Russian investigators, see
          http://www.nst.com.my/news/2015/10/russians-angered-dutch-probe


          [Dec 21, 2015] Weak president, neoliberal Obama and housing bubble

          Notable quotes:
          "... The relationship between low interest rates and bubbles has nothing to do with the above. Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low. Raising asset prices and the resultant higher net worth was supposed to lead to higher spending today. But outsized returns also attracts speculation. what is so difficult to understand? John Williams of SF Fed has shown how positive returns in asset markets raises the speculators expected returns. when this dynamic gets out of control, it is a bubble. ..."
          "... That is exactly the point. Expected returns in stocks have nothing to do with earnings growth. http://www.frbsf.org/our-district/press/presidents-speeches/williams-speeches/2013/september/asset-price-bubbles-tomorrow-yesterday-never-today/ ..."
          "... You think a rise in stock prices created by a fall in the cost of capital is a bubble. ..."
          "... keeping the risk free rate at zero for 7 years is not a change in fundamentals. and if it is and it rises leading to a large fall in equity prices, you will be the first one crying uncle. so why put the economy through this? ..."
          "... Rising stock prices allow corporations to raise debt, because the stock is put up as collateral. This makes funding easier, but it doesnt favor any particular purpose of the funding. It could be to buy back stock, for example. Said buy back can raise the stock price even more, which in turn can pay off the borrowing. Didnt cost a dime. ..."
          "... It always seem to me that right wing economists credit businessmen with superhuman foresight and sophistication, except when it comes to the actions of the Fed and then something addles their brains and they become completely stupid. As I once put, it seems investors cant understand what the Fed is doing, even though they tell you. ..."
          "... Thats it exactly. Markets are efficient, unless the government does anything, and then markets lose their minds and its the governments fault. ..."
          "... Here is how they evaluate models: Good model; one that reaches the right good conclusions. Bad model; one that ends up saying stuff nobody should believe in. ..."
          "... Obama could have at least made the investigations a high priority...but he let Holder, a Wall Street attorney, consign them to the lowest. ..."
          "... Democrats filibuster-proof majority consisted of 58 Democrats and two independents who caucused with them. Only an inept President and Senate majority leader could have failed to take advantage of such a majority to implement significant parts of the party platform. ..."
          "... Gullible folks like pgl and his coterie believe what these Democrats say and waste our time defending their neoliberal behavior. ..."
          economistsview.typepad.com
          reason said... December 18, 2015 at 02:20 AM
          I wish Krugman would attack the view that is being propagated at the moment that low nominal interest rates (it seems irrespective of the reason for them) foster bubbles. It doesn't make the slightest bit of sense - leverage doesn't just magnify the gains, it magnifies the losses as well - what really counts is expectations regardless of nominal interest rates.)

          The distribution of the use of credit between pure financial speculation and productive investment is not a function of interest rates, but of things like bank culture, bank regulation and macro-economic and technological prospects.

          JF said in reply to reason... December 18, 2015 at 05:19 AM

          Great comment. I especially liked this point: "The distribution of the use of credit between pure financial speculation and productive investment is not a function of" ....

          Supervising regulators need to look carefully at the ratio of credit used for financial trading compared to credit used for what we've called real-economy matters. They should adjust the level of monitoring based on this view while they also inform policy makers including those in the legislature.

          There may be an opportunity in 2017 to revise the statutes so the public plainly says what the rules of Commerce are in these financial 'inter-mediation' areas - society is better served if more of such credit offerings go to investments in the real economy where inputs are real things like employees, supplies, equipment/technologies. The public's law can effect this change.

          david said in reply to JF...

          except that a significant chunk of institutional investors have sticky nominal targets for return thanks to the politics of return expectation setting (true for pension fund and endowments) -- low interest rates do encourage chasing phantoms or looking to extract some rents, for those subject to that kind of pressure

          sanjait said in reply to david... December 18, 2015 at 02:47 PM

          Are there enough of those to dominate securities prices?

          I don't see how there possibly could be. For everyone trying to reach for yield there are a lot of people happy to arbitrage or otherwise exploit those inefficiencies.

          pgl said in reply to reason... December 18, 2015 at 05:53 AM

          Nice comment. I think Krugman is letting others take out the bubble brains. But if he's reading your excellent comment - maybe he will go the fray.

          BenIsNotYoda said in reply to reason... December 18, 2015 at 06:35 AM

          "The distribution of the use of credit between pure financial speculation and productive investment is not a function of interest rates, but of things like bank culture, bank regulation and macro-economic and technological prospects."

          The relationship between low interest rates and bubbles has nothing to do with the above. Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low. Raising asset prices and the resultant higher net worth was supposed to lead to higher spending today. But outsized returns also attracts speculation. what is so difficult to understand? John Williams of SF Fed has shown how positive returns in asset markets raises the speculator's expected returns. when this dynamic gets out of control, it is a bubble.

          Sanjait said in reply to BenIsNotYoda... December 18, 2015 at 07:35 AM

          It's hard to see how to your claim that expected returns are high when earnings yields across the board are historically low.

          BenIsNotYoda said in reply to Sanjait... December 18, 2015 at 07:38 AM

          That is exactly the point. Expected returns in stocks have nothing to do with earnings growth. http://www.frbsf.org/our-district/press/presidents-speeches/williams-speeches/2013/september/asset-price-bubbles-tomorrow-yesterday-never-today/

          BenIsNotYoda said in reply to BenIsNotYoda... December 18, 2015 at 07:38 AM

          I mean earnings yields not earnings growth.

          Sanjait said in reply to BenIsNotYoda... December 18, 2015 at 07:48 AM

          So you say. And yet, stock values today conform very well with the standard model Williams says doesn't historically fit the data. While you are talking bubbles, the equity risk premium is parked in the normal range.

          How do you explain that?

          BenIsNotYoda said in reply to Sanjait... December 18, 2015 at 07:54 AM

          so says Williams. dividend yields, earnings yields and risk premiums are not necessarily weighted heavily in investors' formation of expected returns. past returns do, to a great extent. that is what Williams shows.

          BenIsNotYoda said in reply to BenIsNotYoda... December 18, 2015 at 07:56 AM

          our prehistoric brains are wired to trend follow patterns.

          pgl said in reply to BenIsNotYoda... December 18, 2015 at 09:13 AM

          Williams actually tries to model the rise in stock prices and defines any increase the model cannot explain a bubble. Of course maybe his modeling is not entirely spot on and fundamentals can explain the rise stock prices.

          But this is not what you do as you see any asset price increase as a bubble. Which is beyond stupid. Of course it would help if you ever bothered to do what Williams attempted - use a basic model of financial economics. Then again my guess is that is beyond your understanding of basic financial economics. So troll on!

          BenIsNotYoda said in reply to pgl... December 18, 2015 at 10:40 AM

          You think a rise in stock prices created by a fall in the cost of capital is a bubble. But no - it is a change in fundamentals.

          keeping the risk free rate at zero for 7 years is not a change in fundamentals. and if it is and it rises leading to a large fall in equity prices, you will be the first one crying uncle. so why put the economy through this?

          JohnH said in reply to pgl... December 18, 2015 at 04:22 PM

          The first thing pgl did when stocks corrected this summer was to call for QE4...he panicked because his portfolio was threatened...but claimed that he was only worried about workers!

          Fred C. Dobbs said in reply to reason... December 18, 2015 at 10:57 AM

          It does not seem reasonable or
          fair to pay practically no interest
          on savings, which is a consequence
          of Fed policy.

          A consequence of this is that people
          go into risky investments that lead
          to catastrophe, sometimes widespread.

          If the goal was to get people to spend
          (i.e. consume) more, it seems that they
          are persistently & stubbornly frugal.

          Chris Herbert said in reply to Fred C. Dobbs... December 18, 2015 at 02:31 PM

          Rising stock prices allow corporations to raise debt, because the stock is put up as collateral. This makes funding easier, but it doesn't favor any particular purpose of the funding. It could be to buy back stock, for example. Said buy back can raise the stock price even more, which in turn can pay off the borrowing. Didn't cost a dime.

          sanjait said in reply to reason...

          Let me be the fourth person to compliment that comment.

          "leverage doesn't just magnify the gains, it magnifies the losses as well - what really counts is expectations regardless of nominal interest rates."

          QFT!

          The one hypothetical caveat (as BINY alluded to, knowingly or not) is that expectations often get out of whack based on momentum trading. So hypothetically, lowering rates could possibly feed that.

          But guess what? Rates are already at zero. They can't go lower. It's not even a question of lowering rates, but rather whether to keep them where they are. So a bubbles-from-monetary-fed-momentum argument falls completely flat. We've been at zero for 7 years now!

          reason said...

          It always seem to me that right wing economists credit businessmen with superhuman foresight and sophistication, except when it comes to the actions of the Fed and then something addles their brains and they become completely stupid. As I once put, it seems investors can't understand what the Fed is doing, even though they tell you.

          Sanjait said in reply to reason...

          That's it exactly. Markets are efficient, unless the government does anything, and then markets lose their minds and it's the government's fault.

          And somehow the RW economists see no problem with this model

          DeDude said in reply to Sanjait...

          Here is how they evaluate models: Good model; one that reaches the "right" good conclusions. Bad model; one that ends up saying stuff nobody should believe in.
          likbez said in reply to Sanjait...
          "Markets are efficient, unless the government does anything"

          This is a dangerous neoliberal dogma. Total lie.

          === quote ===
          The efficient market hypothesis (EMH) is a flavor of economic Lysenkoism which became popular for the last 30 years in the USA. It is a pseudo scientific theory or, in more politically correct terms, unrealistic idealization of market behavior. Like classic Lysenkoism in the past was supported by Stalin's totalitarian state, it was supported by the power of neoliberal state, which is the state captured by financial oligarchy (see Casino Capitalism and Quiet coup for more details).

          Among the factors ignored by EMH is the positive feedback loop inherent in any system based on factional reserve banking, the level of market players ignorance, unequal access to the real information about the markets, the level of brainwashing performed on "lemmings" by controlled by elite MSM and market manipulation by the largest players and the state.

          Economics, it is said, is the study of scarcity. There is, however, one thing that certainly isn't scarce, but which deserves the attention of economists - ignorance.
          ...Conventional economics analyses how individuals choose - maybe rationally, maybe not - from a range of options. But this raises the question: how do they know what these options are? Many feasible - even optimum - options might not occur to them. This fact has some important implications. ...
          Slightly simplifying, we can say that (financial) markets are mainly efficient in separation of fools and their money... And efficient market hypothesis mostly bypasses important question about how the inequity of resources which inevitably affects the outcomes of market participants. For example, the level of education of market players is one aspect of the inequity of resources. Herd behavior is another important, but overlooked in EMH factor.

          http://www.softpanorama.org/Skeptics/Financial_skeptic/Casino_capitalism/Pseudo_theories/Permanent_equilibrium_fallacy/Efficient_market_hypothesys/index.shtml

          Peter K. said in reply to reason...

          And/or the markets are telling the Fed something, like they don't believe the Fed's forecasts about growth and inflation and are betting otherwise, but the hawks at the Fed dismiss the markets and say we need to raise rates now.

          It's all very convenient reasoning about markets.

          Vile Content said...

          "
          constant repetition, especially in captive media, keeps this imaginary history in circulation no matter how often it is shown to be false.
          "
          ~~pK~

          ... ... ...

          anne said...

          http://krugman.blogs.nytimes.com/2015/11/23/shorts-subject/

          November 23, 2015

          Shorts Subject
          By Paul Krugman

          Last night I was invited to a screening of "The Big Short," which I thought was terrific; who knew that collateralized debt obligations and credit default swaps could be made into an edge-of-your-seat narrative (with great acting)?

          But there was one shortcut the narrative took, which was understandable and possibly necessary, but still worth noting.

          In the film, various eccentrics and oddballs make the discovery that subprime-backed securities are garbage, which is pretty much what happened; but this is wrapped together with their realization that there was a massive housing bubble, which is presented as equally contrary to anything anyone respectable was saying. And that's not quite right.

          It's true that Greenspan and others were busy denying the very possibility of a housing bubble. And it's also true that anyone suggesting that such a bubble existed was attacked furiously - "You're only saying that because you hate Bush!" Still, there were a number of economic analysts making the case for a massive bubble. Here's Dean Baker in 2002. * Bill McBride (Calculated Risk) was on the case early and very effectively. I keyed off Baker and McBride, arguing for a bubble in 2004 and making my big statement about the analytics in 2005, ** that is, if anything a bit earlier than most of the events in the film. I'm still fairly proud of that piece, by the way, because I think I got it very right by emphasizing the importance of breaking apart regional trends.

          So the bubble itself was something number crunchers could see without delving into the details of mortgage-backed securities, traveling around Florida, or any of the other drama shown in the film. In fact, I'd say that the housing bubble of the mid-2000s was the most obvious thing I've ever seen, and that the refusal of so many people to acknowledge the possibility was a dramatic illustration of motivated reasoning at work.

          The financial superstructure built on the bubble was something else; I was clueless about that, and didn't see the financial crisis coming at all.

          * http://www.cepr.net/documents/publications/housing_2002_08.pdf

          ** http://www.nytimes.com/2005/08/08/opinion/that-hissing-sound.html

          anne said in reply to anne...

          http://www.nytimes.com/2002/08/16/opinion/mind-the-gap.html

          August 16, 2002

          Mind the Gap
          By PAUL KRUGMAN

          More and more people are using the B-word about the housing market. A recent analysis * by Dean Baker, of the Center for Economic Policy Research, makes a particularly compelling case for a housing bubble. House prices have run well ahead of rents, suggesting that people are now buying houses for speculation rather than merely for shelter. And the explanations one hears for those high prices sound more and more like the rationalizations one heard for Nasdaq 5,000.

          If we do have a housing bubble, and it bursts, we'll be looking a lot too Japanese for comfort....

          * http://www.cepr.net/documents/publications/housing_2002_08.pdf

          anne said in reply to anne...

          http://www.nytimes.com/2005/08/08/opinion/that-hissing-sound.html

          August 8, 2005

          That Hissing Sound
          By PAUL KRUGMAN

          This is the way the bubble ends: not with a pop, but with a hiss.

          Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom goes bust.

          So the news that the U.S. housing bubble is over won't come in the form of plunging prices; it will come in the form of falling sales and rising inventory, as sellers try to get prices that buyers are no longer willing to pay. And the process may already have started.

          Of course, some people still deny that there's a housing bubble. Let me explain how we know that they're wrong.

          One piece of evidence is the sense of frenzy about real estate, which irresistibly brings to mind the stock frenzy of 1999. Even some of the players are the same. The authors of the 1999 best seller "Dow 36,000" are now among the most vocal proponents of the view that there is no housing bubble.

          Then there are the numbers. Many bubble deniers point to average prices for the country as a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United States is really two countries, Flatland and the Zoned Zone.

          In Flatland, which occupies the middle of the country, it's easy to build houses. When the demand for houses rises, Flatland metropolitan areas, which don't really have traditional downtowns, just sprawl some more. As a result, housing prices are basically determined by the cost of construction. In Flatland, a housing bubble can't even get started.

          But in the Zoned Zone, which lies along the coasts, a combination of high population density and land-use restrictions - hence "zoned" - makes it hard to build new houses. So when people become willing to spend more on houses, say because of a fall in mortgage rates, some houses get built, but the prices of existing houses also go up. And if people think that prices will continue to rise, they become willing to spend even more, driving prices still higher, and so on. In other words, the Zoned Zone is prone to housing bubbles.

          And Zoned Zone housing prices, which have risen much faster than the national average, clearly point to a bubble....

          EMichael said in reply to anne...

          Yeah, the only thing he missed was the timing of the collapse.

          The day he wrote this the Fed had already raised rates 250% in one year, on the way to a total of 400% in the next 6 months.

          Yet prices accelerated until the top was reached a year after the column.

          anne said in reply to EMichael...

          http://www.nytimes.com/2006/08/25/opinion/25krugman.html

          August 25, 2006

          Housing Gets Ugly
          By PAUL KRUGMAN

          Bubble, bubble, Toll's in trouble. This week, Toll Brothers, the nation's premier builder of McMansions, announced that sales were way off, profits were down, and the company was walking away from already-purchased options on land for future development.

          Toll's announcement was one of many indications that the long-feared housing bust has arrived. Home sales are down sharply; home prices, which rose 57 percent over the past five years (and much more than that along the coasts), are now falling in much of the country. The inventory of unsold existing homes is at a 13-year high; builders' confidence is at a 15-year low.

          A year ago, Robert Toll, who runs Toll Brothers, was euphoric about the housing boom, declaring: "We've got the supply, and the market has got the demand. So it's a match made in heaven." In a New York Times profile of his company published last October, he dismissed worries about a possible bust. "Why can't real estate just have a boom like every other industry?" he asked. "Why do we have to have a bubble and then a pop?"

          The current downturn, Mr. Toll now says, is unlike anything he's seen: sales are slumping despite the absence of any "macroeconomic nasty condition" taking housing down along with the rest of the economy. He suggests that unease about the direction of the country and the war in Iraq is undermining confidence. All I have to say is: pop! ...

          EMichael said in reply to anne...

          "Mr. Toll now says, is unlike anything he's seen: sales are slumping despite the absence of any "macroeconomic nasty condition""

          You gotta love builders and RE agents. It wasn't macro that caused it, it was default rates across the board on supposedly safe investments that caused mortgage money supply to totally disappear.

          One day people will understand that payments are the key to all finance.

          JohnH said...

          "and it is an outrage that basically nobody ended up being punished ."

          Yes, indeed. And who do we have to blame for that? Obama and Holder, of course. They made the investigation of mortgage securities fraud DOJ's lowest priority. Krugman's Democratic proclivities prevent him from stating the obvious.

          I' m sure that pgl and his band of merry Obamabots will try to spin this in Obama's favor...I.e. Congress prevented him from implementing the law, even though Congress has nothing to do with it.

          Fact is, Obama has intentionally been a lame duck ever since he took office. He was even clueless on how to capitalize on a filibuster-proof majority in the midst of an economic crisis...which brings us to Trump. Many are so desperate for leadership after Obama's hollow presidency that they'll even support a racist demagogue to avoid another empty White House.

          JohnH said in reply to anne...

          Oh, please...Krugman could barely criticize Obama, even when Obama introduced an austerity budget back in 2011.

          The tendency of people like Krugman to overlook Democrats' bad behavior only encourages more bad behavior. If Krugman really cared about the policies he champions, he would let the chips fall wherever...and not let empty suits like Obama get away with austerity and failure to enforce the law when Wall Street willfully violates it.

          pgl said in reply to JohnH...

          Did you forgot to read the post before firing off your usual hate filled fact free rant? Here - let me help you out:

          "some members of the new commission had a different goal. George Santayana famously remarked that "those who cannot remember the past are condemned to repeat it." What he didn't point out was that some people want to repeat the past - and that such people have an interest in making sure that we don't remember what happened, or that we remember it wrong. Sure enough, some commission members sought to block consideration of any historical account that might support efforts to rein in runaway bankers."

          It seems Krugman indeed bashed how the government sort of let this crooks off the hook. We know you have an insane hatred for President Obama. But do you also hate your poor mom? Why else would you continue to write such incredibly stupid things?

          JohnH said in reply to pgl...

          As I expected, rationalizations for Obama's refusal to enforce the law...since when does the buck no longer stop at the White House? And what's with trying to defend people who refuse to do their job and uphold the rule of law?

          pgl said in reply to JohnH...

          Krugman did not rationalize that. Neither have I.

          Either you know you are lying or you flunked preK reading.

          JohnH said in reply to pgl...

          Of course pgl rationalizs Obama's failures...he spent a lot of time denying that Obama introduced and signed off on austerity...and that he proposed cutting Social Security. And now he can't admit that Obama and Holder have refused to defend the rule of law by not prosecuting...or even seriously investigating...Wall Street criminality.

          RGC said in reply to William...

          Prosecutions don't require congressional action.

          Most of the New Deal was accomplished in 100 days.

          Promotion by a president can galvanize action.

          pgl said in reply to EMichael...

          The lack of prosecutions was a bad thing. Of course any prosecutor would tell you putting rich people in jail for anything is often difficult. Rich people get to hire expensive, talented, and otherwise slimy defense attorneys. I have to laugh at the idea that JohnH thinks he could have pulled this off. The slimy defense attorneys would have had his lunch before the judge's gavel could come down.

          JohnH said in reply to pgl...

          Obama could have at least made the investigations a high priority...but he let Holder, a Wall Street attorney, consign them to the lowest.

          pgl is intent on explaining away Obama's failure to enforce the law...thereby encouraging more lawlessness.

          JohnH said in reply to William...

          Democrats' filibuster-proof majority consisted of 58 Democrats and two independents who caucused with them. Only an inept President and Senate majority leader could have failed to take advantage of such a majority to implement significant parts of the party platform. Even Lieberman had a good record on many issues. Except for ACA, it turned out to be a do-nothing Congress, reflecting an abject lack of leadership...which is why many are so desperate for leadership. Having lacked it for seven years, many are willing to turn to anybody, even Trump, to provide it. Pathetic!

          RGC said in reply to William...

          No vitriol, just facts. And Obama had the example of FDR to follow - why didn't he follow it? I have been deeply disappointed in Obama.

          JohnH said in reply to pgl...

          pgl conveniently forgets my choice words about Bill Clinton, Harry Reid and Nancy Pelosi. What I object to is Democrats who position themselves to sound like FDR and then prosecute a neo-liberal agenda.

          Gullible folks like pgl and his coterie believe what these Democrats say and waste our time defending their neoliberal behavior.

          [Dec 20, 2015] Michael Hudson The IMF Changes its Rules to Isolate China and Russia

          Notable quotes:
          "... By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is ..."
          "... KILLING THE HOST: How Financial Parasites and Debt Bondage Destroy the Global Economy ..."
          "... What especially annoys U.S. financial strategists is that this loan by Russia's sovereign debt fund was protected by IMF lending practice, which at that time ensured collectability by withholding new credit from countries in default of foreign official debts (or at least, not bargaining in good faith to pay). To cap matters, the bonds are registered under London's creditor-oriented rules and courts. ..."
          "... After the rules change, Aslund later noted, "the IMF can continue to give Ukraine loans regardless of what Ukraine does about its credit from Russia, which falls due on December 20. [8] ..."
          "... The post-2010 loan packages to Greece are a notorious case in point. The IMF staff calculated that Greece could not possibly pay the balance that was set to bail out foreign banks and bondholders. Many Board members agreed (and subsequently have gone public with their whistle-blowing). Their protests didn't matter. Dominique Strauss-Kahn backed the US-ECB position (after President Barack Obama and Treasury secretary Tim Geithner pointed out that U.S. banks had written credit default swaps betting that Greece could pay, and would lose money if there were a debt writedown). In 2015, Christine Lagarde also backed the U.S.-European Central Bank hard line, against staff protests. [10] ..."
          "... China and Russia harbored the fantasy that would be allowed redress in the Western Courts where international law is metered out. They are now no longer under that delusion. ..."
          "... It's not Hudson but the US that has simplified the entire world situation into "good guys vs. bad guys", a policy enshrined in Rumsfeld's statement "you're either with us or you're against us". ..."
          "... what is left unsaid is the choices Russia then faces once their legal options play out and the uneven playing field is fully exposed. Do they not then have a historically justifiable basis for declaring war? ..."
          December 18, 2015 | naked capitalism

          By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is KILLING THE HOST: How Financial Parasites and Debt Bondage Destroy the Global Economy

          The nightmare scenario of U.S. geopolitical strategists seems to be coming true: foreign economic independence from U.S. control. Instead of privatizing and neoliberalizing the world under U.S.-centered financial planning and ownership, the Russian and Chinese governments are investing in neighboring economies on terms that cement Eurasian economic integration on the basis of Russian oil and tax exports and Chinese financing. The Asian Infrastructure Investment Bank (AIIB) threatens to replace the IMF and World Bank programs that favor U.S. suppliers, banks and bondholders (with the United States holding unique veto power).

          Russia's 2013 loan to Ukraine, made at the request of Ukraine's elected pro-Russian government, demonstrated the benefits of mutual trade and investment relations between the two countries. As Russian finance minister Anton Siluanov points out, Ukraine's "international reserves were barely enough to cover three months' imports, and no other creditor was prepared to lend on terms acceptable to Kiev. Yet Russia provided $3 billion of much-needed funding at a 5 per cent interest rate, when Ukraine's bonds were yielding nearly 12 per cent."[1]

          What especially annoys U.S. financial strategists is that this loan by Russia's sovereign debt fund was protected by IMF lending practice, which at that time ensured collectability by withholding new credit from countries in default of foreign official debts (or at least, not bargaining in good faith to pay). To cap matters, the bonds are registered under London's creditor-oriented rules and courts.

          On December 3 (one week before the IMF changed its rules so as to hurt Russia), Prime Minister Putin proposed that Russia "and other Eurasian Economic Union countries should kick-off consultations with members of the Shanghai Cooperation Organisation (SCO) and the Association of Southeast Asian Nations (ASEAN) on a possible economic partnership."[2] Russia also is seeking to build pipelines to Europe through friendly instead of U.S.-backed countries.

          Moving to denominate their trade and investment in their own currencies instead of dollars, China and Russia are creating a geopolitical system free from U.S. control. After U.S. officials threatened to derange Russia's banking linkages by cutting it off from the SWIFT interbank clearing system, China accelerated its creation of the alternative China International Payments System (CIPS), with its own credit card system to protect Eurasian economies from the shrill threats made by U.S. unilateralists.

          Russia and China are simply doing what the United States has long done: using trade and credit linkages to cement their geopolitical diplomacy. This tectonic geopolitical shift is a Copernican threat to New Cold War ideology: Instead of the world economy revolving around the United States (the Ptolemaic idea of America as "the indispensible nation"), it may revolve around Eurasia. As long as the global financial papacy remains grounded in Washington at the offices of the IMF and World Bank, such a shift in the center of gravity will be fought with all the power of the American Century (indeed, American Millennium) inquisition.

          Imagine the following scenario five years from now. China will have spent half a decade building high-speed railroads, ports power systems and other construction for Asian and African countries, enabling them to grow and export more. These exports will be coming on line to repay the infrastructure loans. Also, suppose that Russia has been supplying the oil and gas energy needed for these projects.

          To U.S. neocons this specter of AIIB government-to-government lending and investment creates fear of a world independent of U.S. control. Nations would mint their own money and hold each other's debt in their international reserves instead of borrowing or holding dollars and subordinating their financial planning to the IMF and U.S. Treasury with their demands for monetary bloodletting and austerity for debtor countries. There would be less need for foreign government to finance budget shortfalls by selling off their key public infrastructure privatizing their economies. Instead of dismantling public spending, the AIIB and a broader Eurasian economic union would do what the United States itself practices, and seek self-sufficiency in basic needs such as food, technology, banking, credit creation and monetary policy.

          With this prospect in mind, suppose an American diplomat meets with the leaders of debtors to China, Russia and the AIIB and makes the following proposal: "Now that you've got your increased production in place, why repay? We'll make you rich if you stiff our New Cold War adversaries and turn to the West. We and our European allies will help you assign the infrastructure to yourselves and your supporters, and give these assets market value by selling shares in New York and London. Then, you can spend your surpluses in the West."

          How can China or Russia collect in such a situation? They can sue. But what court will recognize their claim – that is, what court that the West would pay attention to?

          That is the kind of scenario U.S. State Department and Treasury officials have been discussing for more than a year. The looming conflict was made immediate by Ukraine's $3 billion debt to Russia falling due by December 20, 2015. Ukraine's U.S.-backed regime has announced its intention to default. U.S. lobbyists have just changed the IMF rules to remove a critical lever on which Russia and other governments have long relied to enforce payment of their loans.

          The IMF's Role as Enforcer of Inter-Government Debts

          When it comes down to enforcing nations to pay inter-government debts, the International Monetary Fund and Paris Club hold the main leverage. As coordinator of central bank "stabilization" loans (the neoliberal euphemism for imposing austerity and destabilizing debtor economies, Greece-style), the IMF is able to withhold not only its own credit but also that of governments and global banks participating when debtor countries need refinancing. Countries that do not agree to privatize their infrastructure and sell it to Western buyers are threatened with sanctions, backed by U.S.-sponsored "regime change" and "democracy promotion" Maidan-style.

          This was the setting on December 8, when Chief IMF Spokesman Gerry Rice announced: "The IMF's Executive Board met today and agreed to change the current policy on non-toleration of arrears to official creditors." The creditor leverage that the IMF has used is that if a nation is in financial arrears to any government, it cannot qualify for an IMF loan – and hence, for packages involving other governments. This has been the system by which the dollarized global financial system has worked for half a century. The beneficiaries have been creditors in US dollars.

          In this U.S.-centered worldview, China and Russia loom as the great potential adversaries – defined as independent power centers from the United States as they create the Shanghai Cooperation Organization as an alternative to NATO, and the AIIB as an alternative to the IMF and World Bank tandem. The very name, Asian Infrastructure Investment Bank, implies that transportation systems and other infrastructure will be financed by governments, not relinquished into private hands to become rent-extracting opportunities financed by U.S.-centered bank credit to turn the rent into a flow of interest payments.

          The focus on a mixed public/private economy sets the AIIB at odds with the Trans-Pacific Partnership (TPP) and its aim of relinquishing government planning power to the financial and corporate sector for their own short-term gains, and above all the aim of blocking government's money-creating power and financial regulation. Chief Nomura economist Richard Koo, explained the logic of viewing the AIIB as a threat to the US-controlled IMF: "If the IMF's rival is heavily under China's influence, countries receiving its support will rebuild their economies under what is effectively Chinese guidance, increasing the likelihood they will fall directly or indirectly under that country's influence."[3]

          Russian Finance Minister Anton Siluanov accused the IMF decision of being "hasty and biased."[4] But it had been discussed all year long, calculating a range of scenarios for a long-term sea change in international law. The aim of this change is to isolate not only Russia, but even more China in its role as creditor to African countries and prospective AIIB borrowers. U.S. officials walked into the IMF headquarters in Washington with the legal equivalent of financial suicide vests, having decided that the time had come to derail Russia's ability to collect on its sovereign loan to Ukraine, and of even larger import, China's plan for a New Silk Road integrating a Eurasian economy independent of U.S. financial and trade control. Anders Aslund, senior fellow at the NATO-oriented Atlantic Council, points out:

          The IMF staff started contemplating a rule change in the spring of 2013 because nontraditional creditors, such as China, had started providing developing countries with large loans. One issue was that these loans were issued on conditions out of line with IMF practice. China wasn't a member of the Paris Club, where loan restructuring is usually discussed, so it was time to update the rules.

          The IMF intended to adopt a new policy in the spring of 2016, but the dispute over Russia's $3 billion loan to Ukraine has accelerated an otherwise slow decision-making process.[5]

          The Wall Street Journal concurred that the underlying motivation for changing the IMF's rules was the threat that Chinese lending would provide an alternative to IMF loans and its demands for austerity. "IMF-watchers said the fund was originally thinking of ensuring China wouldn't be able to foil IMF lending to member countries seeking bailouts as Beijing ramped up loans to developing economies around the world."[6] In short, U.S. strategists have designed a policy to block trade and financial agreements organized outside of U.S. control and that of the IMF and World Bank in which it holds unique veto power.

          The plan is simple enough. Trade follows finance, and the creditor usually calls the tune. That is how the United States has used the Dollar Standard to steer Third World trade and investment since World War II along lines benefiting the U.S. economy.

          The cement of trade credit and bank lending is the ability of creditors to collect on the international debts being negotiated. That is why the United States and other creditor nations have used the IMF as an intermediary to act as "honest broker" for loan consortia. ("Honest broker" means in practice being subject to U.S. veto power.) To enforce its financial leverage, the IMF has long followed the rule that it will not sponsor any loan agreement or refinancing for governments that are in default of debts owed to other governments. However, as the afore-mentioned Aslund explains, the IMF could easily

          change its practice of not lending into [countries in official] arrears … because it is not incorporated into the IMF Articles of Agreement, that is, the IMF statutes. The IMF Executive Board can decide to change this policy with a simple board majority. The IMF has lent to Afghanistan, Georgia, and Iraq in the midst of war, and Russia has no veto right, holding only 2.39 percent of the votes in the IMF. When the IMF has lent to Georgia and Ukraine, the other members of its Executive Board have overruled Russia.[7]

          After the rules change, Aslund later noted, "the IMF can continue to give Ukraine loans regardless of what Ukraine does about its credit from Russia, which falls due on December 20.[8]

          Inasmuch as Ukraine's official debt to Russia's sovereign debt fund was not to the U.S. Government, the IMF announced its rules change as a "clarification." Its rule that no country can borrow if it is in default to (or not seriously negotiating with) a foreign government was created in the post-1945 world, and has governed the past seventy years in which the United States Government, Treasury officials and/or U.S. bank consortia have been party to nearly every international bailout or major loan agreement. What the IMF rule really meant was that it would not provide credit to countries in arrears specifically to the U.S. Government, not those of Russia or China.

          Mikhail Delyagin, Director of the Institute of Globalization Problems, understood the IMF's double standard clearly enough: "The Fund will give Kiev a new loan tranche on one condition that Ukraine should not pay Russia a dollar under its $3 billion debt. Legally, everything will be formalized correctly but they will oblige Ukraine to pay only to western creditors for political reasons."[9] It remains up to the IMF board – and in the end, its managing director – whether or not to deem a country creditworthy. The U.S. representative naturally has always blocked any leaders not beholden to the United States.

          The post-2010 loan packages to Greece are a notorious case in point. The IMF staff calculated that Greece could not possibly pay the balance that was set to bail out foreign banks and bondholders. Many Board members agreed (and subsequently have gone public with their whistle-blowing). Their protests didn't matter. Dominique Strauss-Kahn backed the US-ECB position (after President Barack Obama and Treasury secretary Tim Geithner pointed out that U.S. banks had written credit default swaps betting that Greece could pay, and would lose money if there were a debt writedown). In 2015, Christine Lagarde also backed the U.S.-European Central Bank hard line, against staff protests.[10]

          IMF executive board member Otaviano Canuto, representing Brazil, noted that the logic that "conditions on IMF lending to a country that fell behind on payments [was to] make sure it kept negotiating in good faith to reach agreement with creditors."[11] Dropping this condition, he said, would open the door for other countries to insist on a similar waiver and avoid making serious and sincere efforts to reach payment agreement with creditor governments.

          A more binding IMF rule is that it cannot lend to countries at war or use IMF credit to engage in warfare. Article I of its 1944-45 founding charter ban the fund from lending to a member state engaged in civil war or at war with another member state, or for military purposes in general. But when IMF head Lagarde made the last IMF loan to Ukraine, in spring 2015, she made a token gesture of stating that she hoped there would be peace. But President Porochenko immediately announced that he would step up the civil war with the Russian-speaking population in the eastern Donbass region.

          The problem is that the Donbass is where most Ukrainian exports were made, mainly to Russia. That market is being lost by the junta's belligerence toward Russia. This should have blocked Ukraine from receiving IMF aid. Withholding IMF credit could have been a lever to force peace and adherence to the Minsk agreements, but U.S. diplomatic pressure led that opportunity to be rejected.

          The most important IMF condition being violated is that continued warfare with the East prevents a realistic prospect of Ukraine paying back new loans. Aslund himself points to the internal contradictions at work: Ukraine has achieved budget balance because the inflation and steep currency depreciation has drastically eroded its pension costs. The resulting lower value of pension benefits has led to growing opposition to Ukraine's post-Maidan junta. "Leading representatives from President Petro Poroshenko's Bloc are insisting on massive tax cuts, but no more expenditure cuts; that would cause a vast budget deficit that the IMF assesses at 9-10 percent of GDP, that could not possibly be financed."[12] So how can the IMF's austerity budget be followed without a political backlash?

          The IMF thus is breaking four rules: Not lending to a country that has no visible means to pay back the loan breaks the "No More Argentinas" rule adopted after the IMF's disastrous 2001 loan. Not lending to countries that refuse in good faith to negotiate with their official creditors goes against the IMF's role as the major tool of the global creditors' cartel. And the IMF is now lending to a borrower at war, indeed one that is destroying its export capacity and hence its balance-of-payments ability to pay back the loan. Finally, the IMF is lending to a country that has little likelihood of refuse carrying out the IMF's notorious austerity "conditionalities" on its population – without putting down democratic opposition in a totalitarian manner. Instead of being treated as an outcast from the international financial system, Ukraine is being welcomed and financed.

          The upshot – and new basic guideline for IMF lending – is to create a new Iron Curtain splitting the world into pro-U.S. economies going neoliberal, and all other economies, including those seeking to maintain public investment in infrastructure, progressive taxation and what used to be viewed as progressive capitalism. Russia and China may lend as much as they want to other governments, but there is no international vehicle to help secure their ability to be paid back under what until now has passed for international law. Having refused to roll back its own or ECB financial claims on Greece, the IMF is quite willing to see repudiation of official debts owed to Russia, China or other countries not on the list approved by the U.S. neocons who wield veto power in the IMF, World Bank and similar global economic institutions now drawn into the U.S. orbit. Changing its rules to clear the path for the IMF to make loans to Ukraine and other governments in default of debts owed to official lenders is rightly seen as an escalation of America's New Cold War against Russia and also its anti-China strategy.

          Timing is everything in such ploys. Georgetown University Law professor and Treasury consultant Anna Gelpern warned that before the "IMF staff and executive board [had] enough time to change the policy on arrears to official creditors," Russia might use "its notorious debt/GDP clause to accelerate the bonds at any time before December, or simply gum up the process of reforming the IMF's arrears policy."[13] According to this clause, if Ukraine's foreign debt rose above 60 percent of GDP, Russia's government would have the right to demand immediate payment. But no doubt anticipating the bitter fight to come over its attempts to collect on its loan, President Putin patiently refrained from exercising this option. He is playing the long game, bending over backward to accommodate Ukraine rather than behaving "odiously."

          A more pressing reason deterring the United States from pressing earlier to change IMF rules was that a waiver for Ukraine would have opened the legal floodgates for Greece to ask for a similar waiver on having to pay the "troika" – the European Central Bank (ECB), EU commission and the IMF itself – for the post-2010 loans that have pushed it into a worse depression than the 1930s. "Imagine the Greek government had insisted that EU institutions accept the same haircut as the country's private creditors," Russian finance minister Anton Siluanov asked. "The reaction in European capitals would have been frosty. Yet this is the position now taken by Kiev with respect to Ukraine's $3 billion eurobond held by Russia."[14]

          Only after Greece capitulated to eurozone austerity was the path clear for U.S. officials to change the IMF rules in their fight to isolate Russia. But their tactical victory has come at the cost of changing the IMF's rules and those of the global financial system irreversibly. Other countries henceforth may reject conditionalities, as Ukraine has done, and ask for write-downs on foreign official debts.

          That was the great fear of neoliberal U.S. and Eurozone strategists last summer, after all. The reason for smashing Greece's economy was to deter Podemos in Spain and similar movements in Italy and Portugal from pursuing national prosperity instead of eurozone austerity. Opening the door to such resistance by Ukraine is the blowback of America's tactic to make a short-term financial hit on Russia while its balance of payments is down as a result of collapsing oil and gas prices.

          The consequences go far beyond just the IMF. The fabric of international law itself is being torn apart. Every action has a reaction in the Newtonian world of geopolitics. It may not be a bad thing, to be sure, for the post-1945 global order to be broken apart by U.S. tactics against Russia, if that is the catalyst driving other countries to defend their own economies in the legal and political spheres. It has been U.S. neoliberals themselves who have catalyzed the emerging independent Eurasian bloc.

          Countering Russia's Ability to Collect in Britain's Law Courts

          Over the past year the U.S. Treasury and State Departments have discussed ploys to block Russia from collecting under British law, where its loans to Ukraine are registered. Reviewing the repertory of legal excuses Ukraine might use to avoid paying Russia, Prof. Gelpern noted that it might declare the debt "odious," made under duress or corruptly. In a paper for the Peterson Institute of International Economics (the banking lobby in Washington) she suggested that Britain should deny Russia the use of its courts as an additional sanction reinforcing the financial, energy, and trade sanctions to those passed against Russia after Crimea voted to join it as protection against the ethnic cleansing from the Right Sector, Azov Battalion and other paramilitary groups descending on the region.[15]

          A kindred ploy might be for Ukraine to countersue Russia for reparations for "invading" it, for saving Crimea and the Donbass region from the Right Sector's attempt to take over the country. Such a ploy would seem to have little chance of success in international courts (without showing them to be simply arms of NATO New Cold War politics), but it might delay Russia' ability to collect by tying the loan up in a long nuisance lawsuit.

          To claim that Ukraine's debt to Russia was "odious" or otherwise illegitimate, "President Petro Poroshenko said the money was intended to ensure Yanukovych's loyalty to Moscow, and called the payment a 'bribe,' according to an interview with Bloomberg in June this year."[16] The legal and moral problem with such arguments is that they would apply equally to IMF and US loans. Claiming that Russia's loan is "odious" is that this would open the floodgates for other countries to repudiate debts taken on by dictatorships supported by IMF and U.S. lenders, headed by the many dictatorships supported by U.S. diplomacy.

          The blowback from the U.S. multi-front attempt to nullify Ukraine's debt may be used to annul or at least write down the destructive IMF loans made on the condition that borrowers accept privatizations favoring U.S., German and other NATO-country investors, undertake austerity programs, and buy weapons systems such as the German submarines that Greece borrowed to pay for. As Foreign Minister Sergei Lavrov noted: "This reform, which they are now trying to implement, designed to suit Ukraine only, could plant a time bomb under all other IMF programs." It certainly showed the extent to which the IMF is subordinate to U.S. aggressive New Cold Warriors: "Essentially, this reform boils down to the following: since Ukraine is politically important – and it is only important because it is opposed to Russia – the IMF is ready to do for Ukraine everything it has not done for anyone else, and the situation that should 100 percent mean a default will be seen as a situation enabling the IMF to finance Ukraine."[17]

          Andrei Klimov, deputy chairman of the Committee for International Affairs at the Federation Council (the upper house of Russia's parliament) accused the United States of playing "the role of the main violin in the IMF while the role of the second violin is played by the European Union. These are two basic sponsors of the Maidan – the symbol of a coup d'état in Ukraine in 2014."[18]

          Putin's Counter-Strategy and the Blowback on U.S.-European and Global Relations

          As noted above, having anticipated that Ukraine would seek reasons to not pay the Russian loan, President Putin carefully refrained from exercising Russia's right to demand immediate payment when Ukraine's foreign debt rose above 60 percent of GDP. In November he offered to defer payment if the United States, Europe and international banks underwrote the obligation. Indeed, he even "proposed better conditions for this restructuring than those the International Monetary Fund requested of us." He offered "to accept a deeper restructuring with no payment this year – a payment of $1 billion next year, $1 billion in 2017, and $1 billion in 2018." If the IMF, the United States and European Union "are sure that Ukraine's solvency will grow," then they should "see no risk in providing guarantees for this credit." Accordingly, he concluded "We have asked for such guarantees either from the United States government, the European Union, or one of the big international financial institutions." [19]

          The implication, Putin pointed out, was that "If they cannot provide guarantees, this means that they do not believe in the Ukrainian economy's future." One professor pointed out that this proposal was in line with the fact that, "Ukraine has already received a sovereign loan guarantee from the United States for a previous bond issue." Why couldn't the United States, Eurozone or leading commercial banks provide a similar guarantee of Ukraine's debt to Russia – or better yet, simply lend it the money to turn it into a loan to the IMF or US lenders?[20]

          But the IMF, European Union and the United States refused to back up their happy (but nonsensical) forecasts of Ukrainian solvency with actual guarantees. Foreign Minister Lavrov made clear just what that rejection meant: "By having refused to guarantee Ukraine's debt as part of Russia's proposal to restructure it, the United States effectively admitted the absence of prospects of restoring its solvency. … By officially rejecting the proposed scheme, the United States thereby subscribed to not seeing any prospects of Ukraine restoring its solvency."[21]

          In an even more exasperated tone, Prime Minister Dmitri Medvedev explained to Russia's television audience: "I have a feeling that they won't give us the money back because they are crooks. They refuse to return our money and our Western partners not only refuse to help, but they also make it difficult for us."[22] Adding that "the international financial system is unjustly structured," he promised to "go to court. We'll push for default on the loan and we'll push for default on all Ukrainian debts."

          The basis for Russia's legal claim, he explained was that the loan

          was a request from the Ukrainian Government to the Russian Government. If two governments reach an agreement this is obviously a sovereign loan…. Surprisingly, however, international financial organisations started saying that this is not exactly a sovereign loan. This is utter bull. Evidently, it's just an absolutely brazen, cynical lie. … This seriously erodes trust in IMF decisions. I believe that now there will be a lot of pleas from different borrower states to the IMF to grant them the same terms as Ukraine. How will the IMF possibly refuse them?

          And there the matter stands. As President Putin remarked regarding America's support of Al Qaeda, Al Nusra and other ISIS allies in Syria, "Do you have any idea of what you have done?"

          The Blowback

          Few have calculated the degree to which America's New Cold War with Russia is creating a reaction that is tearing up the world's linkages put in place since World War II. Beyond pulling the IMF and World Bank tightly into U.S. unilateralist geopolitics, how long will Western Europe be willing to forego its trade and investment interest with Russia? Germany, Italy and France already are feeling the strains. If and when a break comes, it will not be marginal but a seismic geopolitical shift.

          The oil and pipeline war designed to bypass Russian energy exports has engulfed the Near East in anarchy for over a decade. It is flooding Europe with refugees, and also spreading terrorism to America. In the Republican presidential debate on December 15, 2015, the leading issue was safety from Islamic jihadists. Yet no candidate thought to explain the source of this terrorism in America's alliance with Wahabist Saudi Arabia and Qatar, and hence with Al Qaeda and ISIS/Daish as a means of destabilizing secular regimes seeking independence from U.S. control.

          As its allies in this New Cold War, the United States has chosen fundamentalist jihadist religion against secular regimes in Libya, Iraq, Syria, and earlier in Afghanistan and Turkey. Going back to the original sin of CIA hubris – overthrowing the secular Iranian Prime Minister leader Mohammad Mosaddegh in 1953 – American foreign policy has been based on the assumption that secular regimes tend to be nationalist and resist privatization and neoliberal austerity.

          Based on this fatal long-term assumption, U.S. Cold Warriors have aligned themselves not only against secular regimes, but against democratic regimes where these seek to promote their own prosperity and economic independence, and to resist neoliberalism in favor of maintaining their traditional mixed public/private economy.

          This is the back story of the U.S. fight to control the rest of the world. Tearing apart the IMF's rules is only the most recent chapter. The broad drive against Russia, China and their prospective Eurasian allies has deteriorated into tactics without a realistic understanding of how they are bringing about precisely the kind of world they are seeking to prevent – a multilateral world.

          Arena by arena, the core values of what used to be American and European social democratic ideology are being uprooted. The Enlightenment's ideals of secular democracy and the rule of international law applied equally to all nations, classical free market theory (of markets free from unearned income and rent extraction by special vested interests), and public investment in infrastructure to hold down the cost of living and doing business are to be sacrificed to a militant U.S. unilateralism as "the indispensible nation." Standing above the rule of law and national interests, American neocons proclaim that their nation's destiny is to wage war to prevent foreign secular democracy from acting in ways other than submission to U.S. diplomacy. In practice, this means favoring special U.S. financial and corporate interests that control American foreign policy.

          This is not how the Enlightenment was supposed to turn out. Classical industrial capitalism a century ago was expected to evolve into an economy of abundance. Instead, we have Pentagon capitalism, finance capitalism deteriorating into a polarized rentier economy, and old-fashioned imperialism.

          The Dollar Bloc's Financial Iron Curtain

          By treating Ukraine's nullification of its official debt to Russia's Sovereign Wealth Fund as the new norm, the IMF has blessed its default on its bond payment to Russia. President Putin and foreign minister Lavrov have said that they will sue in British courts. But does any court exist in the West not under the thumb of U.S. veto?

          What are China and Russia to do, faced with the IMF serving as a kangaroo court whose judgments are subject to U.S. veto power? To protect their autonomy and self-determination, they have created alternatives to the IMF and World Bank, NATO and behind it, the dollar standard.

          America's recent New Cold War maneuvering has shown that the two Bretton Woods institutions are unreformable. It is easier to create new institutions such as the A.I.I.B. than to retrofit old and ill-designed ones burdened with the legacy of their vested founding interests. It is easier to expand the Shanghai Cooperation Organization than to surrender to threats from NATO.

          U.S. geostrategists seem to have imagined that if they exclude Russia, China and other SCO and Eurasian countries from the U.S.-based financial and trade system, these countries will find themselves in the same economic box as Cuba, Iran and other countries have been isolated by sanctions. The aim is to make countries choose between impoverishment from such exclusion, or acquiescing in U.S. neoliberal drives to financialize their economies and impose austerity on their government sector and labor.

          What is lacking from such calculations is the idea of critical mass. The United States may use the IMF and World Bank as levers to exclude countries not in the U.S. orbit from participating in the global trade and financial system, and it may arm-twist Europe to impose trade and financial sanctions on Russia. But this action produces an equal and opposite reaction. That is the eternal Newtonian law of geopolitics. The indicated countermeasure is simply for other countries to create their own international financial organization as an alternative to the IMF, their own "aid" lending institution to juxtapose to the U.S.-centered World Bank.

          All this requires an international court to handle disputes that is free from U.S. arm-twisting to turn international law into a kangaroo court following the dictates of Washington. The Eurasian Economic Union now has its own court to adjudicate disputes. It may provide an alternative Judge Griesa's New York federal court ruling in favor of vulture funds derailing Argentina's debt negotiations and excluding it from foreign financial markets. If the London Court of International Arbitration (under whose rules Russia's bonds issued to Ukraine are registered) permits frivolous legal claims (called barratry in English) such as President Poroshenko has threatened in Ukrainian Parliament, it too will become a victim of geopolitical obsolescence.

          The more nakedly self-serving and geopolitical U.S. policy is – in backing radical Islamic fundamentalist outgrowths of Al Qaeda throughout the Near East, right-wing nationalist governments in Ukraine and the Baltics – the greater the catalytic pressure is growing for the Shanghai Cooperation Organization, AIIB and related Eurasian institutions to break free of the post-1945 Bretton Woods system run by the U.S. State, Defense and Treasury Departments and NATO superstructure.

          The question now is whether Russia and China can hold onto the BRICS and India. So as Paul Craig Roberts recently summarized my ideas along these lines, we are back with George Orwell's 1984 global fracture between Oceanea (the United States, Britain and its northern European NATO allies) vs. Eurasia.

          ... .... ....

          RabidGandhi December 18, 2015 at 9:16 am

          My issue with Hudson is that he tends to paint things in a "good guys/bad guys" dichotomy viz. the IMF vs. the AIIB. Personally, I think it's quite positive that the international sovereign finance institutions will now be more international and less unipolar, but his scenario where

          Nations would mint their own money and hold each other's debt in their international reserves instead of borrowing or holding dollars and subordinating their financial planning to the IMF and U.S. Treasury with their demands for monetary bloodletting and austerity for debtor countries.

          is rather pie-in-the sky. What reason do we have to believe that concentrated Chinese capital would somehow be more benevolent than our current overlords? Oh because AIIB has the word "infrastructure" in its title (just as the Interamerican Development Bank is all about development) /sarc.

          Furthermore, if US planners had half a clue about economics, they would be jumping for joy that the AIIB and the CIPS will finally help release them (eventually) from the burden of having the USD as the global reserve currency, thus relieving the US of the albatross of having to ship its internal demand to China and other net exporters.

          All in all, yes AIIB should be positive, but as Hudson himself points out, this is not so much about economics as it is geopolitics. The world should tread with the utmost caution.

          Dino Reno December 18, 2015 at 9:48 am

          I think his main point is not so much about economics or geopolitics, it's about the rule of law, specifically international law and how it applies to the debt collection brokered between counties.

          China and Russia harbored the fantasy that would be allowed redress in the Western Courts where international law is metered out. They are now no longer under that delusion.

          Even if they come up with a lending facility, the West will thwart their ability to collect on those debts at every turn by simply declaring those debts null and void and extending new funds using the infrastructure build by the bad (Russian/Chinese) debt as collateral. The thirst for power and profit will always be with us, but now it will not be tempered by any international order under the rule of law.

          Nick December 18, 2015 at 10:15 am

          China is learning the hard way how the game is played. For example, they're discovering that much of the tens of billions in no-strings attached loans given to Africa will not provide the returns initially thought (even accounting for massive corruption on all sides), which is why they have been reduced for the first time in a decade this past year.

          Alejandro December 18, 2015 at 10:41 am

          Don't see how "economics" and "social" can be de-linked from "politics"…understanding the limits of "local" may provide an awareness of the "quid pro quo" of extending, direction of extension, and what defines (in/inter) "dependency"…how sacrifice is "shared" or imposed, and how "prosperity" is concentrated or distributed…

          OpenThePodBayDoorsHAL December 18, 2015 at 2:50 pm

          It's not Hudson but the US that has simplified the entire world situation into "good guys vs. bad guys", a policy enshrined in Rumsfeld's statement "you're either with us or you're against us".

          It's like a playground with one big bully and lots of kids running scared, now a second bully appears and they all have to ask themselves whether Bully #2 will be nicer to them, in this case it appears Bully #2 is saying he won't tell them how to run their lives or steal their lunch money.

          Post-comet in 2000 when everything started going to hell the worst casualty has been the rule of law, from hanging chads through to the Patriot Act, death by a thousand cuts of the Constitution, unprosecuted war crimes, unprosecuted financial crimes, and now the very fabric of international law being rent apart. I'm reminded of the Hunter Thompson scene where he has an expired driver's license and a cop pulls him over, he has two choices, hand over the license and get busted, or drive away and get busted… so he comes up with a third choice: he blows his nose all over the license and hands it over to the cop. The equivalent of Bully #1 taking the only soccer ball on the playground and kicking it over the fence so the game is screwed up for everybody, Pepe's "Empire of Chaos" indeed.

          global123 December 18, 2015 at 9:47 am

          stellar article michael hudson

          1)Western economies depend on ocean transport…if chinese or ruskies destroy it, USA-EU will be bankrupt in weeks..USA-EU are consumers and not producers..their exports to rest of world are tiny..So,their position is very weak at this point
          2)The asian countries like china-india will be forced to join hands under joint attack by US financial system and islamic jihadists..Russia and china,former enemies,are now friends…who could have imagines it?
          Russo-chinese-iranian alliance is huge failure of US foreign policies
          3)Using islamic terrorists and islamic countries like turkey-saudi arabia-pakistan-indonesia-egypt is not going to work for USA because muslims think USA as enemy no.1…
          4)A military superiority can not guarantee permanent -everlasting victory against too many opponents
          What i see here is USA has made entire islamic world their enemy,alongwith china and russia
          In case of real war,USA position will be very weak

          camelotkidd December 18, 2015 at 9:49 am

          This is an amazing article. Bravo!
          Now it's becoming clear just what Margaret Thatcher meant when she told everyone that there was no alternative to neoliberalism.

          Steve H. December 18, 2015 at 10:00 am

          Thank you for continuing to mark the historical specifics of the finance/legal wing of geopolitical conflict, and the perverse failings of Full Spectrum Dominance.

          The Oceana/Eurasia dichotomy is a dangerous frame of reference. It essentially contrasts the transport efficiencies of water to the solid defensive capacity of the frozen steppes. But when things get bloody, they usually crack along language lines. Not only as a proxy for migrations of the gene, but also world-views. How horse-people see things, what metaphors they use, are very different than how cow-people categorize the world.

          This highlights that Russia is continuing to operate within the language and legal framework of the Indo-European languages. In other words (!), it is a fight between the U.S. and Russia for European alliances. If this is the case, then the alliance of NATO with Turkic and Arabic lines is of convenience, in that they are not partners but proxies. Europe is faced with the habit of the U.S. in saying, Let's you and him fight. But there's an oceans difference between the U.S. and European interests.

          It also means that Russia and China are being pushed together by western exclusion, like drops of oil on the water. I maintain that Russia has doubled down on global warming, to open up northern sea routes and make the steppes arable. China is already a sea-power, but its massive population will need lebensraum as the fossil-fuel support for the energy needs of megapoli decay. The mountains are a formidable barrier for them to take the steppes by force.

          The question for the rest of the world then becomes, who do you want to have as a friend in a hundred years. Do you bet on the Wizards of Wall Street, with their Magic Money Wand of Fiat? Or do you think Russia will ground-n-pound the fairy dust into the mud?

          SocietalIllusions December 18, 2015 at 11:17 am

          what is left unsaid is the choices Russia then faces once their legal options play out and the uneven playing field is fully exposed. Do they not then have a historically justifiable basis for declaring war?

          The game of brinksmanship continues…

          Jim Haygood December 18, 2015 at 11:18 am

          'The Russian and Chinese governments are investing in neighboring economies on terms that cement Eurasian economic integration.'

          Whereas the U.S. is 'investing' in new military bases to cement U.S. global domination.

          Guess which model actually benefits local living standards, and 'wins hearts and minds'?

          Global domination as a policy goal bankrupted the USSR. It's not working for the USSA either, as the U.S. middle class (once the envy of the world) visibly sinks into pauperization.

          Thus the veracity of Michael Hudson's conclusion that 'when a break comes, it will not be marginal but a seismic geopolitical shift.'

          Steven December 18, 2015 at 1:56 pm

          I get the same thrill reading Hudson the religiously devout must experience reading their bibles or Korans – a glimpse of 'truth' as best it can be known. My first encounter was this interview in Counterpunch: An Interview with Michael Hudson, author of Super Imperialism That led directly to "Super Imperialism" (and just about every book since its publication). After reading it, I was left with the uneasy feeling that no good would come from an international monetary system that allowed any one nation to pay its way in the world by creating money 'out of thin air' i.e. as sovereign and private debt or, almost the same thing, Federal Reserve Notes.

          The race to the bottom of off-shored jobs and industries freed from all environmental restrictions, AKA 'globalization', had started to really kick in but it was just before Operation Iraqi Liberation (get it?). Fundamentally, it wasn't war for oil, of course, but a war to preserve the Dollar Standard. Recycling petrodollars bought a little time after the 1971 collapse of Bretton Woods. But with the world's treasuries filling up with US dollars and debt, the product of the Congressional-military-industrial-complex running wild and more recently the U.S. 0.01% successfully evading almost all forms of taxation, some kind of control more basic than controlling the world's access to money (which basically means credit) was required.

          When people like Alan Greenspan (pretend to) come clean, you really want to look twice:

          THOUGH it was not understood a century ago, and though as yet the applications of the knowledge to the economics of life are not generally realized, life in its physical aspect is fundamentally a struggle for energy, in which discovery after discovery brings life into new relations with the original source.

          Frederick Soddy, WEALTH, VIRTUAL WEALTH AND DEBT, 2nd edition, p. 49
          The world can live without American dollars, especially these days when the U.S. no longer makes much the world needs or can afford but most obviously because it already possesses more of them than can ever be redeemed ('debt that can't be repaid and won't be') What it can't live without is ENERGY.

          So long as most of that energy needs to be pumped out of the ground, the nation that ultimately controls access to the pumps – or to the distribution networks required to deliver it to the ultimate user – controls the world. This is most likely why Reagan promptly dismantled Jimmy Carter's White House solar panels. It is why the US and its European vassals have been dragging their feet for a half-century on the development of renewable energy sources and the electrification of transportation. It is why the banks and Wall Street will stand solidly behind the various electrical utilities efforts to discourage the development of any alternative energy sources from which their executives and shareholders can not extract the last pint of blood or has Hudson more politely calls it 'economic rent'.

          P.S. Hudson seems to have a dangerous monopoly on economic truth these days. Is there anyone else who even comes close?

          [Dec 20, 2015] Paul Krugman: The Big Short, Housing Bubbles and Retold Lies

          Notable quotes:
          "... I get the feeling that if doing a film review of The Force Awakens , most economists would be rooting for the Empire to win - after all the empire will bring free trade within its borders, like the EU. ..."
          "... In market fundamentalist world, markets dont fail. They can only be failed. Though its still not clear how they think a little bit of government incentive for loans to low income borrowers caused the entire financial sector to lose its mind wrt CDOs. ..."
          "... The distribution of the use of credit between pure financial speculation and productive investment is not a function of interest rates, but of things like bank culture, bank regulation and macro-economic and technological prospects. ..."
          "... ....Supervising regulators need to look carefully at the ratio of credit used for financial trading compared to credit used for what weve called real-economy matters. They should adjust the level of monitoring based on this view while they also inform policy makers including those in the legislature. ..."
          "... except that a significant chunk of institutional investors have sticky nominal targets for return thanks to the politics of return expectation setting (true for pension fund and endowments) -- low interest rates do encourage chasing phantoms or looking to extract some rents, for those subject to that kind of pressure ..."
          "... The relationship between low interest rates and bubbles has nothing to do with the above. Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low. Raising asset prices and the resultant higher net worth was supposed to lead to higher spending today. But outsized returns also attracts speculation. what is so difficult to understand? John Williams of SF Fed has shown how positive returns in asset markets raises the speculators expected returns. when this dynamic gets out of control, it is a bubble. ..."
          "... Yes, indeed. And who do we have to blame for that? Obama and Holder, of course. They made the investigation of mortgage securities fraud DOJs lowest priority. Krugmans Democratic proclivities prevent him from stating the obvious. ..."
          "... Fact is, Obama has intentionally been a lame duck ever since he took office. He was even clueless on how to capitalize on a filibuster-proof majority in the midst of an economic crisis...which brings us to Trump. Many are so desperate for leadership after Obamas hollow presidency that theyll even support a racist demagogue to avoid another empty White House. ..."
          "... Yes you are correct. From 2001 into 2008 when all of the liar and ninja loans were being made, not one government official stepped forward to investigate the possibility of fraud, the predatory lending, the misrepresentation of loans taking place, the loans with teaser rates which later ballooned, the packing of loans with deceptive fees, the illegal kick backs, etc. Not one. To make matters worst, the administration from 2001-2008 aligned itself with the banks along with the maestro hisself Greenspan. ..."
          "... When state AGs took on the burden of investigating the flagrant violations, the administration moves to block them saying they had no jurisdiction to do so. It did this through the OCC issuing rules preventing the states from prosecuting the banks. Besides blocking any investigation, the OCC failed in its mission to audit the banks for which it was by law to do. ..."
          economistsview.typepad.com

          Why are Murdoch-controlled newspapers attacking "The Big Short?"

          'The Big Short,' Housing Bubbles and Retold Lies, by Paul krugman, Commentary, NY Times: In May 2009 Congress created a special commission to examine the causes of the financial crisis. The idea was to emulate the celebrated Pecora Commission of the 1930s, which used careful historical analysis to help craft regulations that gave America two generations of financial stability.

          But some members of the new commission had a different goal. ... Peter Wallison of the American Enterprise Institute, wrote to a fellow Republican on the commission ... it was important that what they said "not undermine the ability of the new House G.O.P. to modify or repeal Dodd-Frank"...; the party line, literally, required telling stories that would help Wall Street do it all over again.

          Which brings me to a new movie the enemies of financial regulation really, really don't want you to see.

          "The Big Short" ... does a terrific job of making Wall Street skulduggery entertaining, of exploiting the inherent black humor of how it went down. ... But you don't want me to play film critic; you want to know whether the movie got the underlying ... story right. And the answer is yes, in all the ways that matter. ...

          The ...housing ... bubble ... was inflated largely via opaque financial schemes that in many cases amounted to outright fraud - and it is an outrage that basically nobody ended up being punished ... aside from innocent bystanders, namely the millions of workers who lost their jobs and the millions of families that lost their homes.

          While the movie gets the essentials of the financial crisis right, the true story ... is deeply inconvenient to some very rich and powerful people. They and their intellectual hired guns have therefore spent years disseminating an alternative view ... that places all the blame ... on ... too much government, especially government-sponsored agencies supposedly pushing too many loans on the poor.

          Never mind that the supposed evidence for this view has been thoroughly debunked..., constant repetition, especially in captive media, keeps this imaginary history in circulation no matter how often it is shown to be false.

          Sure enough, "The Big Short" has already been the subject of vitriolic attacks in Murdoch-controlled newspapers...

          The ... people who made "The Big Short" should consider the attacks a kind of compliment: The attackers obviously worry that the film is entertaining enough that it will expose a large audience to the truth. Let's hope that their fears are justified.

          btg said in reply to pgl...

          I get the feeling that if doing a film review of "The Force Awakens", most economists would be rooting for the Empire to win - after all the empire will bring free trade within its borders, like the EU. Krugman would not, however.

          Sanjait said...

          In market fundamentalist world, markets don't fail. They can only be failed. Though it's still not clear how they think a little bit of government incentive for loans to low income borrowers caused the entire financial sector to lose its mind wrt CDOs.

          Are markets efficient or not? I feel like the fundiesndont really have a coherent explanation for what happened, other than insisting the government somehow did it.

          reason said...

          I wish Krugman would attack the view that is being propagated at the moment that low nominal interest rates (it seems irrespective of the reason for them) foster bubbles. It doesn't make the slightest bit of sense - leverage doesn't just magnify the gains, it magnifies the losses as well - what really counts is expectations regardless of nominal interest rates.)

          The distribution of the use of credit between pure financial speculation and productive investment is not a function of interest rates, but of things like bank culture, bank regulation and macro-economic and technological prospects.

          reason said... December 18, 2015 at 02:32 AM

          It always seem to me that right wing economists credit businessmen with superhuman foresight and sophistication, except when it comes to the actions of the Fed and then something addles their brains and they become completely stupid. As I once put, it seems investors can't understand what the Fed is doing, even though they tell you.

          Sanjait said in reply to reason... December 18, 2015 at 08:06 AM

          That's it exactly. Markets are efficient, unless the government does anything, and then markets lose their minds and it's the government's fault.

          And somehow the RW economists see no problem with this model

          DeDude said in reply to Sanjait... December 18, 2015 at 08:18 AM

          Here is how they evaluate models:

          Good model; one that reaches the "right" good conclusions. Bad model; one that ends up saying stuff nobody should believe in.

          likbez said in reply to Sanjait...

          "Markets are efficient, unless the government does anything"

          This is a dangerous neoliberal dogma. Total lie.

          === quote ===
          The efficient market hypothesis (EMH) is a flavor of economic Lysenkoism which became popular for the last 30 years in the USA. It is a pseudo scientific theory or, in more politically correct terms, unrealistic idealization of market behavior. Like classic Lysenkoism in the past was supported by Stalin's totalitarian state, it was supported by the power of neoliberal state, which is the state captured by financial oligarchy (see Casino Capitalism and Quiet coup for more details).

          Among the factors ignored by EMH is the positive feedback loop inherent in any system based on factional reserve banking, the level of market players ignorance, unequal access to the real information about the markets, the level of brainwashing performed on "lemmings" by controlled by elite MSM and market manipulation by the largest players and the state.

          Economics, it is said, is the study of scarcity. There is, however, one thing that certainly isn't scarce, but which deserves the attention of economists - ignorance.
          ...Conventional economics analyses how individuals choose - maybe rationally, maybe not - from a range of options. But this raises the question: how do they know what these options are? Many feasible - even optimum - options might not occur to them. This fact has some important implications. ...
          Slightly simplifying, we can say that (financial) markets are mainly efficient in separation of fools and their money... And efficient market hypothesis mostly bypasses important question about how the inequity of resources which inevitably affects the outcomes of market participants. For example, the level of education of market players is one aspect of the inequity of resources. Herd behavior is another important, but overlooked in EMH factor.

          http://www.softpanorama.org/Skeptics/Financial_skeptic/Casino_capitalism/Pseudo_theories/Permanent_equilibrium_fallacy/Efficient_market_hypothesys/index.shtml

          JF said in reply to reason...

          Great comment. I especially liked this point: "The distribution of the use of credit between pure financial speculation and productive investment is not a function of"

          ....Supervising regulators need to look carefully at the ratio of credit used for financial trading compared to credit used for what we've called real-economy matters. They should adjust the level of monitoring based on this view while they also inform policy makers including those in the legislature.

          There may be an opportunity in 2017 to revise the statutes so the public plainly says what the rules of Commerce are in these financial 'inter-mediation' areas - society is better served if more of such credit offerings go to investments in the real economy where inputs are real things like employees, supplies, equipment/technologies. The public's law can effect this change.

          david said in reply to JF...

          except that a significant chunk of institutional investors have sticky nominal targets for return thanks to the politics of return expectation setting (true for pension fund and endowments) -- low interest rates do encourage chasing phantoms or looking to extract some rents, for those subject to that kind of pressure

          BenIsNotYoda said in reply to reason...

          "The distribution of the use of credit between pure financial speculation and productive investment is not a function of interest rates, but of things like bank culture, bank regulation and macro-economic and technological prospects."

          The relationship between low interest rates and bubbles has nothing to do with the above. Low interest rates RAISE asset prices. Through the magic of low discount rates, the future earnings and cash flows are worth a lot higher today. This is why Bernanke cut rates and kept them low. Raising asset prices and the resultant higher net worth was supposed to lead to higher spending today. But outsized returns also attracts speculation. what is so difficult to understand? John Williams of SF Fed has shown how positive returns in asset markets raises the speculator's expected returns. when this dynamic gets out of control, it is a bubble.

          Sanjait said in reply to BenIsNotYoda...

          It's hard to see how to your claim that expected returns are high when earnings yields across the board are historically low.

          BenIsNotYoda said in reply to Sanjait...

          That is exactly the point. Expected returns in stocks have nothing to do with earnings growth.

          http://www.frbsf.org/our-district/press/presidents-speeches/williams-speeches/2013/september/asset-price-bubbles-tomorrow-yesterday-never-today/

          Fred C. Dobbs said in reply to reason...

          It does not seem reasonable or fair to pay practically no interest on savings, which is a consequence of Fed policy. A consequence of this is that people go into risky investments that lead to catastrophe, sometimes widespread. If the goal was to get people to spend (i.e. consume) more, it seems that they are persistently & stubbornly frugal.

          anne, December 18, 2015 at 06:37 AM

          http://krugman.blogs.nytimes.com/2015/11/23/shorts-subject/

          November 23, 2015

          Shorts Subject
          By Paul Krugman

          Last night I was invited to a screening of "The Big Short," which I thought was terrific; who knew that collateralized debt obligations and credit default swaps could be made into an edge-of-your-seat narrative (with great acting)?

          But there was one shortcut the narrative took, which was understandable and possibly necessary, but still worth noting.

          In the film, various eccentrics and oddballs make the discovery that subprime-backed securities are garbage, which is pretty much what happened; but this is wrapped together with their realization that there was a massive housing bubble, which is presented as equally contrary to anything anyone respectable was saying. And that's not quite right.

          It's true that Greenspan and others were busy denying the very possibility of a housing bubble. And it's also true that anyone suggesting that such a bubble existed was attacked furiously - "You're only saying that because you hate Bush!" Still, there were a number of economic analysts making the case for a massive bubble. Here's Dean Baker in 2002. * Bill McBride (Calculated Risk) was on the case early and very effectively. I keyed off Baker and McBride, arguing for a bubble in 2004 and making my big statement about the analytics in 2005, ** that is, if anything a bit earlier than most of the events in the film. I'm still fairly proud of that piece, by the way, because I think I got it very right by emphasizing the importance of breaking apart regional trends.

          So the bubble itself was something number crunchers could see without delving into the details of mortgage-backed securities, traveling around Florida, or any of the other drama shown in the film. In fact, I'd say that the housing bubble of the mid-2000s was the most obvious thing I've ever seen, and that the refusal of so many people to acknowledge the possibility was a dramatic illustration of motivated reasoning at work.

          The financial superstructure built on the bubble was something else; I was clueless about that, and didn't see the financial crisis coming at all.

          * http://www.cepr.net/documents/publications/housing_2002_08.pdf

          ** http://www.nytimes.com/2005/08/08/opinion/that-hissing-sound.html

          anne said in reply to anne... December 18, 2015 at 06:43 AM

          http://www.nytimes.com/2002/08/16/opinion/mind-the-gap.html

          August 16, 2002

          Mind the Gap
          By PAUL KRUGMAN

          More and more people are using the B-word about the housing market. A recent analysis * by Dean Baker, of the Center for Economic Policy Research, makes a particularly compelling case for a housing bubble. House prices have run well ahead of rents, suggesting that people are now buying houses for speculation rather than merely for shelter. And the explanations one hears for those high prices sound more and more like the rationalizations one heard for Nasdaq 5,000.

          If we do have a housing bubble, and it bursts, we'll be looking a lot too Japanese for comfort....

          * http://www.cepr.net/documents/publications/housing_2002_08.pdf

          anne said in reply to anne... December 18, 2015 at 06:44 AM

          http://www.nytimes.com/2005/08/08/opinion/that-hissing-sound.html

          August 8, 2005

          That Hissing Sound
          By PAUL KRUGMAN

          This is the way the bubble ends: not with a pop, but with a hiss.

          Housing prices move much more slowly than stock prices. There are no Black Mondays, when prices fall 23 percent in a day. In fact, prices often keep rising for a while even after a housing boom goes bust.

          So the news that the U.S. housing bubble is over won't come in the form of plunging prices; it will come in the form of falling sales and rising inventory, as sellers try to get prices that buyers are no longer willing to pay. And the process may already have started.

          Of course, some people still deny that there's a housing bubble. Let me explain how we know that they're wrong.

          One piece of evidence is the sense of frenzy about real estate, which irresistibly brings to mind the stock frenzy of 1999. Even some of the players are the same. The authors of the 1999 best seller "Dow 36,000" are now among the most vocal proponents of the view that there is no housing bubble.

          Then there are the numbers. Many bubble deniers point to average prices for the country as a whole, which look worrisome but not totally crazy. When it comes to housing, however, the United States is really two countries, Flatland and the Zoned Zone.

          In Flatland, which occupies the middle of the country, it's easy to build houses. When the demand for houses rises, Flatland metropolitan areas, which don't really have traditional downtowns, just sprawl some more. As a result, housing prices are basically determined by the cost of construction. In Flatland, a housing bubble can't even get started.

          But in the Zoned Zone, which lies along the coasts, a combination of high population density and land-use restrictions - hence "zoned" - makes it hard to build new houses. So when people become willing to spend more on houses, say because of a fall in mortgage rates, some houses get built, but the prices of existing houses also go up. And if people think that prices will continue to rise, they become willing to spend even more, driving prices still higher, and so on. In other words, the Zoned Zone is prone to housing bubbles.

          And Zoned Zone housing prices, which have risen much faster than the national average, clearly point to a bubble....

          EMichael said in reply to anne... December 18, 2015 at 06:59 AM

          Yeah, the only thing he missed was the timing of the collapse. The day he wrote this the Fed had already raised rates 250% in one year, on the way to a total of 400% in the next 6 months.

          Yet prices accelerated until the top was reached a year after the column.

          anne said in reply to EMichael... December 18, 2015 at 07:43 AM

          http://www.nytimes.com/2006/08/25/opinion/25krugman.html

          August 25, 2006

          Housing Gets Ugly
          By PAUL KRUGMAN

          Bubble, bubble, Toll's in trouble. This week, Toll Brothers, the nation's premier builder of McMansions, announced that sales were way off, profits were down, and the company was walking away from already-purchased options on land for future development.

          Toll's announcement was one of many indications that the long-feared housing bust has arrived. Home sales are down sharply; home prices, which rose 57 percent over the past five years (and much more than that along the coasts), are now falling in much of the country. The inventory of unsold existing homes is at a 13-year high; builders' confidence is at a 15-year low.

          A year ago, Robert Toll, who runs Toll Brothers, was euphoric about the housing boom, declaring: "We've got the supply, and the market has got the demand. So it's a match made in heaven." In a New York Times profile of his company published last October, he dismissed worries about a possible bust. "Why can't real estate just have a boom like every other industry?" he asked. "Why do we have to have a bubble and then a pop?"

          The current downturn, Mr. Toll now says, is unlike anything he's seen: sales are slumping despite the absence of any "macroeconomic nasty condition" taking housing down along with the rest of the economy. He suggests that unease about the direction of the country and the war in Iraq is undermining confidence. All I have to say is: pop! ...

          EMichael said in reply to anne... December 18, 2015 at 07:52 AM

          "Mr. Toll now says, is unlike anything he's seen: sales are slumping despite the absence of any "macroeconomic nasty condition""

          You gotta love builders and RE agents. It wasn't macro that caused it, it was default rates across the board on supposedly safe investments that caused mortgage money supply to totally disappear.

          One day people will understand that payments are the key to all finance.

          JohnH said...

          "and it is an outrage that basically nobody ended up being punished ."

          Yes, indeed. And who do we have to blame for that? Obama and Holder, of course. They made the investigation of mortgage securities fraud DOJ's lowest priority. Krugman's Democratic proclivities prevent him from stating the obvious.

          I' m sure that pgl and his band of merry Obamabots will try to spin this in Obama's favor...I.e. Congress prevented him from implementing the law, even though Congress has nothing to do with it.

          Fact is, Obama has intentionally been a lame duck ever since he took office. He was even clueless on how to capitalize on a filibuster-proof majority in the midst of an economic crisis...which brings us to Trump. Many are so desperate for leadership after Obama's hollow presidency that they'll even support a racist demagogue to avoid another empty White House.

          run75441 said in reply to JohnH...

          Yes you are correct. From 2001 into 2008 when all of the liar and ninja loans were being made, not one government official stepped forward to investigate the possibility of fraud, the predatory lending, the misrepresentation of loans taking place, the loans with "teaser" rates which later ballooned, the packing of loans with deceptive fees, the illegal kick backs, etc. Not one. To make matters worst, the administration from 2001-2008 aligned itself with the banks along with the maestro hisself "Greenspan."

          When state AGs took on the burden of investigating the flagrant violations, the administration moves to block them saying they had no jurisdiction to do so. It did this through the OCC issuing rules preventing the states from prosecuting the banks. Besides blocking any investigation, the OCC failed in its mission to audit the banks for which it was by law to do.

          What was the SEC doing during this time period? What was the administration doing with Enron in 2002? Didn't Cheney get sued by the GAO to find out who he was talking to at Enron?

          Yes there is the matter of not prosecuting banking execs after 2008; however, the issue was allowed to grow during the prior administration and left on the next administration's doorstep. Closing the barn door after the perps have escaped is a bit late and it should have been stopped dead in its tracks during the prior 8 years.

          So keep going down that path and we can also talk about fraud with tranching, CDS, Naked CDs, reserves, etc.

          So, where was the administration during this time period?

          DeDude said...

          Subprime loans in poor communities represented a very small fraction of the total subprime volume and defaulted loans. I mean talk about the mouse and the elephant. Yet the FoxBots are being convinced to look at those scary mice and all that thundering noise they are making.

          Alex H said in reply to Peter K....
          In the book, one of the supposed villains went to the division of AIG that was selling CDSes (i.e. "insuring" the toxic crap) and explained to a direct subordinate of the division exactly how his bank and the other companies of Wall Street were suckering them into taking on absurd risks. In *2005*.

          Because he was massively short in this market, and AIG pulling the plug would have popped the bubble. Nobody else was selling CDSes (then), and Wall Street couldn't have pretended that their risks were covered without them. That doesn't make him a hero, but seriously, if AIG had listened, no collapse.

          Several of the characters effectively called up the ratings agencies to shout at them. Others called NYT and WSJ reporters, who ignored them. Then they called the SEC's enforcement division, who ignored them.

          Besides, if the other side in all of those bets were foreign "widows and orphans", then it wouldn't have wrecked the financial system. If Bear Stearns had been sitting as the middleman between a Korean pension fund and Steve Eisman, they'd have just taken their cut and moved on.

          [Dec 19, 2015] Russia opens black box of jet downed by Turkey

          Notable quotes:
          "... I believe it was not there on patrol, but specifically to shoot the Russian plane down and come back ..."
          "... Although I believe the Turkish map, I still think the Turks proved themselves on the side of the terrorists. ..."
          "... Crossing that strip of Turkish territory by a friendly plane should not have been reason for shooting it down, only a PRETEXT. That may be the reason why the plane was shot down, because the Russians were not expecting the Turks to shoot at them. ..."
          news.yahoo.com

          Mister 2 hours ago 0

          [The air force commander said 14 countries had been invited to monitor the (Russian) investigation but only China and Britain had accepted the official offer]

          Shameful.

          Shelly Winters 1 day ago 5

          Not sure what information this "black box" contains, but CVR's and FDR's in most all aircraft (especially commercial jetliners) records only what the flight crew says in the cockpit and what operational parameters the aircraft experienced i.e. throttle settings, aileron positions, pitch, etc. It's questionable if the downed fighter aircraft's actual flight path would be stored internally in any such device, especially a fighter aircraft operating in hostile airspace. This data the Russians claim to have, if it really exists, could be certainly manipulated. The only true data for flight path would be a ground radar tape pulled from two different locations in the area.

          James

          I said it before, I believe the radar map the Turks showed with the paths was correct. And here are the military, but also their Religious reasons.

          "War of the maps: Turkey released a map showing where Russia violated its airspace, and Russia countered"

          /finance[dot]yahoo[dot]com/news/war-maps-turkey-released-map-210422386.html

          You can see there is a very narrow strip of Turkish territory, about a mile wide, protruding deep into the Syrian territory. I don't know exactly the frequency of the sweep of the Turkish radar, but still, looking at the distances between dots, you can figure out the speed. The time to cross the Turkish strip must have been no longer than 20seconds, my initial estimate was 8, the Turks later said 17, but that's not important. The Russian plane is seen to make a wide circle near the Syrian border, flying much below it's maximum speed, probably looking for terrorist bases and convoys, and which circles crossed that limb. It was flying slow and probably low, and in circles, to get a good look. During the next cycle, I do believe the Turks warned it while flying over Syria, 10 times during 5' not to cross that 1 mile strip again. The Russian Su-24 bomber is seen heading for the strip the second time. Notice the Su-24 is a bomber not a dog-fighter like the F-16 and it's older. And there were two F-16's. The Turkish map shows only one path though. But the Russian maps shows only one too! On the Turkish map though, the F-16 is seen lurking in the air, and at some point accelerated sharply, approaching very close and very fast, probably in full afterburner, which is specifically reserved for attack.

          I believe it was not there on patrol, but specifically to shoot the Russian plane down and come back. At (probably) the same time, the Russian path is seen with a very sharp small quirk. A sort of a mini-loop. I am sure they were trying to avoid incoming missiles. Their plane got hit, and it is seen trying to accelerate, probably to flee, and then the record ends.

          HOWEVER ----------------- Although I believe the Turkish map, I still think the Turks proved themselves on the side of the terrorists.

          After all, if the Russian plane was trying to get rid of the terrorists at the Turkish border, and no HONEST state wants terrorists at it's border, and the Russians were trying to do the "dirty job" of getting rid of them, Turkey should have been glad the Russians are helping them. But the fact they shot the Russian plane down, proves Turkey is harboring and abetting terrorists, if not recruits and send them itself.

          Crossing that strip of Turkish territory by a friendly plane should not have been reason for shooting it down, only a PRETEXT. That may be the reason why the plane was shot down, because the Russians were not expecting the Turks to shoot at them.

          So the Turks are not technically lying, but they ARE! The Russians probably did go through that miserable strip, and that's the technical truth. But Turkey is defending terrorists, and claiming it is not, that's the lie!

          There are very sharp Religious reasons why they should do that, and still show the correct map. INTERESTING.. Ever heard of Tawriyya? Let me explain it for you in short. The Koran forbids a Muslim to lie, under penalty of the white-hot fires of Hell. But.. We already know if he becomes a Martyr, all his sins including lies will be forgotten.

          But.. for a lie, you will be forgotten, if it's technically, a truth. What does that mean? Say, a Muslim has a $100 bill in his pocket. Somebody comes and asks him for a nickel. He will say: I don't have a nickel in my pockets! That's Tawriya, and Allah will have no reason to send him to Hell, because indeed he does not have a nickel in his pockets! That's a technical truth.

          Erdogan, if he were asked "Are the terrorists working for you"? He could answer "Not a single terrorist is working for me". Indeed. Not one, but thousands. Allah won't punish him for that.

          He could be asked: "Why did you shoot the plane down"? and he could answer "It was flying over our territory". He will not mention the reason was to protect his terrorists and their oil convoys. That's "Kitman". Saying half the truth. Allah won't punish him for that either.

          As for lying to the Infidels, Allah won't punish him if he does it out of fear of the Infidels. Yes, but Islam is at perpetual war with the Infidels, until they either convert or disappear from the face of the Earth by any means, so orders Allah. So being at war with ANY infidel, a Muslim can lie to an Infidel all day and all night long! BUT THEY ARE ALWAYS AT WAR WITH ALL INFIDELS, UNTIL THERE ARE NO MORE INFIDELS! SO ORDERS ALLAH! DO YOU REALIZE WHAT THAT MEANS?

          BUT THE TOUGHEST OF ALL IS THE "MURUNA" DOCTRINE. That literally explains terrorism. If you get to understand, you will be very surprised, of how you didn't know it.

          If you want to find what terrorism is, and why Erdogan himself, said "There is no moderate and extremist Islam. There is only Islam". And he knew what he was talking about, learn more. So find the MURUNA concept or doctrine. You can find a better explanation here:

          You can look on Google for this: "Knowing Four Arabic Words May Save Our Civilization from Islamic Takeover"

          And save it before it disappears.

          Remember, you won't win any battle not knowing your enemy first.

          BTW, did you know where the expression "the writing is on the wall" comes from? I's origin is also explained there.

          [Dec 19, 2015] Ukraine still committed to good faith debt talks with Russia Finance Ministry

          Notable quotes:
          "... Ukraine remains committed ... to negotiating in good faith a consensual restructuring of the December 2015 Eurobonds, Nonsense, they are nothing but thieves in suits; Fascist politicians stealing from the taxpayers in the USA, EU, Russia and the Ukraine. You supporters of modern Fascism are disgusting little NeoCon trolls, yes you are! ..."
          "... Under this IMF restructuring deal with the Ukraine, the oligarchs mandated that Monsanto GMO comes in. Now the once fertile farms will grow poisoned food. ... They also mandated hydraulic fracking rights to Exxon and BP. Now the aquifers will be poisoned. ... Moreover, the IMF social chapter destroys family values and requires that corrosive gay propaganda be thrust into the children's minds. ... Welcome to the new Globalist Business Model. ..."
          "... The Ukraine is like a dying carcass. ... The EU jackals are howling, the IMF vultures are circling, and the NATO hyenas are picking the flesh off of the bones. ..."
          "... Ukraine's Finance Minister, who promised in the above Reuters article today Dec 18, 2015, to talk in good faith with the Russian Federation about their $3 Billion Loan due and payable on Dec 15, as of today is in Default on that $3 Billion Loan , and therefore isn't eligible to receive any Loan from the IMF, headed by Chief Lagarde who must now stand trial for an improper loan of $434 Million . ..."
          "... Good faith? They actually mean bait and switch ..."
          "... The deadbeat American lackeys in Kiev have no intention of paying their debts to Russia because Washington DC is run by thieves and immoral people. You know this is true. ..."
          "... Meanwhile Ukraine has restricted air travel, cutoff Crimea, and fought efforts to grant autonomy to Russian-speaking regions. With unpaid debt, the country still stokes war with Russia after being warned by Mr. Kerry to stop. ..."
          news.yahoo.com

          Algis

          "Ukraine remains committed ... to negotiating in good faith a consensual restructuring of the December 2015 Eurobonds," Nonsense, they are nothing but thieves in suits; Fascist politicians stealing from the taxpayers in the USA, EU, Russia and the Ukraine. You supporters of modern Fascism are disgusting little NeoCon trolls, yes you are!

          Robert

          This is the new Globalist Business Model.

          1. Overthrow a sovereign country by revolution or outright bombing campaign.
          2. Appoint oligarchs to run it and fascists to rule the streets.
          3. Rack the country with unpardonable debt.
          4. Bring in the IMF and other global banks to 'restructure' the economy.
          5. Loot the country's resources by selling off the infrastructure for pennies on the dollar.
          6. Impose huge austerity programs. ... Cuts pensions in half and double basic living costs.
          7. Finally, colonialize the citizens under multi-national corporate rule where the people have little or no say.

          Under this IMF restructuring deal with the Ukraine, the oligarchs mandated that Monsanto GMO comes in. Now the once fertile farms will grow poisoned food. ... They also mandated hydraulic fracking rights to Exxon and BP. Now the aquifers will be poisoned. ... Moreover, the IMF social chapter destroys family values and requires that corrosive gay propaganda be thrust into the children's minds. ... Welcome to the new Globalist Business Model.

          The Ukraine is like a dying carcass. ... The EU jackals are howling, the IMF vultures are circling, and the NATO hyenas are picking the flesh off of the bones.

          Algis

          Russia needs to take payment out of their proverbial hides. No one consider it unjustified except a few brainwashed Americans and of course the immoral and corrupt ruling class of the Empire!

          new_federali...

          Ukraine's Finance Minister, who promised in the above Reuters article today Dec 18, 2015, to talk in good faith with the Russian Federation about their $3 Billion Loan due and payable on Dec 15, as of today is in Default on that $3 Billion Loan , and therefore isn't eligible to receive any Loan from the IMF, headed by Chief Lagarde who must now stand trial for an improper loan of $434 Million .

          Therefore, Gold did achieve an all-important triple bottom at $1,050 per ounce this week, and is now in a furious rally up $15 to $1,065 per ounce as DXY (U.S. Dollar Index) falls sharply today due to utter failure of U.S.- led IMF to rescue Ukraine from Financial Collapse today -- Thus Gold will now rally sharply through at least Feb 2016 when Gold will be at $1,500 per ounce, and ultimately going to new all-time highs above $2,000 per ounce -- Dec 18, 2015 at 11:53 a.m. PST.

          Commenter

          Good faith? They actually mean bait and switch

          Algis

          The deadbeat American lackeys in Kiev have no intention of paying their debts to Russia because Washington DC is run by thieves and immoral people. You know this is true.

          RonP

          Meanwhile Ukraine has restricted air travel, cutoff Crimea, and fought efforts to grant autonomy to Russian-speaking regions. With unpaid debt, the country still stokes war with Russia after being warned by Mr. Kerry to stop.

          [Dec 19, 2015] The Enduring Relevance of "Manias, Panics, and Crashes"

          Notable quotes:
          "... Manias, Panics, and Crashes ..."
          "... The New International Money Game ..."
          "... Manias, Panics and Crashes ..."
          "... Why Minsky Matters ..."
          "... Manias, Panics and Crashes ..."
          "... Manias, Panics and Crashes ..."
          December 17, 2015 | Angry Bear

          by Joseph Joyce

          The Enduring Relevance of "Manias, Panics, and Crashes"

          The seventh edition of Manias, Panics, and Crashes has recently been published by Palgrave Macmillan. Charles Kindleberger of MIT wrote the first edition, which appeared in 1978, and followed it with three more editions. Robert Aliber of the Booth School of Business at the University of Chicago took over the editing and rewriting of the fifth edition, which came out in 2005. (Aliber is also the author of another well-known book on international finance, The New International Money Game.) The continuing popularity of Manias, Panics and Crashes shows that financial crises continue to be a matter of widespread concern.

          Kindleberger built upon the work of Hyman Minsky, a faculty member at Washington University in St. Louis. Minsky was a proponent of what he called the "financial instability hypothesis," which posited that financial markets are inherently unstable. Periods of financial booms are followed by busts, and governmental intervention can delay but not eliminate crises. Minsky's work received a great deal of attention during the global financial crisis (see here and here; for a summary of Minksy's work, see Why Minsky Matters by L. Randall Wray of the University of Missouri-Kansas City and the Levy Economics Institute).

          Kindleberger provided a more detailed description of the stages of a financial crisis. The period preceding a crisis begins with a "displacement," a shock to the system. When a displacement improves the profitability of at least one sector of an economy, firms and individuals will seek to take advantage of this opportunity. The resulting demand for financial assets leads to an increase in their prices. Positive feedback in asset markets lead to more investments and financial speculation, and a period of "euphoria," or mania develops.

          At some point, however, insiders begin to take profits and withdraw from the markets. Once market participants realize that prices have peaked, flight from the markets becomes widespread. As prices plummet, a period of "revulsion" or panic ensues. Those who had financed their positions in the market by borrowing on the promise of profits on the purchased assets become insolvent. The panic ends when prices fall so far that some traders are tempted to come back into the market, or trading is limited by the authorities, or a lender of last resort intervenes to halt the decline.

          In addition to elaborating on the stages of a financial crisis, Kindleberger also placed them in an international context. He wrote about the propagation of crises through the arbitrage of divergences in the prices of assets across markets or their substitutes. Capital flows and the spread of euphoria also contribute to the simultaneous rises in asset prices in different countries. (Piero Pasotti and Alessandro Vercelli of the University of Siena provide an analysis of Kindleberger's contributions.)

          Aliber has continued to update the book, and the new edition has a chapter on the European sovereign debt crisis. (The prior edition covered the events of 2008-09.) But he has also made his own contributions to the Minsky-Kindleberger (and now –Aliber) framework. Aliber characterizes the decades since the early 1980s as "…the most tumultuous in monetary history in terms of the number, scope and severity of banking crises." To date, there have been four waves of such crises, which are almost always accompanied by currency crises. The first wave was the debt crisis of developing nations during the 1980s, and it was followed by a second wave of crises in Japan and the Nordic countries in the early 1990s. The third wave was the Asian financial crisis of 1997-98, and the fourth is the global financial crisis.

          Aliber emphasizes the role of cross-border investment flows in precipitating the crises. Their volatility has risen under flexible exchange rates, which allow central banks more freedom in formulating monetary policies that influence capital allocation. He also draws attention to the increases in household wealth due to rising asset prices and currency appreciation that contribute to consumption expenditures and amplify the boom periods. The reversal in wealth once investors revise their expectations and capital begins to flow out makes the resulting downturn more acute.

          These views are consistent in many ways with those of Claudio Borio of the Bank for International Settlements (see also here). He has written that the international monetary and financial system amplifies the "excess financial elasticity," i.e., the buildup of financial imbalances that characterizes domestic financial markets. He identifies two channels of transmission. First, capital inflows contribute to the rise in domestic credit during a financial boom. The impact of global conditions on domestic financial markets exacerbates this development (see here). Second, monetary regimes may facilitate the expansion of monetary conditions from one country to others. Central bankers concerned about currency appreciation and a loss of competitiveness keep interest rates lower than they would otherwise, which furthers a domestic boom. In addition, the actions of central banks with international currencies such as the dollar has international ramifications, as the current widespread concern about the impending rise in the Federal Funds rate shows.

          Aliber ends the current edition of Manias, Panics and Crashes with an appendix on China's financial situation. He compares the surge in China's housing markets with the Japanese boom of the 1980s and subsequent bust that initiated decades of slow economic growth. An oversupply of new housing in China has resulted in a decline in prices that threatens the solvency of property developers and the banks and shadow banks that financed them. Aliber is dubious of the claim that the Chinese government will support the banks, pointing out that such support will only worsen China's indebtedness. The need for an eighth edition of Manias, Panics and Crashes may soon be apparent.

          cross posted with Capital Ebbs and Flows

          [Dec 19, 2015] Turkey Blasts Breakthrough UN Resolution On Syria It Lacks Perspective. Assad Must Go!

          Notable quotes:
          "... "Now, is there a way of us constructing a bridge, creating a political transition, that allows those who are allied with Assad right now, allows the Russians, allows the Iranians to ensure that their equities are respected, that minorities like the Alawites are not crushed or retribution is not the order of the day? I think that's going to be very important as well." ..."
          "... Seymour Hersh Links Turkey to Benghazi, Syria and Sarin ..."
          "... The assessment of the Defense Intelligence Agency is that the sarin was supplied by Turkey to elements in Ghouta with the intent of "push[ing] Obama over the red line. " Intercepted transmissions from Turkish operators in the aftermath of the attack are jubilant, and the success of their covert mission must have seemed well in hand. Obama's implicit call to war in the coming month was proof of that. ..."
          Dec 19, 2015 | Zero Hedge
          Following June elections in which AKP lost its absolute parliamentary majority thanks in part to a stronger than expected showing at the polls by the pro-Kurdish HDP, Turkish President Recip Tayyip Erdogan began to lose his mind.

          The vote put in jeopardy Erdogan's bid to effectively rewrite the country's constitution on the way to consolidating his power in an executive presidency. That decisively undesirable outcome could not stand and so Erdogan did what any respectable autocrat would do: he nullified the election. First, the President undermined the coalition building process so he could call for new elections. Next, he fanned the flames of civil war and reignited a long-simmering conflict with the PKK. The idea was to scare the electorate into believing that a "strong" AKP government was the only antidote to domestic and international terror. Finally, Erdogan cracked down on the press and anyone else critical of his rule. AKP was also suspected of covertly backing attacks on HDP offices and newspapers. Some (i.e. the PKK) went so far as to suggest that Erdogan secretly worked with Sunni extremists to orchestrate suicide bombings - in other words, there's speculation Erdogan terrorized his own people.

          Sure enough, AKP had a better showing at re-do elections last month, but by that point, Erdogan was on the fast track to dictatorial delirium. On November 24, he shot down a Russian fighter jet near the border with Syria in the first such direct military confrontation between Russia and a NATO member in at least six decades. And the madness didn't stop there. After Putin and the Russian MoD laid out their case against Ankara's role in financing Islamic State via Turkey's complicity in the group's lucrative oil trafficking business, Turkey sent hundreds of troops and around two dozen tanks to Bashiqa in Iraq which is right on the crude smuggling route. The deployment infuriated Baghdad and after Turkey refused to pull the troops out, Iraq went to the UN Security Council. Subsequently, Turkish troops were "attacked" by Islamic State.

          The Turks claim that Iraq invited them in the past, a contention Baghdad vehemently denies. Thanks to Barzani and the Kurds, Ankara gets to claim that at least someone welcomes the Turkish troop presence (remember, despite Erdogan's hatred of the PKK and the YPG, Turkey is friendly with Erbil, which relies on Turkey to get some 630,000 b/d of what is technically illegal crude to market).

          Well, for anyone who thought Turkey might be set to bow to international pressure by moving its troops north and thus back towards the Turkey-Iraq border, think again because on Saturday, Turkish PM Ahmet Davutoglu was out with a series of declarations that seem to suggest Turkey is going full-belligerent-retard as Erdogan scrambles to preserve the "Assad must go" narrative on the way to securing whatever Ankara's interests are in both Iraq and Syria.

          First, Davutoglu said that the provision of training to the Peshmerga and Mosul militiamen is "in line with a request from Iraq authorities and as such, the mission in Iraq will continue "until Mosul is freed" from ISIS.

          Ok, so two things there. The deployment is not "in line with a request from Iraq." At this point, Turkey's position has moved from comically absurd to maddeningly obstinate. How many times does Baghdad have to say that Turkey isn't invited before NATO forces Turkey to drop the "they told us we could be here" line? Further, the idea that Turkey will stay until Mosul "is liberated" from ISIS, means Erdogan plans to remain in Iraq indefinitely. As we've documented on several occasions, an operation to retake Mosul is for all intents and purposes a pipe dream and if Turkey intends to wait it out, the troops and tanks could be there for years.

          Next, Davutoglu claims that the Islamic State attacks on Turkish positions in Bashiqa prove Turkey "is right." "Right" about what, it's not clear, but what's interesting is that the attacks came just as ISIS launched its first major offensive in northern Iraq since July in a move that US officials say was likely designed to disrupt preparations for an assault on Mosul. The point: all of this is rather conveniently timed.

          Davutoglu then slammed a UN Security Council resolution agreed in New York on Friday. The meeting of foreign ministers was tipped by John Kerry in Moscow on Tuesday and when discussions ended, diplomats adopted a resolution which purports to draw a road map for ending the war in Syria. As WSJ notes, the resolution "left unresolved divisions among world powers on key issues in the conflict."

          Which "key issues", you ask? Well, the only ones that matter - namely, i) the fate of Bashar al-Assad and ii) which groups should be recognized as "terrorists" and which should be awarded the "moderate opposition" badge.

          "Both issues were left out of the resolution after an hourslong meeting of foreign ministers in New York on Friday failed to reach a compromise and at one point verged on collapse," WSJ goes on the recount, adding that "Russian and Iranian diplomats said the question of Mr. Assad wasn't discussed on Friday because neither of their countries would accept a deal that calls for Mr. Assad's exit, even at the end of a political transition period."

          As we've said on too many occasions to count, Syria is absolutely critical for Tehran when it comes to preserving Iranian influence and ensuring that the so-called "Shiite crescent" doesn't wane. For Russia, this is a chance to supplant the US as Mid-East superpower puppet master and Moscow isn't about to see it slip away by agreeing to a resolution that makes Assad's ouster a foregone conclusion.

          For Turkey, the absence of a decision on Assad's future is maddening. The Security Council resolution "lacks realistic perspective," Davutoglu said on Saturday, before adding that the "Syria crisis can only be solved if Bashar al-Assad leaves power."

          Consider that, and consider the fact that, as we reported yesterday, Ankara is now establishing a military base in Qatar in order that the two country's might work more closely on tackling "common enemies."

          What we're beginning to see here is the formation of three alliances in the Mid-East: 1) Russia, Iran, Syria, and Iraq; 2) Turkey, Saudi Arabia, and Qatar; 3) Britain, France, and Germany. The first alliance is pro-Assad, anti-terror. The second is anti-Assad, pro-Sunni extremist. The third is anti-Assad (although less vehemently so), anti-terror (conspiracy theories aside). Note that we've left the US out. Why? Because Washington is now stuck. The US wants desperately to maintain coordination with Ankara, Riyadh, and Doha, but between stepped up media coverage of Saudi Arabia's role in underwriting extremism (via the promotion of Wahhabism) and hightened scrutiny on Erdogan's role in financing terrorists, the position is becoming increasingly untenable. But aligning solely with the UK, France, and Germany entails adopting a more conciliatory approach to Assad - just ask Berlin which, as we reported on Friday, is now working with Assad's intelligence police and may soon establish a base in Damascus.

          With that in mind, we'll close with the following from Obama, which underscores the extent to which the US is now thoroughly confused as to what to do next:

          "Now, is there a way of us constructing a bridge, creating a political transition, that allows those who are allied with Assad right now, allows the Russians, allows the Iranians to ensure that their equities are respected, that minorities like the Alawites are not crushed or retribution is not the order of the day? I think that's going to be very important as well."

          JustObserving

          First try the sarin gas supplying war criminal, Erdogan

          Turkey supplied the sarin that killed over 1300 Syrians in Ghouta to try to get the Nobel Prize Winner to bomb Assad into oblivion

          Seymour Hersh Links Turkey to Benghazi, Syria and Sarin

          The assessment of the Defense Intelligence Agency is that the sarin was supplied by Turkey to elements in Ghouta with the intent of "push[ing] Obama over the red line." Intercepted transmissions from Turkish operators in the aftermath of the attack are jubilant, and the success of their covert mission must have seemed well in hand. Obama's implicit call to war in the coming month was proof of that.

          http://www.foreignpolicyjournal.com/2014/05/06/seymour-hersh-links-turke...

          WTFRLY

          White House, Media Silent One Year After Murder of US Reporter Who Exposed Western Links to ISIS October 20, 2015

          Turkey killed and American reporter to protect the lies. British reporter Jackie Sutton was found dead a year to the day in Istanbul airport...

          DeadFred
          There aren't that many Turkish troops in Iraq, they can be removed with Iraqi Army and Shiite militia ground troops. The Russian can fly CAP but they shouldn't be involved beyond that. The purpose of Erdogan's insanities is to goad Putin into doing something that will bring NATO against him. He's been wise enough to avoid that so far. The Western economies are a gnats eyelash from collapse so all he needs to so is wait. Maybe selling a few shares of SPY at the right time would help or giving a few billion to some untracable players who call for delivery on their gold futures. I hope he's patient, the end-game is upon us but the fewer nukes that get used the better.
          two hoots

          Israel, where are you in all of this? Oh, see below:

          Forget Qatar/Russia pipelines.

          Israel/Turkey/US/NATO connection found here: "That would allow Turkey to reduce its energy dependence on Russia and open up a new market for Israeli and U.S. developers of a new natural gas project off the Israeli coast." (WSJ)

          http://www.wsj.com/articles/israel-turkey-poised-to-renew-diplomatic-relations-1450438539

          Nat Gas in Israel waters: "Israel has proposed that EU countries invest in a multi-billion euro pipeline to carry its natural gas to the continent, noting that the supply from Israel would reduce Europe's current dependence on natural gas from Russia." (Start Up-Israel)

          http://www.timesofisrael.com/israel-pitches-massive-natural-gas-pipeline-plan-to-europe/

          It could be a whole new NG game? And what thinks Russia/Qatar in all of this?

          [Dec 19, 2015] The Washington Post's Non-Political Fed Looks a Lot Like Wall Street's Fed

          Notable quotes:
          "... Any serious discussion of Fed policy would note that the banking industry appears to have a grossly disproportionate say in the country's monetary policy. ..."
          Dec 19, 2015 | Beat the Press

          ... ... ...

          But what is even more striking is the Post's ability to treat the Fed a neutral party when the evidence is so overwhelming in the opposite direction. The majority of the Fed's 12 district bank presidents have long been pushing for a rate hike. While there are some doves among this group, most notably Charles Evans, the Chicago bank president, and Narayana Kocherlakota, the departing president of the Minneapolis bank, most of this group has publicly pushed for higher rate hikes for some time. By contrast, the governors who are appointed through the democratic process, have been far more cautious about raising rates.

          It should raise serious concerns that the bank presidents, who are appointed through a process dominated by the banking industry, has such a different perspective on the best path forward for monetary policy. With only five of the seven governor slots currently filled, there are as many presidents with voting seats on the Fed's Open Market Committee as governors. In total, the governors are outnumbered at meetings by a ratio of twelve to five.

          Any serious discussion of Fed policy would note that the banking industry appears to have a grossly disproportionate say in the country's monetary policy. Furthermore, it seems determined to use that influence to push the Fed on a path that slows growth and reduces the rate of job creation. The Post somehow missed this story or at least would prefer that the rest of us not take notice.

          * https://www.washingtonpost.com/opinions/the-federal-reserve-makes-a-good-judgment-call-in-raising-interest-rates/2015/12/18/7954e1c6-a4f8-11e5-ad3f-991ce3374e23_story.html

          -- Dean Baker

          [Dec 18, 2015] The Upward Redistribution of Income: Are Rents the Story?

          Looks like growth of financial sector represents direct threat to the society
          Notable quotes:
          "... Perhaps the financialization of the economy and rising inequality leads to a corruption of the political process which leads to monetary, currency and fiscal policy such that labor markets are loose and inflation is low. ..."
          "... Growth of the non-financial-sector == growth in productivity ..."
          "... In complex subject matters, even the most competent person joining a company has to become familiar with the details of the products, the industry niche, the processes and professional/personal relationships in the company or industry, etc. All these are not really teachable and require between months and years in the job. This represents a significant sunk cost. Sometimes (actually rather often) experience within the niche/industry is in a degree portable between companies, but some company still had to employ enough people to build this experience, and it cannot be readily bought by bringing in however competent freshers. ..."
          December 18, 2015 | cepr.netDean Baker:
          Working Paper: : In the years since 1980, there has been a well-documented upward redistribution of income. While there are some differences by methodology and the precise years chosen, the top one percent of households have seen their income share roughly double from 10 percent in 1980 to 20 percent in the second decade of the 21st century. As a result of this upward redistribution, most workers have seen little improvement in living standards from the productivity gains over this period.

          This paper argues that the bulk of this upward redistribution comes from the growth of rents in the economy in four major areas: patent and copyright protection, the financial sector, the pay of CEOs and other top executives, and protectionist measures that have boosted the pay of doctors and other highly educated professionals. The argument on rents is important because, if correct, it means that there is nothing intrinsic to capitalism that led to this rapid rise in inequality, as for example argued by Thomas Piketty.

          Flash | PDF

          RC AKA Darryl, Ron said in reply to Fair Economist, December 18, 2015 at 11:34 AM

          "...the growth of finance capitalism was what would kill capitalism off..."

          "Financialization" is a short-cut terminology that in full is term either "financialization of non-financial firms" or "financialization of the means of production." In either case it leads to consolidation of firms, outsourcing, downsizing, and offshoring to reduce work force and wages and increase rents.

          Consolidation, the alpha and omega of financialization can only be executed with very liquid financial markets, big investment banks to back necessary leverage to make the proffers, and an acute capital gains tax preference relative to dividends and interest earnings, the grease to liquidity.

          It takes big finance to do "financialization" and it takes "financialization" to extract big rents while maintaining low wages.

          RC AKA Darryl, Ron said in reply to RC AKA Darryl, Ron, December 18, 2015 at 11:42 AM
          [THANKS to djb just down thread who supplied this link:]

          http://www.democraticunderground.com/10021305040

          Finance sector as percent of US GDP, 1860-present: the growth of the rentier economy

          [graph]

          Financialization is a term sometimes used in discussions of financial capitalism which developed over recent decades, in which financial leverage tended to override capital (equity) and financial markets tended to dominate over the traditional industrial economy and agricultural economics.

          Financialization is a term that describes an economic system or process that attempts to reduce all value that is exchanged (whether tangible, intangible, future or present promises, etc.) either into a financial instrument or a derivative of a financial instrument. The original intent of financialization is to be able to reduce any work-product or service to an exchangeable financial instrument... Financialization also makes economic rents possible...financial leverage tended to override capital (equity) and financial markets tended to dominate over the traditional industrial economy and agricultural economics...

          Companies are not able to invest in new physical capital equipment or buildings because they are obliged to use their operating revenue to pay their bankers and bondholders, as well as junk-bond holders. This is what I mean when I say that the economy is becoming financialized. Its aim is not to provide tangible capital formation or rising living standards, but to generate interest, financial fees for underwriting mergers and acquisitions, and capital gains that accrue mainly to insiders, headed by upper management and large financial institutions. The upshot is that the traditional business cycle has been overshadowed by a secular increase in debt.

          Instead of labor earning more, hourly earnings have declined in real terms. There has been a drop in net disposable income after paying taxes and withholding "forced saving" for social Security and medical insurance, pension-fund contributions and–most serious of all–debt service on credit cards, bank loans, mortgage loans, student loans, auto loans, home insurance premiums, life insurance, private medical insurance and other FIRE-sector charges. ... This diverts spending away from goods and services.

          In the United States, probably more money has been made through the appreciation of real estate than in any other way. What are the long-term consequences if an increasing percentage of savings and wealth, as it now seems, is used to inflate the prices of already existing assets - real estate and stocks - instead of to create new production and innovation?

          http://en.wikipedia.org/wiki/Financialization

          pgl said in reply to RC AKA Darryl, Ron, December 18, 2015 at 03:25 PM
          Your graph shows something I've been meaning to suggest for a while. Take a look at the last time that the financial sector share of GDP rose. The late 1920's. Which was followed by the Great Depression which has similar causes as our Great Recession. Here is my observation.

          Give that Wall Street clowns a huge increase in our national income and we don't get more services from them. What we get is screwed on the grandest of scales.

          BTW - there is a simple causal relationship that explains both the rise in the share of financial sector income/GDP and the massive collapses of the economy (1929 and 2007). It is called stupid financial deregulation. First we see the megabanks and Wall Street milking the system for all its worth and when their unhanded and often secretive risk taking falls apart - the rest of bear the brunt of the damage.

          Which is why this election is crucial. Elect a Republican and we repeat this mistake again. Elect a real progressive and we can put in place the types of financial reforms FDR was known for.

          Peter K. said in reply to RC AKA Darryl, Ron, December 18, 2015 at 11:50 AM

          " and it takes "financialization" to extract big rents while maintaining low wages."

          It takes governmental macro policy to maintain loose labor markets and low wages. Perhaps the financialization of the economy and rising inequality leads to a corruption of the political process which leads to monetary, currency and fiscal policy such that labor markets are loose and inflation is low.

          djb said...

          http://www.democraticunderground.com/10021305040

          I don't know about the last couple years but this chart indicates a large growth in financials as a share of gdp over the years since the 40's

          RC AKA Darryl, Ron said in reply to djb, December 18, 2015 at 12:03 PM
          [Anne gave you FIRE sector profits as a share of GDP while this gives FIRE sector profits as a share of total corporate profits.]

          *

          [Smoking gun excerpt:]

          "...The financial system has grown rapidly since the early 1980s. In the 1950s, the financial sector accounted for about 3 percent of U.S. gross domestic product. Today, that figure has more than doubled, to 6.5 percent. The sector's yearly rate of growth doubled after 1980, rising to a peak of 7.5 percent of GDP in 2006. As finance has grown in relative size it has also grown disproportionately more profitable. In 1950, financial-sector profits were about 8 percent of overall U.S. profits-meaning all the profit earned by any kind of business enterprise in the country. By the 2000s, they ranged between 20 and 40 percent...

          [Ouch!]

          [Now the whole enchilada:]

          http://www.washingtonmonthly.com/magazine/novemberdecember_2014/features/frenzied_financialization052714.php?page=all

          If you want to know what happened to economic equality in this country, one word will explain a lot of it: financialization. That term refers to an increase in the size, scope, and power of the financial sector-the people and firms that manage money and underwrite stocks, bonds, derivatives, and other securities-relative to the rest of the economy.

          The financialization revolution over the past thirty-five years has moved us toward greater inequality in three distinct ways. The first involves moving a larger share of the total national wealth into the hands of the financial sector. The second involves concentrating on activities that are of questionable value, or even detrimental to the economy as a whole. And finally, finance has increased inequality by convincing corporate executives and asset managers that corporations must be judged not by the quality of their products and workforce but by one thing only: immediate income paid to shareholders.

          The financial system has grown rapidly since the early 1980s. In the 1950s, the financial sector accounted for about 3 percent of U.S. gross domestic product. Today, that figure has more than doubled, to 6.5 percent. The sector's yearly rate of growth doubled after 1980, rising to a peak of 7.5 percent of GDP in 2006. As finance has grown in relative size it has also grown disproportionately more profitable. In 1950, financial-sector profits were about 8 percent of overall U.S. profits-meaning all the profit earned by any kind of business enterprise in the country. By the 2000s, they ranged between 20 and 40 percent. This isn't just the decline of profits in other industries, either. Between 1980 and 2006, while GDP increased five times, financial-sector profits increased sixteen times over. While financial and nonfinancial profits grew at roughly the same rate before 1980, between 1980 and 2006 nonfinancial profits grew seven times while financial profits grew sixteen times.

          This trend has continued even after the financial crisis of 2008 and subsequent financial reforms, including the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act. Financial profits in 2012 were 24 percent of total profits, while the financial sector's share of GDP was 6.8 percent. These numbers are lower than the high points of the mid-2000s; but, compared to the years before 1980, they are remarkably high.

          This explosion of finance has generated greater inequality. To begin with, the share of the total workforce employed in the financial sector has barely budged, much less grown at a rate equivalent to the size and profitability of the sector as a whole. That means that these swollen profits are flowing to a small sliver of the population: those employed in finance. And financiers, in turn, have become substantially more prominent among the top 1 percent. Recent work by the economists Jon Bakija, Adam Cole, and Bradley T. Heim found that the percentage of those in the top 1 percent of income working in finance nearly doubled between 1979 and 2005, from 7.7 percent to 13.9 percent.

          If the economy had become far more productive as a result of these changes, they could have been worthwhile. But the evidence shows it did not. Economist Thomas Philippon found that financial services themselves have become less, not more, efficient over this time period. The unit cost of financial services, or the percentage of assets it costs to produce all financial issuances, was relatively high at the dawn of the twentieth century, but declined to below 2 percent between 1901 and 1960. However, it has increased since the 1960s, and is back to levels seen at the early twentieth century. Whatever finance is doing, it isn't doing it more cheaply.

          In fact, the second damaging trend is that financial institutions began to concentrate more and more on activities that are worrisome at best and destructive at worst. Harvard Business School professors Robin Greenwood and David Scharfstein argue that between 1980 and 2007 the growth in financial-industry revenues came from two things: asset management and loan origination. Fees associated either with asset management or with household credit in particular were responsible for 74 percent of the growth in financial-sector output over that period.

          The asset management portion reflects the explosion of mutual funds, which increased from $134 billion in assets in 1980 to $12 trillion in 2007. Much of it also comes from "alternative investment vehicles" like hedge funds and private equity. Over this time, the fee rate for mutual funds fell, but fees associated with alternative investment vehicles exploded. This is, in essence, money for nothing-there is little evidence that hedge funds actually perform better than the market over time. And, unlike mutual funds, alternative investment funds do not fully disclose their practices and fees publicly.

          Beginning in 1980 and continuing today, banks generate less and less of their income from interest on loans. Instead, they rely on fees, from either consumers or borrowers. Fees associated with household credit grew from 1.1 percent of GDP in 1980 to 3.4 percent in 2007. As part of the unregulated shadow banking sector that took over the financial sector, banks are less and less in the business of holding loans and more and more concerned with packaging them and selling them off. Instead of holding loans on their books, banks originate loans to sell off and distribute into this new type of banking sector.

          Again, if this "originate-to-distribute" model created value for society, it could be a worthwhile practice. But, in fact, this model introduced huge opportunities for fraud throughout the lending process. Loans-such as "securitized mortgages" made up of pledges of the income stream from subprime mortgage loans-were passed along a chain of buyers until someone far away held the ultimate risk. Bankers who originated the mortgages received significant commissions, with virtually no accountability or oversight. The incentive, in fact, was perverse: find the worst loans with the biggest fees instead of properly screening for whether the loans would be any good for investors.

          The same model made it difficult, if not impossible, to renegotiate bad mortgages when the system collapsed. Those tasked with tackling bad mortgages on behalf of investors had their own conflicts of interests, and found themselves profiting while loans struggled. This process created bad debts that could never be paid, and blocked attempts to try and rework them after the fact. The resulting pool of bad debt has been a drag on the economy ever since, giving us the fall in median wages of the Great Recession and the sluggish recovery we still live with.

          And of course it's been an epic disaster for the borrowers themselves. Many of them, we now know, were moderate- and lower-income families who were in no financial position to borrow as much as they did, especially under such predatory terms and with such high fees. Collapsing home prices and the inability to renegotiate their underwater mortgages stripped these folks of whatever savings they had and left them in deep debt, widening even further the gulf of inequality in this country.

          Moreover, financialization isn't just confined to the financial sector itself. It's also ultimately about who controls, guides, and benefits from our economy as a whole. And here's the last big change: the "shareholder revolution," started in the 1980s and continuing to this very day, has fundamentally transformed the way our economy functions in favor of wealth owners.

          To understand this change, compare two eras at General Electric. This is how business professor Gerald Davis describes the perspective of Owen Young, who was CEO of GE almost straight through from 1922 to 1945: "[S]tockholders are confined to a maximum return equivalent to a risk premium. The remaining profit stays in the enterprise, is paid out in higher wages, or is passed on to the customer." Davis contrasts that ethos with that of Jack Welch, CEO from 1981 to 2001; Welch, Davis says, believed in "the shareholder as king-the residual claimant, entitled to the [whole] pot of earnings."

          This change had dramatic consequences. Economist J. W. Mason found that, before the 1980s, firms tended to borrow funds in order to fuel investment. Since 1980, that link has been broken. Now when firms borrow, they tend to use the money to fund dividends or buy back stocks. Indeed, even during the height of the housing boom, Mason notes, "corporations were paying out more than 100 percent of their cash flow to shareholders."

          This lack of investment is obviously holding back our recovery. Productive investment remains low, and even extraordinary action by the Federal Reserve to make investments more profitable by keeping interest rates low has not been able to counteract the general corporate presumption that this money should go to shareholders. There is thus less innovation, less risk taking, and ultimately less growth. One of the reasons this revolution was engineered in the 1980s was to put a check on what kinds of investments CEOs could make, and one of those investments was wage growth. Finance has now won the battle against wage earners: corporations today are reluctant to raise wages even as the economy slowly starts to recover. This keeps the economy perpetually sluggish by retarding consumer demand, while also increasing inequality.

          How can these changes be challenged? The first thing we must understand is the scope of the change. As Mason writes, the changes have been intellectual, legal, and institutional. At the intellectual level, academic research and conventional wisdom among economists and policymakers coalesced around the ideas that maximizing returns to shareholders is the only goal of a corporation, and that the financial markets were always right. At the legal level, laws regulating finance at the state level were overturned by the Supreme Court or preempted by federal regulators, and antitrust regulations were gutted by the Reagan administration and not taken up again.

          At the institutional level, deregulation over several administrations led to a massive concentration of the financial sector into fewer, richer firms. As financial expertise became more prestigious than industry-specific knowledge, CEOs no longer came from within the firms they represented but instead from other firms or from Wall Street; their pay was aligned through stock options, which naturally turned their focus toward maximizing stock prices. The intellectual and institutional transformation was part of an overwhelming ideological change: the health and strength of the economy became identified solely with the profitability of the financial markets.

          This was a bold revolution, and any program that seeks to change it has to be just as bold intellectually. Such a program will also require legal and institutional changes, ones that go beyond making sure that financial firms can fail without destroying the economy. Dodd-Frank can be thought of as a reaction against the worst excesses of the financial sector at the height of the housing bubble, and as a line of defense against future financial panics. Many parts of it are doing yeoman's work in curtailing the financial sector's abuses, especially in terms of protecting consumers from fraud and bringing some transparency to the Wild West of the derivatives markets. But the scope of the law is too limited to roll back these larger changes.

          One provision of Dodd-Frank, however, suggests a way forward. At the urging of the AFL-CIO, Dodd-Frank empowered the Securities and Exchange Commission to examine the activities of private equity firms on behalf of their investors. At around $3.5 trillion, private equity is a massive market with serious consequences for the economy as a whole. On its first pass, the SEC found extensive abuses. Andrew Bowden, the director of the SEC's examinations office, stated that the agency found "what we believe are violations of law or material weaknesses in controls over 50 percent of the time."

          Lawmakers could require private equity and hedge funds to standardize their disclosures of fees and holdings, as is currently the case for mutual funds. The decline in fees for mutual funds noted above didn't just happen by itself; it happened because the law structured the market for actual transparency and price competition. This will need to happen again for the broader financial sector.

          But the most important change will be intellectual: we must come to understand our economy not as simply a vehicle for capital owners, but rather as the creation of all of us, a common endeavor that creates space for innovation, risk taking, and a stronger workforce. This change will be difficult, as we will have to alter how we approach the economy as a whole. Our wealth and companies can't just be strip-mined for a small sliver of capital holders; we'll need to bring the corporation back to the public realm. But without it, we will remain trapped inside an economy that only works for a select few.

          [Whew!]

          Puerto Barato said in reply to RC AKA Darryl, Ron,
          "3 percent of U.S. gross domestic product. Today, that figure has more than doubled, to 6.5"
          ~~RC AKA Darryl, Ron ~

          Growth of the non-financial-sector == growth in productivity

          Growth of the financial-sector == growth in upward transfer of wealth

          Ostensibly financial-sector is there to protect your money from being eaten up by inflation. Closer inspection shows that the prevention of *eaten up* is by the method of rent collection.

          Accountants handle this analysis poorly, but you can see what is happening. Boiling it down to the bottom line you can easily see that wiping out the financial sector is the remedy to the Piketty.

          Hell! Financial sector wiped itself out in 008. Problem was that the GSE and administration brought the zombie back to life then put the vampire back at our throats. What was the precipitating factor that snagged the financial sector without warning?

          Unexpected
          deflation
          !

          Gimme some
          of that

          pgl said in reply to djb...

          People like Brad DeLong have noted this for a while. Twice as many people making twice as much money per person. And their true value to us - not a bit more than it was back in the 1940's.

          Rock O Sock O Choco said in reply to djb... December 18, 2015 at 06:26 PM

          JEC - MeanSquaredErrors said...

          Wait, what?

          Piketty looks at centuries of data from all over the world and concludes that capitalism has a long-run bias towards income concentration. Baker looks at 35 years of data in one country and concludes that Piketty is wrong. Um...?

          A little more generously, what Baker actually writes is:

          "The argument on rents is important because, if correct, it means that there is nothing intrinsic to capitalism that led to **this** rapid rise in inequality, as for example argued by Thomas Piketty." (emphasis added)

          But Piketty has always been very explicit that the recent rise in US income inequality is anomalous -- driven primarily by rising inequality in the distribution of labor income, and only secondarily by any shift from labor to capital income.

          So perhaps Baker is "correctly" refuting Straw Thomas Piketty. Which I suppose is better than just being obviously wrong. Maybe.

          tew said...

          Some simple math shows that this assertion is false "As a result of this upward redistribution, most workers have seen little improvement in living standards" unless you think an apprx. 60% in per-capita real income (expressed as GDP) among the 99% is "little improvement".

          Real GDP 2015 / Real GDP 1980 = 2.57 (Source: FRED)
          If the income share of the 1% shifted from 10% to 20% then The 1%' real GDP component went up 410% while that of The 99% went up 130%. Accounting for a population increase of about 41% brings those numbers to a 265% increase and a 62% increase.

          Certainly a very unequal distribution of the productivity gains but hard to call "little".

          I believe the truth of the statement is revealed when you look at the Top 5% vs. the other 95%.

          cm said in reply to tew...

          For most "working people", their raises are quickly eaten up by increases in housing/rental, food, local services, and other nondiscretionary costs. Sure, you can buy more and better imported consumer electronics per dollar, but you have to pay the rent/mortgage every months, how often do you buy a new flat screen TV? In a high-cost metro, a big ass TV will easily cost less than a single monthly rent (and probably less than your annual cable bill that you need to actually watch TV).

          pgl said in reply to tew...

          Are you trying to be the champion of the 1%? Sorry dude but Greg Mankiw beat you to this.

          anne said...

          In the years since 1980, there has been a well-documented upward redistribution of income. While there are some differences by methodology and the precise years chosen, the top one percent of households have seen their income share roughly double from 10 percent in 1980 to 20 percent in the second decade of the 21st century. As a result of this upward redistribution, most workers have seen little improvement in living standards from the productivity gains over this period....

          -- Dean Baker

          anne said in reply to anne...

          http://www.census.gov/hhes/www/income/data/historical/household/

          September 16, 2015

          Real Median Household Income, 1980 & 2014


          1980 ( 48,462)

          2014 ( 53,657)


          53,657 - 48,462 = 5,195

          5,195 / 48,462 = 10.7%


          Between 1980 and 2014 real median household income increased by a mere 10.7%.

          anne said in reply to don...

          I would be curious to know what has happened to the number of members per household....

          http://www.census.gov/hhes/www/income/data/historical/household/

          September 16, 2015

          Household Size

          2014 ( 2.54)
          1980 ( 2.73)

          [ The difference in household size to real median household incomes is not statistically significant. ]

          anne said in reply to anne...

          http://www.census.gov/hhes/www/income/data/historical/families/index.html

          September 16, 2015

          Real Median Family Income, 1948-1980-2014


          1948 ( 27,369)

          1980 ( 57,528)

          2014 ( 66,632)


          57,528 - 27,369 = 30,159

          30,159 / 27,369 = 110.2%


          66,632 - 57,528 = 9,104

          9,104 / 57,528 = 15.8%


          Between 1948 and 1980, real median family income increased by 110.2%, while between 1980 and 2014 real median family income increased by a mere 15.8%.

          cm said...

          "protectionist measures that have boosted the pay of doctors and other highly educated professionals"

          Protectionist measures (largely of the variety that foreign credentials are not recognized) apply to doctors and similar accredited occupations considered to be of some importance, but certainly much less so to "highly educated professionals" in tech, where the protectionism is limited to annual quotas for some categories of new workers imported into the country and requiring companies to pay above a certain wage rate for work visa holders in jobs claimed to have high skills requirements.

          A little mentioned but significant factor for growing wages in "highly skilled" jobs is that the level of foundational and generic domain skills is a necessity, but is not all the value the individual brings to the company. In complex subject matters, even the most competent person joining a company has to become familiar with the details of the products, the industry niche, the processes and professional/personal relationships in the company or industry, etc. All these are not really teachable and require between months and years in the job. This represents a significant sunk cost. Sometimes (actually rather often) experience within the niche/industry is in a degree portable between companies, but some company still had to employ enough people to build this experience, and it cannot be readily bought by bringing in however competent freshers.

          This applies less so e.g. in medicine. There are of course many heavily specialized disciplines, but a top flight brain or internal organ surgeon can essentially work on any person. The variation in the subject matter is large and complex, but much more static than in technology.

          That's not to knock down the skill of medical staff in any way (or anybody else who does a job that is not trivial, and that's true for many jobs). But specialization vs. genericity follow a different pattern than in tech.

          Another example, the legal profession. There are similar principles that carry across, with a lot of the specialization happening along different legislation, case law, etc., specific to the jurisdiction and/or domain being litigated.

          [Dec 18, 2015] How low can oil prices go? Opec and El Niño take a bite out of crudes cost

          Oil is a valuable chemical resource that is now wasted because of low prices... "The obvious follow-up question is, how long will the sane people of the world continue to allow so much fossil-fuel combustion to continue? An exercise for readers."
          Notable quotes:
          "... Iran wont flood the market in 2016. Right now Iran is losing production. It takes time to reverse decline and make a difference. ..."
          "... Those who predict very low prices dont understand the industry (I do). The low price environment reduces capital investment, which has to be there just to keep production flat (the decline is 3 to 5 million barrels of oil per day per year). At this time capacity is dropping everywhere except for a few select countries. The USA is losing capacity, and will never again reach this years peak unless prices double. Other countries are hopeless. From Norway to Indonesia to Colombia to Nigeria and Azerbaijan, peak oil has already taken place. ..."
          "... If oil prices remain very low until 2025 itll either be because you are right or because the world went to hell. ..."
          "... But Im with Carambaman - prices will go up again. Demand is and will still be there. The excess output will eventually end, and the prices stabilises. And then move up again. ..."
          "... Time to examine the real question: how long can the Saudis maintain their current production rates? Theyre currently producing more than 10 Mbarrels/day, but lets take the latter figure as a lower bound. They apparently have (per US consulate via WikiLeaks--time for a followup?) at least 260 Gbarrels (though it seems no one outside Saudi really knows). You do the math: 260 Gbarrels / (10 Mbarrels/day) = 26 kdays ~= 70 years. @ 15 Mbarrels/day - 47.5 years. @ 20 Mbarrels/day - 35 years. ..."
          "... The obvious follow-up question is, how long will the sane people of the world continue to allow so much fossil-fuel combustion to continue? An exercise for readers. ..."
          "... Saudi Arabia, a US ally, using oil production and pricing to crush US oil shale industry? Did I read that correctly? ..."
          "... Yeah, but I suspect it was *written* incorrectly. Im betting the Saudis real target is the Russians. ..."
          "... In 1975 dollars, thats $8.31 / bbl (with a cumulative inflation factor of 342% over 40 years), or $.45 / gal for gas (assuming a current price of $2.00 / gal). ..."
          "... I spent 30 years in the oil industry and experienced many cycles. When it is up people cannot believe it will go down and when it is down people cannot believe it will go up. It is all a matter of time ..."
          Dec 16, 2015 | The Guardian

          Fernando Leza -> jah5446 15 Dec 2015 06:12

          Iran won't flood the market in 2016. Right now Iran is losing production. It takes time to reverse decline and make a difference.

          Those who predict very low prices don't understand the industry (I do). The low price environment reduces capital investment, which has to be there just to keep production flat (the decline is 3 to 5 million barrels of oil per day per year). At this time capacity is dropping everywhere except for a few select countries. The USA is losing capacity, and will never again reach this year's peak unless prices double. Other countries are hopeless. From Norway to Indonesia to Colombia to Nigeria and Azerbaijan, peak oil has already taken place.

          Fernando Leza -> SonOfFredTheBadman 15 Dec 2015 06:05

          If oil prices remain very low until 2025 it'll either be because you are right or because the world went to hell. I prefer your vision, of course. But I'm afraid most of your talk is wishful thinking. Those of us who do know how to put watts on the table can't figure out any viable solutions. Hopefully something like cheap fusion power will rise. Otherwise you may be eating human flesh in 2060.

          Fernando Leza -> p26677 15 Dec 2015 06:00

          Keep assuming. I'll keep buying Shell stock.

          MatCendana -> UnevenSurface 14 Dec 2015 03:36

          Regardless of the breakeven price, producers with the wells already running or about to will keep pumping. Better to have some income, even if the operation is at a loss, than no income. This will go on and on right until the end, which is either prices eventually go up or they run out of oil and can't drill new wells.

          But I'm with Carambaman - prices will go up again. Demand is and will still be there. The excess output will eventually end, and the prices stabilises. And then move up again.

          Billy Carnes 13 Dec 2015 19:52

          Also this hurts the states...Louisiana is now in the hole over 1.5 Billion or more

          TomRoche 13 Dec 2015 12:31

          @Guardian: Time to examine the real question: how long can the Saudis maintain their current production rates? They're currently producing more than 10 Mbarrels/day, but let's take the latter figure as a lower bound. They apparently have (per US consulate via WikiLeaks--time for a followup?) at least 260 Gbarrels (though it seems no one outside Saudi really knows). You do the math: 260 Gbarrels / (10 Mbarrels/day) = 26 kdays ~= 70 years. @ 15 Mbarrels/day -> 47.5 years. @ 20 Mbarrels/day -> 35 years.

          That's just Saudi (allegedly) proven reserves. But it's plenty long enough to push atmospheric GHG levels, and associated radiative forcing, to ridiculously destructive excess.

          The obvious follow-up question is, how long will the sane people of the world continue to allow so much fossil-fuel combustion to continue? An exercise for readers.

          TomRoche -> GueroElEnfermero 13 Dec 2015 12:14

          @GueroElEnfermero: 'Saudi Arabia, a US ally, using oil production and pricing to crush US oil shale industry? Did I read that correctly?'

          Yeah, but I suspect it was *written* incorrectly. I'm betting the Saudis' real target is the Russians.

          Sieggy 13 Dec 2015 11:49

          In 1975 dollars, that's $8.31 / bbl (with a cumulative inflation factor of 342% over 40 years), or $.45 / gal for gas (assuming a current price of $2.00 / gal).

          Carambaman 13 Dec 2015 10:25

          I spent 30 years in the oil industry and experienced many cycles. When it is up people cannot believe it will go down and when it is down people cannot believe it will go up. It is all a matter of time

          [Dec 17, 2015] Please Don't Shut Down the Internet, Donald Trump

          The New Yorker

          Still, two interesting-and vexing-issues for the technology industry, and for the politicians who regulate it, emerged in the debate. The first came up in John Kasich's response to Trump's proposal. "Wolf, there is a big problem-it's called encryption," he said. "We need to be able to penetrate these people when they are involved in these plots and these plans. And we have to give the local authorities the ability to penetrate, to disrupt. That's what we need to do. Encryption is a major problem, and Congress has got to deal with this, and so does the President, to keep us safe."

          The central question is whether American technology companies should offer the U.S. government, whether the N.S.A. or the F.B.I., backdoor access to their devices or servers. The most important companies here are Apple and Google, which, in the fall of 2014, began offering strong encryption on the newer versions of Android and iOS phones. If you keep your passcode secret, the government will be unable to, for instance, scroll through your contacts list, even if it has a warrant. This has, naturally, made the government angry. The most thorough report on the subject is a position paper put out last month by Cyrus Vance, Jr., Manhattan's district attorney. In the previous year, Vance wrote, his office had been "unable to execute approximately 111 search warrants for smartphones because those devices were running iOS 8. The cases to which those devices related include homicide, attempted murder, sexual abuse of a child, sex trafficking, assault, and robbery."

          The solution isn't easy. Apple and Google implemented their new encryption standards after Edward Snowden revealed how the government had compromised their systems. They want to protect their customers-a government back door could become a hacker's back door, too-and they also want to protect their business models. If the N.S.A. can comb through iPhones, how many do you think Apple will be able to sell in China? In the debate, Carly Fiorina bragged about how, when she ran Hewlett-Packard, she stopped a truckload of equipment and had it "escorted into N.S.A. headquarters." Does that make you more or less eager to buy an OfficeJet Pro?

          The second hard issue that came up indirectly in the debate-and, more specifically, in recent comments by Hillary Clinton-is how aggressive American companies such as Facebook, Twitter, and Google (with YouTube) should be in combatting the use of their platforms by ISIS. Again, there's no simple answer. You can't ban, say, everyone who tweets the hashtag #ISIS, because then you'd have to ban this guy. The algorithms are difficult to write, and the issues are difficult to balance. Companies have to consider their business interests, their legal obligations to and cultural affinities for free speech, and their moral obligations to oppose an organization that seeks to destroy the country in which they were built-and also kill their C.E.O.s.

          [Dec 17, 2015] Putin hails Donald Trump as bright and talented

          economistsview.typepad.com
          Fred C. Dobbs said... December 17, 2015 at 11:26 AM
          Putin hails Donald Trump as 'bright and talented'
          http://www.bostonglobe.com/news/politics/2015/12/17/putin-hails-donald-trump-bright-and-talented/CCIktxBPs0ax3bGNMz7yqO/story.html?event=event25 via @BostonGlobe
          Vladimir Isachenkov - Associated Press - December 17, 2015

          MOSCOW - Russia and the US agree on a general approach to settling the Syrian crisis, President Vladimir Putin said Thursday, saying that Moscow stands ready to improve ties with Washington.

          Putin also said that Russia will continue its air campaign in Syria until a political process starts, and lashed out at Turkey for trying to ''lick the Americans in some of their private parts'' by downing a Russian warplane. ...

          Commenting on relations with Washington, Putin said that Russia supports a US-drafted U.N. Security Council resolution on settling the Syrian crisis, presented by US Secretary of State John Kerry during his visit to Moscow earlier this week.

          ''In general, we like it,'' Putin said. ''I believe that the Syrian authorities should be OK with it too, although they may not like something in it.''

          He added that ''concessions must be made by both sides'' to end the conflict that has killed more than 250,000 and turned millions into refugees since 2011.

          He said the Russian approach, ''strangely as it may seem, coincides with the US vision: joint work on a constitution, creation of instruments of control over future early elections, holding the vote and recognizing its results on the basis of that political process.''

          ''We will help settle this crisis in every possible way,'' Putin said. At the same time, he reaffirmed Russia's stance on the key issue that divided Russia and the West, the fate of Syrian President Bashar Assad, saying the Syrians themselves must determine who rules them. ...

          Already on his way out of the hall, he was asked about US presidential candidate Donald Trump and praised him as a ''very bright and talented man,'' adding that he welcomes the Republican's pledges to establish closer ties with Russia. ...

          [Dec 17, 2015] A Blind Eye Toward Turkey's Crimes

          Notable quotes:
          "... The Official Story of the sarin attack – as presented by Secretary of State John Kerry, Human Rights Watch and other "respectable" sources – firmly laid the blame for the Aug. 21, 2013 atrocity killing hundreds of civilians outside Damascus on Assad. That became a powerful "group think" across Official Washington. ..."
          December 16, 2015 | consortiumnews.com

          A Blind Eye Toward Turkey's Crimes

          To make the story even more compelling, an opposition leader braves the wrath of the autocrat by seeking to expose these intelligence schemes, including the cover-up of key evidence. The autocrat's government then seeks to prosecute the critic for "treason."

          But the problem with this story, as far as the American government and press are concerned, is that the autocratic leader, President Recep Tayyip Erdogan, is in charge of Turkey, a NATO ally and his hated neighbor is the much demonized Syrian President Bashar al-Assad. Major U.S. news outlets and political leaders also bought into the sarin deception and simply can't afford to admit that they once again misled the American people on a matter of war.

          The Official Story of the sarin attack – as presented by Secretary of State John Kerry, Human Rights Watch and other "respectable" sources – firmly laid the blame for the Aug. 21, 2013 atrocity killing hundreds of civilians outside Damascus on Assad. That became a powerful "group think" across Official Washington.

          Though a few independent media outlets, including Consortiumnews.com, challenged the rush to judgment and noted the lack of evidence regarding Assad's guilt, those doubts were brushed aside. (In an article on Aug. 30, 2013, I described the administration's "Government Assessment" blaming Assad as a "dodgy dossier," which offered not a single piece of verifiable proof.)

          However, as with the "certainty" about Iraq's WMD a decade earlier, Every Important Person shared the Assad-did-it "group think." That meant - as far as Official Washington was concerned - that Assad had crossed President Barack Obama's "red line" against using chemical weapons. A massive U.S. retaliatory bombing strike was considered just days away.

          ... ... ...

          But the "group think" was resistant to all empirical evidence. It was so powerful that even when the Turkish plot was uncovered by legendary investigative reporter Seymour M. Hersh, his usual publication, The New Yorker, refused to print it. Rebuffed in the United States – the land of freedom of the press – Hersh had to take the story to the London Review of Books to get it out in April 2014. [See Consortiumnews.com's "Was Turkey Behind Syria Sarin Attack?"]

          ... ... ...

          In statements before parliament and to journalists, Erdem cited a derailed indictment that was begun by the General Prosecutor's Office in the southern Turkish city of Adana, with the criminal case number 2013/120.

          Erdem said the prosecutor's office, using technical surveillance, discovered that an Al Qaeda jihadist named Hayyam Kasap acquired the sarin.

          At the press conference, Erdem said, "Wiretapped phone conversations reveal the process of procuring the gas at specific addresses as well as the process of procuring the rockets that would fire the capsules containing the toxic gas. However, despite such solid evidence there has been no arrest in the case. Thirteen individuals were arrested during the first stage of the investigation but were later released, refuting government claims that it is fighting terrorism."

          Erdem said the released operatives were allowed to cross the border into Syria and the criminal investigation was halted.

          Another CHP deputy, Ali Şeker, added that the Turkish government misled the public by claiming Russia provided the sarin and that "Assad killed his people with sarin and that requires a U.S. military intervention in Syria."

          Erdem's disclosures, which he repeated in a recent interview with RT, the Russian network, prompted the Ankara Prosecutor's Office to open an investigation into Erdem for treason. Erdem defended himself, saying the government's actions regarding the sarin case besmirched Turkey's international reputation. He added that he also has been receiving death threats.

          "The paramilitary organization Ottoman Hearths is sharing my address [on Twitter] and plans a raid [on my house]. I am being targeted with death threats because I am patriotically opposed to something that tramples on my country's prestige," Erdem said.

          [Dec 16, 2015] Cornering Russia, Risking World War III

          Notable quotes:
          "... "The chance for a durable Washington-Moscow strategic partnership was lost in the 1990 after the Soviet Union ended. Actually it began to be lost earlier, because it was [President Ronald] Reagan and [Soviet leader Mikhail] Gorbachev who gave us the opportunity for a strategic partnership between 1985-89. ..."
          "... "And it certainly ended under the Clinton Administration, and it didn't end in Moscow. It ended in Washington - it was squandered and lost in Washington. And it was lost so badly that today, and for at least the last several years (and I would argue since the Georgian war in 2008), we have literally been in a new Cold War with Russia. ..."
          "... "TODAY THERE ARE NO RED LINES. One of the things that Putin and his predecessor President Medvedev keep saying to Washington is: You are crossing our Red Lines! And Washington said, and continues to say, 'You don't have any red lines. We have red lines and we can have all the bases we want around your borders, but you can't have bases in Canada or Mexico. Your red lines don't exist.' This clearly illustrates that today there are no mutual rules of conduct. ..."
          "... "Another important point: Today there is absolutely no organized anti-Cold War or Pro-Detente political force or movement in the United States at all –– not in our political parties, not in the White House, not in the State Department, not in the mainstream media, not in the universities or the think tanks. … None of this exists today. … ..."
          "... In practice, President Assad's imposed ouster precisely will empower ISIS, rather than implode it, and the consequences will ripple across the Middle East – and beyond. ..."
          "... Indeed, ISIS and the other Caliphate forces have very clear human motivations and clearly articulated political objectives, and none of these is in any way consistent with the type of Syrian State that America says it wants for Syria. This precisely reflects the danger of becoming hostage to a certain narrative, rather than being willing to examine the prevailing conceptual framework more critically. ..."
          "... unfortunately, today's reports seem to indicate that the White House and State Department are thinking primarily how to counter Russia's actions in Syria. They are worried, it was reported, that Russia is diminishing America's leadership in the world. ..."
          "... Washington's disinclination to permit Russia any enhancement to its standing in Europe, or in the non-West, through its initiative strategically to defeat Wahhabist jihadism in Syria, is not only to play with fire in the Middle East. It is playing with a fire of even greater danger: to do both at the same time seems extraordinarily reckless. ..."
          "... As Europe becomes accomplice in raising the various pressures on Russia in Syria – economically through sanctions and other financial measures , in Ukraine and Crimea, and in beckoning Montenegro, Georgia and the Baltic towards NATO – we should perhaps contemplate the paradox that Russia's determination to try to avoid war is leading to war. ..."
          "... Russia's call to co-operate with Western states against the scourge of ISIS; its low-key and carefully crafted responses to such provocations as the ambush of its SU-24 bomber in Syria; and President Putin's calm rhetoric, are all being used by Washington and London to paint Russia as a "paper tiger," whom no one needs fear. ..."
          "... In short, Russia is being offered only the binary choice: to acquiesce to the "benevolent" hegemon, or to prepare for war. ..."
          Consortiumnews
          Official Washington is awash with tough talk about Russia and the need to punish President Putin for his role in Ukraine and Syria. But this bravado ignores Russia's genuine national interests, its "red lines," and the risk that "tough-guy-ism" can lead to nuclear war, as Alastair Crooke explains.

          We all know the narrative in which we (the West) are seized. It is the narrative of the Cold War: America versus the "Evil Empire." And, as Professor Ira Chernus has written, since we are "human" and somehow they (the USSR or, now, ISIS) plainly are not, we must be their polar opposite in every way.

          "If they are absolute evil, we must be the absolute opposite. It's the old apocalyptic tale: God's people versus Satan's. It ensures that we never have to admit to any meaningful connection with the enemy." It is the basis to America's and Europe's claim to exceptionalism and leadership.

          And "buried in the assumption that the enemy is not in any sense human like us, is [an] absolution for whatever hand we may have had in sparking or contributing to evil's rise and spread. How could we have fertilized the soil of absolute evil or bear any responsibility for its successes? It's a basic postulate of wars against evil: God's people must be innocent," (and that the evil cannot be mediated, for how can one mediate with evil).

          Westerners may generally think ourselves to be rationalist and (mostly) secular, but Christian modes of conceptualizing the world still permeate contemporary foreign policy.

          It is this Cold War narrative of the Reagan era, with its correlates that America simply stared down the Soviet Empire through military and – as importantly – financial "pressures," whilst making no concessions to the enemy.

          What is sometimes forgotten, is how the Bush neo-cons gave their "spin" to this narrative for the Middle East by casting Arab national secularists and Ba'athists as the offspring of "Satan": David Wurmser was advocating in 1996, "expediting the chaotic collapse" of secular-Arab nationalism in general, and Baathism in particular. He concurred with King Hussein of Jordan that "the phenomenon of Baathism" was, from the very beginning, "an agent of foreign, namely Soviet policy."

          Moreover, apart from being agents of socialism, these states opposed Israel, too. So, on the principle that if these were the enemy, then my enemy's enemy (the kings, Emirs and monarchs of the Middle East) became the Bush neo-cons friends. And they remain such today – however much their interests now diverge from those of the U.S.

          The problem, as Professor Steve Cohen, the foremost Russia scholar in the U.S., laments, is that it is this narrative which has precluded America from ever concluding any real ability to find a mutually acceptable modus vivendi with Russia – which it sorely needs, if it is ever seriously to tackle the phenomenon of Wahhabist jihadism (or resolve the Syrian conflict).

          What is more, the "Cold War narrative" simply does not reflect history, but rather the narrative effaces history: It looses for us the ability to really understand the demonized "calous tyrant" – be it (Russian) President Vladimir Putin or (Ba'athist) President Bashar al-Assad – because we simply ignore the actual history of how that state came to be what it is, and, our part in it becoming what it is.

          Indeed the state, or its leaders, often are not what we think they are – at all. Cohen explains: "The chance for a durable Washington-Moscow strategic partnership was lost in the 1990 after the Soviet Union ended. Actually it began to be lost earlier, because it was [President Ronald] Reagan and [Soviet leader Mikhail] Gorbachev who gave us the opportunity for a strategic partnership between 1985-89.

          "And it certainly ended under the Clinton Administration, and it didn't end in Moscow. It ended in Washington - it was squandered and lost in Washington. And it was lost so badly that today, and for at least the last several years (and I would argue since the Georgian war in 2008), we have literally been in a new Cold War with Russia.

          "Many people in politics and in the media don't want to call it this, because if they admit, 'Yes, we are in a Cold War,' they would have to explain what they were doing during the past 20 years. So they instead say, 'No, it is not a Cold War.'

          "Here is my next point. This new Cold War has all of the potential to be even more dangerous than the preceding 40-year Cold War, for several reasons. First of all, think about it. The epicentre of the earlier Cold War was in Berlin, not close to Russia. There was a vast buffer zone between Russia and the West in Eastern Europe.

          "Today, the epicentre is in Ukraine, literally on Russia's borders. It was the Ukrainian conflict that set this off, and politically Ukraine remains a ticking time bomb. Today's confrontation is not only on Russia's borders, but it's in the heart of Russian-Ukrainian 'Slavic civilization.' This is a civil war as profound in some ways as was America's Civil War."

          Cohen continued: "My next point: and still worse – You will remember that after the Cuban Missile Crisis, Washington and Moscow developed certain rules-of-mutual conduct. They saw how dangerously close they had come to a nuclear war, so they adopted "No-Nos,' whether they were encoded in treaties or in unofficial understandings. Each side knew where the other's red line was. Both sides tripped over them on occasion but immediately pulled back because there was a mutual understanding that there were red lines.

          "TODAY THERE ARE NO RED LINES. One of the things that Putin and his predecessor President Medvedev keep saying to Washington is: You are crossing our Red Lines! And Washington said, and continues to say, 'You don't have any red lines. We have red lines and we can have all the bases we want around your borders, but you can't have bases in Canada or Mexico. Your red lines don't exist.' This clearly illustrates that today there are no mutual rules of conduct.

          "Another important point: Today there is absolutely no organized anti-Cold War or Pro-Detente political force or movement in the United States at all –– not in our political parties, not in the White House, not in the State Department, not in the mainstream media, not in the universities or the think tanks. … None of this exists today. …

          "My next point is a question: Who is responsible for this new Cold War? I don't ask this question because I want to point a finger at anyone. The position of the current American political media establishment is that this new Cold War is all Putin's fault – all of it, everything. We in America didn't do anything wrong. At every stage, we were virtuous and wise and Putin was aggressive and a bad man. And therefore, what's to rethink? Putin has to do all of the rethinking, not us."

          These two narratives, the Cold War narrative, and the neocons' subsequent "spin" on it: i.e. Bill Kristol's formulation (in 2002) that precisely because of its Cold War "victory," America could, and must, become the "benevolent global hegemon," guaranteeing and sustaining the new American-authored global order – an "omelette that cannot be made without breaking eggs" – converge and conflate in Syria, in the persons of President Assad and President Putin.

          President Obama is no neocon, but he is constrained by the global hegemon legacy, which he must either sustain, or be labeled as the arch facilitator of America's decline. And the President is also surrounded by R2P ("responsibility-to-protect") proselytizers, such as Samantha Power, who seem to have convinced the President that "the tyrant" Assad's ouster would puncture and collapse the Wahhabist jihadist balloon, allowing "moderate" jihadists such as Ahrar al-Sham to finish off the deflated fragments of the punctured ISIS balloon.

          In practice, President Assad's imposed ouster precisely will empower ISIS, rather than implode it, and the consequences will ripple across the Middle East – and beyond. President Obama privately may understand the nature and dangers of the Wahhabist cultural revolution, but seems to adhere to the conviction that everything will change if only President Assad steps down. The Gulf States said the same about Prime Minister Nouri al-Maliki in Iraq. He has gone (for now), but what changed? ISIS got stronger.

          Of course if we think of ISIS as evil, for evil's sake, bent on mindless, whimsical slaughter, "what a foolish task it obviously [would be] to think about the enemy's actual motives. After all, to do so would be to treat them as humans, with human purposes arising out of history. It would smack of sympathy for the devil. Of course," Professor Chernus continues, "this means that, whatever we might think of their actions, we generally ignore a wealth of evidence that the Islamic State's fighters couldn't be more human or have more comprehensible motivations."

          Indeed, ISIS and the other Caliphate forces have very clear human motivations and clearly articulated political objectives, and none of these is in any way consistent with the type of Syrian State that America says it wants for Syria. This precisely reflects the danger of becoming hostage to a certain narrative, rather than being willing to examine the prevailing conceptual framework more critically.

          America lies far away from Syria and the Middle East, and as Professor Stephen Cohen notes, "unfortunately, today's reports seem to indicate that the White House and State Department are thinking primarily how to counter Russia's actions in Syria. They are worried, it was reported, that Russia is diminishing America's leadership in the world."

          It is a meme of perpetual national insecurity, of perpetual fears about America's standing and of challenges to its standing, Professor Chernus suggests.

          But Europe is not "far away"; it lies on Syria's doorstep. It is also neighbor to Russia. And in this connection, it is worth pondering Professor Cohen's last point: Washington's disinclination to permit Russia any enhancement to its standing in Europe, or in the non-West, through its initiative strategically to defeat Wahhabist jihadism in Syria, is not only to play with fire in the Middle East. It is playing with a fire of even greater danger: to do both at the same time seems extraordinarily reckless.

          Cohen again:

          "The false idea [has taken root] that the nuclear threat ended with the Soviet Union: In fact, the threat became more diverse and difficult. This is something the political elite forgot. It was another disservice of the Clinton Administration (and to a certain extent the first President Bush in his re-election campaign) saying that the nuclear dangers of the preceding Cold War era no longer existed after 1991. The reality is that the threat grew, whether by inattention or accident, and is now more dangerous than ever."

          As Europe becomes accomplice in raising the various pressures on Russia in Syria – economically through sanctions and other financial measures, in Ukraine and Crimea, and in beckoning Montenegro, Georgia and the Baltic towards NATO – we should perhaps contemplate the paradox that Russia's determination to try to avoid war is leading to war.

          Russia's call to co-operate with Western states against the scourge of ISIS; its low-key and carefully crafted responses to such provocations as the ambush of its SU-24 bomber in Syria; and President Putin's calm rhetoric, are all being used by Washington and London to paint Russia as a "paper tiger," whom no one needs fear.

          In short, Russia is being offered only the binary choice: to acquiesce to the "benevolent" hegemon, or to prepare for war.

          Alastair Crooke is a British diplomat who was a senior figure in British intelligence and in European Union diplomacy. He is the founder and director of the Conflicts Forum, which advocates for engagement between political Islam and the West. [This article also appeared at the Conflicts Forum's Web site and is republished with permission.]

          [Dec 16, 2015] Congress just revived the surveillance state in the name of cybersecurity

          Notable quotes:
          "... Whistleblower: "Every Time There Is a Terrorist Attack, What We Really Need to Do Is Demand that They CUT the Budgets of All the Intelligence Agencies" - William Binney ..."
          Dec 16, 2015 | The Guardian
          Stumphole 16 Dec 2015 17:44

          Use a VPN and Start Page as a search engine. Nothing is saved from your search.

          Fgt 4URIGHTS -> lefthalfback2 16 Dec 2015 19:44

          Only the brain dead idiots who are deceived and under collective Stockholm syndrome are fine with it. Yeah, all the illegal surveillance in the world didn't stop the San Bernadinos attack. Also, let's not forget the treason and terrorism being conducted against innocent Americans (Cointelpro/Gangstalking) and hidden from the American people while their asleep to the crimes happening in secret all around them. Yeah for a fascist, totalitarian police state, isn't it cool?? I feel so safe knowing my criminal government is there to protect me because they love me so much.

          Whistleblower: "Every Time There Is a Terrorist Attack, What We Really Need to Do Is Demand that They CUT the Budgets of All the Intelligence Agencies" - William Binney

          sand44 16 Dec 2015 18:26

          "Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety."
          -Benjamin Franklin 1755

          How far has the standard of American politicians managed to fall?

          AvZweeden 16 Dec 2015 14:53

          Edward Snowden might as well not have blown any whistle, and saved himself a lot of trouble.
          Most Americans think America is a democracy, but it is really an oligarchy in disguise. Probably always was. I read this earlier this year:
          https://theintercept.com/2015/07/30/jimmy-carter-u-s-oligarchy-unlimited-political-bribery/

          [Dec 16, 2015] Big Banks Caught Using Credit Default Swaps To Destroy Nations

          Notable quotes:
          "... when the Big Banks were caught and convicted of conspiring to manipulate the $500 trillion, LIBOR debt market ..."
          "... when the Big Banks were caught and convicted of conspiring to launder trillions for the global drug cartels and "terrorist" entities, despite the supposed "wars" the U.S. claims to be fighting against drugs and terrorism ..."
          "... The Vampire Squid Firmly Attached To The Face Of Humanity ..."
          "... As far as I can gather, the World Bank and the IMF are apart of the very same Cartel that own/control the Central Banks. ..."
          Dec 16, 2015 | Zero Hedge

          Then we have the confessions of the criminals. A full one-quarter of Wall Street's and London's senior banking executives freely admit that crime is a way of life in their industry -- organized crime. Even in our justice system (or what remains of it), once armed with confessions, the principle of "innocent until proven guilty" no longer applies – the guilt is conceded.

          The Big Banks manipulate credit default swaps to perpetrate economic terrorism against other nations in the world, where they literally destroy the economies of those victim-nations. It used to be a theory, but now the proof is finally emerging. You heard it here first.

          LawsofPhysics

          So what? Has any of the bank management/leaders gone to prison and lost all their wealth?

          Ghordius

          good article

          "when the Big Banks were caught and convicted of conspiring to manipulate the $500 trillion, LIBOR debt market"

          (Citicorp, JPMorgan Chase & Co., Barclays Plc and Royal Bank of Scotland Plc agreed to plead guilty to felony charges of conspiring to manipulate the price of U.S. dollars and euros)

          "when the Big Banks were caught and convicted of conspiring to launder trillions for the global drug cartels and "terrorist" entities, despite the supposed "wars" the U.S. claims to be fighting against drugs and terrorism"

          (Wells Fargo and JPMorgan)

          and of course, The Vampire Squid Firmly Attached To The Face Of Humanity, Goldman Sachs, The Great Destroyer

          commoncourtesy

          Fancy-free please will you explain further.

          As far as I can gather, the World Bank and the IMF are apart of the very same Cartel that own/control the Central Banks. All are controlled by the BIS who is run/controlled by pretty much all the same criminals on a merry-go-round. Throw in the Vatican, The Crown (BAR) Temple - The City of London, Washington DC, the Rothschild's et al, puppet Governments (and their military) on the same payroll and the world is pretty much screwed.

          Who are the Board of Governors you are talking about?

          Who is this coalition?

          Please name names.

          Can you vouch for their credibility or are they part of the corrupt cartel?

          There is far TOO MUCH SECRECY going on.

          If everything was more transparent, out of the shadows and open the world would not be in the state is in today.

          Closed dealings, complexity and behind the curtain negotiations promote corruption.

          How can justice be served when most public jurors would not be able to understand the fraudulent accounting practices being utilised?

          What is the TRUTH?

          andrewp111

          A big load of bullshit. The US has its own currency and that currency is backed by military power. Greece is a subordinate vassal state of the EU. There is no comparison between the two.

          [Dec 14, 2015] Barack Obama warns leaders of Islamic State in speech: 'you are next'

          Notable quotes:
          "... There is no "far left" in Europe any more. Since the Merkels, Hollandes, Blairs and Rasmussens of this world were planted in prominent positions because of their excruciatingly statusquo orientation, even the moderate "left" has practically ceased to exist. We now have rabid right or moderately rabid right to choose from, except for a few notable exceptions. ..."
          "... Obama does not have a clue, he has lost the plot. He is backing Saudi Arabia who are the biggest instigators of terrorism in the Middle East. Saudi Arabia is announcing a 34-state military alliance to fight terrorism. ..."
          "... Seems to me that IS was created, either accidentally or deliberately, by the US and its success has gone beyond the US administrations worst nightmare? When the US refuses slam Turkey for it's recent shoot-down of the Russian plane, and do anything to support Iraq in getting rid of unwanted Turkish military near Mosul, within Iraq and near the IS capital, nor wanting to know about Turkish involvement supplying Sarin gas agents to IS, or stopping Turkey supplying food and arms to IS, and receiving stolen Syrian and Iraqi oil as payment, nor preventing Turkey from being the transit centre and R & R centre for IS recruits, then maybe its time to assume that IS is the deliberate brainchild of the US, and that Turkey is playing to the US tune and protection, for promises of territory in a future carve up of Iraq and or Syria. ..."
          "... Seems that ISIL, ISIS, IS and Daesh are all names invented by the US to spread the narrative through the media. They all mean US proxy army to me. Just my opinion. ..."
          "... Perhaps that is because ISIS doesn't actually occupy "territory" as such. As Mr. Knight says, they are an ideology, an idea. An idea, unfortunately in this case, doesn't live in houses in prescribed areas any more than Republicanism lives in Chicago. The way forward has to involve NOT creating another 10,000 new mortal enemies in the Middle East every day. Even if only twelve innocent people had died in Iraq in 2003, instead of the hundreds of thousands who actually did, one could understand very large groups of people related to the victims cursing the US for its irresponsible meddling. ..."
          "... Incredibly ignorant of the president. The US lives in sin with the Saudis. As long as the Saudis keep importing Wahhabism out of their country to others, the problem will exist. ..."
          "... We bombed the Taliban. We bombed Al Qaeda. Neither lead to anything more than establishing the rise of ISIS in the destabilised areas we had bombed. ..."
          "... The biggest contribution America can make to getting rid of Isis is to "persuade" its friends and allies - Saudi Arabia, Qatar and Turkey mainly - to turn off the tap of finance, munitions and logistics to Isis, Al Qaeda in Syria (Al Nusra) and its allies like Ahrar Al Sham. No American ground troops needed; they would be counter-productive. ..."
          "... The secular Syrian government, with women in its ranks, is fighting for its life against a most ruthless and abominable enemy: fanatical jihadist mercenaries financed by an execrable mediaeval tyranny, Saudi Barbaria. This is the enemy of all we stand for, the enemy that perpetrated 9/11 and 7/7 and their latest clone that bombed Paris concert-goers and Russian holiday-makers. They are paid and trained by Riyadh. And armed to the teeth with modern American weapons, passed to them by the newest demagogue, Turkey's Erdoğan. ..."
          "... The sworn enemy of all these head-chopping bigots is Assad's secular republic of Syria because it challenges the ideological dogmatism of Sharia Law. This law is as rigid as Hitler's Nazism or Stalin's communism. ..."
          "... I wonder if because 'a few weeks' was finally taken to supposedly destroy this critical infrastructure - if the 'evasive' ISIL oil business - along with revenues - will suffer? I also wonder why the air campaign hasn't been extended to include the purchasers of ISIL's oil supplies - at sea and in their home countries. ..."
          "... Isis must ultimately be defeated by Muslim forces, or we'll be manufacturing radical faster than we can kill them. ..."
          "... The Muslims seem to be manufacturing radicals quickly enough without any help from us. ..."
          "... What have they been doing for the last two years then? No attacks on ISIS trucks transporting oil, no sanctions on countries that have been buying that oil. We only get some action now that Russia has been attacking ISIS in Syria and of course there is minimal reporting of the successes of the Russians in Western media. As far as Libya is concerned, there are very ominous signs that ISIS is moving to set up headquarters in that country, a country a lot closer to Europe than Syria or Iraq are. There is also the problem that the Russians will not be involved in Libya, unlike Syria, they do not have a functioning government to ask them in. Libya is the nightmare created by NATO and the US, they will have to take full responsibility for their dreadful actions there and fight the barbarians they created, no sitting back and allowing them to flourish this time. ..."
          "... What a farce, who does Obama think he's kidding? If the US was serious about ISIS it would have been finished off a year ago, now that Russia has called the US's bluff they now have to pretend to step up to the plate. Pathetic. ..."
          "... More drivel from the counterfeit president. His allies in the middle east are disgusting butchers. Take Turkey: it is a great shame for Turkey that 32 journalists are imprisoned in the 21st century. Some were arrested on Nov. 26 after being charged in May with espionage, revealing confidential documents and membership in a terrorist organization. The charges are related to a report published by a leading newspaper claiming weapons-loaded trucks that were discovered in January 2014 en route to Syria actually belonged to the National Intelligence Organization (MİT) and had been sent to provide support to rebel groups. ..."
          The Guardian


          ricohflex 14 Dec 2015 22:26

          Talk big but no action. Hot air. Everybody knows now.
          After the Syria red line fiasco, the whole world knows US president makes empty promises.
          In the next TV broadcast, he will give excuses why he cannot do it. Then he will repeat "No Boots On The Ground". Then the US president will blame Congress for not giving him permission to do the most basic things.
          ...
          Now in end-2015 Obama has only ONE thing on his mind.
          He wants to preserve the legacy of his presidency.
          He does not want to do anything to risk the presidency being blamed.
          He does not want to take any mis-step.
          It is a Zero Risk environment in the White House now.
          He dares not even reveal the truth on what country's air space the SU-24 was flying in, when it was shot down.
          It will just be TALK from now on until the next president takes over in 2016.


          wardropper -> LupusCanis 14 Dec 2015 22:21

          There is no "far left" in Europe any more. Since the Merkels, Hollandes, Blairs and Rasmussens of this world were planted in prominent positions because of their excruciatingly statusquo orientation, even the moderate "left" has practically ceased to exist. We now have rabid right or moderately rabid right to choose from, except for a few notable exceptions.


          GerdT 14 Dec 2015 22:21

          Looking out the window I can see the hills that mark the border to Cambodia and not far away Vietnam. I still remember the speeches given during the Vietnam War and how close victory was. The bombs dropped on these countries including North Vietnam during the war exceeded what was dropped during WWII in the Atlantic/European and the Pacific theater of war. Still, it was a US helicopter that left from the American Embassy in Saigon that concluded that war, with the US going home and into denial about the outcome of that war.

          The apocalypse foreseen by the prophets of doomsday painting a picture of an Asian continent that would turn into a communist infested threat to human kind didn't happen.

          I have been recently in Vietnam and Cambodia and seen that people get on with their lives and economies that try to improve for the coming ASEAN community. Without help from western countries they have started to rebuild what was left of their countries after the champion of democracy had left. As the peanut farmer and former President Jimmy Carter said, the destruction was mutual and hence Vietnam didn't deserve any compensation for the unbelievable collateral damage caused by US intervention in this country. If the US was really trying to protect democracy or as Bill Clinton described it protecting National Security, which he defined as US business interests and given the US a right to interfere in any country that tries to threaten them, is a debatable point.

          During the following decades the US again would raise terror and war in countries to ensure that the branding of democracy they preferred would be exported. South Vietnam hadn't been a democracy when the US decided to send troops across and the political leaders of that country came from the military, granting themselves the titles of president and minister, but holding the country in the same grip as in the North the communist did. From South America to the Middle East the US supported groups and leaders that were favorable to US business interests. The Taliban were a useful tool to drive out the Soviet Union only to become a haven for Bin Laden and his followers. Iraq has turned into a political and humanitarian nightmare and ISIL that was as a startup supplied with weapons and training by the US to drive out Assad from Syria is now the greatest threat to world peace according to the US.

          We only have to take a look at the close friends and allies of the US in the Middle East and South America to understand how they spell democracy and human rights. Maybe it is time to listen to the millions of people with families that want to live in peace and are tired of foreign interference in their countries. Instead of supplying arms and support to people that favor the western or eastern political view, we should start to invest and rebuild these countries to ensure they can become equal and respected partners within the global community.

          Phil Atkinson 14 Dec 2015 22:18

          What a joke! Ashton Carter to visit the Middle East to jockey along the Arab states - the same people that the USA supplies weapons to, that end up with terrorists. Or Turkey, that erstwhile NATO member which has been stealing Syrian oil and selling it to Israel and speaking of Israel, that country still illegally occupying the Golan Heights in Syria and aiding and abetting Al-Nusra Front fighters and bombing inside Syria.

          Ashton Carter is a dangerous fool, who believes his own government's propaganda. He should be kept at home.

          SomersetApples 14 Dec 2015 22:08

          Obama does not have a clue, he has lost the plot. He is backing Saudi Arabia who are the biggest instigators of terrorism in the Middle East. Saudi Arabia is announcing a 34-state military alliance to fight terrorism.

          Informed17 14 Dec 2015 22:08

          If ISIS does not do what Obama says, US-led coalition of 60+ countries will destroy another pair of Islamist excavators. I am sure ISIS leaders are scared shitless.

          RocketSurgeon 14 Dec 2015 22:03

          Seems to me that IS was created, either accidentally or deliberately, by the US and its success has gone beyond the US administrations worst nightmare?
          When the US refuses slam Turkey for it's recent shoot-down of the Russian plane, and do anything to support Iraq in getting rid of unwanted Turkish military near Mosul, within Iraq and near the IS capital, nor wanting to know about Turkish involvement supplying Sarin gas agents to IS, or stopping Turkey supplying food and arms to IS, and receiving stolen Syrian and Iraqi oil as payment, nor preventing Turkey from being the transit centre and R & R centre for IS recruits, then maybe its time to assume that IS is the deliberate brainchild of the US, and that Turkey is playing to the US tune and protection, for promises of territory in a future carve up of Iraq and or Syria.

          Seems that ISIL, ISIS, IS and Daesh are all names invented by the US to spread the narrative through the media. They all mean US proxy army to me.
          Just my opinion.

          readerofgrauniad -> Stephen_Sean 14 Dec 2015 22:01

          But who are the good boys in this? To end the war, Asad is probably the best option, and compared to IS he looks like a saint.


          wardropper -> Lech1980 14 Dec 2015 21:59

          Perhaps that is because ISIS doesn't actually occupy "territory" as such. As Mr. Knight says, they are an ideology, an idea. An idea, unfortunately in this case, doesn't live in houses in prescribed areas any more than Republicanism lives in Chicago. The way forward has to involve NOT creating another 10,000 new mortal enemies in the Middle East every day. Even if only twelve innocent people had died in Iraq in 2003, instead of the hundreds of thousands who actually did, one could understand very large groups of people related to the victims cursing the US for its irresponsible meddling. I would imagine our enemies over there number about 50 million by now, and nobody in human history has been able to survive having that many enemies...

          Thomas Hancock 14 Dec 2015 21:55

          Incredibly ignorant of the president. The US lives in sin with the Saudis. As long as the Saudis keep importing Wahhabism out of their country to others, the problem will exist. The thing you learn from history is that no one learns anything from history. Maybe someone can get a time machine and go back to kill Ho Chi Minh, and Vietnam will be a capitalist paradise. This is the same strategy that helped create ISIS in the first place.

          Bernard Knight 14 Dec 2015 21:55

          We bombed the Taliban. We bombed Al Qaeda. Neither lead to anything more than establishing the rise of ISIS in the destabilised areas we had bombed. What is the point?

          1ClearSense -> Stephen_Sean 14 Dec 2015 21:48

          Is that right? You mean when they hit 1050 oil tanker trucks, that's nothing? US followed up hitting 300. They stopped oil revenues for ISIS, and reduced their revenues by 50 %. The number of sorties they have run on ISIS has been considerably more than US. They have also hit other terrorists to secure the rear, so Syrian troops can move on ISIS. You guys are brainwashed.


          Budovski Ximples -> AaronClausen 14 Dec 2015 21:42

          http://www.independent.co.uk/news/world/middle-east/syria-crisis-turkey-and-saudi-arabia-shock-western-countries-by-supporting-anti-assad-jihadists-10242747.html


          pierotg LupusCanis 14 Dec 2015 21:42

          "the US has killed 23,000 ISIL members in airstrikes"

          Who told you? Disney Channel? Anyone can lie to you as long as you are behind a TV screen. It's quite an easy task (having sufficient intelligence resources and money of course)... It's incredibly obvious it would be sufficient hitting the financing of those mercenaries or not to buy the oil they are selling. You know all that "intelligence resources, analysts, linguists, SIGINT experts...". If only the US government wanted really. And yet what is ISIS? Quite a volatile entity... looks like franchising terror... IS/ISIS/ISIL/Daesh will "desappear" when it won't be useful anymore. And they will only find a new name whenever a new proxy ground army should be required.

          "Kremlinbot"? The cold war revamping has seduced you. Let me rimand you this facts:

          • In 2014 the USA has spent in its military expenditure more than 600 Bn $.
          • Russia is around 80.
          • It's been estimated that after WWII the USA caused the death of about 30 million people all over the planet (challenging Stalin scores).

          You'll find the facts... Not on Disnet Channel though.

          After the dissolution of USSR it was clear that it was not "the enemy" anymore. Yet the Ministry of Defence (and its industry) need powerful and fearsome enemies!
          Et voilà, despite what the Ministry fo Truth says, after 20 years of tranquillity it's Russia getting sourranded by military bases along its borders, losing Ukraine (and possibly its strategic Crimea) and now directly challenged in Syria (where they have military bases). Doesn't Russia have the right to "defend" itself and have allies? They have a Ministry of Defense too...

          What if Russia had intervened to topple king Salman of Suadi Arabia because of him being a fearsome dictator? Yet no one did nothing when the "arab spring" was brutally repressed in the region (with the help of the USA).

          It's quite hard not to admit the USA has been quite agressive and active ... So whose to blame for this warfare and new cold war tensions? You might be more biased and less Whitehousebot.

          PS
          Of course I'm not russian.

          Bernard Knight 14 Dec 2015 21:40

          At it's core ISIS, ISL, DEASH, call them what you will, are a murderous death cult using jihad and the establishment of a califate as their raison d'etre. They are an ideology, an idea. No amounts of bombing or taking territory will annihilate that idea. Perhaps it should be the Islamic world that tackles this threat, starting with first and foremost, our foremost arms purchasers, Saudi Arabia.

          Shatford Shatford 14 Dec 2015 21:34

          Asked if Obama had consciously chosen to make his rhetoric more aggressive for public benefit, White House spokesman Josh Earnest said when the president meets the national security council, "he is not looking at public opinion polls".

          Obvious bullshit. It's this kind of Hilary Clinton-like waffling rhetoric and pandering to opinion polls is what is driving the popularity of Donald Trump's campaign.

          Nolan Harding 14 Dec 2015 21:25

          The Islamic state is surrounded by hostile forces, they are under siege so how are they getting ammunition, refined gasoline, food, internet service and all thier Toyota trucks. Obviously the forces surrounding them are not that hostile. A real siege would have seen them starving to death years ago. Like in Leningrad...now THAT was a siege and REAL war, not this strategic game the deluded masses think is a ' war'.


          JMWong 14 Dec 2015 21:24

          Obama has missed the opportunity to announce that hw would the bunch of criminals consisting of Bush, Cheney, Blair, Rumsfeld, Allbright, McCain, Cameron, Hollande, etc. to the International Tribunal for trial for their crimes against humanity. They have murdered millions of people.


          bunkusmystic -> burnel 14 Dec 2015 21:18

          Have a look at the latest Isis videos they have all the latest American weapons ... How do you think they get them? Is it private citizens in Saudi who buy them or the government ... The Saudis want the Iraqi and Syrian oil fields and they are using this Isis fabrication to get them. If the coalition is so serious about fighting Isis how is it that thousands of oil tankers pass through turkey each day? With no one noticing??? It's only Russia who is taking real action


          tjmars 14 Dec 2015 21:17

          This is to draw the heat-seeker foreign press away from the Mad Turk Erdogan who is fake-begging the Russians to prove the accusations that Erdogan Jr is running "red-stained oil" to major buyers on the Turkish black market...
          Ooops!...don't want to know who those 'terrorist supporting capitalists" are!...
          Is this an example of 'laissez-faire" in Late Capitalism...a "bubble" for risk-taking investors?
          Whew! Its a good thing "Soylent Green" was a fictional commodity in movies or the funeral homes would be void of any "dead meat" for ritual burials..
          Thanlks to Capitalism, we will one day see the mythical "dog-eat-dog" aphorism come to light with "god-damned" good profits...
          The western central bankers weren't 'standing behind the curtain" pulling the levers of power again were they?
          Do a litmus test on their 'red tooth and claw' mentality...
          Hey where did they go?
          Obama made them disappear with his speech!


          clashcr 14 Dec 2015 21:14

          Hmm, not a word about Assad. Well US policy about radical Islam - take your pick there are nearly 20 groups in Syria - is about it being overt and not covert. So, they are pleased when radicals show their faces and establish territory because it attracts more radicals to leave the west to go there to be killed. The other result may be that the moderates like the Muslim Brotherhood who may seriously have been talking about a pan-Islamic Caliphate and Sharia law have seen their cause put back by decades.


          JMWong -> sage10 14 Dec 2015 21:12


          If the USA wants to fight ISIS, it must attack ISIS at its source, that is, the countries where the ISIS fighters originate. This means Turkey, Saudi Arabia, the USA itself, UK, France, etc. Bomb these countries and the sources of ISIS fighters will dry up.

          sashasmirnoff 14 Dec 2015 21:09

          I apologize for deviating slightly from this story, but I have a link to share concerning what would usually be considered a sensational story, but this paper has neglected to cover it. A Turkish Parliamentarian has come forward with documented proof that in 2013 Turkey supplied IS with the components to manufacture Sarin gas and facilitated their transport to the IS in Syria. I have no idea why the Guardian doesn't consider this to be newsworthy.

          https://www.rt.com/news/325825-sarin-gas-syria-turkey/

          sage10 14 Dec 2015 20:59

          I still see nothing but a PR blitz here. The strategy has not changed. The claims of success are over-rated. ISIS still controls large swathes of territory; and more importantly, it has shown it can project power internationally...all the way to the US...through sleeper cells and lone wolf attacks. The only way to deal with such a pernicious organization is a full on-the-ground massive combined arms assault: armor, air power, and heavy infantry. It won't take a Desert Storm type campaign, as ISIS is no where near as large as Saddam's army; but it will take a real coordinated military campaign with boots-on-the-ground to seize and hold territory. No question about that. Obama won't commit to that type strategy, so it will be up to the next President to do so, as ISIS will still be around by then, given Obama's reliance solely on air power.


          giorgio16 14 Dec 2015 20:59

          ...is Obama aware that Russia is already fighting isis,...and from the right side?... or he is pretending he is in charge now?
          ...Saudis are fighting shias in Yemen on one side, creating a humanitarian disaster no one wants to acknowledge, and Assad in Sirya on the other creating another disaster convenniently blamed on Assad by Obama and co...interesting times ahead...


          TomGray 14 Dec 2015 20:43

          Obama used the same decapitation tactic against Al Queda. Al Queda destabilized because of it and morphed into ISIS. There is no shortage of people who want to become leaders in any organization. Obama's tactics may hinder ISIS but they will not cause the organized violence that it currently represents to disappear. The players may change but the game remains the same.

          Decapitation can only be part of an effective strategy and so far Obama has not demonstrated that he has the capability to draw together the other essential elements


          ID4352889 -> DogsLivesMatter 14 Dec 2015 20:41

          Saudi flew thousands of Jihadists out of Syria a while ago and sent them to Libya. It is well documented. The West did not interfere. Presumably for the same reasons they didn't interfere with the Turkey/Daesh oil scam.


          DelOrtoyVerga 14 Dec 2015 20:35

          Hurry up Obama before the Ruskies steal your thunder! or the few sparks that are left by now that is...
          Mwahahaha...

          I'm sure these special forces, these token "boots on the ground" you are sending will be exclusively focusing on ISIL and are not being sent to undermine the Syrian government or their allies, I repeat the special forces ARE NOT BEING SENT TO UNDERMINE THE SYRIAN GOVERNMENT OR THEIR ALLIES.

          HowSicklySeemAll 14 Dec 2015 20:26

          Why did the US wait until now to 'drop more bombs than ever before'?

          Russian foreign minister recently stated that:

          "We have noticed that the US-led coalition stepped up its fight against IS only after Russia dispatched a combat air group to Syria. The coalition efforts undertaken in Syria earlier could be described as odd, to say the least This brings to mind NATO's operations in Afghanistan We don't want the fight to be feigned."

          DomesticExtremist 14 Dec 2015 20:13

          Can we assume from this that the fix is in: Kilary has been selected for Pres and Obomber has to roll the pitch on her behalf so that she can hit the ground running?

          "We came, we saw, they died. (insane cackle)."

          Look out for some killer blow to be landed on the Donald soon.

          Sualdam -> meewaan 14 Dec 2015 20:10

          The biggest contribution America can make to getting rid of Isis is to "persuade" its friends and allies - Saudi Arabia, Qatar and Turkey mainly - to turn off the tap of finance, munitions and logistics to Isis, Al Qaeda in Syria (Al Nusra) and its allies like Ahrar Al Sham. No American ground troops needed; they would be counter-productive.

          MrJanuary 14 Dec 2015 19:55

          Well done Russia for mobilizing the worlds second largest military force, the USA, in Syria against ISIS.


          robertthebruce2014 -> MasonInNY 14 Dec 2015 19:48

          We love Putin here in Europe, at least he defends European interests. The USA is only defending Saudi and Israeli interest. We are currently in the process of breaking up the NATO coalition. The USA can stick with Turkey, Israel, and the Saudis.


          pierotg 14 Dec 2015 19:43

          December 2015: "We are hitting Isil harder than ever" .

          July 2015: https://www.youtube.com/watch?v=p2NkjNvwuaU

          !!! Look at the eys of that general behind, please! He was falling almost asleep and then ... frozen! Is it just my impression? That would be really hilarious if we weren't talking about war and crimes against humanity.

          Please, stop lying this way.
          This is far too much. This is alienating.

          The USA and UK governments are loosing all that was left of their credibility and reliability in the last decade and the only strategy left seems to make the big lie bigger than ever. This is like shouting at the world "I can do whatever suits me and f**k the rest!"
          Even their relationships with their EU partners have proved slick.

          I've been listening to politicians speeches and interviews lately and found myself thinking: "That autocrat and ex KGB agent ruling Russia sounds much less hypocrite and far more competent". What if you could choose between Putin or Trump to represent your country (just as if they were sport pros you could hire for your team)?

          This is far too much. This won't do any good and nuclear weapons can still destroy our planet in 30 minutes. Whoever is behind this mess what's going to profit then? This is obscene incompetence and fearsome irresponsibility.

          In my teens Steve Stevens's Top Gun Theme got me goosebumps... On my Strat guitar there has been a Union Jack pickguard for 25 years... What shall I tell my son when he will ask me why I removed the original white one? I'm getting quite embarrassed.

          Is it the End of the World as We know it? Yet I don't feel fine.


          1ClearSense 14 Dec 2015 19:40

          Yemen is the poorest Arab country with limited resources. The Saudis, along with a slew of other Arab regimes have been bombing the Yemeni military and Houthi militia who were clearing up Al Qaeda out of Yemen pretty good, for 9 months.

          In the summer the Saudis and UAE sheiks decided to send ground forces to "liberate" Yemen. Other than taking some part of southern Yemen with the help of separatists and jihadis of all sort, they failed in their mission. A single attack on Saudi military caused dozens of Saudi and Emarati dead. The Emaratis decided on Colombian mercenaries, the Saudi paid Sudanese military to send troops. Yesterday the Yemenis killed a large number of these mercenaries (anywhere between 80 to 150) including the Saudi commander and another high official and a Emarati officer.

          Southern Yemen, the "Saudi liberated" areas is being taken over by al Qaeda piece by piece, and also ISIS has become very active. The idea that these Arab regimes can be productive in anything to defeat jihadi terror is a pipe dream. It is all about public relations and having "Sunni Arabs" along to defeat "Sunni Arabs" jihadis. This is so completely miscalculation that will backfire. Saudis and their crew have no desire or ability to defeat the wahhabi terrorists. The time has come to see it as what it is, the only way to defeat the jihadi terrorists is teaming up with the people who are being successful, and that doesn't include the Arab tyrannies.


          Panda Bear -> Steven Wallace 14 Dec 2015 19:33

          Did your father know offices controlled by the \British at Suez were apparently given over to the Moslem Brotherhood? UK used Islamic extremists back then and US has continued the policy it appears.

          I was recently reminded of Churchill's speech about the possibility of Germans invading Britain... "We'll fight them on the beeches" etc. Wonder if the Germans would have considered the British fighters terrorists if they had managed to occupy Britain?
          Occupation by foreign forces is ok if it's our forces or our allies and our enemies cannot resist or they are designated as terrorists... National Sovereignty is disregarded whole sale by US/NATO and allies.

          One rule for us, another for 'them'! Hypocrisy reigns supreme.


          Steven Wallace -> Zara Thustra 14 Dec 2015 19:32

          haha ok well thats too simplistic Mr Zarathustra . The issue with Islamic fundamentalism is that it uses a religion to kill innocents without targeting anyone of any real importance . The Koran has not changed like the New Testament but I really do not believe that modern day Muslims who pray would all wish to kill me because I am not a Muslim .

          That scare mongering is simply a distraction ,as George Bush said " Who is this Bin Laden ?" Well I would have said " You know him George ,his family financed your oil business ,they are friends of your family ".

          All Muslims are scary to us while the real issues are being ignored 24/7

          The Bible is full of evil concepts ,why not consider ourselves in the West as evil Christians ?

          Not me though ,I'm an atheist


          LewisFriend -> Miramon 14 Dec 2015 19:32

          Well Assad wasn't massacring people either till their was an uprising.. Yet in Syria people were a lot more free than Saudi.. They also don't have the CIA on the ground encouraging one. Be under no illusions the ruling Saudi clique are animals.


          WatchEm 14 Dec 2015 19:30

          Barack Obama warns leaders of Islamic State in speech: 'you are next'

          Threats like that are enough to get my parrot squawking with laughter - forget any "terrorists" or anyone with a live brain cell.

          Yet more tries to reassure a domestic audience, who unlike the majority of nations, apparently live in fear, and need convincing that the USG is doing something and "leading the way" in their declared "War on Terrorism". It's like having to tolerate listening to the banality of what purports to be US "news networks".

          Unfortunately, after around 10,000 bombing runs and predictable time-wasting talk, the message is still not sinking in that the Grand Master Plan of 'leading the way' is a failure and reduced to hope that they can stop terrorism by 'taking out' some leadership. Yep, heard that one before. The USG 'defeated terrorism' by 'taking out' Al Queda leaders - a number of them 34+ times. Al Queda no longer exists - not.

          Instead of 'leading from the rear' and expecting other nations to clean up the carnage and havoc left over by US adventures into the Middle East, perhaps the USG could find a few non-torturers, non rapists and no members of US death squads and clean the region up with their own trash collectors as 'boots on the ground'. Well... no harm in dreaming and fantasising it might work and "we can win, win, win" ...

          So, bottom line, order more bombs with taxpayers funds Carter, and pretend you matter while the 'leader' continues the infantile rhetoric for US consumption, just as his predecessor did. May the US people and people in other victim nations be saved from US 'little men' - both 'generals' and politicians.


          PS Try not to bomb innocent men, women and children on the ground during the bombing runs. They never deserved your slaughter, carnage, death squads and torture the last time around and don't need a US euphemism, "collateral damage", to justify their deaths. But of course, counting bodies is not a topic of conversation in the Rogue Regime of the West. It only matters if it is US men, women and children who are slaughtered while the US regime role play fighting for "democracy and freedom" by "leading from the rear".


          Panda Bear -> MRModeratedModerate 14 Dec 2015 19:21

          Some of them are very busy bombing Yemen to destruction and recruiting mercenaries in places such as Columbia to help! The situation for citizens in Yemen is dire, some areas described as on the verge of famine partly due to the embargo that is also imposed.

          JMWong 14 Dec 2015 19:09

          This speech shows the hypocrisy of the Americans. In fact, as it was made clear many times before, the real objective of the USA is to invade Syria, to destroy Syria and to murder as many Syrians as possible, including its President, Assad. The USA had the same objective with regards to Iraq and Lybia. Iraq was invaded and destroyed. Hundreds of thousands of Iraqis were murdered by the coalition of the willing led by the USA. The lives of tens of millions Iraqis have been destroyed. Its President, Saddam Hussein was murdered. In the case of Libya, the same coalition of the willing, led by the same USA, bombed Libya for six months. It was the greatest terrorist attack over the last ten years. It was six months of terror for millions of Libyans everyday for over six months. More than thirty thousand Libyans were murdered in this exceptional terror attack, including its President, Kaddafi. Now, the USA is leading the same coalition of the willing to murder hundreds of thousand Syrians. Assad must go, chant the USA and its f...king partners. We heard the same chant with regrda to Saddam Hussein and Kaddafi. Saddam Hussein must go. Kaddafi must go. As if the USA with its f.. Partners are the ones to choose who should and should not rule Iraq, Libya and Syria. ISIS was created, is funded, trained armed and supported by the USA and its willing partners. For more than one year that they are bombing Syria, they did not see the thousands and thousands of trucks carrying robbed oil from Syria to Turkey. And now Obama, flanked by thecriminal Ash Carter, a creature of McCain, claims that he is determined to fight ISIS. Since many of the ISIS fighters come from the USA, UK, France, why do you not start by bombing the USA, UK, France. Why start with Syria?

          Steven Wallace 14 Dec 2015 19:05

          Because truth has no place in the modern political theatre . Truth is down to perception and when you control the media you control the truth .Remember NORID ,when the US funded the IRA against the UK ? The IRA used bombs to kill many innocents in their resistance to the British occupation . My brother was a soldier in the British Army and believed he was doing the right thing by going to Northern Ireland . After reflection he now feels he was wrong to be a part of that situation .My father served in Egypt during the Suez Crisis and felt he was right to be there and later questioned why so many young lads were sent to such a inhospitable foreign land . The reason always comes down to money .

          MRModeratedModerate 14 Dec 2015 19:04

          "in recent weeks we've unleashed a new wave of strikes on their lifeline, on their oil infrastructure..."

          I don't see no bombs falling on Turkey?

          illbthr22 -> ObambiBot 14 Dec 2015 18:54

          Your country provides nothing positive to the world. I watch American movies, eat American food, listen to American music. Russia doesn't exist to me. The only time i hear Russia mentioned is when Russia is threatening war with someone or 2 drunks are beating each other up on youtube.


          supercool -> BG Davis 14 Dec 2015 18:49

          Again read my comment. The way the war on drugs is waged and fought. It is never ending, murky and with so many dubious allegiances.

          The war on terror is never ending, murky and with so many dubious allegiance. For example we exported Jihadism to Afghanistan to defeat the invading communist Soviet's, they eventually morphed to the Taliban who then gave sanctuary to Al-Qaeda. Which formed an affiliate branch in Iraq after our invasion in 2003 and which morphed into the Islsmic state.


          HollyOldDog -> stonedage 14 Dec 2015 18:48

          Obama is the first black American President but that doesn't mean that he is the first sensible one.


          Whitt -> supercool 14 Dec 2015 18:46

          As someone who is old enough to have lived under two great Presidents and three great-but-flawed Presidents, I'm saying that Obama is a 2nd-rater at best. A hundred years from now he'll be a triva-question President like Millard Fillmore or Grover Cleaveland.

          OscarAwesome 14 Dec 2015 18:44

          Sure, this is typical political spruiking. Obama doing the Commander in Chief thing, proclaiming PROGRESS, reaffirming how bad the 'enemy' are, saying tough things as a response to the accusations of weakness by US conservatives (who are coy about what their actual alternative to Obama's approach is because it probably looks very much like catastrophic full invasion foolishness of George W's Iraq war), blah, blah, we've seen it all before on countless occasions.

          The situation in Syria in particular is ridiculously complex and consists of a plethora of detail and options for action about which we will all have wildly divergent opinions.

          But there is a part of this that is simple. There are practically zero options for dealing with ISIL/IS/ISIS/whatever besides killing them. They seek no negotiations, offer no potential compromise position and their take on politics is to simply kill everyone who isn't them. The lack of alternate, peaceful/diplomatic options ISIS and similar groups offer, with their preposterous Dark Ages philosophies, is in a macabre way almost refreshing.

          The hard bit is how to kill/capture/degrade their capability without a) slaughtering bystanders and b) causing such carnage as to act as an ISIS recruitment agency.
          For all the great many faults and excesses of the West and the larger Muslin world, ISIS

          do not in any way offer a comprehensive socio-political alternate system of government with a vestige of logical appeal to humanity (unlike, say the threat communism represented in the 20th century). They have some vague pipe dream of apocalyptic conflict where the other 99.999% of the human race is either slaughtered or magically converted to embracing the reversal of human history by 1,500 years. Not going to happen. Silly.

          The threat ISIS represent is largely emotional. Unless you are lightning-strike like unfortunate (or they get hold of nuclear weapons) ISIS disturb our assumptions of physical safety in a symbolic way only. The histrionics generated by that fear is our real enemy.

          Popeyes 14 Dec 2015 18:44

          What a disappointment, I was waiting for Obama to explain just why he didn't bomb IS oil facilities, and why the U.S. are still best buddies with Saudi who it seems supplies and finances most of the terrorists in Syria and Iraq. Nothing new here move along.

          Horst Faranelli 14 Dec 2015 18:43

          ...but the spot oil price is squeezing the heart out of Russia.

          Panda Bear -> GustavoB 14 Dec 2015 18:43

          There have been reports for a while (since Russia began bombing) that Isis have been fleeing Syria and many commanders have relocated to Libya. Isis have overtaken one of the so called governments and are making gains, oil assets their next target I read yesterday.


          Seasuka -> DoomGlitter 14 Dec 2015 18:41

          Whatever America's position now, for decades they have supported and helped to arm Salafist jihadis through Saudi and the Muslim World league in opposition to any secular or perceived communist movements in the region which might threaten oil supplies. Ditto uk.


          jmNZ 14 Dec 2015 18:40

          The secular Syrian government, with women in its ranks, is fighting for its life against a most ruthless and abominable enemy: fanatical jihadist mercenaries financed by an execrable mediaeval tyranny, Saudi Barbaria. This is the enemy of all we stand for, the enemy that perpetrated 9/11 and 7/7 and their latest clone that bombed Paris concert-goers and Russian holiday-makers. They are paid and trained by Riyadh. And armed to the teeth with modern American weapons, passed to them by the newest demagogue, Turkey's Erdoğan.

          The sworn enemy of all these head-chopping bigots is Assad's secular republic of Syria because it challenges the ideological dogmatism of Sharia Law. This law is as rigid as Hitler's Nazism or Stalin's communism.

          And we wonder whether we should support Assad?
          For the record, here are some undisputed facts:

          30 countries, including South Africa, sent election observers to Syria and found them to be "reasonably free and fair". This was in 2014 when Basher al-Assad got 88% of the vote in the first multi-party presidential elections. Nearly half the population of Syria actually made it to the polls. Not half the electorate, half the population.

          Syria is governed by 5 parties in coalition opposed by a 2 party coalition of 5 members and 77 "Independents". Assad's Baqath Party has a majority, 134 out of 250.

          Syria is today's Czechoslovakia.


          Whitt -> supercool 14 Dec 2015 18:34

          "Compare his Presidency with George Bush or most previous American President's if recent years." - supercool
          *
          Considering that most of the Presidents that we've had over the last few decades have been mediocrities and that Bush Jr. was downright incompetent, that is truly an example of damning with faint praise.
          *
          *
          "Obama goes into the history books as a great President who achieved so many first's"
          *
          To paraphrase the immortal Douglas Adams, this is obviously some strange usage of the word "great" that I was not previously aware of.


          ByThePeople 14 Dec 2015 18:10

          "in recent weeks'...'destroying hundreds of their (ISIL's) tanker trucks, wells and refineries. So far, ISIL has lost about 40% of the populated area it once controlled n Iraq."

          Anyone else a bit shocked that after having several countries dropping bombs on ISIL for an extended period of time - that ISIL would still be in possession of hundreds of tanker trucks, wells and refineries - their 'life line'....?

          A full fledged oil business in up, running and in the market to sell oil - which is obviously all being bought up and these revenues, combined with other revenue streams, have been supporting ISIL's efforts for an extended period of time.

          I wonder if because 'a few weeks' was finally taken to supposedly destroy this critical infrastructure - if the 'evasive' ISIL oil business - along with revenues - will suffer? I also wonder why the air campaign hasn't been extended to include the purchasers of ISIL's oil supplies - at sea and in their home countries.

          Panda Bear -> supercool 14 Dec 2015 18:10

          Homs has a cease fire, the 'moderate' terrorists have left. Syrian Arab Army and it's allies are making gains, an airport retaken yesterday. Much Isis oil trading infrastructure destroyed.
          https://www.youtube.com/watch?v=PauFSKZafr4
          http://www.middleeasteye.net/news/syrian-army-retakes-key-airbase-rebel-forces-eastern-ghouta-1589655831
          I'm fascinated to know what the Henry Jackson Society is doing there/reporting...


          ohhaiimark -> JackGC 14 Dec 2015 18:03

          And here in lies the problem. The US is not serious about taking down ISIS. They are a convient bunch of psychopaths that can be used for various agendas the US has in mind. Including but not limited to weakening/removing Assad, getting Iran embroiled in costly war, terrifying domestic populations into giving up freedoms, justifying more military interventions that go against international law.

          The list goes on


          1ClearSense 14 Dec 2015 17:59

          The cult of Wahhabi terrorist supported by Saudi Arabia, Qatar, UAE and Turkey need to be defeated. With all the public information available, we are here because of all the wrong moves by the US. It is about time to nip this in the bud. The root problem is in Saudi Arabia. In no uncertain terms US needs to tell the Arab tyrannies to stop the jihadi terror. It is obviouse US has listened to the Saudis and Qataris to create a Sunni militia in Iraq, Syria to "confront" Iran. The imaginary ghost that constantly scares Saudi tyranny. The result has been all the various head chopping terror groups. The "Sunni" Arab tyrannies will never supply troops to take over areas occupied by terrorists. Qatar demands sanitizing al Qaeda terrorist in Syria and giving them a say. It is stupid to even consider these as allies in fight against the wahhabi Islamist terrorists. Time has come to forget about removing Assad, just cooperate with Russia, Syria, Iran and Iraq to take back land from all terrorists step by step, and have the legitimate government in Syria and Iraq, with their pro government militia control the ground.

          TheBorderGuard -> gunnison 14 Dec 2015 17:55

          Isis must ultimately be defeated by Muslim forces, or we'll be manufacturing radical faster than we can kill them.

          The Muslims seem to be manufacturing radicals quickly enough without any help from us.

          TonyBlunt 14 Dec 2015 17:51

          "We are hitting Isil harder than ever."

          Here is how hard the US and their regional allies have been hitting ISIL and the other jihadi terrorists:

          bolobo -> impartial12 14 Dec 2015 17:50

          Good docu about that recently. Might still be available on BBCiplayer. The Americans bought Saudi drilling rights for 2cents and the Brits bought Iraqi rights for tuppence. Twenty years later the middle easterns thought "hold on a minute," and offered a fifty-fifty split. The Americans pragmatically accepted, thus their relationship with the House of Saud, the Brits got all uppity at the natives and got kicked out.

          TheSindhiAbbasi -> gunnison 14 Dec 2015 17:45

          What about billions of US military equipment in Iraq, that was captured by Daesh?

          gunnison 14 Dec 2015 17:40

          Freeze Saudi assets and blockade all their exports until they send all that gee-whiz military equipment we sold them into this fight, and all the Saudi military we trained too.

          Isis must ultimately be defeated by Muslim forces, or we'll be manufacturing radical faster than we can kill them.

          Panda Bear -> Jools12 14 Dec 2015 17:36

          "We only get some action now that Russia has been attacking ISIS in Syria and of course there is minimal reporting of the successes of the Russians in Western media."

          Exactly. Russia is the old enemy, it is interfering and questioning US actions and has huge natural resources. Putin called them out in his speech at the UN...
          US has been provoking Russia for some time, and is also provoking China. This may not end well for any of us and no one will stand up and demand it stops!

          HAGGISANCHIPS -> ame1ie 14 Dec 2015 17:34

          The nazi ideology was removed militarily. It couldn't survive because it was morally wrong and repugnant, like Daesh.

          Edward Frederick Ezell 14 Dec 2015 17:27

          Sending our professional agents of coercion and terror to kill people in foreign countries over which we somehow more or less claim jurisdiction is not something that is clearly beneficial in the long term although it does respond appropriately to the call for vengeance and blood from our own political actors.

          Panda Bear -> Taku2 14 Dec 2015 17:27

          US has turned it into a proxy war with Russia and Iran and has called in the NATO allies to back them up. Obama seems to work differently to previous presidents like Bush, he seems to like to work quietly using drones and not much publicized actions and calls in the NATO and allied troops to cover their actions.

          Taku2 14 Dec 2015 17:23

          America will do this America will do that. Well, guess what; you cannot do it on your own. You cannot make a successful strategic plan to fight Daesh without the Russians, Iranians and Syrian government forces being integral elements of such a plan.

          Daesh is like an Hydra, so bombing alone cannot defeat it, it just spread it to new areas. You need to do an honest review of how Daesh was created; albeit, unintentionally, by ill-conceived American and EU/NATO policies in the Middle East and Africa.

          America and EU/NATO cannot effective fight the war being waged by Daesh and Al Qaeda, until they have learned the lessons to be learned from their misguided policies, and openly acknowledged the mistakes they have made.

          Sunrise_Song 14 Dec 2015 17:18

          What would it be like to live in a truly peaceful and free world? All it takes is strength, foresight and the guts to be honest.

          All the things the West is failing at. Obama like most Western leaders is a weaver of lies and half-truths.

          How can we ever have peace until we challenge the core issue? This is an ideological fight. It's a war of minds. ISIS believe the West is a basin of sin. That our liberal and secular ways need to be destroyed and replaced by their ideologies and way of life.

          Only, we can see they're wrong. That even with our faults and flaws, our belief in freedom, democracy and equality is the best way, still we defend that same ideology in our own nations.

          Obama is failing the American people. Just like Merkel and Co are failing the European people.

          Bombs won't stop IS.


          Jools12 14 Dec 2015 17:18

          What have they been doing for the last two years then? No attacks on ISIS trucks transporting oil, no sanctions on countries that have been buying that oil. We only get some action now that Russia has been attacking ISIS in Syria and of course there is minimal reporting of the successes of the Russians in Western media. As far as Libya is concerned, there are very ominous signs that ISIS is moving to set up headquarters in that country, a country a lot closer to Europe than Syria or Iraq are. There is also the problem that the Russians will not be involved in Libya, unlike Syria, they do not have a functioning government to ask them in. Libya is the nightmare created by NATO and the US, they will have to take full responsibility for their dreadful actions there and fight the barbarians they created, no sitting back and allowing them to flourish this time.


          TheBorderGuard 14 Dec 2015 17:13

          Obama told reporters: "This continues to be a difficult fight. Isil is dug in, including in urban areas, and they hide behind civilians, using defenceless men, women and children as human shields. So even as we're relentless, we have to be smart, targeting Isil surgically, with precision."

          Good luck, boss. Ask Netanyahu how it went for the Israelis when they tried to end Hamas' rocket attacks from Gaza. Because that's the kind of foe you'll be up against.


          poechristy 14 Dec 2015 17:10

          Someone has obviously told Obama that his Mr Nice Guy act was merely encouraging Islamic State and their supporters in the US. It's time for all Western nations to make clear that anyone involved in any way with Islamic State-funding them, promoting them, or returning from fighting for them- will feel the full force of the law. I can't understand why those returning from Syria are not immediately arrested and held to account.
          I rather suspect we wouldn't be seeing the same appeasement if white supremacists were returning from a foreign land having been involved in the torture,rape and murder of ethnic minorities.


          lefthalfback2 DogsLivesMatter 14 Dec 2015 17:06

          NYT said a few days back that ISIS are looking to Surt in Libya as the spot to which they can decamp if the Heat comes down in Iraq. Does not seem likely to me since it is on the coast and could easily be struck from the sea.


          Whitt DogsLivesMatter 14 Dec 2015 17:03

          Weren't you paying attention?

          (1) We have a coalition of the willing in the international War on Terror.
          (2) ISIS is on their last legs. There's nothing left but a bunch of dead-enders.
          (3) We're squeezing their heart in Iraq, their balls in Syria, and their spleen in Libya.
          (4) There's a light at the end of the tunnel.
          (5) Ve are vinning ze var!

          Now get with the program and quit interfering with the narrative or it's off to Gitmo with you, me lad!


          ohhaiimark 14 Dec 2015 16:58

          Want to stop ISIS? It's rather simple. Sanction those who fund them. Sanction those who spread Wahhabism. Sanction those who buy oil off them....Basically sanction all of America's allies in the region.

          Then work together with the Russians, the Syrians, the Iranians and whoever else is willing to send ground troops in to take each town and city occupied by these scumbags one by one.

          You can't defeat ISIS if your goal is also to remove Assad. That will only help ISIS. It's time to wake up from that delusion that Assad is going anywhere. Once the war is over, then we can let the Syrian people decide who will lead them through democratic elections.


          Djinn666 14 Dec 2015 16:56

          They've squeezed so hard that it oozed into Libya and other points on the compass, including San Bernardino.

          Note to CIC Obama, However beautiful the strategy, you should occasionally look at the results (Winston Churchill).


          Fence2 14 Dec 2015 16:54

          What a farce, who does Obama think he's kidding? If the US was serious about ISIS it would have been finished off a year ago, now that Russia has called the US's bluff they now have to pretend to step up to the plate. Pathetic.


          DogsLivesMatter 14 Dec 2015 16:50

          Meanwhile in Libya....http://www.aljazeera.com/news/2015/12/world-leaders-push-libya-peace-isil-fills-vacuum-151214044020934.html
          Apparently there are 3,000 ISIL fighters in Libya at the moment. It's time President Obama and John Kerry gave us the whole story, but I guess with Saudi Arabia and Turkey being allies the US can't rock the boat too much.


          dikcheney 14 Dec 2015 16:48

          More drivel from the counterfeit president. His allies in the middle east are disgusting butchers. Take Turkey: it is a great shame for Turkey that 32 journalists are imprisoned in the 21st century. Some were arrested on Nov. 26 after being charged in May with espionage, revealing confidential documents and membership in a terrorist organization. The charges are related to a report published by a leading newspaper claiming weapons-loaded trucks that were discovered in January 2014 en route to Syria actually belonged to the National Intelligence Organization (MİT) and had been sent to provide support to rebel groups.

          The USA has been seduced and conned for decades until its entire policy is focused on fighting proxy wars to keep the middle east ablaze in the interests of others. SHAME on the dumb USA.

          laguerre 14 Dec 2015 16:39

          A load of rubbish. US supports the Saudis, who support ISIS. US attacks on ISIS are not serious, as the speech suggests.

          [Dec 14, 2015] No Turkish fabric to make anti-Turkish T-shirts, say Russian designers

          There are two possibilities here: iether Guardian pressitutes sometimes try to play degenarates or they consider their readers to be degenerates...
          Notable quotes:
          "... Typical The Moscow Times garbage. ..."
          "... Hmmm, some really sophisticated comments and analysis apropos of current issues in geopolitics and international relations. Nuanced, objective, and informative. Excuse me but I have to go watch some more esoteric reportage fro