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Casino Capitalism: Neoliberalism in Western countries

"When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done" ~ John Maynard Keynes

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Financialization is a process whereby financial markets, financial institutions, and financial elites gain greater influence over economic policy and economic outcomes. Financialization transforms the functioning of economic systems at both the macro and micro levels.

Its principal impacts are to (1) elevate the significance of the financial sector relative to the real sector, (2) transfer income from the real sector to the financial sector, and (3) increase income inequality and contribute to wage stagnation. Additionally, there are reasons to believe that financialization may put the economy at risk of debt deflation and prolonged recession.

Financialization operates through three different conduits: changes in the structure and operation of financial markets, changes in the behavior of nonfinancial corporations, and changes in economic policy.

Countering financialization calls for a multifaceted agenda that (1) restores policy control over financial markets, (2) challenges the neoliberal economic policy paradigm encouraged by financialization, (3) makes corporations responsive to interests of stakeholders other than just financial markets, and (4) reforms the political process so as to diminish the influence of corporations and wealthy elites.

Thomas Palley, See http://www.levyinstitute.org/pubs/wp_525.pdf

Speculation and gambling were always a part of Wall Street but since the 1930’s they were just a side-show, now they are the show.

Comment to Matt Taibbi article Fannie, Freddie, and the New Red and Blue t


Introduction

“The sense of responsibility in the financial community
for the community as a whole is not small. It is nearly nil.”

-- John Kenneth Galbraith, The Great Crash of 1929

The term Casino Capitalism generally is symonim of neoliberalism (also called economic liberalism), but it also point out to a specific phase of neoliberal transformation of capitalism. Politically it was slow motion corporate coup d'état, which started in 70th and is now accomplished in the USA and other Western countries which buries social-democratic (New Deal style) model of capitalism. 

It hypertrophied police functions of state (in the form of national-security state)  while completely avoiding economic sphere in ways other then enforcement of laws (with a notable exclusion from this top 1% -- "Masters of the Universe"). Like bolshevism it uses the state for the enforcement of the social system.  On top level this is crony capitalism for major corporation. On low level of medium and small business owners it presupposed a deregulated economy (in a sense of the "law of jungle" as a business environment).

Casino capitalism presupposes strong militarized state, suppressing all the attempts to challenge the new "nomenklatura" (much like was the case in the USSR).  It is quite different from traditional liberalism:

“Liberalism” can refer to political, economic, or even religious ideas. In the U.S. political liberalism has been a strategy to prevent social conflict. It is presented to poor and working people as progressive compared to conservative or Right wing. Economic liberalism is different. Conservative politicians who say they hate “liberals” — meaning the political type — have no real problem with economic liberalism, including neoliberalism.

In other words this is neoliberal model of corporatism during the period of "cheap hydrocarbons".  The period that is probably near the end and which by some estimate can last only another 50 years or so (less than 100 years).  The major crisis of casino capitalism in 2008 was connected both with financial excesses (caused by moving to semi-criminal ways of extracting return on capital, typical for casino capitalism),  but also with the rise of the price of oil and decrease of  Energy returned on energy invested (EROEI)In this sense the last low oil price period which started in late 2014 and ended in spring 2018 can be viewed as the "last hurrah" of the casino capitalism.

In understanding neoliberal transformation of the society since early 80th it is important to understanding of the key role of financialization in this process. When major services are privatized (education, healthcare, pension plans) financial institution insert themselves as intermediaries in this arrangement and make it the main source of their profits.  Also contrary to neoliberal propaganda this process is aided and abetted by state. State is used by neoliberalism as a tool of enforcing market relations even where they are not useless or even harmful (education). All this talk about irresolvable controversy between market and state is for gullible fools. In reality, being Trotskyism for rich, neoliberalism uses power of the state to enforce market relations  by force on reluctant population even in areas where this can do no good. That make really it close to Soviet social experiment, which lasted from 1917 to 1991 or almost 75 years. As Marx noted "History repeats itself, first as tragedy, second as farce."

A very good discussion of the role of Financialisation in entrenchment of neoliberalism in modern societies can be found in the book by Costas Lapavitsas. Some highlights are provided in his Guardian article Finance's hold on our everyday life must be broken

This extraordinary public largesse towards private banks was matched by austerity and wage reductions for workers and households. As for restructuring finance, nothing fundamental has taken place. The behemoths that continue to dominate the global financial system operate in the knowledge that they enjoy an unspoken public guarantee. The unpalatable reality is that financialisation will persist, despite its costs for society.

Financialisation represents a historic and deep-seated transformation of mature capitalism. Big businesses have become "financialised" as they have ample profits to finance investment, rely less on banks for loans and play financial games with available funds. Big banks, in turn, have become more distant from big businesses, turning to profits from trading in open financial markets and from lending to households. Households have become "financialised" too, as public provision in housing, education, health, pensions and other vital areas has been partly replaced by private provision, access to which is mediated by the financial system. Not surprisingly, households have accumulated a tremendous volume of financial assets and liabilities over the past four decades.

The penetration of finance into the everyday life of households has not only created a range of dependencies on financial services, but also changed the outlook, mentality and even morality of daily life. Financial calculation evaluates everything in pennies and pounds, transforming the most basic goods – above all, housing – into "investments". Its logic has affected even the young, who have traditionally been idealistic and scornful of pecuniary calculation. Fertile ground has been created for neoliberal ideology to preach the putative merits of the market.

Financialisation has also created new forms of profit associated with financial markets and transactions. Financial profit can be made out of any income, or any sum of money that comes into contact with the financial sphere. Households, for example, generate profits for finance as debtors (mostly by paying interest on mortgages) but also as creditors (mostly by paying fees and charges on pension funds and insurance). Finance is not particular about how and where it makes its profits, and certainly does not limit itself to the sphere of production. It ranges far and wide, transforming every aspect of social life into a profit-making opportunity.

The traditional image of the person earning financial profits is the "rentier", the individual who invests funds in secure financial assets. In the contemporary financialised universe, however, those who earn vast returns are very different. They are often located within a financial institution, presumably work to provide financial services, and receive vast sums in the form of wages, or more often bonuses. Modern financial elites are prominent at the top of the income distribution, set trends in conspicuous consumption, shape the expensive end of the housing market, and transform the core of urban centres according to their own tastes.

Financialised capitalism is, thus, a deeply unequal system, prone to bubbles and crises – none greater than that of 2007-09. What can be done about it? The most important point in this respect is that financialisation does not represent an advance for humanity, and very little of it ought to be preserved. Financial markets are, for instance, able to mobilise advanced technology employing some of the best-trained physicists in the world to rebalance prices across the globe in milliseconds. This "progress" allows financiers to earn vast profits; but where is the commensurate benefit to society from committing such expensive resources to these tasks?

The term "casino capitalism" was coined by Susan Strange who used it as a title of her book Casino Capitalism published in 1986. She was one of the first who realized that

  1. "The roots of the world's economic disorder are monetary and financial";
  2. "The disorder has not come about by accident, but has in fact been nurtured and encouraged by a series of government decisions." (p. 60). In other words its was a counter-revolution of the part of ruling elite (financial oligarchy) which lost its influence in 30th (dismantling New Deal from above in the USA (Reaganomics) or Thatcherism in the GB).

According to Susan Strange transformation of industrial capitalism into neoliberal capitalism ("casino capitalism") involved five trends. All of them increased the systemic instability of the system and the level of political corruption:

  1. Innovations in the way in which financial markets work due to introduction of computers;
  2. The sheer size of markets; (with the introduction of 401K the size of stock market multiplied, etc)
  3. Commercial banks turned into investment banks;
  4. The emergence of Asian nations as large players;
  5. The shift to self-regulation by banks (pp.9-10).

Now it is pretty much established fact that the conversion from "industrial capitalism" to neoliberal, completely financialialized "casino capitalism" is the natural logic of development of capitalism. In early and incomplete matter this trend was noticed at early 1990th by many thinkers. This is just the second iteration of the same trend which was interrupted by the Great Depression and subsequent WWII. So, in a way, replacement of industrial capitalism with financial capitalism in a natural tendency within the capitalism itself and corruption was contributing, but not decisive factor.  The same is true about globalization, especially about globalization of financial flows, typical for casino capitalism, which is a form of colonialism (neocolonialism).

Also this conversion did not happen due to lack of oversight or as a folly. It was a couscous choice made by the US and GB elite, both of which faced deterioration of rates of return on capital. Also unlike "industrial capitalism" which was more-or-less stable system, able to outcompete the neo-theocratic system of the USSR, the financial capitalism is unstable in the same sense as radioactive elements are unstable.  And this instability tend to increase with time. So there is probably natural half-life period for neoliberalism as a social system. It might be already reached in 2008.  In we assume that global victory of neoliberalism happened in 1990. It is just 18 years.  If we think that it happened in late 60th, then it is closer to 50 years.

The global crisis of neoliberal capitalism which started from bursting the USA subprime housing bubble in 2008 undermined ideological legitimacy of its central claim that "free markets" lead to faster and more uniform economic development of all countries. While the peak of its "ideological" power might be over (much like the peak of attractiveness of "command socialism" was over after WWII), it will exist in a zombie state for a long time due to economic and military power of the USA and G7.  And as we know from Hollywood films, zombies can be especially bloodthirsty. It probably will remain the dominant force for at least the next two decades pursuing the same policy of "forceful" opening of energy rich  and resource countries for western multinationals intact using color revolutions and local wars.  But as Napoleon quipped "You can do anything with bayonets, you just can't sit on them".

Conversion to neoliberal capitalism was a reaction on stagnation of industrial production and as such it was nurtured and encouraged by a series of government decisions for the last 50 years. Stagnation of industrial production made expansion of financial sector of paramount importance for the ruling elite and by extension for Congress which represents this elite. House vote 377:4 for Commodity Futures Modernization Act of 2000 is pretty telling in this respect.

There were also at least two important parallel developments.

Most respectable authors like Henry Giroux in his article in Counterpunch generally consider the term "casino capitalism" to be an equivalent to the term Neoliberalism. Here is a relevant quote from Henry Giroux's Authoritarian Politics in the Age of Casino Capitalism :

There is more at work here than simply a ramped up version of social Darwinism with its savagely cruel ethic of “reward the rich, penalize the poor, [and] let everyone fend for themselves,” [ii] there is also a full scale attack on the social contract, the welfare state, economic equality, and any viable vestige of moral and social responsibility. The Romney-Ryan appropriation of Ayn Rand’s ode to selfishness and self-interest is of particular importance because it offers a glimpse of a ruthless form of extreme capitalism in which the poor are considered “moochers,” viewed with contempt, and singled out to be punished. But this theocratic economic fundamentalist ideology does more. It destroys any viable notion of the and civic virtue in which the social contract and common good provide the basis for creating meaningful social bonds and instilling in citizens a sense of social and civic responsibility. The idea of public service is viewed with disdain just as the work of individuals, social groups, and institutions that benefit the citizenry at large are held in contempt.

As George Lakoff and Glenn W. Smith point out, casino capitalism creates a culture of cruelty: “its horrific effects on individuals-death, illness, suffering, greater poverty, and loss of opportunity, productive lives, and money.”[iii]

But it does more by crushing any viable notion of the common good and public life by destroying “the bonds that hold us together.”[iv] Under casino capitalism, the spaces, institutions, and values that constitute the public are now surrendered to powerful financial forces and viewed simply as another market to be commodified, privatized and surrendered to the demands of capital. With religious and market-driven zealots in charge, politics becomes an extension of war; greed and self-interest trump any concern for the well-being of others; reason is trumped by emotions rooted in absolutist certainty and militaristic aggression; and skepticism and dissent are viewed as the work of Satan.

If the Republican candidacy race of 2012 is any indication, then political discourse in the United States has not only moved to the right—it has been introducing totalitarian values and ideals into the mainstream of public life. Religious fanaticism, consumer culture, and the warfare state work in tandem with neoliberal economic forces to encourage privatization, corporate tax breaks, growing income and wealth inequality, and the further merging of the financial and military spheres in ways that diminish the authority and power of democratic governance.[v] Neoliberal interests in freeing markets from social constraints, fueling competitiveness, destroying education systems, producing atomized subjects, and loosening individuals from any sense of social responsibility prepare the populace for a slow embrace of social Darwinism, state terrorism, and the mentality of war — not least of all by destroying communal bonds, dehumanizing the other, and pitting individuals against the communities they inhabit.

Totalitarian temptations now saturate the media and larger culture in the language of austerity as political and economic orthodoxy. What we are witnessing in the United States is the normalization of a politics that exterminates not only the welfare state, and the truth, but all those others who bear the sins of the Enlightenment — that is, those who refuse a life free from doubt. Reason and freedom have become enemies not merely to be mocked, but to be destroyed. And this is a war whose totalitarian tendencies are evident in the assault on science, immigrants, women, the elderly, the poor, people of color, and youth.

What too often goes unsaid, particularly with the media’s focus on inflammatory rhetoric, is that those who dominate politics and policymaking, whether Democrats or Republicans, do so largely because of their disproportionate control of the nation’s income and wealth. Increasingly, it appears these political elite choose to act in ways that sustain their dominance through the systemic reproduction of an iniquitous social order. In other words, big money and corporate power rule while electoral politics are rigged. The secrecy of the voting booth becomes the ultimate expression of democracy, reducing politics to an individualized purchase—a crude form of economic action. Any form of politics willing to invest in such ritualistic pageantry only adds to the current dysfunctional nature of our social order, while reinforcing a profound failure of political imagination. The issue should no longer be how to work within the current electoral system, but how to dismantle it and construct a new political landscape that is capable of making a claim on equity, justice, and democracy for all of its inhabitants. Obama’s once inspiring call for hope has degenerated into a flight from responsibility.

The Obama administration has worked to extend the policies of the George W. Bush administration by legitimating a range of foreign and domestic policies that have shredded civil liberties, expanded the permanent warfare state, and increased the domestic reach of the punitive surveillance state. And if Romney and his ideological cohorts, now viewed as the most extremists faction of the Republican Party, come to power, surely the existing totalitarian and anti-democratic tendencies at work in the United States will be dangerously intensified.

History

Alternatively, we could have spent more time studying the work of Hyman Minsky. We could also have considered the possibility that, just as Keynes’s ideas were tested to destruction in the 1950s, 1960s and 1970s, Milton Friedman’s ideas might suffer a similar fate in the 1980s, 1990s and 2000s. All gods fail, if one believes too much. Keynes said, of course, that "practical men … are usually the slaves of some defunct economist". So, of course, are economists, even if the defunct economists are sometimes still alive.

Martin Wolf

 


 

 

Casino capitalism  is a nickname for nailibelism. Probably more properly nickname would be  financial corporatism. While the key idea of corporatism: that political actors are not individual people, but some associations and first of all corporations (which are officially considered to be "persons" and have rights as well as trade unions and some other associations) remains intact, financial corporatism is different from classic corporatism in several major ways:

Historically corporatism in various modifications became dominant social system after WWII and defeated "command socialism" as was implemented in the USSR. Here is an instructive review of corporatism history (The Economic System of Corporatism):

In the last half of the 19th century people of the working class in Europe were beginning to show interest in the ideas of socialism and syndicalism. Some members of the intelligentsia, particularly the Catholic intelligentsia, decided to formulate an alternative to socialism which would emphasize social justice without the radical solution of the abolition of private property. The result was called Corporatism. The name had nothing to do with the notion of a business corporation except that both words are derived from the Latin word for body, corpus.

The basic idea of corporatism is that the society and economy of a country should be organized into major interest groups (sometimes called corporations) and representatives of those interest groups settle any problems through negotiation and joint agreement. In contrast to a market economy which operates through competition a corporate economic works through collective bargaining. The American president Lyndon Johnson had a favorite phrase that reflected the spirit of corporatism. He would gather the parties to some dispute and say, "Let us reason together."

Under corporatism the labor force and management in an industry belong to an industrial organization. The representatives of labor and management settle wage issues through collective negotiation. While this was the theory in practice the corporatist states were largely ruled according to the dictates of the supreme leader.

One early and important theorist of corporatism was Adam Müller, an advisor to Prince Metternich in what is now eastern Germany and Austria. Müller propounded his views as an antidote to the twin dangers of the egalitarianism of the French Revolution and the laissez faire economics of Adam Smith. In Germany and elsewhere there was a distinct aversion among rulers to allow markets to function without direction or control by the state. The general culture heritage of Europe from the medieval era was opposed to individual self-interest and the free operation of markets. Markets and private property were acceptable only as long as social regulation took precedence over such sinful motivations as greed.

Coupled with the anti-market sentiments of the medieval culture there was the notion that the rulers of the state had a vital role in promoting social justice. Thus corporatism was formulated as a system that emphasized the positive role of the state in guaranteeing social justice and suppressing the moral and social chaos of the population pursuing their own individual self-interests. And above all else, as a political economic philosophy corporatism was flexible. It could tolerate private enterprise within limits and justify major projects of the state. Corporatism has sometimes been labeled as a Third Way or a mixed economy, a synthesis of capitalism and socialism, but it is in fact a separate, distinctive political economic system.

Although rulers have probably operated according to the principles of corporatism from time immemorial it was only in the early twentieth century that regimes began to identify themselves as corporatist. The table below gives some of those explicitly corporatist regimes.

Corporatist Regimes of the Early Twentieth Century
System Name Country Period Leader
National Corporatism Italy 1922-1945 Benito Mussolini
Country, Religion, Monarchy Spain 1923-1930 Miguel Primo de Rivera
National Socialism Germany 1933-1945 Adolph Hitler
National Syndicalism Spain 1936-1973 Francisco Franco
New State Portugal 1932-1968 Antonio Salazar
New State Brazil 1933-1945 Getulio Vargas
New Deal United States 1933-1945 Franklin Roosevelt
Third Hellenic Civilization Greece 1936-1941 Ioannis Metaxas
Justice Party Argentina 1943-1955 Juan Peron

In the above table several of the regimes were brutal, totalitarian dictatorships, usually labeled fascist, but not all the regimes that had a corporatist foundation were fascist. In particular, the Roosevelt New Deal despite its many faults could not be described as fascist. But definitely the New Deal was corporatist. The architect for the initial New Deal program was General Hugh Johnson. Johnson had been the administrator of the military mobilization program for the U.S. under Woodrow Wilson during World War I. It was felt that he did a good job of managing the economy during that period and that is why he was given major responsibility for formulating an economic program to deal with the severe problems of the Depression. But between the end of World War I and 1933 Hugh Johnson had become an admirer of Mussolini's National Corporatist system in Italy and he drew upon the Italian experience in formulating the New Deal.

It should be noted that many elements of the early New Deal were later declared unconstitutional and abandoned, but some elements such as the National Labor Relations Act which promoted unionization of the American labor force are still in effect. One part of the New Deal was the development of the Tennessee River Valley under the public corporation called the Tennessee Valley Authority (TVA). Some of the New Dealer saw TVA as more than a public power enterprise. They hoped to make TVA a model for the creation of regional political units which would replace state governments. Their goal was not realized. The model for TVA was the river development schemes carried out in Spain in the 1920's under the government of Miguel Primo de Rivera. Jose Antonio Primo de Rivera, the son of Miguel Primo de Rivera, was the founder of Franco's National Syndicalism.

Corporatist regime typically promote large governmental projects such as TVA on the basis that they are too large to be funded by private enterprise. In Brazil the Vargas regime created many public enterprises such as in iron and steel production which it felt were needed but private enterprise declined to create. It also created an organized labor movement that came to control those public enterprises and turned them into overstaffed, inefficient drains on the public budget.

Although the above locates the origin of corporatism in 19th century France it roots can be traced much further back in time. Sylvia Ann Hewlett in her book, The Cruel Dilemmas of Development: Twentieth Century Brazil, says,

Corporatism is based on a body of ideas that can be traced through Aristotle, Roman law, medieval social and legal structures, and into contemporary Catholic social philosophy. These ideas are based on the premise that man's nature can only be fulfilled within a political community.
..........
The central core of the corporatist vision is thus not the individual but the political community whose perfection allows the individual members to fulfill themselves and find happiness.
...............
The state in the corporatist tradition is thus clearly interventionist and powerful.

Corporatism is collectivist; it is a different version of collectivism than socialism but it is definitely collectivist. It places some importance on the fact that private property is not nationalized, but the control through regulation is just as real. It is de facto nationalization without being de jure nationalization.

Although Corporatism is not a familiar concept to the general public, most of the economies of the world are corporatist in nature. The categories of socialist and pure market economy are virtually empty. There are only corporatist economies of various flavors.

These flavors of corporatism include the social democratic regimes of Europe and the Americas, but also the East Asian and Islamic fundamentalist regimes such as Taiwan, Singapore and Iran. The Islamic socialist states such as Syria, Libya and Algeria are more corporatist than socialist, as was Iraq under Saddam Hussain. The formerly communist regimes such as Russia and China are now clearly corporatist in economic philosophy although not in name.

The concept of Quite Coup

Sine ira et studio

Tacitus, see Wikipedia

The term "Quiet coup" which means the hijacking of the political power in the USA by financial oligarchy was introduced by Simon H. Johnson, a British-American economist, who currently is the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. From March 2007 through the end of August 2008, he was Chief Economist of the International Monetary Fund. The term was introduced in his article in Atlantic magazine, published in May 2009(The Quiet Coup - Simon Johnson - The Atlantic). Which opens with a revealing paragraph:

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government

The wealth of financial sector gave it unprecedented opportunities of simply buying the political power iether directly or indirectly (via revolving door mechanism):

Becoming a Banana Republic

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (and only in emerging markets): South Korea (1997), Malaysia (1998), Russia and Argentina (time and again). In each of those cases, global investors, afraid that the country or its financial sector wouldn’t be able to pay off mountainous debt, suddenly stopped lending. And in each case, that fear became self-fulfilling, as banks that couldn’t roll over their debt did, in fact, become unable to pay. This is precisely what drove Lehman Brothers into bankruptcy on September 15, causing all sources of funding to the U.S. financial sector to dry up overnight. Just as in emerging-market crises, the weakness in the banking system has quickly rippled out into the rest of the economy, causing a severe economic contraction and hardship for millions of people.

But there’s a deeper and more disturbing similarity: elite business interests—financiers, in the case of the U.S.—played a central role in creating the crisis, making ever-larger gambles, with the implicit backing of the government, until the inevitable collapse. More alarming, they are now using their influence to prevent precisely the sorts of reforms that are needed, and fast, to pull the economy out of its nosedive. The government seems helpless, or unwilling, to act against them.

Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a “buck stops somewhere else” sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for “safety and soundness” were fast asleep at the wheel.

But these various policies — lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector. Policy changes that might have forestalled the crisis but would have limited the financial sector’s profits — such as Brooksley Born’s now-famous attempts to regulate credit-default swaps at the Commodity Futures Trading Commission, in 1998—were ignored or swept aside.

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations. Several other factors helped fuel the financial industry’s ascent. Paul Volcker’s monetary policy in the 1980s, and the increased volatility in interest rates that accompanied it, made bond trading much more lucrative. The invention of securitization, interest-rate swaps, and credit-default swaps greatly increased the volume of transactions that bankers could make money on. And an aging and increasingly wealthy population invested more and more money in securities, helped by the invention of the IRA and the 401(k) plan. Together, these developments vastly increased the profit opportunities in financial services.

Not surprisingly, Wall Street ran with these opportunities. From 1973 to 1985, the financial sector never earned more than 16 percent of domestic corporate profits. In 1986, that figure reached 19 percent. In the 1990s, it oscillated between 21 percent and 30 percent, higher than it had ever been in the postwar period. This decade, it reached 41 percent. Pay rose just as dramatically. From 1948 to 1982, average compensation in the financial sector ranged between 99 percent and 108 percent of the average for all domestic private industries. From 1983, it shot upward, reaching 181 percent in 2007.

The great wealth that the financial sector created and concentrated gave bankers enormous political weight — a weight not seen in the U.S. since the era of J.P. Morgan (the man). In that period, the banking panic of 1907 could be stopped only by coordination among private-sector bankers: no government entity was able to offer an effective response. But that first age of banking oligarchs came to an end with the passage of significant banking regulation in response to the Great Depression; the reemergence of an American financial oligarchy is quite recent.

He further researched this theme in his book 2010 book 13 Bankers The Wall Street Takeover and the Next Financial Meltdown  (ISBN 978-0307379054), coauthored with James Kwak. They also founded and regularly contributes to the economics blog The Baseline Scenario. See also History of Casino Capitalism

The net effect of the ideological counter-revolution based on market fundamentalism ideology was that it restored the power of financial oligarchy typical for Gilded Age. As Simon Johnson argues that was partially done by subverting regulators and that oversize institutions always disproportionately influence public policy:

The second problem the U.S. faces—the power of the oligarchy—is just as important as the immediate crisis of lending. And the advice from the IMF on this front would again be simple: break the oligarchy.

Oversize institutions disproportionately influence public policy; the major banks we have today draw much of their power from being too big to fail. Nationalization and re-privatization would not change that; while the replacement of the bank executives who got us into this crisis would be just and sensible, ultimately, the swapping-out of one set of powerful managers for another would change only the names of the oligarchs.

Ideally, big banks should be sold in medium-size pieces, divided regionally or by type of business. Where this proves impractical—since we’ll want to sell the banks quickly—they could be sold whole, but with the requirement of being broken up within a short time. Banks that remain in private hands should also be subject to size limitations.

This may seem like a crude and arbitrary step, but it is the best way to limit the power of individual institutions in a sector that is essential to the economy as a whole. Of course, some people will complain about the "efficiency costs" of a more fragmented banking system, and these costs are real. But so are the costs when a bank that is too big to fail—a financial weapon of mass self-destruction—explodes. Anything that is too big to fail is too big to exist.

To ensure systematic bank breakup, and to prevent the eventual reemergence of dangerous behemoths, we also need to overhaul our antitrust legislation. Laws put in place more than 100years ago to combat industrial monopolies were not designed to address the problem we now face. The problem in the financial sector today is not that a given firm might have enough market share to influence prices; it is that one firm or a small set of interconnected firms, by failing, can bring down the economy. The Obama administration’s fiscal stimulus evokes FDR, but what we need to imitate here is Teddy Roosevelt’s trust-busting.

Caps on executive compensation, while redolent of populism, might help restore the political balance of power and deter the emergence of a new oligarchy. Wall Street’s main attraction—to the people who work there and to the government officials who were only too happy to bask in its reflected glory—has been the astounding amount of money that could be made. Limiting that money would reduce the allure of the financial sector and make it more like any other industry.

Still, outright pay caps are clumsy, especially in the long run. And most money is now made in largely unregulated private hedge funds and private-equity firms, so lowering pay would be complicated. Regulation and taxation should be part of the solution. Over time, though, the largest part may involve more transparency and competition, which would bring financial-industry fees down. To those who say this would drive financial activities to other countries, we can now safely say: fine.

Two Paths

To paraphrase Joseph Schumpeter, the early-20th-century economist, everyone has elites; the important thing is to change them from time to time. If the U.S. were just another country, coming to the IMF with hat in hand, I might be fairly optimistic about its future. Most of the emerging-market crises that I’ve mentioned ended relatively quickly, and gave way, for the most part, to relatively strong recoveries. But this, alas, brings us to the limit of the analogy between the U.S. and emerging markets.

Emerging-market countries have only a precarious hold on wealth, and are weaklings globally. When they get into trouble, they quite literally run out of money—or at least out of foreign currency, without which they cannot survive. They must make difficult decisions; ultimately, aggressive action is baked into the cake. But the U.S., of course, is the world’s most powerful nation, rich beyond measure, and blessed with the exorbitant privilege of paying its foreign debts in its own currency, which it can print. As a result, it could very well stumble along for years—as Japan did during its lost decade—never summoning the courage to do what it needs to do, and never really recovering. A clean break with the past—involving the takeover and cleanup of major banks—hardly looks like a sure thing right now. Certainly no one at the IMF can force it.

In my view, the U.S. faces two plausible scenarios. The first involves complicated bank-by-bank deals and a continual drumbeat of (repeated) bailouts, like the ones we saw in February with Citigroup and AIG. The administration will try to muddle through, and confusion will reign.

Boris Fyodorov, the late finance minister of Russia, struggled for much of the past 20 years against oligarchs, corruption, and abuse of authority in all its forms. He liked to say that confusion and chaos were very much in the interests of the powerful—letting them take things, legally and illegally, with impunity. When inflation is high, who can say what a piece of property is really worth? When the credit system is supported by byzantine government arrangements and backroom deals, how do you know that you aren’t being fleeced?

Our future could be one in which continued tumult feeds the looting of the financial system, and we talk more and more about exactly how our oligarchs became bandits and how the economy just can’t seem to get into gear.

The second scenario begins more bleakly, and might end that way too. But it does provide at least some hope that we’ll be shaken out of our torpor. It goes like this: the global economy continues to deteriorate, the banking system in east-central Europe collapses, and—because eastern Europe’s banks are mostly owned by western European banks—justifiable fears of government insolvency spread throughout the Continent. Creditors take further hits and confidence falls further. The Asian economies that export manufactured goods are devastated, and the commodity producers in Latin America and Africa are not much better off. A dramatic worsening of the global environment forces the U.S. economy, already staggering, down onto both knees. The baseline growth rates used in the administration’s current budget are increasingly seen as unrealistic, and the rosy "stress scenario" that the U.S. Treasury is currently using to evaluate banks’ balance sheets becomes a source of great embarrassment.

Under this kind of pressure, and faced with the prospect of a national and global collapse, minds may become more concentrated.

The conventional wisdom among the elite is still that the current slump "cannot be as bad as the Great Depression." This view is wrong. What we face now could, in fact, be worse than the Great Depression—because the world is now so much more interconnected and because the banking sector is now so big. We face a synchronized downturn in almost all countries, a weakening of confidence among individuals and firms, and major problems for government finances. If our leadership wakes up to the potential consequences, we may yet see dramatic action on the banking system and a breaking of the old elite. Let us hope it is not then too late.

It is pretty interesting to see how financial oligarchy filters information provided to the population to fit their biases. For example, the key facts about repeal of Glass-Steagall law  (BTW Joe Biden voted for it) mostly hidden from the public: 

Commodity Futures Trading Commission — under the leadership of Mr. Gramm’s wife, Wendy — had approved rules in 1989 and 1993 exempting some swaps and derivatives from regulation. In December 2000, the Commodity Futures Modernization Act was passed as part of a larger bill by unanimous consent after Senator Gramm dominated the Senate debate...

"He was the architect, advocate and the most knowledgeable person in Congress on these topics," Mr. Donovan said. "To me, Phil Gramm is the single most important reason for the current financial crisis."

"The virtually unregulated over-the-counter market in credit-default swaps has played a significant role in the credit crisis, including the now $167 billion taxpayer rescue of A.I.G.," Christopher Cox, the chairman of the S.E.C. and a former congressman, said Friday.

But you will never find discussion of flaws and adverse consequences Phil Gram (or Greenspan for a change) initiatives in Heritage Foundation and other right-wing think tanks publications.

Stages of transformation

So what we are experiencing is a the completion of the transformation of one phase of capitalism to another. It happened in stages:

  1. Manufacturing stagnated and can't provide the "decent" rate of growth. Competition from re-built Europe and Asian markets severely stressed the US manufacturing. due to competition return of capital dropped and in several industries became negative.

  2. Computers brought innovations into financial markets. They make possible real time trading of induces like S&P500, complex financial instruments like derivatives, etc. Later they enables superfast trading (HFT). All those instruments dramatically increased the possibilities of extracting the rent by financial institutions from the society.

  3. Globalization kicked in due to new opportunities offered by high speed global communications (Internet). And that is not limited to outsourcing. Due to globalization the sheer size of the financial markets increased to the extent that they started to represent a different, new transnational phenomena allowing new types of redistribution of wealth to be practiced. Integration of Russian elite (oligarchs) is just one example of this process. In case of pro-western oligarchs (fifth column) West went to significant length to protect them and their racket (Mikhail Khodorkovsky - Wikipedia,)

  4. Commercial banks turned into investment banks to exploit this opportunity.

  5. Financial sector completely corrupted academic science converting most economists to pay prostitutes which serve their interests.

  6. Collapse of the USSR provided the financial sector major shoot in the arm and a golden, once in century opportunity to finance new half-billion consumers and stole for a penny on a dollar huge industrial assets and natural resources as well as put most of those countries in the debt (Latin-Americanization of xUSSR space). Harvard Mafia (with some support from London) did the bidding of western banks in xUSSR space. As more becomes known about the laundering of Russian money in Western banks, many in the United States will likely try to hide behind stories of faraway organized crime. But U.S. policy toward Russia has contributed to that country's sorry conditions--with the Harvard Institute for International Development's Russia project (HIID) playing a major role (Harvard's 'Best and Brightest' Aided Russia's Economic Ruin ). Professor Jeffery Sacks provided a bogus idea of "shock therapy" to achieve spectacular for Western banks result. As a result all xUSSR space became new Latin America with typical for Latin America problems like huge level of inequality, prostitution, child poverty, and prominent role of organized crime.

  7. Banks became dominant political force on western societies with no real counterbalance from other parts of the elite. The first president completely subservient to banking elite was elected in the USA in 1992. Bill Clinton regime lasted eight years and along with economic rape of xUSSR space in best colonial powers tradition, it removed what was left of financial regulations after the flurry of deregulation of the early 1980s. And they behaved as an occupying force not only in xUSSR space but in the USA as well. They deprived workers out of their jobs, they abolished the US pension system as it impede playing with population money and replaced in with widely inadequate 401K plans. They deprived municipalities out of their revenues and assets, while municipalities became just a den of bond traders looking for then next mark which give them the ability to put municipalities deeper in debt.

  8. Newly acquired political power of financial elite speeded the shift to bank "self-regulation" created huge shadow banking system which dwarf "official" under the smoke screen of "free-market" propaganda and PR from a coterie of corrupts academics (Chicago Scholl, Harvard Mafia, etc) . It engaged in pursuit of short term profits and self-enrichment of top brass which became new elite by-and-large displacing not only the old one, but also the newly minted IT elite of dot-com boom. Using newly acquired power financial elite remove all regulations that hamper their interests. Glass-Steagall was repealed at the last days of Clinton presidency, financial derivatives became unregulated.

  9. Deindustrialization kicked in. As financial speculation proved to be much more profitable to other activities deindustrialization kicked in the USA as the financial center of the world. Outsourcing which first was limited to manufacturing jobs now extent its reach on IT and decimate previously profitable sector and its export potential.

  10. Externalities can no longer be suppressed and economics became unstable. Growth of inequality, job insecurity, as well as frequency of financial crises were natural consequences of financialization of the economy. They create huge imbalances, like bubble in residential real estate which was blown with the help and full support of the USA government as a way to overcome dot-com crisis consequences.

  11. Debt crisis strikes. Growth of debt became unsustainable and produces the financial crisis of enormous proportions. By their reckless policies and greed financial sector caused huge financial crisis of 2008 and now they are forcing national governments to auction off their cultural heritage to the highest bidder. Everything must go in fire sales at prices rigged by twenty-something largest banks, the most corrupt institutions the world has ever known.

  12. Devastating "local" wars became "new normal". Due to financial crisis, the overconsumption in western economies came under threat. Debt expansion which led to overconsumption within the western economies affected (or infected) by financialization. To sustain the current standard of living financial expansion became the necessity. It took the form of a competition for spheres of influence in the area of energy supplies, which we see in post USSR space, Iraq, Libya and elsewhere. And central banks play critical role in financing wars. After all Banks of England was created with this exact purpose.

I think by 2008 when the second major financial crisis hit the USA, the transformation on the USA economy into casino capitalism, which is essentially implementation of neoliberal doctrine (or more correctly the US brand of corporatism) was by-and-large complete.

In short we are living in a new politico-economic system in which financial capital won victory over both labor and industrial capital. We might not like what we got, but financial elite is now a new ruling class and this fact is difficult to dispute. As a result. instead of the robber barons of the early 20th century (some of whom actually created/consolidated new industries), we have the top executives from investment banks, insurers and mortgage industry who represent a new Rentier class, much like old aristocracy.

They are living off parasitic monopolization of access to any (physical, financial, intellectual, etc.) kind of property and gaining significant amount of profit without contribution to society (see Rentier capitalism which is a very fuzzy term for neoliberal model of capitalism).

Casino Capitalism as a result of stagnation of industrial manufacturing

Stagnation of industrial manufacturing droved up financial speculation as the method to compensate for falling rate on return on capital. This stagnation became prominent during Reagan administration (which started the major shift toward neoliberalism), although signs of it were present from early 60th.

For example Chicago which was a manufacturing center since 1969 lost approximately 400K manufacturing jobs which were replaced mainly by FIRE-related jobs, In 1995 over 22% of those employed by FIRE industries (66K people) were working in executive and managerial positions. Another 17% are in marketing, sales and processional specialty occupations (computer system analysts, PR specialists, writer and editors).

Those changes in the structure of employment had several consequences:

  1. The stagnation of the underlying economy meant that capitalists were increasingly dependent on the growth of finance to preserve and enlarge their money capital.
  2. The financial superstructure of the capitalist economy could not expand independently of its base -- underlying productive economy — hence the bursting of speculative bubbles became a recurrent and growing problem.
  3. Financialization could never overcome stagnation of industrial production. It is just an opium for rich, not a structural adjustment of the stagnation-prone economy. But like addition to narcotics does to human body it does tremendous damage to real economy.
  4. Rapid increase in inequality is necessary to sustain the appetites of the elite in the system with fixed size of the pie. Politico-economic conditions might became even more unfavorable for labor. Stagnation of industrial production mean shrinking pie, which necessitates redistribution of wealth in favor of a new, all-powerful financial Rentier class. This redistribution resulted in partial wipe-out of large swats of middle class. For the past three decades, America has steadily converted itself into a nation of haves (as Bush II quipped "This is an impressive crowd -- the haves and the have mores! Some people call you the elite -- I call you my base". ) and have-nots. The cost of a college education rises rapidly at a time when wages for skilled labor stagnate, so access to college became against discriminated in favor of upper class of the society. Repressive apparatus and ideological brainwashing are too strong to mount effective resistance.

The key to understanding of Casino Capitalism is that it was a series of government decisions (or rather non-decisions) that converted the state into neoliberal model. In other words casino capitalism has distinct "Government property" mark. It was the USA elite, which refused to act responsibly in the face of changing economic conditions resulting from its own actions, and instead chose to try to perpetuate, by whatever means it had at its disposal, the institutional advantages of dollar as a reserve currency which it had vis-à-vis its main economic rivals and grab as large part of the world economic pie as it can. And this power grab was supported first of all by the role of dollar as currency in which oil is traded.

There might be some geo-strategically motives as well as the US elite in late 80th perceived that competitiveness is slipping out of the USA and the danger of deindustrialization is real. Many accuse Reagan with the desire to ride dollar status as a world reserve currency (exorbitant privilege) until the horse is dead. That's what real cowboys do in Hollywood movies... But the collapse of the main rival, the USSR vindicated this strategy and give a strong short in the arm to financialization of the economy. Actually for the next ten years can be called a triumphal ascend of financialization in the USA.

Dominance of FIRE industries clustered up and in recent years reached in the USA quite dramatic proportions. The old Bolsheviks saying "When we say Lenin we mean the Party and when we say the Party we mean Lenin" now can be reworded: "Now it we say US banks, we mean the US government and vise versa if we say US government we mean US banks".

According to the Center for Responsive Politics, the FIRE sector was and is the biggest contributor to federal candidates in Washington. Companies cannot give directly, so they leave it to bundlers to solicit maximum contributions from employees and families. They might have been brought down to earth this year, but they’ve given like Gods: Goldman Sachs, $4.8 million; Citigroup, $3.7 million; J.P. Morgan Chase & Co., $3.6 million; Merrill Lynch, $2.3 million; Lehman Brothers, $2.1 million; Bank of America, $2.1 million. Some think the long-term effect of such contributions to individual candidates was clear in the roll-call votes for the bailout.

Take the controversial first House vote on bailout of major banks on Sept. 29, 2008. According to CRP, the "ayes" had received 53 percent more contributions from FIRE since 1989 than those who voted against the bill, which ultimately failed 228 to 205. The 140 House Democrats who voted for the bill got an average of $188,572 in this election cycle, while the 65 Republicans backing it got an average of $185,461 from FIRE—about 23 percent more than the bill’s opponents received. A tinkered bill was passed four days later, 263 to 171.

According to the article Fire Sale (The American Conservative) half of Obama’s top ten contributors, together giving him nearly $2.2 million, are FIREmen. The $13 million contributed by FIRE executives to Obama campaign is probably an undercount. Democratic committee leaders are also dependent of FIRE contributions. The list includes Sen. Dodd ( please look at Senator Dodd's top donors for 2007-8 on openSecrets.org ) and Sen. Chuck Schumer ($12 million from FIRE since 1989), Rep. Barney Frank ($2.5 million), and Rep. Charlie Rangel ($4 million, the top recipient in the House). All of them have been accused of taking truckloads of contributions while failing to act on the looming mortgage crisis. Dodd finally pushed mortgage reform last year but by then as his hometown paper, The Hartford Courant stated, "the damage was done."

Casino Capitalism and Financial Instability

At the same time rise of financial capital dramatically increased instability. An oversized financial sector produces instability due to multiple positive feedback loops. In this sense we can talk about Financial Sector Induced Systemic Instability of Economy. The whole society became "House of cards", "Giant Enron" and "extension of Las Vegas". Reckless management, greed and out-right stupidity in playing derivatives games was natural consequence of the oversized financial sector, not just a human folly. In a way it was dramatic manifestation of the oversized financial sector negative influence of the economy. And in 2008 it did brought out economy to the brink of destruction. Peak oil added to suffocating effect on the economy of reckless gambling (and related debts) of financial sector producing the economic calamity that rivals Great Depression. Also, like Socialism, Casino Capitalism demands too much of its elite. And in reality, the financial elite much like Bolsheviks elite, is having its own interests above the interests of the society.

As Kevin Phillips noted "In the United States, political correctness, religious fundamentalism, and other inhibitions sometimes dumb down national debate". And the same statement is true for financial elite that became the center of power under the Casino Capitalism. Due to avalanche of greed the society became one giant Enron as money that are made from value addition in the form of manufacturing fade in significance to the volume of the money that is made from shuffling money around. In other was the Wall Street's locked USA in the situation from which there is no easy exit.

Self-reinforcing ‘positive’ feedback loops prevalent in Casino Capitalism trigger an accelerating creation of various debt instruments, interest of which at some point overwhelm the system carrying capacity. Ability to lend against good collateral is quickly exhausted. At some point apparently there is no good collateral against which lending freely was possible, even at high rates. This means that each new stage of financial innovation involves scam and fraud, on increasing scale. In other words Ponzi economy of "saving and loans" is replaced with Madoff economy.

Whether you shift the resulting huge private debt to public to increase confidence or not, the net result is of this development of events is a crisis and a huge debt that society needs to take. Actually the debt bubble in 2008 can only be compared to the debt bubble of 1933. The liquidation of Bear Sterns and Lehman was only a start of consolidation of finances and we need to find something that replace financial sector dominance in the national economy. It would be nice is some technological breakthrough happened which would lift the country out of this deep hole.

See Financial Sector Induced Systemic Instability of Economy for more details.

Neoliberalism as the Ideology of Casino Capitalism

Like Bolshevism was marked by deification of teaching of Marx and Lenin, converting them into pseudo-religious doctrine, the Casino Capitalism has its own deified ideological doctrine. It is the ideology of Neoliberalism. The latter as an ideology and an agenda seeks to topple democratic capitalism and replace it with a de facto unaccountable autocratic government which serves as channel of a wealth transfer from the public to a rentier elite. In a way it is a spectacular example of a successful (in a very negative sense) pseudo-religious doctrine.

Addiction of the societies to disastrous politico-economical doctrines are similar to addictions to alcohol and drugs in individuals. It is not easy to recover and it takes a long, long time and a lot of misery. As dissolution of the USSR aptly demonstrated not all societies can make it. In this case the USSR elite (nomenklatura) simply shed the old ideology as it understood that it will be better off adopting ideology of neoliberal capitalism; so it was revolution from above.  this abrupt switch created chaos in economics (which was applauded by Washington which under Clinton administration adopted the stance the Carnage needs to be destroyed and facilitated the process), criminal privatization of major industries, and pushed into object poverty the 99% of population of those countries. For some period under "drunk Yeltsyn" Russia sees to exist as an independent country and became a vassal of Washington.

This also means that "society at large" did not had effective brakes to the assent of financial plutocracy (aka financial oligarchy).  I would add to this the computer revolution and internet that made many financial transaction qualitatively different and often dramatically cheaper that in previous history. Computers also enabled creation of new financial players like mutual funds (which created a shadow banking system with their bond funds) , hedge funds, exchange-traded funds (ETFs), as well as high-frequency trading and derivatives.

From the historical view Reaganomics also can be considered to be the US flavor of Lysenkoism with economics instead of genetics as a target. Here is how Reaganomics is defined in Wikipedia

Reaganomics (a portmanteau of "Reagan" and "economics") refers to the economic policies promoted by United States President Ronald Reagan. The four pillars of Reagan's economic policy were to:[1]
  1. reduce the growth of government spending,
  2. reduce marginal tax rates on income from labor and capital,
  3. reduce government regulation of the economy,
  4. control the money supply to reduce inflation.

In attempting to cut back on domestic spending while lowering taxes, Reagan's approach was a departure from his immediate predecessors.

Reagan became president during a period of high inflation and unemployment (commonly referred to as stagflation), which had largely abated by the time he left office.

Please not that the Number 1 idea ("reduce government spending") was essentially a scam, a smoke screen designed to attract Rednecks as a powerful voting block. In a way this was a trick similar to one played by Bolsheviks in Russia with its "worker and peasants rule" smokescreen which covered brutal dictatorship. In reality all administrations which preached Reagonomics (including Clinton's) expanded the role of state and government spending. The number two was applied by-and-large to top 1%. The number three means deregulation in the interests of financial oligarchy and dismantling all social program that hamper profit of the latter (including privatizing of Social Security). The number fours is a scam, in the same sense as number one. As soon as financial institutions get in trouble, money are printed as if there is no tomorrow.

While the essence of Reagonomics was financial deregulation, the other important element was restoring the Gilded Age level of power of financial oligarchy which influence was diminished by FDR reforms. In this sense we can say that Reagan revolution was essentially a counter-revolution: an attempt to reverse the New Deal restrictions on financial sector and restore its dominance in the society.

Like it was the case in Bolshevism the ideology was developed and forced upon the society by a very small group of players. The key ideas of Casino Capitalism were formulated and implemented by Reagan administration with some contribution by Nixon (the role of rednecks aka "moral majority", "silent majority" as an important part of republican political base, which can be attracted to detrimental to its economic position policies by the smoke screen of false "moral" promises).

It was supported by each president after Reagan (paradoxically with Clinton having the most accomplished record -- he was the best Republican President in a very perverted way). Like in case of Lysenkoism opponents were purged and economic departments of the country were captured by principless careerists ready to tow the party line for personal enrichment. Like in case of Bolshevism, many of those special breed of careerists rotated from Republican Party into Fed and other government structures. A classic example of compulsive careerists that were used by finance sector to promote its interests was Alan Greenspan.

One of the key ideas of Reaganomics was the rejection of the sound approach that there should be a balance between too much government regulation and too little and that government role is important for smooth functioning of the market. In this area Reagan and its followers can be called Anarchists and their idea of 'free market" is a misnomer that masks the idea of "anarchic market" (corporate welfare to be exact -- as it was implemented). Emergence of corporate welfare Queens such as GS, Citi, AIG, are quite natural consequence of Reaganomics.

Reaganomics was a the US flavor of Lysenkoism with economics instead of generics as a target... It can and should be called Economic Lysenkoism.

The most interesting part of Reaganomics was that the power of this ideology made it possible to conditioned "working class" and middle class to act against their own economic interests. It helped to ensure the stagnation of wages during the whole 25 years period, which is close to what Soviets managed to achieve with working class of the USSR, but with much more resentment. This makes it in many ways very similar to Bolshevism as a whole, not just Lysenkoism (extremes meet or in less flattering way: "history repeats, first as a tragedy, then as farce).

Along with the term Reaganimics which implicitly stresses the deregulation, the other close term "market fundamentalism" is often used. Here is how market fundamentalism is defined (Longview Institute):

Market Fundamentalism is the exaggerated faith that when markets are left to operate on their own, they can solve all economic and social problems. Market Fundamentalism has dominated public policy debates in the United States since the 1980's, serving to justify huge Federal tax cuts, dramatic reductions in government regulatory activity, and continued efforts to downsize the government’s civilian programs.

Some level of government coercion (explicit or implicit ) is necessary for proper labeling of any pseudo-scientific theory with the term Lysenkoism. This holds true for both Market Fundamentalism (after all Reagan revolution was "revolution from above" by financial oligarchy and for financial oligarchy and hired guns from academia just do what powers that be expected) and, especially, Supply side economic. The political genius of those ideas is evident. Supply-side economics transformed Republicans from a minority party into a majority party. It allowed them to promise lower taxes, lower deficits and, in effect, unchanged spending. Why should people not like this combination? Who does not like a free lunch?

In this sense the Republican Party played the role very similar to the Communist Party of the USSR.

For example supply side economics was too bizarre and would never survive without explicit government support. This notion is supported by many influential observers. For example, in the following comment for Krugman article (Was the Great Depression a monetary phenomenon):

Market fundamentalism (neoclassical counter-revolution — to be more academic) was more of a political construct than based on sound economic theory. However, it would take a while before its toxic legacy is purged from the economics departments. Indeed, in some universities this might never happen.

Extreme deregulation and extreme regulation (Brezhnev socialism) logically meets and both represent a variant of extremely corrupt society that cannot be sustained for long (using bayonets as in the case of USSR or using reserve currency and increasing leverage as is the case of the USA). In both cases the societies were economically and ideologically bankrupt at the end.

Actually, elements of market fundamentalism looks more like religious doctrine than political philosophy — and that bonds its even closer to Lysenkoism. In both cases critics were silenced with the help of the state. It is interesting to note that Reaganomics was wiped into frenzy after the dissolution of the USSR, the country which gave birth to the term of Lysenkoism. In a way the last act of the USSR was to stick a knife in the back of the USA. As a side note I would like to stress that contrary to critics the USSR was more of a neo-feudal society with elements of slavery under Stalin. Gulag population were essentially state slaves; paradoxically a somewhat similar status is typical for illegal immigrants in industrialized countries. From this point of view this category of "state slaves" is generally more numerous that gulag inmates. Prison population also can be counted along those lines.

It look like either implicitly or explicitly Reagan's bet was on restoration of gilded Age with its dominance of financial oligarchy, an attempt to convert the USA into new Switzerland on the "exorbitant privilege" of dollar status as the global fiat currency.

Casino Capitalism is characterized by political dominance of FIRE industries (finance, insurance, and real estate) and diminished role of other and first of all manufacturing industries. It was also accompanied by the drastic growth of inequality (New Gilded Age). Its defining feature is "the triumph of the trader in assets over the long-term producer" in Martin Wolf's words.

Voodoo economic theories

Attempts of theoretical justification of Economic Lysenkoism fall into several major categories:

Those can be called pillars, cornerstones of Economic Lysenkoism. Each of the deserves as separate article (see links above).

Historically especially important was Chicago school of market fundamentalism promoted pseudo-scientific theories of Milton Freedman (Chicago School) as well as supply side economics.

Collapse of the USSR as ideological justification of Casino Capitalism superiority

The huge boost of Casino Capitalism was given by the collapse of the USSR in 1991. That gave a second life to Reagan era. Collapse of the USSR was used as a vindication of market fundamentalism. After it New Deal regulations were systematically destroyed. Dumped down variants of Nietzsche philosophy like bastardatized variant promoted by Russian emigrant became fashionable with an individual "creative" entrepreneur as a new Übermensch, which stands above morality.

"The word Übermensch [designates] a type of supreme achievement, as opposed to 'modern' men, 'good' men, Christians, and other nihilists ... When I whispered into the ears of some people that they were better off looking for a Cesare Borgia than a Parsifal, they did not believe their ears."[9] Safranski argues that the combination of ruthless warrior pride and artistic brilliance that defined the Italian Renaissance embodied the sense of the Übermensch for Nietzsche. According to Safranski, Nietzsche intended the ultra-aristocratic figure of the Übermensch to serve as a Machiavellian bogeyman of the modern Western middle class and its pseudo-Christian egalitarian value system.[10]

Brainwashing

The instability and volatility of active markets can devalue the economic base of real lives, or in more macro-scenarios can lead to the collapse of national and regional economies. In a very interesting and grotesque way it also incorporates the key element of Brezhnev Socialism in everyday life: huge manipulation of reality by mass media to the extend that Pravda and the USSR First TV Channel look pretty objective in comparison with Fox news and Fox controlled newspapers. Complete poisoning of public discourse and relying on the most ignorant part of the population as the political base (pretty much reminiscent of how Bolsheviks played "Working Class Dictatorship" anti-intellectualism card; it can be called "Rednecks Dictatorship").

The "heroes" or transformation of US economy to casino capitalism model

While transformation to casino capitalism was an objective development, there were specific individuals who were instrumental in killing New Deal regulations. We would single out the following twelve figures:

  1. Ronald Reagan (although first steps toward casino capitalism were made under Carter).
  2. Milton Friedman
  3. Alan Greenspan
  4. Phil Gramm
  5. Robert Rubin
  6. Larry Summers
  7. Helicopter Ben
  8. Bush II
  9. Bill Clinton
  10. Sandy Weill
  11. Jeffrey Sachs with his "shock therapy" racket
  12. Martin Feldstein

There is no question that Reagan and most of his followers (Greenspan, Rubin, Phil Gramm, etc) were rabid radicals blinded by ideology. But they were radicals of quite different color then FDR with disastrous consequences for society. Here again the analogy with Bolsheviks looms strong. In a way, they can be called financial terrorists inflicting huge damage on the nation and I wonder if RICO can be use to prosecute at least some of them.

In Bailout Nation (Chapter 19) Barry Ritholtz tried to rank major players that led country into the current abyss:

1. Federal Reserve Chairman Alan Greenspan
2. The Federal Reserve (in its role of setting monetary policy)
3. Senator Phil Gramm
4-6. Moody’s Investors Service, Standard & Poor’s, and Fitch Ratings (rating agencies)
7. The Securities and Exchange Commission (SEC)
8-9. Mortgage originators and lending banks
10. Congress
11. The Federal Reserve again (in its role as bank regulator)
12. Borrowers and home buyers
13-17. The five biggest Wall Street firms (Bear Stearns, Lehman Brothers, Merrill Lynch,Morgan Stanley, and Goldman Sachs) and their CEOs
18. President George W. Bush
19. President Bill Clinton
20. President Ronald Reagan
21-22. Treasury Secretary Henry Paulson
23-24. Treasury Secretaries Robert Rubin and Lawrence Summers
25. FOMC Chief Ben Bernanke
26. Mortgage brokers
27. Appraisers (the dishonest ones)
28. Collateralized debt obligation (CDO) managers (who produced the junk)
29. Institutional investors (pensions, insurance firms, banks, etc.) for
buying the junk
30-31. Office of the Comptroller of the Currency (OCC); Office of Thrift
Supervision (OTS)
32. State regulatory agencies
33. Structured investment vehicles (SIVs)/hedge funds for buying the junk

Early Researchers of Casino Capitalism

Hyman Minsky

Hyman Minsky argued that a key mechanism that pushes an economy towards a crisis is the accumulation of debt and the fact the financial system represents a positive feedback loop that tend to destabilize the system, creating ossilations in the form of boom and bust cycles. . He identified 3 types of borrowers that contribute to the accumulation of insolvent debt: Hedge Borrowers; Speculative Borrowers; and Ponzi Borrowers. That corresponds to three stages of Casino Capitalism of increasing fragility:

Growth of debt and increased levarate at some point create predocition of the crash. The stage of business cycle at which those preconditions are met is called "Minsky moment":

A Minsky moment is the point in a credit cycle or business cycle when investors are starting to have cash flow problems due to spiraling debt they have incurred in order to finance speculative or Ponzy investments.

At this point, a major selloff begins due to the fact that no counterparty can be found to bid at the high asking prices previously quoted, leading to a sudden and precipitous collapse in market clearing asset prices and a sharp drop in market liquidity.[1]

After the collapse of the USSR there were a lot of chest thumping of the status of America as a hyper power (American exceptionalism) and the "end of history" where neoliberalism that displaced Brazhvev socialism (and wiped out the socialist camp) was supposed to reign supreme forever.

But this triumphal march of neoliberalism was short lived. The system proved to be self-destructive due to strong positive feedback look from the unregulated financial sector.

But in 2000 the first moment to pay the piper arrives. It was postponed by Iraq war and housing bubble, but reappeared in much more menacing form in 2008. In 2009 the USA experienced a classic Minsky moment with high unemployment rate and economy suppressed by (and taken hostage) by Ponzi finance institutions which threaten the very survival of the capitalist system and way of life. Huge injection freom the state halped to save the economy from disintration, but the price was very high. And  after 2009 the US economy entered the period prologed stagnation, called  the perios of "secular stagnation".

In events preceding 2008 the shift from speculative toward Ponzi finance was speed up by increased corruption of major players.  The drive to redistribute wealth up destroyed any remnants of the rule of the law in the USA. It became a neo-feudal two casts society with "Masters of the Universe" as the upper cast (top 1% ) and "despicables" (lower 80%) as the lower cast. With some comprador strata of professional in between (top 20% or so), who generally support the upper cast.

Loweer cast experienced deterioration of the standard of living, loss of well paying jobs to outsourcing and offshoring and in 2016 revolted electing Trump, who defeated Hillary Clinton, who became a real symbol of the corruption of neoliberal system. 

"As Minsky observed, capitalism is inherently unstable. As each crisis is successfully contained, it encourages greater speculation and risk taking in borrowing and lending. Financial innovation makes it easier to finance various schemes. To a large extent, borrowers and lenders operate on the basis of trial and error. If a behavior is rewarded, it will be repeated. Thus stable periods naturally lead to optimism, to booms, and to increasing fragility.

A financial crisis can lead to asset price deflation and repudiation of debt. A debt deflation, once started, is very difficult to stop. It may not end until balance sheets are largely purged of bad debts, at great loss in financial wealth to the creditors as well as the economy at large."

For more information see

Susan Strange

For Strange the speed at which computerized financial markets work combined with their much larger size and  near-universal pervasiveness is an important qualitative change, that changes the social system into what he called "casino capitalism".  She actually popularized the term "Casino Capitalism" with her important book Casino Capitalism  published in 1997.

One of the side effects of this change is that volatility extends globally. Approximately $1.5 trillion dollars are invested daily as foreign transactions. It is estimated that 98% of these transactions are speculative. In comparison with this casino Las Vegas looks like a aborigine village in comparison with Manhattan.

Notes:

Susan Strange (June 9, 1923 - October 25, 1998) was a British academic who was influential in the field of international political economy. Her most important publications include

For a quarter of a century, Susan Strange was the most influential figure in British international studies. She held a number of key academic posts in Britain, Italy and Japan. From 1978 to 1988, she was Montague Burton Professor of International Relations at the London School of Economics and Political Science (LSE), the first woman to hold this chair and a professorial position in international relations at the LSE. She was a major figure in the professional associations of both Britain and the US: she was an instrumental founding member and first Treasurer of the British International Studies Association (BISA) [1] and the first female President of the International Studies Association (ISA) in 1995.

It was predominantly as a creative scholar and a forceful personality that she exercised her influence. She was almost single-handedly responsible for creating ‘international political economy’ and turning it into one of the two or three central fields within international studies in Britain, and she defended her creation with such robustness, and made such strong claims on its behalf, that her influence was felt—albeit not always welcomed—in most other areas of the discipline. She was one of the earliest and most influential campaigners for the closer integration of the study of international politics and international economics in the English language scholarship.

In the later period of her career, alongside the financial analyses offered in Casino Capitalism (the analysis in which she felt was vindicated by the South-East Asian financial crisis) and Mad Money, Strange's contributions to the field include her characterisation of the four different areas (production, security, finance and knowledge) through which power might be exercised in International Relations. This understanding of what she termed "structural power", formed the basis of her argument against the theory of American Hegemonic Decline in the early eighties.

Her analysis particularly in States and Markets focused on what she called the ‘market-authority nexus’, the see-saw of power between the market and political authority. The overall argument of her work suggested that the global market had gained significant power relative to states since the 1970s.

This led her to dub the Westphalia system Westfailure. She argued that a ‘dangerous gap’ was emerging between territorially-bound nation states and weak or partial intergovernmental cooperation in which markets had a free hand which could be constructive or destructive.

John K. Galbraith

Among important early critiques of casino capitalism was John K. Galbraith. He promoted a pretty novel idea that the major economic function of Governments is to strengthen countervailing powers to achieve some kind of balance between capital and labor.

While unions are far from being perfect and tend to slide into corruption due to "iron law of oligarchy" when thier management stop representing interests of thwe worksers and start to reprreesnt interest of thier own narry strate of fat cats,  there were the only sizable countewailing power that made the New Seal possible.

His prediction proved to be wrong as government actually represent the capitalist class and is not that interested in creating this balance, which was convincingly demonstrated by Thatcher and Reagan.  Both Britain and the USA start sliding into a new form of corporations, called neoliberalism which actually does not allocate any space for uniot at the negotiation table and strive for their complete elimination and "atomization" of work force, when each invididual is up to himself to find employment and group solidarity is suppressed by instilling neoliberal ideology in schools and universitites as well as via MSM (which in the USA surprisingly never were allowed to use the work neoliberlaism, as if it represents some secret Masonic cult)

And it does not look like there is any renewed support of unions right  (including important right to organize) at the  post subprime/derivatives/shadow_banking crisis stage of neoliberalism, when neoliberal ideology became sufficiently discredited to allow rise of populist politicians such as Trump. 

Still John K. Galbraith critique of primitive market fundamentalism of Milton Freedman and the whole pseudoscience of neoclassical economics which like Marxist political economy is one of there pillars of neoliberalism (along with Randism as philosophy and Neoconservatism or "Trotskyism for the rich" in politics), still has its value today. As Joseph Stiglitz noted (CSMonitor, Dec 28, 2006):

...In many ways, Galbraith was a more critical observer of economic reality.

Driven to understand market realities

Galbraith's vivid depictions of the good, bad, and ugly of American capitalism remain a sorely needed reminder that all is not quite as perfect as the perfect market models – with their perfect competition, perfect information, and perfectly rational consumers – upon which so much of Friedman's analysis depended.

Galbraith, who cut his teeth studying agricultural economics, strove to understand the world as it was, with all the problems of unemployment and market power that simplistic models of competitive markets ignore. In those models, unemployment didn't exist. Galbraith knew that made them fatally flawed

... ... ...

In his early research, Galbraith attempted to explain what had brought on the Great Crash of 1929 – including the role of the stock market's speculative greed fed by (what would today be called) irrational exuberance. Friedman ignored speculation and the failure of the labor market as he focused on the failures of the Federal Reserve. To Friedman, government was the problem, not the solution.

What Galbraith understood, and what later researchers (including this author) have proved, is that Adam Smith's "invisible hand" – the notion that the individual pursuit of maximum profit guides capitalist markets to efficiency – is so invisible because, quite often, it's just not there. Unfettered markets often produce too much of some things, such as pollution, and too little of other things, such as basic research. As Bruce Greenwald and I have shown, whenever information is imperfect – that is, always – markets are inefficient; hence the need for government action.

Galbraith reminded us that what made the economy work so well was not an invisible hand but countervailing powers. He had the misfortune of articulating these ideas before the mathematical models of game theory were sufficiently developed to give them expression. The good news is that today, more attention is being devoted to developing models of these bargaining relationships, and to complex, dynamic models of economic fluctuations in which speculation may play a central role.

Government's role

While Friedman never really appreciated the limitations of the market, he was a forceful critic of government. Yet history shows that in every successful country, the government had played an important role. Yes, governments sometimes fail, but unfettered markets are a certain prescription for failure. Galbraith made this case better than most.

Galbraith knew, too, that people aren't just rational economic actors, but consumers, contending with advertising, political persuasion, and social pressures. It was because of his close touch with reality that he had such influence on economic policymaking, especially during the Kennedy-Johnson years.

Galbraith's penetrating insights into the nature of capitalism – as it is lived, not as it is theorized in simplistic models – has enhanced our understanding of the market economy. He has left an intellectual legacy for generations to come. And he has left a gap in our intellectual life: Who will stand up against the economics establishment to articulate an economic vision that is both in touch with reality and comprehensible to ordinary citizens?

Galbraith was vindicated in his belief that the only economics possible is political economics and that government is always an agent of dominant class. As such it always pursue poklitics favorable to this class, just making marginal efforts to prevent the open revolt of lower classes.

In 2008 neoliberal economist such as Krugman and (to a lesse extent) Stiglitz both have eaten humble pie, because according to neoclassical economics the crises should not have happened. Both should now reread Galbraith's The Great Crash: 1929 (see also extracts).  Krugman also need to shred his previous writings with this mathiness execises of using differential equations to justify the dominance of financial oligarchy,  and eat them with borsch ;-)

BTW it is interesting that in 1996 neoliberal stooge Paul Krugman criticized limitations of Galbright vision in the following way:

To be both a liberal and a good economist you must have a certain sense of the tragic--that is, you must understand that not all goals can be attained, that life is a matter of painful tradeoffs. You must want to help the poor, but understand that welfare can encourage dependency. You must want to protect those who lose their jobs, but admit that generous unemployment benefits can raise the long-term rate of unemployment. You must be willing to tax the affluent to help those in need, but accept that too high a rate of taxation can discourage investment and innovation.

To the free-market conservative, these are all arguments for government to do nothing, to accept whatever level of poverty and insecurity the market happens to produce. A serious liberal does not reply to such conservatives by denying that there are any trade-offs at all; he insists, rather, that some trade-offs are worth making, that helping the poor and protecting the unlucky may have costs but will ultimately make for a better society.

The revelation one gets from reading John Kenneth Galbraith's The Good Society is that Galbraith--who is one of the world's most celebrated intellectuals, and whom one would expect to have a deeper appreciation of the complexity of the human condition than a mere technical economist would -- lacks this tragic sense. Galbraith's vision of the economy is one without shadows, in which what is good for social justice always turns out to have no unfavorable side effects. If this vision is typical of liberal intellectuals, the ineffectuality of the tribe is not an accident: It stems from a deep-seated unwillingness to face up to uncomfortable reality.

Similar limited understanding of Galbright is demonstrated in London Times (cited from comment to Economist's View blog) :

Some motifs of Galbraith’s work have entered popular consciousness. Galbraith wrote of private opulence amid public squalor, illustrating it with a memorable metaphor of a family that travels by extravagant private car to picnic by a polluted river.

Yet while arguing for increased public expenditure on welfare, Galbraith gave scant attention to the limits of that approach. His writings perpetuate a debilitating weakness of modern liberalism: a reluctance to acknowledge that resources are scarce.

In Galbraith’s scheme, said Herbert Stein, the former chairman of the Council of Economic Advisers: “The American people were only asked whether they wanted cleaner air and water . . . The answers to such questions seemed obvious — but they were not the right questions.”

Soros contribution to the understanding of growth of financial sector as source of new, global economic instability

This idea of "casino capitalism" as a driver of financial instability was developed further in the book The Crisis of Global Capitalism by prominent financial speculator and staunch neoliberal George Soros (1998), who after Minsky highlights the potential for disequilibrium in the financial system, and the inability of non-market sectors to regulate markets.

the latter is a prominant feature of Casino Capitalism, which can be defined as economic system were financial barons run amok.

Although the insights of the Soros critique of global capitalism are scarcely new, they were articulated with such candor and accuracy that the book made a significant impact. The following is a sampling of Soros' insights.
  1. Unregulated financial markets are inherently unstable. There is nothing new in this statement. It is just a repetition of what Keynes and Minsky said much more eloquently. But Soros made in important observation about the source of constant disequilibrium of markets under neoliberalism, the observation which permitted for him to achieve spectacular success as a financial speculator.  Soros observes that, contrary to conventional economic theory, financial markets are not driven toward a relatively stable and rational price by the objective value assessment of such things as the soundness of a company's management, products, or record of profitability. Rather they are constantly driven away from equilibrium by the momentum of self-fulfilling expectations -- a rising stock price attracts buyers who further raise the price-to the point of collapse. The recent massive inflation and subsequent collapse in the price of the shares of unprofitable dot-com companies illustrates Soros' point.

    Bank lending also contributes to the instability, because the price of real and financial assets is set in part by their collateral value. The higher their market price rises the larger the loans banks are willing to make to their buyers to bid up prices. When the bubble bursts, the value of the assets plummets below the amount of the money borrowed against them. This forces banks to call their loans and cut back on the lending, which depresses asset prices and dries up the money supply. The economy then tanks-until credit worthiness is restored and a new boom phase begins.

  2. Financial markets are amoral by definition. Following Napoleon Bonaparte ("Money has no motherland; financiers are without patriotism and without decency; their sole object is gain. "), Soros stressed that there is no meaningful place for individual moral behavior of financial oligarchy in the context of financial markets, because such behavior has no consequences for them other than to reduce the financial return of  a more  ethical actor.  In other words modern finance is breeding ground for ruthless sociopath, which we really observed during 2008.

    When I bought shares in Lockheed and Northrop after the managements were indicted for bribery, I helped sustain the price of their stocks. When I sold sterling short in 1992, the Bank of England was on the other side of my transactions, and I was in effect taking money out of the pockets of British taxpayers. But if I had tried to take social consequences into account, it would have thrown off my risk-reward calculation, and my profits would have been reduced.

    Soros argues that if he had not bought Lockheed and Northrop, then somebody else would have, and Britain would have devalued sterling no matter what he did. "Bringing my social conscience into the decision-making process would make no difference in the real world; but it may adversely affect my own results." One can challenge the Soros claim that such behavior is amoral rather than immoral, but his basic argument is accurate. His understanding that it is futile to look to individual morality as the solution to the excesses of financial markets is all too accurate.

  3. Corporate employees are duty-bound to serve only corporate financial interests. As such financial institution are closely related to organized crime and top layers of managers are essentially institualized criminals. Soros writes:

    Publicly owned companies are single-purpose organizations-their purpose is to make money. The tougher the competition, the less they can afford to deviate. Those in charge may be well-intentioned and upright citizens, but their room for maneuver is strictly circumscribed by the position they occupy.

     They are duty-bound to uphold the interests of the company. If they think that cigarettes are unhealthy or that fostering civil war to obtain mining concessions is unconscionable, they ought to quit their jobs. Their place will be taken by people who are willing to carry on.

    Though not specifically mentioned by Soros, this is why corporations were in the past (at least partially) excluded from the political processes (although it was never complete and it is well known fact that Crusades and Siege of Constantinople (1204) were financed by Genoese bankers upset by lack of access to the Byzantium markets). But at least formally other parts of the society can define their goals and the rules of the marketplace and suppress excessive appetities of banker, if nessesary by brute force.  Financial oligarchy is incapable of distinguishing between private corporate interests and broader public interests. And that situation became even worse with the the global dominance of corporatism in the form of neoliberalism.

  4. Financial markets are oblivious to externalities and are infected by "short-termism". Specifically the fact that a strategy or policy produces economic returns in the short-term does not mean the long-term results will be beneficial. The focus of financial markets is on short-term individual gain to the exclusion of both social and longer-term consequences. The fact that particular policies and strategies are effective in producing short-term financial returns does not mean they are more generally beneficial or desirable. Soros offers the example that running up a budget or trade deficit "feels good while it lasts, but there can be hell to pay later."

  5. The relationship between the center and the periphery of the capitalist system is profoundly unequal. The powerful countries at the center of the capitalist system are both wealthier and more stable than countries at the periphery because control of the financial system and ownership of productive assets allows them to shape economic and political affairs to their benefit.

    "Foreign ownership of capital deprives peripheral countries of autonomy and often hinders the development of democratic institutions. The international flow of capital is subject to catastrophic interruptions."

    In times of uncertainty financial capital tends to return to its country of origin, thus depriving countries at the periphery of the financial liquidity necessary to the function of monetized economies. "The center's most important feature is that it controls its own economic policies and holds in its hands the economic destinies of periphery countries."

  6. In the capitalist system greed (aka "monetary values") tend to displace social values in sectors where this is destructive to important public interests. Soros writes:

    Monetary values [under neoliberalism] have usurped the role of intrinsic values, and markets have come to dominate spheres of existence where they do not properly belong.

    Law and medicine, politics, education, science, the arts, even personal relations-achievements or qualities that ought to be valued for their own sake are converted into monetary terms; they are judged by the money they fetch rather than their intrinsic value."

    Because financial "capital is free to go where most rewarded, countries vie to attract and retain capital, and if they are to succeed they must give precedence to the requirements of international capital over other social objectives.

Ha-Joon Chang

One notable later researcher of casino capitalism, especially "free market" fundamentalism propaganda Cambridge University researcher Ha-Joon Chang. In 2011 he published a fascinating book 23 Things They Don't Tell You About Capitalism. Here is a Youtube lecture at LSE (23 Things They Don't Tell You About Capitalism  ). We will reproduce  two Amazon reviews that shed some light at the key ideas of the book:

William Podmore

Ha-Joon Chang, Reader in the Political Economy of Development at Cambridge University, has written a fascinating book on capitalism's failings. He also wrote the brilliant Bad Samaritans. Martin Wolf of the Financial Times says he is `probably the world's most effective critic of globalization'.

Chang takes on the free-marketers' dogmas and proposes ideas like

He notes that the USA does not have the world's highest living standard. Norway, Luxemburg, Switzerland, Denmark, Iceland, Ireland, Sweden and the USA, in that order, had the highest incomes per head. On income per hours worked, the USA comes eighth, after Luxemburg, Norway, France, Ireland, Belgium, Austria and the Netherlands. Japan, Switzerland, Singapore, Finland and Sweden have the highest industrial output per person.

Free-market politicians, economists and media have pushed policies of de-regulation and pursuit of short-term profits, causing less growth, more inequality, more job insecurity and more frequent crises. Britain's growth rate in income per person per year was 2.4 per cent in the 1960s-70s and 1.7 per cent 1990-2009. Rich countries grew by 3 per cent in the 1960s-70s and 1.4 per cent 1980-2009. Developing countries grew by 3 per cent in the 1960s-70s and 2.6 per cent 1980-2009. Latin America grew by 3.1 per cent in the 1960s-70s and 1.1 per cent 1980-2009, and Sub-Saharan Africa by 1.6 per cent in the 1960s-70s and 0.2 per cent 1990-2009. The world economy grew by 3.2 per cent in the 1960s-70s and 1.4 per cent 1990-2009.

So, across the world, countries did far better before Thatcher and Reagan's `free-market revolution'. Making the rich richer made the rest of us poorer, cutting economies' growth rates, and investment as a share of national output, in all the G7 countries.

Chang shows how free trade is not the way to grow and points out that the USA was the world's most protectionist country during its phase of ascendancy, from the 1830s to the 1940s, and that Britain was one of world's the most protectionist countries during its rise, from the 1720s to the 1850s.

He shows how immigration controls keep First World wages up; they determine wages more than any other factor. Weakening those controls, as the EU demands, lowers wages.

He challenges the conventional wisdom that we must cut spending to cut the deficit. Instead, we need controls capital, on mergers and acquisitions, and on financial products. We need the welfare state, industrial policy, and huge investment in industry, infrastructure, worker training and R&D.

As Chang points out, "Even though financial investments can drive growth for a while, such growth cannot be sustained, as those investments have to be ultimately backed up by viable long-term investments in real sector activities, as so vividly shown by the 2008 financial crisis."

This book is a commonsense, evidence-based approach to economic life, which we should urge all our friends and colleagues to read.

Loyd E. Eskildson

The 2008 'Great Recession' demands re-examination of prevailing economic thought - the dominant paradigm (post 1970's conservative free-market capitalism) not only failed to predict the crisis, but also said it couldn't occur in today's free markets, thanks to Adam Smith's 'invisible hand.' Ha-Joon Chang provides that re-examination in his "23 Things They Don't Tell You About Capitalism." Turns out that the reason Adam Smith's hand was not visible is that it wasn't there. Chang, economics professor at the University of Cambridge, is no enemy of capitalism, though he contends its current conservative version should be made better. Conventional wisdom tells us that left alone, markets produce the most efficient and just outcomes - 'efficient' because businesses and individuals know best how to utilize their resources, and 'just' because they are rewarded according to their productivity. Following this advice, countries have deregulated businesses, reduced taxes and welfare, and adopted free trade. The results, per Chang, has been the opposite of what was promised - slower growth and rising inequality, often masked by rising credit expansion and increased working hours. Alternatively, developing Asian countries that grew fast did so following a different version of capitalism, though to be fair China's version to-date has also produced much greater inequality. The following summarizes some of Chang's points:

  1. "There is no such thing as a free market" - we already have hygiene standards in restaurants, ban child labor, pollution, narcotics, bribery, and dangerous workplaces, require licenses for professions such as doctors, lawyers, and brokers, and limit immigration. In 2008, the U.S. used at least $700 billion of taxpayers' money to buy up toxic assets, justified by President Bush on the grounds that it was a necessary state intervention consistent with free-market capitalism. Chang's conclusion - free-marketers contending that a certain regulation should not be introduced because it would restrict market freedom are simply expressing political opinions, not economic facts or laws.
  2. "Companies should not be run in the interest of their owners." Shareholders are the most mobile of corporate stakeholders, often holding ownership for but a fraction of a second (high-frequency trading represents 70% of today's trading). Shareholders prefer corporate strategies that maximize short-term profits and dividends, usually at the cost of long-term investments. (This often also includes added leverage and risk, and reliance on socializing risk via 'too big to fail' status, and relying on 'the Greenspan put.') Chang adds that corporate limited liability, while a boon to capital accumulation and technological progress, when combined with professional managers instead of entrepreneurs owning a large chunk (e.g.. Ford, Edison, Carnegie) and public shares with smaller voting rights (typically limited to 10%), allows professional managers to maximize their own prestige via sales growth and prestige projects instead of maximizing profits. Another negative long-term outcome driven by shareholders is increased share buybacks (less than 5% of profits until the early 1980s, 90% in 2007, and 280% in 2008) - one economist estimates that had GM not spent $20.4 billion on buybacks between 1986 and 2002 it could have prevented its 2009 bankruptcy. Short-term stockholder perspectives have also brought large-scale layoffs from off-shoring. Governments of other countries encourage longer-term thinking by holding large shares in key enterprises (China Mobile, Renault, Volkswagen), providing greater worker representation (Germany's supervisory boards), and cross-shareholding among friendly companies (Japan's Toyota and its suppliers).
  3. "Free-market policies rarely make poor countries rich." With a few exceptions, all of today's rich countries, including Britain and the U.S., reached that status through protectionism, subsidies, and other policies that they and their IMF, WTO, and World Bank now advise developing nations not to adopt. Free-market economists usually respond that the U.S. succeeded despite, not because of, protectionism. The problem with that explanation is the number of other nations paralleling the early growth strategy of the U.S. and Britain (Austria, Finland, France, Germany, Japan, Korea, Singapore, Sweden, Taiwan), and the fact that apparent exceptions (Hong Kong, Switzerland, The Netherlands) did so by ignoring foreign patents (a free-market 'no-no'). Chang believes the 'official historians' of capitalism have been very successful re-writing its history, akin to someone trying to 'kick away the ladder' with which they had climbed to the top. He also points out that developing nations that stick to their Ricardian 'comparative advantage,' per the conservatives prescription, condemn themselves to their economic status quo.
  4. "We do not live in a post-industrial age." Most of the fall in manufacturing's share of total output is not due to a fall in the quantity of manufactured goods, but due to the fall in their prices relative to those for services, caused by their faster productivity growth. A small part of deindustrialization is due to outsourcing of some 'manufacturing' activities that used to be provided in-house - e.g.. catering and cleaning. Those advising the newly developing nations to skip manufacturing and go directly to providing services forget that many services mainly serve manufacturing firms (finance, R&D, design), and that since services are harder to export, such an approach will create balance-of-payment problems. (Chang's preceding points directly contradict David Ricardo's law of comparative advantage - a fundamental free market precept. Chang's example of how Korea built Pohang Steel into a strong economic producer, despite lacking experienced managers and natural resources, is another.)
  5. "The U.S. does not have the highest living standard in the world." True, the average U.S. citizen has greater command over goods and services than his counterpart in almost any other country, but this is due to higher immigration, poorer employment conditions, and working longer hours for many vs. their foreign counterparts. The U.S. also has poorer health indicators and worse crime statistics. We do have the world's second highest income per capita - Luxemburg's higher, but measured in terms of purchasing power parity (PPP) the U.S. ranks eighth. (The U.S. doesn't have the fastest growing economy either - China is predicted to pass the U.S. in PPP this coming decade.) Chang's point here is that we should stop assuming the U.S. provides the best economic model. (This is already occurring - the World Bank's chief economist, Justin Lin, comes from China.)
  6. "Governments can pick winners." Chang cites examples of how the Korean government built world-class producers of steel (POSCO), shipbuilding (Hyundai), and electronics (LG), despite lacking raw materials or experience for those sectors. True, major government failures have occurred - Europe's Concorde, Indonesia's aircraft industry, Korea's promotion of aluminum smelting, and Japan's effort to have Nissan take over Honda; industry, however, has also failed - e.g.. the AOL-Time Warner merger, and the Daimler-Chrysler merger. Austria, China, Finland, France, Japan, Norway, Singapore (in numerous other areas), and Taiwan have also done quite well with government-picked winners. Another problem is that business and national interests sometimes clash - e.g.. American firms' massive outsourcing has undermined the national interest of maintaining full employment. (However, greater unbiased U.S. government involvement would be difficult due to the 10,000+ corporate lobbyists and billions in corporate campaign donations - $500 million alone from big oil in 2009-10.) Also interesting to Chang is how conservative free marketing bankers in the U.S. lined up for mammoth low-cost loans from the Federal Reserve at the beginning of the Great Recession. Government planning allows minimizing excess capacity, maximizing learning-curve economies and economies of scale and scope; operational performance is enhanced by also forcing government-owned or supported firms into international competition. Government intervention (loans, tariffs, subsidies, prohibiting exports of needed raw materials, building infrastructure) are necessary for emerging economies to move into more sophisticated sectors.
  7. "Making rich people richer doesn't make the rest of us richer." 'Trickle-down' economics is based on the belief that the poor maximize current consumption, while the rich, left to themselves, mostly invest. However, the years 1950-1973 saw the highest-ever growth rates in the U.S., Canada, Australia, and New Zealand, despite increased taxation of the rich. Before the 'Golden Age,' per capita income grew at 1-1.5%/year; during the Golden Age it grew at 2-3% in the U.S. Since then, tax cuts for the rich and financial deregulation have allowed greater paychecks for top managers and financiers, and between 1979 and 2006 the top 0.1% increased their share of national income from 3.5% to 11.6%. The result - investment as a ratio of national output has fallen in all rich economies and the pace at which the total economic pie grew decreased.
  8. "U.S. managers are over-priced." First, relative to their predecessors (about 10X those in the 1960s; now 300-400X the average worker), despite the latter having run companies more successfully, in relative terms. Second, compared to counterparts in other rich countries - up to 20X. (Third, compared to counterparts in developing nations - e.g.. JPMorgan Chase, world's 4th largest bank, paid its CEO $19.6 million in 2008, vs. the CEO of the Industrial and Commercial Bank of China, the world's largest, being paid $234,700. Read more ›

Willem Buiter and the idea of long term stagnation

Willem Buiter in his FT article After the Crisis Macro Imbalance, Credibility and Reserve-Currency suggested that after financial crisis of 2008 there might be very long a painful deleveraging period aka secular stagnation.  He was right.

In short each financial crisis make recovery longer and longer. That's why the US will most likely face a long period of stagnation: the digestion of huge excessive debt of the private sector might well take a decade:

Since the excess of debt is relative to income and GDP, the lower the rate of growth, the longer the required period of digestion. This explains for the paradox of trying to stimulate consumption when the economy faces a monumental crisis provoked exactly by excessive debt and excessive consumption. A cartoon line best captured the spirit of it: "country addicted to speculative bubbles desperately searches a new bubble to invest in. "

... ... ...

The roots of the crisis are major international macroeconomic imbalances. Despite the fact that the excesses of the financial system were instrumental to lead these imbalances further than otherwise possible, insufficient regulation should not be viewed as the main factor behind the crisis. The expenditure of central countries, spinned by all sort of financial innovations created by a globalized financial system, was the engine of world growth. When debt became clearly excessive in central countries and the debt-financed expenditure cycle came to an end, the ensuing crisis paralyzed the world economy. With the lesson of 1929 well assimilated, American monetary policy became aggressively expansionist. The Fed inundated the economy with money and credit, in the attempt to avoid a deep depression. Even if successful, the economies of the US and the other central countries, given the burden of excessive debt, are likely to remain stagnant under the threat of deflation for the coming years. The assumption of troubled assets by the public sector, in order to avoid the collapse of the financial system, might succeed, but at the cost of a major increase in public debt. Fiscal policy is not efficient to restart the economy when the private sector remains paralyzed by excessive debt. Even if a coordinated effort to increase public expenditure is successful, the central economies will remain stagnant for as long as the excessive indebtedness of the private sector persists. The period of digestion of excess debt will be longer than the usual recessive cycle. Since imports represent a drain in the effort to reanimate domestic demand through public expenditure, while exports, on the contrary, contribute to the recovery of internal demand, the temptation to central economies to also adopt a protectionist stance will be strong.

Willem Buiter also defined ‘cognitive regulatory capture’ which existed during the Greenspan years and when the Fed were just an arm of Wall Street.

This regulatory capture has resulted in an excess sensitivity of the Fed to financial market and financial sector concerns and fears and in an overestimation of the strength of the link between financial market turmoil and financial sector deleveraging and capital losses on the one hand, and the stability and prosperity of the wider economy on the other hand. The paper gives five examples of recent behavior by the Fed that are most readily rationalized with the assumption of regulatory capture. The abstract of the paper follows next. The latest version of the entire enchilada can be found here. Future revisions will also be found there.

Joseph Stiglitz on 5 steps to Casino Capitalism

Stiglitz is very unene and early Striglist was actually defender of neoliberalism (aka casino capitalism). Later he became a critic. In his 2008 Vanity Fair article Capitalist Fools Stiglitz identifies five key steps in transformation of American capitalism to Casino Capitalism (moments of failure as he called them):

No. 1: Reagan Fires Fed Chairman Volcker and Replaces Him With Greenspan in 1987:

Volcker also understood that financial markets need to be regulated. Reagan wanted someone who did not believe any such thing, and he found him in a devotee of the objectivist philosopher and free-market zealot Ayn Rand.

snip

If you appoint an anti-regulator as your enforcer, you know what kind of enforcement you’ll get. A flood of liquidity combined with the failed levees of regulation proved disastrous.

Greenspan presided over not one but two financial bubbles.

  1. Congress repealed the Glass-Steagall Act in 1999 under Bill Clinton (Glass-Steagall was a depression-era reform that separated commercial and investment banks)

I had opposed repeal of Glass-Steagall. The proponents said, in effect, Trust us: we will create Chinese walls to make sure that the problems of the past do not recur. As an economist, I certainly possessed a healthy degree of trust, trust in the power of economic incentives to bend human behavior toward self-interest—toward short-term self-interest, at any rate, rather than Tocqueville’s "self interest rightly understood."

Stiglitz also refers to a 2004 decision by the SEC "to allow big investment banks to increase their debt-to-capital ratio (from 12:1 to 30:1, or higher) so that they could buy more mortgage-backed securities, inflating the housing bubble in the process."

Once more, it was deregulation run amuck, and few even noticed.

  1. The Bush tax cuts, both on income and capital gains

The Bush administration was providing an open invitation to excessive borrowing and lending—not that American consumers needed any more encouragement.

  1. Faking the Numbers

Here he refers to bad accounting, the failure to address problems with stock options, and the incentive structures of ratings agencies like Moodys that led them to give high ratings to toxic assets.

  1. Paulson and the Flawed Bailout

Valuable time was wasted as Paulson pushed his own plan, "cash for trash," buying up the bad assets and putting the risk onto American taxpayers. When he finally abandoned it, providing banks with money they needed, he did it in a way that not only cheated America’s taxpayers but failed to ensure that the banks would use the money to re-start lending. He even allowed the banks to pour out money to their shareholders as taxpayers were pouring money into the banks.

Stiglitz concludes:

The truth is most of the individual mistakes boil down to just one: a belief that markets are self-adjusting and that the role of government should be minimal. Looking back at that belief during hearings this fall on Capitol Hill, Alan Greenspan said out loud, "I have found a flaw." Congressman Henry Waxman pushed him, responding, "In other words, you found that your view of the world, your ideology, was not right; it was not working." "Absolutely, precisely," Greenspan said. The embrace by America—and much of the rest of the world—of this flawed economic philosophy made it inevitable that we would eventually arrive at the place we are today.

The flawed economic philosophy brought by Reagan, and embraced by so many, brought us to this day. Ideas have consequences, especially when we stop empirically testing them. Republican economics have created great pain to America and harmed our national interest.

The flaw that Greenspan found was always there: self-regulation does not work. As Stiglitz said:

As an economist, I certainly possessed a healthy degree of trust, trust in the power of economic incentives to bend human behavior toward self-interest — toward short-term self-interest

Yes, for all their claims to science, the premise conflicts with tendencies of people.

This is the real legacy of Ronald Reagan and Alan Greenspan:

The whole scheme was kick-started under Ronald Reagan. Between his tax cuts for the rich and the Greenspan Commission’s orchestrated Social Security heist, working Americans lost out in a generational wealth transfer shift now exceeding $1 trillion annually from 90 million working class households to for-profit corporations and the richest 1% of the population. It created an unprecedented wealth disparity that continues to grow, shames the nation and is destroying the bedrock middle class without which democracy can’t survive.

Greenspan helped orchestrate it with economist Ravi Batra calling his economics "Greenomics" in his 2005 book "Greenspan’s Fraud." It "turns out to be Greedomics" advocating anti-trust laws, regulations and social services be ended so "nothing....interfere(s) with business greed and the pursuit of profits."

 Conclusions: From Animal Farm To Animal House

Instead of conclusion I will reproduce the post from Sudden Debt (March 17, 2008):

In Orwell's Animal Farm all animals are equal - except that some are more equal than others. All in the spirit of law, order and the proper functioning of society, of course. Fittingly, the animals that have chosen this role by themselves and for themselves, are the pigs.

Cut to US financial markets today. After years of swinish behavior more reminiscent of Animal House than anything else, the pigs are threatening to destroy the entire farm. As if it wasn't enough that they devoured all the "free market" food available and inundated the world with their excreta, they now wish to be put on the public trough. Truly, some businessmen believe they are more equal than others.

But do not blame the pigs; they are expected to act as swine nature dictates. The fault lies entirely with the farmers, those authorities entrusted by the people to oversee the farm because they supposedly knew better. While the pigs were rampaging and tearing the place apart, they were assuring us all that farms function best when animals are free to do as they please, guided solely by invisible hooves. No regulation, no oversight, no common sense. Oh yes, and pigs fly..

So what is to be done now? Two things:

In other words, the focus from now on should be on adding value by means of work and savings (capital formation), instead of inflating assets and borrowing.

Furthermore, we should realize that in a world already inhabited by close to 7 billion people and beset by resource depletion and environmental degradation, defending growth for growth's sake is a losing proposition. The wheels are already wobbling on the Permagrowth model; pumping harder on the accelerator is not going to make it go any faster and will likely result in a fatal crash.

Debt, and finance in general, should be left to re-size downwards to a level that better reflects the carrying capacity of our world. The Fed's current actions are shortsighted and "conservative" in the worst interpretation of the words: they are designed to artificially maintain debt at levels that myopically projects growth as far as the eye can see.

What level of resizing may be necessary? I hope not as much as at Bear Stearns, which got itself bought by Morgan at buzz-saw prices: $2 per share represents a 98% discount from its $84 book value. What scares me, though, is the statement by Morgan's CFO, who said the price reflected the risk the firm was taking, even though he was comfortable with the valuation of assets in Bear's books. It "...gives us the flexibility and margin of error that's appropriate given the speed at which the transaction came together", he said.

If it takes a 98% discount and the explicit guarantee of the Fed for a large portion of assets to buy one of the largest investment banks in the world, where should all other financial firms be trading at? ....Hello? Anyone? Is that a great big silence I hear, or the sound of credit imploding into a vacuum?


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[Sep 16, 2019] The continual plundering and looting of Iranian resources

Sep 16, 2019 | www.zerohedge.com

camfree , 26 minutes ago link

Bibi is desperate for war with Iran to avoid election defeat and prison and Bolton is fired/resigns only to predict "Iranian deception" on the way out the door.

Insurrexion , 33 minutes ago link

Zeroes,

Re: $100/Bl Oil...

Today, Brent climbed as much as 12% towards $70 per barrel and the US crude oil rose 10% to nearly $61. Historically, Brent crude oil reached an all time high of 147.50 in July of 2008. Remember what happened next?

Qui Bono?

  • KSA, UAE, Qatar
  • Russia
  • US Oil Majors, State of Texas
  • OPEC
  • UK
  • Norway

Who suffers?

  • China
  • Japan
  • India
  • Transportation costs and cost of goods
  • Commuters costs
  • Heating costs going into winter
  • Airlines and air travel

Iraq, Libya, Venezuela and Iran are a mess and cannot produce to make a difference.

This will be the catalyst for the economic downturn.

attah-boy-Luther , 39 minutes ago link

Trumptards locked and loaded....sigh and now this:

https://www.henrymakow.com/2019/09/disgrace-canadas-theft-of-ir.html

So the continual plundering and looting of Iranian resources never ceases to amaze me.

[Sep 16, 2019] President Macron's Amazing Admission by The Saker

Sep 16, 2019 | www.unz.com

Interestingly, one of the people the Ukrainians gave up in this exchange was Vladimir Tsemakh, a native of the Donbass who was kidnapped by the Ukie SBU in Novorussia (our noble "Europeans" did not object to such methods!) and declared the "star witness" against Russia in the MH-17 (pseudo-)investigation. Even more pathetic is that the Dutch apparently fully endorsed this load of crapola . Finally, and just for a good laugh, check out how the infamous' Bellingcat presented Tsemakh . And then, suddenly, everybody seem to "forget" that "star witness" and now the Ukies have sent him to Russia. Amazing how fast stuff gets lost in the collective western memory hole

Thus we see these apparently contradictory developments taking place: on on hand, the Ukraine finally agreed to a prisoner swap with Russia (a painful one for Russia as Russia mostly traded real criminals, including a least two bona fide Ukie terrorist, against what are mostly civilian hostages, but Putin decided – correctly I think – that freeing Russian nationalists from Ukie jails was more important in this case) while on the other hand, the Ukronazi armed forces increased their shelling, even with 152mm howitzers which fire 50kg high explosive fragmentation shells, against the Donbass. Whatever may be the case, this prisoner swap, no matter how one-sided and unfair, is a positive development which might mark the beginning of a pragmatic and less ideological attitude in Kiev.

Some very cautious beginnings of a little hint of optimism might be in order following that exchange, but the big stuff seems to be scheduled for the meeting of the Normandy Group (NG), probably in France. So far, the Russians have made it very clear that they will not meet just for the hell of meeting, and that the only circumstance in which the Russians will agree to a NG meeting would be if it has good chances of yielding meaningful results which, translated from Russian diplomatic language simply means "if/when Kiev stops stonewalling and sabotaging everything". Specifically, the Russians are demanding that Zelenskii commit in writing to the so-called " Steinmeier formula " and that the Ukrainian forces withdraw from the line of contact. Will that happen? Maybe. We shall soon find out.

Here is my informal translation of these words:

The international order is being shaken in an unprecedented manner, above all with, if I may say so, by the great upheaval that is undoubtedly taking place for the first time in our history , in almost every field and with a profoundly historic magnitude . The first thing we observe is a major transformation, a geopolitical and strategic re-composition. We are undoubtedly experiencing the end of Western hegemony over the world . We were accustomed to an international order which, since the 18th century, rested on a Western hegemony, mostly French in the 18th century, by the inspiration of the Enlightenment; then mostly British in the 19th century thanks to the Industrial Revolution and, finally, mostly American in the 20th century thanks to the 2 great conflicts and the economic and political domination of this power. Things change. And they are now deeply shaken by the mistakes of Westerners in certain crises, by the choices that have been made by Americans for several years which did not start with this administration, but which lead to revisiting certain implications in conflicts in the Middle East and elsewhere, and to rethinking a deep, diplomatic and military strategy, and sometimes elements of solidarity that we thought were intangible for eternity, even if we had constituted together in geopolitical moments that have changed. And then there is the emergence of new powers whose impact we have probably underestimated for a long time. China is at the forefront, but also the Russian strategy, which has, it must be said, been pursued more successfully in recent years . I will come back to that. India that is emerging, these new economies that are also becoming powers not only economic but political and that think themselves, as some have written, as real "civilizational states" which now come not only to shake up our international order but who also come to weigh in on the economic order and to rethink the political order and the political imagination that goes with it, with much dynamism and much more inspiration than we have. Look at India, Russia and China. They have a much stronger political inspiration than Europeans today. They think about our planet with a true logic, a true philosophy, an imagination that we've lost a little bit.

... ... ...

6) " Look at India, Russia and China. They have a much stronger political inspiration than Europeans today. They think about our planet with a true logic, a true philosophy, an imagination that we've lost a little bit."

This is the "core BRICS" challenge to the Empire: China and Russia have already established what the Chinese call a "Comprehensive Strategic Partnership of Coordination for the New Era". If they can now extend this kind of informal but extremely profound partnership (I think of it as "symbiotic") to India next, then the BRICS will have a formidable future (especially after the Brazilian people give the boot to Bolsonaro and his US patrons). Should that fail and should India chose to remain outside this unique relationship, then the SCO will become the main game in town. And yes, Macron is spot on: China and, especially, Russia have a fundamentally different worldview and, unlike the western one, theirs does have "much stronger political" goals (Macron used the word "aspirations"), "a real philosophy and imagination" which the West has lost, and not just a "little bit" but, I would argue, completely. But one way or the other, and for the first time in 1000 years, the future of our planet will not be decided anywhere in the West, not in Europe (old or "new"), but in Asia, primarily by the Russian-Chinese alliance. As I explained here , the AngloZionist Empire is probably the last one in history, definitely the last western one.

... ... ...

PS: the latest rumor from the Ukraine: Zelenskii supporters are saying that Poroshenko is preparing a coup against Zelenskii and that he is preparing a special force of Ukronazi deathsquads to execute that coup. Dunno about a real coup, but they have already blocked the Rada . Never a dull moment indeed

[Sep 16, 2019] The attack seemed to have involved not only Houti drones (already build with help from Iran), but also Iranian backed forces in Iraq, AND pro Iranian forces in Saudi Arabia itself. And maybe even other actors.

Sep 16, 2019 | www.moonofalabama.org

dh-mtl , Sep 15 2019 15:58 utc | 3

b,

The Americans have gotten themselves in a real bind with their maximum pressure campaign on Iran. This latest attack on Saudi Arabia's oil production looks like an escalation of the previous attacks on shipping and the spy drone. It is not evident how the Americans can respond to this latest attack.

As I see it their options are:

1. To let KSA respond to the Houthi attack and continue with their campaign to shut down Iranian oil production, without any direct U.S. response to the attack. However this will achieve nothing, as next month Iran will up pressure again with another attack on Middle-East oil assets, and we'll be back to the same place.

2. To bomb Iran's oil industry, as Pompeo and Graham suggest. However this risks blowing up the whole Middle East, as well as the World's oil market and their own (Western) economies.

3. Forget about Iran and move the fight to maintain U.S. global hegemony to another front: back to Venezuela? Serbia? Hong Kong? Taiwan? However the end result of such a move would more than likely be another humuliating defeat for the U.S.

4. Do as Stephen Wertheim / New York Times suggest and sue for peace. This will end the dream of U.S. World dominance, Globalization and the current western based financial system. The U.S. will become no more than a heavily indebted regional power in a 'Multi-polar World Order' led by China and Russia.

As I see it, the U.S. is out of options to continue their war for global dominance. #4 is the only viable option. But, as one author argued in a recent paper (I don't have the reference), wars continue long after the victor is clear, because the loser can't admit defeat (at heavy additional costs to the loser). I think that this is the position that the U.S. finds itself in now.


DontBelieveEitherPr. , Sep 15 2019 16:21 utc | 4

What the attack on Saudi oil infrastructure shows us, is that now Iran has united her proxys into one united front.

While they were cautious to not leave evidence of their involvment with the Houtis before, they now are putting their support more and more into the open.

The attack seemed to have involved not only Houti drones (already build with help from Iran), but also Iranian backed forces in Iraq, AND pro Iranian forces in Saudi Arabia itself. And maybe even other actors.

This is a major new development. Not only for the war on Yemen, but also in the context of Iran providing a credile detterence against US+Saudi aggression.
They excalated with increasing levels, and one wonders, what could top this last attack off.

And i am pretty sure, we will find out sooner rather than later.

Don Bacon , Sep 15 2019 20:13 utc | 29
@ 27
WaPo: Abqaiq . .damaged on the west-northwest sides
That's it! It was Hezbollah for sure. (not)

Actually there were two targets, the Buqaiq (Abqaiq) oil processing plant and the Khurais oil field, both in the Eastern Province.

These attacks are not the first -- from longwarjournal:

Last month, the Houthis claimed another drone operation against Saudi's Shaybah oil field near the United Arab Emirates. At more than 1,000 miles away from it's Yemen territory, that strike marked one of the Houthis farthest claimed attacks.
The Houthis also claimed a drone strike on the Abu Dhabi airport last year, but that has been denied by Emirati officials.
Additionally, a drone strike on Saudi's East-West oil pipeline near Riyadh earlier this year, which the Houthis claimed responsibility, was allegedly conducted by Iranian-backed Iraqi militants. If accurate, that means the Houthi claim of responsibility acted as a type of diplomatic cover for the Iraqi militants.
Since beginning its drone program last year, the Houthis have launched at least 103 drone strikes in Yemen and Saudi Arabia according to data compiled by FDD's Long War Journal. . . here . . .and more here .
Hercules , Sep 15 2019 21:27 utc | 35
Really appreciated the write up on the Houthis attack.
Sounds like the attack left substantial damage. Another bigger issue underlying all of this, aside from Saudi inability to get what it wants now from it's IPO, is the fact that the US Patriots did not detect this attack.
The Saudis spent billions last year on this defense system. Sounds like the clown Prince better give Russians a call about their S-400.
But the US wouldn't appreciate that much, would they?

[Sep 16, 2019] Oil Explodes 20% Higher, Biggest Jump On Record

Sep 16, 2019 | www.zerohedge.com

As Bloomberg notes, "for oil markets, it's the single worst sudden disruption ever, surpassing the loss of Kuwaiti and Iraqi petroleum supply in August 1990, when Saddam Hussein invaded his neighbor. It also exceeds the loss of Iranian oil output in 1979 during the Islamic Revolution, according to data from the U.S. Department of Energy."

Furthermore, in light of news that the Saudi outage could last for months , this could be just the start. As a reminder, according to Morningstar research director, Sandy Fielden, "Brent could go to $80 tomorrow, while WTI could go to $75... But that would depend on Aramco's 48-hour update. The supply problem won't be clear right away since the Saudis can still deliver from inventory."

Of course, should Aramco confirm that the outage - which has taken some 5.7mmb/d in Saudi output after 10 drones struck the world's biggest crude-processing facility in Abqaiq and the kingdom's second-biggest oil field in Khurais - will last for weeks, expect the crude juggernaut to continue until the price hits $80, and keeps moving higher. Finally, here is the price summary from Goldman commodity strategist Damien Courvalin, who earlier today laid out four possible shutdown scenarios, and the price oil could hit for each:

What are the broader implications from this move? According to Ole Hansen, head of commodities strategy at Saxo Bank A/S in Copenhagen, "the global economy can ill afford higher oil prices at a time of economic slowdown." But Peter Boockvar's hot take may be the best one.

camfree , 26 minutes ago link

Bibi is desperate for war with Iran to avoid election defeat and prison and Bolton is fired/resigns only to predict "Iranian deception" on the way out the door. This is obviously another Mossad/CIA/Saudi false flag on the anniversity of 9/11 to serve multiple interests: Bibi's re-election, the central bankers, the MIC's aspirations for war with Iran & Trump has an economic scapegoat ensuring a free pass for 2020.

[Sep 15, 2019] The USA is like the Hotel California, you can check out, but you can never leave.

Sep 15, 2019 | www.zerohedge.com

Paralentor , 40 minutes ago link

Perfect time for Texas to secede from the Union and return to being a Lone Star Nation State. Price for barrels start at $95 and that's only a former friends and family rate.

just the tip , 33 minutes ago link

why would the blue state of texas do such a thing?

Dzerzhhinsky , 33 minutes ago link

The USA is like the Hotel California, you can check out, but you can never leave.

Last time you tried to leave they gave you a warning, this time they would kill you all.

[Sep 15, 2019] Conflicting groups within the elite often represent difficult types of capital

Sep 15, 2019 | www.moonofalabama.org

sad canuck , Sep 15 2019 21:29 utc | 36

@1 steven t johnson

Agree with respect to points 1 and 2 but is at least Kotkin's is a bit more insightful than the recent Markovits book on meritocracy. In the latter, Markovits divides the entire country into middle class and elites, with the owners and Kotkin's clerisy combined and subject to the same structure, rewards and stresses.

Never a mention of capital or ownership of the means of production. Guess one should not be shocked that a Yale professor considers himself elite, but a little surprising that he does not understand that he serves at the pleasure of the owners. That's a club and he's not in it as the comic-laureate Carlin would say. A little class consciousness goes a long way.

[Sep 15, 2019] Americar real Conflict in Trump era is between the two factions of neoliberal elites: financial oligarchy (and associated with them Silicon Valley Moduls) and old manufacturing elite

This is the conflict between financial elite and Silicon Valley modules against traditional manufactures and extractive industries like oil, gas, coil, iron ore, etc.
Notable quotes:
"... The First Estate, once the province of the Catholic Church, has morphed into what Samuel Coleridge in the 1830s called "the Clerisy," a group that extends beyond organized religion to the universities, media, cultural tastemakers and upper echelons of the bureaucracy. The role of the Second Estate is now being played by a rising Oligarchy, notably in tech but also Wall Street, that is consolidating control of most of the economy. ..."
Sep 15, 2019 | dailycaller.com

A recent OECD report , is under assault, and shrinking in most places while prospects for upward mobility for the working class also declines.T

he anger of the Third Estate, both the growing property-less Serf class as well as the beleaguered Yeomanry, has produced the growth of populist, parties both right and left in Europe, and the election of Donald Trump in 2016. In the U.S., this includes not simply the gradual, and sometimes jarring, transformation of the GOP into a vehicle for populist rage, but also the rise on the Democratic side of politicians such as Sens. Bernie Sanders and Elizabeth Warren, each of whom have made class politics their signature issue.

(RELATED: Bernie Sanders Says Middle Class Will Pay More In Taxes)

The Rise of Neo-Feudalism

Today's neo-feudalism recalls the social order that existed before the democratic revolutions of the 17th and 18th Century, with our two ascendant estates filling the roles of the former dominant classes.

The First Estate, once the province of the Catholic Church, has morphed into what Samuel Coleridge in the 1830s called "the Clerisy," a group that extends beyond organized religion to the universities, media, cultural tastemakers and upper echelons of the bureaucracy. The role of the Second Estate is now being played by a rising Oligarchy, notably in tech but also Wall Street, that is consolidating control of most of the economy.

Together these two classes have waxed while the Third Estate has declined. This essentially reversed the enormous gains made by the middle and even the working class over the past 50 years. The top 1% in America captured just 4.9 percent of total U.S. income growth in 1945-1973, but since then the country's richest classes has gobbled up an astonishing 58.7% of all new wealth in the U.S., and 41.8 percent of total income growth during 2009-2015 alone.

In this period, the Oligarchy has benefited from the financialization of the economy and the refusal of the political class in both parties to maintain competitive markets. As a result, American industry has become increasingly concentrated. For example, the five largest banks now account for close to 50 percent of all banking assets, up from barely 30 percent just 20 years ago. (RELATED: The Biggest Bank You've Never Heard Of)

Warren Buffett, Jeffrey Immelt, Charles Schwab and Jamie Dimon, at Georgetown University. Chip Somodevilla/Getty Images.

Warren Buffett, Jeffrey Immelt, Charles Schwab and Jamie Dimon, at Georgetown University. Chip Somodevilla/Getty Images.

The concentration numbers in tech are even more frightening. Once a highly competitive industry, it is now among the most concentrated . Like the barbarian chieftains who seized land after the fall of Rome, a handful of companies -- Facebook , Google , Apple, Microsoft and Amazon -- have gained total control over a host of markets, from social media to search, the software operating systems, cloud computing and e-commerce. In many key markets such as search, these companies enjoy market shares reaching to eighty or ninety percent.

As they push into fields such as entertainment, space travel, finance and autonomous vehicles, they have become, as technology analyst Izabella Kaminska notes, the modern-day "free market" equivalents of the Soviet planners who operated Gosplan, allocating billions for their own subjective priorities. Libertarians might point out that these tech giants are still privately held firms but they actually represent , as one analyst put it, "a new form of monopoly power made possible by the 'network effect' of those platforms through which everyone must pass to conduct the business of life."

The role of the Clerisy

The new feudalism, like the original, is not based simply around the force of arms, or in this case what Marx called "the cash nexus." Like the church in Medieval times, the Clerisy sees itself as anointed to direct human society, a modern version of what historian Marc Bloch called the "oligarchy of priests and monks whose task it was to propitiate heaven." This modern-day version of the old First Estate sets down the ideological tone in the schools, the mass media, culture and the arts. There's also a Clerisy of sorts on the right, and what's left of the center, but this remains largely, except for Fox, an insignificant remnant.

Like their predecessors, today's Clerisy embraces an orthodoxy, albeit secular, on a host of issues from race and gender to the environment. Universities have become increasingly dogmatic in their worldview. One study of 51 top colleges found the proportion of liberals to conservatives as much as 70:1, and usually at least 8:1. At elite liberal arts schools like Wellesley, Swarthmore and Williams, the proportion reaches 120:1.

Similar attitudes can be seen in virtually all other culturally dominant institutions, starting with Hollywood. Over 99 percent of all major entertainment executives' donations went to Democrats in 2018, even though roughly half the population would prefer they keep their politics more to themselves. (RELATED: Here Are Reactions From Democrats, Liberal Celebrities To The Mueller Testimony)

The increasing concentration of media in ever fewer centers -- London, New York, Washington, San Francisco -- and the decline of the local press has accentuated the elite Clerisy's domination. With most reporters well on the left, journalism, as a 2019 Rand report reveals, is steadily moving from a fact-based model to one that is dominated by predictable opinion. This, Rand suggests has led to what they called "truth decay."

The new geography of feudalism

The new feudalism increasingly defines geography not only in America but across much of the world. The great bastion of both the Oligarchy and high reaches of the Clerisy lies in the great cities, notably New York, London, Paris, Beijing, Shanghai, Tokyo, San Francisco, Los Angeles and Seattle. These are all among the most expensive places to live in the world and play a dominant role in the global media.

Yet these cities are not the progressive, egalitarian places evoked by great urbanists like the late Jane Jacobs, but more closely resemble the "gated" cities of the Middle Ages, and their equivalents in places as diverse as China and Japan. American cities now have higher levels of inequality, notes one recent study , than Mexico. In fact, the largest gaps ( between the bottom and top quintiles of median incomes are in the heartland of progressive opinion, such as in the metropolitan areas of San Francisco, New York, San Jose, and Los Angeles. (RELATED: Got Income Inequality? Least Affordable Cities Are Also the Bluest)

In some of the most favored blue cities, such as Seattle , Portland and San Francisco , not only is the middle class disappearing, but there has been something equivalent of "ethnic cleansing" amidst rising high levels of inequality, homelessness and social disorder. Long-standing minority communities like the Albina neighborhood in Portland are disappearing as 10,000 of the 38,000 residents have been pushed out of the historic African-American section. In San Francisco, the black population has dropped from 18% in the 1970s to single digits and what remains, notes Harry Alford , National Black Chamber of Commerce president, "are predominantly living under the poverty level and is being pushed out to extinction."

This exclusive and exclusionary urbanity contrasts with the historic role of cities. The initial rise of the Third Estate was tied intimately to the " freedom of the city . " But with the diminishing prospects for blue-collar industries, as well as high housing costs, many minorities and immigrants are increasingly migrating away from multi-culturally correct regions like Chicago , New York, Los Angeles and San Francisco for less regulated, generally less "woke" places like Phoenix, Dallas-Ft. Worth, Houston, Atlanta and Las Vegas.

Yet even as the middle-class populations flee, poverty remains deeply entrenched in our big cities, with a rate roughly twice that of the suburbs. The much-celebrated urban renaissance has been largely enjoyed by the upper echelons but not the working classes. In the city of Philadelphia , for example, the "center city" income rose, but citywide between 2000 and 2014, for every district that, like downtown, gained in income, two suffered income declines. Similarly, research shows that the number of high poverty (greater than 30 percent below the poverty line) neighborhoods in the U.S. has tripled since 1970 from 1,100 to 3,100.

Undermining the Third Estate

The impact of the rising Clerisy and Oligarchs poses a direct threat to the future of the Third Estate. On the economic side, relentless consolidation and financialization has devastated Main Street. In the great boom of the 1980s, small firms and start-ups powered the economy, but more recently the rates of entrepreneurship have dropped as mega-mergers, chains and on-line giants slowly reduced the scope of opportunities. Perhaps most disturbing of all has been the decline in new formations among younger people.

This phenomenon is most evident in the tech world. Today is not a great time to start a tech company unless you are in the charmed circle of elite firms with access to venture and private equity funds. The old garage start-up culture of Silicon Valley is slowly dying, as large firms gobble up or crush competitors. Indeed, since the rise of the tech economy in the 1990s, the overall degree of industry concentration has grown by 75 percent.

Like the peasant farmer or artisan in the feudal era, the entrepreneur not embraced by the big venture firms lives largely at the sufferance of the tech overlords. As one online publisher notes on his firm's status with Google:

If you're a Star Trek fan, you'll understand the analogy. It's a bit like being assimilated by the Borg. You get cool new powers. But having been assimilated, if your implants were ever removed, you'd certainly die. That basically captures our relationship to Google.

The Clerisy's War on the Middle Class

For generations, the Clerisy has steadfastly opposed the growth of suburbia, driven in large part by the aesthetic concerns –the conviction that single-family homes are fundamentally anti-social– and, increasingly, by often dubious assertions on their environmental toxicity. In places like California, the United Kingdom, Australia and Canada, government policies discourage peripheral construction where home ownership rates tend to be higher, in favor of dense, largely rental housing.

This marks a dramatic turnaround. During the middle of the 20th Century, ownership rates in the United States leaped from 44 percent in 1940 to 63 percent in the late 1970s. Yet in the new generation this prospect is fading. In the United States, home ownership among post-college millennials (aged 25-34) has dropped from 45.4 percent in 2000 to 37.0 percent in 2016, a drop of 18 percent from the 1970s, according to Census Bureau data . In contrast, their parents and grandparents witnessed a dramatic rise of homeownership from 44 percent in 1940 to 63 percent 30 years later.

But the Clerisy's war on middle- and working-class aspiration goes well beyond housing. Climate change policies already enacted in California and Germany have driven millions into "energy poverty." If adopted, many of the latest proposals for such things as the Green New Deal all but guarantee the rapid reduction of millions of highly productive and often well-paying energy, aerospace, automobile and logistics jobs.

Political implications

The war of the Estates is likely to shape our political landscape for decades to come. Parts of the Third Estate –those working with their hands or operating small businesses– increasingly flock to the GOP, according to a recent CityLab report. Trump also has a case to make with these workers, as real wages for blue-collar workers are now rising for the first time in decades. Unemployment is near record lows not only for whites but also Latinos and African-Americans. Of course, if the economy weakens, he may lose some of this support. (RELATED: Trump Blasts Media For 'Barely' Covering 'Great' Economy, Low Unemployment)

But the emergence of neo-feudalism also lays the foundation for a larger, more potent and radicalized left. As opportunities for upward mobility shrink, a new generation, indoctrinated in leftist ideology sometimes from grade school and ever more predictably in undergraduate and graduate school, tilts heavily to the left, embracing what is essentially an updated socialist program of massive redistribution, central direction of the economy and racial redress.

Antifa members in Berkeley, California. AFP/Getty/Amy Osborne.

Antifa members in Berkeley, California. AFP/Getty/Amy Osborne.

In France's most recent presidential election, the former Trotskyite Jean-Luc Melenchon won the under-24 vote, beating the "youthful" Emmanuel Macron by almost two to one. Similarly in the United Kingdom, the birthplace of modern capitalism, the Labour Party , under the neo- Marxist Jeremy Corbyn , won over 60 percent of the vote among voters under 40, compared to just 23 percent for the Conservatives. Similar trends can be seen across Europe, where the Red and Green Party enjoys wide youth support.

The shift to hard-left politics also extends to the United States– historically not a fertile area for Marxist thinking. In the 2016 primaries , the openly socialist Bernie Sanders easily outpolled Hillary Clinton and Donald Trump combined. A 2016 poll by the Communism Memorial Foundation found that 44 percent of American millennials favored socialism while another 14 percent chose fascism or communism. By 2024, these millennials will be by far the country's biggest voting bloc .

In the current run-up to the Democratic nomination these young voters overwhelming tilt toward Sanders and his slightly less radical colleague Warren, while former Vice President Joe Biden retains the support of older Democrats. The common themes of the "new" Left, with such things as guaranteed annual incomes, rent control, housing subsidies, and free college might prove irresistible to a generation that has little hope of owning a home, could remain childless, and might never earn enough money to invest in much of anything. (RELATED: Bernie Sanders Says 'Health Care For All' Will Require Tax Increases)

At the end, the war of the estates raises the prospect of rising autocracy, even under formally democratic forms. In his assessment in "Democracy in America ," Alexis de Tocqueville suggests a new form of tyranny -- in many ways more insidious than that of the monarchical state -- that grants favors and entertainments to its citizens but expects little in obligation. Rather than expect people to become adults, he warns, a democratic state can be used to keep its members in "perpetual childhood" and "would degrade men rather than tormenting them."

With the erosion of the middle class, and with it dreams of upward mobility, we already see more extreme, less liberally minded class politics. A nation of clerics, billionaires and serfs is not conducive to the democratic experiment; only by mobilizing the Third Estate can we hope that our republican institutions will survive intact even in the near future.

Mr. Kotkin is the Presidential Fellow in Urban Futures at Chapman University and the executive director of the Center for Opportunity Urbanism. His next book, "The Coming Of Neo-Feudalism," will be out this spring.


The views and opinions expressed in this commentary are those of the author and do not reflect the official position of the Daily Caller.

[Sep 15, 2019] Trump's new world disorder: competitive, chaotic, conflicted by

The key to understanding the c
The collapse of neoliberalism naturally lead to the collapse of the US influence over the globe. and to the treats to the dollar as the world reserve currency. That's why the US foreign policy became so aggressive and violent. Neocons want to fight for the world hegemony to the last American.
Notable quotes:
"... US foreign policy is ever more unstable and confrontational ..."
"... Bolton's brutal defenestration has raised hopes that Trump, who worries that voters may view him as a warmonger, may begin to moderate some of his more confrontational international policies. As the 2020 election looms, he is desperate for a big foreign policy peace-making success. And, in Trump world, winning matters more than ideology, principles or personnel. ..."
"... Since taking office in January 2017, Trump has not merely broken with diplomatic and geopolitical convention. He has taken a wrecking ball to venerated alliances, multilateral cooperation and the postwar international rules-based order. ..."
"... The resulting new world disorder – to adapt George HW Bush's famous 1991 phrase – will be hard to put right. Like its creator, Trump world is unstable, unpredictable and threatening. Trump has been called America's first rogue president. Whether or not he wins a second term, this Trumpian era of epic disruption, the very worst form of American exceptionalism, is already deeply entrenched. ..."
"... driven by a chronic desire for re-election, Trump's behaviour could become more, not less, confrontational during his remaining time in office, suggested Eliot Cohen, professor of strategic studies at Johns Hopkins university. ..."
"... "The president has proved himself to be what many critics have long accused him of being: belligerent, bullying, impatient, irresponsible, intellectually lazy, short-tempered and self-obsessed," Cohen wrote in Foreign Affairs journal . "Remarkably, however, those shortcomings have not yet translated into obvious disaster. But [that] should not distract from a building crisis of US foreign policy." ..."
"... This pending crisis stems from Trump's crudely Manichaean division of the world into two camps: adversaries/competitors and supporters/customers. A man with few close confidants, Trump has real trouble distinguishing between allies and enemies, friends and foes, and often confuses the two. In Trump world, old rules don't apply. Alliances are optional. Loyalty is weakness. And trust is fungible. ..."
"... The crunch came last weekend when a bizarre, secret summit with Taliban chiefs at Camp David was cancelled . It was classic Trump. He wanted quick 'n' easy, primetime credit for a dramatic peace deal, pushed ahead blindly, then changed his mind at the last minute. Furious over a debacle of his own making, he turned his wrath on others, notably Bolton – who, ironically, had opposed the summit all along. ..."
"... With Trump's blessing, Israel is enmeshed in escalating, multi-fronted armed confrontation with Iran and its allies in Iraq, Lebanon and Syria. Add to this recent violence in the Gulf, the disastrous Trump-backed, Saudi-led war in Yemen, mayhem in Syria's Idlib province, border friction with Turkey, and Islamic State resurgence in northern Iraq, and a region-wide explosion looks ever more likely. ..."
"... "the bipartisan consensus forged in the 1990s – in which the US towered over the world and, at low cost, sought to remake it in America's image – has failed and cannot be revived", ..."
Sep 14, 2019 | www.theguardian.com

With John Bolton dismissed, Taliban peace talks a fiasco and a trade war with China, US foreign policy is ever more unstable and confrontational

It was by all accounts, a furious row. Donald Trump was talking about relaxing sanctions on Iran and holding a summit with its president, Hassan Rouhani, at this month's UN general assembly in New York. John Bolton, his hawkish national security adviser, was dead against it and forcefully rejected Trump's ideas during a tense meeting in the Oval Office on Monday.

...Bolton's brutal defenestration has raised hopes that Trump, who worries that voters may view him as a warmonger, may begin to moderate some of his more confrontational international policies. As the 2020 election looms, he is desperate for a big foreign policy peace-making success. And, in Trump world, winning matters more than ideology, principles or personnel.

The US president is now saying he is also open to a repeat meeting with North Korea's leader, Kim Jong-un, to reboot stalled nuclear disarmament talks. On another front, he has offered an olive branch to China, delaying a planned tariff increase on $250bn of Chinese goods pending renewed trade negotiations next month. Meanwhile, he says, new tariffs on European car imports could be dropped, too.

Is a genuine dove-ish shift under way? It seems improbable. Since taking office in January 2017, Trump has not merely broken with diplomatic and geopolitical convention. He has taken a wrecking ball to venerated alliances, multilateral cooperation and the postwar international rules-based order. He has cosied up to autocrats, attacked old friends and blundered into sensitive conflicts he does not fully comprehend.

The resulting new world disorder – to adapt George HW Bush's famous 1991 phrase – will be hard to put right. Like its creator, Trump world is unstable, unpredictable and threatening. Trump has been called America's first rogue president. Whether or not he wins a second term, this Trumpian era of epic disruption, the very worst form of American exceptionalism, is already deeply entrenched.

The suggestion that Trump will make nice and back off as election time nears thus elicits considerable scepticism. US analysts and commentators say the president's erratic, impulsive and egotistic personality means any shift towards conciliation may be short-lived and could quickly be reversed, Bolton or no Bolton.

Trump wanted quick 'n' easy, primetime credit for a dramatic peace deal in Afghanistan with the Taliban, pushed ahead blindly, then changed his mind at the last minute

Trump is notorious for blowing hot and cold, performing policy zigzags and suddenly changing his mind. "Regardless of who has advised Mr Trump on foreign affairs all have proved powerless before [his] zest for chaos," the New York Times noted last week .

Lacking experienced diplomatic and military advisers (he has sacked most of the good ones), surrounded by an inner circle of cynical sycophants such as secretary of state Mike Pompeo, and driven by a chronic desire for re-election, Trump's behaviour could become more, not less, confrontational during his remaining time in office, suggested Eliot Cohen, professor of strategic studies at Johns Hopkins university.

"The president has proved himself to be what many critics have long accused him of being: belligerent, bullying, impatient, irresponsible, intellectually lazy, short-tempered and self-obsessed," Cohen wrote in Foreign Affairs journal . "Remarkably, however, those shortcomings have not yet translated into obvious disaster. But [that] should not distract from a building crisis of US foreign policy."

This pending crisis stems from Trump's crudely Manichaean division of the world into two camps: adversaries/competitors and supporters/customers. A man with few close confidants, Trump has real trouble distinguishing between allies and enemies, friends and foes, and often confuses the two. In Trump world, old rules don't apply. Alliances are optional. Loyalty is weakness. And trust is fungible.

As a result, the US today finds itself at odds with much of the world to an unprecedented and dangerous degree. America, the postwar global saviour, has been widely recast as villain. Nor is this a passing phase. Trump seems to have permanently changed the way the US views the world and vice versa. Whatever follows, it will never be quite the same again.

Clues as to what he does next may be found in what he has done so far. His is a truly calamitous record, as exemplified by Afghanistan. Having vowed in 2016 to end America's longest war, he began with a troop surge, lost interest and sued for peace. A withdrawal deal proved elusive. Meanwhile, US-led forces inflicted record civilian casualties .

Facebook Twitter Pinterest The US and Israeli flags are projected on the walls of Jerusalem's Old City in May, marking the anniversary of the US embassy transfer from Tel Aviv to Jerusalem. Photograph: Ahmad Gharabli/Getty

The crunch came last weekend when a bizarre, secret summit with Taliban chiefs at Camp David was cancelled . It was classic Trump. He wanted quick 'n' easy, primetime credit for a dramatic peace deal, pushed ahead blindly, then changed his mind at the last minute. Furious over a debacle of his own making, he turned his wrath on others, notably Bolton – who, ironically, had opposed the summit all along.

All sides are now vowing to step up the violence, with the insurgents aiming to disrupt this month's presidential election in Afghanistan. In short, Trump's self-glorifying Afghan reality show, of which he was the Nobel-winning star, has made matters worse. Much the same is true of his North Korea summitry, where expectations were raised, then dashed when he got cold feet in Hanoi , provoking a backlash from Pyongyang.

The current crisis over Iran's nuclear programme is almost entirely of Trump's making, sparked by his decision last year to renege on the 2015 UN-endorsed deal with Tehran. His subsequent "maximum pressure" campaign of punitive sanctions has failed to cow Iranians while alienating European allies. And it has led Iran to resume banned nuclear activities – a seriously counterproductive, entirely predictable outcome.

Trump's unconditional, unthinking support for Benjamin Netanyahu, Israel's aggressively rightwing prime minister – including tacit US backing for his proposed annexation of swathes of the occupied territories – is pushing the Palestinians back to the brink, energising Hamas and Hezbollah, and raising tensions across the region .

With Trump's blessing, Israel is enmeshed in escalating, multi-fronted armed confrontation with Iran and its allies in Iraq, Lebanon and Syria. Add to this recent violence in the Gulf, the disastrous Trump-backed, Saudi-led war in Yemen, mayhem in Syria's Idlib province, border friction with Turkey, and Islamic State resurgence in northern Iraq, and a region-wide explosion looks ever more likely.

The bipartisan consensus forged in the 1990s – in which the US towered over the world and, at low cost, sought to remake it in America's image – has failed and cannot be revived

Stephen Wertheim, historian

Yet Trump, oblivious to the point of recklessness, remains determined to unveil his absurdly unbalanced Israel-Palestine "deal of the century" after Tuesday's Israeli elections. He and his gormless son-in-law, Jared Kushner, may be the only people who don't realise their plan has a shorter life expectancy than a snowball on a hot day in Gaza.

... ... ...

...he is consistently out of line, out on his own – and out of control. This, broadly, is Trump world as it has come to exist since January 2017. And this, in a nutshell, is the intensifying foreign policy crisis of which Professor Cohen warned. The days when responsible, trustworthy, principled US international leadership could be taken for granted are gone. No vague change of tone on North Korea or Iran will by itself halt the Trump-led slide into expanding global conflict and division.

Historians such as Stephen Wertheim say change had to come. US politicians of left and right mostly agreed that "the bipartisan consensus forged in the 1990s – in which the US towered over the world and, at low cost, sought to remake it in America's image – has failed and cannot be revived", Wertheim wrote earlier this year . "But agreement ends there " he continued: "One camp holds that the US erred by coddling China and Russia, and urges a new competition against these great power rivals. The other camp, which says the US has been too belligerent and ambitious around the world, counsels restraint, not another crusade against grand enemies."

This debate among grownups over America's future place in the world will form part of next year's election contest. But before any fundamental change of direction can occur, the international community – and the US itself – must first survive another 16 months of Trump world and the wayward child-president's poll-fixated, ego-driven destructive tendencies.

Survival is not guaranteed. The immediate choice facing US friends and foes alike is stark and urgent: ignore, bypass and marginalise Trump – or actively, openly, resist him.

Here are some of the key flashpoints around the globe

United Nations

Trump is deeply hostile to the UN. It embodies the multilateralist, globalist policy approaches he most abhors – because they supposedly infringe America's sovereignty and inhibit its freedom of action. Under him, self-interested US behaviour has undermined the authority of the UN security council's authority. The US has rejected a series of international treaties and agreements, including the Paris climate change accord and the Iran nuclear deal. The UN-backed international criminal court is beyond the pale. Trump's attitude fits with his "America First" isolationism, which questions traditional ideas about America's essential global leadership role.

Germany

Trump rarely misses a chance to bash Germany, perhaps because it is Europe's most successful economy and represents the EU, which he detests. He is obsessed by German car imports, on which protectionist US tariffs will be levied this autumn. He accuses Berlin – and Europe– of piggy-backing on America by failing to pay its fair share of Nato defence costs. Special venom is reserved for Germany's chancellor, Angela Merkel, most likely because she is a woman who stands up to him . Trump recently insulted another female European leader, Denmark's Mette Frederiksen, after she refused to sell him Greenland .

Israel

Trump has made a great show of unconditional friendship towards Israel and its rightwing prime minister, Benjamin Netanyahu, who has skilfully maximised his White House influence. But by moving the US embassy to Jerusalem, officially condoning Israel's annexation of the Golan Heights, and withdrawing funding and other support from the Palestinians, the president has abandoned the long-standing US policy of playing honest broker in the peace process. Trump has also tried to exploit antisemitism for political advantage, accusing US Democrat Jews who oppose Netanyahu's policies of "disloyalty" to Israel.

... ... ...

[Sep 15, 2019] TuckerCalson: Elizabeth Warren wrote one of the best books I've ever read on economics (The Two-Income Trap: Why Middle-Class Parents Are Going Broke)

Notable quotes:
"... By that point, he'd already warned his audience about the perils of "monopoly power" and declared that income inequality, which the right had long been trained to believe is "just a pure invention of some diabolical French intellectual to destroy America," is actually "completely real" and "totally bad." ..."
"... The reimagining is playing out not just on Carlson's show or in conservative journals, but among a small batch of young, ambitious Republicans in Congress led by senators Josh Hawley of Missouri and Marco Rubio of Florida. ..."
"... Their populist -- or "nationalist" or "post-liberal" -- prescriptions sometimes smack of opportunism. And it's still not clear how far they're willing to stray from their party. But it looks like there are places where the new nationalists could find common cause with an energized left. ..."
"... And one of the speakers, University of Pennsylvania law professor Amy Wax, seemed to do just that -- suggesting that "cultural compatibility" should play a role in deciding which migrants are allowed into the country. "In effect," she said, this "means taking the position that our country will be better off with more whites and fewer nonwhites." But Wax's speech, however discomfiting, stood out because it was so discordant. Conference organizers took pains to prevent hate-mongers from attending -- ultimately rejecting six applicants. ... "Your ideas," he said, "are not welcome here." ... ..."
Sep 06, 2019 | www.bostonglobe.com

David Scharfenberg - September 6

...But he also spoke, in admiring tones and at substantial length, about "The Two-Income Trap: Why Middle-Class Parents Are Going Broke," the book Warren wrote with her daughter in 2004.

"Elizabeth Warren wrote one of the best books I've ever read on economics," he said.

(The Two-Income Trap: Why Middle-Class Parents Are Going Broke
https://www.semanticscholar.org/paper/The-Two-Income-Trap%3A-Why-Middle-Class-Parents-Are-Tyagi-Warren/9e71e947ba3ba9f8a993eb39699b9d9baacff235 )

By that point, he'd already warned his audience about the perils of "monopoly power" and declared that income inequality, which the right had long been trained to believe is "just a pure invention of some diabolical French intellectual to destroy America," is actually "completely real" and "totally bad."

His Bolshevist pronouncements were probably not a surprise to anyone who'd watched Carlson's show closely in the months leading up to his speech. But Fox, despite its outsize influence, has a relatively small audience.

And it's not just Carlson's evolution that's escaped notice. It's hard to keep track of what most of the key players on the right are saying these days, with President Trump soaking up so much attention.

But while the commander-in-chief thrashes about, something important is taking shape in his shadow -- the outlines of a new conservatism inspired, or at least elevated, by his rise to power.

It's a conservatism that tries to wrestle with the post-Cold War, post-industrial angst that fired his election -- dropping a reflexive fealty to big business that dates back to the Reagan era and focusing more intently on the struggles of everyday Americans.

"There are many downsides, I will say, to Trump," Carlson said, in his speech this summer. "But one of the upsides is, the Trump election was so shocking, so unlikely ... that it did cause some significant percentage of people to say, 'wait a second, if that can happen, what else is true?' "

The reimagining is playing out not just on Carlson's show or in conservative journals, but among a small batch of young, ambitious Republicans in Congress led by senators Josh Hawley of Missouri and Marco Rubio of Florida.

Their populist -- or "nationalist" or "post-liberal" -- prescriptions sometimes smack of opportunism. And it's still not clear how far they're willing to stray from their party. But it looks like there are places where the new nationalists could find common cause with an energized left.

Whether the two sides can actually forge a meaningful alliance in the glare of our hyperpartisan politics is an open question. But a compact -- even a provisional one -- may offer the country its best shot at building a meaningful, post-Trump politics.

. . .

CARLSON DELIVERED HIS speech at the National Conservatism Conference -- the first major gathering aimed at forging a new, right-of-center approach in the age of Trump.

"This is our independence day," said Yoram Hazony, an Israeli political theorist and chief organizer of the event, in his spirited opening remarks. "We declare independence from neoconservatism, from libertarianism, from what they call classical liberalism." "We are national conservatives," he said. Any effort to build a right-of-center nationalism circa 2019 inevitably runs into questions about whether it will traffic in bigotry.

And one of the speakers, University of Pennsylvania law professor Amy Wax, seemed to do just that -- suggesting that "cultural compatibility" should play a role in deciding which migrants are allowed into the country. "In effect," she said, this "means taking the position that our country will be better off with more whites and fewer nonwhites." But Wax's speech, however discomfiting, stood out because it was so discordant. Conference organizers took pains to prevent hate-mongers from attending -- ultimately rejecting six applicants. ... "Your ideas," he said, "are not welcome here." ...

* At the National Conservatism Conference, an 'Intellectual Trumpist' Movement Begins to Take Shape

https://www.nationalreview.com/2019/07/national-conservatism-conference-intellectual-trumpist-movement/

Reply Sunday, September 15, 2019 at 06:59 AM

[Sep 15, 2019] The words "Government of the People, by the People, for the People" is an ideological logo that never materialized on any large scale nor over any long time-span anywhere on earth.

Sep 15, 2019 | www.nakedcapitalism.com

laodan , September 14, 2019 at 5:40 am

Democracy is a loaded word. Reasoning about it in a public discussion is thus fraught with lots of difficulties. This comment is to highlight some crucial factors that are rarely mentioned.

1. democracy is the particular political outcome of centuries of struggles within the context of Early-Modernity in Western European societies (14th to 18th centuries). Three forces were in competition for the control of power: the clergy, the nobility, and the new rich merchants (those who in France were living in the "bourgs" and were thus called the bourgeoisie. They were also the one's who were owning the capital). The gradual expansion of the right to vote, to all adult citizens along the 19th and 20th centuries, was calibrated by big capital holders to act as a system serving their interests through the manipulation of the public's opinions. And man how successful the West is at this game

2. the history of the other people, outside of western territories, is rich with their own experiences. Even if they are largely unknown to Westerners these histories offer viable alternatives to the Western model of democracy. But Westerners are not interested to learn about these other models. They firmly believe that their own system is the best and they are always ready to impose it by force

3. Western political science is relatively young (1 or 2 centuries at best). This compares with Chinese political science that spans over 3 millennia as a written matter that finds its origin through oral transmission from earlier times.
_________

The words "Government of the People, by the People, for the People" is an ideological logo that never materialized on any large scale nor over any long time-span anywhere on earth.

The shift of the center of gravity of the economy-world' to East Asia and more particularly to China is a 'fait accompli' that still has to register in the West. The longer it takes the West to come to its senses the more painful the downfall will be and the more totalitarian the governance system will become

David , September 14, 2019 at 6:42 am

The issue isn't really democracy, and in any event not liberal democracy, which is close to an oxymoron, given that liberalism creates imbalances of power and wealth inimical to democracy. And the argument is a bit incoherent : voting rights in most countries were based on property ownership, not wealth as such, and much of the political conflict of the 19th century was between traditional landowners and the emerging middle classes, who had the wealth and wanted the power. Likewise, the move to neoliberalism had begun before the end of the 1970s' and slower economic growth was a consequence of it, not a cause.
The real issue is that people expect political leaders, whom they elect and pay, to do things. But modern political leaders have for the last generation or so developed the art of saying that nothing can be done, or at least nothing that will make life better. So a political figure who proposes to actually do something that people want is a dangerous and disruptive force. Irrespective of their precise views and policies, they are a danger to the current political class, which resolutely refuses to do anything useful.

Redlife2017 , September 14, 2019 at 7:02 am

+1000
The allergy to actually enacting policies that have been proven in the past to be beneficial to the citizenry of a country is impressive in its almost pathological implementation. No matter how bad the outcomes of neoliberal economics is, we can't possibly change those policies. This goes beyond TINA. I look at people like Joe Biden and Jo Swinson and marvel at their innate ability to defend the worst excesses of policies like bailing out the banks and austerity and yet still cry crocodile tears for the people.

Ignacio , September 14, 2019 at 1:39 pm

But if you cannot expect to elect a leader that migth do something this is another way of saying democracy is in trouble. The result is that democracy is constrained by a dominant ideology and this undermines democracy. Everything becomes technocratical and obscure, particularly –but not only– monetary policy. I wonder by how much this already short room of maneuver has to be reduced to allow claiming democracy is already dead. There are many candidates that go with the discourse that "I will do the only thing that can be done" so you know from the very beginning that business will go as usual an nothing will be done. For instance, Joe Incremental Biden. A very good example in US is Health Care. A good majority wants H.C. for all, but we migth find again that candidates that promise it are effectively blocked because "it cannot be done (too expensive etc.)". I really think democracy is in trouble if this occurs again.

Carla , September 14, 2019 at 6:13 pm

Democracy is an idea with potential. We should try it!

rob , September 14, 2019 at 10:50 am

Why should "science" have anything to do with democracy?

As someone from the united states, I live in a republic.
Our founding fathers rejected democracy as a form of government.Some of them, like alexander hamilton loathed democracy Which is one reason I think he was an ass but that is besides the point..

Democracy, as an ideal to be promoted in this republic with democratic assumptions . is just something that stands on its own in the sphere of "civics"
democracy is just a practice of engaging with others. it is a discipline.

science may exemplify practical thinking and action as expressed in the scientific method .. but democracy isn't just about what is the "most likely to be true" . it is just what "most people choose" Now education is what lies between what those people know, how they know it and then their choices as to what they really want . but science is a discipline that is really to be exalted in a free society . but has no real place in the democratic institution. IMO
People make democracy not science . and "people" is a tough nut to crack

Hitler was keen on science, to explain his motives his perversions of truth became state mandated axioms of truth . despite being pure BS..

notabanktoadie , September 14, 2019 at 9:44 am

Under neo-liberalism, the state does little more than maintain the rights of ownership and internal and external security through criminal justice and armed services – notwithstanding, the state may bail out financial services if they require public aid. Kevin Albertson [bold added]

It does more than just bail out financial services, the state PRIVILEGES them beforehand by failing to provide something so simple, so obvious as, for example, inherently risk-free debit/checking accounts for all citizens at the Central Bank (or National Treasury) itself.

The result is nations have a SINGLE* payment system that MUST work through the banks or not at all – making their economies hostage to what are, in essence, government-privileged usury cartels.

We can have nations that are for their citizens or ones which privilege banks and other depository institutions but not both.

*apart from mere physical fiat, paper bills and coins.

The Rev Kev , September 14, 2019 at 11:02 am

The problem may not be so much with democracy as with "representative" democracy. I believe that it was Harvard that did a study that found that the wishes of the bulk of the electorate were habitually ignored unless it aligned with the wishes of the wealthier portion of society. In other words, after the elections were over, voter's wishes were not a factor. Perhaps more imaginative ideas need to be adopted. We have secret balloting right now so how about secret ballots in the Senate and the House of reps – on pieces of paper counted in public under the watch of several parties. No digital crap allowed. No donor would be able to tell what his purchased politician actually voted in any session. Every vote would then become a conscience vote. When you think about it, there is nothing to say that how things are now should also be the way that things always are.

General Jinjur , September 14, 2019 at 1:29 pm

Did you mean the Gilens and Page Princeton Univ study?

The Rev Kev , September 14, 2019 at 7:14 pm

Thanks for that. That is the one. It was called "Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens."

shinola , September 14, 2019 at 11:41 am

" the promotion of the neo-liberal political economic paradigm need not result from a conspiracy."

Just because it "need not" doesn't mean it does not. There is a playbook for privatization:

1) Identify a government function that could provide a profit opportunity.
2) Deprive the dept. that provides that function of the funds needed to adequately do a proper job of it.*
3) Point out, loudly & publicly, what a crappy job the gov't is doing.
4) Announce that "We have a solution for that" – which, of course, involves privatization.*

*Note: steps 2 & 4 require co-operation of gov't representatives which is obtained through lobbying & briber.. er, campaign contributions.

kiwi , September 14, 2019 at 12:33 pm

Well, now governments just 'restructure' and pass out contracts to justify laying off employees. There is no need to starve a department of funds first.

My experience is that the contracted 'service' is oversold and mostly goes to pot, and the gov will still renew the contracts for the crappy service providers over and over.

Carey , September 14, 2019 at 1:54 pm

Thanks for this comment. A good succinct video on the topic:

https://hooktube.com/watch?v=5tu32CCA_Ig

Off The Street , September 14, 2019 at 9:16 pm

In simpler times, democracy was viewed at risk if citizens could vote themselves money. Now citizens are at risk when pirates can dispense with the voting to get money.
A cruel twist is where those pirates and their paid pols stick the citizens with the downside.

JCC , September 14, 2019 at 11:58 am

It seems to me, including all the above comments, underlying all of this is the pursuit of "economic growth", which ultimately means the pursuit of economic wealth by the most powerful of the ownership class at the expense of everyone else. And they are the group that buy and install the politicians to ensure that pursuit remains as unimpeded as possible.

Examples of this off-the-rails philosophical and social justification of "modern" capitalism are apparent to everyone (I hope); Shareholder Primacy, Intellectual "Property" Laws, Health Care as a Profit Center replacing health care of citizenry, abstract legal entities, Corporations, given the same rights (and few responsibilities) as individual people, the taking over of education systems by this same ownership class, again primarily for profit and propaganda, increasing for-profit, and control, surveillance, and more rule the day.

Historically, and unfortunately, the prime reset has often been violent revolution. Mike Duncan's Revolutions podcast teaches us many examples throughout history and should be required listening for today's ownership class and politicians everywhere and High School history classes.

Rod , September 14, 2019 at 12:00 pm

THE MORAL CONSEQUENCES OF ECONOMIC GROWTH by Benjamin Friedman in the HarvardScholar link was a thought provoking read about the linkages between affective economic growth and morality– and visa versa.
I believe he was arguing that a cultures adopted values directs the benefits of that cultures economic growth and applications(without direct outside meddling). And that can become a reinforcing feedback loop–for both the held values and values had about economic growth.
Economic Growth is often compiled in numbers in Lamberts Water Cooler at least weekly–however, like Inflation Stats, often a lot of critical things are not considered in the compilation(gas price in inflation and happiness in economic growth–as two simple i.e.)
imo, We need more progress in expanding the term Economic Growth beyond consumption and production to be pertinent in 2019.

Susan the other` , September 14, 2019 at 12:04 pm

I think this is a really good analysis in that it comes to the conclusion that we need more democracy; we are not democratically "liberal" at all. We were just hoodwinked for about the last 50 years. We need to be socially democratic. It will bring an end to the obscene inequalities we see and stabilize civilization. So the apotheosis of unregulated growth and the free-range consumer is over. Tsk tsk. That was imposed on society by the mandate for profits (which they never wanted to admit, but it depended entirely on demand). I guess the consumer is headed for the bone yard of Idols. We will, by necessity, have something entirely different. A form of social demand; a cooperative of some sort. Hanging on to old worn out ideas is all that is left – kind of like nostalgia. Like the Donald pandering to "business" by gutting the EPA now when manufacturing has been decimated and methods of mitigating pollution are a market in themselves. Trump is just campaigning like an old fool; but it's probably working.

Tomonthebeach , September 14, 2019 at 12:58 pm

Finally, an article on Neolib Capitalism that a 5th-grader can grasp – maybe granny too. I already shared it with a dozen friends (ironically – most with doctorates as the choir can never be too big).

Now let's all rise and sing a rousing chorus of Dude Where's My Democracy.

Cal2 , September 14, 2019 at 2:16 pm

After reading about the failure of the F.D.A. to regulate pharma and protect us, after witnessing our military going into losing war after losing stalemate, after seeing homelessness explode, drug use, the failure of schools supposedly controlled by the Department of Education, an eroding environment, etc.

At what point do citizens stop voluntarily paying taxes and complying with federal laws?

stan6565 , September 14, 2019 at 4:16 pm

After the collapse of NHS care, after the oversubsciption of our local schools by a factor of n, after there being no police in the streets to curb the harassment rowdiness and burglary, after a complete collapse of democracy following people's vote for liberty from shackles of giant EU squid, after the horrific waste of local councils monies on sucking up to the terror of minorities (racial, ethnic, sexual), after our own councils ramming the extreme numbers of noninvited imported alien population down the throats of hitherto taxpaying funders of the target occupation environment, and so on, can I have a separate TV station to tell you, the only thing left for the sitting target taxpayers paying for all this largesse, abuse, and outright extortion is indeed to abandon any of the previously normal concepts of tax, duty and bills payments, and let the local and state governments get into the costly business of corralling each and every hitherto low lying fruit taxpayer, and forcing monies out of them at a great expense to the target and the enforcer.

What a way to go forward in life.

RBHoughton , September 14, 2019 at 10:14 pm

Read all the way through and never encountered the names Reagan or Thatcher. As the principal enablers of the financial / economic disaster called the Washington Consensus, their names should be right up there. We need an annual festival with bonfires and fireworks when we can burn the rogues in effigy.

The author is right that prolonged peace allows power to concentrate. He does not indicate the end result that Rome and Constantinople experienced when deprived citizens declined to fight for the empire and the Goths / Crusaders were able to take over. We study Greek and Roman history in school but somehow its relevance to our declining state means nothing to us.

David in Santa Cruz , September 14, 2019 at 10:44 pm

I've always been a huge fan of the Haynes Guides . A finer series of "how-to" books has never been published.

Gratified to read the phrase "carrying capacity" in a political discussion. One of the central drivers of elite power and asset hoarding is the perception of scarcity and the compulsion to ration (i.e. cut-off supplies of "nice things" to the proles and dusky-hued people).

Looking forward to the Haynes Guide to Eating the Rich .

The Rev Kev , September 14, 2019 at 10:53 pm

Will it be entitled To Serve The Rich ?

[Sep 15, 2019] Dude! Where's My Democracy naked capitalism

Sep 15, 2019 | www.nakedcapitalism.com

https://eus.rubiconproject.com/usync.html

https://acdn.adnxs.com/ib/static/usersync/v3/async_usersync.html

https://c.deployads.com/sync?f=html&s=2343&u=https%3A%2F%2Fwww.nakedcapitalism.com%2F2019%2F09%2Fdude-wheres-my-democracy.html <img src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" /> Legitimate Government

Recently, Foa & Mounk argued that many citizens in supposed advanced democracies have become rather disillusioned with the workings of the political system in their nation. There is good reason to suppose the current political economic paradigm is skewed against the people. So-called democratic deficits exist in the USA and elsewhere . In the UK, for example, the electorate disapprove and have disapproved of four decades of tax and welfare and privatisation policies – yet are apparently powerless to influence these policies.

As politicians and the donors who support them become less responsive to voters' wishes it is hardly surprising many, perhaps the majority, of the populace will view government as illegitimate . In consequence, voters seem increasingly inclined to elect (so-called) populist leaders, political outsiders who may change the rules in favour of the people .

The Left and the Right

Legitimate government, so Abraham Lincoln observes, is that which does for a community that which the community cannot do (or cannot do so well) for themselves. With this it is difficult to disagree. However, political theory differs on who might make up that community.

Broadly speaking, those on the (so-called) economic "right" argue government should enact policy for the benefit of those who own the nation, while those (so-called) economic "left" consider policy should prioritise the interests of citizens. By definition, therefore, capitalist governments will take up positions on the right – particularly in nations, such as the UK, which are increasingly owned by foreign interests . Conversely democratically accountable governments must take positions economically to the left, prioritising the preferences of citizens.

Universal Adult Suffrage

At the dawn of democracy, only the wealthy could vote. Thus, there was less conflict between the aspirations of the powerful and of voters. Following the extension to the adult population of the right to vote in the late 19th and early 20th century, politicians became answerable to a wider range of stakeholders.

In particular, from the middle of the 20th century until the late 1970s, legitimate democratic governments held markets to account in the interests of the demos. An increasingly affluent society facilitated profit making opportunities and thus economies grew; the interests of capital and citizens coincided.

However, since the late 1970s, global economic growth has broadly slowed . It is likely that economic stabilisation has occurred as a result of the slowing pace of innovation and the world reaching (or indeed overshooting) its carrying capacity . However, many were persuaded that the slowdown in growth occurred because governments interfered too much in markets.

In response, to preserve or increase their own income growth, elites are motivated to argue for the "freeing" of markets . Rather than markets being held accountable to citizens through democratic governance, it was suggested that holding governments (and through them the citizenry) to account through reliance on market forces would facilitate a return to economic growth.

The Washington Consensus

The economic paradigm which promotes the small state and reliance on market forces is generally known as neo-liberalism, or the Washington Consensus . Under neo-liberalism, the state does little more than maintain the rights of ownership and internal and external security through criminal justice and armed services – notwithstanding, the state may bail out financial services if they require public aid. In the UK and the USA politicians from both main parties adopted this point of view, often in sincere, if misguided, belief in its validity. Thus, neo-liberalism maintains the appearance of democracy, in that citizens may vote for political leaders, but limits the range of policies on offer to those which are acceptable to markets – or rather, those who command market forces.

It should be emphasised that the promotion of the neo-liberal political economic paradigm need not result from a conspiracy . History indicates that, in any prolonged period of peace, power and wealth tend to accumulate to fewer and fewer individuals . If markets were sufficient to facilitate improvement in the prospects of citizens in general, there would have been few calls for universal suffrage in the first place.

Neoliberalism: Government of the People, by the Market, for the Profit

Since the introduction of neo-liberal socio-economic policies, inequality has increased amongst the citizens of the world's advanced democratic nations . As it has not addressed the root cause of economic stabilisation, the adoption of the neo-liberal political paradigm has not improved the prospects of growth , or stabilised global ecosystems . The growth in incomes of the elites – those who wield market power – has come at the expense of the electorate in general .

Because liberal social attitudes are undermined in increasingly unequal societies , neo-liberal policies have destabilised the social equilibrium of those nations which have adopted them. Reliance on market forces has, paradoxically, even undermined the market; for example, through the Global Financial Crisis and the Eurozone crisis . Curiously, despite these failings, yet more reliance on markets is suggested as the cure .

Democracy: Government of the People, by the People, for the People

Those citizens whose prospects are undermined by the neo-liberal paradigm see it in their interests to support a "strong man" who may change the rules back in their favour. This is a risky strategy; such strong men may rather change the rules in their own favour , or in favour of their supporters. In consequence some have suggested we might consider further tempering democracy . However, we suggest it is the reduction in democratic accountability which has led to this so-called "populist" state of affairs. The solution is rather to increase democratic accountability , not just in central government , but in local government and in our places of employment .

[Sep 15, 2019] Israeli Attacks On Syria Halted After Russia Threatened To Shoot Down Jets

Sep 15, 2019 | www.zerohedge.com

According to reports in both Israeli and Arabic regional media, Israel this past week was preparing to expand major airstrikes against "Iran-backed" targets in Syria, but Moscow imposed its red line. The Independent has published a story describing that Russia's military in Syria threatened to shoot down any invading Israeli warplanes using fighter jets or their S-400 system .

The Jerusalem Post , citing sources in the UK Independent (Arabia) , writes just after the latest meeting in Sochi between Prime Minister Benjamin Netanyahu and Russian President Vladimir Putin:

According to the report, Moscow has prevented three Israeli airstrikes on three Syrian outposts recently, and even threatened that any jets attempting such a thing would be shot down, either by Russian jets or by the S400 Anti-aircraft missiles . The source cited in the report claims a similar situation has happened twice, and that during August, Moscow stopped an airstrike on a Syrian outpost in Qasioun, where a S300 missile battery is placed.

Netanyahu's hasty trip to meet with Putin on Thursday - even in the final days before Tuesday's key election - was reportedly with a goal to press the Russian president on essentially ignoring Israel's attacks in Syria.

Image via The Jerusalem Post

Citing further sources in the British-Arabic Independent Arabia , The Jerusalem Post continues :

According to the Russian source, Putin let Netanyahu know that his country will not allow any damage to be done to the Syrian regime's army, or any of the weapons being given to it...

Israel sources cited by the Arabic newspaper described Netanyahu's attempts to persuade Putin as "a failure" . This in spite of Netanyahu telling reporters after the meeting that his relations with Moscow were stronger than ever.

Moscow is said to be particularly resistant given the Israeli military's recent spate of attacks on targets in Lebanon, Iraq, and Syria.

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Sources in the report claimed further that Putin in a somewhat unprecedented moment raised the issue of Lebanon :

The Russian source said: "Putin has expressed his dissatisfaction from Israel's latest actions in Lebanon" and even emphasized to Netanyahu that he "Rejects the aggression towards Lebanon's sovereignty" something which has never been heard from him. Putin further stated that someone is cheating him in regards to Syria and Lebanon and that he will not let it go without a response. According to him, Netanyahu was warned not to strike such targets in the future.

It could also be simply that Putin understands that Netanyahu, now desperate to extend his political career to a record fifth term as prime minister as next week's elections loom, could be ready to risk a major and very unnecessary Middle East conflagration in order to continue to appeal to Israeli right wing and nationalist voters.


shortingurass , 24 minutes ago link

Say what you want about Putin, this guy has balls. I wish we had a leader like him. it's been way too long we're being governed by weak zio puppets pussies.

naro , 22 minutes ago link

Putin is a good man and loves the Judean people.

naro , 19 minutes ago link

SUPPORT FROM PUTIN IN SOCHI

Netanyahu traveled to the Black Sea resort to meet the Russian leader – just five days before the election – in a move widely seen as an effort to woo elder Russian-speaking immigrants.

Noob678 , 40 minutes ago link

US, Israel talk about mutual defense treaty – Trump - Trump is anti-establishment ZOG-Rothschild lol

The US and Israel are discussing a mutual defense treaty that would further cement the already "tremendous" alliance between the two countries, President Donald Trump has revealed.

"I had a call today with Prime Minister Netanyahu to discuss the possibility of moving forward with a Mutual Defense Treaty, between the United States and Israel, that would further anchor the tremendous alliance between our two countries," Trump tweeted.

Wahooo , 37 minutes ago link

OrangeZioPedo at his finest. MIGA!

Brazen Heist II , 36 minutes ago link

The US has become a bad Jewish comedy sketch and kvetch.

petroglyph , 5 minutes ago link

And just two days ago, Israel was caught again places spy devices in Wash. But today the POTUS is going to sign on for sacrificing what's left of our sovereignty to Israel so they can go around MENA pounding their chest and threatening everyone. https://www.israellobbyus.org/transcripts/1.1Grant_Smith.htm

ADB , 45 minutes ago link

Einstein101: "Well, so far the Joos are those who are throwing the punches ..."

Only because you can run to America the moment anyone fights back. Until now.

How does it feel to have the whole Oded Yinon/ Greater Israel project crumbling before your eyes?

I am Groot , 49 minutes ago link

I hope Putin gives Iran one of those Tsar Bomba's to drop on Israel. Or one of those Satan 2's that can wipe out an area the size of Texas.

Et Tu Brute , 46 minutes ago link

Not sure option 2 would be such good idea, with Damascus being only a few kms from the Israeli border and all...

Airstrip1 , 1 hour ago link

Interesting body language/facials -- Nutty still with the smirk, but VVP and background say a grave/serious word has gone out ... similar as the Izzies bend to listen very carefully to the erect and confident-looking Russkies ...

********'s over, Bibi, where it goes from here depends on your nasty little country ... maybe others in your region looking for 70-odd years payback for your murders terrorism land-confiscation cruelty against those weaker than your miserable selves.

Einstein101 , 53 minutes ago link

********'s over, Bibi, where it goes from here depends on your nasty little country

Not so fast, Israel will try not to step on Putin's tows but it can't afford the Iranians to build that ring of missiles around Israel. It's not that Israel does not have leverage too, it can make things complicated for Putin, like one small bomb on Assad's resident in Damascus.

Airstrip1 , 22 minutes ago link

... one small bomb on Assad's resident in Damascus.

You can certainly shoot out the ******** yourself, Einstein.

Surely you must be aware that your namesake condemned the founding of Israel in 1948, which has turned out to be the all-round disaster he predicted. Not alone, many Jewish voices round the world continue to condemn it. How inconvenient for you and your bombs on Assad's house ... lol ...

Airstrip1 , 7 minutes ago link

"I am in favor of Palestine being developed as a Jewish Homeland but not as a separate State. It seems to me a matter for simple common sense that we cannot ask to be given the political rule over Palestine where two thirds of the population are not Jewish. What we can and should ask is a secured bi-national status in Palestine with free immigration. If we ask more we are damaging our own cause and it is difficult for me to grasp that our Zionists are taking such an intransigent position which can only impair our cause," Einstein said in a letter in 1946, according to the Shapell Manuscript Foundation.


Read Newsmax: Israel: 5 Albert Einstein Quotes About Zionism | Newsmax.com

ThomasEdmonds , 1 hour ago link

In as delicate and diplomatic phrasing as I can attempt, Netanyahu needs to go.

[Sep 15, 2019] Democracy is an idea with potential. The USA should try it one day !

Sep 15, 2019 | www.nakedcapitalism.com

Unfortunately, Joe neoliberal Biden does not qualify. He wants to serve only the rich.

Gratified to read the phrase "carrying capacity" in a political discussion. One of the central drivers of elite power and asset hoarding is the perception of scarcity and the compulsion to ration (i.e. cut-off supplies of "nice things" to the proles and dusky-hued people).

[Sep 15, 2019] Wall Street Ignores Cyclical Jobs Growth Downturn As Employment Indicator Hits Great Recession Levels

Notable quotes:
"... Most of the ads for good jobs are fake. ..."
"... Instead of submitting a general application, as used to be the case in the past, and have the ability to work with the company to find the role that works best. HR has ruined a lot of good companies and their recruiting processes by going to rigid job descriptions instead of just hiring smart people and letting them work. ..."
Sep 15, 2019 | www.zerohedge.com

The Economic Cycle Research Institute's (ECRI) Lakshman Achuthan recently sat down with CNBC's Michael Santoli to discuss the jobs growth downturn. Keep in mind, this conversation was held on Wednesday, several days before Friday's disappointing jobs report.

Achuthan told Santoli there's a " very clear cyclical downturn in jobs growth, there's really no debating that, and it looks set to continue ."

Achuthan said January 2019 marked the cyclical peak in jobs growth, has been moving lower ever since, and the trend is far from over. Both nonfarm payrolls and the household survey year-over-year growth are in cyclical downturns, he said. While the economic narratives via the mainstream financial press continue to cheerlead that the consumer will lift all tides thanks to the supposedly strong jobs market, Achuthan believes the downturn in jobs growth will start to "undermine consumer confidence." And it's the loss in consumer confidence that could tilt the economy into recession.

He also said when examining cyclically sensitive sectors of the economy, there are already "questionable jobs numbers," such as a significant surge in the construction unemployment rate.

Achuthan said nonfarm payroll growth has plunged to a 17-month low, and the household survey is even weaker. He said the top nonfarm payroll line would be revised down by half a million jobs in the coming months, which would underline the weakness in employment.

Achuthan emphasized to Santoli that ECRI's recession call won't be "taken off the table. We've been talking about a growth rate cycle slowdown. We're slow-walking toward -- some recessionary window of vulnerability -- we're not there today -- but this piece of the puzzle [jobs growth downturn] is looking a bit wobbly. This is the main message that Wall Street is missing."

As Wall Street bids stocks to near-record highs on "trade optimism" and the belief that the consumer will save the day, in large part because of solid jobs growth. ECRI's Leading Employment Index, which correctly anticipated this downturn in jobs growth, is at its worst reading since the Great Recession .

And Wall Street's bet today is that the Fed can achieve a soft landing – as in 1995-96 – when it started the rate cut cycle the same month the inflation downturn was signaled by the U.S. Future Inflation Gauge (USFIG) turning lower.

However, this time around, the inflation downturn signal arrived in September 2018, the moment when the Fed should have started the cut cycle. With a ten-month lag in the cut cycle, belated rate cuts have always been associated with recession.

And now it should become increasingly clear to readers why President Trump has sounded the alarm about the need for 100bps rate cuts, quantitative easing, and emergency payroll tax cuts - it's because he's been briefed about the economic downturn that has already started.


GotAFriendInBen , 15 minutes ago link

Actually, MSM cheerleads rate cuts as the cure-all, instead of throwing shoes at Powell

Keyser , 41 minutes ago link

How do you continue to have jobs growth when the country is at full employment?

Typical ******** from C-NBC...

Alex Droog , 19 minutes ago link

The network that employs dotards like Jim Cramer to cheerlead the lemmings.

Build-It-Well , 1 hour ago link

Have we learned anything?

https://soundcloud.com/daniel-sullivan-505714723/little-saigon-report-170-have-we-learned-anything

Art_Vandelay , 1 hour ago link

I don't agree with him that the Fed can do anything to correct this, nor do they have an incentive to do so. The Fed is not on the consumer's side. They will appropriate funds to whoever they want to, just like 08, and give the middle finger to everyone else.

pitz , 1 hour ago link

Job quality is horrible, particularly for US citizen STEM workers. This has been the case since the downturn that began in the late 1990s. Trump needs to fully cancel the OPT program and almost eliminate the H-1B program. Major employers don't even bother considering US citizen STEM talent before they hire foreign nationals.

pump and dump , 1 hour ago link

Most of the ads for good jobs are fake.

pitz , 1 hour ago link

Yes, but they don't bother to come out and tell you its a fake ad. One of the tragedies of the online job application process is that it forces a person, with little to no knowledge of a company and its internals, to pick, out of potentially hundreds of roles, which one would be best for them.

Instead of submitting a general application, as used to be the case in the past, and have the ability to work with the company to find the role that works best. HR has ruined a lot of good companies and their recruiting processes by going to rigid job descriptions instead of just hiring smart people and letting them work.

ZD1 , 1 hour ago link

Congress first established the H-1B program with the The Immigration Act of 1990. It was supposed to be temporary.

Congress needs to abolish it.

Future Jim , 2 hours ago link

This seems to contradict the labor participation rate.

https://fred.stlouisfed.org/series/CIVPART

J S Bach , 2 hours ago link

"Wall Street Ignores Cyclical Slave Growth Downturn As Enslavement Indicator Hits Great Recession Levels"

Ahhh... what truth a few seconds of editing can convoke.

The EveryThing Bubble , 2 hours ago link

It's all rigged folks

don't believe anything you read

[Sep 15, 2019] What People Say About the Economy Can Set Off a Recession

Notable quotes:
"... The probability that a recession will come soon -- or be severe when it does -- depends in part on the state of ever-changing popular narratives about the economy. These are stories that provide a framework for piecing together the seemingly random bits of information that one picks up from friends, the news or social media. ..."
"... The last recession 10 years ago was exceptionally severe, and it is worth examining closely for insights into how the spread of economic narratives drove human behavior. ..."
"... It now appears that while Sept. 15, 2008, was a logical moment for the start of a panic, that's not really what happened. That was when Lehman Brothers, an old-line investment bank, failed, and while this was a major economic event, the evidence suggests that it did not foster a viral narrative among the broad population. ..."
"... Since Lehman was an investment bank, and did not accept deposits from small savers, most people weren't much moved by its demise. Instead, the big change seems to have come on Sept. 25, 2008. That was when the government seized Washington Mutual -- a giant savings and loan association, known as WaMu, that had suffered a sudden mass exodus of depositors -- and sold its assets to JPMorgan Chase for $1.9 billion. ..."
"... Roosevelt's memorable words, "The only thing we have to fear is fear itself," became, in Mr. Bush's Rose Garden speech, "Anxiety can feed anxiety." The New York Times noted that parallel then. It seemed to many people, in real time, that the Great Depression might be repeating itself. ..."
"... Even before Mr. Bush's speech, Great Depression narratives had been emerging strongly. For example, the number of articles in the ProQuest News & Newspapers database containing the words "Great Depression" rose fivefold from 2007 to 2008. The term, with its emotional resonance, had exploded into an epidemic. ..."
"... But the Great Depression narrative is still alive, though it does not dominate at the moment. President Trump's exuberant speeches, if one believes them, still encourage big spending and confidence. Yet older, troubling narratives are waiting to become viral again. ..."
"... New crises that shake up the economy often surprise economists because no exogenous cause appears to be a sufficient explanation for a downturn. People begin to suddenly frame current events in the context of stories they had heard many times before. ..."
"... This may seem puzzling until we realize that an old narrative has renewed itself in an epidemic, and people have begun to respond reflexively in their day-to-day decisions. If enough people begin to act fearfully, their anxiety can become self-fulfilling, and a recession, sometimes a big one, may follow. ..."
Sep 15, 2019 | economistsview.typepad.com

anne , September 13, 2019 at 06:59 PM

https://www.nytimes.com/2019/09/12/business/recession-fear-talk.html?emc=rss&partner=rss

September 12, 2019

What People Say About the Economy Can Set Off a Recession
By Robert J. Shiller

When will the next recession arrive?

Economists are evaluating such factors as President Trump's endlessly shifting tariff policy, the monetary policy of the Federal Reserve and other central banks, and such "leading indicators" as the yields in the bond market.

It is good to look at these things. They provide insights about the state of the markets and the economy, but they have severe limitations as forecasting tools. This approach will not produce a definitive advance reading of a major shift from growth to contraction: a recession.

Forecasting such a shift is extremely difficult. But if we are to have a chance at success, it is critical to insert into the discussion another factor entirely: an examination of the popular narratives that may be infecting individual economic decision-making.

The probability that a recession will come soon -- or be severe when it does -- depends in part on the state of ever-changing popular narratives about the economy. These are stories that provide a framework for piecing together the seemingly random bits of information that one picks up from friends, the news or social media.

For consumers these narratives affect decisions on whether to spend or save, whether to take a demanding or an easy job, whether to take a risk or stick with something safer. For businesspeople the prevailing narratives affect deliberations on whether to hire more help or lay off employees, whether to expand or retrench or even start a new enterprise.

For most people, such important decisions are fraught with ambiguity and uncertainty. Hardly any of us have precise formulas to decide our plans. So we allow ourselves to be influenced by the emotions, theories and scripts suggested in the stories we hear from others.

Fortunately, the widespread digitization of text, combined with enhanced capabilities for natural-language processing, is beginning to give us new insights into the history of economic narratives. We are beginning to develop a new economics, one that studies these changing economic stories and metaphors systematically.

In my new book, I describe narratives that can periodically surge into epidemics and are capable of changing the economy's direction or of turning small booms and recessions into big ones.

These narratives cluster around several issues:

Changes in the current environment may cause a subtle mutation in these perennial stories, causing them to go viral and sometimes increasing their contagious effects or extending the period in which they expand. Much as epidemiologists study infectious diseases, we economists can study the spread and transformation of these powerful stories.

The last recession 10 years ago was exceptionally severe, and it is worth examining closely for insights into how the spread of economic narratives drove human behavior.

It now appears that while Sept. 15, 2008, was a logical moment for the start of a panic, that's not really what happened. That was when Lehman Brothers, an old-line investment bank, failed, and while this was a major economic event, the evidence suggests that it did not foster a viral narrative among the broad population.

Since Lehman was an investment bank, and did not accept deposits from small savers, most people weren't much moved by its demise. Instead, the big change seems to have come on Sept. 25, 2008. That was when the government seized Washington Mutual -- a giant savings and loan association, known as WaMu, that had suffered a sudden mass exodus of depositors -- and sold its assets to JPMorgan Chase for $1.9 billion.

That event was often seen to resemble the Great Depression and the collapse of the banking system in 1933. People feared the possibility of spreading bank failures and therefore of personal tragedies.

The public was transfixed when President George W. Bush spoke from the White House Rose Garden on Oct. 10, 2008, about the risk of a serious economic downturn.

While Mr. Bush did not utter the word "depression," he used language that closely resembled that of the first inaugural address of President Franklin D. Roosevelt in 1933, perhaps the worst time of the Great Depression.

Roosevelt's memorable words, "The only thing we have to fear is fear itself," became, in Mr. Bush's Rose Garden speech, "Anxiety can feed anxiety." The New York Times noted that parallel then. It seemed to many people, in real time, that the Great Depression might be repeating itself.

Even before Mr. Bush's speech, Great Depression narratives had been emerging strongly. For example, the number of articles in the ProQuest News & Newspapers database containing the words "Great Depression" rose fivefold from 2007 to 2008. The term, with its emotional resonance, had exploded into an epidemic.

In contrast, other big historical events, like the panic of 1907, have been almost totally forgotten by the public and are unlikely to develop into a big new epidemic.

But the Great Depression narrative is still alive, though it does not dominate at the moment. President Trump's exuberant speeches, if one believes them, still encourage big spending and confidence. Yet older, troubling narratives are waiting to become viral again.

New crises that shake up the economy often surprise economists because no exogenous cause appears to be a sufficient explanation for a downturn. People begin to suddenly frame current events in the context of stories they had heard many times before.

This may seem puzzling until we realize that an old narrative has renewed itself in an epidemic, and people have begun to respond reflexively in their day-to-day decisions. If enough people begin to act fearfully, their anxiety can become self-fulfilling, and a recession, sometimes a big one, may follow.

Robert J. Shiller is Sterling Professor of Economics at Yale.

[Sep 15, 2019] Thomas Piketty's New Book Brings Political Economy Back to Its Sources

Sep 15, 2019 | economistsview.typepad.com

anne , September 13, 2019 at 06:38 PM

https://promarket.org/thomas-piketty-new-book-brings-political-economy-back-to-its-sources/

September 6, 2019

Thomas Piketty's New Book Brings Political Economy Back to Its Sources
In the same way that Capital in the Twenty-First Century transformed the way economists look at inequality, Piketty's new book Capital and Ideology will transform the way political scientists look at their own field.
By Branko Milanovic

Thomas Piketty's books are always monumental. Some are more monumental than others. His Top Incomes in France in the Twentieth Century: Inequality and Redistribution, 1901–1998 (published in French as Les hauts revenus en France au XXe siècle) covered more than two centuries of income and wealth inequality, in addition to social and political changes in France. His international bestseller Capital in the Twenty-First Century (Le capital au XXI siècle) broadened this approach to the most important Western countries (France, the United States, United Kingdom, and Germany). His new book Capital and Ideology (to be published in English in March 2020; already published in France as Capital et idéologie) broadens the scope even further, covering the entire world and presenting a historical panorama of how ownership of assets (including people) was treated, and justified, in various historical societies, from China, Japan, and India, to the European-ruled American colonies, and feudal and capitalist societies in Europe. Just the mention of the geographical and temporal scope of the book suffices to give the reader an idea of its ambition.

Before I review Capital and Ideology, it is worth mentioning the importance of Piketty's overall approach, present in all three of his books. His approach is characterized by the methodological return of economics to its original and key functions: to be a science that illuminates the interests and explains the behaviors of individuals and social classes in their quotidian (material) life. This methodology rejects the dominant paradigm of the past half-century, which increasingly ignored the role of classes and heterogeneous individuals in the process of production and instead treated all people as abstract agents that maximize their own income under certain constraints. The dominant paradigm has emptied almost all social content from economics and presented a view of society that was as abstract as it was false.

The reintroduction of actual life into economics by Piketty and several other economists (not entirely coincidentally, most of them are economists interested in inequality) is much more than just a return to the sources of political economy and economics. This is because today, we have vastly more information (data) than was available to economists a century ago, not only about our own contemporary societies but also about past societies. This combination between political economy's original methodology and big data is what I call "turbo-Annales," after the French group of historians that pioneered the view of history as a social science focusing on the broad social, economic, and political forces that shape the world. The topics that interested classical political economy and the authors associated with the Annales School can now be studied empirically, and even econometrically and experimentally -- things which they could not do, both because of the scarcity of data and unavailability of modern methodologies.

It is within this context that, I believe, we ought to consider Piketty's Capital and Ideology. How successful was his approach, applied now to the world and over a very long time-horizon?

"The dominant paradigm has emptied almost all social content from economics and presented a view of society that was as abstract as it was false."

For the purposes of this review, I divide Piketty's book into two parts: the first, which I already mentioned, looks at ideological justifications of inequality across different societies (Parts 1 and 2 of the book, and to some extent Part 3); the second introduces an entirely new way of studying recent political cleavages in modern societies (Part 4). I am somewhat skeptical about Piketty's success in the first part, despite his enormous erudition and his skills as a raconteur, because success in discussing something so geographically and temporally immense is difficult to reach, even by the best-informed minds who have studied different societies for the majority of their careers. Analyzing each of these societies requires an extraordinarily high degree of sophisticated historical knowledge regarding religious dogmas, political organization, social stratification, and the like. To take two examples of authors who have tried to do it, one older and one more recent: Max Weber, during his entire life (and more specifically in Economy and Society), and Francis Fukuyama in his two-volume masterpiece on the origins of the political and economic order. In both cases, the results were not always unanimously approved by specialists studying individual societies and religions.

In his analysis of some of these societies, Piketty had to rely on somewhat "straightforward" or simplified discussions of their structure and evolution, discussions which at times seem plausible but superficial. In other words, each of these historical societies, many of which lasted centuries, had gone through different phases in their developments, phases which are subject to various interpretations. Treating such evolutions as if they were a simple, uncontested story is reductionist. It is a choice of one plausible historical narrative where many exist. This compares unfavorably with Piketty's own rich and nuanced narrative in Top Incomes in France in the Twentieth Century.

While I am somewhat skeptical about that first part of the book, I am not skeptical about the second. In this part, we find the Piketty who plays to his strength: bold and innovative use of data which produces a new way of looking at phenomena that we all observe but were unable to define so precisely. Here, Piketty is "playing" on the familiar Western economic history "terrain" that he knows well, probably better than any other economist.

This part of the book looks empirically at the reasons that left-wing, or social democratic parties have gradually transformed themselves from being the parties of the less-educated and poorer classes to become the parties of the educated and affluent middle and upper-middle classes. To a large extent, traditionally left parties have changed because their original social-democratic agenda was so successful in opening up education and high-income possibilities to the people who in the 1950s and 1960s came from modest backgrounds. These people, the "winners" of social democracy, continued voting for left-wing parties but their interests and worldview were no longer the same as that of their (less-educated) parents. The parties' internal social structure thus changed -- the product of their own political and social success. In Piketty's terms, they became the parties of the "Brahmin left" (La gauche Brahmane), as opposed to the conservative right-wing parties, which remained the parties of the "merchant right" (La droite marchande).

To simplify, the elite became divided between the educated "Brahmins" and the more commercially-minded "investors," or capitalists. This development, however, left the people who failed to experience upward educational and income mobility unrepresented, and those people are the ones that feed the current "populist" wave. Quite extraordinarily, Piketty shows the education and income shifts of left-wing parties' voters using very similar long-term data from all major developed democracies (and India). The fact that the story is so consistent across countries lends an almost uncanny plausibility to his hypothesis.

It is also striking, at least to me, that such multi-year, multi-country data were apparently never used by political scientists to study this phenomenon. This part of Piketty's book will likely transform, or at least affect, how political scientists look at new political realignments and class politics in advanced democracies in the years to come. In the same way that Capital in the Twenty-First Century has transformed how economists look at inequality, Capital and Ideology will transform the way political scientists look at their own field.


Branko Milanovic is a senior scholar at the Stone Center on Socio-Economic Inequality at the Graduate Center, City University of New York.

[Sep 14, 2019] How to lose 100 millions trying to enter the USA subway cars mar anne ,

Sep 14, 2019 | economistsview.typepad.com

https://www.nytimes.com/2019/09/14/business/chinese-train-national-security.html

September 14, 2019

Fearing 'Spy Trains,' Congress May Ban a Chinese Maker of Subway Cars
By Ana Swanson

CHICAGO -- America's next fight with China is unfolding at a glistening new factory in Chicago, which stands empty except for the shells of two subway cars and space for future business that is unlikely to come.

A Chinese state-owned company called CRRC Corporation, the world's largest train maker, completed the $100 million facility this year in the hopes of winning contracts to build subway cars and other passenger trains for American cities like Chicago and Washington.

But growing fears about China's economic ambitions and its potential to track and spy on Americans are about to quash those plans. Congress is soon expected to approve legislation that would effectively bar the company from competing for new contracts in the United States, citing national security and economic concerns. The White House has expressed its support for the effort.

Washington's attempt to block a Chinese company from selling train cars inside America is the latest escalation in a trade war that has quickly expanded from a spat over tariffs and intellectual property to a broader fight over economic and national security.

President Trump and lawmakers from both parties are increasingly anxious about the economic and technological ambitions of China, which has built cutting-edge global industries, including those that produce advanced surveillance technology. Those fears have prompted Washington to take an expansive view of potential risks, moving beyond simply trying to curtail Chinese imports.

In addition to slapping tariffs on $360 billion worth of Chinese products, the administration has banned Chinese companies like Huawei, the telecom giant, from buying sensitive American technology. It is moving to curb the ability of firms to export technology like artificial intelligence and quantum computing from the United States to China. And Congress has given the administration expansive power to block Chinese investment on national security grounds.

Now lawmakers have added a provision to a military spending bill that would prevent the use of federal grants to buy subway trains from state-owned or state-controlled companies, a measure that would effectively block CRRC's business.

The bill has gained bipartisan support from lawmakers who say companies like CRRC pose a threat to the United States. Part of the concern is economic: Flush with cash from its rapid growth, China has pumped money into building globally competitive businesses, often creating overcapacity in markets like steel, solar panels and trains.

That has lowered prices for consumers -- including American taxpayers who pay for subway cars. While a subway car has not been manufactured solely by an American company in decades, CRRC's low prices have raised concerns among American freight train companies that the company could ultimately move into -- and demolish -- their business.

CRRC has consistently underbid its competitors, winning over urban transit agencies that are saddled with aging infrastructure and tight budgets. For the Chicago L, CRRC's Chicago subsidiary bid $1.55 million per car, compared with a bid of $1.82 million per car by Bombardier, the Canadian manufacturer. And CRRC also proposed to build the Chicago facility and create 170 new jobs.

Legislators argue that Chinese state-owned companies are not pursuing profit, but the policy aims of the Chinese government to dominate key global industries like electric cars, robotics and rail.

"When you can subsidize, when you can wholly own an enterprise like China does, you can create a wholly unlevel playing field," said Senator Tammy Baldwin, a Wisconsin Democrat who is a co-sponsor of the legislation. "We're used to that unlevel playing field existing between the U.S. and China, but now it's happening in our own backyard."

Another more nefarious worry is also at play. Lawmakers -- along with CRRC's competitors -- say they are concerned that subway cars made by a Chinese company might make it easier for Beijing to spy on Americans and could pose a sabotage threat to American infrastructure, though CRRC says it surrenders control of all technology in the cars to its buyers. Nonetheless, critics speculate that the Chinese firm could incorporate technology into the cars that would allow CRRC -- and the Chinese government -- to track the faces, movement, conversations or phone calls of passengers through the train's cameras or Wi-Fi.

Scott Paul, the president of the Alliance for American Manufacturing, which represents manufacturers and the United Steelworkers, said the risks of giving a Chinese company the ability to monitor or control American infrastructure could not be understated given recent laws requiring Chinese companies to turn over data to Beijing upon request.

"I just think it would be irresponsible to assume the Chinese government to which this firm must answer would be a reliable security partner, given its well documented track record," Mr. Paul said.

Whether those fears are justified remains uncertain. Proponents of the bill have not made clear how subway cars manufactured by a Chinese company would pose a greater espionage threat than everything else that China makes and sells in the United States, including laptops, phones and home appliances.

Dave Smolensky, a spokesman for CRRC, said the company was being unfairly targeted by companies that wanted to legislate a competitor out of business under the guise of national security. He said the firm was a victim to "an aggressive multimillion-dollar media disinformation campaign," funded mostly by domestic freight train companies, intended to play on popular fears about China's rise.

Employees at the Chicago factory also dismissed the concerns, saying they had not seen any evidence that they were working to construct "spy trains."

"I haven't seen any secret wires yet," said Perry Nobles, an electrician for CRRC who was rigging wires in the interior of the trains. "With the world full of cellphones and computers, I'd think there's an easier way to get information."

Rising fears of China's ambitions in Washington have prompted officials to adopt an unsparing view, with policymakers and national security officials warning domestic and foreign governments not to trust Chinese equipment.

American officials have waged a global offensive against Huawei, telling other countries that allowing a Chinese company to build the world's next generation of wireless networks would be akin to handing national secrets to a foreign agent.

Like CRRC, the fear surrounding Huawei is largely based on concerns about technological dominance by China's authoritarian government. No one has yet disclosed finding a backdoor in Huawei's products that would allow it to snoop -- but officials say by the time one is discovered, it may be too late.

"The Chinese are working to put their systems in networks all across the world so they can steal your information and my information," Secretary of State Mike Pompeo said in an interview in May. "This administration is prepared to take this on."

As Senator John Cornyn, Republican of Texas, introduced the provision in March, he said, "China poses a clear and present danger to our national security and has already infiltrated our rail and bus manufacturing industries."

Representative Kevin McCarthy, a Republican whose California district is home to a Chinese bus maker, BYD, had opposed a version of the provision that would apply to buses as well as trains. House lawmakers dropped the bus provision, but the Senate bill would apply to both. Congress will take the issue up again in the coming weeks as part of the annual defense bill.

The legislation would not affect the thousands of American subway cars that CRRC previously won contracts to build, including an 846-car order for the Chicago L. But it would block the company from future contracts, such as those under consideration by the Chicago Metra and the Washington Metro.

The Chicago facility is the company's second in the United States. A factory in Massachusetts that employs more than 150 people is already building trains for Boston, Los Angeles and Philadelphia, prompting concerns that the company plans to expand rapidly in the United States as it has in other foreign markets.

Like many Chinese state enterprises, CRRC is guided by Beijing's Made in China 2025 plan, which lays out an agenda to dominate key industries.

In its 2018 annual report, Liu Hualong, the company's chairman and party secretary, pledged to pursue the dual goals of "Party construction as well as developing into a world-leading company with global competitiveness."

"We conscientiously followed the important instructions of General Secretary Xi Jinping," the report said, referring to the Chinese president and Communist Party leader.

The last American firm to make passenger rail cars, the Pullman Company, produced its final car in 1981. Since then, major American cities have bought subway cars from Bombardier and Japanese manufacturers like Kawasaki, Hyundai and Hitachi.

But American manufacturers of freight rail cars, including the Greenbrier Companies and TrinityRail, which is based in Mr. Cornyn's home state of Texas, say CRRC could use its footing in the United States to steal its business. Together with unions and others, they have mounted a lobbying campaign against CRRC under an umbrella group known as the Rail Security Alliance.

The group says American taxpayer dollars should not be spent in China, where the empty rail cars are made before being shipped to the United States for further work at the company's facilities in Illinois or Massachusetts.

"We think those dollars should stay here," said Erik Olson, the vice president of the Rail Security Alliance.

CRRC sends over experts from its giant headquarters in Qingdao, China, to plants in other countries. In Chicago, the American employees call these Chinese citizens "shifu," a polite term for a skilled worker meaning "master" or "teacher."

On a sunny day in July, the company break room was split between shifus, wearing white jumpsuits and eating stuffed buns, and American workers, many of whom had joined the company in the last few months. The gleaming concrete factory floor was bare, save for a few dozen people installing wiring, air ducts and other components into the empty shells of two rail cars.

"We are a little concerned because it's our livelihood," said Mr. Nobles, who was hired in March from a previous factory job making frames for the Ford Explorer.

This summer, CRRC replaced the Chinese flag outside the factory with a Chicago flag. It has also retained two Washington lobbying firms, Squire Patton Boggs and Crossroads Strategies, to plead its case in Congress.

It may be too late. Senator Sherrod Brown, Democrat of Ohio, said he helped sponsor the bill to prevent the American transit system from being "controlled by a foreign country that is not particularly friendly to us."

"They spell out in black and white they're going to use foreign investment as a weapon, and we're taking action to defend ourselves," Mr. Brown said.

[Sep 14, 2019] Behind the escalating global conflict over trade and technology is a larger breakdown of the postwar rules-based order, which was based on a belief that any country's growth benefits all. Now that China is threatening to compete directly with the United States, support for the system that made that possible has disappeared.

Clinton attempts to bankrupt and subdue Russia as well as his criminal (in a sense of no permission form the UN) attack on Yugoslavia backfired. Russia became permanently hostile. The fact he and his coterie were not yet tried by something like Nuremberg tribunal is only due to the USA dominance at this stage of history. And he probably will manage to die before such opportunity might materialize.
Sep 14, 2019 | economistsview.typepad.com

anne -> Paine ... , September 14, 2019 at 04:43 PM
https://www.project-syndicate.org/commentary/trump-trade-war-damage-by-raghuram-rajan-2019-09

September 5, 2019

The True Toll of the Trade War
Behind the escalating global conflict over trade and technology is a larger breakdown of the postwar rules-based order, which was based on a belief that any country's growth benefits all. Now that China is threatening to compete directly with the United States, support for the system that made that possible has disappeared.
By RAGHURAM G. RAJAN

CHICAGO – Another day, another attack on trade. Why is it that every dispute – whether over intellectual property (IP), immigration, environmental damage, or war reparations – now produces new threats to trade?

For much of the last century, the United States managed and protected the rules-based trading system it created at the end of World War II. That system required a fundamental break from the pre-war environment of mutual suspicion between competing powers. The US urged everyone to see that growth and development for one country could benefit all countries through increased trade and investment.

Under the new dispensation, rules were enacted to constrain selfish behavior and coercive threats by the economically powerful. The US served as a benevolent hegemon, administering the occasional rap on the knuckles to those acting in bad faith. Meanwhile, the system's multilateral institutions, especially the International Monetary Fund, helped countries in dire need of funds, provided they followed the rules....

likbez -> anne... , September 14, 2019 at 08:30 PM

"The US served as a benevolent hegemon, administering the occasional rap on the knuckles to those acting in bad faith"

USA foreign policy since 70th was controlled by neocons who as a typical Trotskyites (neoliberalism is actually Trotskyism for the rich) were/are hell-bent of world domination and practice gangster capitalism in foreign policy.

Bolton attitude to UN is very symptomatic for the neocons as a whole.

Madeline "not so bright" Allbright was the first swan. As well as Clinton attempts to bankrupt and subdue Russia and criminal (in a sense of no permission from the UN) attack on Yugoslavia. Both backfired: Russia became permanently hostile. The fact he and his coterie were not yet tried by something like Nuremberg tribunal is only due to the USA dominance at this stage of history.

The truth is that after the dissolution of the USSR the USA foreign policy became completely unhinged. And inside the country the elite became cannibalistic, as there was no external threat to its dominance in the form of the USSR.

The USA stated to behave like a typical Imperial state (New Rome, or, more correctly, London) accepting no rules/laws that are not written by themselves (and when it is convenient to obey them) with the only difference from the classic imperial states that the hegemony it not based on the military presence/occupation ( like was the case with British empire)

Although this is not completely true as there are 761 US Military Bases across the planet and only 46 Countries with no US military presence. Of them, seven countries with 13 New Military Bases were added since 09/11/2001.In 2001 the US had a quarter million troops posted abroad.

Still as an imperial state and the center of neoliberal empire the USA relies more on financial instruments and neoliberal comprador elite inside the country.

I recently learned from https://akarlin.com/2010/04/on-liberasts-and-liberasty/ that the derogatory term for the neoliberal part of the Russian elite is "liberasts" and this term gradually slipping into English language ( http://onlineslangdictionary.com/meaning-definition-of/liberast ;-)

With the collapse of neoliberal ideology in 2008 the USA centered neoliberal empire experiences first cracks. Brexit and election of Trump widened the cracks in a sense of further legitimizing the ruling neoliberal elite (big middle finger for Hillary was addressed to the elite as whole)

If oil price exceed $100 per barrel there will yet another crack or even repetition of the 2008 Great Recession on a new level (although we may argue that the Great Recession never ended and just entered in Summers terms "permanent stagnation: phase)

Although currently with a bully at the helm the USA empire still going strong in forcing vassals and competitors to reconsider their desire to challenge the USA that situation will not last. Trump currently is trying to neutralize the treat from China by rejecting classic neoliberal globalization mechanism as well as signed treaties like WTO. He might be successful in the short run but in the "long run" that undermines the USA centered neoliberal empire and speed up its demise. .

In the long run the future does not look too bright as crimes committed by the USA during triumphal period of neoliberalism hangs like albatross around the USA neck.

EU now definitely wants to play its own game as Macron recently stated and which Merkel tacitly supports. If EU allies with Russia it will became No.1 force in the world with the USA No. 2. With severe consequences for the USA.

If Russia allied with China the USA Np.1 position will hinge of keeping EU vassals in check and NATO in place. Without them it will became No.2 with fatal consequences for the dollar as world reserve currency and sudden change of the USA financial position due to the level of external debt and requires devaluation of the dollar.

Looks like 75 year after WWII the world started to self-organize a countervailing force trying to tame the USA with some interest expressed by such players as EU, Russia, China, India, Iran, Turkey, Pakistan and even Saudi Arabia. As well as ( in the past; and possibly in the future as neoliberal counterrevolutions in both countries probably will end badly) by Brazil and Argentina.

Only Canada, Australia and probably UK can be counted as the reliable parts of the USA empire. That's not much.

[Sep 14, 2019] when the US puts economic pressure on trade with China, it affects US trade with China, but not necessarily China's trade with other countries of Asia or patterns of US trade with the Asian region as a whole.

Sep 14, 2019 | economistsview.typepad.com

anne , September 14, 2019 at 04:27 PM

http://conversableeconomist.blogspot.com/2019/09/china-and-india-build-internal-supply.html

September 7, 2019

China and India Build Internal Supply Chains

One of the key questions in the escalating US trade disputes with China and other countries is how much the economy of other countries depends on trade. The answer helps to determine how much leverage the US has in trade disputes. Thus, it's interesting to note that starting about a decade ago, both India and China started reducing their dependence on exports as a source of growth, while doing more to build internal supply chains and relying more on domestic products.

A group of authors from McKinsey Global Institute published "Asia's future is now" * in July 2019, including Oliver Tonby, Jonathan Woetzel, Wonsik Choi, Jeongmin Seong and Patti Wang. Here's a figure showing how the reliance of China and India on exports has been falling.

[Graph]

The authors also note:

"As consumption rises, more of what gets made in these countries is now sold locally instead of being exported to the West. Over the decade from 2007 to 2017, China almost tripled its production of labor-intensive goods, from US$3.1 trillion to US$8.8 trillion. At the same time, the share of gross output China exports has dramatically decreased, from 15.5 percent to 8.3 percent. India has similarly been exporting a smaller share of its output over time. This implies that more goods are being consumed domestically rather than exported. Furthermore, as the region's emerging economies develop new industrial capabilities and begin making more sophisticated products, they are becoming less reliant on foreign imports of both intermediate inputs and final goods. The previous era of globalization was marked by Western companies building supply chains that stretched halfway around the world as they sought out the lowest possible labor costs -- and often their supply chains ran through Asia. Now labor arbitrage is on the wane. Only 18 percent of today's goods trade now involves exports from low-wage countries to high-wage countries -- a far smaller share than most people assume and one that is declining in many industries. ....

"Asian consumers have long had a strong preference for foreign luxury goods and brands. But things are changing. The post-90's generation is starting to lose this bias against domestic brands; in fact, they are starting to choose them over foreign brands more often. ..."

Wages in China have risen substantially in the last couple of decades. As a result, the rising manufacturing hubs in Asia are now in places like Vietnam and Indonesia. In addition, many of the international economic ties are within Asian countries, rather than being between China and the United States.

"Historically China was known as the 'factory to the world.' But while low-cost labor was its original competitive advantage, the wage gap between China and the rest of Asia is closing. In 1996, wages in Japan were 46 times higher than in China; by 2016, they were only four times higher. China is moving up the value chain, and as it transitions, other locations around Asia are stepping into some of its former niches. Vietnam, in particular, has become a hub of labor-intensive manufacturing for export. The country has attracted a flood of greenfield investment into cities such as Hai Phong. In addition to Hai Phong (Vietnam), Ho Chi Minh City (Vietnam), Bekasi (Indonesia), and Xi'an (China) are rising makers of electronics. As new places assume new roles in industry value chains, a new set of cities begins to benefit from the influx of capital. Investment in factories leads to new roads, new jobs, and urbanization. Much of the capital flowing into Vietnam comes from South Korea and Japan. These new manufacturing hubs speak not only to the rise of emerging Asian countries but also to a region that is more connected and co-invested."

This helps to explain why, when the US puts economic pressure on trade with China, it affects US trade with China, but not necessarily China's trade with other countries of Asia or patterns of US trade with the Asian region as a whole.

* https://www.mckinsey.com/~/media/McKinsey/Featured%20Insights/Asia%20Pacific/Asias%20future%20is%20now/Asias-future-is-now-final.ashx

-- Timothy Taylor

[Sep 14, 2019] Women in theocratic state are usually slaves but the degree of oppression varies beween different states. One extreme definitely is Saudi Arabia but how far Iran is form it is unclear

Sep 14, 2019 | www.zerohedge.com

See Women's rights in Iran - Wikipedia . Iran ranked 116 out of the 153 countries in terms of legal discrimination against women. 90% of women in Iran use cellphones and have "access to financial accounts" in Iran. In other South Asian regions, "less than 2 in 5" have this access, and a similar high share of women using cellphones

Under Reza Shah women were banned the wearing of the Islamic hijab in public. It was announced that in the beginning of 2018, women would no longer be arrested for wearing 'bad hijab' in public. In August 2019, Iranian civil rights activist Saba Kord Afshari was sentenced to 24 years behind bars, including a 15-year term for taking off her hijab in public, which Iranian authorities say promoted "corruption and prostitution." [30] [31]

WTFUD , 8 minutes ago link

You're Crackers!

Persian women are FREE. Saudi women are SLAVES.

Einstein101 , 6 minutes ago link

Persian women are FREE

I heard Persian women are not allowed to attend stadium sports events, like soccer games. Is this true?

[Sep 14, 2019] Our pundit class view that universal Medicare will require a tax increase and the ability to stay alive without a brain have something in common

Sep 14, 2019 | economistsview.typepad.com

anne , September 14, 2019 at 12:38 PM

http://cepr.net/blogs/beat-the-press/health-care-premiums-and-taxes

September 14, 2019

Health Care Premiums and Taxes
By Dean Baker

There's an old joke about a lawyer who is questioning a doctor on an autopsy they had done on someone who was allegedly a murder victim.

The lawyer asked the doctor, "did you check whether the patient was breathing?"

The doctor answers "no."

The lawyer then asks "did you check whether the patient had a pulse?"

The doctor again answers "no."

The lawyer then asks, "so how did you know that the patient was dead," to which the doctor responds, "because his brains were sitting in a jar on my desk."

The lawyer then triumphantly asks, "so he could have still been alive?" To which the doctor responds, "I suppose he could have been practicing law somewhere."

Our doctor may want to amend their answer to allow for the possibility that the patient could be a political pundit for a leading news outlet.

Our pundit class have to decided to make a crusade out of forcing Senators Warren and Sanders into saying that their proposals for universal Medicare will require a tax increase. Both have repeatedly responded by saying that total costs for the vast majority of people will fall, since Medicare for All will lead to a large reduction in costs by all accounts, because it reduces waste in the health care system.

[Sep 14, 2019] Is it better to be poor in a rich country or rich in a poor country?

Sep 14, 2019 | economistsview.typepad.com

anne , September 13, 2019 at 06:31 PM

https://news.cgtn.com/news/2019-09-11/Should-we-worry-about-income-gaps-within-or-between-countries--JTDcnKWvII/index.html

September 10, 2019

Should We Worry About Income Gaps Within or Between Countries?
The rise of populist nationalism throughout the West has been fueled partly by a clash between the objectives of equity in rich countries and higher living standards in poor countries. Yet advanced-economy policies that emphasize domestic equity need not be harmful to the global poor, even in international trade.
By DANI RODRIK

At the beginning of classes every autumn, I tease my students with the following question: Is it better to be poor in a rich country or rich in a poor country? The question typically invites considerable and inconclusive debate. But we can devise a more structured and limited version of the question, for which there is a definitive answer.

Let's narrow the focus to incomes and assume that people care only about their own consumption levels (disregarding inequality and other social conditions). "Rich" and "poor" are those in the top and bottom 5 percent of the income distribution, respectively. In a typical rich country, the poorest 5 percent of the population receive around 1 percent of the national income. Data are a lot sparser for poor countries, but it would not be too much off the mark to assume that the richest 5 percent there receive 25 percent of the national income.

Similarly, let's assume that rich and poor countries are those in the top and bottom 5 percent of all countries, ranked by per capita income. In a typical poor country (such as Liberia or Niger), that is around 1,000 U.S. dollars, compared to 65,000 U.S. dollars in a typical rich country (say, Switzerland or Norway). (These incomes are adjusted for cost-of-living, or purchasing-power, differentials so that they can be directly compared.)

Now, we can calculate that a rich person in a poor country has an income of 5,000 (1,000 x 0.25 x 20) U.S. dollars while a poor person in a rich country earns 13,000 (65,000 x 0.01 x 20) U.S. dollars. Measured by material living standards, a poor person in a rich country is more than twice as well off as a rich person in a poor country.

This result surprises my students, most of whom expect the reverse to be true. When they think of wealthy individuals in poor countries, they imagine tycoons living in mansions with a retinue of servants and a fleet of expensive cars. But while such individuals certainly exist, a representative of the top 5 percent in very poor countries is likely to be a mid-level government bureaucrat.

The larger point of this comparison is to underscore the importance of income differences across countries, relative to inequalities within countries.

At the dawn of modern economic growth, before the Industrial Revolution, global inequality derived almost exclusively from inequality within countries. Income gaps between Europe and poorer parts of the world were small. But as the West developed in the 19th century, world economy underwent a "great divergence" between the industrial core and the primary-goods-producing periphery. During much of the postwar period, income gaps between rich and poor countries accounted for the greater part of global inequality.

From the late 1980s onward, two trends began to alter this picture. First, led by China, many parts of the lagging regions began to experience substantially faster economic growth than the world's rich countries. For the first time in history, the typical developing-country resident was getting richer at a faster pace than his or her counterparts in Europe and North America.

Second, inequalities began to increase in many advanced economies, especially those with less-regulated labor markets and weak social protections. The rise in inequality in the United States has been so sharp that it is no longer clear that the standard of living of the American "poor" is higher than that of the "rich" in the poorest countries (with rich and poor defined as above).

These two trends went in offsetting directions in terms of overall global inequality – one decreased it while the other increased it. But they have both raised the share of within-country inequality in the total, reversing an uninterrupted trend observed since the 19th century.

Given patchy data, we cannot be certain about the respective shares of within- and between-country inequality in today's world economy. But in an unpublished paper based on data from the World Inequality Database, Lucas Chancel of the Paris School of Economics estimates that as much as three-quarters of current global inequality may be due to within-country inequality. Historical estimates by two other French economists, François Bourguignon and Christian Morrison, suggest that within-country inequality has not loomed so large since the late 19th century.

These estimates, if correct, suggest that the world economy has crossed an important threshold, requiring us to revisit policy priorities. For a long time, economists like me have been telling the world that the most effective way to reduce global income disparities would be to accelerate economic growth in low-income countries. Cosmopolitans in rich countries – typically the wealthy and skilled professionals – could claim to hold the high moral ground when they downplayed the concerns of those complaining about domestic inequality.

But the rise of populist nationalism throughout the West has been fueled partly by the tension between the objectives of equity in rich countries and higher living standards in poor countries. Advanced economies' increased trade with low-income countries has contributed to domestic wage inequality. And probably the single best way to raise incomes in the rest of the world would be to allow a massive influx of workers from poor countries into rich countries' labor markets. That would not be good news for less educated, lower-paid rich-country workers.

Yet advanced-economy policies that emphasize domestic equity need not be harmful to the global poor, even in international trade. Economic policies that lift incomes at the bottom of the labor market and diminish economic insecurity are good both for domestic equity and for the maintenance of a healthy world economy that provides poor economies a chance to develop.


Dani Rodrik is Professor of International Political Economy at Harvard University's John F. Kennedy School of Government.

Paine -> anne... , September 14, 2019 at 07:22 AM
Yes yes yes


Trade and income distribution are related but the relationship can be determinative lay shaped by domestic institutions and country wide foreign trade policy

We need institutions run by and for common workng people

And foreign trade policy to shape impact patterns on domestic households in a pro common working people pattern

Too many well meaning Cosmo humanists assume the corporate message to be binding

A r
Trade off between foreign poor and domestic wage earners
Was part of global progress

Nope
Not necessarily so

Dani has several popularly written papers on tis point

Let's hope Anne can link to some of hem for us

likbez -> anne... , September 14, 2019 at 06:38 PM
Dani Rodrik is wrong. The idea that poor in the USA live better then top 5% in the most poor counties is a kind of persistent neoliberal myth that needs to dispelled.

1. Purchase party essentially means that in poor countries dollar is overvalued twice or more. Which means that $5K in poorest countries is close to $10 or even $15K in the USA and other Western countries.

2. Access to education and medical care is incomparable. In the USA most poor live without medical insurance. That put them in severe disadvantage with top 5% of a poor country.

3. Top 5% in poor countries typically own very comfortable apartments, in many cases far superior to what is available in the USA even for middle income families. Cost of the rent on two bedroom apartment in the large city in poor countries is typically 5-10 times less then in the USA. Taking into account very low quality of apartment complexes in the USA, the apartments in poor countries for top 5% might well belong to luxury apartment class in the USA. I know for sure that in the capital of Tajikistan (2017 GDP per Capita: $777) they are better.

The low 5% in the USA actually live in the third world country with considerable level of segregation from the rest of population as for apartments in which they live (look housing of the low paid retail and WalMart employees for actual data; their standard of living is just horrible, especially for single mothers with children)

3. Level of education. Top 5% in poor country are mostly university educated or better. Low 5% in the USA and other Western countries usually are functionally illiterate.

https://brandongaille.com/us-literacy-rate-and-illiteracy-statistics/

1. 32 million adults can not read in the United States equal to 14% of the population.
2. 21% of US adults read below the 5th grade level.
3. 19% of high school graduates can not read.
4. 85% of juveniles who interact with the juvenile court system are considered functionally illiterate.
5. 70% of inmates in America's prisons can not read above the fourth grade level.

4. Military industrial complex and Wall Street had taken ordinary Americans for a ride much like in the UK during the days of British Empire.

Which for one thing means that due to lack of affordable public transportation you need to own a car outside major metropolises. Which drops you standard of living. You will be fleeced three times: first by used car dealerships, then by insurance companies (low credit rating and high risk of default means high premium) and then repair shops which in some cases are really criminal enterprises exploiting the most poor and vulnerable parts of the population. Parts who has no access to quality cars.

Top 5% in poor countries has access to new small and midsize Japanese models (like Corolla, Nissan Juke, etc )

Also Rodrik method of calculation of income of top 5% of population is highly questionable. He never tried to verify his calculation with actual statistic of distribution of incomes in say top 10 poorest countries in the world (the list includes three the xUSSR "stans"; for them top 5% earns probably at least $20K a year, if not more )

IMHO for poor countries the income of the top 5% is probably two to four times higher then Rodrick estimate due to extreme values of GINI coefficient for such countries. Top 5% on such countries are mostly represented by people working for foreign companies (compradors), high level professionals and high level government employees. For the latter the salary is just the top of the iceberg of the real income.

[Sep 14, 2019] Oil To Hit $100 Pompeo Blames Iran For Unprecedented Drone Attack That Crippled Largest Saudi Oil Processing Facility

Sep 14, 2019 | www.zerohedge.com

Update 2 : In a sharp, if perhaps not unexpected, escalation, US Secretary of State - now without John Bolton by his side - tweeted at 4pm on Saturday, that contrary to earlier reports, "there is no evidence the attacks came from Yemen" and instead accused Iran of launching today's "unprecedented attack on the world's energy supply" which has now indefinitely taken offline as much as 5mmb/d in Saudi crude production.

In a follow up tweet, Pompeo said that he calls "on all nations to publicly and unequivocally condemn Iran's attacks" which is odd as not even Saudi Arabia accused Iran of today's aggression (which many speculated could have been a Saudi false flag in hopes of sending the price of oil soaring ahead of the Aramco IPO). Pompeo concluded that "the United States will work with our partners and allies to ensure that energy markets remain well supplied and Iran is held accountable for its aggression."

Will this pivot away from Houthis to Iran as the "origin" of the attack be sufficient grounds to re-inflame tensions between the US and Iran, especially following last week's news that one of the reasons Bolton was fired was due to his hard-line stance on Iran even as Trump was willing to sit down with the Tehran regime for negotiations. Since the deep state stands to make much more money from war rather than peace, our guess is that the answer is a resounding "yes." Update: The WSJ is out with an update hinting at just how much the price of oil is set to soar when trading reopens late on Sunday after the Saudi Houthi false-flag drone attack on the largest Saudi oil processing plant:

Saudi Arabia is shutting down about half of its oil output after apparently coordinated drone strikes hit Saudi production facilities, people familiar with the matter said, in what Yemen's Houthi rebels described as one of their largest-ever attacks inside the kingdom.

The production shutdown amounts to a loss of about five million barrels a day , the people said, roughly 5% of the world's daily production of crude oil . The kingdom produces 9.8 million barrels a day.

And while Aramco is assuring it can restore output quickly, in case it can't the world is looking at a production shortfall of as much as 150MM barrels monthly, which - all else equal - could send oil soaring into the triple digits. Just what the Aramco IPO ordered.

What appears to be the most devastating Yemen Houthi rebel attack on Saudi Arabia to date, took place overnight on the world's largest oil processing facility as stunning videos emerged of massive explosions rocking the major Aramco Buqyaq facility .

Fires burned into the morning daylight hours, with explosions also reported at the Khurais oil field, in what the Houthis said was a successful attack involving ten drones . "These attacks are our right, and we warn the Saudis that our targets will keep expanding," a rebel military spokesman said on Houthi-operated Al Masirah TV .

Saudi authorities -- initially slow or reluctant to identify the cause of the major blaze -- on Saturday issued a confirmation via the Saudi Press Agency: "At 4.00am (01:00 GMT) the industrial security teams of Aramco started dealing with fires at two of its facilities in Abqaiq and Khurais as a result of... drones," an interior ministry statement said , which further claimed the fires were "under control" .

However, the Saudis have stopped short of acknowledging the Houthis were behind the attack, which Riyadh is also likely to blame on Iran , which has lately promised that if it can't export its oil then "no one will".

It remains unclear according to early statements whether there were injuries or casualties in the twin oil facility attacks.

The impact on global oil markets - closed for the weekend - could be significant given the Khurais field produces about 1% of all the world's oil (estimated at over 1M bpd and reserves of over 20BN bpd) and more importantly Abqaiq, which based on the stunning local footage bore the brunt of the drone attacks, remains the most crucial of the kingdom's processing plants.

Located 37 miles southwest of Aramco's Dhahran headquarters, it controls all the flows from fields like the giant Ghawar field to coastal export terminals like Ras Tanura. Saudi Aramco describes the Buqyaq facility as "the largest crude oil stabilization plant in the world."

Meanwhile, the United States was quick to "strongly condemn" the attack amid already soaring tensions in the gulf after a summer of "tanker wars" and Iranian threats of walking away altogether from the 2015 nuclear deal (JCPOA).

The U.S. envoy to Saudi Arabia issued a statement saying , "The U.S. strongly condemns today's drone attacks against oil facilities in Abqaiq and Khurais. These attacks against critical infrastructure endanger civilians, are unacceptable, and sooner or later will result in innocent lives being lost."

According to Reuters reports the drone attacks will impact up to 5 million bpd of oil production, which suggests that the price of oil - already severely depressed by the recent news that John Bolton is out, making de-escalation with Iran far more likely - is set to soar when trading reopens late on Sunday, just what the upcoming Aramco IPO desperately needs , which in turn has prompted some to wonder if the "Yemen" attack on Saudi Arabia wasn't in fact orchestrated by Saudi interests. 18 years after Sept 11, this shouldn't sound all that outlandish...


funkyfreddy , 47 seconds ago link

What price does American shale need it to be to make a profit?

Ms No , 1 minute ago link

The Sauds lie about everything. Right now they appear to be minimizing it.

Thordoom , 2 minutes ago link

The houthis also said that this operation was coordinated with a cell that is inside of Saudi Arabia.

The already paranoid saudis idiots must be now completely out of their minds.

If it is not false flag they must be shitting them self.

The whole f..king arab world must be laughing and worshiping Houthis right now.

This is what happens when you get in bet with Israel and US.

holycrap , 5 minutes ago link

Oil companies want higher prices. Israel wants US to war with Iran. Jews want Bolt-on to be proven right. Hmm, how can we get all those things with one shot. Oy-vey, I have an idea.

herbivore , 8 minutes ago link

If the U.S. attacks Iran, it will only raise oil prices even more. If the Houthis have the ability to destroy Saudi oil infrastructure, then Iran has the ability to wipe it out for years to come. How can the U.S. protect Saudi oil production? If there was a simple way to do it, you'd think it would have already been implemented. It's looking like Iran wasn't kidding when they said if they can't sell their oil then neither will the Saudis.

Thordoom , 7 minutes ago link

So the mighty US MIC was not able to even detect sandals wearing Houthis fighter's drones and missile?

It is either terrible and unbelievably embarrassing event for US military industrial complex or it is false flag to escalate tensions with Iran.

Kinskian , 9 minutes ago link

No comment yet from our Commander in Tweets? $100 oil should get a market crash going.

funkyfreddy , 4 minutes ago link

$100 oil might get people more interested in electric vehicles that all manufacturers have been forced to invest billions in that the public dont want.

Einstein101 , 12 minutes ago link

What appears to be the most devastating Yemen Houthi rebel attack on Saudi Arabia to date

What is missing from that article is the fact that actually this attack was not performed by the Houthi rebels themselves, and not from Yemen. This attack was actually performed by another Iranian proxy, the PMU, and the drones were sent into Saudi Arabia's territory from Iraq, North West of the country, not from Yemen.

This just underscores the way Iran's ring of proxy terror militias are all connected and acts in tandem under the control of Iran,

Out of its twisted interpretation of Islam's Quran, Iran's mission is to bring about a regime change to moderate Islamic countries (including allies of the US), forcing them into its extremist, US hateful, Shia Islam. The way they do it is by arming and financing terrorist proxy militias in various regions, spreading death and destruction. Iran arms and finances the Houthis in Yemen, The Islamic Jihad in Gazza, Hashd Al-Shaabi in Iraq, Hezbollah in Lebanon, Fatemeyoun Brigades in Syria, various terrorist groups in Africa, and more.

Iran has perfected the art of gradually conquering a country without replacing its flag by planting cancer cells in the form of terror proxy militias.

Meet the Proxies: How Iran Spreads Its Empire through Terrorist Militias

Iran spends billions of Dollars on those militias, at the expense of the well being of common Iranian people. All this money is deprived from their own people, cutting food and gas subsidies. Iran has abundance of oil reserves but a large chunk of the oil revenues goes to support insurgent groups in other countries while Iran's citizens live in misery and hunger. Heck, just on Lebanon's Hezbollah, Iran spends one Billion Dollars each year.

Iran's aim is to directly hurt our national interests by turning friendly Muslim countries against the US. Iran is not shy of demonstrating its hatred to the US. Iran states openly, and with great force, "Death to America!" They burn American flags in their parliament.

Iranian Lawmakers Burn U.S. Flag In Parliament

Iran's regime despises our Western free democratic society and strives to impose on all of us their dark extremist Islamic Sharia law.

Iranian women & girls as young as 9 who don't wear hijab face jail

Meatballs , 11 minutes ago link

Pompeo is a FAT STOOGE. Bibi is playing here. ******* psychos.

[Sep 14, 2019] $100 Oil Drone Strikes Halt Half Of Saudi Crude Production

Sep 14, 2019 | finance.yahoo.com

Half of Saudi Arabia's oil production has gone offline following a surprise drone strike.

Drones attacked Abqaiq facility in Saudi Arabia and the Khurais oil field run by Saudi Aramco early Saturday morning, the kingdom's interior ministry said , sparking a massive fire at a crude processing plant essential to global oil supplies.

The closure will impact nearly 5 million barrels of crude processing per day , affecting 5 percent of the world's daily oil production. And while Aramco is confident that it can recover quickly, if it can't, however, the world could face a production shortage of as much 150MM barrels per month. An outcome which could send oil prices into the triple digits.

Krishnan Viswanathan @kxviswan123

Supply loss from KSA may be as high as 150 MM barrels/month. Oil may hit $100.

33 11:15 AM - Sep 14, 2019 Twitter Ads info and privacy
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Houthi rebels-- who are backed by Iran in a yearlong Saudi-led battle in Yemen-- have apparently asserted responsibility for the strikes and pledged that more assaults can be expected in the future.

A Houthi spokesperson explained, "We promise the Saudi regime that our future operations will expand and be more painful as long as its aggression and siege continue," adding that the attack involved ten drones.

The Iran-backed Houthis have recently been behind a number of assaults on Saudi pipelines, vessels and other energy infrastructure as tensions grow in the region.

Related: Yergin: Expect Extreme Volatility In Oil Markets

There have been no details on the severity of the damage but Agence France-Presse quoted interior ministry spokesperson Mansour al-Turki as saying that there were no human casualties as a result of the attack.

Ahmed Alsalman @AAlsalman91

# Buqayq city view as # Aramco facilities burn. Very likely to be an attack of some sort as gunshots are also heard. # SaudiArabia # Saudi # arabtwitter

44 11:26 PM - Sep 13, 2019 Twitter Ads info and privacy
61 people are talking about this


More Attacks To Come?

This latest strike highlights the risk posed by the Houthis to Saudi Arabia's oil infrastructure as tensions between the groups continues to escalate.

The growing power of the Houthis' drone operations is likely to reignite the debate on where the militant group is securing these weapons. It could very well be that the group has weaponized noncombatant drones, or in a darker scenario, they are receiving the militarized drones from Iran.

A Saudi-led coalition has been at war with the Houthi movement in Yemen since March 2015. The Iranian-backed rebels hold the funding, Sana'a, and other areas in the Arab world's most impoverished nation.

The battle has created one of the world's worst humanitarian crisis. The violence has pressed Yemeni citizens to the brink of starvation. And the death toll has soared to more than 90,000 individuals since 2015, according to the US-based Armed Conflict Location & Event Data Project, which tracks the conflict.

By Michael Kern for Oilprice.com

More Top Reads From Oilprice.com:

IHS Markit: US Natural Gas Prices To Fall To 50-Year Low
The US Massively Underestimates The Trade War Blowback
European Carmakers Face Perfect Storm

Read this article on OilPrice.com

[Sep 14, 2019] Attack on Saudi Oil Plant Is What Everyone Feared Oil Strategy

Sep 14, 2019 | finance.yahoo.com

(Bloomberg) -- Middle East geopolitics have come back with a vengeance to hit the oil market. What everybody feared has happened. An attack has penetrated the defenses of Saudi Arabia's massive Abqaiq oil processing facility, the heart of the kingdom's oil production and export infrastructure, causing an unknown amount of damage. Crude prices will react and emergency stockpiles will be tapped.

Fires at the plant were brought under control within hours, but the flow of crude from Saudi Arabia, the world's biggest exporter, will almost certainly be affected, although we don't yet know by how much or for how long. Traders who have shrugged off tensions in the Middle East for months will respond to this attack when markets open on Monday.

The height of the price spike will depend on how much we know about the extent of the damage and how long it will take to repair. An absence of information will lead traders to assume the worst.

The Abqaiq crude processing plant is the single most important facility in the Saudi oil sector. In 2018 it processed about half of the kingdom's crude oil production, according to a prospectus published in May for the state oil company's first international bond. That's roughly 5 million barrels a day, or one in every 20 barrels of oil used worldwide.

Abqaiq is more important to the Saudi oil sector than the kingdom's Persian Gulf export terminals at Ras Tanura and Ju'aymah, or the Strait of Hormuz that links the Gulf to the Indian Ocean and the high seas. Crude can be diverted away from the Persian Gulf and Hormuz by pumping it across the country to the Red Sea through the East-West oil pipeline. But it cannot bypass Abqaiq. The East-West pipeline starts at Abqaiq and output from the giant Ghawar, Shaybah and Khurais fields is all processed there, so an attack on the facility will impact crude flows to export terminals on both coasts.

The latest attack comes just months after drones, allegedly launched from Iraq by Yemen's Houthi rebels, targeted pumping stations on the oil pipeline. The damage caused by that earlier attack was minimal, but highlighted the vulnerability of Saudi Arabia's oil infrastructure, even when located hundreds of miles from the country's borders.

So what happens now?

Saudi Arabia will probably seek to maintain export levels as much as possible by supplying customers from stockpiles. It holds crude in storage tanks in the kingdom, as well as at sites in Egypt, Japan and the Netherlands. But it has been running its crude hoard down since the beginning of 2016 and it is now back at levels not seen since 2008, according to data from the Joint Organisations Data Initiative. That means the kingdom has much less to draw on than it did three years ago.

The attack will also test stockpiles in oil-consuming countries. Members of the International Energy Agency are required to hold 90 days' worth of oil imports in emergency stocks and those will be pressed into service if the outage at Abqaiq is prolonged. Non-member countries like China and India have also been building up their own emergency reserves. Those, too, will be pressed into service.

Neighboring countries who, just days ago, were being exhorted to stick to output quotas agreed in December will now pump as much as they can to make up for any losses from Saudi Arabia. The United Arab Emirates, Kuwait and Iraq will all boost output as much as they are able. But the one country with lots of spare capacity, Iran, won't see any easing of the restrictions placed on its oil sales by the U.S. Quite the opposite. Its support for the Houthi rebels in Yemen, who have claimed responsibility for the attack on Abqaiq, will ensure that any easing of the pressure being exerted on it remains a distant prospect.

To contact the reporter on this story: Julian Lee in London at jlee1627@bloomberg.net

To contact the editors responsible for this story: Alaric Nightingale at anightingal1@bloomberg.net, Steve Geimann

[Sep 14, 2019] Patents and Copyright: Protection Racket for Intellectuals

Sep 14, 2019 | economistsview.typepad.com

anne , September 13, 2019 at 06:48 PM

http://cepr.net/blogs/beat-the-press/patents-and-copyright-protection-racket-for-intellectuals

September 12, 2019

Patents and Copyright: Protection Racket for Intellectuals
By Dean Baker

Last week I was asked on Twitter why proposals for replacing patent monopoly financing of prescription drugs with direct public financing have gained so little traction. After all, this would mean that drugs would be cheap; no one would have to struggle with paying tens or hundreds of thousands of dollars for drugs that are needed for their health or to save their life. (This is discussed in Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer - it's free. * )

Public funding would also eliminate the incentive to misrepresent the safety and effectiveness of drugs in order to maximize sales at the patent monopoly price. Without patent monopolies, the drug companies would not have had the same incentive to push opioids, as well as many other drugs of questionable safety and effectiveness.

The idea of direct funding of biomedical research also should not seem strange to people. We currently spend close to $45 billion a year on research through the National Institutes of Health and other government agencies. The idea of doubling or tripling this funding to replace the roughly $70 billion of patent supported research now done by the pharmaceutical industry, should not appear outlandish, especially since the potential savings from free market drugs would be close to $400 billion annually (1.9 percent of GDP).

So why is there so little interest in reforming the prescription drug industry along these lines? I can think of two plausible answers. The first is a self-serving one for the elites who dominate policy debates. They don't like to have questions raised about the basic underpinnings of the distribution of income.

The second is perhaps a more simple proposition. Intellectuals have a hard time dealing with new ideas, and paying for innovation outside of the patent system, or creative work outside of the copyright system is a new idea that most intellectual types would rather not wrestle with.

Starting with the first one, the elites who dominate public policy debates are among the winners in the upward redistribution of the last four decades. While there are plenty of journalists struggling to keep their jobs or working as free lancers, and there are plenty of adjunct faculty who can't pay the rent, these are not the people setting the agenda in policy debates. Rather we are talking about columnists who enjoy high six or even seven figure incomes from their writings and speaking fees and top university faculty who can count on comparable pay.

These people do not want to entertain the idea that they didn't end up as big winners through a combination of skill, hard work, and perhaps a dose of good luck. Even the progressives in this group, who support redistributive tax and transfer policy, would rather see this as an expression of their generosity than a refusal to take part in theft.

The issue can be seen as a distinction between someone who wins a big pile of money in a lottery and someone who slips in a fake card to win the poker pot. If we recognize that patent and copyright monopolies are government policies, that could be completely restructured or even eliminated altogether, it destroys the idea that technology has been responsible for upward redistribution or even a major factor in upward redistribution.

If Bill Gates got very rich because of Windows and other Microsoft software, it was not because of the technology, but rather because the government gave him copyright and patent monopolies on this software. All the high-paying jobs in the science, technology, engineering, and mathematics sector are not the result of technological change creating new opportunities, but rather the large incentives the government provides with long and strong intellectual property protections.

This is a direction that many, perhaps most, elite types would rather not go. They might be open to coughing up more money in taxes to reduce inequality and provide opportunities for the poor, but they are not open to the idea that they never should have had the money in the first place.

Motivated reasoning is common in public debates, and this seems a plausible story. However, there is also the alternative option, that questioning patent and copyright monopolies is a new idea to most elite types, and they would rather not expend any mental energy on the effort.

If it had not been for my experiences during the housing bubble, and subsequent collapse and recession, I might be reluctant to accept that intellectual types would have a hard time thinking seriously about patent and copyright monopolies. That experience taught me that some ideas can be too simple for intellectuals to understand.

I first noticed that house sale prices were running far out of line with other prices and with historical experience in 2002. House sale prices had generally moved more or less in step with overall inflation. In the years from 1996 to 2002 they hugely outpaced inflation.

Furthermore, this did not seem to be driven by the fundamentals in the market. Rents were pretty much moving in line with inflation. And, vacancy rates were actually very high, not the story you expect when prices are rising rapidly.

Making the matter even more worrisome, the bubble was clearly driving the economy. Residential construction was growing rapidly as a share of the economy and consumption was soaring as people took advantage of the newly created equity in their homes to increase spending. The construction boom would clearly end when prices came back down to earth and the home equity driven consumption surge would hit a wall when the home equity disappeared.

All of this was very straightforward. The analysis could be constructed from summary data in publicly available series, it didn't require any sophisticated econometric analysis.

Nonetheless, I couldn't get any economists to take my concerns seriously. (Paul Krugman was a notable exception.) It wasn't that they had any counter-arguments. It basically boiled down to "we haven't seen anything like that before."

Incredibly, even after the fact economists could not own up to their mistake. They insisted the story was not the housing bubble, but rather the financial crisis.

This gave them an out, since credit default swaps and collaterized debt obligations can get complicated. Looking at the growth of residential construction and the fall in the savings rate in the GDP data is pretty damn simple. Rather than own up to being too lazy to look at the data that was right in front of their face, economists and their followers in policy circles whipped up a cock and bull story to conceal their incredible incompetence and/or negligence.

Anyhow, having seen first-hand the laziness and narrow-mindedness of economists in refusing to take the risks of the housing bubble seriously, I certainly can find it plausible that they simply don't want to entertain the idea that we could have alternative mechanisms to patents and copyrights to finance research and innovation. Furthermore, they don't want to have to alter their view of the government and the economy to incorporate the fact that these forms of property are determined by policy and can be altered pretty much any way we like.

I have two accounts that are certainly consistent with this view. In one case, I had written an article for a major progressive publication, arguing that we should have publicly funded research for pharmaceuticals, rather than supporting the research through patent monopolies. After it had been the through the editing process, the editor sent me a note asking whether I was arguing for "short patents" or no patents.

I wrote back clarifying that I meant no patents. I explained that short patents wouldn't even make any sense. Since the government had paid for the research, who would get the patent?

When the piece was published it said "short patents." Apparently the editor could not even conceive of an innovative new drug being sold in the free market without some form of patent monopoly.

In the other case, I asked an editor at the Atlantic, for whom I just written another piece, whether they would be interested in an article that made the point that patents and copyrights were tools of public policy, and that there are alternative mechanisms for financing innovation and creative work. I indicated that the piece would focus on prescription drugs, given the enormous financial and health consequences at stake in the sector.

The editor responded that, although they personally were sympathetic to my argument, the magazine doesn't publish opinion pieces. If it's not obvious, nothing that I proposed was opinion. I was giving facts and logic, but apparently this editor could not make the distinction.

The takeaway here is that thinking about patents and copyrights as policy tools that can be altered, as opposed to being natural features of the market, requires more reflection than most people in policy debates are prepared to do. After all, it is not as though any of them will lose their job, or even see their career advancement jeopardized, by not considering the implications of this obvious truth, just as none of them suffered any consequence from ignoring the housing bubble.

So, how do we get the idea of replacing patent monopolies with public funding of prescription drug research into the public debate? Wish I had an answer. I couldn't get the housing bubble into the public debate before its collapse sank the economy or, even after the fact.

Anyhow, I'm open to suggestions. I will keep trying.

* https://deanbaker.net/images/stories/documents/Rigged.pdf

[Sep 14, 2019] 48 States to Investigate Google Anti-Trust or Politicking

the important side effect of dominance in advertizing is a huge surveillance mechanism of Big Brother type that come with it. Google essentially is able to see what particular individual is viewing, unless special steps like blocking Google advertizing server IPs, modifying the page of the fly or disabling Javascript are taken. It does not need access to web server logs, his own advertizing servers produce logs that are equitant if not better.
Sep 14, 2019 | www.nakedcapitalism.com

Fifty Attorney Generals from 48 states, the District of Columbia and Puerto Rico announced on Monday that they are launching an anti-trust investigation into Google. This investigation would be in addition the one that the Justice Department's already conducting. Here's what Texas Attorney General Ken Paxton, who's leading the case, had to say when he made the announcement on Monday.

KEN PAXTON: This is a company that dominates all aspects of advertising on the internet and searching on the internet as they dominate the buyer side, the seller side, the auction side and even the video side with YouTube. And right now, we're looking at advertising, but the facts will lead to where the facts lead. And even as we speak, been up here about a minute, there'll be 3.8 million searches and a lot of advertising dollars just made in every minute that one of these people speaks.

GREG WILPERT: Other major tech companies that have come into the crosshairs of various state and federal government agencies for anti-trust investigations are Facebook, Apple and Amazon. According to a New York Times analysis, Google is facing five major investigations, Facebook eleven, and Apple and Amazon are each facing three. Each area of anti-competitive behavior is different, depending on the market that each one of these companies dominates.

Joining me now to discuss the wave of anti-trust investigations against Google and other tech companies is Bill Black. He is a white-collar criminologist, former financial regulator, and Associate Professor of Economics and Law at the University of Missouri, Kansas City. He's also the author of the book The Best Way to Rob a Bank is to Own One . Thanks for joining us again, Bill.

BILL BLACK: Thank you.

GREG WILPERT: So it's interesting that a Republican State Attorney General is taking the lead on this, Ken Paxton. And that California isn't even a part of the case, along with Alabama. What's going on here? What's your analysis?

BILL BLACK: Okay, so the reason the state AGs are getting involved in general in lots of different things, and going all the way back to the runup to the great financial crisis, is that the United States Department of Justice has basically abandoned cracking down significantly on elite white-collar crimes in general and anti-trust in particular. Now, there's an exception -- cartels. They actually are moderately vigorous until the Trump administration, but in lots of other areas, not so. And so the states felt that the only way that you could have any effective action was to have the states take the lead. But the states lack the capacity to take the lead.

They just don't have -- All the 50 states plus Puerto Rico and DC together do not have the resources in anti-trust, for example, that the federal government has just in its anti-trust division. And that's not even mentioning the FBI, which does the real investigations, and which the states have no real counterpart to. And so the only way the states could even try to be effective was to link together. And they did this in the runup to the great financial crisis sufficiently, effectively, that the federal government actually sought to block the states from bringing this action, claiming that it was preempted, so this is continuing that practice.

They weren't able to get California and they weren't able to get Alabama. So they weren't able to get Alabama on the usual conservative grounds of "why should we sue anybody, the powerful?" But they weren't able to get California of course in part because the state AG is a Democrat, and his leading source of contributions, or among his three leading sources of contributions is Google. And this is one of the real problems with state AGs. They're statewide races, you have to get elected, and they're expensive races, so you're always seeking political contributions and such. That, of course, is something that the US Attorney General doesn't have to do and allows him or her to be more independent.

Then the next question is the states have to face the question always in these kinds of cases that the federal government doesn't face. And that's "who's going to be in charge?" It's obviously that the US Attorney General, unless he has to recuse himself, is in charge at the federal level. But the state level, it's a matter of negotiation. For reasons that pass all understanding, they put Paxton, one of the absolute most notorious state Attorney Generals in the United States, in charge. Paxton is trying to raise political contributions on the basis of this investigation. He sent out an email seeking funds, and I quote "we will continue to fight for your rights and to protect you from monopolistic practices by liberal elites in DC or in Silicon Valley." Now here's a hint, Attorney Generals are not supposed to go after liberals or conservatives or moderates.

That is completely antithetical to the idea of justice, but Paxton is not functioning like an independent, honest person. He's someone who is intensely politically ambitious, who hates anybody who he perceives as even moderate -- much less, liberal or progressive and such -- and he wants to use this investigation as a weapon to go after his political opponents. And on top of that, get paid off, to get a fine that he can use to tout as a success, and to use that resources to do the same type of thing in going after other folks. So again, I have no idea why the state AGs who are Democrats were willing to allow Paxton to take the lead role because it's going to discredit the entire investigation.

GREG WILPERT: I think that's really interesting to see this kind of battle going on, essentially within the elite circles of the United States. It's really breaking out into the open in this case, if that's the real motivation behind -- Well, he said it himself. His real motivation is to go after the liberal elites, which he sees Google and Facebook as being a part of. But I want to turn to the actual issue of anti-trust and monopolies. Now, clearly Google dominates the search market. There's no doubt about that. It's practically the only search engine anyone uses. However, in advertising, Google is not actually a monopoly, at least if one looks at its market share by revenues, where it has a 38% share of digital advertising revenues and Facebook has 22%. Now, give us an idea as to why Google's dominance in search and advertising should actually perhaps be a concern. Is that concern real? And also, if advertisers can simply go elsewhere if they feel that Google isn't treating them fairly, why should their practices in this area be of concern?

BILL BLACK: Okay, so one of the things I teach is anti-trust and such. Monopoly is not the same thing as monopoly power. When we use the word "monopoly," we typically mean one entity that controls nearly everything. There are cases, but they're rare in life where there is actually a monopoly. Long before you have exclusive control over a market, however, you have some degree of market power. How much is incredibly complex and depends on the inner play. But one of the things is, say, use your numbers, we have somewhere around 30 to 40% of control here. We've got a competitor who has 20 and another competitor who has 20. Well then that makes it pretty easy for the three of us to collude. And we can collude implicitly, right? Just don't rock the boat. Anybody that really tries to undercut on fees, then we rush in and we match that and maybe we even cut a little more to show them how vigorous we're going to be. So economists have long been concerned anytime a company gets even close to the degree of market domination that you talked about, so it's not silly in the least that they're worried about it.

Now here's the kicker: people may remember Bork and the phrase "to be Borked." Well one of the reasons he was not approved by the Senate to be a Supreme Court Justice is that he was leading the right-wing movement to say that essentially we should get rid of anti-trust. In the specific context of Silicon Valley and any high tech entity in which numbers matter, penetration matters, the argument from the Right is that there are "network effects." In other words, when I use my email, it's much more valuable if I can talk to everybody than if I can just talk to the 10,000 people who have to be subscribers, in the old days, of some particular email service. And those kind of network effects are fairly common within tech, typically because of this desire to communicate and to search, in this case, much more broadly. So that leads to something close to what, in the old days in economics we would refer to as a "natural monopoly." A natural monopoly just means that there are so many economies of scale, that whoever gets big actually gets cheaper, and they have a competitive advantage over any rivals in those circumstances.

But we want the efficiency of that network and the conservatives are unwilling to do a hybrid, saying, "Okay, we'll have a network that covers everybody, but we'll treat it like a common carrier, and we'll make sure that the private entity doesn't become the multi-billionaire because of the profit from these things." So the conservatives want us just to walk away and let some people become extraordinarily rich and then use their market power, if they choose, to say "I actually don't want those people spreading their views, so I'm going to make life difficult for them." So there's also a political rationale, political science rationale, freedom rationale for saying "you shouldn't let a private company that is not subject at least to the duties of treating everyone fairly have this kind of monopoly power position."

GREG WILPERT: I want to dig a little bit deeper exactly on that issue actually. In the past, major anti-trust cases simply broke up the monopoly; such as, happened with Standard Oil in 1911 and AT&T in 1982. But is that even an option in cases for Facebook and Google? You're speaking about the network effects and they're obviously quite strong in the case of Facebook and Google. That is, do we really want a dozen different search engines or a dozen different baby Facebooks? In other words, wouldn't turning over the company to its users or to some other -- What would a possible alternative look like instead of breaking it up, or is that the only solution?

BILL BLACK: I don't think it is the only solution, but it's been the only solution that the Right has been willing to contemplate and to oppose as well, by the way. Again, their position is "we should just allow this network to be created and allow private parties to gain supernormal profits." In economic jargon, that just means a hell of a lot of money. This is why these people are multi-multi-billionaires, is they control something that has immense monopoly power, and therefore is able to charge more than they should, and that's inefficient. So the efficiency condition should be, "Yes, you create the network, but you don't allow a particular party to become immensely rich from it. You run it instead as essentially a regulated public utility." That says, "No, you can just get a normal return out of all of this. But yes, we'll allow a fully efficient network to be created,"

When you treat it like a public utility, then it has traditionally at law, doctrines of fairness and such that you can't discriminate against the use, that you can't use it as a weapon against your enemies and such, so you have to take all customers on the same terms whether they're big customers or little customers and such. Of course, that harks back to an earlier dispute and one of the first things that the Trump administration sought to eliminate, was any duty on the part of these private monopolies to treat people fairly. So it's quite interesting that the Trump administration is now investigating that which it previously blessed. And of course, the Trump administration has announced that it's going to use the anti-trust laws as a weapon against their political enemies -- the car companies, for daring to agree with California to produce fewer greenhouse gases.

GREG WILPERT: Yeah. I just want to return to the issue of this particular case now with Ken Paxton and Google because obviously, or not obviously, but presumably, he would probably favor a decision that would actually weaken the power of Google and Facebook by breaking it up, which I would think the Democratic state Attorney Generals that are behind this case probably wouldn't necessarily favor. So how are they ever going to come to a resolution in this case, or is this just going to be tied up in the courts forever?

BILL BLACK: So this issue actually cuts across all kinds of ideological dimensions. You have the Texas AG, arguably the most conservative state AG in the country, someone who doesn't care about anti-trust at all, suddenly becoming the great enforcer of antitrust because it's his political opponents. You've got Democrats who often think that monopoly power has gone too far going, "Okay, I'll do a deal with the devil -- Paxton -- on this."

But now, and I mean just like today, the Koch Brothers Foundation has gotten involved. And it's sending out this major effort to get the population to turn against their state AGs because of this very investigation and the Facebook investigation as well. The Koch brothers fear that if this precedence gets created, of actually reinvigorating the anti-trust laws, they could be in the sights of particular Attorney Generals as well. I don't want to say that only conservative or Republican AGs use these laws against their political opponents because there have been a series of scandals involving Democrats as well and it's not so much political there. It's fundraisers. Whoever raises money for them, they help out. You draw the money largely from plaintiff's lawyers and the plaintiff lawyers would really, really, really love it if the state AGs would bring an action against the very folks that they too are suing. That would help their litigation a great deal. So, there are a series of scandals involving Democrats and Republicans in these Attorney General-type suits.

[Sep 13, 2019] Something to thank Russians for

Sep 13, 2019 | www.nakedcapitalism.com

Robert McGregor , September 13, 2019 at 3:43 pm

I'm no fan of Trump, but I would like to see a comparison of the total "US instigated foreign fatalities" for his last 2 & 1/2 years compared with Obama's last 2 & 1/2 years, and what we guess the number would have been under Hillary. I'm sorry, but I think Trump's number would be the lowest. In coming up with an explanation, I like to use the "Reality Show Entertainment Value" theory which many have described. In this case, people like to watch Trump bullshitting and freaking out the establishment, but they really don't like watching dead bodies burn up or be carried away in body bags. That reality is not attractive entertainment, despite the fantasy of it being bankable entertainment when Tarantino flame throws a teenager at the end of "Once Upon a Time in Hollywood."

Obama and Hillary are not "reality TV fans." They are more immersed in their megalomaniac view of themselves as world actors, and will willfully kill a few hundred thousand if they think it advances their misguided objectives.

Jonathan Holland Becnel , September 13, 2019 at 4:07 pm

Whoa there, buddy.

Spoiler alert.

-Tarantino fan :)

P.S. 'It 2' is def one of the best movies of the year. Still need to see Parasite and the Joker.

Punxsutawney , September 13, 2019 at 7:21 pm

Well, the "Liberal" excuse for this is that Putin is controlling him. Well if so, that's one thing to thank the Russians for.

[Sep 13, 2019] Tucker Carlson Pushes for End of the Neo-cons Reuters and Haaretz

Notable quotes:
"... Yes, people tend to forget that Bolton and all the other neocons are worshipers at the altar of a secular religion imported to the US by members of the Frankfurt School of Trotskyite German professors in the 1930s. These people had attempted get the Nazis to consider them allies in a quest for an ordered world. Alas for them they found that the Nazi scum would not accept them and in fact began preparations to hunt them down. ..."
"... Thus the migration to America and in particular to the University of Chicago where they developed their credo of world revolution under that guidance of a few philosopher kings like Leo Strauss, the Wohlstetters and other academic "geniuses" They also began an enthusiastic campaign of recruitment of enthusiastic graduate students who carefully disguised themselves as whatever was most useful politically. ..."
Sep 13, 2019 | turcopolier.typepad.com

"Carlson concluded by warning about the many other Boltons in the federal bureaucracy, saying that "war may be a disaster for America, but for John Bolton and his fellow neocons, it's always good business."

He went on to slam Trump's special representative for Iran and contender to replace Bolton, Brian Hook, as an "unapologetic neocon" who "has undisguised contempt for President Trump, and he particularly dislikes the president's nationalist foreign policy." Iranian Foreign Minister Mohammad Javad Zarif echoed Carlson hours later in a tweet, arguing that "Thirst for war – maximum pressure – should go with the warmonger-in-chief." Reuters and Haaretz

-------------

Yes, people tend to forget that Bolton and all the other neocons are worshipers at the altar of a secular religion imported to the US by members of the Frankfurt School of Trotskyite German professors in the 1930s. These people had attempted get the Nazis to consider them allies in a quest for an ordered world. Alas for them they found that the Nazi scum would not accept them and in fact began preparations to hunt them down.

Thus the migration to America and in particular to the University of Chicago where they developed their credo of world revolution under that guidance of a few philosopher kings like Leo Strauss, the Wohlstetters and other academic "geniuses" They also began an enthusiastic campaign of recruitment of enthusiastic graduate students who carefully disguised themselves as whatever was most useful politically.

They are not conservative at all, not one bit. Carlson was absolutely right about that.

They despise nationalism. They despise the idea of countries. In that regard they are like all groups who aspire to globalist dominion for their particular ideas.

They should all be driven from government. pl

https://www.haaretz.com/us-news/.premium-trump-bolton-neo-cons-iran-fox-news-tucker-carlson-1.7833399?=&ts=_1568393219979b

[Sep 13, 2019] Me First and the Loss of Compassion by Volker Franke

Neoliberalism explicitly denies the value of compassion. It considers "wolf eats wolf" type of competition as the key component of human society that the moral value in itself.
Sep 13, 2019 | www.counterpunch.org

One of the crucial lessons we often fail to impart to our children is that life is not a zero-sum game; that is, the success of another child is not a corresponding failure for me. Children ought to learn how to help one another so they can take joy in crossing the finish line together, building closeness instead of separation, segregation and adversarialism.

And the incessant use of digital media often exacerbates this development.

In a society where we are rewarded for thinking about ourselves first, we disconnect from one another. Just go to the mall and look for shopping carts and trash strewn across the parking lot, oversized trucks and SUVs parked across multiple parking spots, non-handicap vehicles in handicap spots and cars parked in dedicated motorcycle spaces. No consideration for others.

Gone are the days of compassionate conservatism. "America first" finds a ready breeding ground in this "me first" mentality. It is finally time to catch up for those left behind by social progress made in the name of equality. After all, they too are better than others, better than those abroad and better than those from abroad. The new aMEricaFIRST echoes that sentiment, segregates American society and separates us from friends and allies around the world.

How can we get our compassion back? How can we reconnect with each other and engage with the world? At the personal level, take small steps and start a conversation with someone different from you, expose yourself to the diversity that makes this country so unique–and involve your children in that exposure to pluralism, normalizing it, modeling it. Put yourself in the shoes of someone less fortunate and find the "things that unite."

At the social level, we – including our children – must recognize that the rights and freedoms we cherish and enjoy also come with responsibilities. Success in America has focused on maximizing individual freedoms limited only when their exercise encroaches on the freedoms of others. Today, we need to reconnect and rebuild our communities by focusing on the needs of others. To achieve this, let's reconsider the idea of mandatory public service: citizens serving others in need. A public service requirement between the end of high school and the beginning of college – fulfilled in many ways, including such service opportunities as AmeriCorps, the Peace Corps, Meals on Wheels or other freely helpful initiatives – brings those in service in contact with those from whom they have been disconnected, both at home and abroad. Only through connection will we regain compassion and only then will we be able to make America great again. More articles by: Volker Franke

[Sep 13, 2019] Chile's Neoliberal Flip-Flop - CounterPunch.org

Notable quotes:
"... Robert Hunziker lives in Los Angeles and can be reached at roberthunziker@icloud.com . ..."
Sep 13, 2019 | www.counterpunch.org

As for the gory details of CIA involvement in the Chilean coup d'état of 1973, Costa-Gavras' film "Missing" (Universal Pictures, 1982) staring Jack Lemmon and Sissy Spacek exposes the surreptitious U.S. involvement via CIA operatives, supportive of Pinochet's cold-bloodied massacre of students and other innocent bystanders. Not surprisingly, the film was removed from the U.S. market following a lawsuit against the director and Universal Pictures by former ambassador Nathaniel Davis for defamation of character. When Davis lost his lawsuit, the film was re-released by Universal in 2006.

The face of neoliberalism in Chile today is disheartened, reflecting deep losses for the wealthy class as the people of the country reject Milton Friedman's neoliberal policies, including clever tax evasion techniques by the business class. Could this be the start of a worldwide movement against neoliberalism?

After all, Chile is the country that neoliberal advocates crowned their "newborn" in the battle against big government, "get government off our backs," according to Milton Friedman (and, Reagan picked up on the adage.) But, au contraire, according to the film "Missing," fascism took control over Chile. Is it possible that Friedman and Kissinger secretly cherished a fascist empire, where control would be complete, disguised as "the land of individual economic freedom?" Whatever their motives, that's what they got, and they never hesitated to revere Chile's remarkable economic achievements, fascism and all, which is powerfully expressed in the film "Missing," from end to end the heavy hand of fascism is ever-present.

Today is a new day as the people of Chile abandon decades of rotting neoliberal policies. They've had enough of Milton Freidman. The people have decided that the "state" is a beneficial partner for achievement of life's dreams. The "state" is not the menacing force of evil preached by Margaret Thatcher and Ronald Reagan.

The people of Chile are embracing an anti-neoliberalistic nation/state for the first time in over four decades. Will the world follow in their footsteps similar to the world adopting the principles of the "Miracle of Chile" these past four decades?

As for the new way forward, it's all about student debt. Yes, student debt was the catalyst behind Chile's repudiation of neoliberalism. In 2011 students in Chile made headlines by launching nationwide strikes over high tuition costs that drove their families into debt (sound familiar?) The strike lasted for eight months.

Over time, the student marches gained recognition by other like-minded organizations like trade unions and protests of environmental degradation. According to Tasha Fairfield, an assistant professor for the London School of Economics' Department of International Development, the strikes were pivotal: "The student movement played a critical role in creating political space," according to Fairfield, it "dramatically changed the political context in Chile and helped to place the issues of Chile's extreme inequalities centrally on the national agenda," Sebastian Rosemont, Chilean Activists Change the Rules of the Game, Foreign Policy In Focus, Dec. 2, 2014.

Subsequently, the national election of 2013 swept the left wing into power with a huge wave of public support, gaining strong majorities in both houses of the National Congress as well as electing Michelle Bachelet president. The big leftward sweep came as over two thirds of the population grew to support student demands for free university tuition.

Ever since the 2013 election, neoliberal policies have crumbled like a decrepit equestrian statue of Pinochet, who carried the stigma of brutal criminality to, and beyond, the grave.

In stark contrast to 40 years ago, today, when students, armed with only stones clashed with police equipped with full regalia of riot gear, tear gas, and armored vehicles, the harsh police activity drew heavy international criticism. That, combined with more than two-thirds of the population in support of the student movement, led to a new politics, Nueva Mayoria (New Majority), a center-left coalition made up of Bachelet's Socialist Party, the Christian Democratic Party, and the Party for Democracy.

Whereupon, Nueva Mayoria, turning up its nose to neoliberalism, raised corporate taxes from 20 percent to 25 percent and closed tax loopholes for companies and wealthy business owners. Those changes added $8.3 billion annually to government coffers, thus, serving as a source of funds to provide free education to all Chileans by 2020, as well as improved health care, and including a roll back of the for-profit schools that emerged under Pinochet's dictatorship, which is another neoliberal fascination, witness the U.S. for-profit schools listed on the New York Stock Exchange honestly, what's with that? In order to achieve success, the new Chilean politics astutely employed a key tactical move by applying the corporate tax hikes to only the largest corporations. As a result, nearly 95% of businesses are not be affected by higher taxation. This, in fact, served to secure a broad base of support for the new politics by having those who can afford to pay Pay.

Along those same lines, the new government removed a tax dodge employed by large business owners that allowed them to mostly escape taxes on $270 billion of profits (similar to the U.S. 15% "carried interest" for private equity entities, e.g., Mitt Romney's 15% tax rate).

Thus, it's little wonder that public backlash is challenging neoliberalism, especially considering the conditions throughout the Pinochet regime, as described in the meticulously structured documentary film, "The Pinochet Case," (Icarus Films, 2002), which opens with scenes of ordinary Chileans scouring the desert for the remains of family members who were tortured and killed decades previous.

Chile, "The Babe of Neoliberalism," came to life as an experiment for the "Chicago School" of economic thought. It worked. Today neoliberal theory rules the world, laissez-faire capitalism as practiced from China to the United States, privatization, open markets, slash government, and deregulation, in short, "whatever works best for profits works best for society." But, does it?

Forty years of neoliberal thought and practice has changed the world's socio-economic landscape, but it only really, truly works for the same class of people today as it did 800 years ago for the nobility of the Middle Ages.

Robert Hunziker lives in Los Angeles and can be reached at roberthunziker@icloud.com .

[Sep 13, 2019] Does the end of neoliberalism coinside with the end of "Western hegemony"? by John Wright

Not so fast. The West still has the technological edge. And huge ultural influence. Most probably those will be two separate events, if they happen at all.
Sep 13, 2019 | consortiumnews.com

John Wright , September 12, 2019 at 16:43

Mr. Lawrence –

The Russia question is a very interesting and useful way to approach the much larger question which is how to manage the "end of Western hegemony".

Mackinder, Brzezinski and other geo-strategic thinkers have long posited that in order to control the world, one much control Eurasia.

The alliance between China and Russia, by definition, secures their dominance of Eurasia. Even forty years of U.S. trouble-making in Afghanistan, the geographic heart of Eurasia, has only proved to be an annoyance slowing the inevitable partnership of China and Russia, and the growing courtship of India. Recent U.S. interference in the Ukraine was a desperate, rather ham-handed attempt to deny Russia access to its historic, and only warm water, port in Crimea (and interfere with Russian gas pipelines to Europe). The Ukrainians seem to be now coming back to their senses a bit.

[ I may add a comment elucidating some of the long history of Western elite (primarily British, then U.S.) interference in the affairs of both Russia and China, but most CN readers should already be aware of the highlights.]

The EU and the euro, both created to prolong the dominance of the U.S., are now clearly faltering. The EU created a common market and allowed for the expansion of NATO eastward after the breakup of the Soviet Union and Russia's loss of the Warsaw Pact countries. The euro, directly tied to the U.S. PetroDollar at its creation, facilitated the greater transfer of U.S. debt instruments into the European banks, giving the debt addicted U.S. economy more capacity to expand its financial bubble and extend the era of U.S. dominance. The European central banks are now at their breaking point.

Thus, the era of U.S. PetroDollar supremacy, and with it U.S. dominance, is now coming to an end and the scramble for places in the new global system is heating up. The Greeks, Italians, Germans and Dutch have already signed deals with the Chinese, will the French be far behind?

Russia, the ambitious junior partner to China, can be seen to be both a cultural and geographic buffer between the Chinese juggernaut and Western Europe. The Russians have energy and consumer markets that the Western Europeans need access to if they are going to maintain any semblance of their present standard of living as U.S. economic dominance recedes. The nuclear armed U.S. presence on the continent keeps the Europeans cautious; as does their very precarious debt co-dependency with Wall Street, the Federal Reserve Bank and the U.S. Treasury.

The northern Europeans don't want to freeze or go broke, so Nord Stream 2 will go ahead. Trump is truly delusional if he thinks he can keep that from happening. Trump's trade war has only accelerated the Chinese shift away from the U.S. and toward its well-planned future in Asia, Europe, Africa and South America. China and Russia are both stockpiling gold in anticipation of rolling out a new global monetary system to replace the failing U.S. PetroDollar and SWIFT.

... ... ...

[Sep 13, 2019] The USA foreign policy has been run by hubristic idiots with delusions of grandeur. Its foreign policy 101 that you never, never, set policy to drive your 2 largest rivals to alliance.

Sep 13, 2019 | www.nakedcapitalism.com

marku52 , , September 13, 2019 at 3:48 pm

It seems since about the Vietnam war era, US FP has been run by hubristic idiots with delusions of grandeur. Its foreign policy 101 that you never, never, set policy to drive your 2 largest rivals to alliance.

Yet these morons did exactly that. Since Trump, there have been many retirements from the State Dept. And maybe that's not such a bad thing. They show no evidence of competence.

[Sep 13, 2019] Wallace against the USA neocolonialism

Leopard can't change its spots...
Notable quotes:
"... After he became vice president in 1940, as Roosevelt was increasingly ill, Wallace promoted a new vision for America's role in the world that suggested that rather than playing catch up with the imperial powers, the United States should work with partners to establish a new world order that eliminated militarism, colonialism and imperialism. ..."
"... In diplomacy, Wallace imagined a multi-polar world founded on the United Nations Charter with a focus on peaceful cooperation. In contrast, in 1941 Henry Luce, publisher of Time Magazine, had called for an 'American century,' suggesting that victory in war would allow the United States to "exert upon the world the full impact of our influence, for such purposes as we see fit and by such means as we see fit." ..."
"... Foreign aid for Wallace was not a tool to foster economic dominance as it was to become, but rather "economic assistance without political conditions to further the independent economic development of the Latin American and Caribbean countries." He held high "the principle of self-determination for the peoples of Africa, Asia, the West Indies, and other colonial areas." He saw the key policy for the United States to be based on "the principles of non-interference in the internal affairs of other nations and acceptance of the right of peoples to choose their own form of government and economic system." ..."
"... The United States should be emulating China, its Belt and Road Initiative and Community of Common Destiny, as a means of revitalizing its political culture and kicking its addiction to a neo-colonial concept of economic development and growth. Rather than relying on militarization and its attendant wars to spark the economy, progressives should demand that the US work in conjunction with nations such as China and Russia in building a sustainable future rather than creating one failed state after another. ..."
Sep 13, 2019 | consortiumnews.com

Stephen M , September 10, 2019 at 15:14

This is as good a time as any to point to an alternative vision of foreign policy. One based on the principle of non-interference, respect for sovereignty, territorial integrity, and, above all, international law. One based on peaceful coexistence and mutual cooperation. A vision of the world at peace and undivided by arbitrary distinctions. Such a world is possible and even though there are currently players around the world who are striving in that direction we need look no further than our own history for inspiration. Ladies and gentlemen, I give you one Henry A. Wallace, for your consideration.

(The following excerpts from an article by Dr. Dennis Etler. Link to the full article provided below.) --

The highest profile figure who articulated an alternative vision for American foreign policy was the politician Henry Wallace, who served as vice president under Franklin D. Roosevelt from 1940-1944 and ran for president in 1948 as the candidate of the Progressive Party.

After he became vice president in 1940, as Roosevelt was increasingly ill, Wallace promoted a new vision for America's role in the world that suggested that rather than playing catch up with the imperial powers, the United States should work with partners to establish a new world order that eliminated militarism, colonialism and imperialism.

Wallace gave a speech in 1942 that declared a "Century of the Common Man." He described a post-war world that offered "freedom from want," a new order in which ordinary citizens, rather than the rich and powerful, would play a decisive role in politics.

That speech made direct analogy between the Second World War and the Civil War, suggesting that the Second World War was being fought to end economic slavery and to create a more equal society. Wallace demanded that the imperialist powers like Britain and France give up their colonies at the end of the war.

In diplomacy, Wallace imagined a multi-polar world founded on the United Nations Charter with a focus on peaceful cooperation. In contrast, in 1941 Henry Luce, publisher of Time Magazine, had called for an 'American century,' suggesting that victory in war would allow the United States to "exert upon the world the full impact of our influence, for such purposes as we see fit and by such means as we see fit."

Wallace responded to Luce with a demand to create a world in which "no nation will have the God-given right to exploit other nations. Older nations will have the privilege to help younger nations get started on the path to industrialization, but there must be neither military nor economic imperialism." Wallace took the New Deal global. His foreign policy was to be based on non-interference in the internal affairs of other countries and mutual respect for each other's territorial integrity and sovereignty.

Sadly, since then, despite occasional efforts to head in a new direction, the core constituency for US foreign policy has been corporations, rather than the "common man" either in the United States, or the other nations of the world, and United States foreign relations have been dominated by interference in the political affairs of other nations. As a result the military was transformed from an "arsenal for democracy" during the Second World War into a defender of privilege at home and abroad afterwards.

-- -
Foreign aid for Wallace was not a tool to foster economic dominance as it was to become, but rather "economic assistance without political conditions to further the independent economic development of the Latin American and Caribbean countries." He held high "the principle of self-determination for the peoples of Africa, Asia, the West Indies, and other colonial areas." He saw the key policy for the United States to be based on "the principles of non-interference in the internal affairs of other nations and acceptance of the right of peoples to choose their own form of government and economic system."

--

Wallace's legacy suggests that it is possible to put forth a vision of an honest internationalism in US foreign policy that is in essence American. His approach was proactive not reactive. It would go far beyond anything Democrats propose today, who can only suggest that the United States should not start an unprovoked war with Iran or North Korea, but who embrace sanctions and propagandist reports that demonize those countries.

Rather than ridiculing Trump's overtures to North Korea, they should go further to reduce tensions between the North and the South by pushing for the eventual withdrawal of troops from South Korea and Japan (a position fully in line with Wallace and many other politicians of that age).
Rather than demonizing and isolating Russia (as a means to score political points against Trump), progressives should call for a real détente, that recognizes Russia's core interests, proposes that NATO withdraw troops from Russia's borders, ends sanctions and reintegrates Russia into the greater European economy. They could even call for an end to NATO and the perpetuation of the dangerous global rift between East and West that it perpetuates.
Rather than attempt to thwart China's rise, and attack Trump for not punishing it enough, progressives should seek to create new synergies between China and the US economically, politically and socioculturally.
-- -
In contrast to the US policy of perpetual war and "destroying nations in order to save them," China's BRI proposes an open plan for development that is not grounded in the models of French and British imperialism. It has proposed global infrastructure and science projects that include participants from nations in Africa, Asia, South and Central America previously ignored by American and European elites -- much as Wallace proposed an equal engagement with Latin America. When offering developmental aid and investment China does not demand that free market principles be adopted or that the public sector be privatized and opened up for global investment banks to ravish.
--
The United States should be emulating China, its Belt and Road Initiative and Community of Common Destiny, as a means of revitalizing its political culture and kicking its addiction to a neo-colonial concept of economic development and growth. Rather than relying on militarization and its attendant wars to spark the economy, progressives should demand that the US work in conjunction with nations such as China and Russia in building a sustainable future rather than creating one failed state after another.

Link to the full article provided below.

https://www.globalresearch.ca/henry-wallaces-internationalism-path-american-foreign-policy-could-have-taken-still-can/5683683

[Sep 13, 2019] Support and attend the People's Mobilization to Stop the US War Machine and Save the Planet, September 20 through 23, in New York City.

Sep 13, 2019 | www.nakedcapitalism.com

Expat2uruguay , September 13, 2019 at 5:59 pm

"Support and attend the People's Mobilization to Stop the US War Machine and Save the Planet, September 20 through 23, in New York City. Christian liberationist intellectual Cornel West and Omali Yeshitela, chairman of the Black Is Back Coalition for Social Justice, Peace and Reparations will speak, and much of the Black Agenda Report team are participating.

Only a mass movement of the streets can begin to dismantle the twin imperial policies of endless austerity and war, end the military occupations of Africa and Black America, and save the world from a wounded and angry ecosphere."
https://www.blackagendareport.com/what-does-boltons-ouster-mean-victims-us-imperial-aggression

[Sep 13, 2019] Clowns, AI and layoffs

Sep 13, 2019 | www.nakedcapitalism.com

Bugs Bunny , September 13, 2019 at 4:25 pm

Clowns should be increasingly used in redundancy (layoff, firing) meetings until it becomes the norm and employers start to compete with each other to offer the best clown redundancy experience and promote it as a benefit.

It would also create clown jobs, which would probably require more clown schools, meaning that the tuition prices would go through the roof and young people dreaming of becoming redundancy clowns would either have to come from wealth or take out massive clown loans to fund their education for clown universities and grad schools. Shareholders can only take so much top line costs and Wall Street pressure would force corporations to improve return on investment and reduce redundancy clown labor expenses. Sadly, redundancy clowns would find themselves training their own replacements – HB1 clowns from "low cost" countries. Employers would respond to quality criticisms of the HB1 clown experience by publishing survey results showing very similar almost ex-employee satisfaction with the new clowns.

Eventually, of course, redundancy clowns will be replaced by AI and robots. It's just the future and we will need to think about how to adapt to it today by putting in place a UBI for the inevitable redundant redundancy clowns.

[Sep 13, 2019] The Pompeo Doctrine How to Seize the Arctic's Resources, Now Accessible Due to Climate Change

Notable quotes:
"... Harry S. Truman ..."
Sep 13, 2019 | www.counterpunch.org

Usually a forum for anodyne statements about international cooperation and proper environmental stewardship, the lid was blown off the latest Arctic Council meeting in May when Pompeo delivered an unabashedly martial and provocative speech that deserves far more attention than it got at the time. So let's take a little tour of what may prove a historic proclamation (in the grimmest sense possible) of a new Washington doctrine for the Far North.

"In its first two decades, the Arctic Council has had the luxury of focusing almost exclusively on scientific collaboration, on cultural matters, on environmental research," the secretary of state began mildly. These were, he said, "all important themes, very important, and we should continue to do those. But no longer do we have that luxury. We're entering a new age of strategic engagement in the Arctic, complete with new threats to the Arctic and its real estate, and to all of our interests in that region."

In what turned out to be an ultra-hardline address, Pompeo claimed that we were now in a new era in the Arctic. Because climate change -- a phrase Pompeo, of course, never actually uttered -- is now making it ever more possible to exploit the region's vast resource riches, a scramble to gain control of them is now officially underway. That competition for resources has instantly become enmeshed in a growing geopolitical confrontation between the U.S., Russia, and China, generating new risks of conflict.

On the matter of resource exploitation, Pompeo could hardly contain his enthusiasm. Referring to the derision that greeted William Seward's purchase of Alaska in 1857, he declared:

"Far from the barren backcountry that many thought it to be in Seward's time, the Arctic is at the forefront of opportunity and abundance. It houses 13% of the world's undiscovered oil, 30% of its undiscovered gas, and an abundance of uranium, rare earth minerals, gold, diamonds, and millions of square miles of untapped resources."

Of equal attraction, he noted, was the possibility of vastly increasing maritime commerce through newly de-iced trans-Arctic trade routes that will link the Euro-Atlantic region with Asia. "Steady reductions in sea ice are opening new passageways and new opportunities for trade," he enthused. "This could potentially slash the time it takes to travel between Asia and the West by as much as 20 days Arctic sea lanes could come [to be] the 21st century's Suez and Panama Canals." That such "steady reductions in sea ice" are the sole consequence of climate change went unmentioned, but so did another reality of our warming world. If the Arctic one day truly becomes the northern equivalent of a tropical passageway like the Suez or Panama canals, that will likely mean that parts of those southerly areas will have become the equivalents of uninhabitable deserts.

As such new trade and drilling opportunities arise, Pompeo affirmed, the United States intends to be out front in capitalizing on them. He then began bragging about what the Trump administration had already accomplished, including promoting expanded oil and gas drilling in offshore waters and also freeing up "energy exploration in the Arctic National Wildlife Refuge ," a pristine stretch of northern Alaska prized by environmentalists as a sanctuary for migrating caribou and other at-risk species. Additional efforts to exploit the region's vital resources, he promised, are scheduled for the years ahead.

A New Arena for Competition (and Worse)

Ideally, Pompeo noted placidly, competition for the Arctic's resources will be conducted in an orderly, peaceful manner. The United States, he assured his listeners, believes in "free and fair competition, open, by the rule of law." But other countries, he added ominously, especially China and Russia, won't play by that rulebook much of the time and so must be subject to careful oversight and, if need be, punitive action.

China, he pointed out, is already developing trade routes in the Arctic, and establishing economic ties with key nations there. Unlike the United States (which already has multiple military bases in the Arctic, including one at Thule in Greenland, and so has a well-established presence there), Pompeo claimed that Beijing is surreptitiously using such supposedly economic activities for military purposes, including, heinously enough, spying on U.S. ballistic missile submarines operating in the region, while intimidating its local partners into acquiescence.

He then cited events in the distant South China Sea, where the Chinese have indeed militarized a number of tiny uninhabited islands (outfitting them with airstrips, missile batteries, and the like) and the U.S. has responded by sending its warships into adjacent waters. He did so to warn of similar future military stand-offs and potential clashes in the Arctic. "Let's just ask ourselves, do we want the Arctic Ocean to transform into a new South China Sea, fraught with militarization and competing territorial claims?" The answer, he assured his listeners, is "pretty clear." (And I'm sure you can guess what it is.)

The secretary of state then wielded even stronger language in describing "aggressive Russian behavior in the Arctic." In recent years, he claimed, the Russians have built hundreds of new bases in the region, along with new ports and air-defense capabilities. "Russia is already leaving snow prints in the form of army boots" there, a threat that cannot be ignored. "Just because the Arctic is a place of wilderness does not mean it should become a place of lawlessness. It need not be the case. And we stand ready to ensure that it does not become so."

And here we get to the heart of Pompeo's message: the United States will, of course, "respond" by enhancing its own military presence in the Arctic to better protect U.S. interests, while countering Chinese and Russian inroads in the region:

"Under President Trump, we are fortifying America's security and diplomatic presence in the area. On the security side, partly in response to Russia's destabilizing activities, we are hosting military exercises, strengthening our force presence, rebuilding our icebreaker fleet, expanding Coast Guard funding, and creating a new senior military post for Arctic Affairs inside of our own military."

To emphasize the administration's sincerity, Pompeo touted the largest NATO and U.S. Arctic military maneuvers since the Cold War era, the recently completed " Trident Juncture " exercise (which he incorrectly referred to as "Trident Structure"), involving some 50,000 troops. Although the official scenario for Trident Juncture spoke of an unidentified "aggressor" force, few observers had any doubt that the allied team was assembled to repel a hypothetical Russian invasion of Norway, where the simulated combat took place.

Implementing the Doctrine

And so you have the broad outlines of the new Pompeo Doctrine, centered on the Trump administration's truly forbidden topic: the climate crisis. In the most pugnacious manner imaginable, that doctrine posits a future of endless competition and conflict in the Arctic, growing ever more intense as the planet warms and the ice cap melts. The notion of the U.S. going nose-to-nose with the Russians and Chinese in the Far North, while exploiting the region's natural resources, has clearly been circulating in Washington. By August, it had obviously already become enough of a commonplace in the White House (not to speak of the National Security Council and the Pentagon), for the president to offer to buy Greenland.

And when it comes to resources and future military conflicts, it wasn't such a zany idea. After all, Greenland does have abundant natural resources and also houses that U.S. base in Thule. A relic of the Cold War, the Thule facility, mainly a radar base, is already being modernized , at a cost of some $300 million, to better track Russian missile launches. Clearly, key officials in Washington view Greenland as a valuable piece of real estate in the emerging geopolitical struggle Pompeo laid out, an assessment that clearly wormed its way into President Trump's consciousness as well.

Iceland and Norway also play key roles in Pompeo's and the Pentagon's new strategic calculus. Another former Cold War facility, a base at Keflavik in Iceland has been reoccupied by the Navy and is now being used in antisubmarine warfare missions. Meanwhile, the Marine Corps has stationed several hundred combat troops at bases near Trondheim, Norway, the first permanent deployment of foreign soldiers on Norwegian soil since World War II. In 2018, the Pentagon even reactivated the Navy's defunct Second Fleet, investing it with responsibility for protecting the North Atlantic as well as the Arctic's maritime approaches, including those abutting Greenland, Iceland, and Norway. Consider these signs of heating-up times.

And all of this is clearly just the beginning of a major buildup in and regular testing of the ability of the U.S. military to operate in the Far North. As part of Exercise Trident Juncture, for example, the aircraft carrier Harry S. Truman and its flotilla of support ships were sent into the Norwegian Sea, the first time a U.S. carrier battle group had sailed above the Arctic Circle since the Soviet Union imploded in 1991. Similarly, Secretary of the Navy Richard Spencer recently announced plans to send surface warships on trans-Arctic missions, another new military move. (U.S. nuclear submarines make such journeys regularly, sailing beneath the sea ice.)
This article first appeared on TomDispatch. More articles by:Michael T. Klare

[Sep 12, 2019] While the case of the Dancing Israelis has long been treated as an outlier in the aftermath of September 11, what is often overlooked is the fact that hundreds of Israeli nationals were arrested in the aftermath of the attacks.

Sep 12, 2019 | www.zerohedge.com

Lumberjack , 1 hour ago link

This is new:

https://www.mintpressnews.com/newly-released-fbi-docs-shed-light-on-apparent-mossad-foreknowledge-of-9-11-attacks/258581/

A crowded dance floor

While the case of the “Dancing Israelis” has long been treated as an outlier in the aftermath of September 11, what is often overlooked is the fact that hundreds of Israeli nationals were arrested in the aftermath of the attacks.

According to a FOX News report from December 2001, 60 Israelis were apprehended or detained after September 11, with most deported, and a total of 140 Israelis were arrested and detained in all of 2001 by federal authorities. That report claimed that the arrests, ostensibly including the “Dancing Israelis,” were in relation to an investigation of “an organized [Israeli] intelligence gathering operation designed to ‘penetrate government facilities.’”

The report also added that most of those arrested, in addition to having served in the IDF, had “intelligence expertise” and worked for Israeli companies that specialized in wiretapping. Some of those detained were also active members of the Israeli military; and several detainees, including the “Dancing Israelis,” had failed polygraph tests when asked if they had been surveilling the U.S. government.

Lumberjack , 45 minutes ago link

More:

note the head of urban moving systems fled to Israel on Sept. 14, when all airspace was shut down over CONUS., Did he cross the border into Canada to flee?

The FBI presence at the Urban Moving Systems search site drew the attention of the local media and was later reported on both television and in the local press. A former Urban Moving Systems employee later contacted the Newark Division with information indicating that he had quit his employment with Urban Moving Systems as a result of the high amount of anti-American sentiment present among Urban’s employees. The former employee stated that an Israeli employee of Urban had even once remarked, “Give us twenty years and we’ll take over your media and destroy your country” (page 37 of the FBI report ).

The FBI returned to search the premises of Urban Moving Systems a month later, but by that time found:

The building and all of its contents had been abandoned by…the owner of Urban Moving Systems. This [was] apparently being done to avoid criminal prosecution after the 09/11/2001 arrest of five of his employees and subsequent seizure of his office computer systems by members of the FBI-NK on or around 09/13/2001.”

The company’s owner — Dominik Otto Suter, an Israeli citizen — had fled to Israel on September 14, 2001, two days after he had been questioned by the FBI. The FBI told ABC News that “Urban Moving may have been providing cover for an Israeli intelligence operation.” Surprisingly, since at least 2016, Suter has been living in the San Francisco Bay Area, where he works for a contractor for major tech companies like Google and Microsoft. According to the public records database Intelius, in 2006 and 2007 Suter also worked for a telecommunications company — Granite Telecommunications — that works for the U.S. military and several other U.S. government agencies.

Lumberjack , 36 minutes ago link

Clip on the "5 Dancing Israelis"

https://mobile.twitter.com/zogistani99/status/907121866317467648

Barry Madingo-Odongo , 1 hour ago link

They did it. And if the American people do understand that, israel's going to disappear. israel will flat-*** disappear from this Earth.
- Dr. Alan Sabrosky

[Sep 12, 2019] Was Benjamin Frankin anti-Semite by today's standard? Yes he was. But that does not diminish accuracy of some of his observations if we replace Jews with Zionists and/or "financial oligarchy"

Notable quotes:
"... According to a FOX News report from December 2001, 60 Israelis were apprehended or detained after September 11, with most deported, and a total of 140 Israelis were arrested and detained in all of 2001 by federal authorities. That report claimed that the arrests, ostensibly including the “Dancing Israelis,” were in relation to an investigation of “an organized [Israeli] intelligence gathering operation designed to ‘penetrate government facilities.’” ..."
"... The report also added that most of those arrested, in addition to having served in the IDF, had “intelligence expertise” and worked for Israeli companies that specialized in wiretapping. Some of those detained were also active members of the Israeli military; and several detainees, including the “Dancing Israelis,” had failed polygraph tests when asked if they had been surveilling the U.S. government. ..."
"... The FBI presence at the Urban Moving Systems search site drew the attention of the local media and was later reported on both television and in the local press. A former Urban Moving Systems employee later contacted the Newark Division with information indicating that he had quit his employment with Urban Moving Systems as a result of the high amount of anti-American sentiment present among Urban’s employees. The former employee stated that an Israeli employee of Urban had even once remarked, “Give us twenty years and we’ll take over your media and destroy your country” (page 37 of the FBI report ). ..."
"... The company’s owner — Dominik Otto Suter, an Israeli citizen — had fled to Israel on September 14, 2001, two days after he had been questioned by the FBI. The FBI told ABC News that “Urban Moving may have been providing cover for an Israeli intelligence operation.” Surprisingly, since at least 2016, Suter has been living in the San Francisco Bay Area, where he works for a contractor for major tech companies like Google and Microsoft. According to the public records database Intelius, in 2006 and 2007 Suter also worked for a telecommunications company — Granite Telecommunications — that works for the U.S. military and several other U.S. government agencies. ..."
Sep 12, 2019 | www.zerohedge.com

ExposeThem511 , 58 minutes ago link

Quote memorialized by Jean Patrice in "Communism Unmasked" first edition in the 1940s:

The author used the following quote in the referenced book at pp. 257-258 because the topic of Appendix II on p. 257 was "Jews and Vatican II." The author was questioning why the Jews would have been invited to Vatican II as if anyone invites a corporate adversary to a board meeting. Appendix II beginning on p. 257 is a worthwhile read.

Author's prefacing statement:

Let me here quote the warning issued by Benjamin Franklin. He is reported as being very hostile to the Jews. According to the diaries of Charles Pinckney of South Carolina, one of the framers of the American Constitution, Franklin protested very strongly against the Jews. He is reported as saying at the Constitutional Convention:

In whatever country Jews have settled in any great numbers, they have lowered its moral tone, depreciated its commercial integrity, and segregated themselves and not been assimilated; have sneered at and tried to undermine the Christian religion and upon which that nation is founded, by objecting to its restrictions; have built up a State within a State, and, when opposed, have tried to strangle that country to death financially, as in the case of Spain and Portugal. . .

If you do not exclude them from the United States in this Constitution, in less than 200 years they will have swarmed in such great numbers that they will dominate and devour the land and change our form of Government for which we Americans have shed our blood, given our life and substance and jeopardised our liberty. If you do not exclude them, in less than 200 years our descendants will be working in the fields to furnish them substance, while they will be in the counting houses rubbing their hands. I warn you, gentlemen, that if you do not exclude the Jews for all time, your children will curse you in your grave, Jews, gentlemen, are Asiatics. Let them be born where they will never be otherwise.

Interesting how Franklin mentioned "a State within a State" just like today's "the Deep State."

History has been significantly veiled to hide these truths.

Lumberjack , 1 hour ago link

This is new:

https://www.mintpressnews.com/newly-released-fbi-docs-shed-light-on-apparent-mossad-foreknowledge-of-9-11-attacks/258581/

A crowded dance floor

While the case of the “Dancing Israelis” has long been treated as an outlier in the aftermath of September 11, what is often overlooked is the fact that hundreds of Israeli nationals were arrested in the aftermath of the attacks.

According to a FOX News report from December 2001, 60 Israelis were apprehended or detained after September 11, with most deported, and a total of 140 Israelis were arrested and detained in all of 2001 by federal authorities. That report claimed that the arrests, ostensibly including the “Dancing Israelis,” were in relation to an investigation of “an organized [Israeli] intelligence gathering operation designed to ‘penetrate government facilities.’”

The report also added that most of those arrested, in addition to having served in the IDF, had “intelligence expertise” and worked for Israeli companies that specialized in wiretapping. Some of those detained were also active members of the Israeli military; and several detainees, including the “Dancing Israelis,” had failed polygraph tests when asked if they had been surveilling the U.S. government.

Lumberjack , 45 minutes ago link

More:

note the head of urban moving systems fled to Israel on Sept. 14, when all airspace was shut down over CONUS., Did he cross the border into Canada to flee?

The FBI presence at the Urban Moving Systems search site drew the attention of the local media and was later reported on both television and in the local press. A former Urban Moving Systems employee later contacted the Newark Division with information indicating that he had quit his employment with Urban Moving Systems as a result of the high amount of anti-American sentiment present among Urban’s employees. The former employee stated that an Israeli employee of Urban had even once remarked, “Give us twenty years and we’ll take over your media and destroy your country” (page 37 of the FBI report ).

The FBI returned to search the premises of Urban Moving Systems a month later, but by that time found:

The building and all of its contents had been abandoned by…the owner of Urban Moving Systems. This [was] apparently being done to avoid criminal prosecution after the 09/11/2001 arrest of five of his employees and subsequent seizure of his office computer systems by members of the FBI-NK on or around 09/13/2001.”

The company’s owner — Dominik Otto Suter, an Israeli citizen — had fled to Israel on September 14, 2001, two days after he had been questioned by the FBI. The FBI told ABC News that “Urban Moving may have been providing cover for an Israeli intelligence operation.” Surprisingly, since at least 2016, Suter has been living in the San Francisco Bay Area, where he works for a contractor for major tech companies like Google and Microsoft. According to the public records database Intelius, in 2006 and 2007 Suter also worked for a telecommunications company — Granite Telecommunications — that works for the U.S. military and several other U.S. government agencies.

Lumberjack , 36 minutes ago link

Clip on the "5 Dancing Israelis"

https://mobile.twitter.com/zogistani99/status/907121866317467648

Barry Madingo-Odongo , 1 hour ago link

They did it. And if the American people do understand that, israel's going to disappear. israel will flat-*** disappear from this Earth.
- Dr. Alan Sabrosky

[Sep 12, 2019] Where we are now in Afghanistan- Editorial Opinion by PL

This is all false. The goal was establish military bases in former soviet republics to encircle Russia and this goal was achieved. Putin was probably not so wise giving 100% support to Bush invasion, which was a typical false flag invasion.
Taliban was the creation of the USA to fight Soviets, like political Islam in general so any complains are just pure hypocity.
Notable quotes:
"... Afghanistan borders China. For that reason alone, we are never leaving whatever the cost in blood or treasure. The country is a very forward, strategic military base that can be used to launch air attacks on Chinese assets and impede China's Belt and Road initiative. ..."
"... Despite his bluster, Trump is very weak and knows the Taliban is winning and fears they will try to drive us out before the election, ushering in his defeat. Most of his time is spent cowering in his golf resorts, ranting and raving on a tiny little cellphone. ..."
"... The Blob will not allow any of his fears to shake the resolve of the Deep State to make Afghanistan a colony for a thousand years. ..."
"... American's negotiating position in every instances with rival nations is to dictate the terms for surrender regardless of the circumstances on the ground. It's an untenable position and guarantees perpetual war and occupation which is precisely the point. ..."
"... It seems to me that if one parsed reports from the Special Inspector General Afghanistan Reconstruction along with the United Nations Office on Drug and Crime's "Afghanistan Opium Survey", any illusions as to what the reasons for the West's intervention in that country were, should dissipate rather speedily. ..."
"... we invaded Afghanistan so that we could steal the foreign aid money that we would give them and could sponsor the opium trade. ..."
"... Gramsci and his like stand vindicated. Capture the academies and the rest of us follow, often willingly. ..."
"... And just a few, of those in the public eye, standing up true and declaring "This emperor has no clothes!" ..."
Sep 12, 2019 | turcopolier.typepad.com

Where we are now in Afghanistan- Editorial Opinion by PL

(Lt. Hamilton VC at Kabul where he commanded Sir Louis Cavangnari's escort)

A year or so after the US intervention in Afghanistan began in 2001 I perceived that there was a danger that US public and government opinion might begin to favor the idea of "nation building" in Afghanistan. From long experience in and study of the area of Islamicate civilization and its history it seemed clear to me that such an effort would be doomed to failure at any price that one should be willing to pay in; expended effort over time, money and blood shed on all sides.

The basic problem with Afghanistan is that there "is no there there." Afghanistan is really a geographical expression rather than a country in the sense understood of the word in the post-Westphalian system of independent states.

Across the Islamicate world from Mauritania to BanglaDesh and beyond to Oceania there is a pronounced tendency to atomization in group perception of identity. Arabs do not identify with Berbers, etc., Tribes and clans within these groups regard all others as rivals and often enemies unless they are needed as temporary allies.

The Islamic religion which holds unity to be an ideal is often thought to be a unifier against the atomizing tendency in these cultures, but in fact there are many, many varieties of Islam, each one believing that it is uniquely favored by God. This often cancels out whatever unifying effect Islam, as religion, can have.

Afghanistan, created as a buffer between imperial Russia and British India, is an extreme case of atomization among the inhabitants of a state which has recognition in the world political system including membership in the UN. In spite of that status , a status that might deceive one into believing that there is such a thing as "the Afghan People,"the population of Afghanistan is actually made up of a number of different ethnic nations; Pushtuns, Hazzara, Tajiks, Uzbeks, Turcomans, Arabs, etc. These different peoples all speak mutually unintelligible languages which often have such extreme separation in dialect that this amounts to uninteligibility as well. Some of these groups are Sunni and others Shia. This is yet another factor in the separation of the segments of the population.

The country has little substantial physical infrastructure. What there is was largely constructed in the 50s and 60s as part of Cold War competition between the USSR and the US. There is very little legal or governmental infrastructure. A commercial company investing its own or borrowed money in Afghanistan is taking a great risk of never being able to recover its investment from the local "pirates." Government is generally predatory in its attitude toward foreign investment funds. I tried to find a safe haven in Afghanistan for some of my company's funds and could find none. Senior Afghan government people would typically respond to questions about legal infrastructure with exhortations to "bring your project, all will be well." Needless to say ...

US intervention in this place was inevitable after 9/11, but what was not necessary or wise were repeated US decisions for a COIN nation building campaign. As this tendency began to be evident I argued for a much more limited goal in which the US would keep about 20K troops in country to maintain a government controlled enclave around Kabul and Bagram. This would enable pursuit of located international terrorist groups through raiding operations from that base area. The basis for this strategy was my conclusion that the US could never "pacify" all of the territory of Afghanistan and that we would "break our teeth" trying.

I pressed this belief in various fora and with various individuals within the Obama Administration even as Obama endlessly contemplated the entreaties of the COINista generals, Petraeus, Mattis, McChrystal etc. for a country wide nation building COIN campaign. The most interesting of these encounters was at an IQ2 debate at NYU in 2009 where I (and teammates) argued that "The US can never win in Afghanistan." My side lost on points but the leader of the other team recently told me that he knows now that we were completely correct. Obama gave in to the generals, and gave them the COIN war that they wanted. I suppose that for "Barry" it was immensely flattering to have them "butter him up."

It is clear now that the COIN strategy has failed miserable and totally. Afghanistan is not one bit more united or modernized than it has ever been. The US has spent a sea of money there and many brave people have perished or been wrecked in chasing the idea of Afghanistan as a Central Asian Switzerland.

Trump has allowed Zalmai Khalilzad to attempt to achieve a negotiated peace with the Taliban, the former salafi takfiri, Pushtun rulers of Afghanistan, in the apparent belief that they could be "talked down out of the tree" just as his business competitors could always be talked down to meet at a "closing" table where his supposed "closing genius' would bring a DEAL.

Unfortunately this belief in his closing talent goes unrewarded in Palestine, Syria, Turkey,Yemen, Iran, China (not yet), North Korea and Afghanistan. IMO his difficulty in finding solutions lies in his entrapment within his own New York City business model, a model in which everything is for sale if the deal is structured skillfully to advantage the stronger party while all the while claiming that the party you are screwing is your friend.

Sadly for The Donald all those "stupid" foreigners do not understand that "everything is for sale." Among them, the Taliban, an army and religio-political movement are notable for a lack of belief in the commercial possibilities of selling out to Donald Trump for a "mess of pottage" or thirty pieces of silver whichever reference you prefer. They want to win, and they want to be seen to have driven the "crusaders" from Afghanistan and in the process to have humiliated the US as the leading infidel state. To that end they lie, prevaricate and await the day when they can crush the puny forces of "modernism" after the American departure. Zalmai Khalilzad is an Afghan pushtun Sunni by birth and rearing. Did he not know that they could not be trusted in dealings with the US? I do not blame the Taliban for being what they are. I blame all the American and NATO fools for believing that they could make the Taliban either go away or become "happy campers." They were never going to do either of those things. We should have known that. Some of us did, but Americans are addicted to all the melting pot, right side of history foolishness so common in "levelled" America,

What should the US do now that the scales have fallen from Trump's eyes and the time of "good faith" negotiation with the Taliban is "dead?" The first thing to do is to fire Khalilzad.

Last night, Col. (ret.) Douglas Macgregor told Tucker Carlson that the US should simply leave, and should have never intervened. IOW we should get the hell out totally and forever. This is a tempting thought. I have wrestled with the attractiveness of the idea but there are certain problems with it.

1. We should not want to give the jihadi movements proof of our feckless defeatability. IMO if we leave suddenly the Afghan government and armed forces will soon collapse. The country will then further disintegrate into a welter of jihadi factions and regional tribal strongmen, the strongest of which will be the Taliban.

2. We have encouraged modernist Afghan men, women and girls to emerge from the shadows. Shall we leave them to their fates under the rule of the jihadis.

3. What about all the translators, base workers and other people who have cast their lots with us. The Taliban and other jihadis will simply kill them as apostates. We abandoned a lot of such people in Iraq. Will we do it again?

On balance I would say Macgregor is right that we must leave. The time for a small remaining presence is past. The forces in the field are too strong for a small force to maintain itself even with massive long range air support. Think of Sir Louis Cavangnari. No, we should leave, but we should leave on a schedule that will enable us to control the timing of our going and to protect the departure of those who wish to leave with us. pl

BTW, SWMBO says that no mutually understood languages = no country.

https://en.wikipedia.org/wiki/Pierre_Louis_Napoleon_Cavagnari

Posted at 06:00 PM in Afghanistan , Policy | Permalink


Keith Harbaugh , 10 September 2019 at 12:57 PM
"We should not want to give the jihadi movements proof of our feckless defeatability."

Gee, like admit to reality? My view: Acknowledge the U.S. is not omnipotent, and has very limited ability to influence, let alone, control, other parts of the world other than those to which it has extremely close ties, most especially the Five Eyes and other parts of what was once called Western Civilization.

Aono , 10 September 2019 at 01:11 PM
Col,

I just want to mention that about once a year I dig the IQ2 debate out and watch it again in full. Call it a sanity check I suppose. It is clear that you were trying to be substantive throughout, which was somewhat hampered by the amorphous premise of "success" undergirding the debate question. The other side (Nagle in particular) was trying to "win" the debate by defining success so broadly as to exclude questions over the "how," and they used that as an excuse to dodge your indictment of COIN. But it is very clear who had the right of it, and it is at least somewhat gratifying to hear that same admission was made to you.

Dave Schuler , 10 September 2019 at 02:03 PM
I suspect that we will retain our forces in Afghanistan for the foreseeable future. To understand why you've got to consider the politics rather than the pragmatics.

No president wants to be the one who "lost Afghanistan" (as though it were ours to lose) or, worse yet, be the president who removed forces from a country from which an attack on the U. S. would emanate afterwards or be staged from or planned from.

The greatest likelihood of our removing our forces from Afghanistan would be towards the end of a president's second term, especially if that president were a Democrat and could expect to take less heat from the media. In other words Obama should have removed our forces from Afghanistan and if he wouldn't Trump won't, especially not before being re-elected.

Barbara Ann said in reply to Dave Schuler ... , 10 September 2019 at 05:54 PM
These kind of wars seem to take 3 presidents to end. Trump is this war's Nixon and was elected on a platform which included 'losing' Afghanistan. The media will howl once the Taliban take over, but it will swiftly pass as they realize Americans have no interest in a place where their countrymen are no longer dying.
blue peacock , 10 September 2019 at 02:45 PM
Col. Lang

No matter what the US government does or does not do, wouldn't Afghanistan revert to its natural state as you have described it?

It seems Trump's "negotiated" deal with the Taliban would have been a good approach to getting out but that's now no longer a possibility. Would supporting the Tajiks through Russia and India as a counter-balance to the Taliban work to keep them from completely dominating? Russia and India likely have an interest in preventing jihadis from using Taliban dominated territory to infiltrate. Is it even worth any effort on the part of the US government? It would seem Pakistan and China would continue working to influence events there.

Grazhdanochka , 10 September 2019 at 03:08 PM
My longstanding belief is that Afghanistan to be 'tamed' requires the type of Steel that only existed long ago.

The Modern World has modernized beyond the brutal realities that taming it likely requires, and as such may lose a fraction of the Lives and Treasure as past - but cannot sustain it politically or socially.

The next Question - If Afghanistan is simply a construct, why not forsake most of it and develop the regions of Afghanistan that ARE more amiable and Homogenous?

A lot of the Tadzhiks and Uzbeks (varied Turkmen) I suspect could be far more easily propped up and supported in their own Lands, which back to back with the Central Asian FSU States is a more viable 'Nation Building' Exercise.

What ultimately tamed the 'Wilds'? The Development of strong local States, Force of Arms and ultimately - Demographics. If you will not do it yourself, pick a unified Team and back them in doing it. Ironically the means to inflict harm on occupying Militaries seems to go down as those Armies means to stomach it does also.

The next obvious Question. Is it worth considering (not necessarily for the US and Western States - who will appear as desperate Losers the idea that Afghanistan if allowed to run as strong Armed Islamic State, albeit modernized - might actually one day develop into one more approachable to further modernization?

All just quick Thoughts for me.

The Twisted Genius , 10 September 2019 at 03:28 PM
I agree we should unilaterally withdraw all our forces from Afghanistan. The military can surely plan and carry out a unilateral withdrawal. Just do it. The Taliban are not al Qaeda or the Islamic State. Their desires don't extend beyond the mountains of Afghanistan. Hell, they're fighting IS. Let them do so and don't give them reason to go over to them.

The rub will be all those Afghanis who tied their futures to us. We should resettle them here or somewhere more familiar to them as part of that withdrawal. The chance of that happening under the Trump administration is nil.

CK said in reply to The Twisted Genius ... , 11 September 2019 at 06:57 AM
That is the exact same argument I heard in 72 and again in 75. By early 76 no one cared. There are in every country and in every involvement Quislings and main chancers who find the short term gelt available to be worth the future risk of making the wrong and visible choice. In the case of most of these Afghanis the tie was a slip knot at best.
Ray R , 10 September 2019 at 03:45 PM
A "long, long, time ago" in "a land far away", Najibullah was deposed. Pat, you'll recall that I was then serving as the chair of the Inter-agency Task Force on Afghanistan. Well, we had our regular meeting at which a couple of the folks opined that this was a wonderful development for the country and the folks would now all join hands, dance around the campfire, and sign Kumbaya. To bring the group back to reality, I asked for someone to identify the national sport of Afghanistan. One of the group said that, obviously, it was buzkhasi. So I then asked for someone else to clarify how such a game unfolds and another stalwart did so. This dialogue quickly brought everyone back to reality. For those unfamiliar with the sport, buzkhasi consists of two nominal "teams" on horseback trying to get a headless goat carcass across the opponent's goal line. All goes well at first, but ultimately the teams disintegrate until it's every man for himself in mass mayhem. Thus, IMHO will go Afghanistan.
A. Pols , 10 September 2019 at 04:23 PM
Sadly enough this old quote seems especially true in the case of the "Afghan War" or whatever it is. Our experts' obdurate insistence on pursuing "peace with honor" or some outcome we can get our heads around and feel good about has become a receding horizon...

The only way we could "win" would be by waging a war of extermination with the goal of totally depopulating the entire territory and building an impenetrable barrier around it. But of course that would be a hard sell for a country with a good guy reputation to protect. And then what would we do with the land? After all, we still haven't been able to settle most of Nevada and Wyoming!


"History is an account, mostly false, of events, mostly unimportant, which are brought about by rulers, mostly knaves, and soldiers, mostly fools."

Ambrose Bierce

walrus , 10 September 2019 at 05:19 PM
I said at the beginning of this mess that the one sure thing was that we would end up with chains of Iraqi and afghan restaurants begun by the refugees who had to leave their countries with us when we left. I just hope we have progressed from leaving behind card indexes of our in-country supporters for the Taliban to discover, as allegedly happened in Vietnam.
Barbara Ann , 10 September 2019 at 06:00 PM
I enjoyed the IQ2 debate you reference, particularly your coining of the word "Vermontize". Incredible to think this conversation about an 8 year old war was 10 years ago - and we are still having it. Here is the link for anyone interested:

https://www.intelligencesquaredus.org/debates/america-cannot-and-will-not-succeed-afghanistanpakistan

Valissa , 10 September 2019 at 09:05 PM
I really enjoy these type of situational overview and analysis posts, thanks!

Although I see your point about Trump's crass business approach, let's face it... the military and various US gov't orgs have had any many years to try various approaches to "solving" (cough, cough) Afghanistan. After all the US has been in Afghanistan since 2001. We had been in Afghanistan for 15 years before Trump was elected. After all those years of failure by the Borg I have no problem whatsoever with Trump taking a shot at the situation in his own way. Trump tried a certain tactic and it didn't work. Oh well, but lessons learned. He'll regroup, get more advice and try something else. He's making more of an effort to resolve things than previous presidents, and willing to think outside of the Borg box.

evodevo said in reply to Valissa... , 11 September 2019 at 10:00 AM
No, all Trump was doing was looking for a re-election publicity stunt and a shot at that elusive Nobel like Obama got....he's done this kind of thing for the last 40 years - he isn't going to change his personality now...
BraveNewWorld , 10 September 2019 at 09:07 PM
If the US leaves and I believe it should it doesn't have to mean the end of days. China, Russia, Iran, India and Pakistan have all expressed interest in clearing the area of terrorists. They have all been blocked by the US presence. Preferably the US would work a deal with those players who are far better connected and prepared to clean up the neighbourhood than the US is from the other side of the world. Russia was willing to act as guarantor for the collapsed deal. Work a deal for one or more of them to move in as the US moves out.

My concern is that with all the big players wanting a piece of the pie that it evolves into an even worse proxy war. But China, Pakistan, Russia and Iran are all rowing in more or less the same direction these days and India has bitten off all it can chew in Kashmir so this may be the perfect time. Americans just have to get over that indispensable nation nonsense.

Ya, I know go fuck myself.

Diana C said in reply to turcopolier ... , 11 September 2019 at 10:19 AM
Thank you for thinking of the women and girls....and perhaps their little boys.

I've lived through the abandonment of Vietnam and the influx of refugees from that part of the world, the mess after the Iraq War that included bringing to our country many who had tied their fortunes to us. We can not this time decide to abandon any who have tied their hopes to us after we came in and caused so much turmoil in their country.

I always thought it was hubris on our part to think we could do what the Soviets failed to do.

If we bring these people here, my hope is that we examine how our bringing in Somalis has, in many places, not been a successful effort in regard to integrating them into our society. (Do not many of us, including Nancy Pelosi, regret the bringing in of at least one Somali woman?) We need to prepare for their entry into our country in some way that will not mean just dropping them somewhere and letting them fend for themselves.

I know the government has some sort of protocol for finding them places to live. Often, however, the people seem to be dropped in and left in some ways to depend on themselves "as strangers in a strange land." This should be our last time. Stop the "nation-building" efforts.

I feel that most Americans are welcoming and friendly people, but they often just do not understand how difficult it is for some to adapt to a very different way of life.

RenoDino , 11 September 2019 at 09:33 AM
Afghanistan borders China. For that reason alone, we are never leaving whatever the cost in blood or treasure. The country is a very forward, strategic military base that can be used to launch air attacks on Chinese assets and impede China's Belt and Road initiative.

Despite his bluster, Trump is very weak and knows the Taliban is winning and fears they will try to drive us out before the election, ushering in his defeat. Most of his time is spent cowering in his golf resorts, ranting and raving on a tiny little cellphone.

The Blob will not allow any of his fears to shake the resolve of the Deep State to make Afghanistan a colony for a thousand years.

They have been successful in implanting in the psyche of every American the incorrect notion that the Taliban launched 9/11. That notion alone means there is no support for any truce or treaty with our bete noir.

Morongobill , 11 September 2019 at 09:35 AM
These lines from Rudyard Kipling immediately came to my mind:

"When you're wounded and left on Afghanistan's plains,
And the women come out to cut up what remains,
Jest roll to your rifle and blow out your brains
An' go to your Gawd like a soldier.
Go, go, go like a soldier,
Go, go, go like a soldier,
Go, go, go like a soldier,
So-oldier of the Queen!"

We are never going to change Afghanistan so getting out and taking those who supported us is appealing to me.

turcopolier , 11 September 2019 at 10:01 AM
RenoDino

It is not a base. It is a sinkhole.

confusedponderer -> turcopolier ... , 11 September 2019 at 11:49 AM
Mr. Lang,
" It is not a base. It is a sinkhole. "

Maybe that's why Mr. Prince wanted Trump to make him the viceroy of Afghanistan.

What a career that would be - a former SEAL lieutenant, then mercenary, promoted to something like a field marshal, bringing fabulous quarter numbers, strategy or something like that, peace and freedom to the place by privatizing the war and fighting it more cost effective for himself .

https://www.zerohedge.com/news/2018-08-19/trump-mulling-blackwater-founder-erik-princes-plan-privatize-war-afghanistan

RenoDino said in reply to confusedponderer... , 11 September 2019 at 05:10 PM
It is not a base. It is a sinkhole--A distinction without a difference.

Confusedponderer

Your reference to Mr. Prince was spot on. He understood what the long-term plans for Afghanistan were and still are. A viceroy is the designated ruling representative of a colonial power.

American's negotiating position in every instances with rival nations is to dictate the terms for surrender regardless of the circumstances on the ground. It's an untenable position and guarantees perpetual war and occupation which is precisely the point.

HK Leo Strauss -> confusedponderer... , 11 September 2019 at 10:01 PM
This has been Trump's true failing - not applying his vast business acumen to turn DoD into a profit center.
guidoamm , 11 September 2019 at 11:12 AM
It seems to me that if one parsed reports from the Special Inspector General Afghanistan Reconstruction along with the United Nations Office on Drug and Crime's "Afghanistan Opium Survey", any illusions as to what the reasons for the West's intervention in that country were, should dissipate rather speedily.

History repeats.

turcopolier , 11 September 2019 at 11:51 AM
guidoamm

so, your belief is that we invaded Afghanistan so that we could steal the foreign aid money that we would give them and could sponsor the opium trade. Funny! A joke right?

turcopolier , 11 September 2019 at 02:22 PM
ISL

IMO Trump has no clarity of anyhthing in foreign policy. He is just trying to make a deal in accordance with his experience of deal making and is not doing well. It will be interesting to see if he and Trudeau can sell the USMCA to Pelosi. this is clearly a gooddeal. Let's see how hard he pushes for it. With regard to the ME, have reached the conclusion that his basic attitudes are formed in the culture of New York City Jewry. A Christian Brother who had two PH.D.s in STEM and was a New York City guy once told me that I had to understand that everyone in NY City is to some extent Jewish, even the cardinal archbishop.

JM Gavin , 11 September 2019 at 08:45 PM
I spent several years in Afghanistan between 2002 and 2014. I was there, with a front row seat, when the shift to nation-building began. The best days of my life were in Afghanistan, spent amongst the finest men and women from many nations...including Afghanistan. We lost the war a long time ago. By 2006, I could see we were losing. By 2008, I knew it was lost. How many Afghans have hitched their horses to our wagon? More than enough. How many others chose to live as free men and women because we were there? A significant part of the population. They face a reckoning for living that hope out loud, in public.

The Afghan people are amazing, and a lot of them believed in us, and in a future where women could be more than a piece of property. I can see why some would say we should walk away, and, it's hard to argue against that.

I'll carry what we did in Afghanistan to my grave. DOL,

JMG

Jim Ticehurst , 11 September 2019 at 11:18 PM
Colonel ...I agree with your Opinion on this matter of Withdrawal. I have read a Year by Year timeline of The Millions spent. for the Training Of Afghanistan Military and Security Forces and Like in Viet Nam..they will fail. Fail to defend themselves..

Their hearts wont be in it..and like Vietnam..It Just made The Communist North Vietnamese the Third Most Powerful Conventional Weapons stockpile in the World..with all the Equipment we Left behind...The..billions spent to keep our military presence there..

The millions Spent for VA Resources to care for our wounded. Many with traumatic head injuries...The loss of Our People there..Overt and Covert...The loss of Seal Team 6 in the Aftermath of Finally Getting Osama Bin Laden...It will Never End...

There will always be those willing to die for JiHad..Forever..Over a Trillion Dollars..Plus all The Money we sent to Pakistan. Which has been Most of Our Foreign Aid..Its been a Tragic Blunder and there has never been such a thing as "Mission Accomplished"..

This has been the second most Costly War since WWII. ..Bring Them Home.. ...

9/11/2001,,,,9/11/2019.A War of the Politicians..By The Politicians For The Politicians.and the Military..Industrial Complex....and Their Egos..and Bank accounts..Period...Thomas Jefferson Knew This was coming.

Jack , 11 September 2019 at 11:31 PM
Sir

I know nothing about Doug Macgregor but he sounds really sane in this interview with Tucker. If Trump does what he suggests it would be a welcome approach and drive the Borg insane.

Do you know him or have an opinion about him?

https://twitter.com/justinbaragona/status/1171583543832715264?s=21

turcopolier , 12 September 2019 at 07:55 AM
jack

Yes, I know Doug. A fine soldier. AIPAC would rather see me have the job than Doug

Bill Hatch , 12 September 2019 at 08:10 AM
I agreed with sending SOF in to kill AQ being harbored by the Taliban. I said at the time, "Go in, kill the people who need killing & get the hell out."

There is only one thing that can unify Afgan tribes, that's the presence of foreigners. A very long history has resulted in the reference to "the graveyard of empires." I don't believe that the Taliban is a threat to the US outside of Afghanistan. They are a threat to any American in Afghanistan. Nation building in Afghanistan is domed to failure. The only issue is what is to be the fate of the Afghani's who assisted us or bought into the idea of westernization. Our recent history is to abandon these people.

Eventually we will join the list of Afghan invaders from Cyrus, to Alexander, to the Brits. The only question is how we depart & how much more blood & treasure we spend.

JM Gavin said in reply to Bill Hatch... , 12 September 2019 at 09:02 AM
In my experience, nothing can unify Afghan tribes, or even the sub-tribes. There is a saying amongst the Pashtun: "Me against my brothers, my brothers and I against my cousins, my cousins and I against the world." The real Taliban (meaning the political entity, exiled to the east, also known as "The Quetta Shura," have never been able to get "Taliban" factions in Afghanistan to unite against anything. COL Lang is spot-on, there is no collective "Afghan" identity.

Afghanistan is still run by warlords. The vast majority of folks referred to as "Taliban" are really just warlords (and the warlords' minions) wrapping themselves in the Taliban flag, as it suits them now. If the Taliban were to come back to controlling power in Afghanistan, many of the warlords would switch to fighting the Taliban. True territorial gains in Afghanistan are generally made when warlords switch sides. Afghan warlords are the most loyal people money can buy...well, rent, anyway.

DOL,

JMG

English Outsider , 12 September 2019 at 04:06 PM
The IQ2 debate was significant for me personally when I first saw it. The arguments for staying in Afghanistan were set out coherently and for perhaps the first time I caught a glimpse of the immense intellectual effort, in the think tanks and the academies, that goes into justifying the neocon position. That neocon position working through almost by osmosis to the heavyweight newspapers and media outlets, and providing the narrative framework within which the Intelligence Initiatives of this world right down to the little propaganda sites work. Such varied figures as Charles Lister or Peter Tatchell have backup, and how.

It's an intellectual fortress, the whole, and for many of us in the general public it confirms us comfortably in the neocon rationale. It gives us the arguments, and the excuses, and as long as one declines to notice that those arguments and excuses do shift around, we pay our taxes for this or that crazy neocon venture without complaint and often gladly. Gramsci and his like stand vindicated. Capture the academies and the rest of us follow, often willingly.

And just a few, of those in the public eye, standing up true and declaring "This emperor has no clothes!"

Which happened, as I saw several years later when I got to view it, in that IQ2 debate. Around that time I came across Major Stueber's documentary which had rather more than seven minutes to lay out how hopeless it was for Western armies to fight alongside local forces, when those local forces were so hopelessly factional, corrupt, and therefore ineffectual.

And a footnote just recently. I head a Swedish aid worker relating just how impossible it was for him too to function in Afghanistan. Money put through to local groups swallowed up in false invoicing, ghost workers whose salaries went to swell the pay packet of their superiors, slush funds because that was the only way to get things done.

It was never a doable venture, Afghanistan. That was clear to a few in that debate ten years ago and it's clear to more now. I hope it's possible to get out without leaving the urban Westernised Afghans too much at the mercy of the rest.

And perhaps, also reflecting that the Rovean narratives that the academies and think tanks conjure up for us, at such expense and at such effort, all crumble eventually when reality, as it must finally, breaks through.

[Sep 12, 2019] Ukraine appears not to have noticed that its backing for the United States to persuade Europe to reject Nord Stream II is supporting American pressure for Europe to buy American LNG instead and will lead to loss of profits from transit

Sep 12, 2019 | thenewkremlinstooge.wordpress.com

Mark Chapman September 2, 2019 at 9:00 pm

Ukraine appears not to have noticed that its backing for the United States to persuade Europe to reject Nord Stream II is supporting American pressure for Europe to buy American LNG instead. Would they be transiting that to Europe through Ukraine? Hardly.

https://news.yahoo.com/ukraine-struggling-sense-trump-boltons-190111002.html

President Trump has repeatedly criticized the project, saying it would make Germany "captive" to Russian interests, and urging the Europeans to buy fuel from the U.S. instead. During their talks in Kyiv this week, Danilyuk discussed this issue at length with Bolton, and he urged the U.S. government to block the project by imposing economic sanctions against it. "Bolton was very supportive," Danilyuk says. "He understands that Nord Stream 2 is bad for the United States."

If – extremely unlikely – that initiative were ever successful, and the EU blew off Nord stream II in favour of American imported LNG the Ukies would still be out $3 Billion a year in transit fees. The USA wants to replace Russian gas supplies to Europe, not supplement them.

As usual, Ukraine is so eager to hurt Russia that it does not care if it hurts itself in doing it. Just the sort of ally the USA loves.

[Sep 12, 2019] Amazing; I had no idea Betsy Voss advocate of for-profit charter schools (privatizing education) and The New Curriculum and Eric Prince (advocate for privatizing war) are brother and sister. Blood will tell.

Sep 12, 2019 | thenewkremlinstooge.wordpress.com

Mark Chapman September 3, 2019 at 12:23 pm

Amazing; I had no idea Betsy Voss – advocate of for-profit charter schools (privatizing education) and The New Curriculum – and Eric Prince (advocate for privatizing war) are brother and sister. Blood will tell.

Profiteering is naked and in the open now in the west, and public systems increasingly favour the wealthy – if you want better, you should be ready to pay for it. I guess that's what all those tax cuts were about – shifting a burden off of the wealthy, so that now public services are pay-as-you-go because the government can't afford to provide them for everyone. However, tax cuts also favoured the wealthy – gee, it almost makes you think the class system is coming back, dunnit?

Jen September 3, 2019 at 2:58 pm
I recall Jeremy Scahill mentioning in his book on Blackwater (before it started changing its name faster than you can change your socks) that Erik Prince was related to Betsy deVos. This was long before Scahill turned his own name and reputation into mud when he walked out of a London conference back in 2012 or 2013 because the Syrian nun Agnes Mariam de la Croix, who was known to support President Assad at the time, was a guest speaker at the conference.

[Sep 11, 2019] Joe Biden's Son Blames Russian Agents For Ashley Madison Profile

See also "Amorality and criminality of neoliberal elite"
Notable quotes:
"... "due diligence." ..."
"... Biden thinks international agents, possibly Russian, who objected to his board membership with a Ukrainian gas company set up a fake account to discredit him. ..."
"... As Breitbart reports, ..."
Aug 29, 2015 | Zero Hedge
Last night we heard the best 'excuse' yet if you are caught with an Ashley Madison account, from Dan Loeb - "due diligence." Today, not to be outdone by a married hedge fund manager, Vice-President Joe Biden's son "Hunter" has unleashed his own set of excuses for member ship of the extramarital affairs website, as Breitbart reports - Biden thinks international agents, possibly Russian, who objected to his board membership with a Ukrainian gas company set up a fake account to discredit him. However, IP mapping suggests otherwise...

As Breitbart reports,

Vice President Joe Biden's son Hunter Biden's account on the extramarital dating website Ashley Madison was used and likely created on the Georgetown University campus while Biden was teaching there.

Business executive Robert "Hunter" Biden, reportedly an adviser to his father's political career, told Breitbart News Monday that he suspected his enemies of creating a fake Ashley Madison account for him in order to discredit him. The email address provided for "Robert Biden's" account matched a personal email address once used by Biden, the vice president's son confirmed.

Biden thinks international agents, possibly Russian, who objected to his board membership with a Ukrainian gas company set up a fake account to discredit him. A source close to Biden told People Magazine after the first Breitbart story ran that the IP address for the account traces to Jacksonville, Florida.

But account information shows that the profile, which was confirmed by a credit card purchase in 2014, was used at the latitude/longitude point of 38.912682, -77.071704.

That latitude-longitude point just happens to exist on the Georgetown University campus, at an administrative building on Reservoir Road. And Hunter Biden just happened to be teaching there around the time the account was set up.

* * *
Faced with the new information, representatives for Biden said that the vice president's son would not comment on the story beyond his original statements to Breitbart News denying that the account was his.

hedgeless_horseman

Biden's son discharged from Navy after testing positive for cocaine

He could be head of the ethics committee for the House of Lords.

http://www.telegraph.co.uk/news/politics/11763582/Lord-Sewel-filmed-snor...


knukles

At least his character flaws are in no way reflective of his father.
You know, apples never fall too far from the trees, stuff.

Hunter says: Hey, quit pickin' on me. Everybody has to try to get a head somehow!

jcaz

ROFLMAO!!!!!!!!!!!!!!!! Can't wait until they find Joe's profile....

Manthong

"The truth about the conflict with Russia"

Aw c'mon..

Chevron, Shell, Monsanto, Cargill and others all had deals worth hundreds of billions with Ukraine prior to the Nuland putsch.

When Yanukovych swung toward Russia's Trade Union instead of the EU, Nuland used the $5 billion of NGO and western sympathizers she bought over the years, spent a little more and engineered the violent coup and subsequent civil warfare.

The US sought to marginalize Russia and kick them out of Sevastopol but surprise, surprise the locals would have none of that. Neither would Russia and the next thing you know Crimea voted to be absorbed once again by Russia and Nuland is left with crap on her face. Since the Donbass would have none of that either, 6,000 people are now dead and the Ukraine is a basket case that the west will have to pay for.

There may be some ethnic animosities in play too, but the real motivations are geo-political and economical.

ThanksChump

The most-credible bits of information I've found support your summary.

It's sad.

I doubt the West will pay for the cleanup in Ukraine without some form of ROI. That expense will fall on their non-Russian neighbors who will be directly affected by starving neighbors this winter, with Poland carrying the bulk.

I doubt the ethnic problems will play a significant role, aside from pro-Russia Ukrainians feeling less charitable than otherwise.

ThanksChump

The most-credible bits of information I've found support your summary.

It's sad.

I doubt the West will pay for the cleanup in Ukraine without some form of ROI. That expense will fall on their non-Russian neighbors who will be directly affected by starving neighbors this winter, with Poland carrying the bulk.

I doubt the ethnic problems will play a significant role, aside from pro-Russia Ukrainians feeling less charitable than otherwise.

JustObserving

Demented mass-murderer Putin is also a hacker and a blackmailer?

Since the beginning of the week, the three most influential mass circulation newsmagazines of the United States, Britain, and Germany-Time, The Economist, and Der Spiegel-have published cover stories that combine wild accusations against Vladimir Putin with demands for a showdown with Russia.

The most striking and obvious characteristic of these cover stories is that they are virtually identical. The CIA has scripted them all. The stories employ the same insults and the same fabrications. They denounce Putin's "web of lies." The Russian president is portrayed as a "depraved" mass murderer.

http://www.wsws.org/en/articles/2014/07/30/pers-j30.html

[Sep 11, 2019] Tucker John Bolton refuses to acknowledge his mistakes - YouTube

Tucker is right: the problem is that Bolton can be replaced by another Bolton.
Sep 11, 2019 | www.youtube.com

Matt Curley , 16 hours ago

With Romney being "VERY VERY UNHAPPY" makes it all worthwhile..

Pete G , 18 hours ago

No more Wars Trump America first starts at Home Bring our Troops home 🇺🇸

Zentella6 , 18 hours ago

Bye bye, douchebag. Great news for America. I'm an 11 year vet, and I approve this message.

Marcus McCurley , 10 hours ago

I'm a vet who served in the 82nd Airborne and I say good riddance to this War Monger. This is an awful awful man!

stantheman1684 , 14 hours ago

iv> I see the GLOBALIST shills are in full force on this video, trying to artificially bring down the ratio from probably 99% Positive that such a bad man is gone. Doesn't matter, the Silent Majority & good people everywhere know that Bolton was a poor candidate for that job with a catastrophic failure record & everybody is better of with a more competent person in that position.

MAGA2020

Rebecca Martinez , 18 hours ago

Neo-con Bolton war monger turning on military industrial complex! No wars, no conflicts, no ME instability change! Good riddens!

Richard Willette , 13 hours ago

Trump only hires the best. Bolton will go to Fox and someone from Fox will be 4th National Security Advisor

Michael Ross , 14 hours ago

Thanks President Trump for getting rid of the globalist John Bolton

TED C , 17 hours ago

Foreign policy appears to be 17 year wars. Being a perpetual non winner.

caligirl , 16 hours ago

Good job Tucker, thank you for telling the truth about John Bolton and help to stop bombing Iran!

The Nair , 12 hours ago (edited)

John Bolton is owned by foreign powers like many in Washington. They get paid by their lobby to push the neocon agenda which translates into robbing the US of it's $ to fight wars that don't benefit the US.

yukonjeffimagery , 6 hours ago

War monger Bolton. How did that Libya thing work out for Europe ? Now after looking back, I am sure the African invasion into Europe was planned by Obama and his boss Soros.

Justin Noordyke , 8 hours ago

Romney is another swamp rat. All these politicians supporting Bolton have lost their sanity.

Marutgana Rudraksha , 6 hours ago

2,200 neo-cons don't like this video.

danielgarrison91 , 17 hours ago

Tucker while I agree with you on the mess in Iraq and Afghanistan and Libya. But one thing you left out Tucker. Foxnews hired John Bolton as a Contributer for over a decade. How do you miss that part.

SAROJA Band , 3 hours ago (edited)

Bolton is pure evil. A "catastrophic success". Warmonger neo-con-artist. Abject failure. Delusional hubris exemplified. Brilliant reporting Tucker!!

Jamie Kloer , 8 hours ago

All the policies in the Middle East are complete and other failures. I'm so sick of neo cons. You can't get rid of them. You can not get rid of them. It doesn't matter who you vote for. Constant war. Like every regime couldn't be replaced around the world. Absolutely ridiculous.

BP , 9 hours ago

"In Washington, nobody cares what kind of job you did, only that you did the job. Nobody there learns from mistakes, because mistakes are never even acknowledged. Ever." Yes, Tucker DOES understand Washington!!!

Deborah Beaudoin Zaki , 6 hours ago div tabindex="0" class="comment-renderer-te

xt" role="article"> If Bolton becomes a Fox News contributor: I will change the channel immediately... I already do this when Jeff Epstein's, the child trafficker and rapist, good buddy Alan Dershowitz comes on as a guest... Do not know why Fox News selects guest contributors that have their morals/values in the wrong directions...

Angela J , 6 hours ago div tabindex="0" role="art

icle"> Bolton was signatory to PNAC- the project for a new american century, like other progressives and neo-cons of his generation. They do not view the chaos left by taking out Ghaddafi and Saddam as problems, rather the creation of failed states was their objective all along. Members of the GOP went along with these plans where they coincided with their own political and business objectives- the military industrial complex and the oilmen.

[Sep 11, 2019] Chile, September 11, 1973 The Horrors of 'the First 9-11' Are Routinely Overlooked

Sep 11, 2019 | www.globalresearch.ca

Chile, September 11, 1973: The Horrors of 'the First 9/11' Are Routinely Overlooked Each September large memorials are held for the 9/11 attacks on the US. Yet few recall the far more destructive 9/11 that occurred 28 years before. By Shane Quinn Global Research, September 11, 2019 The Duran and Global Research 8 September 2017 Region: Latin America & Caribbean , USA Theme: History , Media Disinformation , US NATO War Agenda

This article was originally published in September 2017.

On September 11, 1973, Salvador Allende 's democratic government in Chile was ousted by United States-backed forces in one of the Cold War's defining moments. Allende himself was killed during the coup while his presidential palace, La Moneda, was extensively bombed. Many thousands of Chileans were either murdered, "disappeared", imprisoned, and coerced to emigrate or enter exile. Allende's widow and family were forced to go into hiding in Mexico for many years.

In replacing Allende the Americans installed General Augusto Pinochet , one of the most notorious of the post-Second World War dictators. During the next 17 years of Pinochet's dictatorship around 40,000 Chileans were tortured – often under the most sadistic fashion and overseen by doctors in the Josef Mengele style (the Nazi doctor at Auschwitz). The doctors would ensure the victims would remain alive for as long as possible, administer medication to resuscitate them, so the torture could then recommence.

A Chilean who suffered such treatment in these chambers, but survived and later became an international lawyer, was asked where these doctors are today? He replied , "they're practicing in Santiago". There have been a number of Mengele-style doctors not only walking free in Chile, but resuming employment unhindered.

There have been no calls from the United States or Israel to bring these Nazi-style physicians to justice. Indeed, the Pinochet regime was already protecting Nazi war criminals such as SS Colonel Walter Rauff , creator of the gas chambers, and Mengele himself.

As the US's population is approximately 18 times bigger than Chile's, with an infinitely bigger landmass, the Chilean 9/11 was felt on a far greater scale. Indeed, it was also more destructive. In the US's 9/11, the White House was not bombed, the President ( George W. Bush ) was not killed, its people were not imprisoned and tortured en masse after the initial crimes were committed, a brutal dictator and his death squads were not imposed.

Before the Chilean coup in 1973, the country had been a lively, vibrant place where people were welcoming and cheerful. The Pinochet years afflicted upon the population persistent feelings of terror and suspicion.

A few days after the coup was implemented National Security Adviser Henry Kissinger described the situation in Chile as,

Forty Years Since the Chilean Coup of September 11, 1973

"Nothing of very great consequence".

U.S. Secretary of State Henry Kissinger with Pinochet in 1976 (Source: Wikimedia Commons )

Except to the people of Chile that is. Following Allende's election three years before, Kissinger told CIA director Richard Helms over the phone,

"We will not let Chile go down the drain", to which Helms responded, "I am with you".

Kissinger, a future Nobel Peace Prize winner, had been implicated in other war crimes such as an open call for genocide in Cambodia in 1969, "Anything that flies on everything that moves".

Disturbed by Allende's election victory in early September 1970, US President Richard Nixon ordered the CIA to, "prevent Allende from coming to power or to unseat him". Allende was not due to take office until two months later. The US State Department suggested to, "let Allende come in and see what we can work out", – the words "work out" denoting a sinister undertone judging by the record books.

However, President Nixon rejected the State Department's proposal, protesting the possibility of,

"Like another Castro? Like in Czechoslovakia? The same people said the same thing. Don't let them do that".

President Nixon expressed caution saying that,

"We don't want a big story leaking out that we are trying to overthrow the government", before warning Kissinger "to be sure the paper record doesn't look bad".

Kissinger forwarded to Secretary of State William Rogers that,

"The President's view is to do the maximum possible to prevent an Allende takeover".

The aim of the Nixon administration in attempting to overthrow Allende's incoming government was to destroy independent nationalism, or what was called a "virus" that might "infect" others – the domino effect. After all Henry Stimson , the US Secretary of War during World War II, described Latin America as "our little region over here which has never bothered anybody".

Chile obviously came under the auspices of "our little region", despite the fact its capital Santiago is over 8,000 km from Washington. The rights of nations to manage their own affairs is an unacceptable prospect to US planners. We see examples of this to the present day.

In the meantime, "the maximum possible to prevent an Allende takeover" failed as the former physician successfully assumed office in November 1970. The CIA had been sent to work in building support for Allende's rival, former President Jorge Alessandri , but to no avail. Instead the CIA exerted covert pressure, including paying millions of dollars to opposition groups to speed up Allende's ousting.

The four-week tour of Chile by Cuban leader Fidel Castro in late 1971 further alarmed policymakers in the US. Allende himself had visited Cuba about a decade before, and had been impressed by the progress made by Castro's revolution, before again visiting the island nation in 1972.

Image result for allende castro

Fidel Castro with Salvador Allende (Source: teleSUR / Twitter )

By the following year Allende was ousted and killed, with crucial CIA input, as Pinochet went about privatising the Chilean economy to suit American corporate requirements. The "Chicago boys", neoliberal Chilean economists trained at University of Chicago, were welcomed into the government – and were supported by the IMF and the World Bank.

The Chicago boys' policies had a disastrous effect on the population as unemployment more than doubled between 1974 and 1975, to over 18%. By 1983 unemployment further rocketed to 34.6%, far worse than the Great Depression in the US.

The population revolted at various stages but this is where Pinochet's brutal methods of repression came in useful, and was no doubt welcomed by the US government, IMF, and so on. Furthermore, Pinochet was a major drug trafficker who sold cocaine to the US and Europe in the 1980s, amassing a personal fortune in the process, along with his cronies. Pinochet, who also had links to Colombian drug dealers, said

"Not a leaf moves in Chile if I don't move it – let that be clear".

Meanwhile, the population continued to slide into poverty and desolation.

*

Note to readers: please click the share buttons above. Forward this article to your email lists. Crosspost on your blog site, internet forums. etc.

Shane Quinn obtained an honors journalism degree. He is interested in writing primarily on foreign affairs, having been inspired by authors like Noam Chomsky. He is a frequent contributor to Global Research.

The original source of this article is The Duran and Global Research Copyright © Shane Quinn , The Duran and Global Research , 2019

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[Sep 11, 2019] Chile, September 11, 1973 The Inauguration of Neoliberalism, Shock Treatment and the Instruments of Economic Repression

Notable quotes:
"... In the wake of the military coup and following the engineered hike in food prices, I estimated that approximately 85% of the Chilean population did not meet minimum calorie and protein requirements as defined by the World Health Organization (WHO). ..."
"... In October 1973, the "official" food price index had increased by 82.3 percent (in relation to September), according to the Instituto Nacional de Estadistica, which had been taken over by the Junta. ..."
"... Food prices had increased by 211.1 percent in October and November 1973 in relation to September, according to my estimates of 31 food categories. (The official November figures pointed to an increase of 88.6 percent in relation to September). And thereafter, it was on the basis of these official (fake) statistics that the movement in real purchasing power was estimated and official wage adjustments were implemented. ..."
"... I left Chile for Peru in December 1973. The report was released as a working paper (200 copies) by the Catholic University a few days before my departure. In Peru, where I joined the Economics Department of the Catholic University of Peru, I was able to write up a more detailed study of the Junta's neoliberal reforms and their ideological underpinnings. This study was published in 1974-75 in English and Spanish. ..."
Sep 11, 2019 | www.globalresearch.ca

Chile, September 11, 1973: The Inauguration of Neoliberalism, "Shock Treatment" and the Instruments of Economic Repression: The Junta's Deadly "Economic Medicine" Salvador Allende was assassinated on the orders of Henry Kissinger By Prof Michel Chossudovsky Global Research, September 11, 2019 Region: Latin America & Caribbean , USA Theme: Global Economy , History , Poverty & Social Inequality

"Workers of my country, I have faith in Chile and its destiny.

Other men will overcome this dark and bitter moment when treason seeks to prevail.

Keep in mind that, much sooner than later, the great avenues will again be opened through which will pass free men to construct a better society.

Long live Chile!

Long live the people! Long live the workers!"

President Salvador Allende's farewell speech, 11 September 1973.

"It's hard to find someone with the fighting spirit, courage and the story of Allende. He was a man who actually had the branded name in history: democratically the left came to power, and by bombs he was removed from government." Senador Pedro Simon

Chile: "Shock Treatment" and the Mechanisms of Economic Repression

Immediately following Allende's election in September 1970 and prior to his inauguration in November 1970:

"Kissinger initiated discussion on the telephone with CIA director Richard Helm's about a preemptive coup in Chile. "We will not let Chile go down the drain," Kissinger declared. "I am with you," Helms responded. Their conversation took place three days before President Nixon, in a 15-minute meeting that included Kissinger, ordered the CIA to "make the economy scream," and named Kissinger as the supervisor of the covert efforts to keep Allende from being inaugurated. ( National Security Archive )

The CIA was the lead organization behind the imposition of a neoliberal economic agenda in Chile. In August 1972, a year prior to the coup, the CIA funded a 300-page economic blueprint to be implemented in the wake of the overthrow of the Allende government.

The ultimate objective of the September 11, 1973 military coup in Chile was the imposition of the neoliberal agenda (aka deadly "economic medicine") leading to the impoverishment of an entire nation.

Wall Street was behind the coup, working hand in glove with the CIA, the US State Department and Chile's economic elites. Henry Kissinger was the Go-Between.

After Allende's election in November Wall Street's major commercial banks (including Chase Manhattan, Chemical, First National City, Manufacturers Hanover, and Morgan Guaranty), cancelled credits to Chile. In turn, in 1972, Kennecott Corporation "tied up Chilean copper exports with lawsuits in France, Sweden, Italy, and Germany". (See John M. Swomley, Jr. "The Political Power of Multinational Corporations," Christian Century, 91 (25 September 1974), p. 881.

"Regime change" was enforced through a covert CIA military intelligence operation, which laid the groundwork for the military takeover, the assassination of president Allende as well as the macro-economic reforms to be adopted in the wake of the military coup.

At the time of the September 11, 1973 military coup, I was Visiting Professor of Economics at the Catholic University of Chile. In the hours following the bombing of the Presidential Palace of La Moneda, the new military rulers imposed a 72-hour curfew.

Salvador Allende in the defense of the Palacio de la Moneda, September 11, 1973 (left)

When the university reopened several days later, I started patching together the history of the coup from written notes. I had lived through the September 11, 1973 coup as well as the failed June 29th coup. Several of my students at the Universidad Catolica had been arrested by the military Junta.

Chicago Economics, Chilean Style

Sweeping macro-economic reforms (including privatization, price liberalization and the freeze of wages) were implemented in early October 1973.

Barely a few weeks after the military takeover, the military Junta headed by General Augusto Pinochet ordered a hike in the price of bread from 11 to 40 escudos, a hefty overnight increase of 264%. This "economic shock treatment" had been designed by a group of economists called the "Chicago Boys," many of whom were my colleagues at the Institute of Economics of the Catholic University.

These deadly macro-economic reforms were largely dictated by Wall Street in liaison with the CIA, with "Chicago Economics" providing an ideological "free market" paradigm and justification. Professors Milton Friedman and Arnold Harberger of Chicago University were by no means the driving force behind these reforms.

While food prices had skyrocketed, wages had been frozen to ensure "economic stability and stave off inflationary pressures." From one day to the next, an entire country had been precipitated into abysmal poverty; in less than a year the price of bread in Chile increased thirty-six fold (3700%). Eighty-five percent of the Chilean population had been driven below the poverty line.

In November 1973, following the dramatic hikes in the price of food, I drafted in Spanish an initial "technical" assessment of the Junta's deadly macro-economic reforms.

Together with a medical doctor, colleague and lifelong friend who was teaching at the Faculty of Medicine of the University of Chile, I estimated the impacts of the economic reforms on the levels of undernourishment, which had resulted from the collapse of the standard of living.

In the wake of the military coup and following the engineered hike in food prices, I estimated that approximately 85% of the Chilean population did not meet minimum calorie and protein requirements as defined by the World Health Organization (WHO).

In October 1973, the "official" food price index had increased by 82.3 percent (in relation to September), according to the Instituto Nacional de Estadistica, which had been taken over by the Junta.

The INE figures on the price of food commodities, however, had been falsified. In November, I proceeded to collect and tabulate the actual rate of increase in food prices from directly observed prices in the Santiago Metropolitan area. I discovered a substantial discrepancy in relation to the official statistics.

Food prices had increased by 211.1 percent in October and November 1973 in relation to September, according to my estimates of 31 food categories. (The official November figures pointed to an increase of 88.6 percent in relation to September). And thereafter, it was on the basis of these official (fake) statistics that the movement in real purchasing power was estimated and official wage adjustments were implemented.

Fearing censorship by the Junta led by General Augusto Pinochet, I limited my analysis to the collapse of living standards in the wake of the Junta's reforms, resulting from the price hikes of food and fuel, focussing on statistical estimates, without making any kind of political analysis.

The Economics Institute of the Catholic University was initially reluctant to publish the report. They sent it to the Military Junta prior to its release.

The opinions expressed in this report are those of the author. Therefore, they are of the author's responsibility and do not compromise the Institute of Economics

(This was first time that the Institute chose to publish a disclaimer)

I left Chile for Peru in December 1973. The report was released as a working paper (200 copies) by the Catholic University a few days before my departure. In Peru, where I joined the Economics Department of the Catholic University of Peru, I was able to write up a more detailed study of the Junta's neoliberal reforms and their ideological underpinnings. This study was published in 1974-75 in English and Spanish.

Economic Repression

By March 1974, food prices in Chile (according to my estimates) had increased by 505.5 percent (since September 1973). Real wages had collapsed.

Chile: The movement of real wages (1970-77) based on official statistics

Source: Rudiger Dornbusch, Sebastian Edwards. Macroeconomic Populism in Latin America http://www.nber.org/papers/w2986 (p20)

The above graph (based on official statistics) shows that real wages collapsed by close to 70 percent in relation to the base period (1970), which also corresponds to the beginning of the Unidad Popular (UP) government of Salvador Allende. The collapse in real wages was greater than that indicated by the official statistics.

It is worth noting that in 1971, the Allende government increased real wages by 20%. The collapse from its 1971 level to early 1974 was of the order of 75% based on official statistics of the cost of living. A wage increase was implemented by the Junta in early March of 1974 (see graph above).

The Destruction of Economic Life

The events of September 11 1973 marked me profoundly in my work as an economist. Through the tampering of prices, wages and interest rates, people's lives had been destroyed; an entire national economy had been destabilized. Macro-economic reform was neither "neutral" –as claimed by the academic mainstream– nor separate from the broader process of social and political transformation.

I also started to understand the role of military-intelligence operations in support of what is usually described as a process of "economic restructuring". In my earlier writings on the Chilean military Junta, I looked upon so-called "free market" reforms as well-organized instruments of "economic repression."

Macro-Economics and Geopolitics are intertwined. The economic dimensions of US led wars must be understood. The destruction of economic life in Afghanistan, Iraq, Syria and Libya constitutes a crime against humanity, i.e. an "Economic Genocide" which consists in destabilizing and deliberately sabotaging a national economy.

While the contemporary mechanisms of intervention ("color revolutions", "war on terrorism", economic destabilization, sanctions, etc) are different to those of the 1970s, the ultimate objective is the derogation of national sovereignty and the imposition of neoliberalism:

I recall that in the months leading up to the September 1973 coup in Chile, the distribution of basic consumer goods and food had been deliberately disrupted through market manipulation. No bread, no milk, no sugar were available at government regulated prices. Chile's escudo was worthless. The black market prevailed.

A similar situation is now unfolding in Venezuela where the national currency has collapsed. Black market prices for food and essential commodities have spiralled. Reminiscent of Chile in 1973, foreign exchange (Forex) market manipulation in Venezuela coupled with sabotage triggers food shortages, poverty and political instability. Concurrent with the engineered collapse of the Bolivar, real purchasing power has plummeted. (see below)

Source: Los Angeles Times, May 31, 2016

Michel Chossudovsky, September 17, 2016 Forty Years Since the Chilean Coup of September 11, 1973

sources:

Michel Chossudovsky, La medicion del ingreso minimo de subsistencia y la politica de ingresos para 1974 , Documentos de Trabajo no. 18, Noviembre de 1973.

Michel Chossudovsky, The Neo-liberal Model and the Mechanisms of Economic Repression, The Chilean Case, Research Paper No. 7411, Department of Economics, University of Ottawa, 1974, published in Co-Existence, Vol 12, 1975

Michel Chossudovsky, Hacia el nuevo modelo economico chileno : inflación y redistribución del ingreso, El trimestre económico . Mexico, Vol. 42. 1975, 2, p. 311-347.

* * *

The videos below describe the preparation of the September 11, 1973 military coup and its aftermath.

Video: CIA, Chile and Allende

https://www.youtube.com/embed/8R7MNnoYktM Chile: The First Start. The Inauguration of Neoliberalism

https://www.youtube.com/embed/dRRUpO5kPhw?feature=oembed

The original source of this article is Global Research Copyright © Prof Michel Chossudovsky , Global Research, 2019

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[Sep 11, 2019] Andrew Bacevich, Ending War, American-Style

Sep 11, 2019 | www.nakedcapitalism.com

September 11, 2019 by Yves Smith Yves here. Note that for all of Trump's considerable faults, including hiring John Bolton in the first place and taking too long to get rid of him, Bolton's opposition to finding a way for the US to extricate itself from the war in Afghanistan was reportedly the last straw.

By Andrew Bacevich, who serves as president of the Quincy Institute for Responsible Statecraft . His new book The Age of Illusions: How America Squandered Its Cold War Victory will be published in January. Originally published at TomDispatch

When the conflict that the Vietnamese refer to as the American War ended in April 1975, I was a U.S. Army captain attending a course at Fort Knox, Kentucky. In those days, the student body at any of our Army's myriad schools typically included officers from the Army of the Republic of Vietnam (ARVN).

Since ARVN's founding two decades earlier, the United States had assigned itself the task of professionalizing that fledgling military establishment. Based on a conviction that the standards, methods, and ethos of our armed forces were universally applicable and readily exportable, the attendance of ARVN personnel at such Army schools was believed to contribute to the professionalizing of the South Vietnamese military.

Evidence that the U.S. military's own professional standards had recently taken a hit -- memories of the My Lai massacre were then still fresh -- elicited no second thoughts on our part. Association with American officers like me was sure to rub off on our South Vietnamese counterparts in ways that would make them better soldiers. So we professed to believe, even while subjecting that claim to no more scrutiny than we did the question of why most of us had spent a year or more of our lives participating in an obviously misbegotten and misguided war in Indochina.

For serving officers at that time one question in particular remained off-limits (though it had been posed incessantly for years by antiwar protestors in the streets of America): Why Vietnam? Prizing compliance as a precondition for upward mobility, military service rarely encourages critical thinking.

On the day that Saigon, the capital of the Republic of Vietnam, fell and that country ceased to exist, I approached one of my ARVN classmates, also a captain, wanting at least to acknowledge the magnitude of the disaster that had occurred. "I'm sorry about what happened to your country," I told him.

I did not know that officer well and no longer recall his name. Let's call him Captain Nguyen. In my dim recollection, he didn't even bother to reply. He simply looked at me with an expression both distressed and mournful. Our encounter lasted no more than a handful of seconds. I then went on with my life and Captain Nguyen presumably with his. Although I have no inkling of his fate, I like to think that he is now retired in Southern California after a successful career in real estate. But who knows?

All I do know is that today I recall our exchange with a profound sense of embarrassment and even shame. My pathetic effort to console Captain Nguyen had been both presumptuous and inadequate. Far worse was my failure -- inability? refusal? -- to acknowledge the context within which that catastrophe was occurring: the United States and its armed forces had, over years, inflicted horrendous harm on the people of South Vietnam.

In reality, their defeat was our defeat. Yet while we had decided that we were done paying, they were going to pay and pay for a long time to come.

Rather than offering a fatuous expression of regret for the collapse of his country, I ought to have apologized for having played even a miniscule role in what was, by any measure, a catastrophe of epic proportions. It's a wonder Captain Nguyen didn't spit in my eye.

I genuinely empathized with Captain Nguyen. Yet the truth is that, along with most other Americans, soldiers and civilians alike, I was only too happy to be done with South Vietnam and all its troubles. Dating back to the presidency of Dwight D. Eisenhower, the United States and its armed forces had made a gargantuan effort to impart legitimacy to the Republic of Vietnam and to coerce the Democratic Republic of Vietnam to its north into giving up its determination to exercise sovereignty over the entirety of the country. In that, we had failed spectacularly and at a staggering cost.

"Our" war in Indochina -- the conflict we chose to call the Vietnam War -- officially ended in January 1973 with the signing in Paris of an "Agreement Ending the War and Restoring Peace in Vietnam." Under the terms of that fraudulent pact, American prisoners of war were freed from captivity in North Vietnam and the last U.S. combat troops in the south left for home, completing a withdrawal begun several years earlier. Primary responsibility for securing the Republic of Vietnam thereby fell to ARVN, long deemed by U.S. commanders incapable of accomplishing that mission.

Meanwhile, despite a nominal cessation of hostilities, approximately 150,000 North Vietnamese regulars still occupied a large swathe of South Vietnamese territory -- more or less the equivalent to a