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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

PseudoScience > Who Rules America > Neoliberalism

News Neoliberalism Recommended Links Neoliberalism 101: 12 best articles on neoliberalism Neoclassical Pseudo Theories and Crooked and Bought Economists as Fifth Column of Financial Oligarchy The Systemic Instability of Financial Institutions Regulatory Capture & Corruption of regulators
Secular Stagnation Peak Cheap Energy and Oil Price Slump Neoliberalism as a Cause of Structural Unemployment in the USA USA-Russia Gas War Rational expectations scam Economism and abuse of economic theory in American politics Monetarism fiasco
GDP as a false measure of a country economic output Number racket Efficient Market Hypothesis Invisible Hand Hypothesys: The Theory of Self-regulation of the Markets Supply side Voodoo In Goldman Sachs we trust Neocolonialism as Financial Imperialism
Twelve apostles of deregulation Clinton Summers Greenspan Rubin Helicopter Ben: Arsonist Turned into Firefighter Reagan
Chicago school of deification of market Free Market Fundamentalism Free Market Newspeak as opium for regulators The Idea of Dynamic Stochastic General Equilibrium CDS -- weapons of mass financial destruction Phil Gramm Bush II
Zombie state of neoliberalism Insider Trading SEC corruption Fed corruption Systemic Fraud under Clinton-Bush Regime Wall Street Propaganda Machine American Exceptionalism
Redistribution of wealth up as the essence of neoliberalism Glass-Steagall repeal Pope Francis on danger of neoliberalism Fiat money, gold and petrodollar Neoliberalism as a Cause of Structural Unemployment in the USA Buyout Kleptocrats Republican Economic Policy
Principal-agent problem Quiet coup Pecora commission History of Casino Capitalism Casino Capitalism Dictionary :-) Humor  Ayn Rand and Objectivism Cult

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[Mar 03, 2021] The crazy idea of trickle-down wealth may be safely discarded as not working.

Mar 03, 2021 | www.unz.com

Here is a graph to look at. It depicts the share of the US national wealth owned by 0.1% of families, that is 160 thousand families with more than $20 million per head. They had it wonderfully good in the years leading to the Great Depression; or rather, their wonderful life brought on the Great Depression. As their share dropped, ordinary Americans got a chance to fulfill the American dream. Life was good for ordinary guys until the late Seventies; then Thatcher and Reagan succeeded in turning the tide, and since then the fat cats' share has increased and your share has dropped, until we have arrived at the present miserable state.

This graph is taken from this work by two young Berkeley economists, Emmanuel Saez and Gabriel Zucman , who updated it here last year. True Left (I aspire to this lot) aren't politically correct diversity lovers, but people who think that the wealthy should be reined in. The very rich hog resources; they distort democracy by their lobbying and their NGOs; and now they want to save mankind, while mankind should be saved from them. Naturally the rich guys do not relish the idea of being taxed, let alone expropriated Lenin style; that's why they invented the faux-Left of radical feminists and race equality activists. A good Christian would approve of bridling the rich: it would be better for their souls. What is a man profited, if he gain the whole world, and lose his own soul, asked Christ. But this graph proves that keeping their share down isn't only good for their souls, but is good for our wellbeing, too. The crazy idea of trickle-down wealth may be safely discarded as not working.

[Mar 01, 2021] Texas Becoming Failed State Amid Historic Winter Storm Consortiumnews

Mar 01, 2021 | consortiumnews.com

By Kenny Stancil
Common Dreams

M uch of the United States is currently engulfed in a deadly winter storm on top of the ongoing coronavirus pandemic, but the negative public health effects of this convergence may be most severe in Texas, where millions of people are endangered by a lack of heat amid sub-zero temperatures and thousands of vaccine doses nearly expired in thawing freezers after the Lone Star state's isolated and underregulated electric grid was hit with widespread power outages .

As journalist Emily Atkin explained Tuesday, the jet stream "bringing frigid and dangerous Artic weather to millions of Americans" is, like other forms of extreme weather, related to global warming. That's because, as Kevin Trenberth, a climate scientist at the National Center for Atmospheric Research, told Atkin several years ago, "all weather events are affected by climate change because the environment in which they occur is warmer and moister than it used to be."

What's made Winter Storm Uri especially fatal in Texas is not only the arrival of an unprecedented cold spell, but the way the weather event is occurring in the context of preexisting social injustices like homelessness as well as how it is interacting with the state's underdeveloped infrastructure, inadequate planning and regulation, and lack of emergency preparedness.

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Writing for Discourse Blog Tuesday, Samantha Grasso argued that "occasionally, something will happen in Texas to remind the people who live here that we live in a failed state."

Grasso explained how freezing temperatures cascaded into power outages causing millions to go without heat and water in the midst of a winter storm and pandemic:

"While people began losing power Thursday, statewide outages spiked early Monday morning, after the Electric Reliability Council of Texas (ERCOT), the entity that controls the power grid for almost the entire state, announced a 'rolling blackout,' estimating outages around 40 minutes long in order to keep the grid from being overwhelmed. (The ERCOT, for what it's worth, was borne out of Texas' brainless reflex to buck federal regulation .) But by that time, it was likely too late, for a variety of reasons . Forty minutes turned into hours, and then days, with no real sign of when things will get better. After the power went out, so did the water, with several cities issuing boil water notices , or asking residents not to drip their faucets despite their pipes freezing, or even shutting off the water."

As Grasso noted, "It would be an understatement to say that ERCOT was unprepared for a cold weather crisis of this scale."

The rest of the lower 48 states use two electric grids: the Eastern Interconnect and the Western Interconnect. By contrast, in Texas, 90 percent of the state's residents rely on ERCOT. As Kate Galbraith reported Monday in the Texas Tribune , the Lone Star state sought independence from the national grids to avoid federal regulations.

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While Republican lawmakers and right-wing media figures have used the crisis in Texas as an opportunity to attack renewable energy for its alleged unreliability, The Daily Poster reported Tuesday that ERCOT attributed the blackouts to "a shortage of natural gas due to a drop in pressure and frozen instruments at fossil fuel and nuclear facilities."

"The fact that Texas deregulated its power grid in the 1990s could also be part of the problem," The Daily Poster added. "Electricity market incentives are currently structured in such a way that Texas' power companies receive more money if they don't weatherize all their plants and shut down some of them during cold weather."

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Notably, the parts of Texas that are connected to the two national grids have not been devastated by power outages. In El Paso, for instance, "about 3,000 customers had power outages lasting five minutes or less when the winter storm moved in on Sunday," a local ABC affiliate reported . "As of Monday afternoon, only 12 customers were impacted."

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Occurring as they did in the midst of a pandemic, the widespread power outages in Texas threatened to squander thousands of doses of the Moderna vaccine, which must be kept between -13°F and 5°F. As the Houston Chronicle reported Monday night, public health officials in Harris County "hustled to distribute thousands of doses" after the storage facility lost power and "its backup generator failed."

NBC News reported Tuesday that "of the 8,430 vaccines, county health officials distributed 5,410 doses to five locations, including 3,000 to the Harris County Jail, 1,000 to Houston Methodist Hospital, 810 to Rice University, and 600 to Lyndon B. Johnson Hospital and Ben Taub Hospital."

"The remaining doses were salvaged," the news outlet added, "after Moderna advised county officials that the rest could be refrigerated and used for patients later that same day."

Meanwhile, mutual aid and political action groups were scrambling to provide resources and shelter to people "who were facing below-freezing temperatures without robust city assistance," Grasso wrote. "Though cities opened warming centers and shelters, facilities quickly reached capacity and weren't safe to travel to in the harsh weather conditions."

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Reflecting on Covid-19, Grasso said that "Texas, just like the rest of the country, killed so many people because our leaders thought it more important to prioritize short-term gains than invest in people for a long-term gain."

"And through this mismanaged crisis," she added, "it will kill others, too."

By Tuesday night, at least 23 people had died nationwide, the majority in Texas, as a result of Winter Storm Uri, according to the The New York Times .

This article is from Common Dreams.

[Mar 01, 2021] Neoliberalism- A Critical Reader by Saad-Filho, Alfredo, Johnston, Deborah, Saad-Filho

Mar 01, 2021 | www.amazon.com

It is impossible to define neoliberalism purely theoretically, for several reasons. First, methodologically, although neoliberal experiences share important commonalities (explained in what follows), neoliberalism is not a mode of production. Consequently, these experiences do not necessarily include a clearly defined set of invariant features, as may be expected in studies of 'feudalism" or 'capitalism", for example. Neoliberalism straddles a wide range of social, political and economic phenomena at different levels of complexity. Some of these are highly abstract, for example the growing power of finance or the debasement of democracy, while others are relatively concrete, such as privatisation or the relationship between foreign states and local non-governmental organisations (NGOs). Nevertheless, it is not difficult to recognise the beast when it trespasses into new territories, tramples upon the poor, undermines rights and entitlements, and defeats resistance, through a combination of domestic political, economic, legal, ideological and media pressures, backed up by international blackmail and military force if necessary.

Second, as is argued in Chapters 7 and 9., neoliberalism is inseparable from imperialism and globalisation. In the conventional (or mainstream) discourse, imperialism is either absent or, more recently, proudly presented as the 'American Burden': to civilise the world and bring to all the benediction of the Holy Trinity, the green-faced Lord Dollar and its deputies and occasional rivals, Holy Euro and Saint Yen. New' converts win a refurbished international airport, one brand-new branch of McDonald's, two luxury hotels, 3,000 NGOs and one US military base. This offer cannot be refused - or else.- In turn, globalisation is generally presented as an inescapable, inexorable and benevolent process leading to greater competition, welfare improvements and the spread of democracy around the world. In reality, however, the so-called process of globalisation - to the extent that it actually exists (see Saad-Filho 2003) - is merely the international face of neoliberalism: a worldwide strategy of accumulation and social discipline that doubles up as an imperialist project, spearheaded by the alliance between the US ruling class and locally dominant capitalist coalitions. This ambitious power project centred on neoliberalism at home and imperial globalism abroad is implemented by diverse social and economic political alliances in each country, but the interests of local finance and the US ruling class, itself dominated by finance, are normally hegemonic.

Third, historical analysis of neoliberalism requires a multi-level approach. The roots of neoliberalism are long and varied, and its emergence cannot be dated precisely. As Chapters я to 6 show, neoliberalism amalgamates insights from a range of sources, including Adam Smith, neoclassical economics, the Austrian critique of Keynesianism and Soviet-style socialism, monetarism and its new classical and 'supply-side' offspring. Their influence increased by leaps and bounds with the breakdown of the postwar order: the end of the 'golden age' of rapid worldwide growth in the late 1960s, the collapse of the Bretton Woods system in the early 1970s, the erosion of the so-called 'Keynesian compromise' in the rich countries in the mid 1970s, the meltdown of the Soviet bloc in the 1980s and the implosion of developmental alternatives in the poor countries, especially after balance of payments crises in the 1980s and 1990s. Chapters 1 and 2 show that the collapse of the alternatives provided space for the synthesis between conservative view's and the interests of the US elite and their minions. The cauldron was provided by the aggressive populist conservatism of Ronald Reagan and Margaret Thatcher, and the broth was tendered by finance - that had become hegemonic worldwide after the 'coup- led by the chairman of the US Federal Reserve System, Paul Volcker, in 1979.3 By persuasion and by force, neoliberalism spread everywhere.

It is, however, important to avoid excessively linear accounts of the rise of neoliberalism. For example, in the United Kingdom, key elements of Thatcher's monetarist economic platform had been imposed by the previous Labour government; she only expanded them and gave them a compelling rationale. There was also an irresolvable tension between the puritanical claims made by milk-snatching Thatcher, Reagan's ventriloquists, and the intellectual harlots peddling their wares around the US Imperial Court, and the political practice of these neoliberal administrations. For example, Reagan's 'voodoo economics' (in the words of his deputy, George Bush pere) would have been unacceptable to the guardians of the scriptures. History shows that it is easier to impose pristine economic and political models in the dominions, because at home the strength of conflicting interests and the messy realities of limited power do not allow history to start anew on demand. This is best illustrated in Chapter 14's discussion of the asymmetric application of agrarian liberalism. It is relatively easy to parachute well-paid advisers into distant and unimportant countries, where Lord Dollar can easily bend the natives' will. This purifying ritual will make them almost civilised. However, should the ignorant masses and their brutal leaders reject dollar diplomacy and be reluctant to play by the (new) rules, weapons of mass destruction are available and they can be deployed increasingly effectively from great distances.

Although every country is different, and historical analysis can reveal remarkably rich details, the overall picture is clear. Tire most basic feature of neoliberalism is the systematic use of state power to impose (financial) market imperatives, in a domestic process that is replicated internationally by 'globalisation'. As Chapters 22. 23 and 30 argue in the cases of the United States, the United Kingdom and east and south-east Asia respectively, neoliberalism is a particular organisation of capitalism, which has evolved to protect capital(ism) and to reduce the power of labour. This is achieved by means of social, economic and political transformations imposed by internal forces as well as external pressure. The internal forces include the coalition between financial interests, leading industrialists, traders and exporters, media barons, big landowners, local political chieftains, the top echelons of the civil service and the military, and their intellectual and political proxies. These groups are closely connected with 'global' ideologies emanating from the centre, and they tend to adapt swiftly to the demands beamed from the metropolis.

Their efforts have led to a significant worldwide shift in power relations away from the majority. Corporate power has increased, wiiile finance has acquired unrivalled influence, and the political spectrum has shifted towards the right. Left parties and mass organisations have imploded, while trade unions have been muzzled or disabled by unemployment. Forms of external pressure have included the diffusion of Western culture and ideology, foreign support for state and civil society institutions peddling neoliberal values, the shameless use of foreign aid, debt relief and balance of payments support to promote the neoliberal programme, and diplomatic pressure, political unrest and military intervention when necessary. For example, Chapter 24 shows how' the ruling economic and political forces in the European Union have instrumentalised the process of integration to ensure the hegemony of neoliberalism. This account is complemented by Chapter 2n's analysis of the segmentation of Eastern Europe into countries that are being drawn into a Western European-stvle neoliberalism and others that are following Russia's business oligarchy model. In sum, neoliberalism is everywhere both the outcome and the arena of social conflicts. It sets the political and economic agenda, limits the possible outcomes, biases expectations, and imposes urgent tasks on those challenging its assumptions, methods and consequences.

In the meantime, neoliberal theory has not remained static. In order to deal with the most powerful criticisms levelled against neoliberalism, that it has increased poverty and social dislocation around the world, neoliberal theory has attempted to present the ogre in a more favourable light. I11 spite of the substantial resources invested in this ideologically inspired make-over, these amendments have remained unconvincing, not least because the heart of the neoliberal project has remained unchanged. This is discussed in Chapter 15 for poverty and distribution, while Chapter 21 unpicks the agenda of the 'Third Way', viewed by many as 'neoliberalism with a human face'.

A MULTI-PRONGED POWER PROJECT

Neoliberalism offered a finance-friendly solution to the problems of capital accumulation at the end of a relatively long cycle of prosperity. Chapters 1. 22 and 30 show that neoliberalism imposed discipline upon a restless working class through contractionary fiscal and monetary policies and wide-ranging initiatives to curtail social rights, under the guise of anti-inflation and productivity-enhancing measures. Neoliberalism also rationalised the transfer of state capacity to allocate resources inter-temporally (the balance between investment and consumption) and inter-sectorally (the distribution of investment, employment and output) towards an increasingly internationally integrated (and US-led) financial sector. In doing so, neoliberalism facilitated a gigantic transfer of resources to the local rich and the United States, as is shown by Chanters 11 and 15. Neoliberal globalism is not at all a model of 'economic deregulation', and it does not promote 'private initiative' in general. Under the ideological veil of non-intervention, neoliberalism involves extensive and invasive interventions in every area of social life. It imposes a specific form of social and economic regulation based on the prominence of finance, international elite integration, subordination of the poor in every country and universal compliance with US interests. Finally, neoliberalism does not foster rapid accumulation. Although it enhances the power and the living standards of the global elite and its appendages, it is destructive for the vast majority. Domestically, the expansion of 'market relations' tramples upon rights of access to food, water, education, work, land, housing, medical care, transportation and public amenities as well as 011 gender relations, as is shown by Chanters 16 to 18. Lawrs are changed to discipline the majority, restrict their rights of association and make it difficult to protest against the consequences of neoliberalism and to develop alternatives. The police, the courts and the armed forces are available to quash protests in the 'new democracies' such as Bolivia, Ecuador, Nigeria, South Africa, South Korea and Zambia, as well as in 'old democracies' such as France, India, Italy, Sweden, the United Kingdom and the United States. Chanter 20 shows that democracy is everywhere limited by the rights of global capital to seize the land and exploit its people, while Chanter 8 reviews the systematic seizure of assets which has gone hand in hand with neoliberalism in many countries. Finally, an increasing share of global profits is being pumped into the rich countries, especially the United States. These transfers increase the pressure 011 the periphery, where rates of exploitation must increase sharply in order to support extraordinary levels of elite consumption domestically as well as in the United States. In other words, neoliberalism is a hegemonic system of enhanced exploitation of the majority. Chanter 12 shows that the neoliberal promise of rising living standards for poor countries has not been fulfilled, and Chanter ip, discusses the manner in which foreign aid has served this process of exploitation. These and other chapters in this volume argue that neoliberalism prevents the implementation of those very policies that would most likely contribute to economic growth and poverty reduction: as Chapter 28 argues for South Asia, neoliberalism has fatally narrowed the policy discourse. This exploitative agenda is primarily but not exclusively the outcome of a shift in the power relations within (and between) countries. It is also the outcome of technological changes, especially cheaper international transportation, communications and computing power, the internet, the emergence of 'flexible' production, greater international integration between production chains and in the financial markets, and so 011. These material changes responded to existing social changes at least as much as they induced them.

TRANSCENDING NEOLIBERALISM

In spite of its power, the transformations that it has wrought 011 the world economy, and the achievement of ever rising living standards for the minority, neoliberalism does not offer an efficient platform for capital accumulation. Under neoliberalism, economic growth rates have declined, unemployment and underemployment have become widespread, inequalities within and between countries have become sharper, the living and working conditions of the majority have deteriorated almost everywhere, and the periphery has suffered greatly from economic instability. In other words, neoliberalism is a global system of minority power, plunder of nations and despoilment of the environment. This system breeds economic, political and social changes, creating the material basis for its own perpetuation and crushing the resistances against its reproduction. Chanters 26 to 30 discuss the continuing crisis in Latin America, sub- Saharan Africa, South Asia, Japan and East and South-East Asia. They argue that neoliberal policies have enhanced instability everywhere, while Chanter 10 shows that the theoretical and empirical evidence cannot support neoliberalism's central hypothesis that trade openness is good for growth.

However, neoliberalism also destroys its own conditions of existence. Its persistent failure to deliver sustained economic growth and rising living standards exhausts the tolerance of the majority and lays bare the web of spin in which neoliberalism clouds the debate and legitimates its destructive outcomes. Tire endless mantra of 'reforms' which systematically fail to deliver their promised 'efficiency gains' delegitimises the neoliberal states, their discourse and their mouthpieces. The explosion of consumer credit that has supported the improvement of living standards in the centre, given the growing fiscal constrains upon the state, limits the scope for interest-rate manipulation - the most important neoliberal economic policy tool. Most importantly, popular movements have emerged and successfully challenged the neoliberal hegemony. Whatever their limitations, as Chapter ?? argues, the recent social explosions in Argentina, Bolivia, Ecuador, as well as more limited social movements elsewhere, show that neoliberalism is not invulnerable. This book details and substantiates these claims, and points toward an agenda of reflection, critique and struggle.

[Mar 01, 2021] Art Berman on Twitter

Mar 01, 2021 | twitter.com

In the past decade, capital employed in Exxon's upstream business has risen by a third -- and...production fell 17% & proved reserves by 39%.

"In the past decade, capital employed in Exxon's upstream business has risen by a third -- and...production fell 17% & proved reserves by 39%. This...has trashed Exxon's return on capital." https:// bloomberg.com/opinion/articl es/2021-02-25/exxon-reserves-debooking-of-6-billion-barrels-matters?sref=866aH6XX #OOTT #oilandgas #oil #WTI #CrudeOil #fintwit #OPEC #Commodities

[Feb 28, 2021] Neoliberalism on ventilator

Feb 28, 2021 | www.moonofalabama.org

Canadian Cents , Feb 28 2021 17:21 utc | 9

Danny Haiphong on "Capitalism on a Ventilator" , a book that has apparently been banned by Amazon:
Capitalism on a Ventilator: A new book analyzes the impact of COVID-19 on the U.S. and China

" The COVID-19 pandemic has placed China and the United States on the opposite ends of human progress."

steven t johnson , Feb 28 2021 18:03 utc | 17

Canadian Cents@9 The book Capitalism on a Ventilator is a collection of essays or articles produced by the Workers World Party, one of the Communist Parties in the US.

Amazon lists the book as currently unavailable (and asks if you want an email if it becomes more available.)

It is indeed possible this is a surreptitious way of censoring the book, especially if the unavailability means WWP (which operates the International Action Center) simply hasn't complied with technical requirements imposed by Amazon.

Such as guaranteeing delivery within a limited number of days. Amazon has, apparently, tightened up a lot to make it difficult for independents to sell on Amazon.

But it is also possible that the limited budgets and other resources led to limited numbers of copies which are now sold out. When the new press run is complete, the book becomes available again.

[Feb 28, 2021] Is A Deregulated Power Grid Good For Texans by Haley Zaremba

Feb 28, 2021 | oilprice.com

Unless you've been living under a rock for the last few weeks, you've most likely been inundated with all kinds of new stories and finger-pointing social media diatribes about Texas' shocking grid failure as temperatures dropped below freezing across the Lone Star State earlier this month. And, adding insult to injury, after coping with rolling blackouts and a plague of burst pipes during the harsh winter storm, some residents were hit with power bills big enough to bankrupt them--in some cases over $15,000.

As these disastrous (and in some cases deadly ) developments unfolded, there was no shortage of accusations and blame games to go around, with different factions ( mistakenly ) pointing to frozen wind turbines while others blamed the state's uniquely deregulated power grid. Now, as Texas lawmakers launch an investigation into the source of the energy system failures, state regulators have also come under fire amidst a general atmosphere of "finger pointing and blame shifting" at the unfolding legislative hearings .

While the outages came as a shock to Texans, as well as to the rest of the world watching the news unfold on their various screens, the elements that came together in a perfect storm (so to speak) to cause the systemwide failures have been in place for years, and in some cases, decades. Texas' unique utilities market has been blazing its own trail for a long time now, having begun its course towards energy independence in 1999, but it's only when something goes wrong that these kinds of innovations (or "the nation's most extensive experiment in electrical deregulation" according to the New York Times) come under scrutiny.

Texas is in a unique position to run its own grid however it sees fit, as 90 percent of the state's energy is produced on its very own grid. And the state has seen fit to run that grid with very, very little regulation, "handing control of the state's entire electricity delivery system to a market-based patchwork of private generators, transmission companies and energy retailers" as the New York Times reported last week.

Related Video: Top 5 Uses of Petroleum

This decision was not a sinister and sneaky back-room deal; it was widely publicized and supported in equal measure by constituents and industry leaders alike. "Competition in the electric industry will benefit Texans by reducing monthly rates and offering consumers more choices about the power they use," then- Texas-governor George W. Bush was quoted when he became a signatory on the 1999 deregulation legislation.

But while Texans were promised cheap electricity in exchange for rallying around grid deregulation, that simply never came to fruition. Since long, long before the $15,000 one-month utility bills, Texans have been paying a premium for the very same energy they were promised to receive at a discounted rate. A deregulated power grid is particularly vulnerable to the ebbs and flows of the market, and nearly 60% of Texans now buy their electricity from a retail power company at a market-based rate instead of a local utility. A recent Wall Street Journal analysis based on nationwide data from the U.S. Energy Information Administration revealed that not only have Texans not received the lower power bills they were expecting, on the whole they've paid more than other U.S. consumers--a lot more. "Customers of that deregulated energy market have paid a total of $28 billon more for their power since 2004 than they would have paid if they'd been covered by the state's traditional utilities," Earther reported this week.

While the slow trickle of money of of Texans' pockets over the last 17 years is newsworthy, considering that deregulation was sold to the public to do the exact opposite, it's entirely likely that the system would have charged on unchanged without the massive and scandalous grid failures cause by this months storms--although with changing weather patterns this kind of catastrophic climate event was coming sooner or later. But in the wake of the devastating outages, the U.S. and Texas energy industries are already changing in response as power companies bail on deregulated grids . "Investors prefer steady dividends from regulated utilities over erratic profits in the freewheeling American power production industry," the Financial Times reported this week.

While there are certainly still plenty of benefits to deregulation--incentivizing innovation and pricing out coal plants are just two examples--this months events show that those benefits no longer outweigh the risks for many Texan power producers and consumers.

By Haley Zaremba for Oilprice.com

[Feb 28, 2021] Possible end of "plato oil": Increase in countries that shtill have unpapped reserves now is unable to make up for the decline of production of the rest of the world

Feb 28, 2021 | peakoilbarrel.com

The natural annual deline from exiting wells is around 800 kb/d/yr.

Originally from: US December Oil Production Drops – Peak Oil Barrel

RON PATTERSON IGNORED 02/27/2021 at 5:25 pm

Dennis, I must disagree with your assessment. OPEC peaked in 2016. Yes, Iran can come back and increase production by about 1.5 million barrels per day. But that still will not make up for the decline in the rest of OPEC. No need to mention Venezuela, they may come back around 2030 or so, long after the peak has passed.

Russia said they had peaked in early 2020. I see no reason to think they were lying.

That leaves Brazil, Norway, and Canada. They all three may increase production but nothing spectacular. Not nearly enough to make up for the rest of the world in decline. REPLY STEPHEN HREN IGNORED 02/27/2021 at 5:58 pm

I'm inclined to agree with Ron. So much investment deferred because of 2014 and 2020 price crashes. LTO can come back quickly if the price stays consistently high (a big if) but it won't be enough to save the day. Investors are expecting cash from LTO these days, not production increases. I imagine most other countries are just coasting after the turmoil of the last year. Also still plenty of wildcards in the collapse department over the next 5-10 years: Iraq, Nigeria, Libya, etc. WATCHER IGNORED 02/28/2021 at 1:12 am

Factions in the administration are on record as wanting sharply higher oil prices. Seems difficult to see how this would get through the Senate, but it is a green priority. RON PATTERSON IGNORED 02/28/2021 at 8:48 am

Does Occidental know what they are talking about? They are saying that the investors are just not there for a massive increase in production. And they are one of the two largest producers in the Permian Basin.

U.S. Oil Production Has Already Passed Its Peak, Occidental Says Bold Mine
By Kevin Crowley
October 14, 2020, 1:49 PM CDT

America's oil production will never again reach the record 13 million barrels a day set earlier this year, just before the pandemic devastated global demand, according to Occidental Petroleum Corp.

"It's just going to be too difficult to replace the 2 million barrels a day of production that we've lost, and then to further grow beyond that," Chief Executive Officer Vicki Hollub said Wednesday at the Energy Intelligence Forum. "Over the next three to four years there's going to be moderate restoration of production, but not at high growth."

Occidental is one of the biggest producers in the U.S. shale industry, which added wells at such a rate prior to the spread of Covid-19 that the country became the world's top crude producer, overtaking Saudi Arabia and Russia, ushering in an era that President Donald Trump called "American energy dominance."

U.S. oil production is stuck below it's pre-pandemic high
Shale's debt-fueled expansion came to a juddering halt due to lower gasoline demand and oil prices, but also because of Wall Street's increasing reluctance to fund growth at any cost. Shale operators are increasingly prioritizing cash flow and returns to investors over production growth.

Occidental, which vies with Chevron Corp. to be the biggest producer in the Permian Basin, has been forced to throttle back capital spending, lower growth targets and cut its dividend in a bid to save cash during the downturn. Its finances were already severely challenged by the debt taken on through its $37 billion purchase of rival Anadarko Petroleum Corp. last year.

Hollub said global consumption stands at about 94 billion barrels a day, and it will take a Covid-19 vaccine before it returns to 100 million barrels. Due to cutbacks around the world, supply and demand for oil will likely balance again by the end of 2021, she said.

Unlike some of her European peers, Hollub sees strong long-term demand for oil. "I expect we'll get to peak supply before we get to peak demand," she said. HICKORY IGNORED 02/28/2021 at 11:31 am

"Unlike some of her European peers, Hollub sees strong long-term demand for oil. "I expect we'll get to peak supply before we get to peak demand," she said."

Thanks Ron.
I wonder if she is referring to the balance in the USA, or the world.

It will be a horse-race finish for the whole decade- "and here comes Demand up the backstretch " RON PATTERSON IGNORED 02/28/2021 at 11:26 am

Figure this one out. The EIA's AEO2021 In the past they have always given scenarios based on "Low Price" and "High Price". But now it is "Low Supply" and "High Supply".

They are not making a prediction, they are just saying: "Here is what low supply looks like", and "Here is what high supply looks like". Hell, we already knew that.

Anyway, it is all about tight oil. Everything depends on tight oil. Occidental says tight oil has peaked. But the EIA is taking no chances. They are saying in effect: "Here is what it looks like if tight oil has peaked and here is what it looks like if it has not."

REPLY

[Feb 28, 2021] Bank Of America Expects Fastest Oil Price Rise In 30 Years - OilPrice.com

Feb 28, 2021 | oilprice.com

Oil prices are set to rise by the fastest rate since the 1970s over the next three years, Bank of America said in a new report, joining the growing group of analysts forecasting a return of oil to three-digit territory.

The average price of Brent over the next five years, however, will be between $50 and $70 per barrel, according to the bank, as quoted by The National.

[Feb 28, 2021] OPEC+ Faces Calls to Cool Oil Market Frenzy With Extra Barrels

At some point changes in oil price will became qualitative and all this paper oil speculation designed to keep them down will stop working. It might well be that the moment of declining world production is near or already reached.
There is a finite amount of oil in the ground and with the current size of population it will eventually be depleted. The only question is how soon.
Bloomberg, of course, repeats IEA propaganda as the USA need low oil prices to survive as transportation of goods is mainly done by trucks and to keep it global empire from shrinking. So take the information provided with a grain of salt.
The problem for the USA is that shale oil production (which actually mostly produce light fractions; the fact carefully hidden in EIA statistics) is in decline and can't be revived without huge subsidies and the write down of debt.
Feb 28, 2021 | finance.yahoo.com

From trading houses in Geneva to Wall Street banks, much of the oil world agrees that global markets could use some more barrels. The big question is whether OPEC+ will provide enough of them.

A crude glut that piled up during the pandemic is vanishing fast. Global inventories are plunging at the steepest rate in two decades, according to Morgan Stanley. Prices have rallied to pre-virus levels, while U.S. production has taken a hit from freezing storms. Talk swirls of market supercycles, and even the return of $100 oil.

With the need for more supply evident, traders expect the OPEC+ coalition, led by Saudi Arabia and Russia, will agree to increase production when it meets on March 4, reversing some of the output cuts made last year.

But it's unclear if the group will act vigorously enough. Wary of the virus's persisting threat to demand, Saudi Energy Minister Prince Abdulaziz bin Salman has urged fellow producers to remain "extremely cautious."

If the alliance agrees an output hike that falls short of requirements, however, it could trigger a further price surge

... ... ...

Goldman Sachs Group Inc. sees Brent hitting $75 a barrel in the third quarter as a new commodities supercycle beckons , while trading giant Trafigura Group says it's "very bullish" on the months ahead. Socar Trading SA, a unit of Azerbaijan's state oil company, predicts $80 could be reached this summer and triple digits within two years.

"The fear is that in 12 months there will be a shortage" even if OPEC+ revives output, said Socar Chief Trading Officer Hayal Ahmadzada. "It will drive the price very high, very fast."

... ... ...

Prices are still far below the levels most OPEC nations need to cover government spending , and the International Energy Agency -- a leading forecaster -- anticipates a market setback in the second quarter as a seasonal lull briefly causes inventories to accumulate again.

[Feb 27, 2021] The book tells the story about a slow coup d'etat that happened in Japan during the 70's and late 80's and how Japan was transformed from a centralized command economy where credit creation was "window-dressed" by the powerful Finance Ministry by means of an artificially created housing bubble into one that is dominated by a neoliberalized Central Bank with all the monetary, financial and social ramifications we can see today

Feb 27, 2021 | www.moonofalabama.org

vato , Feb 27 2021 11:19 utc | 41

Regarding the Renegade Inc. link @Karlof has provided and the interview with Richard A. Werner, the research paper he talks about in the midsection can be read here: Can banks create money out of nothing? .
Strangeley enough, it's probably the first empirical reasarch attempt on how a bank "loan" is indicated on a bank balance sheet. He does it by taking a fictitious loan from one of these small local community banks he talks about in the interview.

The paper is easily accessible and also contains a brief history of the perception on how money is created and how banks operate.

And since the documentary The Spider's Web has been mentioned, there are two complementary films to banking and finance which are worth watching: 97% Owned and Princes of Yen , the latter based on Richard Werner's same-titled book. The book tells the story about a slow coup d'etat that happened in Japan during the 70's and late 80's and how Japan was transformed from a centralized command economy where credit creation was "window-dressed" by the powerful Finance Ministry by means of an artificially created housing bubble into one that is dominated by a neoliberalized Central Bank with all the monetary, financial and social ramifications we can see today, not just in Japan but around the globe.

[Feb 27, 2021] America Needs New Infrastructure to Survive, But Will Biden Deliver- -

Feb 27, 2021 | www.nakedcapitalism.com

By Tom Conway, the international president of the United Steelworkers Union (USW) . Produced by the Independent Media Institute

Patricia McDonald layered on sweaters, socks and mittens and huddled under blankets for 15 hours as the temperature in her Duncanville, Texas, home plunged to 42 degrees in the wake of Winter Storm Uri.

Well after the water in her kitchen froze, McDonald decided she'd had enough and braved a hair-raising ride over snow-covered, ice-slicked roads to get to her daughter's house several miles away.

The Dallas County probation officer was safe and warm there. However, McDonald couldn't establish the computer connection she needed to check in with colleagues, and she worried about clients who had had fewer resources than she did for surviving the state's massive power failure.

This isn't merely a Texas problem. Failing infrastructure -- from pothole-scarred roads and run-down bridges to aging utility lines and dilapidated water systems -- poses just as big a threat to the rest of the country.

Without a bold rebuilding campaign, Americans will continue to risk their well-being and livelihoods as the nation collapses around them.

McDonald, financial secretary for United Steelworkers (USW) Local 9487, which represents hundreds of city and county workers in Dallas, grew increasingly angry knowing that it took just several inches of snow and frigid temperatures to knock out the Texas power grid and paralyze the state.

Some Texans, confronted with days-long power outages, slept in idling motor coaches that officials turned into makeshift warming centers or drove around seeking hotel rooms that still had light and heat.

Others hunkered down at home, melting snow to flush toilets after frozen pipes burst or heating rooms with generators and charcoal grills despite the danger of carbon monoxide poisoning. A handful of people froze to death, including an 11-year-old boy found lifeless in his bed.

But even as McDonald and other Texans waited for power to be restored, police and firefighters in Philadelphia used rafts to rescue at least 11 people trapped by a torrent of water after a 48-inch main ruptured in the city's Nicetown neighborhood.

On February 5, a utility worker in Oldsmar, Florida, averted disaster when he noticed that a hacker had taken over his computer and increased the amount of lye in the drinking water supply to dangerous levels. The security breach provided a chilling reminder that financially struggling water systems not only contend with lead-tainted pipes and failing dams but also with vulnerable computer systems that require urgent improvements.

America cannot move forward if it continues falling apart. That's why the USW and other labor unions are championing a historic infrastructure program that will modernize the country, improve the nation's competitiveness and create millions of jobs while simultaneously enhancing public safety.

"There needs to be change," said McDonald, one of the millions affected by the blackouts that utilities hurriedly imposed because surging demand and equipment failures put the whole power grid " seconds and minutes away " from a catastrophic failure that could have left the state without electricity for months.

A major infrastructure investment, such as the one President Joe Biden envisioned in his Build Back Better plan, will create jobs not only for the workers who build roads and bridges but also for the Americans who manufacture aluminum, cement, fiberglass, steel and other items essential for construction projects.

Stronger, more resilient infrastructure will help America weather the ever more frequent, increasingly severe storms associated with climate change. That means not only upgrading power grids but also encasing utility poles in concrete or relocating power lines underground. It also requires strengthening coastal barriers to guard against the growing hurricane damage that Texas and other states face.

Expanding broadband and rebuilding schools will ensure that children across the country have equitable access to educational opportunities. Investments in manufacturing facilities will enable the nation to rebuild production capacity decimated by decades of offshoring.

And an infrastructure campaign will ensure local officials have the resources they need to manage growth, such as the huge expansion underway at the Electric Boat submarine shipyard in Groton, Connecticut.

Kevin Ziolkovski welcomes the business that the shipyard brings to his community. But Ziolkovski, who represents dozens of Groton Utilities workers as unit president of USW Local 9411-00, said it makes no sense for the federal government to continue awarding bigger contracts to Electric Boat without providing sufficient funds for related infrastructure.

Ziolkovski says Groton Utilities needs $3.5 million more just to construct a new water tank for the shipyard, one of its biggest customers. He also knows that Groton and other towns need funds to upgrade roads, sewerage systems, public transit and recreational amenities to accommodate the expected influx of workers and their families.

"If you want to see these multibillion-dollar nuclear submarines get built for the defense of the entire nation, you should support everything that goes into that, too," said Ziolkovski, who sees a national infrastructure program as one solution and developed a briefing book on local infrastructure needs for Connecticut's congressional delegation.

McDonald, who returned to her home after three days to find the power back on but her neighborhood under a boil-water advisory, knows that other communities will suffer unless the nation embraces a rebuilding program.

It pains her to know that America fell into such disrepair that it cannot provide basic services, like power and safe roads, at the very time people need them most.

"There's no excuse for this," she said.


doug , February 26, 2021 at 6:57 am

We need infrastructure upgrade. How to fund? It seems a fair number of the examples here were originally funded by local taxes. As local property taxes have been cut/ held down, the local money to repair and maintain has disappeared. Now the same local tax cutters want Federal money for their projects. What happened to local borrowing and funding? Is it different from the past?
I am all for Federal funding of national projects such as roads, but local stuff might be best funded at local level with some Federal guarantees.

tegnost , February 26, 2021 at 8:43 am

all we really need is a policy to upgrade infrastructure rather than a policy of handing money to connected insiders. Local borrowing and funding won't be a drop in the bucket and that lack will be used to say " sorry, you can't have that! unless you guarantee profits to the funding banksters". The system as it stands now makes this article seem fantastic, in the disney sense

rc , February 26, 2021 at 8:44 am

The Fed can easily fund an entire $10 trillion infrastructure package over a decade. If not completely corrupted, this adds productive capacity at good to high rates of return lowering total factor costs.

Also, savings could be had from the healthcare rackets that siphon off an unreal 8% to 10% (up to $2 trillion/year) of GDP in skims. The US needs to increase investment by 5% of GDP ($1 trillion) / year to get back on track.

R.k. Barkhi , February 27, 2021 at 4:00 pm

The funds are in "our" insanely huge "defense" budgets where because they routinely break the 1996 law requiring an annual accounting,over $21 Trillion dollars have been unaccounted for,n this by outside investigaters. Imagine the real amount if investigated by insiders.

When we defund the military from the size of the next 10 largest military budgets globally down to merely the largest, we will be able to rebuild our country,pay off student debt and pay for Medicare 4 All with change left over. This will also decrease our military's huge pollution footprint as they are 1 of the largest sources.

Alex Cox , February 26, 2021 at 1:24 pm

Interesting that the purpose of all this infrastructure improvement is, in the author's take, a better shipyard to build nuclear submarines!

Please wake me when the nightmare ends.

HH , February 26, 2021 at 5:33 pm

The U.S. is run by predatory plutocrats. Biden and the coin-operated Congress are there just to maintain a dignified facade on the looting operation. As long as the majority of voters are willing to lower their standard of living in return for receiving infusions of hatred from their favorite demagogues, the nation will continue to decline.

Jeremy Grimm , February 26, 2021 at 5:52 pm

Even if Biden launches a large scale infrastructure and infrastructure repair program I am not sure how much infrastructure and infrastructure repair the money would buy without major changes in the ownership of construction Cartels and some of the ownership of existing infrastructure -- like the Grid, Internet, and telecommunications. But look on the bright side of life there are probably still shovel-ready projects waiting from the Obama years. I trust that Biden has replaced the government appointees who oversaw where the CARES Act trillions went so that we will at least have some idea where all the infrastructure and infrastructure repair money went.

Sound of the Suburbs , February 27, 2021 at 3:53 am

Neoliberals know next to nothing about the monetary system.
All their mistakes during globalisation have allowed heterodox economists to make enormous progress in this area.
Even amongst the mainstream there are one or two that do have some idea.

Paul Ryan was a typically confused neoliberal and Alan Greenspan had to put him straight.
Paul Ryan was worried about how the Government would pay for pensions.
Alan Greenspan told Paul Ryan the Government can create all the money it wants, there is no need to save for pensions.
https://www.youtube.com/watch?v=DNCZHAQnfGU
What matters is whether the goods and services are there for them to buy with that money.
That's where the real wealth in the economy lies.

Neoliberals have got very confused about where the real wealth in the economy lies and money, which comes out of nothing.
They don't know what real wealth creation is, and think it comes from things like making money, trade and inflating asset prices.
It's a recipe for disaster.

They always think there is no money, when money comes out of nothing and Governments can create as much as they want.
They don't know what real wealth creation is and how to grow an economy in a sustainable way.
They usually adopt the economic growth model of the US in the 1920s.

At 25.30 mins you can see the super imposed private debt-to-GDP ratios.
https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6

Bank credit is used for unproductive purposes and it is the money creation of bank credit that drives the economy.
Debt rises faster than GDP, as you head towards a financial crisis.
No one realises the problems that are building up in the economy as they use an economics that doesn't look at debt, neoclassical economics; apart from the Chinese.

1929 – US
1991 – Japan
2008 – US, UK and Euro-zone
The PBoC saw the Chinese Minsky Moment coming and you can too by looking at the chart above.
The Chinese were lucky; it was very late in the day.

Sound of the Suburbs , February 27, 2021 at 4:27 am

How did we get here?

Mankind first started to produce a surplus with early agriculture.
It wasn't long before the elites learnt how to read the skies, the sun and the stars, to predict the coming seasons to the amazed masses and collect tribute.
They soon made the most of the opportunity and removed themselves from any hard work to concentrate on "spiritual matters", i.e. any hocus-pocus they could come up with to elevate them from the masses, e.g. rituals, fertility rights, offering to the gods . etc and to turn the initially small tributes, into extracting all the surplus created by the hard work of the rest.
The elites became the representatives of the gods and they were responsible for the bounty of the earth and the harvests.
As long as all the surplus was handed over, all would be well.

The class structure emerges.
Upper class – Do as little as they can get away with and get most of the rewards
Middle class – Administrative/managerial class who have enough to live a comfortable life
Working class – Do the work, and live a basic subsistence existence where they get enough to stay alive and breed

Their techniques have got more sophisticated over time, but this is the underlying idea.
They have achieved a total inversion, and got most of the rewards going to those that don't really do anything.

Everything had worked well for 5,000 years as no one knew what was really going on.
The last thing they needed was "The Enlightenment" as people would work out what was really going on.
They did work out what was going on and this had to be hidden again.

The classical economists identified the constructive "earned" income and the parasitic "unearned" income.
Most of the people at the top lived off the parasitic "unearned" income and they now had a big problem. (Upper class – Do as little as they can get away with and get most of the rewards)
This problem was solved with neoclassical economics, which hides this distinction.
It's a pseudo economics that was designed to hide the way the economy actually works.
It confuses making money and creating wealth so all rich people look good.

Great minds think alike.
William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced by neoclassical economics.
https://www.youtube.com/watch?v=g6iXBQ33pBo&t=2485s
He thinks we have been on the wrong path for one hundred years.
Small state, unregulated capitalism was where it all started and it's rather different to today's expectations.

[Feb 27, 2021] Several analysts of the deregulated Texas grid model point out that had the state maintained a "reliable emergency backup" such as is possible with nuclear or coal power, the blackout could have been averted

Feb 27, 2021 | www.moonofalabama.org

Down South , Feb 26 2021 19:47 utc | 17

Engdahl takes a look at the energy crisis in Texas.

The Green Energy Fallacy

In addition US oil production, centered in Texas, has plunged by a third, and more than 20 Gulf Coast oil refineries are blocked as are grain barge shipments along the Mississippi River. Several analysts of the deregulated Texas grid model point out that had the state maintained a "reliable emergency backup" such as is possible with nuclear or coal power, the blackout could have been averted. Recently Texas has forced six coal power plants to close since 2018, owing to state rules that force power companies to take the subsidized wind and solar power, undercutting the cost of their own coal generation. It simply forced them to shut down functioning coal plants that generated 3.9 GW. Had those still been on line, sources say the blackouts could easily have been averted. Unlike current wind technology or solar, coal and nuclear plants can store up to a month or more capacity on site for power emergencies.

While in northern states like Minnesota where severe winters are common and prepared for, Texas has no such requirements for reserve capacity. For example, the Minnesota Public Utilities Commission requires plants to have enough reserve capacity online to ensure the power stays on during extreme circumstances. Instead, Texas operates an "energy-only" market, where wholesale power prices are seen as an adequate incentive to bring more power plants online. The aim of the energy only model was to make intermittent wind and solar more profitable to increase their market share over conventional alternatives like coal or nuclear.

The state grid model forced Texas coal and nuclear plants to sell electricity at a loss on the market because they are unable to reduce their electricity output when high wind and solar output force prices into the red. Ultimately, it forced the unnecessary closing of the six coal plants, just what the green energy advocates wanted. The flaws in the model are glaring, as is the growing dependence on unreliable wind and solar options to get a dubious zero carbon footprint.

Texas 'Deep Freeze': Urgent Climate Warning but Not How You Think

Piotr Berman , Feb 27 2021 16:35 utc | 50

About the "economic model" of the Texan freeze.

It should be obvious to all that "price signals" do not convey public interest all the time, and definitely not in the times of crisis.

To prevent or alleviate a crisis, investments are needed that may be "wasted" or not. I did not notice a public debate like that: "do you want to pay 1c/kWh more so the power supply will be adequate even during to relatively short events that happen every 10 years or so?" It is cheaper to build pipes and other equipment if they do not have to work in cold weather, and to close usually unneeded thermal power stations rather then keeping them capable of producing electricity during occasional weeks of peak demand.

Funnily enough, the "novel pricing mechanisms" reward the companies that did not prevent the crisis, even few kWh's sold at a price 1000 times larger than the usual contributes very well to the balance sheets. IMF is busy convincing borrowing countries to engage in "reforms" of that kind (and worse, persistent jacking up of prices).

[Feb 27, 2021] Woman sues Texas electric company Griddy for $1B over $9K bill

Feb 27, 2021 | nypost.com

A Texas electric company has been hit with a $1 billion class action lawsuit from a woman who claims her bill skyrocketed to more than $9,000.

Houston resident Lisa Khoury says her monthly Griddy electric bill spiked to $9,340 from $200, and that the company pulled $1,200 from her bank account until she blocked further payments, according to KTRK-TV .

"It went through my mind how are we going to pay this, what are we going to do, this is life-changing," Khoury told KXAS-TV .

The suit accuses Griddy of price gouging and failing to protect its customers from astronomical energy costs.

Other customers have reported that the company has charged them as high as $17,000.

The electric company, which serves nearly 30,000 Texans, sent an email out to their customers on Feb. 13 before the winter storm, warning them of the high costs and even encouraged them to switch providers.

"Prices are looking to stay at record rates over the next couple of days due to the polar vortex. Your well-being is more important than our bottom-line. Unless you are a Griddy energy-saving expert, we recommend you immediately switch to another provider due to these price surges," a screenshot of the email posted to Twitter reads.

A Griddy spokesman told The Dallas Morning News that "the lawsuit is meritless and we plan to vigorously defend it."

[Feb 25, 2021] Regarding terms "liberal" and "neoliberal"

Feb 25, 2021 | www.moonofalabama.org

MFB , Feb 25 2021 7:26 utc | 74

Regarding "liberal" and "neoliberal"...

"Liberal" appeared in Europe in a socio-economic context in the late 1600s to describe an system where business would be free, unhindered by royal/government control. For the most part, to start up a business, one needed a royal license or patent. The liberals wanted unregulated business, and their motto was "laissez faire" (let it be done/happen). Laissez-faire capitalism is generally considered the first (entrepreneurial) phase of capitalism, starting in the early 1700s.

Outside the English-speaking world, the word still relates to free trade and unregulated business practices.

"Neoliberal" is more recent, coming into common usage since the arrival of the Thatcher/Reagan regime of globalization. Neoliberals go one further than the original liberals. While the latter just wanted governments to let businesses do their thing, the neoliberals believe that it is government's duty to promote and support business, in other words to play a major role in making it possible for corporations to make money. Hence, Boeing and the other corporations and the big banks must NEVER be allowed to fail, for that would represent a failure of government as it is understood in neoliberal ideology.

Posted by: RJPJR | Feb 25 2021 1:02 utc | 5 4

Apropos neoliberalism.

The liberalism which is referred to here is the economic liberalism which was adopted in the United Kingdom in the 1840s after the "reform" of the Corn Laws, which permitted free trade in grain and therefore brought down both the price of wheat and the small farming community in the UK, as it was intended to do. Later these liberal policies (largely modelled on the "comparative advantage" economic theory, which had already been refuted by the time it was developed by David Ricardo) were used to justify the Irish genocide of 1847-9.

This policy was eventually abandoned later in the nineteenth century, except for places like India, of course. It was restored in the West in the 1970s, under the name of "free trade", and therefore is called neoliberalism, or new liberalism in the economic sense.

The term is not a compliment.

I suspect that the term "liberal-fascist" derives partly from the term Islamofascist, meaning a Muslim who does not bow to Washington six times a day, and partly from the term "social-fascist", a Stalinist term for a socialist who did not bow to Moscow six times a day.


vk , Feb 25 2021 12:04 utc | 84

@ Posted by: MFB | Feb 25 2021 7:26 utc | 74

Liberalism is the ideology of capitalism. According to Losurdo, the term "liberal" (as an adjective) is first found in 16th Century Spain, and essentially was a defense of slave labor to serf labor.

The first theoretician of Liberalism that I can think of is John Locke. If he wasn't the first, he certainly was the most influential, as he was the philosopher of the Founding Fathers of the USA.

Liberalism was never an organized "school" or ideology. The term itself as we know today (an ism) was only consolidated sometime around the French Revolution (1789), hence why many people today (mainly Western First Worlders) still associate the term is progressivism and even leftism. In reality, they are confounding the term with radicalism, which was the faction of the abolitionist liberals who extrapolated liberalism to all human beings.

Neoliberalism is literally the New Liberalism. The neoliberals believe that everything that happened between the Russian Revolution (1917) and the post-war welfare state social-democracy was an abortion of History that should've never have happened. They then propose the return to the classical liberal era (until 1914) with updates to the new technological realities of their time, as if the period of 1917-1975 never existed. They then seek to "link up" 1980-present to 1500-1914.

... ... ...

Mao Cheng Ji , Feb 25 2021 12:28 utc | 87

@vk "The neoliberals believe that everything that happened between the Russian Revolution (1917) and the post-war welfare state social-democracy was an abortion of History that should've never have happened."

Personally, I tend to define 'neoliberalism' as global financial capitalism. 'Global' being the key. Something similar to what's described here: https://en.wikipedia.org/wiki/Ultra-imperialism . Technological advances in global communications and transportation (containerization) being its most important precursors.

But I agree that the collapse of the Soviet Union, a competing alternative model, has to be an important component also.

vk , Feb 25 2021 12:34 utc | 88

@ Posted by: Mao Cheng Ji | Feb 25 2021 12:28 utc | 87

You're thinking about Monetarism - the economics school founded by Milton Friedman that served as the economic theory of neoliberalism after the 1980s.

Neoliberalism was founded in 1947 (Mont Pelerin Society). One interesting thing about the original neoliberals was that they didn't distinguish between European social-democracy and communism: in their view, the welfare state was the realization of the Communist Manifesto's program (it really does propose for what we nowadays call the welfare state in some of its pages as some kind of transition program).

The Mont Pelerin Society still exists.

Dogon Priest , Feb 25 2021 13:15 utc | 91

Some animals are more equal than others

vk , Feb 25 2021 13:36 utc | 93

@ Posted by: Mao Cheng Ji | Feb 25 2021 12:49 utc | 89

Monetarism is the economic theory. Neoliberalism is the political-ideological doctrine. Neoliberalism found in Monetarism the missing piece for them to govern the Western world, sometime in the mid-1970s.

It is common for a political-ideological doctrine to absorb theories outside of its "field" in order to strengthen itself and gain power. Change of clothes (i.e. change of the theories it adopts) is also common.

The impression Westerners have nowadays that one political-ideological doctrine must always have exactly one economic theory or even that they are the same thing comes from the fact that we live in the Era of Marxism, i.e. a historical period where Marxism is dominant. But Marxism is the exception to the rule, based on the scientific theory of the greatest philosopher of all time.

In practice, the bourgeois ideologues will have to make do with much inferior theoreticians (John Locke, Adam Smith, David Ricardo, Paul Samuelson, Mises, Hayek, Böhm-Bawerk, Walras, Keynes, Friedman etc. etc. etc.) and so it is expected for them to change their thinkers from time to time.

Mao Cheng Ji , Feb 25 2021 14:18 utc | 97

@vk "Neoliberalism found in Monetarism the missing piece..."

The way I see it, economics is the base. Like I said, technological advances in global communications and transportation shifted the paradigm. What we have now is international division of labor, controlled by west-owned global finance. Global financial capital is rising above national boundaries; the role of national governments is to provide resources, infrastructure, and disciplined low-cost labor, thus attracting a portion of global capital, competing for it.

That's what I call 'neoliberalism', but I don't insist on it. What's in the name? 'Hyperimperialism', 'super-imperialism', 'inter-imperialism' or even 'state cartel' would do.

It's just that 'neoliberalism' is a popular word these days, that seems to be used to describe the current form of "relations of production". And why not.

Now, about ideologies. My feeling is, there are always hundreds of various ideologies flying around. The establishment will pick a suitable one, shine it up in think-tanks, and go with it. It'll become the dominant ideology. Until it doesn't suffice anymore, and then they'll replace it with another. But that's all bullshit. Pwogwessivism, liberalism, social democracy, the third way, whatever. No need to pay attention.

vk , Feb 25 2021 14:53 utc | 99

@ Posted by: Mao Cheng Ji | Feb 25 2021 14:18 utc | 97

Now, about ideologies. My feeling is, there are always hundreds of various ideologies flying around. The establishment will pick a suitable one, shine it up in think-tanks, and go with it. It'll become the dominant ideology. Until it doesn't suffice anymore, and then they'll replace it with another. But that's all bullshit. Pwogwessivism, liberalism, social democracy, the third way, whatever. No need to pay attention.

That's the definition of democracy in the post-war, as defined by the likes of Arthur M. Schlesinger, Jr. and Hannah Arendt.

Schlesinger defined democracy or Western democracy as the system with a "vital center". A vital center is a political system dominated by a political spectrum (left-right). The ideologies within this political spectrum freely compete against each other in the public arena for political power (getting into the White House; forming a majority within a Parliament). Schlesinger is the father of what we nowadays call "pluralism". In opposition, a totalitarian system is one of a single party, in which he put Nazi Germany and the USSR - they don't have a "vital center".

Hannah Arendt defined totalitarianism as any system that vertebrates itself on one single meta-narrative (History). She put as the totalitarian holotypes both Nazi Germany and the USSR - the first built itself over the narrative of the master race; the second over class struggle. By exclusion, she defines a democratic system as those without a single narrative or any meta-narrative. By a different route, she comes to a similar endgame as Schlesinger, with the exception that, in her model, democracies don't necessarily need to be multi-party or even plural. You could be a single-party system and not plural - as long as the party doesn't adopt any "meta-narrative", it suffices as free and democratic. Needless to say, Arendt is one of the precursors to Postmodernism (absolute relativity).

That's why the West, until the present days, still consider itself as fully democratic and China and Russia fully totalitarian: as long as the West doesn't adopt a meta-narrative and keeps more than one party, they are democratic by post-war standards. It's not and never was about eradicating poverty, turning the world a better place, fomenting progress for the people etc. etc.

karlof1 , Feb 25 2021 18:41 utc | 121

Lots of stabs being made at a definition for Neoliberalism. The following is from Hudson's J is for Junk Economics , pgs 167-8:

" Neoliberalism: An ideology to absolve banks, landlords and monopolists from accusations of predatory behavior. Just as European fascism in teh 1930s reflected the failure of socialist parties to put forth a viable alternative, today's U.S.-centered neoliberalism reflects the failure of industrial capitalism or socialism to free society from rentier interests that are a legacy of feudalism.

"Turning the tables on classical political economy, rentier interests act as plaintiffs against public regulation and taxation of their economic rents in contrast to Adam Smith and other classical liberals, today's neoliberals want to deregulate monopoly income and free markets for rent seeking, as well as replacing progressive income taxation and taxes on land and banking with a value-added tax (VAT) on consumers.

"Endorsing an oligarchic role of government to protect property and financial fortunes (see Chicago School and Moral Hazard ), neoliberalism loads the economy with an exponential growth of debt while depicting it in a way that avoids recognizing the rising rentier overhead (rent, interest and insurance) paid to the FIRE sector. (See Junk Economics and Social Market .) Neoliberals want to privatize public infrastructure. They defend this grabitization by depicting public ownership and regulation as less efficient than congtrol by financial managers, despite their notorious short-termism. The pretense is that private operators will provide goods and services at lower cost even while extracting monopoly rent, building interest, dividends and high management salaries into prices. (See Pentagon Capitalism .)"

A related definition follows:

" Neoliberal Disease: A term coined by Jan Hellevig to describe the free hand that leaders of the demoralized post-Soviet bureaucracies gave neoliberals to redesign and de-industrialize their economies by creating client kleptocracies . 'They freed the markets, but only for the criminals. They totally neglected investments to modernize the industry, and let the assets and cash streams be openly or covertly stolen by insiders and the mob. The result was total chaos and the breakup of the Soviet Union.'" (Jon Hellevig, "Russian Economy--The disease is not Dutch but Liberal," Awara March 2 2016, reprinted in Johnson's Russia List , March 3, 2016, #12.)" [All Emphasis Original]

It should be noted the strategy Hellevig describes is the same as that used by those termed "Corporate Raiders" that first prominently surfaced during Reagan/Bush and were responsible for the so-called Savings & Loan Crisis.

If you don't have Hudson's book, I highly suggest getting it as it's filled with excellent information and beats taking both micro- and macroeconomics. It's the companion book to Killing the Host , which is essential for understanding Neoliberalism. The only part of the Saga missing is a definitive history telling how the Neoliberal doctrine arose in the UK and was exported to the USA @1880. Hudson has provided key portions but the overall story still remains to be told.

v> Notsofast says: February 22, 2021 at 7:15 pm GMT • 3.1 days ago • 100 Words

Notsofast says: February 22, 2021 at 7:15 pm GMT • 3.1 days ago • 100 Words

the worst mistake jimmy carter ever made was to hire brzezinski, father of the mujahideen and grandfather of al-qaeda. we used to brag about arming terrorists with weapons to shoot down russian helicopters, hell they even made a "comedy" about it called charlie wilsons war. now we accuse the russians of placing bounties on americans in afganistan and demand more sanctions be placed on russia.

utter hypocrisy.

as for the maidan cookie monster and her neocon half wit husband, further proof of failing upward, nothing succeeds like failure in washington. /div

[Feb 25, 2021] This Obscure Energy Treaty Is the Greatest Threat to the Planet You've Never Heard Of -

Feb 25, 2021 | www.nakedcapitalism.com

This Obscure Energy Treaty Is the Greatest Threat to the Planet You've Never Heard Of Posted on February 25, 2021 by Yves Smith

Yves here. An ugly trade treaty that included corporate-profit guaranteeing "investor-state dispute settlement" mechanisms is again getting the bad press it deserves. We mentioned the 1994 Energy Charter Treaty in our 2013-2015 opposition to the TransPacific Partnership and its Atlantic sister, the TransAtlantic Trade and Investment Partnership because it had become notorious in Europe for undermining clean energy initiatives. From a November 2013 post, quoting Public Citizen :

Vattenfal, a Swedish company, is a serial trade pact litigant against Germany. In 2011, Der Spiegel reported on how it was suing for expected €1 billion plus losses due to Germany's program to phase out nuclear power:

According to Handelsblatt, Vattenfall has an advantage in seeking compensation because the company has its headquarters abroad. As a Swedish company, Vattenfall can invoke investment rules under the Energy Charter Treaty (ECT), which protect foreign investors in signatory nations from interference in property rights. That includes, according to the treaty's text, a "fair and equitable treatment" of investors.

The Swedish company has already filed suit once against the German government at the ICSID. In 2009, Vattenfall sued the federal government over stricter environmental regulations on its coal-fired power plant in Hamburg-Moorburg, seeking €1.4 billion plus interest in damages. The parties settled out of court in August 2010.

These treaty terms are designed to erode national sovereignity and establish supra-national mechanisms to make corporate profits senior to national laws. I'm not making that up. Again from that 2013 post:

Word has apparently gotten out even to Congressmen who can normally be lulled to sleep with the invocation of the magic phrase "free trade" that the pending Trans Pacific Partnership is toxic. This proposed deal among 13 Pacific Rim countries (essentially, an "everybody but China" pact), is only peripherally about trade, since trade is already substantially liberalized. Its main aim is to strengthen the rights of intellectual property holders and investors, undermining US sovereignity, allowing drug companies to raise drug prices, interfering with basic operation of the Internet, and gutting labor, banking, and environmental regulations.

Or as Public Citizen put it :

It's not really about "trade", but a system of enforceable global governance that is not designed for modification by those who will live the results.

The only good news about the Energy Charter Treaty, compared to its later versions of investor-state dispute settlement provisions, is that signatories can withdraw. And that might actually happen with the Energy Charter Treaty.

By Fabian Flues, an adviser on trade and investment policy at Berlin-based PowerShift, Cecilia Olivet, project coordinator with the Economic Justice Programme at the Transnational Institute, and Pia Eberhardt, a researcher and campaigner with the Brussels-based campaign group Corporate Europe Observatory. Originally published at openDemocracy

On 4 February the German energy giant RWE announced it was suing the government of the Netherlands . The crime? Proposing to phase out coal from the country's electricity mix. The company, which is Europe's biggest emitter of carbon, is demanding €1.4bn in 'compensation' from the country for loss of potential earnings, because the Dutch government has banned the burning of coal for electricity from 2030.

If this sounds unreasonable, then you might be surprised to learn that this kind of legal action is perfectly normal – and likely to become far more commonplace in the coming years.

RWE is suing under the Energy Charter Treaty (ECT), a little-known international agreement signed without much public debate in 1994. The treaty binds more than 50 countries, and allows foreign investors in the energy sector to sue governments for decisions that might negatively impact their profits – including climate policies. Governments can be forced to pay huge sums in compensation if they lose an ECT case.

On Tuesday, Investigate Europe revealed that the EU, the UK and Switzerland could be forced to pay more than €345bn in ECT lawsuits over climate action in the coming years. This amount, which is more than twice the EU's annual budget, represents the total value of the fossil fuel infrastructure that is protected by the ECT, and was calculated using data gathered by Global Energy Monitor and Change of Oil International.

With ECT-covered assets worth €141bn (or more than €2,000 per citizen), the UK – which in 2019 became the first major economy to pass a net zero emissions law – is the country most vulnerable to future claims.

In 2019 the European Commission called the ECT "outdated" and "no longer sustainable", and more than 450 climate leaders and scientists and 300 lawmakers from across Europe have called on governments to withdraw from the treaty.

But in response, powerful interests have mobilised to not just defend the treaty, but to expand it to new signatory states. These interests include the fossil fuels lobby keen to keep its outsized legal privileges ; lawyers who make millions arguing ECT cases; and the Brussels-based ECT Secretariat, which has close ties to both industries and whose survival depends on the treaty's continuation.

A Bodyguard for Polluters

Supporters of the ECT make a number of controversial claims to prevent countries from leaving the treaty and persuade new countries to join. But their myths and misinformation are easily debunked .

For example, ECT supporters say the treaty attracts foreign investment, including into clean energy. However, there is no clear evidence that ECT-style agreements do this: a recent meta-analysis of 74 studies found that investment agreements' effect on increasing foreign investment "is so small as to be considered zero".

And while ECT supporters claim the treaty protects renewable investments, in reality it predominantly protects and prolongs the fossil-fuel dominated status quo. In recent years only 20% of investments protected by the ECT covered clean energy, compared to 56% for coal, oil and gas.

By protecting the status quo, the ECT acts as a bodyguard for polluters . As the RWE example shows, when a government decides to phase out coal or cease oil and gas operations, fossil fuel companies can demand steep compensation via the ECT. So with no public benefits and clear risks for climate action, why are countries hesitant to leave the treaty? Two more myths are preventing them from taking action.

Firstly, ECT proponents claim that an ongoing process to 'modernise' the treaty will fix its flaws. But modernisation has proceeded at a snail's pace since 2017, and is unlikely to succeed given resistance from powerful ECT members like Japan , whose companies have used the ECT to take legal action against other governments. Leaked reports show that the talks are stalled due to the requirement to take decisions unanimously.

No signatory state has proposed removing its dangerous corporate courts, which take the form of arbitration tribunals run by three private lawyers. No state has proposed a clear exemption for climate action. No ECT member wants to exclude protection of fossil fuels from the modernised treaty any time soon.

In short: the negotiations around ECT 'modernisation' will not bring the treaty in line with global climate commitments.

Secondly, ECT supporters claim that leaving the treaty offers no protection against costly lawsuits. The ECT's sunset clause – which allows investors to sue a country for 20 years after its withdrawal from the treaty – makes a unilateral ECT exit useless, it is claimed.

In practice, however, withdrawing from the ECT significantly reduces countries' risk of being sued and avoids carbon lock-in from new fossil fuel projects. The ECT's sunset clause only applies to investments made before withdrawal, while those made after are no longer protected.

At a time when the majority of new energy investment is still in fossil fuels, not renewables, this is important. The sooner countries leave, the fewer new dirty investments will fall under the ECT and be 'locked-in' by its legal status.

Italy took the necessary step of withdrawing from the ECT in 2016. Going forward, if multiple countries decide to withdraw together – say, the EU bloc, supported by allies such as the UK or Switzerland – they can further weaken the sunset clause. Countries that withdraw could adopt an agreement that excludes claims within their group, before jointly leaving the ECT at the same time. That would make it difficult for investors from those countries to sue others from the group.

This week a European-wide petition has been launched so that citizens can call on their governments to end the ECT madness.

Leaving the outdated, climate-killing ECT is a no-brainer. It is not just good governance, but the logical step for all who take global warming seriously.


The Rev Kev , February 25, 2021 at 3:27 am

Those "investor-state dispute settlement" mechanisms are nuts and I can see a rush for the door if one or two countries pull out of the Energy Charter Treaty. There has to be a point where they realize that the Energy Charter Treaty is not in fact a suicide pact. Good thing that there is not an equivalent in the medical industry or else healthcare companies would be suing nations for giving their citizens vaccines on the grounds that it is robbing those companies of future income from treating them during the present pandemic.

Unknown Unknowns , February 25, 2021 at 5:24 am

"not an equivalent in the medical industry or else healthcare companies would be suing nations for giving their citizens vaccines on the grounds that it is robbing those companies of future income from treating them during the present pandemic"

Are you sure?

They have been given a non-liability clause for side-effects. The EU has ordered more vaccine in spite of not knowing if the vaccines will stop the transfer of the disease. If that doesn't sound like an equivalent, what does?

Yves Smith , February 25, 2021 at 6:30 am

No. that's quite different. The governments under an ISDS type of regime would be required to buy or to compensate for non-purchases.

Here, they are competing with each other to try to get supplies. The liability waivers are in a completely different economic category and result from governments being so eager to get the vaccines that they were released without going through the normal approval process (and the drug companies as a result having an upper hand in bargaining).

Olivier , February 25, 2021 at 9:50 am

It was the governments themselves who enjoined the pharma companies to rush vaccine development and who then also rushed the approval process. Thus in this case (and only in this case) I think that a waiver of liability (maybe with some residual liability for gross negligence) is entirely appropriate.

vlade , February 25, 2021 at 7:14 am

I believe the EU contracts kept at least some liabilities, which was one of the reasons why it took so long to get it.

Dave in Austin , February 25, 2021 at 7:32 am

The ECT mechanism is a reasonable response to a question: "If a company in good faith follows a nation's laws and invests money in a long-term, legal project, who should pay for the stranded costs if the nation decides to change the law to make the project illegal?" This is about who should pay for stranded assets.

Legislators naturally are looking for someone else to pick up the bill and the "someone else" is often a foreign company because domestic companies have to much political power to be messed with and the company shareholders are often local people.

The Canadian gas pipeline to the US gulf coast is an example. More than two billion dollars were invested, the proper permits were gotten and the pipeline was built- all except a five mile stretch now held up in the usual creative American litigation machine. So who should pay for the two billion invested- half of which came from the Alberta provincial government? Alberta has already filed the arbitration claim and I support their position; if a country encourages a legal investment and then changes the rules the country can do it- but the country should pay for the loss.

When American assets are confiscated overseas using the same sort of creative legal reasoning the US investors are rightly up in arms. I'm specifically not including the all-to-common cases of fraud and political payoffs by foreign investors. In the cases Yves cites there are no allegations that the contracts were tainted by fraud.

A well known modern historian has pointed out that if the American abolitionists wanted to end slavery they should have campaigned to do what the British did- buy all the slaves, set them free and compensate the owners for the "taking" of the property. In the 1830s the British spent the money and freed the slaves. In the U.S., on the other hand we had a civil war, more than half a million young men killed- and the cost of the war was five times what it would have cost to purchase and free all the slaves. I use this example because there were clearly both moral and economic issues involved in slavery, just as there are in the fight to limit air pollution and stop climate change.

Not only is there no free lunch, but there is always a fight about who should pay for the lunch.

Susan the other , February 25, 2021 at 11:41 am

This sets the stage to rethink contracts of all kinds. If the Energy Charter Treaty (basically contracts to protect vested interests for profits and against liabilities) is breached by a country simply leaving the organization it makes all those contracts worthless. And it explains why the TPP and the TAP don't have a get-out clause. I think the question of stranded assets is being mishandled too. Especially because we will need fossil fuel for many decades to come. At this point it is a question of what do we sacrifice to protect the atmosphere? It looks like gasoline-cars and maybe home heating fuel. But not electricity. RWE AG is a huge generator and provider of electricity. Asia Pacific as well as the EU. So taking Texas as a good example, what happens to RWE if they are faced with any number of problems and need to generate electricity fast? Their best backup is oil and natural gas. And it's gotta be a no-brainer that they are seriously involved with Nordstream-2, and something similar in eastern Siberia (?), to supply fuel and back-up fuel for their operations. ECT is an old agreement. TPP is a newer one. Neither one of them are looking at the downside to the environment. So they should both be rethought and re-construed. Because, for more accurate consideration, fossil fuels are not so much a stranded asset as an asset that must be carefully conserved to last us through a long transition period.

Michael McK , February 25, 2021 at 12:02 pm

Given that industries spend as much effort lobbying for the environmental disasters our leaders (they paid to get elected) approve I don't think they deserve to earn back the expense of their investments, let alone the theoretical profit that that stupid, immoral investment could have generated
I think this sort of situation shows how important it is for governments to be the investors/owners of critical infrastructure instead of capitalists (paid for by asset taxes, transaction taxes and MMT).
At this point I can think of no wealthy person who's fortune is not built on the misery of our grandchildren (Oh no! It's us, now, not our grandkids at the edge of the abyss) and we need a massive asset tax on top of huge lifestyle changes. An asset free, radically different life is coming soon for us all whether we choose it or not and putting the decision off is only making the looming reality worse..

[Feb 24, 2021] The tendency of liberalism to deny the consequences of society stems from its myth of the 'individual '

Feb 24, 2021 | www.moonofalabama.org

Patroklos , Feb 21 2021 22:13 utc | 63

b@8 (and vk passim)

The tendency of liberalism to deny the consequences of society stems from its myth of the 'individual'. Liberalism imagines a world of rational subjects each making decisions in a sovereign way (Thatcher's 'there is no such thing as society'). This allows capitalism to erect a moral framework that represents the consequences of an economy as the consequences of personal decisions. In this way, success (wealth) is 'reward' and failure (poverty) is punishment. It's what Max Weber called 'secular Protestantism'. The working classes participate in this evaluative ideology (Gramsci); it is the source of their self-loathing and the reason they always vote against their own best interests. They all believe their lack of means is a consequence of their lack of intelligence, work ethic, failure of entrepreneurial spirit, etc etc. Here is Marx's own critique of the way liberalism washes its hands of the effects of capitalism:

"The... theory... which is also expressed as a law of nature, that population grows faster than the means of subsistence, is the more welcome to the bourgeois as it silences his conscience, makes hard-heartedness into a moral duty and the consequences of society into the consequences of nature, and finally gives him the opportunity to watch the destruction of the proletariat by starvation as calmly as any other natural event without bestirring himself, and, on the other hand, to regard the misery of the proletariat as its own fault and to punish it. To be sure, the proletarian can restrain his natural instinct by reason, and so, by moral supervision, halt the law of nature in its injurious course of development." - Karl Marx, Wages, December 1847

While it may be superficially true that our poor Texan could have cunningly evaded copping the wholesale price the fact remains that he is -- as all Texans are -- a victim of a system structurally designed to extract exorbitant rents from his need for power. A socialist system would not see him as a battery hen to be skimmed or as an atomized individual who should 'sink or swim' (in the words of that local mayor) but would seek to prevent power, food, water, air, housing, education, health, etc etc from being hijacked and sequestered by vested interests accessible only by outrageous fees. Socialism would outlaw rent-seeking, which is the theft of meaningful life by carpetbaggers and their corrupt partners in government.

[Feb 24, 2021] US-centered, racist, and mafia-styled community

Feb 24, 2021 | www.moonofalabama.org

karlof1 , Feb 23 2021 18:04 utc | 233

Explosive Global Times Editorial today. My comment from Escobar's FB:

As we saw with Lavrov's latest interview, the gloves are coming off as China and Russia escalate the diplomatic war in response to the "US-centered, racist, and mafia-styled community" attacking them. The quote is from the Global Times Editor and deserves to be put in full:

"Canada, the UK and Australia, three members of the Five Eyes alliance, have recently taken action to put pressure on China. They have formed a US-centered, racist, and mafia-styled community, willfully and arrogantly provoking China and trying to consolidate their hegemony as all gangsters do. They are becoming a racist axis aimed at stifling the development rights of 1.4 billion Chinese."

Despite the proven fact that there's only one race of humans--the Human Race--the 5-Eyes nations continue to employ racism as a key tool of their so-called diplomacy. Again, the GT Editor:

"Five Eyes alliance members are all English-speaking countries. The formation of four states, except the UK, is the result of British colonization. Those countries share the Anglo-Saxon civilization. The Five Eyes countries have been brought together by the US to become the 'center of the West.' They have a strong sense of civilization superiority . The bloc, which was initially aimed at intelligence sharing, has now become an organization targeting China and Russia. The evil idea of racism has been fermenting consciously or unconsciously in their clashes with the two countries."

And this "idea" is nothing new and has existed for centuries. My research led me to a 100+ year-old work, The Day of The Saxon , and to the work that suggested it, The Empire of "The City" , both of which are freely available at The Archive. What is suggested by them and the recent work ( Tomorrow, the World: The Birth of U.S. Global Supremacy ), reviewed by Pepe about the planning that resulted in the post-war Outlaw US Empire is that Empire is merely the continuance of the global Saxon Empire that still exists, and that what we're experiencing are the ongoing "political adjustments" that confer superiority to the Saxons since that's what they seek. In updated parlance, that would be Full Spectrum Dominance. As we know, the Chinese have already felt Saxon love and want no more of it and have finally made the connection between past and present. The Editor again:

"With a common language, a common historical background, and a coordinated attack target, such an axis is destined to erode international relations and allow hooliganism to rise to the diplomatic stage in the 21st century." [My Emphasis]

Hooliganism, an apt term given its roots in British football. Do read the entire editorial for there is much more commendable content. Those in the EU need to understand that they're doing the Saxon's bidding even through the UK is no longer a member as NATO still remains and is dominated by Saxons.

[Feb 24, 2021] Looks like officials knew this harsh winter would come, but succumbed to the interests of the energy capitalists.

Feb 24, 2021 | www.moonofalabama.org

vk , Feb 23 2021 17:54 utc | 231

"Power companies get exactly what they want": How Texas repeatedly failed to protect its power grid against extreme weather

Looks like officials knew this harsh winter would come, but succumbed to the interests of the energy capitalists.

As I said previously: there are no surprises in capitalism; predictability is its second name.

[Feb 24, 2021] Lloyds: one giant Ponzi scheme.

Notable quotes:
"... Not only was Lloyd's still self-regulating, it was empowered to determine itself what was meant by the notion of self-regulation, unilaterally making rules governing its operations, without answering to any outside authority, even Parliament. Lloyd's secrets were still safe. ..."
Feb 24, 2021 | www.moonofalabama.org

John Cleary , Feb 22 2021 14:10 utc | 115

I've been following Scottish independence closely now for about six months, and so have formed a view of the protagonists. Nicola Sturgeon puts me in mind of Lady Mary Archer, someone I knew for about four years. She is oh so sweet and polished on the outside - indeed a High Court judge famously said of her "is she not sweet? Is she not fragrant?". But on the inside....phew!

I believe it comes from a sense of impunity, a sense they can do anything they like, however disgusting and depraved, and there is nobody that can touch them because they are best female friends with Queen Elizabeth II. And the result is, well, abomination.

Let me give you some insights.

The source of wealth for Lord Archer is Lloyds of London, specifically the asbestosis fraud. The quotes I am about to relate come from David McClintick's "The Decline and Fall of Lloyds of London", Time Magazine Europe, February 21 2000 vol 155 no 7

Caressed by a soft breeze, Ralph Rokeby-Johnson and Roger Bradley surveyed the forbidding fourth hole of the vintage Walton Heath golf course south of London. It was a bright Thursday in early October, 1973. 

"Orator, you're not orating," Rokeby-Johnson said. "Have I upset you?" Rokeby-Johnson had been needling the normally loquacious Bradley for inside information since they'd teed off in the autumn golf outing of Lloyd's of London, the world's pre-eminent insurance market. Bradley and Rokeby-Johnson were leading executives at competing firms in the market and Lloyd's men maintained a spirited rivalry in golf as well as business. 


But as they shop-talked their way along the first three holes, "Orator" Bradley had fallen silent, because he sensed that Rokeby-Johnson was himself harboring information that could prove explosive: the threat to Lloyd's posed by asbestos, the ubiquitous, benign-looking insulation material that was slowly but surely infecting workers in the asbestos industry with deadly lung diseases--asbestosis and cancer--prompting lawsuits and insurance claims in America. 

"What can you tell me?" Bradley finally asked as they idled on the fourth tee, waiting for the players ahead to clear the green. 

"What I can tell you," Rokeby-Johnson replied in a stage whisper, "is that asbestosis is going to change the wealth of nations. It will bankrupt Lloyd's of London and there is nothing we can do to stop it."

It was Jefrey Archer who devised a means to turn an impending disaster into the Midas touch.

Fast forward to February 2000. Over a quarter of a century has passed since Ralph Rokeby-Johnson shared his apocalyptic vision with Orator Bradley. Legendary Lloyd's of London, pioneer of the insurance industry and synonymous with it, has escaped bankruptcy. But the organization that was once part of the very bedrock of Britannia has been devastated by losses including massive compensation claims from American workers afflicted by asbestosis and lung cancer. The wealth of nations may not have changed dramatically, but Lloyd's fundamental character has changed, and thousands of Lloyd's investors--the so-called Names who pledge all their personal wealth to underwrite insurance policies issued by Lloyd's syndicates--have been ruined. 

The decline and fall of Lloyd's, like all engrossing tragedies, has been building to a spectacular d?nouement. The final act is now upon us and waiting in the wings are a group of Names who could yet prove to be Lloyd's nemesis. These are the dissident investors, including members of the so-called United Names Organization, who have refused to settle their asbestos-related debts with Lloyd's because, they claim, they are the victims of a massive and calculated swindle. Back in the 1980s, they argue, Lloyd's duped them into becoming Names by fraudulently misrepresenting its profitability and concealing the ruinous asbestosis losses that were in the pipeline. 

Do they have a case? The truth, they say, will soon out. Later this month, in what could prove to be the trial of the new century, the Lloyd's dissidents will claim in England's High Court that they have been the victims, not just of negligent underwriting, but of one of the greatest fraudulent conspiracies of all time. They will argue that they were recruited to Lloyd's at a time when the 300-year-old institution knew it was facing massive asbestosis claims and needed extra capital to absorb its forecast losses. The dissident Names will further charge that this massive fraud was not the work of a few posh-mannered, money-grubbing Lloyd's underwriters, but was condoned and indeed orchestrated by the Lloyd's hierarchy itself. 


How much was involved?

Admonished by their partners to stop the shop-talk, Bradley and Rokeby-Johnson dropped the subject until after the game when they settled with drinks in a corner of the tweedy bar of the clubhouse. 

"Were you serious about asbestosis destroying Lloyd's?" Bradley asked. 

"Of course," Rokeby-Johnson replied. On the back of his scorecard, he then proceeded to calculate that Lloyd's could be swamped by claims far in excess of the market's ability to pay--perhaps as much as $120 billion by the year 2000. 

"Do you mean 'million' or 'billion'?" the incredulous Bradley asked. 

"Billion," Rokeby-Johnson stressed. "It's the time bombs that worry me." 

"What are the time bombs?" 

"The time bombs are the young victims [of asbestosis] who will gradually develop lung disease. When they die, the lawyers are going to have a field day. Pick a figure, but it won't be far off what I've told you. See whether I am right. I shall be gone long before you."
The day after the golf match, Bradley recounted the conversation to a senior Lloyd's colleague who warned him against repeating it to anyone else. It seemed to Bradley then that at least a few Lloyd's insiders were aware of the looming asbestos problem even as they recruited new Names to bolster the market's capital base. 

And recruit they did. The number of names soared beyond 7,000 in the early '70s to 14,000 in 1978 and reached over 34,000 by the late '80s. After nearly three centuries of genteel, discreet one-by-one recruitment in Britain, Lloyd's salesmen fanned out across the world, especially North America, touting Lloyd's as an exclusive club offering secure investments to only a select few who qualified for membership. According to many of these new recruits, the Lloyd's sales pitch promised not only risk-free profits, but the opportunity to join an elite and prestigious "society" which had existed for 300 years and whose membership included titled British aristocrats. New investors signed up in droves. As one Name recalled later, "You don't need to drop the names of many English earls to attract a bunch of North American dentists."
Evans says the clinching argument for joining came again from Coleridge, who boasted to recruits that Lloyd's was backed by its own act of Parliament. "He said, 'Parliament would never have passed the act had Lloyd's accounts and regulation not been impeccable.' I thought to myself, if Parliament has given its seal of approval to Lloyd's, what more do I need?"
None the wiser, Parliament on July 23, 1982, gave Lloyd's its exemption from lawsuits. It could be held liable for damages only if a plaintiff could prove "bad faith," which is difficult to establish under English law where the "buyer-beware" principle is more firmly established than in the U.S. (an obstacle the Jaffray suit will have to surmount). Not only was Lloyd's still self-regulating, it was empowered to determine itself what was meant by the notion of self-regulation, unilaterally making rules governing its operations, without answering to any outside authority, even Parliament. Lloyd's secrets were still safe.

And Jeffrey Archer, what was his big idea?

In 1986, Lloyd's quietly added a clause to its contract with investors. Any legal dispute over the investment would have to be resolved in England under English law. Investors were not told that Parliament four years earlier had effectively inoculated Lloyd's from lawsuits in England.....Most lawsuits by private investors against Lloyd's in the U.S. were stymied, too. The fraud allegations for the most part never got a hearing because Lloyd's invoked the clause it had slipped into its contracts with investors beginning in 1986 calling for any legal disputes to be litigated in England. Even though the investors argued that they had been tricked into signing that clause --and Americans' rights under U. S. securities laws generally cannot be waived by such contracts--U.S. appellate courts ruled that the contracts were valid and that Names had to sue Lloyd's in England.


Archer has a plot in one of his books where a contract is central. One protagonist asks another "Did he sign"? And the other replies "Yes, he didn't see that, nor any of the other three clauses I had slipped in."

If you understand what happened you will understand why Lord and Lady Archer are such favourites of the British royal family.

But my point is about Mary Archer, and the blackness within. It was not enough for this person to reduce others to absolute penury, oh no. She had herself appointed as Chair of the Lloyds Hardship Committee.

If you tell Lloyds you cannot pay your bill you can claim hardship. But you will have to justify yourself before this committee. Can you imagine Mary's joy and pleasure at making others beg for mercy? Her ecstasy as she noses through the most personal matters of other women she has just cut down to size. She probably became quite moist at the excitement of it all.

No, this is not my imagination. When "Lady" Archer got rid of her secretary for "disloyalty" she didn't just fire her. She sued her, took away her house and bankrupted the poor woman. Remember, she's best friends with the Queen.

These people are monsters. And Nicola Sturgeon is one of them.


Note to b. I do not have a link to the Time Magazine piece, but i'd be happy to post the entire text if your readers are interested.

Jen , Feb 22 2021 19:32 utc | 135

John Cleary @ 115 and onwards:

Your comments on Lloyds as a giant Ponzi pyramid scheme have been interesting to read.

There! I said it! Lloyds: one giant Ponzi scheme.

[Feb 24, 2021] Poland, Ukraine Urge Biden to Do His Best 'to Put an End' to Nord Stream 2 Project

Feb 24, 2021 | www.moonofalabama.org

vk , Feb 22 2021 12:16 utc | 109

Clipping:

Poland, Ukraine Urge Biden to Do His Best 'to Put an End' to Nord Stream 2 Project

"Our calls for vigilance and boldness were heard in the US Congress, which pressed on with measures designed to stop this dangerous, divisive project. We call on US President Joe Biden to use all means at his disposal to prevent the project from completion", the pair added.

They think they have a voice in the US Congress? Should apply for Statehood then.

The ministers suggested that if completed, the project will add to Russia's drive "to try to convince the Ukrainian public that the West doesn't care about its own principles, and ultimately, about the security and prosperity of Ukraine".

But wasn't the critique against socialism from the Soviet space that it was "utopian", i.e. that it put its "principles" (ideology) before economic fundamentals?

--//--

EU must be 'united and determined' on Russia sanctions, says Borrell

90 years old and still has not grown up.

I guess old dogs indeed can't learn new tricks.

snake , Feb 22 2021 22:15 utc | 151

Poland, Ukraine Urge Biden to Do His Best 'to Put an End' to Nord Stream 2 Project
vk @ 109. Congress of the USA to interfere with the completion of Russian-German Nord stream II project because the LNG cartel in USA governed Texas, Lousisana , Oregon want to require every man women and child in Europe to pay monopoly prices for LNG. As I see it failure of Nord Stream II will be extremely dangerous to the survival of the solar and wind renewable energy efforts; its a do it or die situation for dominate energy is the goal of the LNG cartel...

[Feb 21, 2021] It doesn't matter if we die of freezer burn sleeping on cardboard after we've been laid-off, evicted, and starved.

Feb 21, 2021 | www.unz.com

obwandiyag , says: February 12, 2021 at 5:10 am GMT • 8.8 days ago

Don't you know that whining about race, from the racist or the anti-racist side, doesn't matter, is more important than billionaires fucking us over. It's more important than anything. It doesn't matter if we die of freezer burn sleeping on cardboard after we've been laid-off, evicted, and starved. It doesn't matter if we die in a nuclear war that the billionaires started because they think it would be a good idea.

Nope. All that matters is whining about race. That's the most important thing. All else is trivial.

Ray Caruso , says: February 12, 2021 at 5:39 am GMT • 8.8 days ago

Didn't American people suffer from the disease? Yes, the US government is "grotesquely and manifestly incompetent" and they were likely to expect "a massive coronavirus outbreak in China would never spread back to America".

The crucial factor here is that the US is not a nation per the most basic definition of the word, "a group of people born of a common ancestry". Consequently, as illustrated by job-killing "trade deals" and in countless other ways, there are plenty of "Americans" who don't care a whit about the fate of Americans. That makes it entirely plausible that the Deep State and/or one or more billionaires would release a virus in China in the full expectation that it would hit the US and that once here it would disrupt, impoverish, and kill millions of Americans. This was a win-win for them. The Deep State and the billionaires don't like China, which is a non-liberal country and curtails their power by restricting the use of US tech products. So if somehow the virus were contained in China it would be okay with them, as it just would be a smaller win. However, what they really wanted was for the virus circle back to the US. They knew that once here the disruption it would cause would further enrich and empower them while giving them a pretext to dump it all on Donald Trump, whom they would accuse of being incompetent and uncaring.

FHTEX , says: February 12, 2021 at 12:06 pm GMT • 8.5 days ago

While full of good insights, the problem with this article as far as COVID is concerned is that it misleads on the main point. COVID is not biowarfare, it is not a pandemic, it's just the flu. The US recorded the same death rate in 2020 as in previous years and, as Dr. Colleen Huber has documented, medical oxygen and supply sales were no different from previous years.

All those COVID-19 deaths were simply deaths of a different name. Of course, we knew from last March's Diamond Princess cruise–still by far the best controlled COVID "experiment"–that the case-fatality rate of COVID-19 for the general public is in the flu range.

But, it never was about COVID-19, which is just a glorified coronavirus of the type seen even before the dawn of humans. Long before the virus even hit the streets, the media and governments and medical establishments had secretly planned to to create a "panic-demic" to scare people into a whole lot of strange and dangerous behaviors–like giving up their liberties and economic futures. COVID-19 is just a medical nothing-burger that convinced a lot of otherwise sane people to scare themselves into oblivion. Or did it? If the post-election analyses are correct, Trump won in a major landslide and even those who voted against him were already suffering from Trump derangement syndrome. So, maybe the people weren't fooled by COVID so much as electorally raped by the vast elite cabal.

Digital Samizdat , says: February 12, 2021 at 12:06 pm GMT • 8.5 days ago

Whatever we say is a fact-based result of diligent research; whatever you say is a conspiracy theory – both the US and China representatives subscribe to this mantra.

Maye both Washington and Beijing are guilty -- of a perpetrating a hoax.

Putin surprised me. He flatly refused the offer of Schwab and his ilk. He condemned the manner of recent pre-Covid growth, for all the growth went into a few deep pockets. Moreover, he noted that digital tycoons are dangerous for the world.

Emslander , says: February 12, 2021 at 12:12 pm GMT • 8.5 days ago

The next strong man we elect must be an actual STRONG man. I salute Trump for his genius in identifying the real majority in this country and for forcing the techno-oligarchs into overdoing their election steal. Now we need someone who is willing to establish real authority on behalf of the un-queer.

[Feb 21, 2021] 'Freedom' under neo-liberal capitalism is all of the negative type.

Feb 21, 2021 | www.unz.com

Mulga Mumblebrain , says: February 16, 2021 at 1:13 am GMT • 4.2 days ago

@Flying Dutchman

'Freedom' under neo-liberal capitalism is all of the negative type. You are free to be as greedy and arrogant as you like, as rich, ie as big a thief, as you like, and as poor as you like. You are to ignore the liberal injunction that your freedom must not interfere with that of others, and screw as many patsies as you desire. You are 'free' to vote for two or so near identical parties, then have no 'freedom' but that which your money buys you. 'Freedom' is the biggest lie of all Big Lies.

[Feb 21, 2021] Inclusive means, don't let usurers like the IMF get you on the debt hook and immiserize your people. Sustainable means no pillage of national wealth or resources and no imposition of externalities (like Chevron did to Ecuador, for instance.)

Feb 21, 2021 | www.unz.com

anon [384] Disclaimer , says: February 11, 2021 at 5:42 pm GMT • 9.3 days ago

Don't be spooked by those words. Do you know where the words sustainable and inclusive come from? Tycoons didn't think them up. They're just parroting them to try and twist their meaning. Those words are from the Addis Ababa consensus. Tycoons give lip service to those words because if they don't, no one will give them the time of day.

https://www.un.org/esa/ffd/wp-content/uploads/2015/08/AAAA_Outcome.pdf

AA is the consensus of the ECOSOC bloc, treaty parties of the ICESCR, 171 of them, the overwhelming majority of the world. ECOSOC reports to the UNGA, the most participative and least controllable UN organ. US UN delegates don't even dare mention the AA outcome – they fixate on the Monterrey Consensus, two documents ago.

Inclusive means, don't let usurers like the IMF get you on the debt hook and immiserize your people. Sustainable means no pillage of national wealth or resources and no imposition of externalities (like Chevron did to Ecuador, for instance.) You will see that the outcome document subordinates everthing the tycoons or the US want to human rights and rule of law. Economic rights too. The outcome curbs US "Western" corporatist development by pulling WTO and IMF under the authority of G-192 organizations like UNCTAD and ILO.

It's hard for people in US satellites to interpret this stuff because the underlying intitiatives of the G-192 (that is, the world) are hidden from you and buried in US propaganda. Xi is quoting his Five Principles, four of which are straight out of the UN Charter. China has ratified the ICESCR. So China is not communist. China is not capitalist. China is a member of the ECOSOC bloc. People in the US or its satellites have no idea what that is, but it's vastly bigger than the Third International was. It's development based on human rights. Tycoons and the US hate that shit but they can't stop it.

Realist , says: February 12, 2021 at 2:36 pm GMT • 8.4 days ago

A couple of things that would go a long way to correct the goddamn stupidity running rampant in this country are.

Correcting the following horrendous actions: The SCOTUS has passed down egregious decisions that abridge the First Amendment and show contempt for the concept of representative democracy. Buckley v. Valeo, 424 U.S. 1976 and exacerbated by continuing stupid SCOTUS decisions First National Bank of Boston v. Bellotti, Citizens United v. Federal Election Commission and McCutcheon v. Federal Election Commission.
These decisions have codified that money is free speech thereby giving entities of wealth and power total influence in elections.

And-

Making it absolutely impossible for anyone to amass more than 100 million dollars extreme wealth concentrates too much power.

[Feb 21, 2021] The GDP is a massively false paradigm. Much of it is comprised of non-productive (parasitical) economic "activity

Feb 21, 2021 | www.unz.com

Majority of One , says: February 15, 2021 at 5:42 pm GMT • 4.5 days ago

@Chinaman me obsolescent with the disappearance of home-ec from our high schools. Economy means to economize, to save and to make do. Credit cards in hand, suburban Americans spend like drunken Irish sailors on shore leave.

BTW Chinaman: Those you apparently consider as deplorable, are the ones who do the actual, real productive work. Most of the rest of employed Americans are keystrokers and button-pushers, ordered around by governmental administrators and corporate bureaucrats. Squatting atop the economic scrotumpole are various types of parasites, include coupon-clipper sons of riches and those who get their ill-gotten gains from the FIRE sector: Finance, Insurance and Real Estate speculation.

Wake up and smell the coffee...

[Feb 20, 2021] No one owes you or your family anything; nor is it the local government's responsibility to support you during trying times like this! Sink or swim it's your choice! The City and County, along with power providers or any other service owes you nothing!

Feb 20, 2021 | www.moonofalabama.org

karlof1 , Feb 18 2021 19:21 utc | 152

"Interpreting US 'democracy, human rights and freedom': Global Times editorial ." I just now read some of what the self-ousted Texas mayor said to his citizens, and while appalled I'm not at all surprised:

"Tim Boyd, the mayor of Colorado City, Texas, said in a post to the public that ' No one owes you or your family anything; nor is it the local government's responsibility to support you during trying times like this! Sink or swim it's your choice! The City and County, along with power providers or any other service owes you nothing! '

"He also wrote that, 'Only the strong will survive and the weak will perish,' and he even said that 'this is sadly a product of a socialist government where they feed people to believe that the few will work and others will become dependent for handouts.' Boyd later resigned as his remarks had provoked public anger, but it seems that he really believes in what he posted, and so do many American politicians.

"From the perspective of an outsider, the logic of the tragedy of nearly 500,000 deaths due to the COVID-19 epidemic in the US so far and more than 20 people being killed in the winter storm in Texas are the same. The logic is that the attention of the capital and the government has not been directed toward the protection of human rights . The capitalist system in the US has derived a set of national morals that deviated from the public interest and has gradually become flashy but useless." [My Emphasis]

I hope thomas @140 reads this. The Global Times editor's words bear repeating:

" The capitalist system in the US has derived a set of national morals that deviated from the public interest and has gradually become flashy but useless ." [My Emphasis]

Essentially, the clock's been turned-back over 100 years as the editor notes:

"The US' concept of 'freedom' actually conceals the cold-blooded proposition of the 'freedom of being eliminated.'

The US' notion of 'democracy, human rights and freedom' is actually a combination of 'elections, political rights and social Darwinism.' As such, it comes as no surprise that various human tragedies often occur in such a wealthy country as the US. To live in the US, you must have the strength and capability to save yourself in the event of a disaster, or you should be able to pay a considerable amount of money for the help you seek. Otherwise, you deserve the miserable situation you are in, and it's more worthy for you to pin your hopes on charitable organizations and God, instead of the government ." [My Emphasis]

That's what the state of things was prior to the Great Depression when the national government was finally provoked into providing the most miniscule of safety nets, termed "Automatic-Stabilizers" to satisfy the Predatory Financial Class with the promise that the business cycles of boom and bust wouldn't be as harsh as previously. That a particular segment of the Political Class has sought the elimination of that safety net since its inception verifies the editor's thesis as he continues:

"Boyd portrayed the government's assisting the victims as 'sadly a product of a socialist government.' This reflects how much he and many other American politicians like him feel contempt for government's efforts on people's livelihood. Whether they will survive or die in the face of natural disasters is the public's own business and it's not worthy for US governments and officials to protect people's lives - Boyd's words are really shocking .

"Such a US should stop preaching to China on human rights. The US and China have different political focuses. What China seeks is the health, safety and happiness of its people , while the US wants to see political rights orderly distributed among social elites in a capitalist manner. The human rights outlooks held by China and the US are based on different groups of people. Different rights are positioned in different places in the two countries. As a result, China's human rights construction has brought tangible benefits to all Chinese people, while the US human rights view is more suitable to be used to brag about and as an ideological tool to launch attacks against others ." [My Emphasis]

Ex-mayor Boyd reminds me of the fictional character Frank played by Henry Fonda in Once Upon a Time in the West , for whom any means can be used to gain the outcome. Such characters were once very visible in movies made about the USA--the sociopathic killer always aiming for A Fistful of A Few Dollars More where even the good guy was ugly. I couldn't agree more with the editor's closing comment:

"Washington, please take care of your own people in the freeze and put an end to the deaths caused by COVID-19 first thing first. We may not link these issues to human rights, but this should be what 'America First' is all about."

The personification of Boyd passed away yesterday and is much to blame for the woefulness of the USA's moral condition. Unfortunately, there are too many creatures like him, many of which are in governments throughout the land.

[Feb 20, 2021] Why China, with same size of power grid, won't suffer outage like in the US

Feb 20, 2021 | www.moonofalabama.org

vk , Feb 18 2021 18:40 utc | 142

Why China, with same size of power grid, won't suffer outage like in the US

"Why does the US use the winter storm as the excuse every time?" Shu Bin, director of the State Grid Beijing Economics Research Institute, told the Global Times on Thursday, noting that the power grid system is very vulnerable and requires constant maintenance and upgrade.

A report from the US Department of Energy (DOE) in 2015 said that 70 percent of power transformers in the country were 25 years or older, 60 percent of circuit breakers were 30 years or older, and 70 percent of transmission lines are 25 years or older. And the age of these components "degrades their ability to withstand physical stresses and can result in higher failure rates," the report noted.

[...]

"The US has no nationwide power grid network allocation plan like China. When it encounters extreme weather, a state won't help another state like some Chinese provinces and regions do with flexible allocation plans," Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told the Global Times on Thursday.

[...]

"China uses 50Hz across the country, like the country has the same heartbeat," he said, adding that China has never experienced such a scale of blackouts as the US.

[...]

China has mastered the top technologies such as "UHV transmission" and "flexible DC transmission" and started the strategic "west-east electricity transmission" and "north-south electricity transmission" projects, which in turn offer an opportunity for the development of the country's western region.


[Feb 20, 2021] The USA is the only large oil producer which consumes more than it produces and the only one of the three that favors lower prices

Feb 20, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 02/15/2021 at 8:49 am

There are a few factors at play IMO.

One factor is a change in one of the three large producer's policies. This large producer is also the only producer that consumes more than it produces and therefore the only one of the three that favors lower prices. I'm referring to USA, of course.

USA shale (and to a much lesser extent GOM) growth kept a lid on prices. Where would prices have been 2010-19 without USA adding 7 million BOPD?

USA growth doesn't appear to be headed toward adding 1 million BOPD or more per year in the future. USA companies are all being pressured to pay dividends. To cover dividends, USA companies need much higher prices. USA companies aren't forecasting growth like past years.

For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority. I am not making a "political" statement here trying to rile up the left on the board. Just look at oil prices since the USA election on 11/3. Not a coincidence. Not likely USA will be intervening anytime soon in the ME to protect oil supplies. At least not in a big way.

I have no idea how high oil prices will go. I wonder what happens politically in USA with $3 gasoline? $4 ? Are high gasoline prices no longer a political liability? They weren't for Obama in 2012. But USA was drilling like crazy in 2012. Not sure what happens this time if that occurs, given clear desire of Biden Administration to discourage USA oil production growth.

Another factor is the Western European producers have told the market recently in a very straightforward manner that their oil production is past peak. The CEO's of both BP and RDS have stated this. Total is also transitioning away from oil. Equinor also, it changed its name to remove the word oil.

Next, even though total worldwide demand will still be below a record, demand growth from 2020 to 2021 worldwide will be big, much bigger than from 2009 to 2010 after GFC. What did prices do from the depths of GFC to 2011? Compare GFC stimulus to COVID stimulus.

Last, how many paper barrels are traded per physical barrel? With the increase in paper barrels (I would call them more accurately day trader barrels) volatility in the oil market has grown. The price went negative big time one day last April. It was purely a day trader phenomenon.

Just my thoughts. Feel free to disagree. REPLY HICKORY IGNORED 02/15/2021 at 11:28 am

Everyday you can find headlines that point to a huge transition underway in the world energy scene.
For example today-
-Exclusive: Equinor considers more US asset sales in global strategy revamp, and
-Ford bets $29B on leading the 'electric vehicle revolution'

There is a huge scramble underway to adapt to the conditions these big companies now see coming to be over this decade.
In the meantime, I think that oil demand growth will be very strong over the next 18-24 months.
And as the price of gas in the USA goes up in this rebound phase, the great difference in travel cost/mile between plug-in vehicles (like a Ford mustang) and ICE vehicles will become a widely known fact. Ford (and the other manufacturers) all know that now, even if they were slow on the uptake.

This world is going to change rapidly this decade in so many ways. REPLY ALIMBIQUATED IGNORED 02/15/2021 at 11:34 am

I think a general feeling of optimism that there is light at the end of the Covid 19 tunnel is helping as well. REPLY SURVIVALIST IGNORED 02/15/2021 at 12:23 pm

" For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority."

Great observation. I recall when GWB2 went to KSA to 'kiss the ring' and ask for more oil production. I wonder how it will play out next time. REPLY HICKORY IGNORED 02/15/2021 at 12:33 pm

"" For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority."

Of much greater impact- For the first time ever, the major oil companies are not making oil production growth, either domestic or foreign, a priority. REPLY SHALLOW SAND IGNORED 02/15/2021 at 1:11 pm

Both are happening simultaneously.

Both are making a big impact. REPLY SHALLOW SAND IGNORED 02/15/2021 at 1:12 pm

Trump jumped on KSA when oil prices went up during his admin.

Will Biden? REPLY PAOIL IGNORED 02/15/2021 at 1:57 pm

The Biden administration is under pressure to see oil prices rise. The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two ways: 1) green subsidies; or 2) higher oil prices. Until high oil prices threaten the economy, the Biden administration will enact policies that gladly see oil prices rise. And with the oil price experience of 2009 to 2014 still relatively fresh in people's minds, the Biden administration is not afraid of $60, $70, or even $90 oil. They are hoping for it. REPLY HICKORY IGNORED 02/15/2021 at 2:13 pm

"$60, $70, or even $90 oil. They are hoping for it."
As are the people working in the oil industry. REPLY STEPHEN HREN IGNORED 02/15/2021 at 4:59 pm

As far as anyone on this board is considered, the higher the price of oil the better. Let's phase out oil production in the US over the next three decades and keep the price high the entire time so the producers make money and people are incentivized to switch to less polluting EVs. It'll be like the TRC for the whole country but heading towards a bottleneck. Auction drilling rights so only the best wells get drilled. Keep restricting drilling in a phased manner, enact a gradually lower cap on the number of wells that can be drilled until it goes to zero in twenty years and then maintain these stripper wells until they are empty. REPLY PAULO IGNORED 02/15/2021 at 6:33 pm

Can you imagine any US party that would actually dare to promote a higher cost for gasoline? Personally, I think there should be a big carbon tax and fuel tax surcharge imposed to fix infrastructure, but whatever.

Confession: I am not anti oil. My son works in the Cdn industry. I just think people drive more than they should and that energy should be priced higher. Win win. LLOYD IGNORED 02/16/2021 at 3:55 pm

So $90 oil is good for:
-Saudi
-Democrats
-Shallow
-Tesla
-Renewables

But not for:
-Rednecks with huge vehicles

The election calculus gets tricky here. REPLY ALIMBIQUATED IGNORED 02/16/2021 at 4:09 am

PAOIL-
I disagree that high oil prices are needed to make green energy competitive, because oil is already very expensive energy, which is why it is rarely used to generate electricity. Wind and solar compete against coal, nuclear and gas, not oil.

Oil shines as a way to store energy in a moving vehicle and power internal combustion engines. As such, it really competes with batteries, not with the rest of the energy market at all. And batteries still have a tiny impact on oil markets.

So higher oil prices might be useful for the EVs, but not particularly useful for wind and solar. But in reality, the EV market is suffering from chronic battery shortages as manufacturers struggle to build factories fast enough to meet 20% or more annual demand growth. The oil price really isn't an issue, and raising oil prices wouldn't help.

If Biden's goal was to make EVs more competitive, the government has an easy way to raise oil prices, which is to raise taxes at the pump. This would be more or less neutral to the oil price from the producer point of view. It would just encourage exports and discourage imports, improving America's balance of payments. But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. The most effective way to promote EVs is subsidizing the purchase price of the vehicle. That has been very effective.

Hoping that the American consumer will keep oil demand up internationally no longer makes sense, as America's relative economic importance has been falling since 1945. I'm not sure what the previous administration was trying to accomplish by talking down the price. REPLY JEFF IGNORED 02/16/2021 at 5:13 am

"But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. "

So average fuel economy in Europe and US is the same? REPLY EULENSPIEGEL IGNORED 02/16/2021 at 8:47 am

I have driven a Toyota Corolla on an 4 week US trip.

With an engine for the US market – you can't buy this modell in Europe. It was very steady going – and thirsty. At least for european thinking, we used 7-8 litres / 100 km by mostly driving country roads in cruise control at the given speed (didn't wanted to deal with US police). Slow for my feeling, I'm driving faster in Germany.

And use only round about 6 litres with a car of similar size, which is a bit faster than this Corolla – with this lazy slow driving I would use below 5 litres with my car (and get a lot of flashing).

So there is a difference in fuel economy. ALIMBIQUATED IGNORED 02/16/2021 at 5:55 pm

Jeff –
That was a little unclear on my part. I meant high gasoline prices haven't gotten people to buy, EVs, but direct subsidies seem to work.

It's also worth mentioning that $120 oil didn't really dent consumption much, and certainly didn't inspire many to buy EVs.

In my opinion liquid fuel is cheap. I mean I think that consumers aren't willing to make significant changes in behavior even if prices increase significantly. S IGNORED 02/17/2021 at 3:05 am

Alimbiquated, as an European in a well-to-do country, the matter of car buying is somewhat more complicated than just gasoline price. E.g. fully electric car availibily, their price, distances that need to be travelled (range anxiety in other words) are still important. Hybrid cars are also rather expensive. Here it seems that these two car groups are selling better and better, public charging points are increasing etc so we will see what happens. As I have a full electric car I got relatively cheaply (still a bit of ouch ) I think I will not get a petroleum or diesel car ever J HOUSMAN IGNORED 02/18/2021 at 4:08 pm

"The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two way" Three ways, actually. The third is when we finally start to realize the actual cost of destroying the environment by burning fossil fuels REPLY MATT MUSHALIK IGNORED 02/15/2021 at 10:01 pm

Global crude oil may have peaked 2018-19 before Covid

https://pbs.twimg.com/media/EsHyv1FVQAIDRAd?format=jpg

If ever we come out of the Covid tunnel, there could be surprises ahead REPLY POLLUX IGNORED 02/15/2021 at 5:30 am

Strike threatens shutdown at Norway's giant Johan Sverdrup offshore oilfield

A dozen workers that are members of the Safe union are threatening to down tools at the Mongstad terminal from midnight on Monday if talks with the industry body aimed at breaking an impasse over a 2020 wage settlement with Equinor fail.

Other fields that could be impacted include Kvitebjorn, Visund, Byrding, Fram and Valemon, with gas output exports from the Troll area also in danger of being hit. REPLY MATT MUSHALIK IGNORED 02/15/2021 at 8:05 am

With an excursion to Gabon and Azerbaijan

15/2/2021
Exxon-Mobil's refinery closure in Australia: peak oil context
https://crudeoilpeak.info/exxon-mobils-refinery-closure-in-australia-peak-oil-context REPLY TULSAGEO IGNORED 02/15/2021 at 9:37 am

An interesting scenario showing what happens when demand outstrips supply due to lack of investment is playing out right now in Oklahoma and Texas. There has been a lack of investment in the region last year due to the drop in prices, and in Oklahoma, the slowing of investment has been happening for a few years. The massive cold snap that descended on the region made spot prices (not the futures price you can look up on Bloomberg etc) rise from $2 an MMBTU, to $5, to $9, to $300, to $600, all in the course of a week. It is currently higher. The cold weather has caused shut ins of wells, and processing plants. You have a situation where demand is increasing but supply cannot keep up. I know this is a micro problem that will resolve itself as temperatures increase, in the coming weeks, but this could be an example of what oil prices might see in the near future. There has been a lack of investment for years in large projects, if demand rebounds quickly as vaccine roll out continues, we will not be able to turn back on new production fast enough to keep prices from running higher, resulting in some temporary ridiculous price spikes. REPLY SHALLOW SAND IGNORED 02/15/2021 at 10:31 am

I saw this resulted in a lot of wells that have been shut in for 5-10 years being reactivated. REPLY GREENBUB IGNORED 02/15/2021 at 8:25 pm

Shallow, are you affected by the cold snap or power outages? REPLY SHALLOW SAND IGNORED 02/16/2021 at 12:41 am

Yes. We have about 10% frozen off. Our pumpers decided what to drain and shut in, and what to keep on. They are real pros. You can't find better.

Our people are the key. We owe them bigtime. They have been out there in this stuff keeping the rest from freezing.

We will be good soon, temps will come up.

Keep in mind, with one exception, our pumpers are 50+ years old.

Are there millennials that are going to keep the strippers going 24/7/365?

Takes special people. REPLY STEPHEN HREN IGNORED 02/16/2021 at 4:33 pm

No. I work in construction biz. 90% of twenty somethings can't work five minutes without looking at their phones. They are useless. All my buddies have the same complaint. REPLY OVI IGNORED 02/15/2021 at 9:49 pm

An interesting clip from this article:
"This isn't a consensus view yet but it's quickly coming. Two heavyweights in the past week have stepped up and called out the problem.

The first was Goldman Sach's Jeff Currie, who called the bull market in the early 2000s.

"I want to be long oil and hang on for the ride," Currie said in an interview with S&P Global Platts on Feb. 5, warning "there is a lot of upside here."

"Is it back to $150/b? I don't know as it is a macro repricing we are talking about and everything needs to reprice."

The other is JPMorgan and Marko Kolanovic, who said Friday that oil and commodities appear to be entering a supercycle.

"We believe that the new commodity upswing, and in particular oil up cycle, has started," the JPMorgan analysts said in their note. "The tide on yields and inflation is turning."

"We believe that the last supercycle peaked in 2008 (after 12 years of expansion), bottomed in 2020 (after a 12-year contraction) and that we likely entered an upswing phase of a new commodity supercycle."

https://www.forexlive.com/news/!/what-an-incredible-turnaround-for-oil-prices-20210215 REPLY RON PATTERSON IGNORED 02/16/2021 at 2:31 pm

WTI hit $60 today. How come high oil prices seem to be doing nothing for the shale business.

Anyone? Anyone? Bueller? Dennis? 😉

REPLY STEPHEN HREN IGNORED 02/16/2021 at 4:34 pm

They're too busy spending all their earnings REPLY OVI IGNORED 02/16/2021 at 6:45 pm

Drillers Trying New Pricing Structure

Shale driller bases rig lease costs on well performance

Rigs are typically rented out at a daily rate for a period of a few months, which has meant less money for oilfield service providers as drilling becomes quicker and more efficient. So Helmerich & Payne Inc. is touting a new pricing model based on overall well performance, and almost a third of its U.S. rigs are now being leased on that basis, CEO John Lindsay said Wednesday on an earnings call.

In the Permian Basin of West Texas and New Mexico, home to the busiest shale patch in North America, operators are now drilling the same number of wells with 180 rigs as they were with 300 rigs a year ago, according to industry data provider Lium.

https://www.worldoil.com/news/2021/2/16/shale-driller-bases-rig-lease-costs-on-well-performance REPLY RON PATTERSON IGNORED 02/16/2021 at 8:45 pm

Yeah okay. That's all great. But what I was looking at was oil production. It's going down, not up. With these prices oil production should be increasing, not decling. Why is that? After all, that's really all that matters.

[Feb 20, 2021] The USA is the only large oil producer which consumes more than it produces and the only one of the three that favors lower prices

Feb 20, 2021 | peakoilbarrel.com

SHALLOW SAND IGNORED 02/15/2021 at 8:49 am

There are a few factors at play IMO.

One factor is a change in one of the three large producer's policies. This large producer is also the only producer that consumes more than it produces and therefore the only one of the three that favors lower prices. I'm referring to USA, of course.

USA shale (and to a much lesser extent GOM) growth kept a lid on prices. Where would prices have been 2010-19 without USA adding 7 million BOPD?

USA growth doesn't appear to be headed toward adding 1 million BOPD or more per year in the future. USA companies are all being pressured to pay dividends. To cover dividends, USA companies need much higher prices. USA companies aren't forecasting growth like past years.

For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority. I am not making a "political" statement here trying to rile up the left on the board. Just look at oil prices since the USA election on 11/3. Not a coincidence. Not likely USA will be intervening anytime soon in the ME to protect oil supplies. At least not in a big way.

I have no idea how high oil prices will go. I wonder what happens politically in USA with $3 gasoline? $4 ? Are high gasoline prices no longer a political liability? They weren't for Obama in 2012. But USA was drilling like crazy in 2012. Not sure what happens this time if that occurs, given clear desire of Biden Administration to discourage USA oil production growth.

Another factor is the Western European producers have told the market recently in a very straightforward manner that their oil production is past peak. The CEO's of both BP and RDS have stated this. Total is also transitioning away from oil. Equinor also, it changed its name to remove the word oil.

Next, even though total worldwide demand will still be below a record, demand growth from 2020 to 2021 worldwide will be big, much bigger than from 2009 to 2010 after GFC. What did prices do from the depths of GFC to 2011? Compare GFC stimulus to COVID stimulus.

Last, how many paper barrels are traded per physical barrel? With the increase in paper barrels (I would call them more accurately day trader barrels) volatility in the oil market has grown. The price went negative big time one day last April. It was purely a day trader phenomenon.

Just my thoughts. Feel free to disagree. REPLY HICKORY IGNORED 02/15/2021 at 11:28 am

Everyday you can find headlines that point to a huge transition underway in the world energy scene.
For example today-
-Exclusive: Equinor considers more US asset sales in global strategy revamp, and
-Ford bets $29B on leading the 'electric vehicle revolution'

There is a huge scramble underway to adapt to the conditions these big companies now see coming to be over this decade.
In the meantime, I think that oil demand growth will be very strong over the next 18-24 months.
And as the price of gas in the USA goes up in this rebound phase, the great difference in travel cost/mile between plug-in vehicles (like a Ford mustang) and ICE vehicles will become a widely known fact. Ford (and the other manufacturers) all know that now, even if they were slow on the uptake.

This world is going to change rapidly this decade in so many ways. REPLY ALIMBIQUATED IGNORED 02/15/2021 at 11:34 am

I think a general feeling of optimism that there is light at the end of the Covid 19 tunnel is helping as well. REPLY SURVIVALIST IGNORED 02/15/2021 at 12:23 pm

" For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority."

Great observation. I recall when GWB2 went to KSA to 'kiss the ring' and ask for more oil production. I wonder how it will play out next time. REPLY HICKORY IGNORED 02/15/2021 at 12:33 pm

"" For the first time ever, the USA government is not making oil production growth, either domestic or foreign, a priority."

Of much greater impact- For the first time ever, the major oil companies are not making oil production growth, either domestic or foreign, a priority. REPLY SHALLOW SAND IGNORED 02/15/2021 at 1:11 pm

Both are happening simultaneously.

Both are making a big impact. REPLY SHALLOW SAND IGNORED 02/15/2021 at 1:12 pm

Trump jumped on KSA when oil prices went up during his admin.

Will Biden? REPLY PAOIL IGNORED 02/15/2021 at 1:57 pm

The Biden administration is under pressure to see oil prices rise. The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two ways: 1) green subsidies; or 2) higher oil prices. Until high oil prices threaten the economy, the Biden administration will enact policies that gladly see oil prices rise. And with the oil price experience of 2009 to 2014 still relatively fresh in people's minds, the Biden administration is not afraid of $60, $70, or even $90 oil. They are hoping for it. REPLY HICKORY IGNORED 02/15/2021 at 2:13 pm

"$60, $70, or even $90 oil. They are hoping for it."
As are the people working in the oil industry. REPLY STEPHEN HREN IGNORED 02/15/2021 at 4:59 pm

As far as anyone on this board is considered, the higher the price of oil the better. Let's phase out oil production in the US over the next three decades and keep the price high the entire time so the producers make money and people are incentivized to switch to less polluting EVs. It'll be like the TRC for the whole country but heading towards a bottleneck. Auction drilling rights so only the best wells get drilled. Keep restricting drilling in a phased manner, enact a gradually lower cap on the number of wells that can be drilled until it goes to zero in twenty years and then maintain these stripper wells until they are empty. REPLY PAULO IGNORED 02/15/2021 at 6:33 pm

Can you imagine any US party that would actually dare to promote a higher cost for gasoline? Personally, I think there should be a big carbon tax and fuel tax surcharge imposed to fix infrastructure, but whatever.

Confession: I am not anti oil. My son works in the Cdn industry. I just think people drive more than they should and that energy should be priced higher. Win win. LLOYD IGNORED 02/16/2021 at 3:55 pm

So $90 oil is good for:
-Saudi
-Democrats
-Shallow
-Tesla
-Renewables

But not for:
-Rednecks with huge vehicles

The election calculus gets tricky here. REPLY ALIMBIQUATED IGNORED 02/16/2021 at 4:09 am

PAOIL-
I disagree that high oil prices are needed to make green energy competitive, because oil is already very expensive energy, which is why it is rarely used to generate electricity. Wind and solar compete against coal, nuclear and gas, not oil.

Oil shines as a way to store energy in a moving vehicle and power internal combustion engines. As such, it really competes with batteries, not with the rest of the energy market at all. And batteries still have a tiny impact on oil markets.

So higher oil prices might be useful for the EVs, but not particularly useful for wind and solar. But in reality, the EV market is suffering from chronic battery shortages as manufacturers struggle to build factories fast enough to meet 20% or more annual demand growth. The oil price really isn't an issue, and raising oil prices wouldn't help.

If Biden's goal was to make EVs more competitive, the government has an easy way to raise oil prices, which is to raise taxes at the pump. This would be more or less neutral to the oil price from the producer point of view. It would just encourage exports and discourage imports, improving America's balance of payments. But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. The most effective way to promote EVs is subsidizing the purchase price of the vehicle. That has been very effective.

Hoping that the American consumer will keep oil demand up internationally no longer makes sense, as America's relative economic importance has been falling since 1945. I'm not sure what the previous administration was trying to accomplish by talking down the price. REPLY JEFF IGNORED 02/16/2021 at 5:13 am

"But it hasn't worked in Europe, where taxes are over 60% of the price at the pump. "

So average fuel economy in Europe and US is the same? REPLY EULENSPIEGEL IGNORED 02/16/2021 at 8:47 am

I have driven a Toyota Corolla on an 4 week US trip.

With an engine for the US market – you can't buy this modell in Europe. It was very steady going – and thirsty. At least for european thinking, we used 7-8 litres / 100 km by mostly driving country roads in cruise control at the given speed (didn't wanted to deal with US police). Slow for my feeling, I'm driving faster in Germany.

And use only round about 6 litres with a car of similar size, which is a bit faster than this Corolla – with this lazy slow driving I would use below 5 litres with my car (and get a lot of flashing).

So there is a difference in fuel economy. ALIMBIQUATED IGNORED 02/16/2021 at 5:55 pm

Jeff –
That was a little unclear on my part. I meant high gasoline prices haven't gotten people to buy, EVs, but direct subsidies seem to work.

It's also worth mentioning that $120 oil didn't really dent consumption much, and certainly didn't inspire many to buy EVs.

In my opinion liquid fuel is cheap. I mean I think that consumers aren't willing to make significant changes in behavior even if prices increase significantly. S IGNORED 02/17/2021 at 3:05 am

Alimbiquated, as an European in a well-to-do country, the matter of car buying is somewhat more complicated than just gasoline price. E.g. fully electric car availibily, their price, distances that need to be travelled (range anxiety in other words) are still important. Hybrid cars are also rather expensive. Here it seems that these two car groups are selling better and better, public charging points are increasing etc so we will see what happens. As I have a full electric car I got relatively cheaply (still a bit of ouch ) I think I will not get a petroleum or diesel car ever J HOUSMAN IGNORED 02/18/2021 at 4:08 pm

"The green agenda of wind, solar and EV's is only cost competitive with fossil fuels in two way" Three ways, actually. The third is when we finally start to realize the actual cost of destroying the environment by burning fossil fuels REPLY MATT MUSHALIK IGNORED 02/15/2021 at 10:01 pm

Global crude oil may have peaked 2018-19 before Covid

https://pbs.twimg.com/media/EsHyv1FVQAIDRAd?format=jpg

If ever we come out of the Covid tunnel, there could be surprises ahead REPLY POLLUX IGNORED 02/15/2021 at 5:30 am

Strike threatens shutdown at Norway's giant Johan Sverdrup offshore oilfield

A dozen workers that are members of the Safe union are threatening to down tools at the Mongstad terminal from midnight on Monday if talks with the industry body aimed at breaking an impasse over a 2020 wage settlement with Equinor fail.

Other fields that could be impacted include Kvitebjorn, Visund, Byrding, Fram and Valemon, with gas output exports from the Troll area also in danger of being hit. REPLY MATT MUSHALIK IGNORED 02/15/2021 at 8:05 am

With an excursion to Gabon and Azerbaijan

15/2/2021
Exxon-Mobil's refinery closure in Australia: peak oil context
https://crudeoilpeak.info/exxon-mobils-refinery-closure-in-australia-peak-oil-context REPLY TULSAGEO IGNORED 02/15/2021 at 9:37 am

An interesting scenario showing what happens when demand outstrips supply due to lack of investment is playing out right now in Oklahoma and Texas. There has been a lack of investment in the region last year due to the drop in prices, and in Oklahoma, the slowing of investment has been happening for a few years. The massive cold snap that descended on the region made spot prices (not the futures price you can look up on Bloomberg etc) rise from $2 an MMBTU, to $5, to $9, to $300, to $600, all in the course of a week. It is currently higher. The cold weather has caused shut ins of wells, and processing plants. You have a situation where demand is increasing but supply cannot keep up. I know this is a micro problem that will resolve itself as temperatures increase, in the coming weeks, but this could be an example of what oil prices might see in the near future. There has been a lack of investment for years in large projects, if demand rebounds quickly as vaccine roll out continues, we will not be able to turn back on new production fast enough to keep prices from running higher, resulting in some temporary ridiculous price spikes. REPLY SHALLOW SAND IGNORED 02/15/2021 at 10:31 am

I saw this resulted in a lot of wells that have been shut in for 5-10 years being reactivated. REPLY GREENBUB IGNORED 02/15/2021 at 8:25 pm

Shallow, are you affected by the cold snap or power outages? REPLY SHALLOW SAND IGNORED 02/16/2021 at 12:41 am

Yes. We have about 10% frozen off. Our pumpers decided what to drain and shut in, and what to keep on. They are real pros. You can't find better.

Our people are the key. We owe them bigtime. They have been out there in this stuff keeping the rest from freezing.

We will be good soon, temps will come up.

Keep in mind, with one exception, our pumpers are 50+ years old.

Are there millennials that are going to keep the strippers going 24/7/365?

Takes special people. REPLY STEPHEN HREN IGNORED 02/16/2021 at 4:33 pm

No. I work in construction biz. 90% of twenty somethings can't work five minutes without looking at their phones. They are useless. All my buddies have the same complaint. REPLY OVI IGNORED 02/15/2021 at 9:49 pm

An interesting clip from this article:
"This isn't a consensus view yet but it's quickly coming. Two heavyweights in the past week have stepped up and called out the problem.

The first was Goldman Sach's Jeff Currie, who called the bull market in the early 2000s.

"I want to be long oil and hang on for the ride," Currie said in an interview with S&P Global Platts on Feb. 5, warning "there is a lot of upside here."

"Is it back to $150/b? I don't know as it is a macro repricing we are talking about and everything needs to reprice."

The other is JPMorgan and Marko Kolanovic, who said Friday that oil and commodities appear to be entering a supercycle.

"We believe that the new commodity upswing, and in particular oil up cycle, has started," the JPMorgan analysts said in their note. "The tide on yields and inflation is turning."

"We believe that the last supercycle peaked in 2008 (after 12 years of expansion), bottomed in 2020 (after a 12-year contraction) and that we likely entered an upswing phase of a new commodity supercycle."

https://www.forexlive.com/news/!/what-an-incredible-turnaround-for-oil-prices-20210215 REPLY RON PATTERSON IGNORED 02/16/2021 at 2:31 pm

WTI hit $60 today. How come high oil prices seem to be doing nothing for the shale business.

Anyone? Anyone? Bueller? Dennis? 😉

REPLY STEPHEN HREN IGNORED 02/16/2021 at 4:34 pm

They're too busy spending all their earnings REPLY OVI IGNORED 02/16/2021 at 6:45 pm

Drillers Trying New Pricing Structure

Shale driller bases rig lease costs on well performance

Rigs are typically rented out at a daily rate for a period of a few months, which has meant less money for oilfield service providers as drilling becomes quicker and more efficient. So Helmerich & Payne Inc. is touting a new pricing model based on overall well performance, and almost a third of its U.S. rigs are now being leased on that basis, CEO John Lindsay said Wednesday on an earnings call.

In the Permian Basin of West Texas and New Mexico, home to the busiest shale patch in North America, operators are now drilling the same number of wells with 180 rigs as they were with 300 rigs a year ago, according to industry data provider Lium.

https://www.worldoil.com/news/2021/2/16/shale-driller-bases-rig-lease-costs-on-well-performance REPLY RON PATTERSON IGNORED 02/16/2021 at 8:45 pm

Yeah okay. That's all great. But what I was looking at was oil production. It's going down, not up. With these prices oil production should be increasing, not decling. Why is that? After all, that's really all that matters.

[Feb 20, 2021] Did the USA eneterd that stage of permanet decline of oil production?

Feb 20, 2021 | peakoilbarrel.com

OVI IGNORED 02/16/2021 at 10:19 pm

Good to hear from you Ron.

In ShaleProfile published today, the Permian is showing a slight bump up in production. It may have hit bottom. The latest STEO is showing US production dropping till June and July before beginning to increase. Looks like many more LTO wells have to be put on line before the decline from all of the current wells can be offset. OVI IGNORED 02/16/2021 at 6:36 pm

U.S. oil output plunges as Arctic air freezes Permian shale fields

(Bloomberg) –U.S. oil production has plunged by more than 2 million barrels a day as the coldest weather in 30 years brings havoc to key producing states that rarely have to deal with frigid Arctic blasts.

Oil traders and company executives, who asked not to be identified, lifted their forecasts for supply losses from an earlier estimate on Monday of 1.5 million to 1.7 million barrels. They said the losses were particularly large in the Permian Basin, the most prolific U.S. oil region, which straddles West Texas and southeast New Mexico. Output cuts were also significant in the Eagle Ford, in southern Texas, and the Anadarko basin in Oklahoma.

Two million barrels would be the equivalent of about 18% of overall U.S. crude production, based on the most recent government data.

Wonder if this drop will show up as a drop in US inventories on Feb 24. While production is down, so is driving.

https://www.worldoil.com/news/2021/2/16/us-oil-output-plunges-as-arctic-air-freezes-permian-shale-fields WATCHER IGNORED 02/17/2021 at 2:30 am

Reminder back in the day in the Bakken they had to equip their onsite huge storage of fracking water with heaters, because NoDak is cold. One suspects the Permian is not equipped with that and widespread frozen pipe damage can be expected. HOLE IN HEAD IGNORED 02/18/2021 at 8:31 am

From the Blog of Mike Shellman , TSHTF in Texas . He says about 3.5 million barrels will go off line and for how long don't know .
https://www.oilystuffblog.com/single-post/update-from-texas?postId=602d1a9d98be8f0017126cd1 HHH IGNORED 02/18/2021 at 10:28 pm

There is a lot of reasons to be bullish on oil at the moment. There is one problem lurking over next 4-5 months though. Treasury will shrink the TGA by about 1 trillion USD. Most assume this will be bullish for most things other than the dollar. But as this cash gets pushed into the economy/markets. Banks are forced to hold more collateral, mainly T bills. Short end of treasury yield curve is without a doubt going negative as banks have to have collateral to except all this cash. Likely another collateral shortage in the making (repo blowup) Fed would likely have to cut QE purchases to get yields back into positive territory. Which is no different than hiking interest rates on an economy with a massive debt load that can't handle higher rates.

Most of the US government debt is on short end of the curve. Therefore most of the debt will have a negative yield. This would likely end the reflation narrative/ inflation narrative we currently have. It's likely dollar bullish because the collateral underpinning everything just went negative yield. And if it turns out to be highly dollar bearish. Well lookout oil prices would be well beyond the moon.

[Feb 19, 2021] The infrastructure failed - the people paid to manage this failed - everybody is angry, 10 people died so far last I heard.

Feb 19, 2021 | www.moonofalabama.org

Grieved , Feb 18 2021 0:45 utc | 52

@36 oldhippie

Not as apocalyptic as it may seem. I wrote a comment on the situation in the earlier thread here .

Temps are starting to move up and tomorrow (Thursday) should begin the thaw. Friday is sunny and 47 deg F for a high, then sunny weekend and following. So we're over the worst of it. The lowest it ever got was around 0 deg F.

The infrastructure failed - the people paid to manage this failed - everybody is angry, 10 people died so far last I heard.

Rolling blackouts, some people very much suffering, townships opening warming shelters - probably not millions of pipes bursting. Not totally iced in, just nowhere to go. People stayed home. Businesses stayed closed. Not totally without food, people stocked up staples in 2020.

Not that dire. Absolutely fucking disgusting, and a hardship that touched everyone - some people got really screwed and I don't know why the treatment was uneven like that - not demographics, something with the grid. Dire, yes, and life-threatening to some or perhaps many (numbers not clear to me yet), but not so dire as your picture suggests. Nothing like Katrina, except the same ineptness.

But heads will roll. The governor has mandated an investigation into the regulator, ERCOT. What follows next is of great interest. Facts will appear. I'll post anything useful.

I heard a rumor it was getting better. Could be less blackouts. Will post now in case power goes off ;)


vk , Feb 18 2021 2:24 utc | 63

Texas Could Have Kept the Lights On

This Texas debacle may light a heated debate in the USA for the next weeks, for two reasons:

1) Texas is the big alt-right/Trumpist Festung for the foreseeable future. Their nation-building process involve catapulting Texas as the anti-California , the conservative version of the Shining City on the Hill, around which the USA will be rebuilt;

2) What is happening in Texas right now goes directly to the heart of neoliberalism, which is the political doctrine that vertebrates the alt-right. That's why conservative ideologues such as Tucker Carlson et al are desperately scrambling on TV and social media to blame the outage on the so-called Green New Deal.

What is happening right now in Texas, therefore, may be another episode on the battle for the soul of the American Empire.

vetinLA , Feb 18 2021 2:27 utc | 64

Thom Hartmann podcast on the Texas SNAFU;

http://dl.thomhartmann.com/private/podcasts/2021_0217_thp-021721-hour1.mp3

[Feb 19, 2021] These people...you know, quite literally, will kill us...not just us...I'm talking about snuffing out the possibility of the next generation...my kids...and they have to be stopped

Feb 19, 2021 | www.moonofalabama.org

gm , Feb 17 2021 20:56 utc | 25

Chris Hedges, Just talkin' 'bout revolution [against the Borg? Chris can't quite bring himself to name just who "they" are] on Jimmy Dore yesterday:

"These people...you know, quite literally, will kill us...not just us...I'm talking about snuffing out the possibility of the next generation...my kids...and they have to be stopped"

https://youtu.be/FEtIYziP27A

CJ , Feb 17 2021 21:42 utc | 30

Astonishing lack of understanding of history, basic humanity and common sense.
It seems no one among the current group of "victors" has heard the phrase "win the battle but lose the war."
With all the witch hunting and hate mongering going on, it also seems no one in authority has heard "treat others as you would have them treat you."
Also applies to WEF Great Reset Masters of the Universe.
A huge amount of karma heading their way.

[Feb 14, 2021] Tucker Carlson Says Show Is Being Targeted for Cancelation

Feb 14, 2021 | www.theepochtimes.com

Fox News ' Tucker Carlson said on the Thursday night episode of his program that his show has been targeted for cancellation.

Carlson said that "in the last several weeks, and particularly in the last 24 hours, the call to take this show off the air by groups funded -- for real -- by the Ford Foundation, or by George Soros, by Michael Bloomberg, by Jeff Bezos, has become deafening, going after our advertisers, going after the companies that carry our signal into your home."

What's more, he added, there has been a "cowardice and complicity" on behalf of the "entire media class in all of this," suggesting that eventually, reporters at legacy news outlets will be targeted as well.

Writing for Fox News' website, Carlson added that it may be part of a larger campaign to silence Fox News and other media, noting that some legacy news outlets have dedicated resources calling for the channel to be taken down. One columnist for The New York Times, he added, "has written three separate columns demanding that someone yank this news channel off the air immediately" and on Wednesday, "suggested that 'Tucker Carlson Tonight' was somehow guilty of terrorism and violence, something that we've opposed consistently for four years."

"Fox is the last big organization in the American news media that differs in even the smallest ways from the other big news organizations. At this point, everyone else in the media is standing in crisp formation, in their starched matching uniforms and their little caps, patiently awaiting orders from the billionaire class. And then there's Fox News off by itself, occasionally saying things that are slightly different from everyone else," Carlson wrote .

He added: "These are craven servants of the Democratic Party. They are feline, not canine. All of their aggression is passive aggression."


[Feb 14, 2021] Financial oligarchy and Jewish factor

Feb 14, 2021 | www.unz.com

Anon [256] Disclaimer , says: February 14, 2021 at 8:50 am GMT • 6.5 hours ago

@ForeverGone

Most to these so-called "jews" are NOT ACTUAL JEWS although they claim to be. Rather, they superficially converted to Judaism about 1200 years ago, for political and financial advantages. Think of them more like a criminal organization (Rothschild Khazarian Mafia) which uses the terms "jew" and "anti-semitism" as Liability Shields: designed to Deflect-Accountability and Evoke False-Trust and Sympathy with which to deceive the victims of their Banking-Financial-$cams, War-Profiteering, Cultural-$ubversion, and other Massive Cons.

This is why it's Important not to fall for their Primary Trap THEY RELY ON BEING PERSECUTED so they can continue using their main go-to (anti-semitism) get out of jail free card.

[Feb 11, 2021] As Major General Smedley Darlington Butler (the most decorated Marine in U.S. history) said, "I spent 33 years and four months in active military service and during that period I spent most of my time as a high class muscle man for Big Business, for Wall Street and the bankers. In short, I was a racketeer; a gangster for capitalism."

Feb 11, 2021 | www.unz.com

annamaria , says: February 11, 2021 at 12:56 am GMT • 10.1 hours ago

@onebornfree nomy/">https://thesaker.is/does-the-us-still-have-an-economy/

Wall Street killed the truth squad and protected the profits from job and investment offshoring. This is what happens to elected officials when they attempt to represent the general interest rather than the special interests that finance political campaigns. The public interest is blocked off by a brick wall posted with a sign that says get compliant with the Establishment or get out of politics.

As for the "direct collision course" re the EU and Russia, the collision course has been imposed by the Master-oligarchy of U. S. on the hapless vassal EU.

[Feb 10, 2021] Two ideologies emerged after WWI from Austria in reaction to the traumatic experience of that collapse -- ideologies formulated by Austrians that then deeply damaged the rest of the world. Neoliberalism was one, of course.

Feb 10, 2021 | www.nakedcapitalism.com

Michaelmas , February 6, 2021 at 10:42 pm

Slobodan's "The Globalists" is a great look at Von Mises and Hayek peddling NeoLiberalism to the last hereditary aristocracy standing in Europe in the interwar years.

It's Slobodian, Quinn.

To my mind, this set up a deracinated pseudo-nazism

So you're on to something.

Hayek is the Grandfather of neoliberalism and the primary influence on Hayek's thought was the Vienna of his youth: the go-go years after Franz Josef surrendered to the Hungarians, created the dual monarchy, and there was the great cultural efflorescence of Vienna that preceded the Austro-Hungarian empire's collapse.

Two ideologies emerged after WWI from Austria in reaction to the traumatic experience of that collapse -- ideologies formulated by Austrians that then deeply damaged the rest of the world.

Neoliberalism was one, of course. The other? Well, someone once asked Ernst Hanfstaengl aka Putzi, Hitler's confidant, what caused Hitler's antiSemitism.

Hanfstaengl replied: 'Anyone who did not know Vienna before 1914 cannot understand.' Hanfstaengl then explained that before WWI Vienna was full of beautiful people, the soldiers in their uniforms, the Hapsburg Empire's citizens in their local traditional clothes etc and 'then these strange people came from the East all dressed in black and speaking a strange kind of German'. These were the Orthodox Jews who came from Silesia, a part of the Austro-Hungarian Empire. Kaiser Franz Josef had done much to emancipate and help the Jews, so many crossed over to Vienna to start a new life.

Now, to further put Hitler and Nazism's policies in their historical context, it's necessary to understand the situation in Germany prior to their appearance.

In 1871, Bismarck had nationalized healthcare, making it available to all Germans, then provided old-age pensions as public social security. Child labor was abolished and public schools were provided for all children. The Kaiser implemented worker protection laws in 1890. After WW I, the Social Democrats' influence had remained strong. Germany had an active union membership. An official "Decree on Collective Agreements, Worker and Employees Committees and the Settlement of Labor disputes" enabled collective bargaining, legal enforcement of labor contracts as well as social security for disabled veterans, widows, and dependents. In 1918, unemployment benefits were given to all German workers.

In the 1932 elections, the Nazi Party didn't have an outright majority. According to the Nuremberg Trial transcripts, on January 4, 1933, German bankers and industrialists had a secret backroom deal with then-Chancellor Von Papen to make Hitler the Chancellor of Germany in a coalition.

https://www.loc.gov/rr/frd/Military_Law/pdf/NT_war-criminals_Vol-VIII.pdf

According to banker Kurt Baron von Schröder:

"In February 1933, as Chancellor, Hitler met with the leading German industrialists at the home of Hermann Goring. There were representatives from IG Farben, AG Siemens, BMW, coal mining magnates, Theissen Corp, AG Krupp, and others bankers, investors, and other Germans belonging to the top 1%. In this meeting, Hitler said, "Private enterprise cannot be maintained in the age of democracy.'"

In 1934 the Nazis outlined their plan to revitalize the German economy with the reprivatization of significant industries: railways, public works project, construction, steel, and banking. Hitler guaranteed profits for the private sector; many American industrialists and bankers flocked to Germany to invest.

The Nazis had a thorough plan for deregulation. The Nazi's chief economist stated," The first thing German business needs is peace and quiet. It must have a feeling of absolute legal security and must know that work and its return are guaranteed." Likewise, businesses weren't to be hampered by too much "regulation." On May 2, 1933, Hitler sent his Brown Shirts to all union headquarters. Union leaders were beaten, and sent to prison or concentration camps. The Nazi party expropriated union funds -- money workers paid for union membership -- for itself.

On January 20, 1934, the Nazis passed the Law Regulating National Labor, abrogating the power of the government to set minimum wages and working conditions. Employers lowered wages and benefits. Workers were banned from striking or engaging in other collective bargaining rights, and worked longer hours for lower wages. Their conditions so deteriorated that when the head of the AFL visited Nazi Germany in 1938, he compared an average worker's life to that of a slave. .

The Nazis also privatized medicine. One of Hitler's economists was the head of a private insurance company. These private for-profit health insurance companies immediately started to profit from Anti-Semitism. In 1934, they eliminated reimbursements for Jewish physicians, which allowed them to profit further.

And so on.

Philip K. Dick once wrote a novel whose particular ontological riff was that the Roman empire never really ended and in the 20th century people lived in an imposed illusion under the same elite, or their heirs, that had headed the Roman empire.

That sort of science-fictional novel could be written based on our own reality, riffing on the theme: The Nazis won.

[Feb 10, 2021] the holding of mortgages by financial entities as de facto landlordism

Feb 10, 2021 | www.nakedcapitalism.com

Jonny Appleseed , February 6, 2021 at 9:10 am

I am curious as to why Prof. Hudson does not describe the holding of mortgages by financial entities as de facto landlordism, even if it is decentralized and theoretically time-limited (tho' not so with infinite re-fi and heloc).If the mortgage lenders are granted the monopoly of literally creating a debt on a ledger, rather than it being a public utility, and the benefits (read as: interest payments) accrue solely to those private entities, how is that substantially different than hereditary land title and rent? I concede that at the end of the lengthy mortgage term, the aristos cede the deed, but the parasitism is considerable, often over the entire working life of a person or couple.

michael hudson , February 6, 2021 at 11:09 am

My whole point, which I hope I've stated repeatedly clearly enough, is that "Rent is for paying interest." The financial class today has replaced the 19th-century's post-feudal landlord class.

Mikel , February 6, 2021 at 3:59 pm

Loans are also taken out against financial assets such as stocks/bonds. Is that another reason for propping up the stock market to the bizarre levels now seen?

Carolinian , February 6, 2021 at 10:05 am

Great stuff. While some of us are resistant to using money and debt to explain everything , who can deny that this country has always been about money above all with a not altogether insincere love of freedom on the side. Perhaps that latter is the source of the "you're not the boss of me" approach to the rest of the world that Hudson talks about.

ex-PFC Chuck , February 6, 2021 at 10:22 am

Although I'm more text than video oriented, this time I watched the latter first instead of reading the transcript. It was like sitting in a master class about the ongoing pernicious influence of the American financial sector on our country's foreign policy since early in the 20th century. Even if you've already read the transcript you should watch the video as well.

[Feb 10, 2021] The IMF system was designed to impoverish debtors

Feb 10, 2021 | www.nakedcapitalism.com

The IMF system was designed to impoverish debtors. The purpose of the IMF was to make other countries so poor and dependent on the United States so they could never be militarily independent. In the discussion of the British loan for instance, in the 1930s the discussion in the London Economic Conference was, "Yes, we're bankrupting Europe, but if we give Europe enough money to avoid austerity, they're just going to spend the money on the military." That was said by the Americans in the State Department and the White House again and again, especially by Raymond Moley who was basically in charge of President Roosevelt's foreign policy towards Europe.

The question is: how do you create an international financial system designed to promote prosperity, not austerity? The Bretton Woods is for austerity for everybody except the United States, which will have a free ride forever. The question that I'm involved with in the work I'm doing in China and with other countries is how to create a system based on prosperity instead of austerity, with mutual support between creditors and debtors, without the kind of financial antagonism that has been built in to the international financial system ever since World War I. Financial reform involves tax reform as well: how do we end up taxing economic rent instead of letting the rentiers take over society. That is what classical economics is all about: how do we revive it?

Oscar Brisset

Final question: these austerity and anti-labor policies which the IMF imposes on countries of the global South seem to be well known practices from before the IMF was created, from what you've discussed. Did the IMF invent anything new? In addition, in the 19th century, was predatory lending something common, or was direct invasion always the go-to method for subjugating a territory?

Prof Hudson

The 19th century was really the golden age of industrial capitalism. Countries wanted to invest to make a profit. They didn't want to invest in dismantling an existing industry, because there wasn't much industry to dismantle. They wanted to make profit by creating industry. There was a lot of investment in infrastructure, and it almost always lost money. For instance, there was recently a criticism of China saying, "Doesn't China know that the Panama Canal went bankrupt again and again, and that all the investments in canals and the railroads all went broke again and again?" Of course China knows that. The idea is that you make investment not to make a profit on basic large infrastructure. The 19th century was basically inter-state lending, inter-governmental lending, public sector lending. That's where the money was made. The late 20th century was one of financialization, dismantling the industry that was already in place, not lending to create industry to make a profit. It's asset-stripping, not profit-seeking

[Feb 10, 2021] Hedge funds bet on oil's 'big comeback' after pandemic hobbles producers By Reuters

Feb 10, 2021 | www.investing.com

By Maiya Keidan and Rod Nickel

TORONTO (Reuters) - Hedge funds are turning bullish on oil once again, betting the pandemic and investors' environmental focus has severely damaged companies' ability to ramp up production.

Such limitations on supply would push prices to multi-year highs and keep them there for two years or more, several hedge funds said.

The view is a reversal for hedge funds, which shorted the oil sector in the lead-up to global shutdowns, landing energy focused hedge funds gains of 26.8% in 2020, according to data from eVestment. By virtue of their fast-moving strategies, hedge funds are quick to spot new trends.

... Tawil predicted prices of $70 to $80 a barrel for Brent by the end of 2021 and is investing long independent oil and gas producers.

... ... ...

Global crude and condensate production was down 8% in December from February 2020, prior to the pandemic's spread accelerating, according to Rystad Energy.

North America's output was down 9.5% and Europe's production declined just 1% over the same time period.

U.S. sanctions against Venezuela and declining oilfields in Mexico have kept oil output from Latin America sluggish.

DarthSlack Ars Praefectus et Subscriptor REPLY FEB 8, 2021 2:57 PM Jamjen831 wrote: peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.

I assume some of it is just old stuff people just re-download without thinking. Android hasn't always had a built in flashlight app (and am I crazy in that the early ones required root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google Lens was a QR scanner until fairly recently.

Count me in that boat. I just checked my phone and sure enough, Barcode Scanner was there. I'm guessing it's from 3-4 phones ago and just came along for the ride as Play autoloaded my apps on the new phones because I haven't used it in ages and ages. daggar Ars Tribunus Militum REPLY FEB 8, 2021 2:57 PM

Jamjen831 wrote: peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.

I assume some of it is just old stuff people just re-download without thinking. Android hasn't always had a built in flashlight app (and am I crazy in that the early ones required root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google Lens was a QR scanner until fairly recently.

It's more likely that it's stuff that gets re-downloaded without user interaction. When you set up a new Android, the phone will often re-download all the apps from the old phone. Unless you're going through to curate those apps, your 2021 new phone might be getting something that's gone through a succession of auto-downloads since the mid 2010's. everythingallatonce Smack-Fu Master, in training REPLY FEB 8, 2021 2:57 PM

peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.
I can't really speak for the barcode scanner, but given that a lot of Android phones are incapable of being updated there is a decent chance a lot of people with much older phones actually have to install a flashlight app.

Google really needs to do something regarding the malware problem. I'm not going to pretend to know the answer, but for a company that made $15.23 billion in earnings last quarter and owns Project Zero you'd think they'd be able to protect a platform they have complete control over. Jamjen831 Ars Scholae Palatinae et Subscriptor REPLY FEB 8, 2021 3:02 PM Dr.Bananas wrote: peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.
Not all phones. I haven't had an Android phone with a stock barcode scanner ever. Samsung Galaxy Ace, Galaxy Nexus, Moto G, Nexus 5X, Nokia 3 and my current Sony XZ2 Compact all came without one. It should be part of the default camera app, but sadly that's not always the case.

As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has pushed that. Xavin Ars Legatus Legionis et Subscriptor REPLY FEB 8, 2021 3:03 PM

marsilies wrote: So I use an app called "Barcode Scanner" that's not the malware app. However, the recent reviews blast it for adware, which I haven't noticed. I think having the exact same name has caused some people to post negative reviews on the wrong app:
https://play.google.com/store/apps/deta ... nt.android
That's correct, it's clean, people are just confused by the same names. The one with the malware was always a sad copy of the ZXing Team one you linked.

Jamjen831 wrote: show nested quotes

As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has pushed that.
You need an internet connection for Lens to scan barcodes. Batmanuel Ars Tribunus Militum REPLY FEB 8, 2021 3:12 PM Ancan wrote: I've got a Galaxy S8+ and if there's a built in barcode scanner I must admit I haven't found out in the years I've had it.

It's built into Bixby Vision. Jeff S Ars Praefectus et Subscriptor REPLY FEB 8, 2021 3:16 PM

CrookedKnight wrote: show nested quotes

And how many users know they can use an app called "Lens" to scan barcodes?

Does Lens give you technical info about the type of a barcode (aka the Symbology)? Granted, most people don't have a need to know or care, but I have a job doing work with retail POS equipment, including hand and flatbed scanners. For my job, it's SUPER helpful sometimes to have a barcode scanner app that can tell me what type of barcode is being scanned - because sometimes scanners will scan all the barcodes, *except* this one type of barcode, and then I gotta find out what kind of barcode it is, so that I can enable that symbology for the scanner in question (or provide instructions to my customers on how they enable it for their POS).

Or, I can scan the barcode to get the underlying text in the barcode, to compare with our app's logs, to make sure it's scanning correctly (e.g. not getting truncated or anything like that).

That's why I have ZXing Team barcode scanner on my phone and recommend it to co-workers.

  1. AreWeThereYeti Ars Praefectus et Subscriptor REPLY FEB 8, 2021 3:16 PM Jamjen831 wrote: show nested quotes

    I assume some of it is just old stuff people just re-download without thinking. Android hasn't always had a built in flashlight app (and am I crazy in that the early ones required root?). And I'm pretty sure that's the same with QR readers. I hadn't realized that Google Lens was a QR scanner until fairly recently.

    It isn't just old people, as you admitted yourself practically everyone doesn't understand all the things their apps can do, especially when that changes over time. A big part of that problem is the appalling fact that most apps, even the most widely used and professionally developed, have basically no documentation, and no way of finding out what their features actually are.

    Developers have this fantasy in their heads that they don't document the programs because it's really hard to keep the documentation in-sync with a changing app, but the real reason is just a pervasive problem in development culture caused by the race to get things onto the market, and the convenient lie that developers tell themselves that their apps are "self documenting", as if everyone has the time or desire to play "app scientist" and experiment with the app endlessly to find out all its hidden, unobvious features.

    @dmccarty: Yeah, the "update or not" decision is tricky for apps. What I do, is turn off update only for apps that I have no desire for updates too and which shouldn't be doing any internet activity or only activity to a defined, trusted spot. Any other kind of app, especially ones that might be subjected to varying network input from undefined sources, gets updates. Up +21 ( +22 / -1 ) Down 3906 posts | registered 9/15/2009

  2. MikeSafari Wise, Aged Ars Veteran REPLY FEB 8, 2021 3:17 PM peachpuff wrote: Barcode scanners and flashlight apps... who installs these? Phones come with these features already baked in.

    I unfortunately didn't have a choice. I bought a Nokia 6.1 a couple of years ago and installed the official Google Camera app, which has a built-in barcode/QR code reader, but when Nokia pushed the Android 10 update, it broke the camera app completely. And Nokia's default camera app does *not* read barcodes or QR codes for some reason. So to read them, I had to install a third-party app.

    Not super thrilled anyway, but thankfully it was not this one.

marsilies Ars Praefectus et Subscriptor REPLY FEB 8, 2021 3:20 PM Jamjen831 wrote: show nested quotes

As mentioned above, Google Lens is the defacto QR Scanner (it's part of the camera app). Do those phones have Lens? I've been on Nexus\Pixel for a long time so not too sure how Google has pushed that.
Lens looks like it was initially exclusive to the Pixel 2, and slowly expanded until it became its own Android app in June 2018:
https://en.wikipedia.org/wiki/Google_Lens

So all the phones listed peachpuff came without it, and you'd probably have to have an Android phone released in the last 2 1/2 years to even have it pre-installed.

Then, as others have noted, one would have to know that Lens can scan barcodes, and if you have had Android phones for a while, the initial setup and migration may install their old barcode scanner app anyway.

[Feb 06, 2021] Everything Makes Sense, But Nothing Is Logical by Bill Blain

Feb 06, 2021 | www.zerohedge.com

Authored by Bill Blain via MorningPorridge.com,

The thing to really wonder about is how society is changing and what that means for financial markets. After all, it's the madness of crowds, sentiment and human behaviours that drive market prices. Modern communications via immediate 24/7 news, social media, the ease and gamification of trading, and the influences of inputs such as Reddit and Fake News are changing the way markets function. It was revealing how quickly a loose internet shock-flock of aligned retail investors swiped the market this week.

Their anger at the financial machine was palpable. They demonstrate a fundamental change at the heart of market capitalism.

The basis of " shareholder capitalism " was best summed up by Gordon Gecko: "Greed is Good" . It was utterly corrupting. Anything to improve returns to the owners, the shareholders, was apparently justified. It was justified by the belief free markets would achieve an equilibrium where shareholders would make optimal profits by providing maximum utility to their customers.

Just like communism, it didn't quite work out the way the economists and sociologists predicted. Everyone talks a good talk about fair shares of the cake, but try a simple experiment and ask you kids to divide it. Everyone wants a bigger slice. (My father's solution was simple: whoever cuts the cake chooses last.)

In reality nothing is really fair. Inequality is a driver of the human condition. Companies cut corners to improve their share of the cake - often the management sneak in and take the rewards, cutting out shareholders and customers. To make profits big corporates will compromise what they can: safety, the environment, law and justice – everything from poisoning the planet, unsafe aircraft, or bursting dams. Costs were seen as externalities addressed through insurance, or hiring the best lawyers.

Its no wonder we now have kickback against it, and a new mantra of "stakeholder" capitalism trying to ensure we all get that fairer slice of the pie.

Every single big investor now swears by their strict adoption of the principals and importance of Corporate Social Responsibility (CSR), Environment, Social and Governance (ESG) investment, and Sustainability. (I have serious concerns these valid and laudable goals have been diminished into mere tickbox investing by corporate bureaucracy.)

Yet for all the noise and stakeholders sharing the pie, we are still seeing the steepest ever transfer of wealth from the poor to the rich. Income inequality is rising. Across the Occidental Western economies the poor have become desperately poor. Witness the growth in Foodbanks in Europe and the US and the success of Marcus Rashford in addressing the appalling reality of kids arriving in school unfed, penalising their life chances from the get-go.

And it's not just the poorest in society. The middle classes have also been hollowed out by the difficulties of stretching static incomes to cover every rising living costs, and TAXES.

Oh yes these two great certainties in life; death and taxes. Except . If you are rich enough ..

As we've seen the concept of Shareholder capitalism stopped delivering anything much to any but the wealthiest. Since 2008, and particularly since the outbreak of the Covid Pandemic, we've seen the bulk of QE money creation and government stimulus work its way into financial assets, with the effect of driving up the price of stocks. As I wrote a few weeks ago a rough number is that $3 trillion out of $5 trillion subsidy money in the US has gone into the pockets of the richest in society through the inflation of their financial assets.

Try and explain how that has worked – will immediately get you branded a communist. But it's really simple. Stocks go up because bond yields are so low – and bond yields are so low because its policy. How to correct it?

This is why Taxes are really interesting.

If you look at the new generation of the uber-wealthy Tech barons, and the last US President, they all share a common theme – the belief that minimising tax payments is a signal of entrepreneurial genius. However, the reality, at the end of the day, is tax optimisation through complex tax structures is pretty much the same as tax evasion.

Ask any right of centre American what raising taxes would do to the economy – and they will immediately counter it's the success of tax cuts that's driven growth and markets. Tax cuts/handouts to the rich are credited as the singular success of the last White House administration – creating thousands of low-paid jobs across the states. If you were to tax the rich they wouldn't invest their money in job creation, and there would be no trickle down to the poor. Even questioning the efficacy of tax burdens on the rich could apparently shake the edifice of US shareholder capitalism to the ground.

The thing is.. we might not actually need taxes at all. If central banks can create limitless money with zero consequences, then why does anyone have to pay taxes? Let the rich keep it all and we can print more money to keep the poor happy.

But Taxes have an important role in society. They are a fee members of society pay to be part of it – you work in order to pay the taxes that allow you membership of society. The more you pay, the greater your contribution – the more society should value you. You want the benefits of society, then be willing to pay for it.

In an ideal world we would laud billionaires for their hard work, effort, and paying the bulk of their earnings in taxes to raise the up rest of us. Instead, they impress their equals by avoiding taxes, while the rest of us increasingly resent their conspicuous wealth – earned off our backs which is very much how anyone under 30 working hard to save a deposit for a rabbit-hutch flat they can never afford increasingly feels about the world.

We are only now beginning to questioning tax equality and tax evasion. The papers will make some righteous noise about the dislikeable high-street retailer who has emptied the company pension fund to finance his yachts in a tax-haven, or it might expose a singer who has not paid a penny in tax. We almost feel sympathy for the entertainer whose stellar career ends up on the skids because they can't meet a tax-demand.

We regard the Inland Revenue as the ultimate baddie for harassing us to pay our modest amounts of tax – it's easy for them to go after little people. If they try to catch the big tax-avoiders they face a battery of lawyers and accountants and deliberately complex webs to be unravelled.

In short, the rich get away with not paying Tax while poor get harassed and get poorer. Inequality rises.

And this where we return to Norges Bank and why their decision to act on bad tax players is so critical.

NBIM own 1.5% of the global stock market, with stakes in over 9ooo companies. They've not named the seven stocks they dumped – there is no blacklist, it says – but clearly it should set every CFO thinking about their tax transparency – including paying tax where value creation takes place. That's a clear shot across the bows for any of the big tech firms currently selling stuff over the internet, delivering it your front door and booking all the revenues somewhere low tax, and repatriating profits via somewhere that's agreed a zero-taxes deal in exchange for opening a HQ office.

Some of the most valuable firms on the planet have the least transparent tax policies. Just saying but there is a fascinating article in the Garuniad y'day: "Inside the mind of Jeff Bezos". It reports Jeff (till recently the richest guy on the planet) saying: " the only way I can see to deploy this much financial resource is by converting my Amazon winnings into space travel ."

Personally, I would love to mine asteroids, but Bezos could probably ensure every child on the planet has access to clean water, or cure cancer and have statues to himself erected across the planet proclaiming what a wonderful philanthropic champion.

Or he and every single other billionaire could just pay taxes, thankful for the opportunities they had to realise their dreams building their companies, while making society better. I'm not saying take every penny – but let's be realistic who can spend a couple of billion dollars? Even the first Mrs Blain would have struggled with that one (although I suspect young Ms Blain could make a significant dent )

I know exactly what posts will be made on this website and Zerohedge on this article. I will be screamed at for being a socialist. Some libertarian idiot will call himself "John Galt" and declare a belief that helping others is weakness. Not interested. The only way we make the world better as politicians keep reminding us – is to remember we are in this together, on a very small planet. [ZH: 'fair and balanced' - everyone deserves to speak their mind and be heard.]

High taxation economies – like the Scandinavians – tend to be fairly happy places. Entrepreneurs live well and are held in high regard. Their taxes fund social provision, health and education that are the envy of the rest of us.

In low tax countries the wealth creators live in bunker complexes protected by guards while the masses eke out their miserable crusts .

... ... ...

[Feb 05, 2021] Biden vows to defend neoliberalism globally and confront Russia

Feb 05, 2021 | www.zerohedge.com

On Thursday afternoon President Biden gave a much anticipated and wide-ranging speech laying out his foreign policy agenda during a visit to the State Department. As expected much of it was a repudiation of Trump's "America First" vision - though without mentioning Donald Trump by name. His address to State Department diplomats and staff was centered around the theme of his words: "America is back. Diplomacy is back at the center of our foreign policy."

Alarming for anyone who has called for an end to the vision which sees Washington as essentially acting the like to 'global police force' - which unfortunately became a (disastrous) reality starting in the Bush years and under the neocons, Biden vowed that as commander-in-chief he would "defend democracy globally" .

He urged for the US to rebuild "the muscles of democratic alliances that have atrophied from four years of neglect and abuse." He emphasized that "We can't do it alone."

Of course, the big question is what will that look like, with many expecting a return to the kind of 'humanitarian interventionism' abroad and liberal internationalism that defined the Obama years . This often took the form of covert wars (with the foremost example being Syria) and military interventions under the guise international coalitions (such as NATO's war on Libya) aimed at regime change.

"We must meet this new moment of accelerating global challenges – from a pandemic to the climate crisis to nuclear proliferation – that will only be solved by nations working together in common cause," Biden said in the afternoon address. "That must start with diplomacy, rooted in America's most cherished democratic values: defending freedom, championing opportunity, upholding universal rights, respecting the rule of law, treating every person with dignity."

Here are some of the highlights and significant foreign policy changes in US posture...

Russia

Biden said that "we will not hesitate to raise the costs on Russia." At a moment Russian opposition leaders are lobbying Washington for the targeted use of Magnitsky sanctions on Putin's inner circle, Biden actually mentioned the imprisoned opposition activist Alexey Navalny by name.

He called on the Kremlin to release Navalny "immediately and without condition" while expressing that authorities had targeted him for "exposing corruption" of Putin and top Kremlin leadership. And further :

He said that he "made it clear to President Putin, in a manner very different from my predecessor, that the days the United States rolling over in the face of Russia's aggressive action" – pointing to cyber attacks from the SolarWinds breach and the poisoning of opposition figure Alexei Navalny – "are over."

[Feb 05, 2021] The Old Mantra Of -Too Big To Fail- Is Exposed As A Lie... - ZeroHedge

Feb 05, 2021 | www.zerohedge.com

Authored by Brandon Smith via Alt-Market.us,

It is a general rule that corrupt economies tend to operate on faith and not on fundamentals. And to be clear, it's not so much about naive faith that the system is stable or functional. No, it's more about the masses having faith that the corruption and instability will never be derailed. Most people are not as stupid as the establishment and central bankers think they are – Almost everyone knows the system is broken, they just refuse to consider the possibility that the fraud will be disrupted, or that it will be allowed to fail.

The old mantra "too big to fail" is a lie. NOTHING is too big to fail, and that includes the US economy, the dollar and the elaborate Kabuki theater that keeps them both afloat. All it takes is a single moment, an epiphany that the Ponzi scheme is unsustainable rather than unstoppable.

I'm reminded specifically of the inflationary crisis of Argentina in 2001 – 2002.

Argentina's economy was highly dependent on foreign capital inflows, and its currency peg to the US dollar, not to mention they were precariously reliant on support from the IMF. The IMF openly validated the government of Argentina and their currency peg model, but foreign capital began to decline and the peg became unsustainable. Without tangible growth in manufacturing and a strong middle class, an economy cannot survive for long. A top down system based on illusory "financial products" and creative accounting is doomed to crash eventually.

All it took was for the IMF to criticize the policies they initially endorsed and announced that they were removing financial aid, and all hell broke loose in Argentina.

Almost overnight the Argentina peso plunged in value, interest rates spiked and inflation struck hard. People poured into the streets and civil unrest erupted. The IMF would later admit it made "errors" in its handling of the Argentina situation, but this was simply spin control designed to protect them from further scrutiny. The IMF avoided most of the blame and has been growing into a monstrous global centralization machine ever since.

I think we are witnessing the beginning of a similar end of mass faith in fraud in the US. The recent Robinhood short squeeze event as well as the current decoupling of physical silver prices from the paper ETF market have accelerated the timetable. Not surprisingly, these moves have forced the establishment to intervene to some extent to essentially stop renegade traders from freely investing. Accusations are flying and deplatforming has ensued. The idea that the system is a functional fraud is gone; The world now knows it is a dysfunctional fraud, and collapse cannot be very far behind.

Furthermore the collusion between banks, hedge funds and Big Tech is blatantly revealed. These relationships are supposed to remain hidden in the ether. They are obvious to anyone with any financial knowledge and sense, but they aren't supposed to be wielded in the open. Conspirators aren't supposed to admit to the conspiracy? Right?

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Some people might say the establishment has been forced to unmask by activists. Maybe. But, as I have been warning for many years, when criminals start openly admitting to their crimes it is probably because they think that it's too late for anyone to do anything about it.

The point is, bankers and globalists have ways of avoiding responsibility for the disasters they engineer. When the con-game breaks, they always have patsies to take the fall.

This sets up a bizarre dynamic in which the money elites that constructed the economy like a time-bomb are treated like victims (or heroes) and the people telling the truth about the fraud are treated like villains and criminals. Are activist stock market traders and silver market guerrillas to blame for any crisis that erupts in the near future? No, of course not, but they will be blamed anyway.

That said, propaganda narratives and scapegoats may not be enough to save the bankers this time. They will never allow a major fiscal crash to develop in a vacuum. They need more cover, and they need to have the means to lock down the public to prevent civil unrest or rebellion from spilling over into their backyards. I have long suspected that the covid pandemic is a useful tool in this regard. As I noted in my article 'How Viral Pandemic Benefits The Globalist Agenda' , published in January of 2020:

" Even if a pandemic does not kill a large number of people, it still disrupts international travel, it disrupts exports and imports, it disrupts consumer behavior and retail sales, and it disrupts domestic trade. If it does kill a large number of people, and if the Chinese government's response is any indication, it could result in global martial law. With many economies including the US economy already in a precarious balancing act of historic debt vs. crashing demand and useless central bank repo market intervention, there is little chance that the system can withstand such a tsunami "

As we all know, medical martial law in the name of "public health" is being established in most countries regardless of the actual death rate. The insane globalist rantings of the World Economic Forum and Klaus Schwab have been very revealing; Schwab and other elites have even called the pandemic a "perfect opportunity" to execute there agenda for the "Great Reset".

However, the globalists are highly fallible, and mistakes in judgment have been made. During the Event 201 pandemic wargame on a coronavirus outbreak (conveniently held two months before the real thing happened), the elites forecast at least 65 million initial deaths globally from such a virus. We are a year into the pandemic and nowhere near that kind of death rate. In fact, the death rate is so minuscule (0.26%) , that the public is beginning to realize the lockdown mandates are pointless.

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In the US, conservative states are moving on and keeping their economies wide open. Half the population is refusing to take the vaccines, and many members of law enforcement are refusing to implement lockdown policies. I don't think this is what the globalists expected at all. They needed mass fear and they are getting mass defiance.

They're going to need a bigger threat, or a bigger virus.

This is why I have been repeatedly warning that the talk of reopenings by Biden and other democrats is going to be very short lived. I have predicted that Biden will attempt a federal lockdown similar to the Level 4 lockdowns used in Europe and Australia after a couple of months of relative calm. I based this prediction on the covid "mutation" narrative being spread right now by the mainstream media and establishment cronies like Anthony Fauci. It is not hard to see where this is headed.

The globalists must have the "legal" option of restricting public movement as well as large gatherings, and they must have the option of surveillance on individuals 24/7 through contact tracing. This is the only way to prevent rebellion against the Reset and rising anger due to economic turmoil. The veil has been lifted, the conspiracy is being widely broadcast. Martial law alone would only inspire more dissent, medical tyranny in the name of "saving lives" is the ONLY play the globalists have. They have to have help from a large portion of the citizenry, so they must maintain the appearance that they are operating from the moral high ground.

The covid mutation story is clearly the next play, and Bank of America economists appear to agree with me . They recently stated that they see little optimism in terms of a reopening of the economy, and that hard lockdowns will return, possibly in March or April.

Another factor to consider is that the economic crash will have to reach a peak soon because Joe Biden now resides in the White House. If the crash happens in the near term, activist investors can be blamed, Trump can be blamed, and conservatives and liberty activists can be blamed. If the crash happens a year or two from now, only Biden and the globalists will get the blame.

Without lockdowns and scapegoats the scenario will end very badly for the globalists. It might end badly for them anyway. Be ready for more chaos by Spring; I suspect the elites are getting desperate, and if they allow America to go back to normal and for the pandemic to end with a whimper they will never get another chance at their precious Reset.

[Feb 05, 2021] The Great Reset, Part IV- -Stakeholder Capitalism- Vs. -Neoliberalism- - ZeroHedge

Feb 05, 2021 | www.zerohedge.com

Stakeholders consist of "customers, suppliers, employees, and local communities" in addition to shareholders. But for Klaus Schwab and the WEF, the framework of stakeholder capitalism must be globalized. A stakeholder is anyone or any group that stands to benefit or lose from any corporate behavior -- other than competitors, we may presume. Since the primary pretext for the Great Reset is global climate change, anyone in the world can be considered a stakeholder in the corporate governance of any major corporation. And federal partnerships with corporations that do not "serve" their stakeholders, like the Keystone Pipeline project, for example, must be abandoned.

...T ake one David Campbell, a British socialist (although non-Marxist) and author of The Failure of Marxism (1996). After declaring that Marxism had failed, Campbell began advocating stakeholder capitalism as a means to the same ends. His argument with the British orthodox Marxist Paddy Ireland represents an internecine squabble over the best means of achieving socialism, while also providing a looking glass into the minds of socialists determined to try other, presumably nonviolent tacks.

Campbell castigated Ireland for his rejection of stakeholder capitalism. ... Ireland's more-radical-than-thou Marxism left Campbell flummoxed. Didn't Ireland realize that his market determinism was exactly what the defenders of "neoliberalism" asserted as the inevitable and only sure means for the distribution of social welfare? "Marxism," Campbell rightly noted, "can be identified with the deriding of 'social reform' as not representing, or even as obstructing, 'the revolution.'" Like so many antireformist Marxists, Ireland failed to recognize that "the social reforms that [he] derided are the revolution."

Ireland and Campbell agreed that the very idea of stakeholder capitalism derived from companies having become relatively autonomous from their shareholders. The idea of managerial independence and thus company or corporate autonomy was first treated by Adolf A. Berle and Gardiner C. Means in The Modern Corporation and Private Property (1932) and after them in James Burnham's The Managerial Revolution (1962). In "Corporate Governance, Stakeholding, and the Company: Towards a Less Degenerate Capitalism?," Ireland writes of this putative autonomy: "[T]he idea of the stakeholding company is rooted in the autonomy of 'the company' from its shareholders; its claim being that this autonomy can be exploited to ensure that companies do not operate exclusively with the interests of their shareholders in mind."

This apparent autonomy of the company, Ireland argues, came about not with incorporation or legal changes to the structure of the corporation, but with the growth of large-scale industrial capitalism. The growth in the sheer number of shares and with it the advent of the stock market made for the ready salability of the of the share. Shares became "money capital," readily exchangeable titles to a percentage of profit, and not claims on the company's assets. It was at this point that shares gained apparent autonomy from the company and the company from its shareholders.

Moreover, with the emergence of this market, shares developed an autonomous value of their own quite independent of, and often different from, the value of the company's assets. Emerging as what Marx called fictitious capital, they were redefined in law as an autonomous form of property independent of the assets of the company. They were no longer conceptualized as equitable interests in the property of the company but as rights to profit with a value of their own, rights which could be freely and easily bought and sold in the marketplace .

On gaining their independence from the assets of companies, shares emerged as legal objects in their own right, seemingly doubling the capital of joint stock companies. The assets were now owned by the company and by the company alone, either through a corporation or, in the case of unincorporated companies, through trustees. The intangible share capital of the company, on the other hand, had become the sole property of the shareholder. They were now two quite separate forms of property. Moreover, with the legal constitution of the share as an entirely autonomous form of property, the externalization of the shareholder from the company had been completed in a way not previously possible.

Thus, according to Ireland, a difference in interests emerged between the holders of the industrial capital and the holders of the money capital, or between the company and the shareholder.

Nevertheless, Ireland maintains, the autonomy of the company is limited by the necessity for industrial capital to produce profit. The value of shares is ultimately determined by the profitability of the company's assets in use. "The company is, and will always be, the personification of industrial capital and, as such, subject to the imperatives of profitability and accumulation. These are not imposed from the outside on an otherwise neutral and directionless entity, but are, rather, intrinsic to it, lying at the very heart of its existence." This necessity, Paddy argues, defines the limits of stakeholder capitalism and its inability to sustain itself. "The nature of the company is such, therefore, as to suggest that [there] are strict limits to the extent to which its autonomy from shareholders can be exploited for the benefit of workers or, indeed, other stakeholders."

Here is a point on which the "neoliberal" Milton Friedman and the Marxist Paddy Ireland would have agreed, despite Ireland's insistence that the extraction of "surplus value" at the point of production is the cause. And this agreement between Friedman and Ireland is exactly why Campbell rejected Ireland's argument. Such market determinism is only necessary under capitalism, Campbell asserted. Predictions about how companies will behave in the context of markets are only valid under current market conditions...

Despite this insurmountable "neoliberal"/Marxist impasse, the notion of stakeholder capitalism is at least fifty years old. Debates about the efficacy of stakeholder capitalism date to the 1980s. They were stirred up by Friedman's rejection of the "soulful corporation," which reached its peak with Carl Kaysen's "The Social Significance of the Modern Corporation" in 1957. Kaysen viewed the corporation as a social institution that must weigh profitability against a broad and growing array of social responsibilities: "there is no display of greed or graspingness; there is no attempt to push off onto the workers or the community at large part of the social costs of the enterprise. The modern corporation is a soulful corporation." Thus, in Kaysen, we see hints of the later notion of stakeholder capitalism.

Likely, stakeholder capitalism can be traced, although not in an unbroken line of succession, to the "commercial idealism" of the late nineteenth and early twentieth centuries, when Edward Bellamy and King Camp Gillette, among others, envisioned corporate socialist utopias via incorporation. For such corporate socialists, the main means for establishing socialism was through the continuous incorporation of all the factors of production. With incorporation, a series of mergers and acquisitions would occur until the formation of a singular global monopoly, in which all "the People" had equal shares, was complete. In his "World Corporation , " Gillette declared that "the trained mind of business and finance sees no stopping-place to corporate absorption and growth, except final absorption of all the World's material assets into one corporate body, under the directing control of one corporate mind." Such a singular world monopoly would become socialist upon the equal distribution of shares among the population. Stakeholder capitalism falls short of this equal distribution of shares but gets around it by distributing value on the basis of social and political pressure.

Interestingly, Campbell ends his argument, rather undogmatically, by stating unequivocally that if Friedman was right and "if these comparisons [between shareholder and stakeholder capitalism] tend to show exclusive maximization of shareholder value to be the optimal way of maximizing welfare," then "one should give up being a socialist." If, after all, the maximization of human welfare is really the object, and "shareholder capitalism" (or "neoliberalism") proves to be the best way to achieve it, then socialism itself, including stakeholder capitalism, must necessarily be abandoned.

[Feb 04, 2021] The GameStop Rebels Vs. -Too Big To Fail- - ZeroHedge

Feb 04, 2021 | www.zerohedge.com

The GameStop Rebels Vs. "Too Big To Fail" BY TYLER DURDEN WEDNESDAY, FEB 03, 2021 - 6:10

Authored by Ryan McMaken via The Mises Institute,

Last week, a large number of small-time investors drove up the price of GameStop's (GME) stock a historic 1,784 percent . But this was no mere spike in some obscure stock. The stock's price spiked in part as a result of efforts by "an army of smaller investors who have been rallying on Reddit and elsewhere online to support GameStop's stock and beat back the professionals." These professionals were hedge fund managers who had shorted GameStop's stock. In other words, hedge funders were betting billions that GameStop's stock would go down. But the price went up instead, meaning hedge funds like Melvin Capital (and Citron Research) took "a significant loss," possibly totaling $70 billion.

There surely were plenty of insiders on both sides of this deal. Given the complexity of various schemes employed by seasoned investors, it seems it is very unlikely that this is just a simple matter of little Davids taking on Wall Street Goliaths.

But it also looks like that's not all that was going on. Had this only been just another scheme by some Wall Street insiders against some other Wall Street insiders the story would probably have ended there.

But that's not what happened. Rather, it appears that, for many of the smaller investors who were involved, much of this "short squeeze" was conducted for the purposes of throwing a monkey wrench in the plans of Wall Street hedge funds which exist within the rarified world of billionaires and their friends.

Pro–Wall Street Fearmongering

The reactions to the event from media pundits and other commentators were telling in that there was clearly fear and outrage over the fact that business as usual on Wall Street wasn't being enforced. Predictably, much of the reaction to the Reddit rebellion was to label it a "fiasco," " insanity ," and something sure to leave a " trail of destruction ." The important thing was to use words designed to make it all look like the threat to hedge funds represents some sort of grave threat to the overall economy. Jim Lebenthal at CNBC, for example, declared the "short-squeeze fiasco is a threat to the proper functioning of financial markets."

The fearmongering went beyond even the usual places we hear about financial news. On The View , for example, Meghan McCain delivered the sort of status quo –defending bromides we've come to expect from her. She insisted the GameStop affair could spiral into an economy-killing disaster because

If the stock ends up plunging because of this, because of GameStop and Wall Street loses billions, at a certain point, it will impact stocks like Apple and Disney and stocks that a lot of average Americans do invest in, and if that happens, average Americans will end up losing even more money.

Her comment doesn't rally make any sense, and she doesn't seem to have even a rudimentary understanding of what happened. But her comment delivered the important point: namely, that anything that causes volatility in the market could be a disaster for every American household. Translation: and we should all be very, very afraid if something isn't done to keep these Reddit people -- whom she compared to the Capitol "insurrectionists" -- under control.

Of course, in a functioning and relatively unhampered market, unusual, unexpected things happen all the time. Entrepreneurial actors do things the incumbent firms and "experts" hadn't counted on. This leads to "instability" and big swings in prices. This is actual capitalism, and it doesn't mean the marketplace isn't functioning properly. In fact, it probably means the marketplace is dynamic and responsive to consumers and other market participants.

But that's not something Wall Street insiders or their pals in Washington like in the modern era. Although Wall Streeters love to portray themselves as capitalist captains of industry, the fact is they have very little interest in real, competitive capitalism.

Rather, we live in the era of "too big to fail" (TBTF), when market freedom means nothing and preserving the portfolios of powerful Wall Street institutions is what really matters.

Decades of "Too Big to Fail"

It's based on the idea that Wall Street is just too important to the whole economy, and Washington must intervene to make sure rich guys on Wall Street stay rich. David Stockman explains this philosophy:

[It is] the notion that the "threat of systemic risk" and a cascading contagion of losses form the failure of any big Wall Street institution would be so calamitous that it warranted an exemption from free market discipline.

This goes back at least to the 1994 Mexican bailout -- which was really a bailout of investors, not of Mexico -- which solidified the process of normalizing huge transfers of wealth from taxpayers and dollar holders to the Wall Street elite. By then, the "Greenspan put" was already in place, with the central bank forever poised to embrace more easy money in pursuit of propping up stock prices. Then came the bailouts of 2008 and the covd-19 avalanche of easy money -- all of which lopsidedly benefited Wall Street over the rest of the economy.

This "exemption from free market discipline" is what Wall Street is all about these days. The financial sector has become accustomed to enjoying bailouts, easy money, and the resulting financialization which puts ever greater amounts of the US economy into the hands of Wall Street money managers. The sector is now built on corporate welfare, not "free markets." No matter what happens, Wall Street expects the deck to be stacked in its favor.

This is why "volatility" has become a bad word, and "stability" is now the name of the game. It's why Lebenthal thinks anything out of the ordinary is a threat to the "proper functioning of financial markets." If some free market innovation and inventiveness actually takes place in some small corner of the marketplace, well, then we're all expected to get very upset.

That's the way Wall Street likes it. ay_arrow 1


Kayman 8 hours ago

The marketing slogan "Too Big Too Fail" conveniently presumed Wall Street was more important than the Real Economy. A fatal presumption.

Wall Street is a Parasite, backstopped by the Fed, who, in turn, are backstopped by the Nation. A crumbling nation, where the Fed strangles lending/savings intermediation, and saves the blood suckers by bleeding the dying core of America.

wmbz 8 hours ago

"The sector is now built on corporate welfare, not "free markets."

This is NOT a new thing. Corporate welfare has been in play for a long, long time. I am amazed how long it has taken otherwise "smart" people to grasp this fact.

The only difference is, it is out in the glaring sunlight for all to see. TPTB are damn proud of it!

junction 7 hours ago (Edited)

Except for the involvement of WallStreetBets in temporarily blocking the hedge fund bear raid on GameStop using "naked" shorts, it is still business as usual on Wall Street. No one at the SEC does anything but collect a salary, issue press releases and go to lunch as the Mafia crime families. . . oops, hedge funds run "bust out" operations on businesses. The lapdog financial press cheered on the hedge funds as they demolished American businesses. The same gutter journalists who are not yet linking micro-manager Bezos giving up total control of Amazon right after his cloud service illegally de-platformed Parler for violation of bogus. made-up community standards. But then, bigger things are afoot. Bolshevik president Biden just approved deploying B-1 bomber to Norway for the first time. Nuclear bomb carrying B-1 bombers. Anything to distract people from how rotten things are.

Cognitive rationalist 7 hours ago

Banking financial sector: private profits for me, public losses for thee

gladitsover 8 hours ago remove link

"..the table is tilted folks. The game is rigged.."

George Carlin

Lokiban 8 hours ago

I think it was all about showing to those unawares how corrupt and rigged Wall street truly is and they have gotten the message out bigtime.
The only question to be asked is who became the proverbial bagholder when average people saw their 'Bitcoin-Tulipmania' chance to get out with amazing profits and with that breaking the promise to continue pumping gme till it hits $1500.
One has always to be carefull if these kind of actions are true populism going against the controllers or is it controllers playing their hideous games again for a reason, like the great reset.
Greed has never been a good advisor in these times, easy sheoplemoney. It works all the time..

dustinthewind 9 hours ago

" Curiosity v Manipulation"

https://www.armstrongeconomics.com/armstrongeconomics101/understanding-cycles/curiosity-v-manipulation/

COMMENT: Message: Re Reddit "WallStreetBets"
Hi Marty,
Thanks for this blog post but I think they are not trying to make money out of short squeezing GME really, they are trying to make a point. If you follow some of the posts you see many stories about how badly people and their families were hurt in 2008 when not a single banker went to prison. Stories of Fathers losing jobs and houses and descending into alcoholism in front of their children who now are part of WallStreetBets, others who had to live off of beans and rice or what Mama could grow in the garden and went hungry etc.

So they are not buying GME to see it rise, though that is fine, they are spending money "they can afford to lose" to punish the hedge funds that have along with bankers hurt the little guy repeatedly. These same people IMO have bought off our politicians, removed regulations like Glass Steagal etc all to reap profits to the top while crushing everyone else.

Listen in June 2008 I got laid off from Palm, in July I broke my arm ( badly ), in August some tenants left so I tried to put that property up for sale but in September Lehman fell and the real estate agent told me the market was OFF that I could not sell and needed to rent it with no one renting for 5 more months. At the same time in September I had a 100K home equity line I took out just for emergencies and since I was having one I wanted to use it – but then Wells Fargo pulled the whole thing.

So there I was Marty, sitting on the couch with a cast from fingers to shoulder watching the world meltdown on a tiny TV set while on lots of pain killers
I was forced to use my small 401K, and ended up using the whole thing through 9 months of disability, two surgeries and a job search that did not yield a job until the fall of 2011.
So IMO these arrogant SOB cheating hedge fund guys should pound sand on GME for once because the casino is rigged, heads they win, tails they win, and the taxpayers lose their jobs, homes, and pay for their bailouts.
I say give it to 'em.
Off my soapbox

REPLY: I fully understand that. I have fought against these people my whole life. I was more interested in learning HOW the economy functioned where they were only interested in guaranteed trades. I guess I was the Leonardo da Vinci of finance. Instead of digging up bodies to figure out how the anatomy functioned, I searched history and developed a computer model to try to ascertain what made the world economy tick.

A professor from Princeton where Einstein taught said to me that I reminded him of Einstein. I was surprised, for I did not see myself as comparable to Einstein in any way. He then explained that what he meant was my curiosity which moved me to try to figure out what made it all function. I came to understand what he meant. If you are not CURIOUS and seek out knowledge, then you will NEVER discover anything new! I was not dealing with the physics of the world, but the finance. People are attracted by this blog and Socrates for that same reason. They have that spark of curiosity and seek to also understand what makes it all tick! We need to teach students to be curious. That is the key to all progress we desperately need to survive this never-ending battle of authoritarianism v independence and freedom.

I have stated many times that I had discovered the 8.6-year frequency in my research I conducted at Princeton, University in the Firestone Library. Those were fond memories for it was an amazing resource back then as was the Royal British Newspaper Library, which I gathered my FOREX database by sifting through the largest newspaper collection in the world.

This was the difference between me and the "club" where I tried to understand the movement of the ages that caused the rise and fall of civilization and therein the economy/markets, and the "club" which seeks to manipulate everything by sheer force armed with bribes. They own the Southern District of New York courts, the Second Circuit, and the Department of Justice along with the SEC and CFTC. Goldman Sachs has even stacked the SEC and CFTC with their former people. Nobody was prosecuted despite the fact that they were involved in the looting of capital in Malaysia and Greece. And people have the audacity to claim there was absolutely no election fraud? There is nothing we can trust that goes on in government anymore and it will only get far worse as we head into 2032.

I am well aware of the sentiment behind this Reddit trend. My concern is simple. Don't put it past the "club" to be in there making this seem like a sure bet and then set everyone up for the big crash. Be careful here going into Feb/March 2021.

[Feb 03, 2021] Inner Party members are untouchable: Prosecution of top officials is unlikely outcome Of Durham 'Russiagate' probe

Feb 03, 2021 | www.zerohedge.com

Authored by Douglass Braff via SaraACarter.com,

While Special Counsel John Durham's investigation into the origins of the Trump-Russia probe is generally focused on the FBI's activities, sources familiar with the investigation told Fox News the prosecution of high-ranking FBI officials, such as former Director James Comey, is "unlikely."

In a report published Tuesday, Fox News reports that sources told the publication that the investigation is ongoing and that Durham last year concluded the part of his investigation looking into the CIA and he is now examining the FBI's activities.

Additionally, another source told the news outlet that the special counsel had been pursuing "new and credible leads" through the end of the Trump administration, however, Fox News noted that it is unclear at this point what those lines of inquiry entail.

Moreover, a spokesperson for Durham told the outlet that they had "no comment from Mr. Durham."

Durham's probe is looking into the origins of former Special Counsel Robert Mueller's investigation into alleged Russian interference in the 2016 presidential election as well as now-debunked collusion between Russian officials and the Trump campaign. Former President Donald Trump and conservatives have called Mueller's yearlong probe a "witch hunt" and accused it of being motivated by anti-Trump animus.

Mueller's investigation yielded no evidence that collusion occurred between the Trump campaign and Russian officials during the 2016 election.

Tuesday's report comes after the first and only criminal sentencing stemming from Durham's investigation was issued last week.

Last Friday, Kevin Clinesmith , a former FBI lawyer, was sentenced to one year of probation and 400 hours of community service for altering an email during the Mueller's investigation that was used as grounds for the surveillance of former Trump campaign adviser Carter Page.

Previously, Comey has said that investigators have yet to reach out to him.

"I have had no contact with him and haven't talked to him," the former FBI director told CBS News' "Face the Nation" back in August.

"I can't imagine that I'm a target."

Last summer, Durham's team also questioned former CIA Director John Brennan for about eight hours at the CIA headquarters . Brennan later said through a spokesman he was assured he was "not a target," according to Fox News.

Back in December, Brennan told "Fox News Sunday" host Chris Wallace that he had no issue with Durham's investigation extending into 2021 and also divulged briefly about the eight-hour session.

"I think that is fine, I have no problems with it," the former CIA director said, adding that Durham's team already talked with him for eight hours. "I do believe that John Durham is going to carry out his responsibilities ably and hopefully not with any political influence." 5,713 64 NEV play_arrow


Clee Torres 4 minutes ago

No sh*t Sherlock.

You mean there are two levels of justice? One for me and one for thee?

JohnG 3 minutes ago

Inner Party members are untouchable.

nope-1004 9 minutes ago

Comey, Brennan, Hunter, the Fed, Yellen, Bernanke, Powell, Geithner, Biden, Clinton, Podesto, Obama, Rice, Holder, Corzine......

THEY ALL LAUGH AT YOU.

How does that make you feel?

BeansBulletsBandaidsComms 3 minutes ago

Smart.

When lynch met clinton on the plane and it barely made a ripple.

That's when I knew.

enough of this 11 minutes ago (Edited)

No surprise. Durham and his pals are milking the investigation for all its worth. In the meantime, Comey skates and the amendment named in his honor remains in full force.

https://www.investmentwatchblog.com/crimes-without-consequences-the-clinton-comey-amendment/

Cen Sore 10 minutes ago

On a happier note, Mr. Durham is looking for a nice beachfront mansion...

WOODisGOOD 3 minutes ago

Deep State gotta protect Deep State. That's just the way it works.

squib 4 minutes ago

I remember, Strzok, Comey, Clapper, Brennan etc. always looked smug bc they knew that they'd be taken care of.

PaulDF 3 minutes ago

"Insurance Policy" indeed

Alex Jones was right... 4 minutes ago remove link

In other news, water is wet...

Reaper 16 minutes ago

US Law makes Dunham a Principle who abeted the crimes he's investigating. As such, under US Code, he's liable for the same punishment as the perps. Remember how quickly Roger Stone was prosecuted for lying.

[Feb 03, 2021] Those who have the most to say about the burdens of government regulation tend to be silent about the enormous infrastructure supporting a very specific conception of corporate personhood, limited liability, and intellectual property.

Feb 03, 2021 | crookedtimber.org

kinnikinick 01.29.21 at 4:47 pm

Those who have the most to say about the burdens of government regulation tend to be silent about the enormous infrastructure supporting a very specific conception of corporate personhood, limited liability, and intellectual property.
It's like an industrialist looking out upon a vast landscape of canals, dams, and levees, and complaining at the "unnatural" construction of a bridge putting a ferryman out of a job.

[Feb 03, 2021] Amid -Shortage-, Ecuador Police Bust Clinic Giving 1000s Of Fake COVID Vaccines - ZeroHedge

Feb 03, 2021 | www.zerohedge.com

rock-ribbed 17 hours ago remove link

It's still not clear exactly what the clinic's customers were being injected with...

My guess is that it's something less hazardous to your health than the real vaccine, but still not what the greatest scientist of all time, Dr. Fauci, and our greatest president of all time, His Excellency Joe Biden, have mandated that you take.

[Feb 03, 2021] Freedom from the Market

Feb 03, 2021 | crookedtimber.org

Freedom from the Market

by HENRY on JANUARY 26, 2021

Mike Konczal has a new book, Freedom from the Market ( Bookshop.org locator , Amazon ). I've been wanting to write about this book for a while, but first had to wait for it to come out, and then had my working life banjaxed by the madness of the last few weeks. But it is a great book that looks to remake the American debate about freedom and largely succeeds. Full disclosure: Mike is a friend of the 'see very occasionally but like very strongly' variety; I also read an early version of the mss and commented on it.

When I say that this book is about the American debate, I mean it. Non-Americans will learn from the book, but they aren't the target audience. The examples that Konczal draws on to inform modern Americans are drawn from their own, largely forgotten history. This could be seen as a reflection of the American parochialism that Konczal mentions in passing, but it is, I think, a deliberate political move. It also is in some ways refreshing – rather than weaving fairytales about the wonders of Fantasy Sweden or Fantasy Germany, it tells stories where the ambiguities are necessarily more visible to its readers.

Still, it provides measured hope. By drawing on what has happened in American history, Konczal makes it easier for Americans to understand that things they might not believe are possible in America must be, because they have been. He rescues moments such as the WWII government run daycare centers that allowed women to work, or the use of the power of the federal state to force through the integration of Southern hospitals, from the enormous condescension of posterity. Notably, although he doesn't dwell on this point, many of these changes began at moments that seem shittier and more despairing than our own.

Konczal neither provides a standard linear history, nor a policy textbook. Instead, he is claiming an alternative American tradition, which has not looked to the market as its apotheosis, but instead has sought to free Americans from its random vagaries. His history explains how America has responded collectively to the real and expressed needs of publics, who have organized to fight for them. And it does so in the plain language that he mentions in passing was necessary to allow ordinary people to organize and understand who was trying to stop them.

Konczal's fundamental claim is that people who attribute freedom to markets miss out on much of the story. Equally important is a notion of freedom from markets, "rooted in public programs that genuinely serve people and checking market dependency." This notion goes back much further in time than the New Deal. The nineteenth century is sometimes depicted as a reign of laissez-faire, both by those who admired it and deplored it. Konczal argues instead that there was an emerging sense of public needs – and imperfect ways in which the government provided for them. This helps us understand, for example, the provision of public land through the Homestead Act and the land grant universities.

The nineteenth century notion of the public was clearly horribly flawed and contradictory – it did not include slaves or Native Americans. Some, like Horace Greeley ended up fleeing these contradictions into the welcoming arms of free market absolutism. But within these contradictions lay possibilities that opened up in the twentieth century. Konczal builds, for example on Eric Schickler's work to argue that as the New Deal began to provide concrete benefits to African Americans, it created a new relationship between them and the Democratic Party, breaking up the old coalition that had held Jim Crow together.

The organizing ideas in this book are Polanyian – the stresses of the market lead to social rupture, which may in turn create the conditions for political mobilization. But Konczal doesn't depict this as necessary or inevitable – people's choices have consequences. He is also more precise than Polanyi in his understanding of how change happens – through social movements and the state:

While the Supreme Court can be effective at holding back change and enforcing already existing power structures, it is actually very weak at creating new reform itself. It controls no funding and is dependent on elite power structures to carry out its decisions. What really creates change is popular mobilization and legislative changes.

Finally, Konczal not only employs Polanyi's ideas, but the ideas of Polanyi's friendly critics like Quinn Slobodian, to describe how modern Hayekians have sought to "encase" the market order in institutions and practices that are hard to overturn. Property rights aren't the foundation of liberty, as both nineteenth century jurists and twentieth century economists would have it. They are a product of the choices of the state, and as such intensely political.

This allows Konczal to turn pragmatism against the Hayekians. Hayek's notion of spontaneous order is supposed to be evolutionary, to provide a more supple response to what people (thought of as individuals want). But if there is a need to provide collective goods for people that cannot be fulfilled through voluntarism, the Hayekian logic becomes a brutal constraint on adaptation.

The efforts of Hayekians to enforce binding legal constraints, to cripple the gathering of the collective knowledge that can guide collective action, to wink at legal doctrines intended to subvert social protections against the market; all these prevent the kinds of evolutionary change that are necessary to respond to changing circumstances. Konczal makes it clear that Oliver Wendell Holmes was no left-winger – but his pragmatist criticisms of the rigid and doctrinaire laissez-faire precepts of his colleagues rings true. Their "willingness to use a very specific understanding of economics to override law writes a preferential understanding of economics into the constitution itself." Although Konczal wrote this book before the current crisis, he describes Holmes as mentioning compulsory vaccination laws as one of the ways in which government interference in private decisions can have general social benefits. The wretched contortions of libertarians and market conservatives over anti-pandemic measures during the last several months, and the consequences of their intellectual rigidity for human welfare in states such as North Dakota illustrate the point, quite brutally.

What Konczal presses for is a very different notion of freedom. This doesn't deny the benefits of markets, but it qualifies them. In Konczal's words, "markets are great at distributing things based on people's willingness to pay. But there are some goods that should be distributed by need." Accepting this point entails the necessity of keeping some important areas of life outside the determining scope of markets. Furthermore, people's needs change over time, as societies and markets change. Konczal's framework suggests the need for collective choice to figure out the best responses to these changes, and a vibrant democratic politics, in which the state responds to the expressed needs of mobilized publics as the best way to carry out these choices.

All this makes the book sound more like an exercise in political theory than it is. That's because of my own professional deformities, and because I want you to read the book itself, if you really to get the good stuff – the stories, the examples, and the overall narrative that Konczal weaves together. Freedom from the Market has the potential to be a very important book, focusing attention on the contested, messy but crucially important intersection between social movements and the state. It provides a set of ideas that people on both sides of that divide can learn from, and a lively alternative foundation to the deracinated technocratic notions of politics, in which good policy would somehow, magically, be politically self supporting, that has prevailed up until quite recently. Strongly recommended.

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Brett 01.26.21 at 3:47 pm ( 1 )

I'll second this recommendation – it was a great read. I would especially recommend reading it for the section on Medicare integration, since that's a story that rarely gets told but is genuinely quite fascinating. It gives me greater respect for LBJ, given that he was giving them full-support despite a difficult, treacherous political battle to integrate hospitals in the South despite immense resistance.

He also made a very interesting point after the Homestead section when he got to the section on work-hour labor movements, about how they needed to specifically make it so that certain rights couldn't be contracted away, because otherwise even laws establishing such-and-such rules would get end-runned by businesses requiring their employees to give them up in contracts.

Kurt Schuler 01.27.21 at 4:10 am (
3
)

Henry, you write, "if there is a need to provide collective goods for people that cannot be fulfilled through voluntarism, the Hayekian logic becomes a brutal constraint on adaptation." That seems like a big "if." Other than the classic examples of national defense and perhaps police and courts, what goods cannot be provided through voluntarism?

Chris Bertram 01.27.21 at 8:29 am (no link)

There's a nice line in Slobodian's book about Americans not knowing much about the rest of the world but imagining that the US is a scale-model of it. Isn't the worry about the general claim here that it is more plausible to see property rights as merely the creature of the state when you have a vast internal market with many needs catered for by domestic production than it is when you have small states with relatively specialized domestic production that need to trade across borders to satisfy their needs. In such a case, where the real economy transcends borders and where trade barriers at those borders just make everyone poorer, you need transnational guarantees (or at least a very strong degree of confidence) for property rights and investment against the potential interference of local governments. So even if Konczal is right for the US, the question of how to do social democracy transnationally remains for the rest of us. The EU is one possible answer to that, but the continuation of national political narratives, blaming other nations within the structure for their own problems (Germany > Greece, Italy) etc remains a big obstacle to anti-market pushback at that level.

reason 01.27.21 at 11:20 am (no link)

Just a short aside, this sentence struck me:

" Property rights aren't the foundation of liberty, as both nineteenth century jurists and twentieth century economists would have it."

Property rights are inherently a restriction of liberty. They restrict the rights of everybody but the designated owner. It may be that in some circumstances they are net a positive, that this is clearly not something one can expect from the nature of the thing. That this point isn't made more often and more strongly puzzles me.

Jake Gibson 01.27.21 at 1:22 pm (no link)

I think it can be illuminating to think of "property rights" in the context that at some point all property was taken (stolen) from The Commons.
And that property laws are enshrinement of common law on possession (nine tenths).

MPAVictoria 01.27.21 at 1:22 pm ( 8 )

"what goods cannot be provided through voluntarism?"

Apparently insulin .
https://nymag.com/intelligencer/2019/07/another-person-has-died-from-rationing-insulin.html

Henry 01.27.21 at 2:16 pm (no link)

The "twentieth century economists" like the "nineteenth century jurists" refer just to those discussed in the book (basically Friedman, Chicago School, market for corporate control people etc etc). So they're not claims about the general class of economists in the twentieth century, where there is tons of disagreement on lots of stuff obviously, but a particular strain of economic thought that Konczal writes about.

Rapier 01.27.21 at 3:27 pm ( 10 )

There is no "the" market. All markets are not the same.
The Hayekians first insistence is that in fact all markets are the same. They then have designed the 'markets' they want, and if you design a market you win.

Mike Huben 01.27.21 at 4:11 pm (no link)

Kurt Schuler @ 3 asks: "what goods cannot be provided through voluntarism?"

The glib answer is "none" because you can always find an exceptional case of private production.

But the problem is "provided" is underspecified: it could mean provision to only one person, or (better) provision of ENOUGH. And even enough is underspecified.

Look at something like water. Public provision of vast volumes of clean, safe, cheap drinking water is an alternative to voluntarism's answer: expensive bottled water which must be used frugally by the poor, consumes much energy in transportation and waste in plastic: which is enough? Which is proper provision? Should there be only one type of provision?

And of course that question implies another; what goods should not be provided through voluntarism? Maybe pollution, addiction, crime, and a host of others.

"Voluntarism" is an example of framing, trying to focus the world through an ideological lens. If you accidentally accept this narrow peephole on the world, your thinking is greatly constrained because of the things is has misdirected you from. The same kind of framing as "markets are freedom", which Konczal is apparently decrying. (I have not yet read the book.)

steven t johnson 01.27.21 at 4:59 pm ( 12 )

Given the tenor of most responses, it doesn't seem likely Konczal's book is going to change the narrative in any significant way.

Bob@2 seems a good example of the pro-market reasoning. For one thing, "economics" says that if a person with a scarce talent can earn more money than is necessary to induce them to exercise that talent, the income can be taxed away without affecting the market outcome. Considering the real life examples of professional athletes, movie stars and artists, the sage advice to tax the athletes, stars and artists, precisely because it won't endanger the market outcomes of professional athletics, Hollywood and the art world presupposes the market outcomes of pro sports, Hollywood and the museum/art gallery circuit are just and wise.

Bob@2 wrote "Economics is wisely silent on people's preferences and needs. The point surely is not that there is something inherent in certain goods that means they should be distributed by need–who decides what those "good" goods are that everyone (ought to?) need?; the point is that income should be redistributed so that everyone can buy whatever they see fit to buy based on their own understanding of their needs."

Yes, I recall reading a short article by von Hayek explaining there was no scientific way to distinguish between wants and needs, thus there was no way ever, even in principle, to deny there was such a thing as scarcity. Like von Hayek, the assumption that, given the impossibility of pronouncing a difference between needs and wants (nor apparently even a way of merely satisficing any such distinction,) the only valid way of deciding what must be produced is by consumer sovereignty. The "votes" by rational consumers are the only possible means of justice. Like distinguishing between productive and unproductive labor, anything less than the market is tyranny.

I have no idea why Bob says Konczal's book as presented doesn't pose a problem, given two market refutations of it are endorsed in the comment. It may be something like compatibilism, the philosophical position that people have free will in the religious sense despite the myriad of facts and millennia of experience showing that the religious notion of moral responsibility is, to say the least, flawed. In words, compatibilists will say they accept things like mental illness leave old notions of moral responsibility -- which is to say, old notions about retribution and punishment -- then in practice, they will do things like try adolescents as adult or arbitrarily limit the definition of mental illness or simply ignore such fiddling objections to honor time-honored customs. Similarly, market proponents will give lip service to the notion of market failure, then inexplicably (?) fail to see it.

Chris Bertram@5 writes " the continuation of national political narratives, blaming other nations within the structure for their own problems (Germany > Greece, Italy) etc remains a big obstacle " to social democracy. Is the illustrative example meant to condemn Germany blaming Greece and Italy for creating their own problems and leeching (or trying to) off of Germany? Or, is it Greece and Italy blaming of Germany for not curing their own failures for them? Is it somehow both? Also, the definition of the EU as a consortium of states premised on fiscal integrity may be more of an obstacle to social democracy than political narratives, however construed?

Francis Spufford 01.27.21 at 7:50 pm ( 13 )

Kurt Schuler @ 3 --

Well, insulin clearly (see above). But also: schools that make everybody literate and promote basic social solidarity. Colleges that are cheap enough to educate all of the talents. Hospitals that treat illnesses irrespective of ability to pay. Universal vaccinations. Flood defences. Disaster relief. Food inspectors. Drug safety testers. Buildings inspectors. Fire inspectors. Transport safety inspectors. Highways. Mending potholes in highways. Keeping bridges safe. Last-mile rural electrification. Universal mail coverage at a single price. Legal advice to even access to justice by rich and poor. Excellent daycare at prices poor people can afford. Basic research in particle physics and astronomy. R & D in far-from-market areas society needs. Drug discovery for diseases poor people get. Training of specialists in non-profitable yet essential professions. Landscape conservation. Pollution control. Tech regulation. Setting a carbon price/tax. Railways that move people fast enough and cheaply enough to take custom away from ecocidal airlines. Mass transit in cities. Space programmes. A welfare safety net permitting risky careers in the arts. A welfare safety net to equalise the chances of children. A welfare safety net allowing every member of a society to go to sleep every night in a state of delicious moral luxury, knowing that no-one is hungry. Lighthouses. Earthquake detection. Censuses. Diplomacy. Peacemaking. Peacekeeping. Public broadcasters with editorial independence. Et cetera et cetera et cetera, in every flavour from civilisational basic to utopian flight of fancy. Collective action! Getting the job done everywhere on the planet where libertarians aren't.

John Quiggin 01.28.21 at 6:52 am ( 14 )

" In such a case, where the real economy transcends borders and where trade barriers at those borders just make everyone poorer, you need transnational guarantees (or at least a very strong degree of confidence) for property rights and investment against the potential interference of local governments."

Much of the world did social democracy pretty well last century, without transnational guarantees. Conversely, the creation of investor guarantees like ISDS has been a gift to predatory corporations like Philip Morris.

[Feb 03, 2021] US insulin prices as market failure

Feb 03, 2021 | crookedtimber.org

mw 01.28.21 at 6:04 pm (
19
)

"Apparently insulin ."

Insulin (and Epi pens) become unaffordable in the U.S. because the government massively screwed up the regulations. These are off-patent drugs, so in theory anybody can make them. BUT, getting production facilities FDA-approved is a long, expensive process. So when there's an effective monopoly on a drug, no other company will enter the market to compete -- even after huge price hikes. Why not? Because after the new company had invested the time and money to get its production line built and approved, the original monopolist would drop its prices back down, and the new entrant would make no money. And everybody knows this, so potential new entrants don't bother. An obvious solution is reciprocity to allow importation of drugs already approved in the EU. But there's no way the FDA is going to allow that to happen and lose its regulatory monopoly.

The bottom line is that these are not failures of unregulated markets, they are cases of government failure in the most heavily regulated market in the U.S. (and where, in fact, the strict regulation is the key enabler of the bad outcome and where the obvious fix is blocked by the regulatory agency defending its turf).

MPAVictoria 01.29.21 at 1:39 am (no link)

"Insulin (and Epi pens) become unaffordable in the U.S. because the government massively screwed up the regulations."

Just need to point out that this is completely false. Insulin prices are high in the US because of a lack of price controls. Canada has very similar patent rules and our insulin is made by the same companies but guess what? We set a maximum price for pharmaceuticals. The US should do the same.

mw 01.29.21 at 1:23 pm (no link)

MPAVictoria @ 23 Just need to point out that this is completely false. Insulin prices are high in the US because of a lack of price controls. Canada has very similar patent rules and our insulin is made by the same companies but guess what? We set a maximum price for pharmaceuticals. The US should do the same.

Yes, you could layer on additional price-control regulations to fix the problems caused by the existing regulations. Of course it's one thing for Canada to adopt such rules where the U.S. has not (and remains a source of profits and R&D incentives) and another when the U.S. is also controlling prices. Incidentally, if price controls were to be adopted in the U.S., my suggested approach is that the U.S. should require all pharma companies within, say, two years to sell drugs here for the lowest price they have negotiated in any industrialized country with a comparable per-Capita GDP. Then we can all be in it together.

But that's all a discussion for another thread -- the point remains that insulin and epi pens are not examples of a free, unregulated market failing, they're an example of a very heavily (but badly) regulated market failing. Yes bad U.S. regulations are responsible -- they create barriers to entry (specifically high costs of setting up a production facility combined with an FDA regulatory monopoly and a ban on imports) that enable monopoly pricing.

notGoodenough 01.29.21 at 8:01 am (no link)

mw @ 19, MPAVictoria @ 23

Not to side-track the thread, but I think there was an attempt to explore this on a previous thread (particularly with respect to Daraprim, though I believe many of the points are applicable in a general sense) [1]. While I´ll freely admit I am not an economist, I didn´t find the responses to my queries and concerns from those advocating "regulations are the issue" sufficiently satisfactory [2, 3] to warrant changing my position – in short, I see little evidence to support the notion that it is US regulations responsible for the high price of pharmaceuticals (particularly as it appears that R&D spending is frequently less than that of marketing and administration). I hope the discussion at the links provided is of interest.

Apologies to everyone for the interjection, but Pharma is a topic of keen interest and concern to me.

[1] https://crookedtimber.org/2019/10/09/the-third-lesson/
[2] https://crookedtimber.org/2019/10/09/the-third-lesson/#comment-766046
[3] https://crookedtimber.org/2019/10/09/the-third-lesson/#comment-766434

CHETAN R MURTHY 01.29.21 at 8:32 pm (no link)

mw @ 30: I forgot to respond to your by-the-by argument that the pharmas' US profits fund their R&D. This is, as with the rest of your arguments, untrue.

(1) the US taxpayer funds most pharma research
(2) Last I checked, pharmas spend more on advertising and lobbying than they do on R&D.

'nuff said.

MPAVictoria 01.30.21 at 1:29 am (no link)

@ NotGoodenough – Interesting links thank you! And I completely agree that I am unconvinced that over regulation in it the reason the US has uniquely high drug prices.

@ me – Drug approval and manufacturing requirements in the US are not that different from any other developed country. Neither is it's Drug IP regime. So the argument that these features are what cause these outrageous pharmaceutical prices doesn't make much sense. In fact the US had a bit of a reputation of being too ready to approve drugs with limited effectiveness. The reason that Americans pay more than anyone else in the world is simple – no price controls.

[Feb 03, 2021] How Financial Markets Shape Social Values and Political Views

Feb 03, 2021 | www.nakedcapitalism.com

John Emerson , February 2, 2021 at 6:29 am

I have seen classic hoarding psychology, where someone who has accumulated a solid chunk of unencumbered liquid wealth, stocks or bonds or gold, overvalued it compared to everything else in the world. For example, suppose a 30 year old worker has accumulated a $40,000 nut. That will be his treasure, even though he could barely live on it for a year and it wouldn't carry him through a major medical emergency. He is often willing to sacrifice a lot of personal, family, and social quality of life to preserve and increase his nut, and in many cases will also become quite predatory, and political reaction comes with that. And sometimes he invests it successfully and makes it into a higher class, but often enough his investment fails and his life is wasted.

vlade , February 2, 2021 at 6:48 am

Retail investors often have disproportionate emotional investmenet in their investment (pun intended).

Don't know whether it was subject to any research, if yes, I'd be curious to see.

BrianM , February 2, 2021 at 9:12 am

There's behavioural finance research that suggests we overvalue something that we own relative to when we don't. I think it was all focussed on goods or property, but the rationale would extend to investments too.

John Emerson , February 2, 2021 at 7:41 am

Managers of branches of national franchise businesses like McDonald's dependent on cheap labor too. They are encouraged to identify with the company though unless they move up in the organization I think they get wise. A very close friend of mine was a Starbucks manager for a decade or so, and he was eligible to move up to middle manager but found that the New Age company man zombification required was inhuman and for him impossible.

He cashed out and started his own, better coffee shop, but had to take on too much debt and is not accumulating much net worth. He things of it as a challenging, rewarding, well paid job. (H has testified at the legislature in favor of a $15 minimum wage.)

Even Keel , February 2, 2021 at 10:31 am

It does not tell us what happened to the control group. Impossible to determine the effects of the treatment without that, isn't it?

Alex Cox , February 2, 2021 at 12:18 pm

I don't recall W's attempts to privatize Social Security, but I certainly remember Bill Clinton's. The impeachment scandal prevented him from achieving his goal: Alexander Cockburn wrote a piece entitled 'How Monica Lewinsky Saved Social Security. '

Gulag , February 2, 2021 at 1:46 pm

"One possibility is that investment activities itself–with its focus on material gain, risk taking, winning and losing–triggers emotions and modes of reasoning that influence views on issues beyond traditional market activity."

It seems to me that this suggestion raises a deeper issue. Some have argued that the ultimate success of capitalism (financial, industrial or both) is due to having transformed human nature such that everyone living within it becomes an excellent calculator of gains and loss, pleasure and pain.

Is it possible that such a long process of socialization to capitalist logic makes us all ( in many areas of our lives) capitalist calculating machines?

And if so, how could such a system be dramatically changed?

Ludus57 , February 2, 2021 at 5:41 pm

I suspect the catalyst for change would be a substantial market crash that takes the usual warning:
" Stocks can go down in value as
well as up."
And adds:
"Stocks can also tank down the
pan!"
At that point, the previously unthinkable can rear it's (ugly for some) head!

.Tom , February 2, 2021 at 8:03 pm

I'm a millionaire! Suddenly I have an opinion about capital gains tax.

https://www.youtube.com/watch?v=EHUtHITYb94

JohnB , February 3, 2021 at 2:17 am

Good article. I like to call this 'buy in'. Once someone has a stake in stock markets and the finance industry, e.g. most commonly through their pension (which is becoming mandatory in many countries, through forced auto-enrolment), the effect described in this article is triggered.

The antidote to all of this is pretty simple: The ethics of investing.

It's extremely easy to find and point out ethical problems with investments. Ask someone what pension fund and plan they are invested in, find the pdf listing the individual companies invested in, and then Google them for ethical issues (usually you don't need to – you'll already know the bad ones by name).

Then point out the ethical issues to the person, and watch them have a meltdown while they try to fob off concerns about ethics as passé and childish.

The problem is though, this doesn't provide people with a solution/alternative that is ethical, so the above is not a perfect antidote to 'buy-in'. People still need to retire at some point, and those who accumulate money well enough to b able to put money away for retirement, still want to know what they should do for a sustainable retirement.

I have no idea what to do, myself. I can't depend on political/economic-policy change to sort this for me. So at some point I'm probably going to have to have a look at how to invest ethically, even though I feel it is probably impossible.

[Feb 03, 2021] The GameStop Rebels Vs. -Too Big To Fail- - ZeroHedge

Feb 03, 2021 | www.zerohedge.com

The GameStop Rebels Vs. "Too Big To Fail" BY TYLER DURDEN WEDNESDAY, FEB 03, 2021 - 6:10

Authored by Ryan McMaken via The Mises Institute,

Last week, a large number of small-time investors drove up the price of GameStop's (GME) stock a historic 1,784 percent . But this was no mere spike in some obscure stock. The stock's price spiked in part as a result of efforts by "an army of smaller investors who have been rallying on Reddit and elsewhere online to support GameStop's stock and beat back the professionals." These professionals were hedge fund managers who had shorted GameStop's stock. In other words, hedge funders were betting billions that GameStop's stock would go down. But the price went up instead, meaning hedge funds like Melvin Capital (and Citron Research) took "a significant loss," possibly totaling $70 billion.

There surely were plenty of insiders on both sides of this deal. Given the complexity of various schemes employed by seasoned investors, it seems it is very unlikely that this is just a simple matter of little Davids taking on Wall Street Goliaths.

But it also looks like that's not all that was going on. Had this only been just another scheme by some Wall Street insiders against some other Wall Street insiders the story would probably have ended there.

But that's not what happened. Rather, it appears that, for many of the smaller investors who were involved, much of this "short squeeze" was conducted for the purposes of throwing a monkey wrench in the plans of Wall Street hedge funds which exist within the rarified world of billionaires and their friends.

Pro–Wall Street Fearmongering

The reactions to the event from media pundits and other commentators were telling in that there was clearly fear and outrage over the fact that business as usual on Wall Street wasn't being enforced. Predictably, much of the reaction to the Reddit rebellion was to label it a "fiasco," " insanity ," and something sure to leave a " trail of destruction ." The important thing was to use words designed to make it all look like the threat to hedge funds represents some sort of grave threat to the overall economy. Jim Lebenthal at CNBC, for example, declared the "short-squeeze fiasco is a threat to the proper functioning of financial markets."

The fearmongering went beyond even the usual places we hear about financial news. On The View , for example, Meghan McCain delivered the sort of status quo –defending bromides we've come to expect from her. She insisted the GameStop affair could spiral into an economy-killing disaster because

If the stock ends up plunging because of this, because of GameStop and Wall Street loses billions, at a certain point, it will impact stocks like Apple and Disney and stocks that a lot of average Americans do invest in, and if that happens, average Americans will end up losing even more money.

Her comment doesn't rally make any sense, and she doesn't seem to have even a rudimentary understanding of what happened. But her comment delivered the important point: namely, that anything that causes volatility in the market could be a disaster for every American household. Translation: and we should all be very, very afraid if something isn't done to keep these Reddit people -- whom she compared to the Capitol "insurrectionists" -- under control.

Of course, in a functioning and relatively unhampered market, unusual, unexpected things happen all the time. Entrepreneurial actors do things the incumbent firms and "experts" hadn't counted on. This leads to "instability" and big swings in prices. This is actual capitalism, and it doesn't mean the marketplace isn't functioning properly. In fact, it probably means the marketplace is dynamic and responsive to consumers and other market participants.

But that's not something Wall Street insiders or their pals in Washington like in the modern era. Although Wall Streeters love to portray themselves as capitalist captains of industry, the fact is they have very little interest in real, competitive capitalism.

Rather, we live in the era of "too big to fail" (TBTF), when market freedom means nothing and preserving the portfolios of powerful Wall Street institutions is what really matters.

Decades of "Too Big to Fail"

It's based on the idea that Wall Street is just too important to the whole economy, and Washington must intervene to make sure rich guys on Wall Street stay rich. David Stockman explains this philosophy:

[It is] the notion that the "threat of systemic risk" and a cascading contagion of losses form the failure of any big Wall Street institution would be so calamitous that it warranted an exemption from free market discipline.

This goes back at least to the 1994 Mexican bailout -- which was really a bailout of investors, not of Mexico -- which solidified the process of normalizing huge transfers of wealth from taxpayers and dollar holders to the Wall Street elite. By then, the "Greenspan put" was already in place, with the central bank forever poised to embrace more easy money in pursuit of propping up stock prices. Then came the bailouts of 2008 and the covd-19 avalanche of easy money -- all of which lopsidedly benefited Wall Street over the rest of the economy.

This "exemption from free market discipline" is what Wall Street is all about these days. The financial sector has become accustomed to enjoying bailouts, easy money, and the resulting financialization which puts ever greater amounts of the US economy into the hands of Wall Street money managers. The sector is now built on corporate welfare, not "free markets." No matter what happens, Wall Street expects the deck to be stacked in its favor.

This is why "volatility" has become a bad word, and "stability" is now the name of the game. It's why Lebenthal thinks anything out of the ordinary is a threat to the "proper functioning of financial markets." If some free market innovation and inventiveness actually takes place in some small corner of the marketplace, well, then we're all expected to get very upset.

That's the way Wall Street likes it. ay_arrow 1


Kayman 8 hours ago

The marketing slogan "Too Big Too Fail" conveniently presumed Wall Street was more important than the Real Economy. A fatal presumption.

Wall Street is a Parasite, backstopped by the Fed, who, in turn, are backstopped by the Nation. A crumbling nation, where the Fed strangles lending/savings intermediation, and saves the blood suckers by bleeding the dying core of America.

wmbz 8 hours ago

"The sector is now built on corporate welfare, not "free markets."

This is NOT a new thing. Corporate welfare has been in play for a long, long time. I am amazed how long it has taken otherwise "smart" people to grasp this fact.

The only difference is, it is out in the glaring sunlight for all to see. TPTB are damn proud of it!

junction 7 hours ago (Edited)

Except for the involvement of WallStreetBets in temporarily blocking the hedge fund bear raid on GameStop using "naked" shorts, it is still business as usual on Wall Street. No one at the SEC does anything but collect a salary, issue press releases and go to lunch as the Mafia crime families. . . oops, hedge funds run "bust out" operations on businesses. The lapdog financial press cheered on the hedge funds as they demolished American businesses. The same gutter journalists who are not yet linking micro-manager Bezos giving up total control of Amazon right after his cloud service illegally de-platformed Parler for violation of bogus. made-up community standards. But then, bigger things are afoot. Bolshevik president Biden just approved deploying B-1 bomber to Norway for the first time. Nuclear bomb carrying B-1 bombers. Anything to distract people from how rotten things are.

Cognitive rationalist 7 hours ago

Banking financial sector: private profits for me, public losses for thee

gladitsover 8 hours ago remove link

"..the table is tilted folks. The game is rigged.."

George Carlin

Lokiban 8 hours ago

I think it was all about showing to those unawares how corrupt and rigged Wall street truly is and they have gotten the message out bigtime.
The only question to be asked is who became the proverbial bagholder when average people saw their 'Bitcoin-Tulipmania' chance to get out with amazing profits and with that breaking the promise to continue pumping gme till it hits $1500.
One has always to be carefull if these kind of actions are true populism going against the controllers or is it controllers playing their hideous games again for a reason, like the great reset.
Greed has never been a good advisor in these times, easy sheoplemoney. It works all the time..

[Feb 03, 2021] Biden DOJ Drops Yale Discrimination Suit After Trump DOJ Found Whites, Asians Treated Unfairly - ZeroHedge

Feb 03, 2021 | www.zerohedge.com

After the Trump Justice Department sued Yale following the results of a 2-year Civil Rights investigation which found "long-standing and ongoing" race-based discrimination, the Biden DOJ just dismissed the case without explanation .

... ... ...

The Trump DOJ had argued that the Ivy League university had violated federal civil rights law for "at least 50 years," by favoring Black and Hispanic students over Whites and Asians, according to The Hill .

The legal battle represented one of the Trump administration's moves to challenge affirmative action programs aimed at increasing diversity on campus, which some conservatives consider unfair and illegal.

Yale, which staunchly defended its admission practices, praised the DOJ's decision to drop the case in a statement, saying it was "gratified" by the decision. - The Hill

"Our admissions process has allowed Yale College to assemble an unparalleled student body, which is distinguished by its academic excellence and diversity," argued the university. "Yale has steadfastly maintained that its process complies fully with Supreme Court precedent, and we are confident that the Justice Department will agree."

The Trump administration notably instituted several measures to prevent universities from considering race as a factor during admissions, even joining a similar lawsuit against Harvard University.

[Feb 03, 2021] Naked Short Selling- The Truth Is Much Worse Than You Have Been Told

Feb 03, 2021 | oilprice.com

There is a massive threat to our capital markets, the free market in general, and fair dealings overall. And no, it's not China. It's a homegrown threat that everyone has been afraid to talk about.

Until now.

That fear has now turned into rage.

Hordes of new retail investors are banding together to take on Wall Street. They are not willing to sit back and watch naked short sellers, funded by big banks, manipulate stocks, harm companies, and fleece shareholders.

The battle that launched this week over GameStop between retail investors and Wall Street-backed naked short sellers is the beginning of a war that could change everything.

It's a global problem, but it poses the greatest threat to Canadian capital markets, where naked short selling -- the process of selling shares you don't own, thereby creating counterfeit or 'phantom' shares -- survives and remains under the regulatory radar because Broker-Dealers do not have to report failing trades until they exceed 10 days.

This is an egregious act against capital markets, and it's caused billions of dollars in damage.

Make no mistake about the enormity of this threat: Both foreign and domestic schemers have attacked Canada in an effort to bring down the stock prices of its publicly listed companies.

In Canada alone, hundreds of billions of dollars have been vaporized from pension funds and regular, everyday Canadians because of this, according to Texas-based lawyer James W. Christian. Christian and his firm Christian Smith & Jewell LLP are heavy hitters in litigation related to stock manipulation and have prosecuted over 20 cases involving naked short selling and spoofing in the last 20 years.

"Hundreds of billions have been stolen from everyday Canadians and Americans and pension funds alike, and this has jeopardized the integrity of Canada's capital markets and the integral process of capital creation for entrepreneurs and job creation for the economy," Christian told Oilprice.com.

The Dangerous Naked Short-Selling MO

In order to [legally] sell a stock short, traders must first locate and secure a borrow against the shares they intend to sell. A broker who enters such a trade must have assurance that his client will make settlement.

While "long" sales mean the seller owns the stock, short sales can be either "covered" or "naked" . A covered short means that the short seller has already "borrowed" or has located or arranged to borrow the shares when the short sale is made. Whereas, a naked short means the short seller is selling shares it doesn't own and has made no arrangements to buy. The seller cannot cover or "settle" in this instance, which means they are selling "ghost" or "phantom" shares that simply do not exist without their action.

When you have the ability to sell an unlimited number of non-existent phantom shares in a publicly-traded company, you then have the power to destroy and manipulate the share price at your own will.

And big banks and financial institutions are turning a blind eye to some of the accounts that routinely participate in these illegal transactions because of the large fees they collect from them. These institutions are actively facilitating the destruction of shareholder value in return for short term windfalls in the form of trading fees. They are a major part of the problem and are complicit in aiding these accounts to create counterfeit shares.

The funds behind this are hyper sophisticated and know all the rules and tricks needed to exploit the regulators to buy themselves time to cover their short positions. According to multiple accounts from traders, lawyers, and businesses who have become victims of the worst of the worst in this game, short-sellers sometimes manage to stay naked for months on end, in clear violation of even the most relaxed securities laws.

The short-sellers and funds who participate in this manipulation almost always finance undisclosed "short reports" which they research & prepare in advance, before paying well-known short-selling groups to publish and market their reports (often without any form of disclosure) to broad audiences in order to further push the stock down artificially. There's no doubt that these reports are intended to create maximum fear amongst retail investors and to push them to sell their shares as quickly as possible.

That is market manipulation. Plain and simple.

Their MO is to short weak, vulnerable companies by putting out negative reports that drive down their share price as much as possible. This ensures that the shorted company in question no longer has the ability to obtain financing, putting them at the mercy of the same funds that were just shorting them. After cratering the shorted company's share price, the funds then start offering these companies financing usually through convertibles with a warrant attachment as a hedge (or potential future cover) against their short; and the companies take the offers because they have no choice left. Rinse and Repeat.

In addition to the foregoing madness, brokers are often complicit in these sorts of crimes through their booking of client shares as "long" when they are in fact "short". This is where the practice moves from a regulatory gray area to conduct worthy of prison time.

Naked short selling was officially labeled illegal in the U.S. and Europe after the 2008/2009 financial crisis.

Making it illegal didn't stop it from happening, however, because some of the more creative traders have discovered convenient gaps between paper and electronic trading systems, and they have taken advantage of those gaps to short stocks.

Still, it gets even more sinister.

According to Christian, "global working groups" coordinate their attacks on specifically targeted companies in a "Mafia-like" strategy.

Journalists are paid off, along with social media influencers and third-party research houses that are funded by what amounts to a conspiracy. Together, they collaborate to spread lies and negative narratives to destroy a stock.

At its most illegal, there is an insider-trading element that should enrage regulators. The MO is to infiltrate a company through disgruntled insiders or lawyers close to the company. These sources are used to obtain insider information that is then leaked to damage the company.

Often, these illegal transactions involve paying off "informants", journalists, influencers, and "researchers" are difficult to trace because they are made from offshore accounts that are shut down once the deed is done.

Likewise, the "shorts" disguised as longs can be difficult to trace when the perpetrators have direct market access to trading systems. These trades are usually undetected until the trades fail or miss settlement. At that point, the account will move the position to another broker-dealer and start the process all over again.

The collusion widens when brokers and financial institutions become complicit in purposefully mislabeling "shorts" as "longs", sweeping the illegal transactions under the rug and off of regulatory radar.

"Spoofing" and "layering" have also become pervasive techniques to avoid regulator attention. Spoofing, as the name suggests, involves short sellers creating fake selling pressure on their targeted stocks to drive prices lower. They accomplish this by submitting fake offerings in "layers" at different prices to create a mirage.

Finally, these bad actors manage to skirt the settlement system, which is supposed to "clear" on what is called a T+2 basis . That means that any failed trades must be bought or dealt with within 3 days. In other words, if you buy on Monday (your "T" or transaction day), it has to be settled by Wednesday.

Unfortunately, Canadian regulators have a hard time keeping up with this system, and failed trades are often left outstanding for much longer periods than T+2. These failing trades are constantly being traded to reset the settlement clock and move the failing trade to the back of the line. The failures of a centralized system

According to Christian, it can be T+12 days before a failed trade is even brought to the attention of the IIROC (the Investment Industry Regulatory Organization of Canada)

Prime Brokers and Banks are Complicit

This is one of Wall Street's biggest profit center and fines levied against them are merely a minor cost of doing business.

Some banks are getting rich off of these naked short sellers. The profits off this kind of lending are tantalizing, indeed. Brokers are lending stocks they don't own for massive profit and sizable bonuses.

This layer of what many have now called a "criminal organization" is the toughest for regulators to deal with, regardless of the illegal nature of these activities.

Prime brokers lend cash account shares that are absolutely not allowed to be lent. They lend them to short-sellers in order to facilitate them in settling their naked shorts.

It's not that the regulators are in the dark on this. They are, in fact, handing out fines, left and right -- both for illegal lending and for mismarking "shorts" and "longs" to evade regulatory scrutiny. The problem is that these fines pale in comparison to the profits earned through these activities.

And banks in Canada in particular are basically writing the rules themselves, recently making it easier (and legal) to lend out cash account shares.

Nor do law firms have clean hands. They help short sellers bankrupt targeted companies through court proceedings, a process that eventually leads to the disappearance of evidence of naked shorts on the bank books.

"How much has been stolen through this fraudulent system globally is anyone's guess," says Christian, "but the number begins with a 'T' (trillions)."

The list of fines for enabling and engaging in manipulative activity that destroys companies' stock prices may seem to carry big numbers from the retail investor's perspective, but they are not even close to being significant enough to deter such actions:

- The SEC charged Citigroup's principal U.S. broker-deal subsidiary in 2011 with misleading investors about a $1 billion collateralized debt obligation (CDO) tied to the U.S. housing market. Citigroup had bet against investors as the housing market showed signs of distress. The CDO defaulted only months later, causing severe losses for investors and a profit of $160 million (just in fees and trading profits). Citigroup paid $285 million to settle these SEC charges.

- In 2016, Goldman, Sachs & Co. agreed to pay $15 million to settle SEC charges that its securities lending practices violated federal regulations. To wit: The SEC found that Goldman Sachs was mismarking logs and allowed customers to engage in short selling without determining whether the securities could reasonably be borrowed at settlement.

- In 2013, a Charles Schwab subsidiary was found liable by the SEC for a naked short-selling scheme and fined $8.2 million .

- The SEC charged two Merrill Lynch entities in 2015 with using "inaccurate data in the course of executing short sale orders", fining them $11 million.

- And most recently, Canadian Cormark Securities Inc and two others came under the SEC's radar. On December 21, SEC instituted cease-and-desist orders against Cormark. It also settled charges against Cormark and two other Canada-based broker deals for "providing incorrect order-making information that caused an executing broker's repeated violations of Regulation SHO". According to the SEC, Cormark and ITG Canada caused more than 200 sale orders from a single hedge fund, to the tune of more than $660 million between August 2016 and October 2017, to be mismarked as "long" when they were, in fact, "short" -- a clear violation of Regulation SHO. Cormark agreed to pay a penalty of $800,000 , while ITG Canada -- one of the other broker-dealers charged -- agreed to pay a penalty of $200,000. Charging and fining Cormark is only the tip of the iceberg. The real question is on whose behalf was Cormark making the naked short sells?

- In August 2020, Bank of Nova Scotia (Scotiabank) was fined $127 million over civil and criminal allegations in connection with its role in a massive price-manipulation scheme.

According to one Toronto-based Canadian trader who spoke to Oilprice.com on condition of anonymity, "traders are the gatekeeper for the capital markets and they're not doing a very good job because it's lucrative to turn a blind eye." This game is set to end in the near future, and it is only a matter of time.

"These traders are breaking a variety of regulations, and they are taking this risk on because of the size of the account," he said. "They have a responsibility to turn these trades down. Whoever is doing this is breaking regulations [for the short seller] and they know he is not going to be able to make a settlement. As a gatekeeper, it is their regulatory responsibility to turn these trades away. Instead, they are breaking the law willfully and with full knowledge of what they are doing."

"If you control the settlement system, you can do whatever you want," the source said. "The compliance officers have no teeth because the banks are making big money. They over-lend the stocks; they lend from cash account shares to cover some of these fails for instance, if there are 20 million shares they sold 'long', they can cover by borrowing from cash account shares."

The Naked Truth

In what he calls our "ominous financial reality", Tom C.W. Lin, attorney at law, details how "millions of dollars can vanish in seconds, rogue actors can halt trading of billion-dollar companies, and trillion-dollar financial markets can be distorted with a simple click or a few lines of code".

Every investor and every institution is at risk, writes Lin.

The naked truth is this: Investors stand no chance in the face of naked short sellers. It's a game rigged in the favor of a sophisticated short cartel and Wall Street giants.

Now, with online trading making it easier to democratize trading, there are calls for regulators to make moves against these bad actors to ensure that North America's capital markets remain protected, and retail investors are treated fairly.

The recent GameStop saga is retail fighting back against the shorting powers, and it's a wonderful thing to see - but is it a futile punch or the start of something bigger? The positive take away from the events the past week is that the term "short selling" has been introduced to the public and will surely gather more scrutiny.

Washington is gearing up to get involved. That means that we can expect the full power of Washington, not just the regulators, to be thrown behind protecting the retail investors from insidious short sellers and the bankers and prime brokers who are profiting beyond belief from these manipulative schemes.

The pressure is mounting in Canada, too, where laxer rules have been a huge boon for manipulators. The US short cartel has preyed upon the Canadian markets for decades as they know the regulators rarely take action. It is truly the wild west.

Just over a year ago, McMillan published a lengthy report on the issue from the Canadian perspective, concluding that there are significant weaknesses in the regulatory regime.

While covered short-selling itself has undeniable benefits in providing liquidity and facilitating price discovery, and while the Canadian regulators' hands-off approach has attracted many people to its capital markets, there are significant weaknesses that threaten to bring the whole house of cards down.

McMillan also noted that "the number of short campaigns in Canada is utterly disproportionate to the size of our capital markets when compared to the United States, the European Union, and Australia".

Taking Wall Street's side in this battle, Bloomberg notes that Wall Street has survived "numerous other attacks" over the centuries, "but the GameStop uprising could mark the end of an era for the public short", suggesting that these actors are "long-vilified folks who try to root out corporate wrongdoing".

Bloomberg even attempts to victimize Andrew Left's Citron Research, which -- amid all the chaos -- has just announced that it has exited the short-selling game after two decades.

Nothing could be further from the truth. Short sellers, particularly the naked variety, are not helping police the markets and route out bad companies, as Bloomberg suggests. Naked short sellers are not motivated by moral and ethical reasons, but by profit alone. They attack good, but weak and vulnerable companies. They are not the saviors of capital markets, but the destroyers. Andrew Left may be a "casualty", but he is not a victim. Nor likely are the hedge funds with whom he has been working.

In a petition initiated by Change.org, the petitioners urge the SEC and FINRA to investigate Left and Citron Research, noting: "While information Citron Research publishes are carefully selected and distributed in ways that do not break the law at first sight, the SEC and FINRA have overlooked the fact that Left and Citron gains are a result of distributing catalysts in an anticipation of substantial price changes due to public response in either panic, encouragement, or simply a catalyst action wave ride. Their job as a company is to create the most amount of panic shortly after taking a trading position so they and their clients can make the most amount of financial gains at the expense of regular investors."

On January 25 th , the Capital Markets Modernization Taskforce published its final report for Ontario's Minister of Finance, noting that while naked short selling has been illegal in the United States since 2008, it remains a legal loophole in Canada. The task force is recommending that the Ministry ban this practice that allows for the short-selling of tradable assets without first borrowing the security.

The National Coalition Against Naked Short Selling - Failing to Deliver Securities (NCANS), which takes pains to emphasize that is not in any way against short-selling, notes: "Naked short-selling transfers the risk exposure and the hedging expense of the derivatives market makers onto the backs of equity investors, without any corresponding benefit to them. This is fundamentally unfair, and must stop."

Across North America, the issue is about to reach a fever pitch over GameStop. For once, regular retail investors have a voice to use against Wall Street. And for once, Washington appears to be listening. The House and Senate both have hearings scheduled over the GameStop saga.

Paradoxically, the same company that basically started the retail investor coup -- zero-fee trading app Robinhood -- is now under fire for pulling the rug out from under the same democratic movement.

After retail investors joined forces against Wall Street short-sellers to push GameStop stock from $20 to a high of over $480 in less than a week, Robinhood made the very unpopular move of instituting a ban on buying for retail investors. Under the rules, Wall Street could still buy and sell, but retail investors could only sell. This new band of investors -- which includes pretty much all of Robinhood's clientele -- are up in arms, with customers now suing. They won't go away, and they have Washington's ear and Twitter and Reddit's social media power. This is shaping up to be an uprising.

What happens with GameStop next could end up dictating a new form of capital markets democracy that levels the playing field and punishes the Mafia-like elements of Wall Street that have been fleecing investors and destroying companies for years.

Retail investors want to clean up capital markets, and they just might be powerful enough to do it now. That's a serious wake-up call for both naked short sellers and the investing public.

Viva la Revolucion.

James Stafford

Publisher Oilprice.com

More Top Reads From Oilprice.com:

[Feb 02, 2021] Watching stock market moves is like watching Pulp Fiction: halfway through, the violence doesn t even bother you anymore

Notable quotes:
"... "It's like watching 'Pulp Fiction.' Halfway through, the violence doesn't even bother you anymore." ..."
Jan 27, 2019 | www.zerohedge.com

"Investors are becoming desensitized,"

Bryce Doty, SVP at Sit Investment Associates, told Bloomberg, then continued the verbal poetry:

"It's like watching 'Pulp Fiction.' Halfway through, the violence doesn't even bother you anymore."

[Feb 02, 2021] Drilled Uncompleted Wells Won't Save U.S. Oil Production by Art Berman

Notable quotes:
"... U.S. oil production has fallen more than 2 million barrels per day since March 2020. It will fall much lower. ..."
"... EIA's forecast is impossible. It does not account for the low level of drilling and for the high decline rates of U.S. wells. It seems more likely that production will drop by at least another million barrels per day below October's level later in 2021. ..."
Feb 02, 2021 | www.artberman.com

U.S. oil production has fallen more than 2 million barrels per day since March 2020. It will fall much lower.

Output has fallen from almost 13 mmb/d in late 2019 to below 10.5 mmb/d in October 2020 (Figure 1). EIA forecasts an increase in November to 11.0 mmb/d and then an average level of about 11.1 mmb/d for the rest of 2021.

... ... ...

EIA Forecast is Impossible

EIA's forecast is impossible. It does not account for the low level of drilling and for the high decline rates of U.S. wells. It seems more likely that production will drop by at least another million barrels per day below October's level later in 2021.

... ... ...

What About DUCs?

Many reasonably expect that DUCs (drilled uncompleted wells) provide a solution to the lag between drilling and production. There are, after all, about 5,800 DUCs in the main U.S. tight oil plays. These are already drilled and could be converted into producing wells for the cost of completion which is about half the total well cost.

Most DUCs, however, are uncompleted for a reason namely, that their owners don't believe that their performance will be as good as wells that they chose to complete instead.

... It doesn't matter whether wells are newly drilled and completed or DUCs -- there are simply too few wells being added to maintain present levels of production.

... ... ...

It is unlikely that the tight oil business will recover from the effect of Covid-19 and lower oil prices. Markets will continue to send higher price signals until rig counts recover to the 800 or so rigs needed to support EIA's 11 mmb/d forecast.

The public and many investors have the peculiar belief that the world will be just fine without oil. The world will be fine. It has survived meteor impacts and mass extinctions but humans are more fragile. Higher oil prices are the last thing the global economy needs right now.

Javier JANUARY 17, 2021 AT 11:56 AM REPLY

Art, I couldn't agree more. Commodities are rising and oil price is set to rise, in the midst of a global economic crisis. A perfect storm is brewing and no amount of money printing can fix that. If things take a turn for the worst the economic crisis could be followed by a monetary crisis. Energy per capita and standard of living are going down for the majority no matter what.

That could easily add a social crisis whose first signs we are all seeing. Peter Turchin predicted the increase in social instability 10 years ago in Nature Vol 46, 4 February 2010, pg 608.

The pandemic was just a catalyst for what was already brewing. We are living in interesting times.

[Feb 02, 2021] The Importance of Usury Laws

Notable quotes:
"... Today's cultural dominance in much of the South and chunks of the Midwest by boobtoob preachers, Dominationists and the highly heretical oxymoronical "Christian" Zioni$ts can be seen as the afterbirth of cultural Calvinism. Calvinism is Talmudic in its essence and squats at the nexus of what they like to call "Judeo-Christian Civilization". ..."
Jan 22, 2021 | www.unz.com

Mefobills , says: January 22, 2021 at 2:34 pm GMT • 9.3 hours ago

The author Jafee is confused on Bentham, because Bentham was confused himself, or was a Jewish agent of mammon.

The highlighted terms accord with Benthamian Utilitarianism -- the greatest human happiness of the greatest human number.[1]
Much (but surely not all) pertinent history suggests that Bentham's thinking influenced the construction of the Preamble

The English philosopher Jeremey Bentham (1748-1832) was a defender of usury, which is the opposite of happiness for the greatest human number.

In 1787 Jeremey Bentham wrote "In Defence of Usury." Bentham was the son of a rich lawyer, and a lawyer himself, not an economist, which is why he was confused. Bentham created the present mis-definition of usury which prevails to today, so he was very damaging. "The taking of grater interest than the law allows, or the taking of greater interest than is usual."

Bentham ignored hundreds of years of the Catholic Scholastics work on usury, and also ignored Aristotle. Actually Bentham attacked Aristotle in order to spread his B.S. Bentham's father was Jewish, and Bentham also ignored the fairly strong Old Testament admonitions against usury.

Bentham spread the same erroneous B.S. that Calvin did, and both men did enormous damage, and whether by design or confusion are NOT for the common good. Their connections to our (((friends))) is suspicious.

A Persian Daric is a gold coin. Bentham said this: Though all money in nature is barren, though a Daric would not beget another Daric yet for a Daric which a man borrowed he might get a ram and couple of ewes and the ewes would probably not be barren (pages 98 to 101 of his screed)

Aristotle and the Catholic Schoolmen clearly showed that it was the Ewes that were fertile, not the coins.

Bentham or Calvin could not read with comprehension and twisted words into new meanings. This twisted language persists in the brains of modern humans as confusion.

As if every Daric is going to buy an Ewe in order to reproduce.

By 1850 John Whipple wrote "The Importance of Usury Laws – An answer to Jeremey Bentham."

"The purpose of money is to facilitate exchange. It was never intended as an article of trade, as an article possessing an inherent value in itself, and further than as representative or test of the value of all other articles."

It undoubtedly admits of private ownership, but of an ownership that is not absolute, like the product of individual industry, but qualified and limited by the special use for which it was designed.

And

The power of money over every other article, arises out of the artificial character given to it by the STATE , AND NOT OUT OF THE QUALITIES OF THE MATERIAL WHICH IT IS COMPOSED.

Bentham also argued that anti-usury laws were due to prejudice against Jews. Whipple was not frightened by the Jew trick of anti-semitism claims. Whipple said this in reply, "The real truth is this feeling which he calls prejudice is the result of the moral instinct of mankind."

Whipple wasn't afraid of calling out the Jew.

In other words, Bentham did not have the moral instinct of mankind, but instead was a usurer, hiding behind his utilitarianism doctrine.

My view is that the preamble general welfare clause is direct lineage that comes through Benjamin Franklin and his experiences in the Philadelphia Colony. Franklin was definitely NOT a usurer, and was not confused on money.

Abdul Alhazred , says: January 22, 2021 at 3:01 pm GMT • 8.9 hours ago

The Preamble of the constitution reflects a Liebnizian metaphysic reflected in the notion of the pursuit of happiness, were are not talking utilitarianism, but a recognition that man is made in the image of the creator, Imago Dei where happiness reflects an acknowledgement that we are actually creative beings where happiness is a reflection of such creativity, above mere acquisition of 'property' as the Confederacy devolved the phrase to "Life, Liberty and Property"

Majority of One , says: January 22, 2021 at 7:45 pm GMT • 4.2 hours ago
@Mefobills eply distorted by Calvinistic Puritanism and its "Chosen People" mythos.

Much of the religious fervor which dominated the American frontier in the latter decades of the 18th Century and early 19th–they called it "The Great Awakening" -- was infused with the patriarchal form of religiosity as ignited by Calvinistic tropes and memes.

Today's cultural dominance in much of the South and chunks of the Midwest by boobtoob preachers, Dominationists and the highly heretical oxymoronical "Christian" Zioni$ts can be seen as the afterbirth of cultural Calvinism. Calvinism is Talmudic in its essence and squats at the nexus of what they like to call "Judeo-Christian Civilization".

My preference is to employ the more objectively truthful description: the "JudieChristie MagickMindfuck.

Mefobills , says: January 22, 2021 at 11:20 pm GMT • 35 minutes ago
@Leonard R. Jaffee Anti-semitism card. Bentham even attacked Aristotle for corrupting Christianity.

In Bentham's book, Bentham associates some of the positive attributes of thrift with money lending. Money lending becomes on the same plane as thrift in his worldview. An here is the coup-de-gras: Compound interest was forbidden in Bentham's day, and Bentham urged its legalization.

A compound curve for interest is outside of nature, as the claims on nature grow exponentially. Nature does not grow exponentially. Nature and labor cannot pay the claims, and society polarizes. Jesus started his mission on the Jubilee year, as Jubilees are coded in the Bible to prevent polarization.

If Bentham wasn't a Jew, he certainly had the Jewish spirit. Bentham was not for the common good.

[Feb 02, 2021] The Toxic University -- Zombie Leadership, Academic Rock Stars and Neoliberal Ideology

Jan 27, 2021 | www.amazon.com

This book considers the detrimental changes that have occurred to the institution of the university, as a result of the withdrawal of state funding and the imposition of neoliberal market reforms on higher education. It argues that universities have lost their way, and are currently drowning in an impenetrable mush of economic babble, spurious spin-offs of zombie economics, management-speak and militaristic-corporate jargon. John Smyth provides a trenchant and excoriating analysis of how universities have enveloped themselves in synthetic and meaningless marketing hype, and explains what this has done to academic work and the culture of universities – specifically, how it has degraded higher education and exacerbated social inequalities among both staff and students. Finally, the book explores how we might commence a reclamation. It should be essential reading for students and researchers in the fields of education and sociology, and anyone interested in the current state of university management.

Quotes

If we are to unmask what is going on within and to universities, then we need to look forensically at the forces at work and the pathological and dysfunctional effects that are placing academic lives in such jeopardy -- hence my somewhat provocative-sounding title 'the toxic university 5 .

One of the most succinct explanations of what is animating me in writing this book was put by Lucal (2015) -- echoing arguably the most significant sociologist ever. Charles Wright Mills (1971 [1959]) in his The sociological imagination -- when she said: ...neoliberalism is a critical public issue influencing apparently private troubles of college [university] students and teachers, (p. 3)

... ... ...

Pathological Organizational Dysfunction

Just on 40 years ago, for all of my sins, I studied 'organizational theory and 'management behaviour' as part of my doctorate in educational administration. I cannot remember encountering the term, but in light of mv subsequent four decades of working in universities around the world, I think I have encountered a good deal of what 'pathological organisational dysfunction" (POD) means in practice. I regard it is an ensemble term for a range of practices that fall well within the ambit of the 'toxic university 5 . The short explanation is that what I am calling POD has become a syndrome within which the toxic university has become enveloped in its unquestioning embrace of the tenets of neoliberalism -- marketization, competition, audit culture, and metrification. In other words. POD has become a major emblematic ingredient of the toxic university, which as Ferrell (2011) points out looks fairly unproblematic on the surface:

Higher education on the corporate model imagines students as consumers, choosing between knowledge products and brands. It imagines itself liberating the university from the dictates of the state/tradition/aristocratic self-replication, and putting it in the hands of its democratic stakeholders. It therefore naturally subscribes to the general management principles and practices of global corporate culture. These principles -- transparency, accountability, efficiency -- are hard to argue with in principle.

(p. 166 emphasis in original)

What is not revealed in this glossy reading of neoliberalism is the way in which it does its work, or its effects, as Ferrell (2011) puts it in relation to universities, the way it has 'wrecked something worthwhile" (p. 181).

John Gatto. an award-winning teacher of the year in New York, comes closest to what I mean by POD in his description of'psychopathic 5 organizations. Gatto (2001) says that the term psychopathic, as applied to organizations, while it might conjure up lurid images of deranged people running amuck, really means something quite different; he invokes the term to refer to people 'without consciences' (p. 303). The way he put it is that:

4.0 out of 5 stars Essential reading for anyone working in a UK university today. Reviewed in the United Kingdom on August 30, 2019

Reviewers of this book seem to conflate the price of, and access to, this book in an ironic context. This isn't fair as this is very much a book written from a formal academic perspective. In that sense the book is probably priced reasonably.

However, as I don't work in this field I found that I had to read around some of the topics in order to get a deeper understanding of the issues raised by the book. So one thing I think that author could do is to almost re-write the book in a more "journalistic" sense and this would make it more accessible to a wider audience.

As it stands, however, this book is right on the money. Reading almost every page brought from me nods of agreement at familiar practices from university "leaders". This book is therefore absolutely correct in its findings and this then makes it profoundly depressing as the book describes, in my view, the dismantling of the university system as we know it. Every chapter details things I have witnessed or heard about from other universities. The "rock star" academics section, usually focusing on "dynamic" researchers, is the highlight as I know enough people who fit the descriptions given - people who would sell their mothers to get a grant or get slightly higher up the greasy pole.

The critique of university leadership, marketing functions and financial (mis)management are also spot-on.

Overall, get past the formal academic nature of this book (it is not a book designed for a wide audience, which is a pity) and it is excellent, timely and deeply depressing.

PHILIP TAYLOR 5.0 out of 5 stars

Forensic Analysis of The Toxic Neo-Liberal University Reviewed in the United Kingdom on April 19, 2019

A brilliant exposition of the toxic neo-liberal University

[Feb 02, 2021] Corruption of IT education under neoliberalism: Schools teach to the test, depriving children of a rounded and useful education.

May 23, 2020 | discussion.theguardian.com

DrMidnite , 10 Apr 2019 17:04

"Schools teach to the test, depriving children of a rounded and useful education."

Boy do they. I work in Business/IT training and as the years have rolled on I and every colleague I can think of have noticed more and more people coming to courses that they are unfit for. Not because they are stupid, but because they have been taught to be stupid.

So used to being taught to the test that they are afraid to ask questions. Increasingly I get asked "what's the right way to do...", usually referring to situation in which there is no right way...

I had the great pleasure of watching our new MD describe his first customer-facing project, which was a disaster, but they "learned" from it. I had to point out to him that I teach the two disciplines involved - businesss analysis and project management - and if he or his team had attended any of the courses - all of which are free to them - they would have learned about the issues they would face, because (astonishingly) they are well-known.

I fear that these incurious adult children are at the bottom of Brexit, Trump and many of the other ills that afflict us. Learning how to do things is difficult and sometimes boring.

Much better to wander in with zero idea of what has already been done and repeat the mistakes of the past. I see the future as a treadmill where the same mistakes are made repetitively and greeted with as much surprise as if they had never happened before.

We have always been at war with Eastasia...

[Feb 02, 2021] Freedom From the Market- America s Fight to Liberate Itself from the Grip of the Invisible Hand

Highly recommended!
Feb 02, 2021 | www.amazon.com

J. Edgar Mihelic, MA, MBA 5.0 out of 5 stars on January 18, 2021

Pushing Back on Neoliberalism

This is a good, short book laying out many of the ways that the market has crept up on us and made our lives smaller.

Konczal provides necessary pushback to the neoliberal project, showing just everything that we have lost as the forces of capital decided that the Great Society, the New Deal, and the Progressive Era were bridges too far against the corporate form. 8 people found this helpful

anonymous 5.0 out of 5 stars January 23, 2021
Ayn Rand would hate this book.

Konczal's book is a compact history of how Americans have tried to remove the constraints imposed on them by the market. Konczal questions the conventional idea that the market is solely a mechanism that expands choices and opportunity. As he shows, markets can, and have, achieved precisely the opposite outcomes -- restricting choices and preventing people from having options. In many instances, Americans successfully reclaimed the liberty they had lost to the market by organizing or taking state action. He thus makes a more general case for ensuring that societal outcomes are more consistent with Berlin's notion of positive liberty. Libertarians will not appreciate the book's conclusions.

The book starts with the Homestead Act and ends with the decision to terminate virtually free higher education in the 1960s and 1970s. In between, he covers a lot of historical ground -- the effort to reduce working hours in the 19th century, the Wagner Act and Social Security during the New Deal, and the introduction of Medicare and Medicaid, among other things. Despite the book's ambitious scope, you can read it in a sitting, which is quite a feat. Either Konczal is a naturally efficient writer, or he has a good editor.

There is one topic I would've liked to see treated in more detail -- finance. Konczal gives the best concise summary of the economic ideas behind the ideological shift toward neoliberalism I have read. Still, the liberalization of finance during the past 50 years and its farreaching implications receive a cursory discussion. In an interview, Konczal said he wanted to include more discussion of this topic and something on the gold standard but didn't see how to incorporate it. In my view, it would have fit quite naturally into the chapter "Free Economy."

But this is a quibble. Overall, the book is both well researched and well written. It sheds light on an important and timely question -- to what extent should Americans permit themselves to be subject to market-driven outcomes? The book shows that, historically, Americans have tried to implement changes that enabled them to live freer lives by organizing and taking political action. Not all those changes were successful but many were.

For a deeper dive into these and related questions, read this book along with Polanyi's "The Great Transformation," Robin's "The Reactionary Mind," and Slobodian's "The Globalists." 4 people found this helpful

Henry J. Farrell 5.0 out of 5 stars January 25, 2021
Freedom from the Market remakes our understanding of what is possible in American politics

Freedom from the Market remakes our understanding of American politics. By drawing intelligently on forgotten aspects of American history, Konczal makes it easier for Americans to understand that things they might not believe are possible in America must be, because they have been. He rescues moments such as the WWII government run daycare centers, or the use of the power of the federal state to bring through the integration of Southern hospitals, from the enormous condescension of posterity. And notably, although he doesn't dwell on this point, many of these changes began at moments that seem shittier and more despairing than our own.

So what Konczal is doing is neither to provide a standard linear history, nor yet a policy textbook. Instead, he is claiming an alternative American tradition, that has not looked to the market as its apotheosis, but instead has sought to free Americans from its random vagaries. His history explains how Americans have responded collectively to the real and expressed needs of publics, who have organized to fight for them. And it does so in the plain language that he mentions in passing was necessary to allow ordinary people to organize and understand who was trying to stop them.

Konczal's fundamental claim is that people who link freedom to markets miss out on much of the story. Equally important is a notion of freedom <em>from</em> markets, "rooted in public programs that genuinely serve people and checking market dependency." This notion goes back much further in time than the New Deal. The nineteenth century is sometimes depicted as a reign of laissez-faire, both by those who admired it and deplored it. Konczal argues instead that there was an emerging sense of public needs - and how the government might provide for them. For example, this helps us understand the provision of public land through the Homestead Act and the land grant universities.

The nineteenth century notion of the public was clearly horribly flawed and contradictory - it did not include slaves or Native Americans. Some, like Horace Greeley ended up fleeing these contradictions into the welcoming arms of free market absolutism. But within these contradictions lay possibilities that opened up in the twentieth century. Konczal builds, for example on Eric Schickler's work to argue that as the New Deal began to provide concrete benefits to African Americans, it created a new conduit between them and the Democratic Party, breaking up the old coalition that had held Jim Crow together.
Konczal explains how change happens - through social movements and the state:

While the Supreme Court can be effective at holding back change and enforcing already existing power structures, it is actually very weak at creating new reform itself. It controls no funding and is dependent on elite power structures to carry out its decisions. What really creates change is popular mobilization and legislative changes.

He also draws on historians like Quinn Slobodian, to describe how modern Hayekians have sought to "encase" the market order in institutions and practices that are hard to overturn. Property rights aren't the foundation of liberty, as both nineteenth century jurists and twentieth century economists would have it. They are a product of the choices of the state, and as such intensely political.

This allows Konczal to turn pragmatism against the Hayekians. Hayek's notion of spontaneous order is supposed to be evolutionary. But if there is a need to to provide collective goods for people that cannot be fulfilled through voluntarism, the Hayekian logic becomes a brutal constraint on adaptation.

The efforts of Hayekians to enforce binding legal constraints, to cripple the gathering of the collective knowledge that can guide collective action, to wink at legal doctrines intended to subvert social protections against the market; all these prevent the kinds of evolutionary change that are necessary to respond to changing circumstances. Konczal makes it clear that Oliver Wendell Holmes was no left-winger - but his criticisms of the rigid and doctrinaire laissez-faire precepts of his colleagues rings true. Their "willingness to use a very specific understanding of economics to override law writes a preferential understanding of economics into the constitution itself." Although Konczal wrote this book before the current crisis, he describes Holmes as mentioning compulsory vaccination laws as one of the ways in which government interference in private decisions can have general social benefits. The wretched contortions of libertarians over the last several months, and their consequences for human welfare in states such as North Dakota illustrate the point, quite brutally.

What Konczal presses for is a very different notion of freedom. This doesn't deny the benefits of markets, but it qualifies them. In Konczal's words, "markets are great at distributing things based on people's willingness to pay. But there are some goods that should be distributed by need." Accepting this point entails the necessity of keeping some important areas of life outside the determining scope of markets. Furthermore, people's needs change over time, as societies and markets change. Konczal's framework suggests the need for collective choice to figure out the best responses to these changes, and a vibrant democratic politics, in which the state responds to the expressed needs of mobilized publics as the best way to carry out these choices.

All this makes the book sound more like an exercise in political theory than it is. You need to read the book itself, if you really to get the good stuff - the stories, the examples, and the overall narrative that Konczal weaves together. <em>Freedom from the Market</em> has the potential to be a very important book, focusing attention on the contested, messy but crucially important intersection between social movements and the state. It provides a set of ideas that people on both sides of that divide can learn from, and a lively alternative foundation to the deracinated technocratic notions of politics, in which good policy would somehow, magically, be politically self supporting, that has prevailed up until quite recently. Recommended.

[Feb 01, 2021] Many neoliberalized US universities and colleges are greedy and have become too dependent on international students and their superior fee-paying ability compared with domestic students to finance bloated administrative staff salaries

Covid-19 exposed some warts of neoliberalism in higher education... They want to keep those lucrative international students flooding in, after all.
Notable quotes:
"... We align our identities with our institutions and think in very a short-term, metric-based fashion, seeing "success" (for instance) in terms of student recruitment (tuition fees paid in). Moreover, we're encouraged above all to be global in outlook: we look forward to our perennially "busy" international conference seasons and we emphasize the global and the transnational over the merely local or national ..."
"... our identities as academics are unavoidably embedded in a form of neoliberal hyperglobalisation. We rely on unrestricted flows of (wealthy) bodies across borders. ..."
"... We see this form of globalisation, and the benefits that accrue to us and our institutions from it, as a form of moral necessity : something it isn't possible even to argue against in good faith. Hence our loud assent to principles like open borders and always-on mass migration. ..."
"... Our commitment to the global as a form of moral mission has left us completely unprepared for what's currently unfolding. We are utterly unused to considering the material constraints of the economy our livelihoods depend on; that globalisation might come back to bite us; that the very aircraft that carry us across the world to conference destinations and field work sites would one day turn off the spigot of endlessly mobile bodies our careers and identities depend on. ..."
"... In this respect, I think of this post over at Crooked Timber, where John Quiggin (an economist I have a great deal of respect for) simply cannot bring himself to confront the possibility that the open borders dream might be dead. ..."
"... But the fact that the "export education" model was a disastrous wrong turn will take much longer to be accepted, I think, because of the widespread commitment I've been talking about here to the principle of the global as a form of moral necessity. ..."
May 22, 2020 | www.nakedcapitalism.com

Musicismath , April 6, 2020 at 1:04 pm

we've had a Minsky-like process operating on a society-wide basis: as daily risks have declined, most people have blinded themselves to what risk amounts to and where it might surface in particularly nasty forms. And the more affluent and educated classes, who disproportionately constitute our decision-makers, have generally been the most removed.

I see something very similar happening in academia. We align our identities with our institutions and think in very a short-term, metric-based fashion, seeing "success" (for instance) in terms of student recruitment (tuition fees paid in). Moreover, we're encouraged above all to be global in outlook: we look forward to our perennially "busy" international conference seasons and we emphasize the global and the transnational over the merely local or national (denigrated as narrow, provincial, and ideologically suspect).

We like to see ourselves as mobile subjects, bodies in constant motion, our minds Romantically untethered from the confines of any one nation state.

So our identities as academics are unavoidably embedded in a form of neoliberal hyperglobalisation. We rely on unrestricted flows of (wealthy) bodies across borders. Our institutions (or many of them) have become dependent on international students and their superior fee-paying ability compared with merely "domestic students."

We might agree in principle with ideas of a GND, say, or take an ecocritical approach to a novel or a play, but we're certainly not going to cut back on the number of international conferences we attend. Indeed, many of us go further.

We see this form of globalisation, and the benefits that accrue to us and our institutions from it, as a form of moral necessity : something it isn't possible even to argue against in good faith. Hence our loud assent to principles like open borders and always-on mass migration. We have to keep those lucrative international students flooding in, after all. (Not that we'd ever put it in terms as crassly material as that; after all, we don't work in university administration .)

Our commitment to the global as a form of moral mission has left us completely unprepared for what's currently unfolding. We are utterly unused to considering the material constraints of the economy our livelihoods depend on; that globalisation might come back to bite us; that the very aircraft that carry us across the world to conference destinations and field work sites would one day turn off the spigot of endlessly mobile bodies our careers and identities depend on.

Hence the reason why a lot of my colleagues are so lost right now. They're so used to living on a purely symbolic (or moral-symbolic) level that the materiality of this virus and its consequences seems like a crude insult. Many stubbornly hold on to their old commitments, unwilling to admit that the world might have changed.

In this respect, I think of this post over at Crooked Timber, where John Quiggin (an economist I have a great deal of respect for) simply cannot bring himself to confront the possibility that the open borders dream might be dead.

Where we go from here, I have no idea. But the fact that international and Erasmus students might be gone for the foreseeable future, and the major implications this will have for the financial viability or our universities, seems to be slowly sinking in.

But the fact that the "export education" model was a disastrous wrong turn will take much longer to be accepted, I think, because of the widespread commitment I've been talking about here to the principle of the global as a form of moral necessity.

[Feb 01, 2021] Predator Nation- Corporate Criminals, Political Corruption, and the Hijacking of America by Charles Ferguson

Feb 01, 2021 | www.amazon.com

"As we view the achievements of aggregated capital, we discover the existence of trusts, combinations, and monopolies, while the citizen is struggling far in the rear or is trampled to death beneath an iron heel." ~Grover Cleveland (about that other gilded age)

"There is fraud at the heart of Wall Street -- deliberate intellectual, business, and political deception. Charles Ferguson is in hot pursuit. Inside Job shook up the cozy world of academic finance. Predator Nation should stir prosecutors into action. And if we fail to reform our political system, you can say goodbye to American democracy." -- Simon Johnson , coauthor of White House Burning and professor at MIT Sloan School of Management

"Over the last thirty years, the United States has been taken over by an amoral financial oligarchy, and the American dream of opportunity, education, and upward mobility is now largely confined to the top few percent of the population.

Federal policy is increasingly dictated by the wealthy, by the financial sector, and by powerful (though sometimes badly mismanaged) industries. These policies are implemented and praised by these groups' willing servants, namely the increasingly bought-and-paid-for leadership of America's political parties, academia, and lobbying industry.

If allowed to continue, this process will turn the United States into a declining, unfair society with an impoverished, angry, uneducated population under the control of a small, ultrawealthy elite. Such a society would be not only immoral but also eventually unstable, dangerously ripe for religious and political extremism."

Charles Ferguson, Predator Nation, 2012

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University Doc Top Contributor: Camping

Scary read. Frightening true! HIGHLY recommend!!

4.0 out of 5 stars Scary read. Frightening true! HIGHLY recommend!! Reviewed in the United States on February 11, 2017 Verified Purchase Just finished this page turner. Wow! Talk about an enlightening read. Scary too and worse, yet it's so spot on. I always knew that most businesses, especially those dealing with money are crooked, selfish and good for nothing greedy souls. This book proves my point and more. Personally, I never heard of this book or the author until my brother recommended it to me in passing. It scared the hell out of him. Naturally, I had to see what book could do that. After reading it, I understand why.
Not only are the financial industries greedy and crooked but so is our governments and both Democrats and Republicans. The housing crash of 2008 wasn't the beginning of our problems but the culmination of years of greed, shady deals and lack of accountability for the financial industry. President George W. Bush was complicit in protecting the finance industry not the people of America. Worse yet was President Barack Obama. It's all in there: every dirty little detail. If you think your broker, banker or financial advisor has your best interest at heart, this couldn't show how very wrong you are. Is the book perfect? No. Is the U.S. Government or any other world government perfect? Hell no. should we be very afraid of how our bankers are? Yes.
This is a book I enjoyed reading because I already knew about most of it already just by observing and never trusting anyone anyway. I highly recommend it. I loved the fact that the author wasn't afraid to speak the truth. That is always refreshing. I look forward to reading more by Charles Ferguson.
Overall, an informative and compelling read. Everyone whether interested in finances or note needs to read this book. Seriously! Read less 2 people found this helpful Helpful Report abuse >

Orchid
OMG! You owe it to yourself to read what is really going on!

5.0 out of 5 stars OMG! You owe it to yourself to read what is really going on! Reviewed in the United States on November 4, 2014 Verified Purchase Definitely an eye opener. If I was cynical before, this one pushed me over the edge. Banks and large corporations in collusion with the government and zero accountability. Our newspapers, again, did a disservice to the public. It is one thing to talk about the mortgage industry going under, it is quite another to understand what the banks did to facilitate a world-wide recession with NO prosecutions. I was particularly appalled that the corporations paid the politicians who voted to remove any restraints on the banks. Then the banks created derivative markets they knew would fail. Moreover, the bank made millions of dollars by betting the derivative market would fail. Yet, when the bubble burst, these same people were standing at the government door (that they paid for) with their hand out for a taxpayer bail-out. The CEOs were rewarded for their bad behavior with millions of dollars in bonuses and no repercussions for bilking millions of victims or for causing a world wide downward money spiral. 7 people found this helpful Helpful Report abuse >

petronmb
Long on diagnosis, short on solution

4.0 out of 5 stars Long on diagnosis, short on solution Reviewed in the United States on June 9, 2012 Verified Purchase As a fan of "Inside Job" I was eager to read Predator Nation, which minces no words in designating the financial industry as "criminal" abetted by the political establishment, whether Republican or Democrat. The other reviews here lay out what this book accomplishes, to which I would only underscore the powerful and no-holds-barred approach of Ferguson to establishing responsibility and labeling it "criminal" as well as "predatory."

Beyond critique of Wall Street and the political "duopoly," the book widely supports the thesis that something is terribly wrong in America, a cultural malaise rooted in economic thievery and imbalance empowering the wealthy, and rendering today's America into the equivalent of what we used to call "a banana republic." Charles Ferguson pulls no punches in laying out his case here.

But, as another review has pointed out, the ending is disappointing. Charles has laid into Obama as part of the "duopoly" governing America, meaning diverging only on fractious social issues but essentially united in matters of finance and government, including war. At one point he labels Obama's weak commentary on controlling Wall Street "horse [manure]" and then at another point says "he [Obama] screwed us." In his concluding five page chapter which has an "oh, well" feel to it he tells us "hold your nose and vote for him [Obama], as I will."

With this and various commentaries we seem to be very long on laying out damages and ascribing responsibility, but have almost nothing to say on what to do other than repair to the lounge on the Titanic and have another whiskey, hoping somebody will come along with a bright idea or two at some point. If more energy were put into finding answers, as with ascribing blame, maybe we could be more hopeful. Read less 9 people found this helpful

[Jan 29, 2021] The System Is Rigged - Episode 4537- Game Stop Corp

Notable quotes:
"... "I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I love the smell of burning Wall Street in the morning." ..."
"... Back in the Oughts when the fraudulent mortgages were grossly inflating Real Estate Investment Trusts (REITs), there were many instances of naked short selling to keep honest REITs down, activities I learned firsthand. We formed a shareholders organization that lobbied the SEC to enforce its laws but to no avail--the regulators were well captured and did zip. ..."
"... There's short selling, and then there's naked short selling. Why do the markets require naked short selling? If those hedge funds already owned the stocks that they are selling short, they would not be in such trouble now. ..."
Jan 29, 2021 | www.moonofalabama.org

psychohistorian , Jan 28 2021 18:47 utc | 6

Early this week a few amateur stock trading nerds decided to promote a stock that was heavily shortened by certain hedge funds. The idea was to raise the stock price of Game Stop Corp., a vendor for computer games, by having lots of small stock traders to buy into it. The hedge fund that shortened the stock, and thereby bet on a dropping stock price, would then make huge losses while the many small buyers would potentially profit.

These people, who had joined up in the sub-reddit /r/WallStreetBets, were not driven by greed but by rage against the financial machine :

Instead of greed, this latest bout of speculation, and especially the extraordinary excitement at GameStop, has a different emotional driver: anger. The people investing today are driven by righteous anger, about generational injustice, about what they see as the corruption and unfairness of the way banks were bailed out in 2008 without having to pay legal penalties later, and about lacerating poverty and inequality. This makes it unlike any of the speculative rallies and crashes that have preceded it.

The movement was successful. The stock price of Game Stop Corp. rose from some $10 to over $400 within just a few days. The short seller had to take cover under a larger firm:

Hedge fund Melvin Capital closed out its short position in GameStop on Tuesday after taking huge losses as a target of the army of retail investors. Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its finances.

I'm shocked! Absolutely shocked to see that the game of finance is rigged!!!!/snark

There have not been market fundamentals since the beginning of financialization in 1971 when money became fiat instead of gold backed. I find it interesting that it has taken 50 years for the cancer of financialization to fully compromise the host. It will be interesting to see where this goes from here.

I think the speed of decline of empire is speeding up as noted by the increase in international investment in China.

I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I love the smell of burning Wall Street in the morning.


Rutherford82 , Jan 28 2021 18:50 utc | 7

@6 psychohistorian

"I am also reading the the next focus of the little people investors is the highly manipulated precious metals markets.....I love the smell of burning Wall Street in the morning."

Is Max Keiser going after the silver market again? I bet he was posting on r/Wallstreetbets to stir things up!

karlof1 , Jan 28 2021 18:50 utc | 8

Back in the Oughts when the fraudulent mortgages were grossly inflating Real Estate Investment Trusts (REITs), there were many instances of naked short selling to keep honest REITs down, activities I learned firsthand. We formed a shareholders organization that lobbied the SEC to enforce its laws but to no avail--the regulators were well captured and did zip.

We even ran full pages ads in the NY Times and WaPost to add visibility to our justifiable outrage, which was well proven when the bubble burst.

But Obama didn't do his job and enforce the law, and the entire mess is far worse now. This episode epitomizes the amazing amounts of corruption masquerading as well regulated markets and an equitable financial system.

I support Hudson's debt forgiveness for the main reason it will bankrupt the debt holders--the Financial Parasites--who are also the beneficiaries of the corrupt system; and with their destruction, will allow for the rise of the Public Financial Utility that will restore law and order to that realm of the economy. Yes, this must be seen as yet another episode of the longstanding Class War, one of the most brazen ever.

lysias , Jan 28 2021 19:41 utc | 18

There's short selling, and then there's naked short selling. Why do the markets require naked short selling? If those hedge funds already owned the stocks that they are selling short, they would not be in such trouble now.

Bemildred , Jan 28 2021 20:20 utc | 24

It's not over yet:

Triden , Jan 28 2021 20:55 utc | 29

Citadel and Point72 have infused close to $3 billion into Gabe Plotkin's hedge fund to shore up its finances.

-b

How Robinhood was rigged:

Robinhood sells its orderflow to Citadel for execution. Citadel then chiselled the retail investor for pennies per trade by frontrunning (think high freq trading) before execution of retail order, inflating the price and cheating the customer. Citadel bailed out Citron, essentially inheriting the short position. Citadel then threatened Robinhood with refusing payment for orderflow

[Jan 29, 2021] With -Biden- in the White House, the Kremlin now needs to change gear by The Saker

Jan 29, 2021 | www.unz.com

US Presidents are really puppets, figureheads, even if during their campaign they pretend otherwise. As for the elections, every four years in the US, they are nothing but a grand brainwashing show whose sole purpose is to give the illusion of people power. They could have presidential elections every 2 years, or even every year, none of that would change the fact that the US is a plutocratic dictatorship with much less people power than any other state in the collective West.

In fact, the argument above is just a tiny fig leaf trying to conceal the undeniable fact that the US are not ruled by a person, but are ruled by a class, in the Marxist sense of this world. Personally, I call this ruling class the "US Nomenklatura ". And while both Obama and Trump pretended to want real change, they both lost that chance (assuming they ever wanted this is the first place, which I doubt) when they did not do what Putin did when he came to office: crush the Russian oligarchs as a class (some fled abroad, some died, some lost it all, and some agreed to play by Putin's new rules). Obama, being the vapid and spineless car salesman that he, is probably never even contemplated any real move against the US Nomenklatura . As for Trump, being the pompous narcissist that he is, he might have even entertained some thoughts of showing "who is boss", but that lasted only 1 month, until the US Nomenklatura forced Trump to fire Flynn (after that, it was all freefall ).

[Jan 28, 2021] 'Where is the line between global business attempts to control society-' Putin asks Davos as he calls out power of Big Tech

Jan 28, 2021 | www.rt.com

'Where is the line between global business & attempts to control society?' Putin asks Davos as he calls out power of Big Tech 27 Jan, 2021 12:10 / Updated 3 hours ago Get short URL 'Where is the line between global business & attempts to control society?' Putin asks Davos as he calls out power of Big Tech © Pixabay / Gerd Altmann 354 18 Follow RT on RT Technology giants have become powerful rivals to governments, but there are doubts over the benefits for society of their monopoly positions, Russia's President Vladimir Putin told the annual World Economic Forum, on Wednesday .

"Where is the line between a successful global business, in-demand services and consolidation of big data – and attempts to harshly and unilaterally govern society, replace legitimate democratic institutions, restrict one's natural right to decide for themselves how to live, what to choose, what stance to express freely?" Putin wondered.

"We've all seen this just now in the US. And everybody understands what I'm talking about," he added.

The Russian leader was apparently referring to the crackdown by Big Tech corporations like Twitter, Facebook, Google, Apple and Amazon, mostly on Donald Trump and his supporters, during the recent presidential election in the US. The companies, which, according to some critics, sided with Democratic candidate Joe Biden, blocked President Trump's social media accounts over accusations of inciting violence, with the same being done to many pages of groups and individuals who'd backed him.

ALSO ON RT.COM YouTube prolongs Trump suspension citing 'ongoing potential for violence' as Big Tech doubles down on deplatforming policies

However, one-sided bias claim voiced by some might be an overestimation – the accounts of Democrats supporters were also subject to restrictions, but on a much smaller scale.

Conservative Twitter-like platform Parler was also forced offline, and now there are calls to block the Telegram app as well.

These events have shown that Big Tech companies "in some areas have de facto become rivals to the government," Putin said.

Billions of users spend large parts of their lives on the platforms and, from the point of view of those companies, their monopolistic position is favorable for organizing economic and technological processes, the Russian president explained. "But there's a question of how such monopolism fits the interest of society," he stressed.

ALSO ON RT.COM Putin tells Davos that divided modern world facing 'real breakdown', with demographic struggles & echoes of 1930s pre-WW2 tensions

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shadow1369 8 hours ago 27 Jan, 2021 07:51 AM

This is a great opportunity for Russia to create some Big Tech operators which actually allow free speech. Russia certainly has the expertise and the means, and cannot be bullied by western regimes.
Proton1963 shadow1369 1 hour ago 27 Jan, 2021 02:54 PM
Sure.. But only after the Russians can build a drivable car or a decent smart phone or a laptop.
Election_Fraud Biden shadow1369 1 hour ago 27 Jan, 2021 02:12 PM
The West is surely giving Russia a lot of opportunities, through its own arrogance and stupidity, does not it ? It keeps going backwards in its effort to diminish Russia. And the same goes for China too.
JOHNCHUCKMAN 7 hours ago 27 Jan, 2021 08:45 AM
Putin is a remarkable statesman, and he sets a very high standard for political discourse. I can't think of any of our Western leaders who speak in these truthful and philosophic terms. What we hear in the West are slogans or whining or complaining.
Tenakakhan JOHNCHUCKMAN 3 hours ago 27 Jan, 2021 01:03 PM
The patriarch of the west has become extremely weak. It seems like our leaders lack any moral authority to speak truth and common sense for fear of being cancelled. What we see now is the virtue signaling dregs sponsored by extreme groups leading our nations down the toilet. If a real war was to break out now we would be cannon fodder.
Hilarous 7 hours ago 27 Jan, 2021 09:04 AM
I think there's a simple explanation. Big tech is afraid to lose section 230 of the communications act, which stipulates that online platforms are not legally responsible for user content. Trump and some Republicans have accused social media sites of muzzling conservative voices. They said undoing Section 230 would let people who claim they have been slighted sue the companies. So Big Tech has a strong interest to remove Trump and run down a few bad examples to convince people and politics that Section 230 must remain.
Count_Cash 8 hours ago 27 Jan, 2021 07:40 AM
In many cases they aren't rivals, but owners of government. Money controls everything in the west and big tech have it. They have taken control of, or are blackmailing governments. The Western Liberal Regime straddles both Big Tech and government!
RTaccount Count_Cash 7 hours ago 27 Jan, 2021 08:57 AM
Correct. Let us never forget that in America we are ruled by oligarchs just like the rest of the world, and that our oligarchs are largely hidden. They are our true government, and so it is meaningless to make this type of distinction.

[Jan 28, 2021] Michael Hudson- Finance Capitalism vs. Industrial Capitalism The Rentier Resurgence and Takeover

Jan 26, 2021 | www.nakedcapitalism.com

Yves here. This is another tour de force from Michael Hudson, derived from a paper he presented in early January at the UPRE session during the annual ASSA meeting. This time he turns from his recent focus on the economically destructive but oligarchy-advancing practice of sanctifying debt to another favorite topic, the evolution of capitalism. Hudson looks from the early Industrial Revolution onward and demonstrates that the dominance of financial capital over industrial capital was neither the likely course of events nor desirable. A major feature of this development is the increasing weight of rentier activities and how they drain income from workers and more productive sectors.

One of his key conclusions:

The result is a "deep state" supporting a cosmopolitan financial oligarchy. That is the definition of fascism, reversing democratic government to restore control to the rentier financial and monopoly classes. The beneficiary is the corporate sector, not labor, whose resentment is turned against foreigners and against designated enemies within.

For Hudson, the deep state enforcers are the IMF and the World Bank (which pressed emerging economies to develop capital markets, making them more vulnerable to destabilizing hot money flows). He did not mention them in this article but I imagine Hudson would add domestic law neutering "investor-state dispute settlement" provisions in trade agreements.

Even with its length (get a cup of coffee!), an article that covers so much terrain is bound to simplify a bit. One small quibble: While Hudson correctly depicts China as hewing strictly and successfully to an industrial capital model, and keeping finance in check, Hudson overeggs the pudding a bit in saying, "China has kept banking in the public domain." China's regional governments have supported real-estate development projects, including a non-trivial proportion of ghost cities. often funded by private "wealth management products". China's "shadow banking sector" which officials have just estimated at nearly $13 trillion , or 86% of GDP and nearly 30% of banking assets.

Chinese officials say they are about to crack down on them, after many years of looking the other way, plus the occasional bailout of particular wealth management product issuances gone sour. Similarly, the dominant mobile payment platform player, Alibaba, is private.

By Michael Hudson, a research professor of Economics at University of Missouri, Kansas City, and a research associate at the Levy Economics Institute of Bard College. His latest book is "and forgive them their debts": Lending, Foreclosure and Redemption from Bronze Age Finance to the Jubilee Year

Marx and many of his less radical contemporary reformers saw the historical role of industrial capitalism as being to clear away the legacy of feudalism – the landlords, bankers and monopolists extracting economic rent without producing real value. But that reform movement failed. Today, the Finance, Insurance and Real Estate (FIRE) sector has regained control of government, creating neo-rentier economies.

The aim of this post-industrial finance capitalism is the oppositeof that of industrial capitalism as known to 19 th -century economists: It seeks wealth primarily through the extraction of economic rent, not industrial capital formation. Tax favoritism for real estate, privatization of oil and mineral extraction, banking and infrastructure monopolies add to the cost of living and doing business. Labor is being exploited increasingly by bank debt, student debt, credit-card debt, while housing and other prices are inflated on credit, leaving less income to spend on goods and services as economies suffer debt deflation.

Today's New Cold War is a fight to internationalize this rentier capitalism by globally privatizing and financializing transportation, education, health care, prisons and policing, the post office and communications, and other sectors that formerly were kept in the public domain of European and American economies so as to keep their costs low and minimize their cost structure.

In the Western economies such privatizations have reversed the drive of industrial capitalism to minimize socially unnecessary costs of production and distribution. In addition to monopoly prices for privatized services, financial managers are cannibalizing industry by debt leveraging and high dividend payouts to increase stock prices.

* * *

Today's neo- rentier economies obtain wealth mainly by rent seeking, while financialization capitalizes real estate and monopoly rent into bank loans, stocks and bonds. Debt leveraging to bid up prices and create capital gains on credit for this "virtual wealth" has been fueled by central bank Quantitative Easing since 2009.

Financial engineering is replacing industrial engineering. Over 90 percent of recent U.S. corporate income has been earmarked to raise the companies' stock prices by being paid out as dividends to stockholders or spent on stock buyback programs. Many companies even borrow to buy up their own shares, raising their debt/equity ratios.

Households and industry are becoming debt-strapped, owing rent and debt service to the Finance, Insurance and Real Estate (FIRE) sector. This rentier overhead leaves less wage and profit income available to spend on goods and services, bringing to a close the 75-year U.S. and European expansion since World War II ended in 1945.

These rentier dynamics are the opposite of what Marx described as industrial capitalism's laws of motion. German banking was indeed financing heavy industry under Bismarck, in association with the Reichsbank and military. But elsewhere, bank lending rarely has financed new tangible means of production. What promised to be a democratic and ultimately socialist dynamic has relapsed back toward feudalism and debt peonage, with the financial class today playing the role that the landlord class did in post-medieval times.

Marx's View of the Historical Destiny of Capitalism: to Free Economies from Feudalism

The industrial capitalism that Marx described in Volume I of Capital is being dismantled. He saw the historical destiny of capitalism to be to free economies from the legacy of feudalism: a hereditary warlord class imposing tributary land rent, and usurious banking. He thought that as industrial capitalism evolved toward more enlightened management, and indeed toward socialism, it would replace predatory "usurious" finance, cutting away the economically and socially unnecessary rentier income, land rent and financial interest and related fees for unproductive credit. Adam Smith, David Ricardo, John Stuart Mill, Joseph Proudhon and their fellow classical economists had analyzed these phenomena, and Marx summarized their discussion in Volumes II and III of Capital and his parallel Theories of Surplus Value dealing with economic rent and the mathematics of compound interest, which causes debt to grow exponentially at a higher rate than the rest of the economy.

However, Marx devoted Volume I of Capital to industrial capitalism's most obvious characteristic: the drive to make profits by investing in means of production to employ wage labor to produce goods and services to sell at a markup over what labor was paid. Analyzing surplus value by adjusting profit rates to take account of outlays for plant, equipment and materials (the "organic composition of capital"), Marx described a circular flow in which capitalist employers pay wages to their workers and invest their profits in plant and equipment with the surplus not paid to employees.

Finance capitalism has eroded this core circulation between labor and industrial capital. Much of the midwestern United States has been turning into a rust belt. Instead of the financial sector evolving to fund capital investment in manufacturing, industry is being financialized. Making economic gains financially, primarily by debt leverage, far outstrips making profits by hiring employees to produce goods and services.

Capitalism's Alliance of Banks with Industry to Promote Democratic Political Reform

The capitalism of Marx's day still contained many survivals from feudalism, most notably a hereditary landlord class living off the land rents, most of which were spent unproductively on servants and luxuries, not to make a profit. These rents had originated in a tax. Twenty years after the Norman Conquest, William the Conquer had ordered compilation of the Domesday Book in 1086 to calculate the yield that could be extracted as taxes from the English land that he and his companions had seized. As a result of King John's overbearing fiscal demands, the Revolt of the Barons (1215-17) and their Magna Carta enabled the leading warlords to obtain much of this rent for themselves. Marx explained that industrial capitalism was politically radical in seeking to free itself from the burden of having to support this privileged landlord class, receiving income with no basis in cost value or enterprise of its own.

Industrialists sought to win markets by cutting costs below those of their competitors. That aim required freeing the entire economy from the "faux frais" of production, socially unnecessary charges built into the cost of living and doing business. Classical economic rent was defined as the excess of price above intrinsic cost-value, the latter being ultimately reducible to labor costs. Productive labor was defined as that employed to create a profit, in contrast to the servants and retainers (coachmen, butlers, cooks, et al .) on whom landlords spent much of their rent.

The paradigmatic form of economic rent was the ground rent paid to Europe's hereditary aristocracy. As John Stuart Mill explained, landlords reaped rents (and rising land prices) "in their sleep." Ricardo had pointed out (in Chapter 2 of his 1817 Principles of Political Economy and Taxation ) a kindred form of differential rent in natural-resource rent stemming from the ability of mines with high-quality orebodies to sell their lower-cost mineral output at prices set by high-cost mines. Finally, there was monopoly rent paid to owners at choke points in the economy where they could extract rents without a basis in any cost outlay. Such rents logically included financial interest, fees and penalties.

Marx saw the capitalist ideal as freeing economies from the landlord class that controlled the House of Lords in Britain, and similar upper houses of government in other countries. That aim required political reform of Parliament in Britain, ultimately to replace the House of Lords with the Commons, so as to prevent the landlords from protecting their special interests at the expense of Britain's industrial economy. The first great battle in this fight against the landed interest was won in 1846 with repeal of the Corn Laws. The fight to limit landlord power over government culminated in the constitutional crisis of 1909-10, when the Lords rejected the land tax imposed by the Commons. The crisis was resolved by a ruling that the Lords never again could reject a revenue bill passed by the House of Commons.

The Banking Sector Lobbies Against the Real Estate Sector, 1815-1846

It may seem ironic today that Britain's banking sector was whole-heartedly behind the first great fight to minimize land-rent. That alliance occurred after the Napoleonic Wars ended in 1815, which ended the French blockage against British seaborne trade and re-opened the British market to lower-priced grain imports. British landlords demanded tariff protection under the Corn Laws – to raise the price of food, so as to increase the revenue and hence the capitalized rental value of their landholdings – but that has rendered the economy high-cost. A successful capitalist economy would have to minimize these costs in order to win foreign markets and indeed, to defend its own home market. The classical idea of a free market was one free from economic rent – from rentier income in the form of land rent.

This rent – a quasi-tax paid to the heirs of the warlord bands that had conquered Britain in 1066, and the similar Viking bands that had conquered other European realms – threatened to minimize foreign trade. That was a threat to Europe's banking classes, whose major market was the funding of commerce by bills of exchange. The banking class arose as Europe's economy was revived by the vast looting of monetary bullion from Constantinople by the Crusaders. Bankers were permitted a loophole to avoid Christianity's banning of the charging of interest, by taking their return in the form of agio , a fee for transferring money from one currency to another, including from one country to another.

Even domestic credit could use the loophole of "dry exchange," charging agio on domestic transactions cloaked as a foreign-currency transfer, much as modern corporations use "offshore banking centers" today to pretend that they earn their income in tax-avoidance countries that do not charge an income tax.

If Britain was to become the industrial workshop of the world, it would prove highly beneficial to Ricardo's banking class. (He was its Parliamentary spokesman; today we would say lobbyist.) Britain would enjoy an international division of labor in which it exported manufactures and imported food and raw materials from other countries specializing in primary commodities and depending on Britain for their industrial products. But for this to happen, Britain needed a low price of labor. That meant low food costs, which at that time were the largest items in the family budgets of wage labor. And that in turn required ending the power of the landlord class to protect its "free lunch" of land rent, and all recipients of such "unearned income."

It is hard today to imagine industrialists and bankers hand in hand promoting democratic reform against the aristocracy. But that alliance was needed in the early 19 th century. Of course, democratic reform at that time extended only to the extent of unseating the landlord class, not protecting the interest of labor. The hollowness of the industrial and banking class's democratic rhetoric became apparent in Europe's 1848 revolutions, where the vested interests ganged up against extending democracy to the population at large, once the latter had helped end landlord protection of its rents.

Of course, it was socialists who picked up the political fight after 1848. Marx later reminded a correspondent that the first plank of the Communist Manifesto was to socialize land rent, but poked fun at the "free market" rent critics who refused to recognize that rentier-like exploitation existed in the industrial employment of wage labor. Just as landlords obtained land rent in excess of the cost of producing their crops (or renting out housing), so employers obtained profits by selling the products of wage-labor at a markup. To Marx, that made industrialists part of the rentier class in principle, although the overall economic system of industrial capitalism was much different from that of post-feudal rentiers, landlords and bankers.

The Alliance of Banking with Real Estate and Other Rent-Seeking Sectors

With this background of how industrial capitalism was evolving in Marx's day, we can see how overly optimistic he was regarding the drive by industrialists to strip away all unnecessary costs of production – all charges that added to price without adding to value. In that sense he was fully in tune with the classical concept of free markets, as markets free from land rent and other forms of rentier income.

Today's mainstream economics has reversed this concept. In an Orwellian doublethink twist, the vested interests today define a free market as one "free" for the proliferation of various forms of land rent, even to the point of giving special tax advantages to absentee real estate investment, the oil and mining industries (natural-resource rent), and most of all to high finance (the accounting fiction of "carried interest," an obscure term for short-term arbitrage speculation).

Today's world has indeed freed economies from the burden of hereditary ground rent. Almost two-thirds of American families own their own homes (although the rate of homeownership has been falling steadily since the Great Obama Evictions that were a byproduct of the junk-mortgage crisis and Obama Bank Bailouts of 2009-16, which lowered homeowner rates from over 68% to 62%). In Europe, home ownership rates have reached 80% in Scandinavia, and high rates characterize the entire continent. Home ownership – and also the opportunity to purchase commercial real estate – has indeed become democratized.

But it has been democratized on credit. That is the only way for wage-earners to obtain housing, because otherwise they would have to spend their entire working life saving enough to buy a home. After World War II ended in 1945, banks provided the credit to purchase homes (and for speculators to buy commercial properties), by providing mortgage credit to be paid off over the course of 30 years, the likely working life of the young home buyer.

Real estate is by far the banking sector's largest market. Mortgage lending accounts for about 80 percent of U.S. and British bank credit. It played only a minor role back in 1815, when banks focused on financing commerce and international trade. Today we can speak of the Finance, Insurance and Real Estate (FIRE) sector as the economy's dominant rentier sector. This alliance of banking with real estate has led banks to become the major lobbyists protecting real estate owners by opposing the land tax that seemed to be the wave of the future in 1848 in the face of rising advocacy to tax away the land's entire price gains and rent, to make land the tax base as Adam Smith had urged, instead of taxing labor and consumers or profits. Indeed, when the U.S. income tax began to be levied in 1914, it fell only on the wealthiest One Percent of Americans, whose taxable income consisted almost entirely of property and financial claims.

The past century has reversed that tax philosophy. On a national level, real estate has paid almost zero income tax since World War II, thanks to two giveaways. The first is "fictitious depreciation," sometimes called over-depreciation. Landlords can pretend that their buildings are losing value by claiming that they are wearing out at fictitiously high rates. (That is why Donald Trump has said that he loves depreciation.) But by far the largest giveaway is that interest payments are tax deductible. Real estate is taxed locally, to be sure, but typically at only 1% of assessed valuation, which is less than 7 to 10 percent of the actual land rent.[1]

The basic reason why banks support tax favoritism for landlords is that whatever the tax collector relinquishes is available to be paid as interest. Mortgage bankers end up with the vast majority of land rent in the United States. When a property is put up for sale and homeowners bid against each other to buy it, the equilibrium point is where the winner is willing to pay the full rental value to the banker to obtain a mortgage. Commercial investors also are willing to pay the entire rental income to obtain a mortgage, because they are after the "capital" gain – that is, the rise in the land's price.

The policy position of the so-called Ricardian socialists in Britain and their counterparts in France (Proudhon, et al .) was for the state to collect the land's economic rent as its major source of revenue. But today's "capital" gains occur primarily in real estate and finance, and are virtually tax-free for landlords. Owners pay no capital-gains tax as real estate prices rise, or even upon sale if they use their gains to buy another property. And when landlords die, all tax liability is wiped out.

The oil and mining industries likewise are notoriously exempt from income taxation on their natural-resource rents. For a long time the depletion allowance allowed them tax credit for the oil that was sold off, enabling them to buy new oil-producing properties (or whatever they wanted) with their supposed asset loss, defined as the value to recover whatever they had emptied out. There was no real loss, of course. Oil and minerals are provided by nature.

These sectors also make themselves tax exempt on their foreign profits and rents by using "flags of convenience" registered in offshore banking centers. This ploy enables them to claim to make all their profits in Panama, Liberia or other countries that do not charge an income tax or even have a currency of their own, but use the U.S. dollar so as to save American companies from any foreign-exchange risk.

In oil and mining, as with real estate, the banking system has become symbiotic with rent recipients, including companies extracting monopoly rent. Already in the late 19 th century the banking and insurance sector was recognized as "the mother of trusts," financing their creation to extract monopoly rents over and above normal profit rates.

These changes have made rent extraction much more remunerative than industrial profit-seeking – just the opposite of what classical economists urged and expected to be the most likely trajectory of capitalism. Marx expected the logic of industrial capitalism to free society from its rentier legacy and to create public infrastructure investment to lower the economy-wide cost of production. By minimizing labor's expenses that employers had to cover, this public investment would put in place the organizational network that in due course (sometimes needing a revolution, to be sure) would become a socialist economy.

Although banking developed ostensibly to serve foreign trade by the industrial nations, it became a force-in-itself undermining industrial capitalism. In Marxist terms, instead of financing the M-C-M' circulation (money invested in capital to produce a profit and hence yet more money), high finance has abbreviated the process to M-M', making money purely from money and credit, without tangible capital investment.

The Rentier Squeeze on Budgets: Debt Deflation as a Byproduct of Asset-Price Inflation

Democratization of home ownership meant that housing no longer was owned primarily by absentee owners extracting rent, but by owner-occupants. As home ownership spread, new buyers came to support the rentier drives to block land taxation – not realizing that rent that was not taxed would be paid to the banks as interest to absorb the rent-of-location hitherto paid to absentee landlords.

Real estate has risen in price as a result of debt leveraging. The process makes investors, speculators and their bankers wealthy, but raises the cost of housing (and commercial property) for new buyers, who are obliged to take on more debt in order to obtain secure housing. That cost is also passed on to renters. And employers ultimately are obliged to pay their labor force enough to pay these financialized housing costs.

Debt deflation has become the distinguishing feature of today's economies from North America to Europe, imposing austerity as debt service absorbs a rising share of personal and corporate income, leaving less to spend on goods and services. The economy's indebted 90 percent find themselves obliged to pay more and more interest and financial fees. The corporate sector, and now also the state and local government sector, likewise are obliged to pay a rising share of their revenue to creditors.

Investors are willing to pay most of their rental income as interest to the banking sector because they hope to sell their property at some point for a "capital" gain. Modern finance capitalism focuses on "total returns," defined as current income plus asset-price gains, above all for land and real estate. Inasmuch as a home or other property is worth however much banks will lend against it, wealth is created primarily by financial means, by banks lending a rising proportion of the value of assets pledged as collateral.

Chart 10.4: annual changes in GDP and the major components of asset price gains

(nominal, $bn)

The fact that asset-price gains are largely debt-financed explains why economic growth is slowing in the United States and Europe, even as stock market and real estate prices are inflated on credit. The result is a debt-leveraged economy.

Changes in the value of the economy's land from year to year far exceeds the change in GDP. Wealth is obtained primarily by asset-price ("capital") gains in the valuation of land and real estate, stocks, bonds and creditor loans ("virtual wealth"), not so much by saving income (wages, profits and rents).The magnitude of these asset-price gains tends to dwarf profits, rental income and wages.

The tendency has been to imagine that rising prices for real estate, stocks and bonds has been making homeowners richer. But this price rise is fueled by bank credit. A home or other property is worth however much a bank will lend against it – and banks have lent a larger and larger proportion of the home's value since 1945. For U.S. real estate as a whole, debt has come to exceed equity for more than a decade now. Rising real estate prices have made banks and speculators rich, but have left homeowners and commercial real estate debt strapped.

The economy as a whole has suffered. Debt-fueled housing costs in the United States are so high that if all Americans were given their physical consumer goods for free – their food, clothing and so forth – they still could not compete with workers in China or most other countries. That is a major reason why the U.S. economy is de-industrializing. So this policy of "creating wealth" by financialization undercuts the logic of industrial capitalism.

Finance Capital's Fight to Privatize and Monopolize Public Infrastructure

Another reason for deindustrialization is the rising cost of living stemming from conversion of public infrastructure into privatized monopolies. As the United States and Germany overtook British industrial capitalism, a major key to industrial advantage was recognized to be public investment in roads, railroads and other transportation, education, public health, communications and other basic infrastructure. Simon Patten, the first professor of economics at America's first business school, the Wharton School at the University of Pennsylvania, defined public infrastructure as a "fourth factor of production," in addition to labor, capital and land. But unlike capital, Patten explained, its aim was not to make a profit. It was to minimize the cost of living and doing business by providing low-price basic services to make the private sector more competitive.

Unlike the military levies that burdened taxpayers in pre-modern economies, "in an industrial society the object of taxation is to increase industrial prosperity"by creating infrastructure in the form of canals and railroads, a postal service and public education. This infrastructure was a "fourth" factor of production.Taxes would be "burdenless," Patten explained, to the extent that they were invested in public internal improvements, headed by transportation such as the Erie Canal.[2]

The advantage of this public investment is tolower costs instead of letting privatizers impose monopoly rents in the form of access charges to basic infrastructure. Governments can price the services of these natural monopolies (including credit creation, as we are seeing today) at cost or offer them freely, helping labor and its employers undersell industrialists in countries lacking such public enterprise.

In the cities, Patten explained, public transport raises property prices (and hence economic rent) in the outlying periphery, as the Erie Canal had benefited western farms competing with upstate New York farmers.That principle is evident in today's suburban neighborhoods relative to city centers.London's Tube extension along the Jubilee Line, and New York City's Second Avenue Subway, showed that underground and bus transport can be financed publicly by taxing the higher rental value created for sites along such routes. Paying for capital investment out of such tax levies can provide transportation at subsidized prices, minimizing the economy's cost structure accordingly. What Joseph Stiglitz popularized as the "Henry George Law" thus more correctly should be known as "Patten's Law" of burdenless taxation.[3]

Under a regime of "burdenless taxation" the return on public investment does not take the form of profit but aims at lowering the economy's overall price structure to "promote general prosperity." This means that governments should operate natural monopolies directly, or at least regulate them. "Parks, sewers and schools improve the health and intelligence of all classes of producers, and thus enable them to produce more cheaply, and to compete more successfully in other markets."Patten concluded: "If the courts, post office, parks, gas and water works, street, river and harbor improvements, and other public works do not increase the prosperity of society they should not be conducted by the State." But this prosperity for the overall economy was not obtained by treating public enterprises as what today is called a profit center.[4]

In one sense, this can be called "privatizing the profits and socializing the losses." Advocating a mixed economy along these lines is part of the logic of industrial capitalism seeking to minimize private-sector production and employment costs in order to maximize profits. Basic social infrastructure is a subsidy to be supplied by the state.

Britain's Conservative Prime Minister Benjamin Disraeli (1874-80) reflected this principle: "The health of the people is really the foundation upon which all their happiness and all their powers as a state depend."[5]He sponsored the Public Health Act of 1875, followed by the Sale of Food and Drugs Act and, the next year, the Education Act. The government would provide these services, not private employers or private monopoly-seekers.

For a century, public investment helped the United States pursue an Economy of High Wages policy, providing education, food and health standards to make its labor more productive and thus able to undersell low-wage "pauper" labor. The aim wasto create a positive feedback between rising wages and increasing labor productivity.

That is in sharp contrast to today's business plan of finance capitalism – to cut wages, and also cut back long-term capital investment, research and development while privatizing public infrastructure. The neoliberal onslaught by Ronald Reagan in the United States and Margaret Thatcher in Britain in the 1980s was backed by IMF demands that debtor economies balance their budgets by selling off such public enterprises and cutting back social spending. Infrastructure services were privatized as natural monopolies, sharply raising the cost structure of such economies, but creating enormous financial underwriting commissions and stock-market gains for Wall Street and London.

Privatizing hitherto public monopolies has become one of the most lucrative ways to gain wealth financially. But privatized health care and medical insurance is paid for by labor and its employers, not by the government as in industrial capitalism. And in the face of the privatized educational system's rising cost, access to middle-class employment has been financed by student debt. These privatizations have not helped economies become more affluent or competitive. On an economy-wide level this business plan is a race to the bottom, but one that benefits financial wealth at the top.

Finance Capitalism Impoverishes Economies While Increasing Their Cost Structure

Classical economic rent is defined as the excess of price over intrinsic cost-value. Capitalizing this rent – whether land rent or monopoly rent from the privatization described above – into bonds, stocks and bank loans creates "virtual wealth." Finance capitalism's exponential credit creation increases "virtual" wealth – financial securities and property claims – by managing these securities and claims in a way that has made them worth more than tangible real wealth.

The major way to gain fortunes is to get asset-price gains ("capital gains") on stocks, bonds and real estate.However, this exponentially growing debt-leveraged financial overhead polarizes the economy in ways that concentrates ownership of wealth in the hands of creditors, and owners of rental real estate, stocks and bonds, draining the "real" economy to pay the FIRE sector.

Post-classical economics depicts privatized infrastructure, natural resource development and banking as being part of the industrial economy, not superimposed on it by a rent-seeking class. But the dynamic of finance-capitalist economies is not for wealth to be gained mainly by investing in industrial means of production and saving up profits or wages, but by capital gains made primarily from rent-seeking. These gains are not "capital" as classically understood. They are "finance-capital gains," because they result from asset-price inflation fueled by debt leveraging.

By inflating its housing prices and a stock market bubble on credit, America's debt leveraging, along with its financializing and privatizing basic infrastructure, has priced it out of world markets. China and other non-financialized countries have avoided high health insurance costs, education costs and other services freely or at a low cost as a public utility. Public health and medical care costs much less abroad, but is attacked in the United States by neoliberals as "socialized medicine," as if financialized health care would make the U.S. economy more efficient and competitive. Transportation likewise has been financialized and run for profit, not to lower the cost of living and doing business.

One must conclude that America has chosen to no longer industrialize, but to finance its economy by economic rent – monopoly rent, from information technology, banking and speculation, and leave industry, research and development to other countries. Even if China and other Asian countries didn't exist, there is no way that America can regain its export markets or even its internal market with its current debt overhead and its privatized and financialized education, health care, transportation and other basic infrastructure.

The underlying problem is not competition from China, but neoliberal financialization. Finance-capitalism is not industrial capitalism. It is a lapse back into debt peonage and a rentier neo-feudalism. Bankers play the role today that landlords played up through the 19 th century, making fortunes without corresponding value, by capital gains for real estate, stocks and bonds on credit, by debt leveraging whose carrying charges increase the economy's cost of living and doing business.

Today's New Cold War is a Fight by Finance Capitalism Against Industrial Capitalism

Today's world is being fractured by an economic warfare over what kind of economic system it will have. Industrial capitalism is losing the fight to finance capitalism, which is turning to be its antithesis just as industrial capitalism was the antithesis to post-feudal landlordship and predatory banking houses.

In this respect today's New Cold War is a conflict of economic systems. As such, it is being fought against the dynamic of U.S. industrial capitalism as well as that of China and other economies. Hence, the struggle also is domestic within the United States and Europe, as well as confrontational against China and Russia, Iran, Cuba, Venezuela and their moves to de-dollarize their economies and reject the Washington Consensus and its Dollar Diplomacy. It is a fight by U.S.-centered finance capital to promote neoliberal doctrine giving special tax privileges to rentier income, untaxing land rent, natural resource rent, monopoly rent and the financial sector. This aim includes privatizing and financializing basic infrastructure, maximizing its extraction of economic rent instead of minimizing the cost of living and doing business.

The result is a war to change the character of capitalism as well as that of social democracy. The British Labour Party, European Social Democrats and the U.S. Democratic Party all have jumped on the neoliberal bandwagon. They are all complicit in the austerity that has spread from the Mediterranean to America's Midwestern rust belt.

Finance capitalism exploits labor, but via a rentier sector, which also ends up cannibalizing industrial capital. This drive has become internationalized into a fight against nations that restrict the predatory dynamics of finance capital seeking to privatize and dismantle government regulatory power. The New Cold War is not merely a war being waged by finance capitalism against socialism and public ownership of the means of production. In view of the inherent dynamics of industrial capitalism requiring strong state regulatory and taxing power to check the intrusiveness of finance capital, this post-industrial global conflict is between socialism evolving out of industrial capitalism, and fascism, defined as a rentier reaction to mobilize government to roll back social democracy and restore control to the rentier financial and monopoly classes.

The old Cold War was a fight against "Communism." In addition to freeing itself from land rent, interest charges and privately appropriated industrial profits, socialism favors labor's fight for better wages and working conditions, better public investment in schools, health care and other social welfare support, better job security, and unemployment insurance. All these reforms would cut into the profits of employers. Lower profits mean lower stock-market prices, and hence fewer finance-capital gains.

The aim of finance capitalism is not to become a more productive economy by producing goods and selling them at a lower cost than competitors. What might appear at first sight to be international economic rivalry and jealousy between the United States and China is thus best seen as a fight between economic systems: that of finance capitalism and that of civilization trying to free itself from rentier privileges and submission to creditors, with a more social philosophy of government empowered to check private interests when they act selfishly and injure society at large.

The enemy in this New Cold War is not merely socialist government but government itself, except to the extent that it can be brought under the control of high finance to promote the neoliberal rentier agenda. This reverses the democratic political revolution of the 19 th century that replaced the House of Lords and other upper houses controlled by the hereditary aristocracy with more representative legislators. The aim is to create a corporate state, replacing elected houses of government by central banks – the U.S. Federal Reserve and the European Central Bank, along with external pressure from the International Monetary Fund and World Bank.

The result is a "deep state" supporting a cosmopolitan financial oligarchy. That is the definition of fascism, reversing democratic government to restore control to the rentier financial and monopoly classes. The beneficiary is the corporate sector, not labor, whose resentment is turned against foreigners and against designated enemies within.

Lacking foreign affluence, the U.S. corporate state promotes employment by a military buildup and public infrastructure spending, most of which is turned over to insiders to privatize into rent-seeking monopolies and sinecures. In the United States, the military is being privatized for fighting abroad ( e.g ., Blackwater USA/Academi), and jails are being turned into profit centers using inexpensive convict labor.

What is ironic is that although China is seeking to decouple from Western finance capitalism, it actually has been doing what the United States did in its industrial takeoff in the late 19 th and early 20 th century. As a socialist economy, China has aimed at what industrial capitalism was expected to achieve: freeing its economy from rentier income (landlordship and usurious banking), largely by a progressive income tax policy falling mainly on rentier income.

Above all, China has kept banking in the public domain. Keeping money and credit creation public instead of privatizing it is the most important step to keep down the cost of living and business. China has been able to avoid a debt crisis by forgiving debts instead of closing down indebted enterprises deemed to be in the public interest. In these respects it is socialist China that is achieving the fate that industrial capitalism initially was expected to achieve in the West.

Summary: Finance Capital as Rent-Seeking

The transformation of academic economic theory under today's finance capitalism has reversed the progressive and indeed radical thrust of the classical political economy that evolved into Marxism. Post-classical theory depicts the financial and other rentier sectors as an intrinsic part of the industrial economy. Today's national income and GDP accounting formats are compiled in keeping with this anti-classical reaction depicting the FIRE sector and its allied rent-seeking sectors as an addition to national income, not a subtrahend. Interest, rents and monopoly prices all are counted as "earnings" – as if all income is earned as intrinsic parts of industrial capitalism, not predatory extraction as overhead property and financial claims.

This is the opposite of classical economics. Finance capitalism is a drive to avoid what Marx and indeed the majority of his contemporaries expected: that industrial capitalism would evolve toward socialism, peacefully or otherwise.

Some Final Observations: Financial Takeover of Industry, Government and Ideology

Almost every economy is a mixed economy – public and private, financial, industrial and rent-seeking. Within these mixed economies the financial dynamics – debt growing by compound interest, attaching itself primarily to rent-extracting privileges, and therefore protecting them ideologically, politically and academically. These dynamics are different from those of industrial capitalism, and indeed undercut the industrial economy by diverting income from it to pay the financial sector and its rentier clients.

One expression of this inherent antagonism is the time frame. Industrial capitalism requires long-term planning to develop a product, make a marketing plan, and undertake research and development to keep undercutting competitors. The basic dynamic is M-C-M': capital (money, M) is invested in building factories and other means of production, and employing labor to sell its products (commodities, C) at a profit (M').

Finance capitalism abbreviates this to a M-M', making money purely financially, by charging interest and making capital gains. The financial mode of "wealth creation" is measured by the valuations of real estate, stocks and bonds. This valuation was long based on capitalizing their flow of revenue (rents or profits) at the going rate of interest, but is now based almost entirely on capital gains as the major source of "total returns."

In taking over industrial companies, financial managers focus on the short run, because their salary and bonuses are based on current year's performance. The "performance" in question is stock market performance. Stock prices have largely become independent from sales volume and profits, now that they are enhanced by corporations typically paying out some 92 percent of their revenue in dividends and stock buybacks.[6]

Even more destructively, private capital has created a new process: M-debt-M'. One recent paper calculates that: "Over 40% of firms that make payouts also raise capital during the same year, resulting in 31% of aggregate share repurchases and dividends being externally financed, primarily with debt."[7]This has made the corporate sector financially fragile, above all the airline industry in the wake of the COVID-19 crises.

Private equity has played a big role in increasing corporate leverage, both through their own actions and by disinhibiting large public companies in the use of debt. As Eileen Appelbaum and Rosemary Batt explained, the large buyout firms, following the playbook developed in the 1980s, produce their returns from financial engineering and cost cutting (smaller size deals target "growthier" companies, but while those private equity firms assert that they add value, it may just be that they are skilled at identifying promising companies and riding a performance wave). Contrary to their marketing, private equity fee structures mean they make money even when they bankrupt firms. And they have become so powerful that it's hard to get political support to stop them when they hurt large numbers of citizens though exploitative practices like balance ("surprise")billing. [8]

The classic description of this looting-for-profit practice process is the 1993 paper by George Akerloff and Paul Romer describing how "firms have an incentive to go broke for profit at society's expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations."[9]

The fact that "paper gains" from stock prices can be wiped out when financial storms occur, makes financial capitalism less resilient than the industrial base of tangible capital investment that remains in place. The United States has painted its economy into a corner by de-industrializing, replacing tangible capital formation with "virtual wealth," that is, financial claims on income and tangible assets. Since 2009, and especially since the Covid crisis of 2020, its economy has been suffering through what is called a K-shaped "recovery." The stock and bond markets have reached all-time highs to benefit the wealthiest families, but the "real" economy of production and consumption, GDP and employment, has declined for the non- rentier sector, that is, the economy at large.

How do we explain this disparity, if not by recognizing that different dynamics and laws of motion are at work? Gains in wealth increasingly take the form of a rising valuation of rentier financial and property claims on the real economy's assets and income, headed by rent-extraction rights, not means of production.

Finance capitalism of this sort can survive only by drawing in exponentially increasing gains from outside the system., either by central bank money creation (Quantitative Easing) or by financializing foreign economies, privatizing them to replace low-priced public infrastructure services with rent-seeking monopolies issuing bonds and stocks, largely financed by dollar-based credit seeking capital gains. The problem with this financial imperialism is that it makes client host economies as high-cost as their U.S. and other sponsors in the world's financial centers.

All economic systems seek to internationalize themselves and extend their rule throughout the world. Today's revived Cold War should be understood as a fight between what kind of economic system the world will have. Finance capitalism is fighting against nations that restrict its intrusive dynamics and sponsorship of privatization and dismantling of public regulatory power. Unlike industrial capitalism, the rentier aim is not to become a more productive economy by producing goods and selling them at a lower cost than competitors. Finance capitalism's dynamics are globalist, seeking to use international organizations (the IMF, NATO, the World Bank and U.S.-designed trade and investment sanctions.) to overrule national governments that are not controlled by the rentier classes. The aim is to make all economies into finance-capitalist layers of hereditary privilege, imposing austerity anti-labor policies to squeeze a dollarized surplus.

Industrial capitalism's resistance to this international pressure is necessarily nationalist, because it needs state subsidy and laws to tax and regulate the FIRE sector. But it is losing the fight to finance capitalism, which is turning to be its nemesis just as industrial capitalism was the nemesis of post-feudal landlordship and predatory banking. Industrial capitalism requires state subsidy and infrastructure investment, along with regulatory and taxing power to check the incursion of finance capital. The resulting global conflict is between socialism (the natural evolution of industrial capitalism) and a pro- rentier fascism, a state-finance-capitalist reaction against socialism's mobilization of state power to roll back the post-feudal rentier interests.

Underlying today's rivalry felt by the United States against China is thus a clash of economic systems. The real conflict is not so much "America vs. China," but finance capitalism vs. industrial "state" capitalism/socialism. At stake is whether "the state" will support financialization benefiting the rentier class or build up the industrial economy and overall prosperity.

Apart from their time frame, the other major contrast between finance capitalism and industrial capitalism is the role of government. Industrial capitalism wants government to help "socialize the costs" by subsidizing infrastructure services. By lowering the cost of living (and hence the minimum wage), this leaves more profits to be privatized. Finance capitalism wants to pry these public utilities away from the public domain and make them privatized rent-yielding assets. That raises the economy's cost structure – and thus is self-defeating from the vantage point of international competition among industrialists.

That is why the lowest-cost and least financialized economies have overtaken the United States, headed by China. The way that Asia, Europe and the United States have reacted to the covid-19 crisis highlights the contrast. The pandemic has forced an estimated 70 percent of local neighborhood restaurants to close in the face of major rent and debt arrears. Renters, unemployed homeowners and commercial real estate investors, as well as numerous consumer sectors are also facing evictions and homelessness, insolvency and foreclosure or distress sales as economic activity plunges.

Less widely noted is how the pandemic has led the Federal Reserve to subsidize the polarization and monopolization of the U.S. economy by making credit available at only a fraction of 1 percent to banks, private equity funds and the nation's largest corporations, helping them gobble up small and medium-sized businesses in distress.

For a decade after the Obama bank-fraud bailout in 2009, the Fed described its purpose as being to keep the banking system liquid and avoid damage to its bondholders, stockholders and large depositors. The Fed infused the commercial banking system with enough lending power to support stock and bond prices. Liquidity was injected into the banking system by buying government securities, as was normal. But after the covid virus hit in March 2020, the Fed began to buy corporate debt for the first time, including junk bonds. Former FDIC head Sheila Bair and Treasury economist Lawrence Goodman note, the Federal Reserve bought the bonds "of 'fallen angels' who sank to junk status during the pandemic" as a result of having indulged in over-leveraged borrowing to pay out dividends and buy their own shares.[10]

Congress considered limiting companies from using the proceeds of the bonds being bought "for outsize executive compensation or shareholder distributions" at the time it approved the facilities. but made no attempt to deter companies from doing this. Noting that "Sysco used the money to pay dividends to its shareholders while laying off a third of its workforce a House committee report found that companies benefiting from the facilities laid off more than one million workers from March to September." Bair and Goodman conclude that "there's little evidence that the Fed's corporate debt buy-up benefited society." Just the opposite: The Fed's actions "created a further unfair opportunity for large corporations to get even bigger by purchasing competitors with government-subsidized credit."

The result, they accuse, is transforming the economy's political shape. "The serial market bailouts by monetary authorities – first the banking system in 2008, and now the entire business world amid the pandemic" has been "a greater threat [to destroy capitalism] than Bernie Sanders." The Fed's "super-low interest rates have favored the equity of large companies over their smaller counterparts," concentrating control of the economy in the hands of firms with the largest access to such credit.

Smaller companies are "the primary source of job creation and innovation," but do not have access to the almost free credit enjoyed by banks and their largest customers. As a result, the financial sector remains the mother of trusts, concentrating financial and corporate wealth by financing a gobbling-up of smaller companies as giant companies to monopolize the debt and bailout market.

The result of this financialized "big fish eat little fish" concentration is a modern-day version of fascism's Corporate State. Radhika Desai calls it "creditocracy," rule by the institutions in control of credit.[11]It is an economic system in which central banks take over economic policy from elected political bodies and the Treasury, thereby completing the process of privatizing economy-wide control.

Industrial Capitalism's aims Finance Capitalism's aims

Make profits by producing products Extract economic rent and interest
Minimize the cost of living and prices Add land and monopoly rent to prices
Favor industry and labor. Give special tax favoritism to the finance, insurance and real estate (FIRE) sectors.
Minimize land rent and housing costs by taxing land rent and other rent-yielding assets, not capital or wages Shift taxes off land-rent taxation to leave it available to pay as interest to mortgage bankers
Provide public infrastructure at low cost Privatize infrastructure into monopolies to extract monopoly rent
Reform parliaments to block rent-seeking

Avoid military spending and wars that require running into foreign debt

Block democratic reform, by shifting control to non-elected officials

Use international organization (such as the IMF or NATO) to force neoliberal policy

Concentrate economic and social planning in the political capital. Shift planning and resource allocation to the financial centers.
Concentrate monetary policy in the national treasury Shift monetary policy to central banks, representing private commercial banking interests.
Bring prices in line with cost-value Maximize opportunities for rent seeking via land ownership, credit and monopoly privileges
Banking should be industrialized to finance tangible capital investment Banks lend against collateral, bidding up asset prices, especially for rent-yielding assets
Recycle corporate revenue is into capital investment in new means of production Pay out revenue as dividends or use it for stock buybacks to increase stock price gains
The time frame is long-term to develop products and marketing plans: M-C-M' The time frame is short-term, hit-and-run by financial speculation, M-M'.
Industrial engineering to raise productivity by research and development and new capital investment. Financial engineering to raise asset prices – by stock buybacks and higher dividend payouts.
Focuses on long-term development of industrial capitalism as a broad economic system. Short-term hit-and-run objectives, mainly by buying and selling assets.
Economy of High Wages, recognizing that well fed, well-educated labor with leisure is more productive than low-priced "pauper" labor, and long-term employment A race to the bottom, burning out employees and replacing them with new hires.

Mechanization of labor treats workers as easily replaceable and hence disposable.

M-C-M' Profits are made by investing in means of production and hiring labor to produce commodities to sell at a higher price than what it costs to employ labor. M-M' "Capital" gains made directly by asset-price inflation
Banking is industrialized, to provide credit mainly to invest in new capital formation. This increased credit tends to bid up commodity prices and hence the living wage. Increased bank credit to finance the bidding up of housing, stocks and bonds raises the cost of housing and of buying pension income, leaving less to spend on goods and services.
Supports democracy to the extent that the lower house will back industrial capital in its fight against the landlord class and other rentiers, whose revenue adds to prices without adding value. Finance capital joins with "late" industrial capitalism to oppose pro-labor policies. It seeks to take over government, and especially central banks, to support prices for stocks, bonds, real estate and packaged bank loans gone bad and threatening banks with insolvency.
Industrial capitalism is inherently nationalistic, requiring government protection and subsidy of industry. Finance capital is cosmopolitan, seeking to prevent capital controls and impose free trade and libertarian anti-government policy.
Supports a mixed economy, with government paying for infrastructure to subsidize private industry. Government works with industry and banking to create a long-term growth plan for prosperity. Seeks to abolish government authority in all areas, so as to shift the center of planning to Wall Street and other financial centers.

The aim is to dismantle protection of labor and industry together.

Banking and credit are industrialized. Industry is financialized, with profits used mainly to increase stock prices via stock buyback programs and dividend payouts, not new R&D or tangible investment.
Favor industry and labor. Give special tax favoritism to the finance, insurance and real estate (FIRE) sectors.

__________

[1]I provide the charts in The Bubble and Beyond (Dresden: 2012), Chapters 7 and 8, and Killing the Host (Dresden: 2015).

[2]"The Theory of Dynamic Economics," Essays in Economic Theory ed. Rexford Guy Tugwell (New York: 1924), pp. 96 and 98, originally in The Publications of the University of Pennsylvania , Political Economy and Public Law Series 3:2 (whole No. 11), 1892, p. 96. Europe's aristocratic governments developed their tax policy "at a time when the state was a mere military organization for the defense of society from foreign foes, or to gratify national feelings by aggressive wars." Such states had a "passive" economic development policy, and their tax philosophy was not based on economic efficiency. I provide the details in "Simon Patten on Public Infrastructure and Economic Rent Capture," American Journal of Economics and Sociology 70 (October 2011), pp. 873-903.

[3]George advocated a land tax, but his opposition to socialism led him to reject the value and price concepts necessary to define economic rent quantitatively. His defense of bankers and interest rendered his policy recommendations ineffective as he moved to the libertarian right wing of the political spectrum, opposing government investment but merely taxing the rent taken by privatizers – the reverse of what Patten and his pro-industrial school of economists were advocating, based on classical value and price theory.

[4]"The Theory of Dynamic Economics," p. 98.

[5]Speech of June 24, 1877. He used Latin and said " Sanitas, Sanitatum " and translated it as "Sanitation, all is sanitation." It was a pun on a more famous aphorism, " Vanitas, vanitatum ," "Vanity, all is vanity."

[6]William Lazonick, "Profits Without Prosperity:Stock Buybacks Manipulate the Market and Leave Most Americans Worse Off," Harvard Business Review , September 2014. And more recently, Lazonick and Jang-Sup Shin, Predatory Value Extraction: How the Looting of the Business Corporation Became the U.S. Norm and How Sustainable Prosperity Can Be Restored (Oxford: 2020).

[7]Joan Farre-Mensa, Roni Michaely, Martin Schmalz, "Financing Payouts," Ross School of Business Paper No. 1263 (December 1, 2020), quoted by Matt Stoller,"How to Get Rich Sabotaging Nuclear Weapons Facilities," BIG, January 3, 2021.

[8] Eileen Appelbaum and Rosemary Batt, Private Equity at Work: When Wall Street Manages Main Street (Russell Sage: 2014). See also Eileen Appelbaum, Written Testimony before the U.S. House of RepresentativesCommittee on Financial Services , November 19, 2020.

[9]George Akerloff and Paul Romer, "Looting: The Economic Underworld of Bankruptcy for Profit,"https://www.brookings.edu/wp-content/uploads/1993/06/1993b_bpea_akerlof_romer_hall_mankiw.pdf

[10]Sheila Bair and Lawrence Goodman, "Corporate Debt 'Relief' Is an Economic Dud," Wall Street Journal , January 7, 2021.

[11]Desai, Radhika. 2020.'The Fate of Capitalism Hangs in the Balance of International Power'. Canadian Dimension, 12 October. https://canadiandimension.com/articles/view/the-fate-of-capitalism-hangs-in-the-balance-of-international-power . See also Geoffrey Gardiner, Towards True Monetarism (Dulwich: 1993) and The Evolution of Creditary Structure and Controls (London: Palgrave, 2006) and the post-Keynesian group Gang of 8 popularized the term "creditary economics" in the 1990s.


Roquentin , January 26, 2021 at 8:21 am

I don't think I'm really on board with this strict separation between finance capital and industrial capital. Marx got a lot right, but one of many things he got wrong was actually buying into the emancipatory potential of capitalism.

He mistakenly saw the market and its logic as some sort of quasi-autonomous, internally functioning thing with scientific laws which governed its motion (this is literal, hence he and Engels talking about "scientific socialism"). He missed that the capitalist marketplace and money itself were always already political, neither of which have any independent existence from the institutions which create them.

I believe we have seen a rise in "rentier" capitalism less because it is fundamentally different than industrial capital and more because the rich and powerful long ago realized that there is no "free market" and that they could construct the market legally and politically in precisely the way which allows them to maintain and expand their wealth and power.

Marx, for all his polemics against capitalism was actually too wrapped up in its logic to see this part of it. He didn't really grasp that the supposed laws of the marketplace could be bent or broken at will be the people with the means to do so (hence, "too big to fail"), thought the laws of capitalism were something like laws of nature instead of pure fiat made by people.

That's the mistake. At some point the elite just realized that the "free market," far from threatening them was the most effective way to maintain their control of society.

Darthbobber , January 26, 2021 at 11:06 am

At least in Capital, I don't see this as Marx's mistake. It is not the dominance of Capital itself that he sees as potentially emancipatory, but the actual increase in the ability to generate surplus that it creates, which could be deployed to other ends if the system were surpassed. (And for Marx, it's "progressive" function was already firmly in the past.)

The absolute Hellscape created for the working class, the degradation of the environment, and other disasters he saw as baked into the system. And this did not depend on whether industrial or finance capital predominated. He certainly would never have deluded himself with the belief that "the euthanasia of the rentiers" would fix things. That was left to a later economist.

I think that Marx regarded the "laws" of capitalism as different from what you seem to be calling laws.

He was of course in no position to observe the ever-accelerating tinkering with the supposed laws of the system that we've been witness to for many decades, but what he did see, and what he analyzed in the form of various proposals to eliminate the "bad" effects of the system while retaining it's essential characteristics he saw as perhaps capable of altering the ways in which crises manifested but not of avoiding the crises.

This isn't really adequately expressed, but I'm working from my little Lenovo touchscreen and am disinclined to do longer exposition until I have a keyboard available.

Susan the other , January 27, 2021 at 1:56 pm

At the end of the 19th C. with capitalism exploiting the environment like never before the reaction in the art world was to romanticize nature. Dream-scapes of mystical nature. Followed soon by goofball tourism in model-Ts. The industrial revolution was the economic singularity at the beginning of automation. It gave us the ability to accumulate wealth in a whirlwind. But it lasted barely a century. At which point nature was no longer beautiful and mystical – it was completely trashed. So this went hand in glove with a population explosion and capitalism because it required both. Which is now totally counterproductive. In fact self-destructive. And instead of letting the whole thing implode, bringing essential resources and services to a screeching halt, we are (apparently) financializing the economy.

M-C-M has become M-debt-M. At least this eliminates the ravaging of the environment at ever accelerated consumption. What we need, I submit, is M – environment – M. We need to increase our national and state legislatures by adding a new branch of lawmakers – scientists, now especially environmental scientists, but science in all its branches. And give science full political authority, along with vested financial interests. Balance sheets can be manipulated; money can be digitized; but the environment is the only thing that counts.

James Simpson , January 26, 2021 at 9:23 am

All this and not a word about the consequences for the world of 'productive' industrial capitalism. The need to produce so-called goods endlessly and in increasing quantities is destroying the planet yet the author seems to regard it as something to which a society should aspire. Capitalism itself, with its inherent drive for endless economic growth, is incompatible with a finite planet. Even some capitalists realise this and suggest, hopelessly, that we must immediately and seriously look for ways to expand beyond this planet. A piece elsewhere on this site today about Jeffrey Epstein labels him a 'child rapist' in a way that suggests his activities promoting capitalism were more respectable. 'Capitalist' should carry the same stigma. Or is the extinction of all complex life – as esteemed climate scientists are telling us we are headed for if we don't stop this growth obsession – a less wicked end than a sex crime?

Ian Ollmann , January 26, 2021 at 9:57 am

We could use more production of solar panels, wind turbines and electric transportation.
We could use an enriched working class with the wherewithal to replace their carbon sourced living standard with a green one.

Roquentin , January 26, 2021 at 10:17 am

This is a really good point. Just producing something doesn't produce a net gain for society. I once had this idea that someone with a better background in economics than I have should write a long essay or a book about how the rise of advertising in the 1950s coincided with the need of industrial capitalists to create demand out of thin air for the products they were producing. When the actual need for your products doesn't exist, we figured out how to manufacture demand as well. Up to that point, capitalism had mostly been concerned with the supply side of production but the advent of marketing, advertising, and PR was all about managing the demand/consumption side as well.

This is another way the rentier/industrial capitalist distinction breaks down. Both are beholden to the same interests.

rob , January 26, 2021 at 10:45 am

There was a book called "from the wonderful folks who brought you pearl harbor", which (in a light hearted way) dealt with madison ave (the series mad men was supposedly taken from this story line) and the creation of "consumers" . in the fifties The real time version would be george seldes' works multiple books.. and he had a publication called "in fact" which dealt with the "association of national manufacturers" and how they were controlling the media of the day though advertising.

He was doing stories about the dangers of tobacco and the industry killing of all stories dealing with negative facts about tobacco, back in the forties and fifties.. A great book was "witness to a century"

It blows my mind that just about everything going on today, has been cooking for about a century and we act like us "figuring it out" is a big deal . we must be one smart species.

Darthbobber , January 26, 2021 at 12:59 pm

This theme gets a significant amount of space in Baran and Sweezy's "Monopoly Capital (1966), in the chapter on the Sales Effort in particular, but also scattered elsewhere throughout the book.

tegnost , January 26, 2021 at 12:15 pm

au contraire. I say it's described as part and parcel of finance capitalism. The extractive industries create a surplus of material that must then be sold (analogous is the need to have a war in order to create the need for more bullets), and the extractors get a massive land rent bonus as the resource is given to them free of charge, and they also benefit from tax advantages and land appreciation facilitated by the aforementioned finance capitalism . How much of the bezos fortune has been acquired through selling counterfeit goods touted by fake reviews on the product quality? More junk, sold faster. delivered by an army of gig workers driving individual polluting cars and the notion that an electric or hybrid bus should be replaced by an army of uber drivers, until they don;)t need them anymore

From the above "The oil and mining industries likewise are notoriously exempt from income taxation on their natural-resource rents. For a long time the depletion allowance allowed them tax credit for the oil that was sold off, enabling them to buy new oil-producing properties (or whatever they wanted) with their supposed asset loss, defined as the value to recover whatever they had emptied out. There was no real loss, of course. Oil and minerals are provided by nature."

Kirk Seidenbecker , January 27, 2021 at 3:33 am

From Buckminster Fuller's last book 'Critical Path' –

" approximately 60 percent of the employed in U.S. America are working at tasks that are not producing any life support .Which would cost society the least: to carry on as at present, trying politically to create more no-wealth producing jobs, or paying everybody handsome fellowships to stay at home and save all those million-dollar-each gallons of petroleum?"

Maybe it's time to give the environment a breather from human 'production'. Ecosystems have been loving COVID-19.

Ian Ollmann , January 26, 2021 at 9:54 am

Excellent article!
Thank you.

It is time we boycott the FIRE sector.

TomDority , January 26, 2021 at 10:25 am

I think their exists a confusion as to what constitutes- or is not included in the term – Productive industrial capitalism.

I think the term 'Industrial' evokes images of smoke stacks, endless pollution, misery and environmental degradation and excludes a positive side that includes polution elimination, contained systems, environmental resoration and blooming, happiness and mission, higher and more meaningfull fullfillment.

I think the term 'Productive' evokes images of so-called goods as being created endlessly while destroying the planet – whereas restoration of soils and environment on an industrial scale and the resultant beneficiary of goods produced for the enablement of biodiversity.

Further, a large component of the term 'productive' having negative connotations is a direct result of Financial capitalism's take over and, deceptive use of terms and language – they were led by the computer revolutions use of terms and language taken from long used context and applied to their own narrow doings – See Michael Hudson's -J is for Junk Economics.

This same de-focusing and sly re-working of definitions has left a majority of folks believing that banks use peoples savings to lend out to people trying to start a business, buy a home, or to business to increase production – and not the reality of most of it being to boost asset prices and de-regulate any type financial gambling and shicanery – . And what does it say about economics as science? where economics pretends that itself is self correcting and not entropic like about everything else, will take bad actors out of the equation of the free market, will produce good corporate citizens, and claims creative destruction without realizing that destruction applies to only those things previously created.

When has the production of good corporate citizens outweighed the destructive capacity of those produced bad corporate citizens.

There seems to be no distinction between the predatory, destructive and harmful capitalist corporation that only contributes to overhead, misery and deductive as opposed to productive – that and, those that are productive, useful and positive for all species and the planet.

Mother nature and this planet does not hold humans in as high esteem as we humans do – if you are religious – I don't think god does either.
Sorry

Paul Boisvert , January 26, 2021 at 11:40 am

For a critique of Hudson's argument by a fellow marxist economist, JW Mason, to whom NC occasionally has linked, see:

http://jwmason.org/slackwire/has-finance-capitalism-destroyed-industrial-capitalism/

Mason is a careful and thoughtful economist, so his take is well worth reading. He points out that interest payments as a percent of GDP fluctuate with time and Fed-interest rate setting, and in fact are currently back down to roughly the same level as in 1975. I checked some FRED graphs, and this is true for both business interest payments and household interest payments.

He also points out that increases in relative financialization vs. industrialization have generally varied globally, with one area's increase in one aspect balanced by another area's increase in the other. And while US primary manufacturing has decreased, companies like Amazon, Walmart, and Google are still "industry", as they produce usable consumer services (mainly logistical and distributional) that are not "financial". Mason points out that most top fortunes in the US are still made in such "industrial" realms, not financial.

As Hudson agrees that Marx understood, Mason points out that industrial capitalists still extract "exploitative rent", in the form of profit extracted from the labor power of workers, via the capitalists' collective monopoly on the means of production. He feels that both industrial and financial capitalism are largely inseparable and essential (to the extractors) to the extraction of surplus value from workers.

Kilgore Trout , January 26, 2021 at 1:38 pm

Impressive article. Thanks for posting it, Yves.

I'm not sure I fully buy Mason's argument in PB's comment that Amazon, Walmart, et al are "industry". Clearly, they've superseded Main St as agents to abet consumer culture, and may do so more efficiently (thus adding to GDP), but can this part of the service industry truly be labelled as "industrial"? It seems to me they're old wine in new bottles, so isn't it a zero sum, at least in the long run? They've really only made it easier for consumers to increase their indebtedness–it's just a click away instead of a drive away–so are a more efficient way to abet the FIRE sector more than the industrial sector, especially since so much of what is on offer is now made offshore.

Further, as JS points out, we need to know how to get to some sort of sustainable economy before the whole thing collapses. Somehow the financial capitalism vs industrial capitalism conflict has to be replaced, which will require strong government and far-sighted leaders–both in short supply thanks to Neoliberalism. As many at NC have pointed out, we are now in a race between nuclear armageddon and climate armageddon. But it's good to know where we are, and how we got here, if we are to find our way out of our present predicament.

Paul Boisvert , January 26, 2021 at 3:20 pm

Kilgore,
Good points. Re Walmart, etc., and the label "industrial", Mason's point is simply that those firms aren't "financial", i.e., not in the FIRE sector, and hence aren't what Hudson says he's upset with. Yet (claims Mason, I haven't checked), they are the sort of firms, rather than FIRE, that comprise the dominant chunk of the wealthiest US firms, and of wealth generation in general.

Mason would agree that the problem isn't about one type of capitalism vs. another, but about the whole inhuman, exploitative, unsustainable capitalist shebang.

One point re FIRE that neither Hudson nor Mason address is Dean Baker's take: that much of what should rightfully be "labor's" share of GDP doesn't actually instead go to "capitalists" as "profit" OR to rentiers as interest or rent. It simply goes as wages/salaries to the very highest-paid (and increasingly so) laborers, as opposed to the bottom 90% of laborers. Most top professionals and managers of firms are not "owners", hence they "work" for a living–but they get paid these days predominatly via wages and salaryies that have skyrocketed. And FIRE is indeed in this case a major offender, as Dean points out.

While one could argue that these are simply "profits by a different name", the point is that such employees actually have no "owners" right to the salaries, unlike true owners' rights to (all) profit. They do have a lot of cronyistic, informal power, however. Baker suggests several ways to regulate and lower their salaries, both for finance (a financial transactions tax), and for all corporations in general. This would free up money to go to the lower-paid workers and/or customers of these extractive firms.

Grebo , January 26, 2021 at 8:24 pm

Shareholders of public companies do not actually own the company [David Ciepley] and very few have a controlling stake either. Given the supine boards of most companies the CEOs have effectively complete control and should be considered functionally equivalent to the "capitalists" of lore. What with their options and so forth they are adept at joining the ranks of "owners" even if they started as "laborers".

Baker has some good ideas, incremental style, but I don't get a sense he has a big picture like Hudson. Mason quibbles over details just for the sake of it, it seems to me.

Yves Smith , January 26, 2021 at 10:06 pm

We've regularly referred to the landmark article by Amar Bhide, Efficient Markets, Deficient Governance, which lays out longer form how US regulations by preferring liquid markets, have created anonymous, transient, arms-length shareholders who do not exercise control over companies, and due to the need to keep strategically sensitive information confidential, are incapable of supervising them properly even if they had the power to do so.

https://hbr.org/1994/11/efficient-markets-deficient-governance

Jeremy Grimm , January 26, 2021 at 5:17 pm

The very first sentence of Michael Hudson's post targets: "the landlords, bankers and monopolists extracting economic rent without producing real value." I believe Amazon, Walmart, et al. fit the category of monopolists extracting economic rent without producing value. The FIRE sector was prominent but not the only target of Hudson's post. I think Mason works hard to mince Hudson's words -- to no useful end. "He[Mason] feels that both industrial and financial capitalism are largely inseparable and essential (to the extractors) to the extraction of surplus value from workers." I believe firms that make physical products, like automobiles or light bulbs, and select top management from their engineering and production staff have proved very different in their operations than the same firms run by top management selected from their financial staff.

KMD , January 26, 2021 at 6:22 pm

Boeing being a prime example of the latter.

McWatt , January 26, 2021 at 12:33 pm

Michael Hudson is a God That Walks the Planet!!!!!!!!!!

Jonathan Holland Becnel , January 27, 2021 at 10:43 am

"WE'RE NOT WORTHY!!!" – Wayne's World

icancho , January 26, 2021 at 5:06 pm

Regarding "Deep States" and such, their enforcers, IMF, WB etc:

A fascinating history of shifts in the structure and functioning of the Japanese economy -- essentially from serving the population to serving the speculators -- promoted by a subverted Japanese Central Bank, facilitated and encouraged by the IMF is to be found in this documentary based on Richard Werner's " Princes of the Yen ": https://www.youtube.com/watch?v=p5Ac7ap_MAY

Sound of the Suburbs , January 27, 2021 at 4:05 am

Don't get confused between making money and creating wealth.

When you equate making money with creating wealth, people try and make money in the easiest way possible, which doesn't actually create any wealth.
In 1984, for the first time in American history, "unearned" income exceeded "earned" income. The American have lost sight of what real wealth creation is, and are just focussed on making money. You might as well do that in the easiest way possible. It looks like a parasitic rentier capitalism because that is what it is.

Bankers make the most money when they are driving your economy into a financial crisis. They will load your economy up with their debt products until you get a financial crisis. On a BBC documentary, comparing 1929 to 2008, it said the last time US bankers made as much money as they did before 2008 was in the 1920s. https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6

At 18 mins. The bankers loaded the US economy up with their debt products until they got financial crises in 1929 and 2008. As you head towards the financial crisis, the economy booms due to the money creation of bank loans.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

The financial crisis appears to come out of a clear blue sky when you use an economics that doesn't consider debt, like neoclassical economics.

Once you have a firm grip on what wealth creation and money really are; it all becomes clear.

Banks – What is the idea? The idea is that banks lend into business and industry to increase the productive capacity of the economy. Business and industry don't have to wait until they have the money to expand. They can borrow the money and use it to expand today, and then pay that money back in the future.
The economy can then grow more rapidly than it would without banks.

Debt grows with GDP and there are no problems. The banks create money and use it to create real wealth.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

Sound of the Suburbs , January 27, 2021 at 4:11 am

Who are these mugs?
https://www.housepricecrash.co.uk/forum/uploads/monthly_2018_02/Screen-Shot-2017-04-21-at-13_53_09.png.e32e8fee4ffd68b566ed5235dc1266c2.png
That's us in the UK. We let the bankers load our economy up with their debt products until we got a financial crisis.

Can you see when we started using an economics that doesn't consider private debt? It's not hard, don't over think it.

Ludus57 , January 27, 2021 at 9:21 am

The interesting point about China would seem to be that, having seen the results that Financialisation has produced in the West, they are determined to avoid it.

Of course it might be worth adding that it required overturning the lessons of the '30s and comprehensive deregulation for us to end up where we are, and I cannot see the People's Bank of China ignoring their own analysis of (Western) capitalism to allow a similar fate to befall their own system. Debt has place and role to play, but ruling the system, as today, is certainly not it.

In economics they have obviously heeded their lessons well. It's the social side that needs more attention.

Jonathan Holland Becnel , January 27, 2021 at 10:40 am

As someone whos relatively new to Marxist Literature, I find Michael Hudson's writing to be very readable. Thanks for posting :)

#HUDSONHAWK
#HUDSON2024

[Jan 27, 2021] The 1932 Glass-Steagall legislation and the act based on it did service in that respect up until the late 1990s when it was repealed by the Clinton government

Notable quotes:
"... In reforming the US financial industry, you would need to separate savings and trading banks from investment banks. The 1932 Glass-Steagall legislation and the act based on it did service in that respect up until the late 1990s when it was repealed by the Clinton government. In some countries (Japan being a notable example), the postal service performs savings bank functions. ..."
Jan 27, 2021 | www.moonofalabama.org

karlof1 , Jan 26 2021 23:04 utc | 73

dan of steele @44--

What in your opinion would be the proper approach [for the Outlaw US Empire to engage China]? I ask that seriously.

Assuming my reengineering your query is correct, I provided an answer well prior to the 2016 election--Give up on Neoliberalism, the pursuit of Empire and Zero-sumism; go back to obeying the UN Charter and US Constitution while following the latter's instructions located in the Preamble; and join with normal nations to help others develop via a global BRI as a partner with China. Given current political realities, that's just not going to happen. Instead, I propose the following:

Throw the "vested interests" overboard and work in a Win-Win manner for humanity like China, its Eurasian Bloc partners, and other like-minded nations. Fundamentally, the pursuit of Empire and the #1 policy goal of attaining Full Spectrum Domination must be renounced forever with corresponding adjustments made to the federal government--one of those being an intense auditing of the entire national defense structure and arrest of those who've defrauded it for decades. Second, Repeal the Federal Reserve Act and make banking a public utility, and at the same time arrest the fraudulent banks's and Wall Street firms's people, seize their assets, and reincorporate the mess into the Treasury Department. Third, repeal the 1947 National Security Act and all subsequent acts that are incompatible with the ideal of freedom--Yes, that includes the Patriot Act and such. Fourth, eliminate the Electoral College via a Constitutional amendment that also makes all elections publicly financed, mandates a finite amount of free media coverage, removes restrictions on requirements for appearing on a ballot, and makes "Democracy's Gold Standard" the law of the land. Eliminate the FBI, the Department of Homeland Security and all other armed agencies not directly concerned with safeguarding the public welfare against the designs of Corporations, which was the original regulatory rationale adopted in the late 1890s and 1900s. Use existing Anti-Trust legislation to break up corporations with oligopolistic power. Legislate Social Media and all other natural monopolies to be public utilities, that would also include public health. Eliminate the Death Penalty except for Treason and committing an act of corruption while holding public office at any level of government. Seriously consider removing all regulatory agencies from the Executive and placing them within a Fourth Branch, The Regulatory Branch, which would be non-partisan and electoral for 8 years while eliminating the "Revolving Door." Alter the system of taxation to eliminate any possibility of attaining a "Free Lunch" while paying particular attention to Capital Gains instead of payroll income.

It's very likely I omitted a few items, but IMO the above are the most important. Clearly, the current political paradigm would need drastic alteration for the above, although I doubt any of the above would be objectionable to a majority of the public once reasons were provided--which is to say, none of it's really radical since most of what's being rejected was reactionary to begin with. Doing all that would turn the clock back 120+ years in many cases prior to the time when nascent Neoliberals captured the federal government and began their alterations in 1913. It's very interesting to note the biggest political force against Wilsonian Democracy as it was euphemized was Teddy Roosevelt and his Square Deal for the American Proletariat. Yet ironically, he made it possible for Wilson to win the election, and WW1 would have altered his program in some never to be known manner.

Thanks for asking your question dan of steele as I haven't put any of that together for quite awhile. Until the "vested interests" are removed, however, nothing's going to change for the better, including relations with China, making their removal the required first step.


Jen , Jan 26 2021 23:47 utc | 76

karlof1 @ 73:

In reforming the US financial industry, you would need to separate savings and trading banks from investment banks. The 1932 Glass-Steagall legislation and the act based on it did service in that respect up until the late 1990s when it was repealed by the Clinton government. In some countries (Japan being a notable example), the postal service performs savings bank functions.

The system of taxation to be based on land taxation over income taxation.

Stock market transactions to be subject to a transaction fee charged to sellers that is a percentage of the profit they make on selling stocks. For that matter, stock exchanges should be public utilities subject to regulation.

Investopedia: Who Owns The Stock Exchanges?

... Tokyo Stock Exchange
The third-largest stock exchange in the world is also the largest to not be publicly-traded. Though the Tokyo Stock Exchange is organized as a joint stock corporation, those shares are closely held by member firms like banks and brokerages. By contrast, the smaller Osaka Stock Exchange is publicly-traded, which perhaps befits long-held Japanese stereotypes about Osaka being more entrepreneurial and less hidebound than Tokyo ...

...Shanghai Stock Exchange
This is the largest stock exchange in the world still owned and controlled by a government. [My emphasis - Jen.] The Shanghai exchange is operated as a non-profit entity by the China Securities Regulatory Commission and is arguably one of the most restrictive of the major exchanges in terms of listing and trading criteria ...

...The Bottom Line
Running an exchange is a great business; it is effectively a monopoly. Those who own exchanges can require companies to pay listing fees, traders to pay for market access and investors to pay transaction fees. It is not altogether surprising, then, that there is so much activity in this space. In addition to the aforementioned major mergers, the Singapore Exchange is trying to acquire the Australian Stock Exchange, while Brazil's BM&F Bovespa (once state-owned and now publicly-traded) is looking to expand through acquisition as well.

While these transactions are interesting to a point, they do not generally help the individual investor. Unfortunately, trading stocks listed on foreign exchanges is still difficult (and expensive) for U.S. investors and none of these mergers will change that. Of course, it is up to the brokerages to offer these services and for investors to demand them. (Find out how the third-largest stock exchange in North America came to be. Check out History Of The Toronto Stock Exchange.)

In the meantime, it looks like there is an unmistakable trend in the market of stock markets towards greater global integration and fewer small independent operators...

Needless to say Beijing must be in no hurry not to relinquish control and regulation of the Shanghai Stock Exchange.

uncle tungsten , Jan 27 2021 0:32 utc | 88

Jen #76

In reforming the US financial industry, you would need to separate savings and trading banks from investment banks. The 1932 Glass-Steagall legislation and the act based on it did service in that respect up until the late 1990s when it was repealed by the Clinton government. In some countries (Japan being a notable example), the postal service performs savings bank functions.

My proposition is that cash is the ownership of the common wealth - that the state creates and manages it. Others use it for a transaction tax on each use. Keep it simple and non negotiable.

Glaring inequities can be remediated with a close monitored reimbursement system that is transparent and under continuous audit.

Every account transfer for whatever reason is taxed . If you withdraw cash you pay tax similar to an ATM fee. etc.

Complicated concession systems are avoided as they immediately invite scammers to skate around the rigmarole. Yes there will be minor unfairness issues but that sure beats the major unfairness issues we have in place now. Illegal money laundering requires multiple moves across accounts and diverse banks to obfuscate the nature of the transactors etc. That would generate further taxation on those tricks and perhaps reveal the trail.

Yes there will be double tax. But if transaction tax is set at a low rate to not screw the low income people then it will get their support as they will see that the higher cash users will be paying more for the privilege. Sliding scales can be configured in such systems but avoidance is made incredibly difficult.

As psychohistorian often says : its the global private finance banks that we must seize control of.

[Jan 27, 2021] PACE decided to pass a non-binding resolution of more sanctions against Russia for the Navalny fiasco while Frau Merkel (and her likely successor) remains clear that Nord Stream II must be finished

Jan 27, 2021 | consortiumnews.com

Jeff Harrison , January 26, 2021 at 02:13

Incisive and grim. As Mr. Putin observed, Presidents come and go but the policy stays the same. But wait! I think there's more

WRT Iran. Iran recently announced that their sales of oil had increased substantially, without, of course identifying how much or with whom. If they are doing these transactions in national currencies, there's nothing other than piracy that the US can do, making the US more dependent on our vassals to carry our water here. But

In other news, the EU has decided to stop supporting Guido. If some of the OAS vassals get the idea that they, too, can stand on at least their two knees, maybe Mr. Maduro can get a bit more of a break. The US is sure to be wroth.

PACE decided to pass a non-binding resolution of more sanctions against Russia for the Navalny fiasco while Frau Merkel (and her likely successor) remains clear that Nord Stream II must be finished. The German FM pointed out that they could face serious court battles since the Pipeline consortium which includes other EU countries has all the permits they require.

The results are in aaaaannnnnddd – thanx to Covid, for the first time in history China had more Direct Foreign Investment (DFI) than the US. The US better hope that doesn't keep up ..

[Jan 27, 2021] Why financial oligarchy loves neoclassical economics

Jan 27, 2021 | www.nakedcapitalism.com

Sound of the Suburbs , January 27, 2021 at 4:00 am

The globalists found just the economics they were looking for.
The USP of neoclassical economics – It concentrates wealth.
Let's use it for globalisation.

Mariner Eccles, FED chair 1934 – 48, observed what the capital accumulation of neoclassical economics did to the US economy in the 1920s.
"a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion of currently produced wealth. This served then as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied themselves the kind of effective demand for their products which would justify reinvestment of the capital accumulation in new plants. In consequence as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When the credit ran out, the game stopped"

This is what it's supposed to be like.
A few people have all the money and everyone else gets by on debt.

[Jan 26, 2021] Appeals to bring more young Russians to US as 'soft power' tool could backfire, there's no guarantee they will like what they see

Jan 26, 2021 | www.moonofalabama.org

vk , Jan 25 2021 17:23 utc | 130

Trump's decoupling dream come true.

--//--

Appeals to bring more young Russians to US as 'soft power' tool could backfire, there's no guarantee they will like what they see

McFaul says that "Biden's team should come up with new ways to grow these ties [with ordinary Russians] even over Putin's objections. In the long run, forging and sustaining links with Russian society will undermine anti-American propaganda as well as American stereotypes about Russia."

To this, McFaul adds that, "The new administration should make it easier for Russians to study in and travel to the United States," and urges European states to do the same.

My take on this is very simple: the West cannot even absorb their own youth anymore. What makes them think they can absorb Russia's?

Besides, it's not so simple an operation to attract young people to your country to study. The logistics are very complicated, and it requires a lot of resources not even counting the promise of jobs within your own country (in the case of STEM students). Even the brain drain from countries with large populations such as China and India don't surpass much above the low to mid six digits. And those programs take time to gain traction - decades in most cases. And all of this already taking into account the fact that your country still has to be an attractive place.

Discontent already exists in Americans with Indian STEM from H1B1 visa program. As the excess population rises, so will resistance to new influx of immigrants - specially high-skilled ones. This will snowball to a stage where Americans become second-class citizens in their own country (as you would have to guarantee the jobs for the foreigners in order to sweeten the deal).

[Jan 26, 2021] How will the USA regain its advantage in this world?

Decimation of education by neoliberalism and neoliberal brainwashing is the root of all evil.
Jan 26, 2021 | www.moonofalabama.org
uncle tungsten , Jan 26 2021 0:28 utc | 168

How will the USA regain its advantage in this world?

I was looking back at some earlier reports to gain an insight into the means by which the USA gave the game away and the means that might restore its place in the economic world. It has allowed itself to be completely captive to global private finance AND ownership of the keys to its salvation. If it dfoes not nationalise its key industries then it can rest assured of its doom. IMO it is now almost impossible for it to nationalise a pizza parlour let alone an education or engineering sector.

This (posted here before) from Strategic Culture of November 2020 "How a Wise Decoupling May Be a Good Thing for Both China and the West". It is worth reconsidering from time to time.

If the USA is to survive the oncoming collapse and break free of its apocalyptic war agenda, then certain realities WILL have to occur. These realities include (but are not limited to):

1) Regaining its lost industrial potential, with an emphasis on the machine tool sector which the west once enjoyed as a world leader

2) Regaining the lost scientific and technological capacities which the USA once had when it still valued productive thinking under the days of JFK and NASA

3) Regaining a grasp of education which values productive citizens over consumer subjects

4) Regaining control over national credit under federal banking, dirigisme and other long-term investment practices that rely on regulating Wall Street speculation and other unproductive forms of banking.

How might these vital capacities be regained?....

The USA is incapable of nationalising its education sector and is incapable systemically of having the patience to await the benefits. It will continue to sustain an education sector that is designed to transfer $$$ in taxation directly to private corporation pockets and to do so by reducing the the number of salary earners between the input $ and the $ that end in private corporation pockets. The private corporations will continue to perfect the swindle of returning the least possible effort in return for those $$$.

Ditto for defence spending and every other sector.

The USAi is hoist by its own petard and has a dull brained president surrounded by ideological obsessives, cultural paranoiacs, a narcissistic Congress and Senate. It will not be capable of restoring its real economy and will continue to imagine itself as a world leader. It will berate and negate and cancel all unorthodox thought from those that favour nation building.

The rest of the world's nations had better take note. Clearly many have.

[Jan 26, 2021] When guys like Michael Saylor put a half a billion into bitcoin they have done their homework. Seems to me a scam is an operation containing a lot of lies

Jan 26, 2021 | www.moonofalabama.org

uncle tungsten , Jan 26 2021 1:11 utc | 172

c1ue #118
I actually talked about this with Kuppy last week.

He considers HFT a problem but not crippling; he says they cost him $10K to $25K a day but apparently this isn't enough to deter his hedge fund activities. He said that up to 70% of trading volume activity in any stock is HFT (!).
As for scam: well - the value of the front running exists only so long as the herd is in the market. Every single market crash - whether bitcoin or the stock market or whatever - sees the vast majority of players exit (or bankrupt). At that point, the trading volumes and numbers of people participating plummet dramatically.
How valuable do you think RH's model is then?

Sounds to me that HFT is a scam in itself. Am I to believe that algorithms trading against each other repetitively at high speed is anything other than machine driven gambling on one algorithm's interpretation of the behaviour of another algorithm, mostly outside of the human buy and sell in the market place. Are the humans just strapped on for the ride through a cabal of trading companies?


psychohistorian , Jan 26 2021 1:29 utc | 173

@ uncle t # 168 who wrote
"
I was looking back at some earlier reports to gain an insight into the means by which the USA gave the game away and the means that might restore its place in the economic world. It has allowed itself to be completely captive to global private finance AND ownership of the keys to its salvation. If it does not nationalize its key industries then it can rest assured of its doom.
"

I continue to posit that the key industry that needs to be "nationalized/made totally sovereign" is finance. If humanity can follow China's lead, the motivations in the other industries will revert to doing what is right, rather than what is profitable.


In regards to your HFT comment in # 172, you have calling HFT a scam correct. It is programmed/manufactured theft under the guise of AI.