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The Secular Stagnation as an Immanent Feature of Post-2008 Neoliberalism

Image courtesy of Koren Shadmi (What’s Behind a Rise in Ethnic Nationalism? Maybe the Economy - The New York Times, Oct 14, 2016)
News Neoliberalism as a New Form of Corporatism Recommended Links GDP as a false measure of a country economic output Ethno-linguistic and "Cultural" Nationalism as antidote to Neoliberalism Chronic Unemployment Redistribution of wealth up as the essence of neoliberalism
Forthcoming slow motion collapse of global neoliberal empire led by the USA Anti-globalization movement Why Peak Oil Threatens the International Monetary System Brexit as the start of the reversal of neoliberal globalization Immigration, wage depression and free movement of workers Economics of Peak Energy Upward Redistribution of Wealth
Identity politics as diversion of attention from social inequality Neoliberalism war on labor The Great Transformation Eroding Western living standards Immigration, wage depression and free movement of workers Greece debt enslavement Ukraine debt enslavement
Neoliberal rationality Neoliberal "New Class" as variant of Soviet Nomenklatura The fiasco of suburbia Quite coup Casino Capitalism Lawrence Summers Oil glut fallacy
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Russia oil production Helicopter Ben: Arsonist Turned into Firefighter Financial Quotes Casino Capitalism Dictionary Financial Humor Humor Etc

Introduction

Secular stagnation is a term proposed by Keynesian economist Alvin Hansen back in the 1930s to explain the USA dismal economic performance during this period. The period in which sluggish growth and output, and employment levels well below potential, coincide with a problematically low (even negative) real interest rates even in the face of the extraordinarily easy monetary policy. Later a similar phenomenon occurred in Japan. that's why it is often called called Japanification of the economy.  Secular stagnation returned to the USA in full force after the financial crisis of 2008 (so called The Long Recession), so this is the second time the USA society experience the same socio-economic phenomenon. 

Formally it can be defined as any stagnation that lasts substantially longer then the business cycle (and dominates the business cycle induced variations of economic activities), the suppression of economic performance for a long (aka secular) period. It also can be viewed as the crisis of demand, when demand became systemically weak (which under neoliberalism is ensured by redistribution of wealth up).

The global stagnation we are experiencing is the logical result of the dominance of neoliberalism and a sign of its crisis an a ideology. It is somewhat similar to the crisis of Bolshevik's ideology in the USSR in 60th when everybody realized that the existing society cannot fulfill the key promise of higher living standards. And that over centralization of economic life naturally leads to stagnation.  The analogy does not ends here, but this point is the most important.

Neoliberalism replaced over-centralization (with iron fist one party rule) with over-financialization (with iron fist rule of financial oligarchy), with generally the same result as for the economy ( In other words neoliberalism like bolshevism is equal to economic stagnation; extremes meet).  The end of cheap oil did not help iether. In a sense neoliberalism might be viewed as the elite reaction to the end of cheap oil, when it became clear that there are not enough cookies for everyone.

This growth in the financial sector's profits has not been an accident; it is the result of  engineered shift in the elite thinking, which changed government policies. The central question of politics is, in my view, "Who has a right to live and who does not".  In the answer to this question, neoliberal subscribes to Social Darwinism: ordinary citizens should be given much less rather than more social protection. Such  policies would have been impossible in 50th and 60th (A Short History of Neo-liberalism)

In 1945 or 1950, if you had seriously proposed any of the ideas and policies in today's standard neo-liberal toolkit, you would have been laughed off the stage at or sent off to the insane asylum. At least in the Western countries, at that time, everyone was a Keynesian, a social democrat or a social-Christian democrat or some shade of Marxist.

The idea that the market should be allowed to make major social and political decisions; the idea that the State should voluntarily reduce its role in the economy, or that corporations should be given total freedom, that trade unions should be curbed and citizens given much less rather than more social protection--such ideas were utterly foreign to the spirit of the time. Even if someone actually agreed with these ideas, he or she would have hesitated to take such a position in public and would have had a hard time finding an audience.

And this change in government polices was achieved in classic Bolsheviks coup d'état way, when yoiu first create the Party of "professional neoliberal revolutionaries". Who then push for this change and "occupy" strategic places like economics departments at the universities, privately funded think tanks, MSM, and then subvert one or both major parties.  The crisis of "New Deal Capitalism" helped, but without network of think tanks and rich donors, the triumph of neoliberalism in the USA would have been impossible:

...one explanation for this triumph of neo-liberalism and the economic, political, social and ecological disasters that go with it is that neo-liberals have bought and paid for their own vicious and regressive "Great Transformation". They have understood, as progressives have not, that ideas have consequences. Starting from a tiny embryo at the University of Chicago with the philosopher-economist Friedrich von Hayek and his students like Milton Friedman at its nucleus, the neo-liberals and their funders have created a huge international network of foundations, institutes, research centers, publications, scholars, writers and public relations hacks to develop, package and push their ideas and doctrine relentlessly.

Most economists are acutely aware of the increasing role in economic life of financial markets, institutions and operations and the pursuit of prifits via excotic instruments such as derivatives (all this constituted  financialization). This dominant feature of neoliberalism has huge the re-distributional implications, huge effects on the US economy, international dimensions and monetary system, depth and longevity of financial crises and unapt policy responses to them.

They have built this highly efficient ideological cadre because they understand what the Italian Marxist thinker Antonio Gramsci was talking about when he developed the concept of cultural hegemony. If you can occupy peoples' heads, their hearts and their hands will follow.

I do not have time to give you details here, but believe me, the ideological and promotional work of the right has been absolutely brilliant. They have spent hundreds of millions of dollars, but the result has been worth every penny to them because they have made neo-liberalism seem as if it were the natural and normal condition of humankind. No matter how many disasters of all kinds the neo-liberal system has visibly created, no matter what financial crises it may engender, no matter how many losers and outcasts it may create, it is still made to seem inevitable, like an act of God, the only possible economic and social order available to us.  

Neoliberalism naturally leads to secular stagnation due to redistribution of wealth up. which undermines purchasing power of the 99%, or more correctly 99.9 of the population. In the USA this topic became hotly debated theme in establishment circles after Summers speech in 2013.  Unfortunately it was suppressed in Presidential campaign of 2016. Please note that Sanders speaks about Wall Street shenanigans, but not about ideology of neoliberalism.  No candidates tried to address this problem of "self-colonization" of the USA, which is probably crucial to "making America great again" instead of continued slide into what is called "banana republic" coined by American writer O. Henry (William Sydney Porter 1862–1910). Here is how Wikipedia described the term:

Banana republic or banana state is a pejorative political science term for politically unstable countries in Latin America whose economies are largely dependent on exporting a limited-resource product, e.g. bananas. It typically has stratified social classes, including a large, impoverished working class and a ruling plutocracy of business, political, and military elites.[1] This politico-economic oligarchy controls the primary-sector productions to exploit the country's economy.[2]

... ... ...

In economics, a banana republic is a country operated as a commercial enterprise for private profit, effected by a collusion between the State and favoured monopolies, in which the profit derived from the private exploitation of public lands is private property, while the debts incurred thereby are a public responsibility.

This topic is of great importance to the US elite because the USA is the citadel of  neoliberalism. It also suggest that the natural way neoliberal economic system based on increasing of the level of inequality (redistribution of wealth up) should behave: after the initial economic boom (like in case of steroids use) caused by  financialization of economy (as well as dissolution of the USSR), helped by off-shoring of manufacturing, the destructive effects of this temporary boost come into foreground. Redistribution of wealth up increases inequality which after a certain delay starts to undercuts domestic demand. It also tilts the demand more toward conspicuous consumption (note the boom of luxury cars sales in the USA).  

But after  inequality reaches certain critical threshold  the economy faces extended period of low growth reflecting persistently weak private demand (purchasing power of lower 90% of population).  People who mostly have low level service economy jobs (aka MC-jobs) can't buy that much.  Earlier giants of American capitalism like Ford understood that, but Wall Street sharks do not and does not want.  They operate under principle "Après nous le déluge" ("After us, the deluge").

An economic cycle enters recession when total spending falls below expected by producers and they realize that production level is too high relative to demand. What we have under neoliberalism is Marx's crisis of overproduction on a new level. At this level it is intrinsically connected with the parasitic nature of complete financialization of the economy. The focus on monetary policy and the failure to enact fiscal policy options is the key structural defect of neoliberalism ideology and can't be changed unless neoliberal ideology is abandoned. Which probably will not happen unless another huge crisis hits the USA. That might not happen soon.  Bolshevism lasted more then 70 years. If we assume that the "age of neoliberalism" started at 1973 with Pinochet coup d'état in Chile, neoliberalism as a social system is just 43 years old (as of 2016). It still has some "time to live"(TTL) in zombies state due to the principle first formulated by Margaret Thatcher as TINA ("There Is No Alternative") -- the main competitor, bolshevism, was discredited by the collapse of the USSR and China leadership adoption of neoliberalism. While Soviet leadership simply abandoned the sinking ship and became Nouveau riche in a neoliberal society that followed, Chinese elite managed to preserved at least outer framework of the Marxist state and the political control of the Communist party (not clear for how long). But there was a neoliberal transformation of Chinese economy, initiated, paradoxically, by the Chinese Communist Party.

Currently, no other ideology, including old "New Deal" ideology can  compete with neoliberal ideology, although things started to change with Sanders campaign in the USA on  the left and Trump campaign on the right. Most of what we see as a negative reaction to neoliberalism in Europe generally falls into the domain of cultural nationalism.    

The 2008 financial crisis, while discrediting neoliberalism as an ideology (in the same way as WWII discredited Bolshevism), was clearly not enough for the abandonment of this ideology. Actually neoliberalism proved to be remarkably resilient after this crisis. Some researchers claim that it entered "zombie state" and became more bloodthirsty and ruthless.

There is also religious overtones of neoliberalism which increase its longevity (similar to Trotskyism, and neoliberalism can be called "Trotskyism for rich"). So, from a small, unpopular sect with virtually no influence, neo-liberalism has become the major world religion with its dogmatic doctrine, its priesthood, its law-giving institutions and perhaps most important of all, its hell for heathen and sinners who dare to contest the revealed truth.  Like in most cults adherents became more fanatical believers after the prophecy did not materialized. The USA elite tried partially alleviate this problem by resorting to military Keynesianism as a supplementary strategy. But while military budget was raised to unprecedented levels, it can't reverse the tendency. Persistent high output gap is now a feature of the US economy, not a transitory state.

But there is another factor in play here: combination of peak (aka "plato" ;-) oil and established correlation of  the speed of economic growth and prices on fossil fuels and first of all on oil. Oil provides more than a third of the energy we use on the planet every day, more than any other energy source (How High Oil Prices Will Permanently Cap Economic Growth - Bloomberg). It is dominant fuel for transport and in this role it is very difficult to replace. 

That means that a substantial increase of price of oil acts as a fundamental limiting factor for economic growth. And "end of cheap oil" simply means that any increase of supply of oil to support growing population on the planet and economic growth now requires higher prices. Which naturally undermine economic growth, unless massive injection of currency are instituted. that probably was the factor that prevented slide of the US economy into the recession in 2009-2012.  Such a Catch-22.

Growth dampening potential of over $100-a-barrel oil is now a well established factor. Unfortunately, the reverse is not true. Drop of oil price to below $50 as happened in late 2014 and first half of 2015 did not increase growth rate of the USA economy. It might simply prevented it from sliding it into another phase of Great Recession. Moreover when  economies activity drops, less oil is needed.  Enter permanent stagnation.

Also there is not much oil left that can be profitably extracted at prices below $80. So the current oil price slump is a temporary phenomenon, whether it was engineered, or is a mixture of factors including temporary overcapacity . Sooner or later oil prices should return to level "above $80", as only at this level of oil price capital expenditures in new production make sense. That des not mean that oil prices can't be suppressed for another year or even two, but as Herbert Stein aptly noted   "If something cannot go on forever, it will stop,"

 The alien spaceship landing

Imagine the alien spaceship landed somewhere in the world. There would be denial, disbelief, fear, and great uncertainty for the future. World leaders would struggle to make sense of the events. The landing would change everything.

The secular stagnation (aka "end of permanent growth") is a very similar event.  This also is the event that has potential to change everything, but it is much more prolonged in time and due to this less visible ("boiling frog effect").  Also this is not a single event, but a long sequence of related events that probably might last several decades (as Japan had shown) or even centuries. The current "Great Recession" might be just a prolog to those events. It is clearly incompatible with capitalism as a mode of production, although capitalism as a social system demonstrated over the years tremendous adaptability and it is too early to write it down completely.  Also no clear alternatives exists. 

A very slow recovery and the secular stagnation is characteristic of economies suffering from a balance-sheet recession (aka crisis of overproduction), as forcefully argued by Nomura’s Richard Koo and other economists. The key point is that private investment is down, not because of “policy uncertainty” or “increased regulation”, but because business-sector expectations about future profitability have become dramatically depressed — and rationally so — in a context characterized by heavy indebtedness (of both households and corporations). As businesses see the demand falls they scale down production which creates negative feedback look and depresses demand further. 

The key point is that private investment is down, not because of “policy uncertainty” or “increased regulation”, but because business-sector expectations about future profitability have become dramatically depressed — and rationally so — in a context characterized by heavy indebtedness (of both households and corporations). As businesses see the demand falls they scale down production which creates negative feedback look and depresses demand further.   

Five  hypothesis about the roots of secular stagnation

There are at least five different hypothesis about the roots of secular stagnation:

Summers’s remarks and articles were followed by an explosion of debate concerning “secular stagnation”—a term commonly associated with Alvin Hansen’s work from the 1930s to ’50s, and frequently employed in Monthly Review to explain developments in the advanced economies from the 1970s to the early 2000s.2 Secular stagnation can be defined as the tendency to long-term (or secular) stagnation in the private accumulation process of the capitalist economy, manifested in rising unemployment and excess capacity and a slowdown in overall economic growth. It is often referred to simply as “stagnation.” There are numerous theories of secular stagnation but most mainstream theories hearken back to Hansen, who was Keynes’s leading early follower in the United States, and who derived the idea from various suggestions in Keynes’s General Theory of Employment, Interest and Money (1936).

Responses to Summers have been all over the map, reflecting both the fact that the capitalist economy has been slowing down, and the role in denying it by many of those seeking to legitimate the system. Stanford economist John B. Taylor contributed a stalwart denial of secular stagnation in the Wall Street Journal. In contrast, Paul Krugman, who is closely aligned with Summers, endorsed secular stagnation on several occasions in the New York Times. Other notable economists such as Brad DeLong and Michael Spence soon weighed in with their own views.3

Three prominent economists have new books directly addressing the phenomena of secular stagnation.4 It has now been formally modelled by Brown University economists Gauti Eggertsson and Neil Mehrotra, while Thomas Piketty’s high-profile book bases its theoretical argument and policy recommendations on stagnation tendencies of capitalism. This explosion of interest in the Summers/Krugman version of stagnation has also resulted in a collection of articles and debate, edited by Coen Teulings and Richard Baldwin, entitled Secular Stagnation: Facts, Causes and Cures.5

Seven years after “The Great Financial Crisis” of 2007–2008, the recovery remains sluggish. It can be argued that the length and depth of the Great Financial Crisis is a rather ordinary cyclical crisis. However, the monetary and fiscal measures to combat it were extraordinary. This has resulted in a widespread sense that there will not be a return to “normal.” Summers/Krugman’s resurrection within the mainstream of Hansen’s concept of secular stagnation is an attempt to explain how extraordinary policy measures following the 2007–2008 crisis merely led to the stabilization of a lethargic, if not comatose, economy.

But what do these economists mean by secular stagnation? If stagnation is a reality, does their conception of it make current policy tools obsolete? And what is the relationship between the Summers/Krugman notion of secular stagnation and the monopoly-finance capital theory?

... ... ...

In “secular stagnation,” the term “secular” is intended to differentiate between the normal business cycle and long-term, chronic stagnation. A long-term slowdown in the economy over decades can be seen as superimposed on the regular business cycle, reflecting the trend rather than the cycle.

In the general language of economics, secular stagnation, or simply stagnation, thus implies that the long-run potential economic growth has fallen, constituting the first pillar of MISS. This has been most forcefully argued for by Robert Gordon, as well as Garry Kasparov and Peter Thiel.6 Their argument is that the cumulative growth effect of current (and future) technological changes will be far weaker than in the past. Moreover, demographic changes place limits on the development of “human capital.” The focus is on technology, which orthodox economics generally sees as a factor external to the economy and on the supply-side (i.e., in relation to cost). Gordon’s position is thus different than that of moderate Keynesians like Summers and Krugman, who focus on demand-side contradictions of the system.

In Gordon’s supply-side, technocratic view, there are forces at work that will limit the growth in productive input and the efficiency of these inputs. This pillar of MISS emphasizes that it is constraints on the aggregate supply-side of the economy that have diminished absolutely the long-run potential growth.

The second pillar of MISS, also a supply-side view, goes back at least to Joseph Schumpeter. To explain the massive slump of 1937, Schumpeter maintained there had emerged a growing anti-business climate. Moreover, he contended that the rise of the modern corporation had displaced the role of the entrepreneur; the anti-business spirit had a repressive effect on entrepreneurs’ confidence and optimism.7 Today, this second pillar of MISS has been resurrected suggestively by John B. Taylor, who argues the poor recovery is best “explained by policy uncertainty” and “increased regulation” that is unfavorable to business. Likewise, Baker, Bloom, and Davis have forcefully argued that political uncertainty can hold back private investment and economic growth.8

Summers and Krugman, as Keynesians, emphasize a third MISS pillar, derived from Keynes’s famous liquidity trap theory, which contends that the “full-employment real interest rate” has declined in recent years. Indeed, both Summers and Krugman demonstrate that real interest rates have declined over recent decades, therefore moving from an exogenous explanation (as in pillars one and two) to a more endogenous explanation of secular stagnation.9 The ultimate problem here is lack of investment demand, such that, in order for net investment to occur at all, interest rates have to be driven to near zero or below. Their strong argument is that there are now times when negative real interest rates are needed to equate saving and investment with full employment.

However, “interest rates are not fully flexible in modern economies”—in other words, market-determined interest rate adjustments chronically fail to achieve full employment. Summers contends there are financial forces that prohibit the real interest rate from becoming negative; hence, full employment cannot be realized.10

Some theorists contend that there has been demographic structural shifts increasing the supply of saving, thus decreasing interest rates. These shifts include an increase in life expectancy, a decrease in retirement age, and a decline in the growth rate of population.

Others, including Summers, point out that stagnation in capital formation (or accumulation) can be attributed to a decrease in the demand for loanable funds for investment. One mainstream explanation offered for this is that today’s new technologies and companies, such as Google, Microsoft, Amazon, and Facebook, require far less capital investment. Another hypothesis is that there has been an important decrease in the demand for loanable funds, although they argue this is due to a preference for safe assets. These factors can function together to keep the real interest rate very low. The policy implication of secular low interest rates is that monetary policy is more difficult to implement effectually; during a recession, it is weakened and can even become ineffectual.

Edward Glaeser, focusing on “secular joblessness,” places severe doubt on the first pillar of MISS, but then makes a very important additional argument. Glaeser rejects the notion that there has been a slowdown in technological innovation; innovation is simply “unrelenting.” Likewise, he is far less concerned with secular low real interest rates, which may be far more cyclical. “Therefore,” contends Glaeser, “stagnation is likely to be temporary.”

Nonetheless, Glaeser underscores secular joblessness, and thus the dysfunction of U.S. labor markets constitutes a fourth pillar of MISS: “The dysfunction in the labour market is real and serious, and seems unlikely to be solved by any obvious economic trend.” Somehow, then, the problem is due to a misfit of skills or “human capital” on the side of workers, who thus need retraining. “The massive secular trend in joblessness is a terrible social problem for the US, and one that the country must try to address” with targeted policy.11 Glaeser’s argument for the dysfunction of U.S. labor markets is based on recession-generated shocks to employment, specifically of less-skilled U.S. workers. After 1970, when workers lost their job, the damage to human capital became permanent. In short, when human capital depreciates due to unemployment, overall abilities and “talent” are “lost” permanently. This may be because the skills required in today’s economy need to be constantly practiced to be retained. Thus, there is a ratchet-like effect in joblessness caused by recessions, whereby recession-linked joblessness is not fully reversed during recoveries—and all this is related to skills (the human capital of the workers), and not to capital itself. According to Glaeser, the ratchet-like effect of recession-linked joblessness is further exacerbated by the U.S. social-safety net, which has “made joblessness less painful and increased the incentives to stay out of work.”12

Glaeser contends that, if his secular joblessness argument is correct, the macroeconomic fiscal interventions argued for by Summers and Krugman are off-base.13 Instead, the safety net should be redesigned in order to encourage rather than discourage people from working. Additionally, incentives to work need to be radically improved through targeted investments in education and workforce training.14 Such views within the mainstream debate, emphasizing exogenous factors, are generally promoted by freshwater (conservative) rather than saltwater (liberal) economists. Thus, they tend to emphasize supply-side or cost factors.

The fifth pillar of MISS contends that output and productivity growth are stagnant due to a failure to invest in infrastructure, education, and training. Nearly all versions of MISS subscribe to some version of this, although there are both conservative and liberal variations. Barry Eichengreen underscores this pillar and condemns recent U.S. fiscal developments that have “cut to the bone” federal government spending devoted to infrastructure, education, and training.

The fifth pillar of MISS necessarily reflects an imbalance between public and private investment spending. Many theorists maintain that the imbalance between public and private investment spending, hence secular stagnation, “is not inevitable.” For example, Eichengreen contends if “the US experiences secular stagnation, the condition will be self-inflicted. It will reflect the country’s failure to address its infrastructure, education and training needs. It will reflect its failure to…support aggregate demand in an effort to bring the long-term unemployed back into the labour market.”15

The sixth pillar of MISS argues that the “debt overhang” from the overleveraging of financial firms and households, as well as private and public indebtedness, are a serious drag on the economy. This position has been argued for most forcefully by several colleagues of Summers at Harvard, most notably Carmen Reinhart and Kenneth Rogoff.16 Atif Mian and Amir Sufi also argue that household indebtedness was the primary culprit causing the economic collapse of 2007–2008. Their policy recommendation is that the risk to mortgage borrowers must be reduced to avoid future calamities.17

As noted, the defenders of MISS do not necessarily support a compatibility between the above six pillars: those favored by conservatives are supply-side and exogenous in emphasis, while liberals tend towards demand-side and endogenous ones. Instead, most often these pillars are developed as competing theories to explain the warrant of some aspect of secular stagnation, and/or to defend particular policy positions while criticizing alternative policy positions. However, the concern here is not whether there is the possibility for a synthesis of mainstream views. Rather, the emphasis is on how partial and separate such explanations are, both individually and in combination.

Neoliberal economy actually needs bubbles to function

As Krugman said "We now know that the economic expansion of 2003-2007 was driven by a bubble. You can say the same about the latter part of the 90s expansion; and you can in fact say the same about the later years of the Reagan expansion, which was driven at that point by runaway thrift institutions and a large bubble in commercial real estate." In other words blowing bubbles is the fundamental way neoliberal economy functions, not an anomaly.

As much as the USA population is accustomed to hypocrisy of the ruling elite and is brainwashed by MSM, this news, delivered to them personally by the crisis of 2008 was too much for them not question the fundamentals (A Primer on Neoliberalism):

Of course, the irony that those same institutions would now themselves agree that those “anti-capitalist” regulations are required is of course barely noted. Such options now being considered are not anti-capitalist. However, they could be described as more regulatory or managed rather than completely free or laissez faire capitalism, which critics of regulation have often preferred.

But a regulatory capitalist economy is very different to a state-based command economy, the style of which the Soviet Union was known for. The points is that there are various forms of capitalism, not just the black-and-white capitalism and communism. And at the same time, the most extreme forms of capitalism can also lead to the bigger bubbles and the bigger busts.

In that context, the financial crisis, as severe as it was, led to key architects of the system admitting to flaws in key aspects of the ideology.

At the end of 2008, Alan Greenspan was summoned to the U.S. Congress to testify about the financial crisis. His tenure at the Federal Reserve had been long and lauded, and Congress wanted to know what had gone wrong. Henry Waxman questioned him:

[Greenspan’s flaw] warped his view about how the world was organized, about the sociology of the market. And Greenspan is not alone. Larry Summers, the president’s senior economic advisor, has had to come to terms with a similar error—his view that the market was inherently self-stabilizing has been “dealt a fatal blow.” Hank Paulson, Bush’s treasury secretary, has shrugged his shoulders with similar resignation. Even Jim Cramer from CNBC’s Mad Money admitted defeat: “The only guy who really called this right was Karl Marx.” One after the other, the celebrants of the free market are finding themselves, to use the language of the market, corrected.

Raj Patel, Flaw PDF formatted document, The Value of Nothing, (Picador, 2010), pp.4, 6-7

Now for the second time in history, the challenge is to save capitalism from itself

Now for the second time in history, the challenge is to save capitalism from itself: to recognize the great strengths of open, competitive markets while rejecting the extreme capitalism and unrestrained greed that have perverted so much of the global financial system in recent times. It took such a statesman as Franklin Delano Roosevelt to rebuild American capitalism after the Great Depression. New Deal policies allowed to rebuild postwar domestic demand, to engineer the Marshall Plan to rebuild Europe and to set in place the Bretton Woods system to govern international economic engagement.

With the abolishment of those policies blowing of one bubble after another, each followed by a financial crisis  became standard chain of the events. Since 1973 we already have a half-dozen bubbles following by economic crisis. It started with  Savings and loan crisis which partially was caused by the deregulation of S&Ls in 1980, by the Depository Institutions Deregulation and Monetary Control Act signed by President Jimmy Carter on March 31, 1980, an important step is a series that eliminated regulations initially designed to prevent lending excesses and minimize failures.

To hide this unpleasant fact neoliberals resort to so called the Great Neoliberal Lie:

What is neoliberalism

The fallacious and utterly misleading argument that the global economic crisis (credit crunch) was caused by excessive state spending, rather than by the reckless gambling of the deregulated, neoliberalized financial sector.

Just as with other pseudo-scientific theories and fundamentalist ideologies, the excuse that "we just weren't fundamentalist enough last time" is always there. The neoliberal pushers of the establishment know that pure free-market economies are as much of an absurd fairytale as 100% pure communist economies, however they keep pushing for further privatizations, tax cuts for the rich, wage repression for the ordinary, and reckless financial sector deregulations precisely because they are the direct beneficiaries of these policies. Take the constantly widening wealth gap in the UK throughout three decades of neoliberal policy. The minority of beneficiaries from this ever widening wealth gap are the business classes, financial sector workers, the mainstream media elite and the political classes. It is no wonder at all that these people think neoliberalism is a successful ideology. Within their bubbles of wealth and privilege it has been. To everyone else it has been an absolute disaster.

Returning to a point I raised earlier in the article; one of the main problems with the concept of "neoliberalism" is the nebulousness of the definition. It is like a form of libertarianism, however it completely neglects the fundamental libertarian idea of non-aggression. In fact, it is so closely related to that other (highly aggressive) US born political ideology of Neo-Conservatism that many people get the two concepts muddled up. A true libertarian would never approve of vast taxpayer funded military budgets, the waging of imperialist wars of aggression nor the wanton destruction of the environment in pursuit of profit.

Another concept that is closely related to neoliberalism is the ideology of minarchism (small stateism), however the neoliberal brigade seem perfectly happy to ignore the small-state ideology when it suits their personal interests. Take the vast banker bailouts (the biggest state subsidies in human history) that were needed to save the neoliberalised global financial sector from the consequences of their own reckless gambling, the exponential growth of the parasitic corporate outsourcing sector (corporations that make virtually 100% of their turnover from the state) and the ludicrous housing subsidies (such as "Help to Buy and Housing Benefits) that have fueled the reinflation of yet another property Ponzi bubble.

The Godfather of neoliberalism was Milton Friedman. He made the case that illegal drugs should be legalised in order to create a free-market drug trade, which is one of the very few things I agreed with him about. However this is politically inconvenient (because the illegal drug market is a vital source of financial sector liquidity) so unlike so many of his neoliberal ideas that have consistently failed, yet remain incredibly popular with the wealthy elite, Friedman's libertarian drug legalisation proposals have never even been tried out.

The fact that neoliberals are so often prepared to ignore the fundamental principles of libertarianism (the non-aggression principle, drug legalisation, individual freedoms, the right to peaceful protest ...) and abuse the fundamental principles of small state minarchism (vast taxpayer funded bailouts for their financial sector friends, £billions in taxpayer funded outsourcing contracts, alcohol price fixing schemes) demonstrate that neoliberalism is actually more like Ayn Rand's barmy (greed is the only virtue, all other "virtues" are aberrations) pseudo-philosophical ideology of objectivism  than a set of formal economic theories.

The result of neoliberal economic theories has been proven time and again. Countries that embrace the neoliberal pseudo-economic ideology end up with "crony capitalism", where the poor and ordinary suffer "austerity", wage repression, revocation of labor rights and the right to protest, whilst a tiny cabal of corporate interests and establishment insiders enrich themselves via anti-competitive practices, outright criminality and corruption and vast socialism-for-the-rich schemes.

Neoliberal fanatics in powerful positions have demonstrated time and again that they will willingly ditch their right-wing libertarian and minarchist "principles" if those principles happen to conflict with their own personal self-interest. Neoliberalism is less of a formal set of economic theories than an error strewn obfuscation narrative to promote the economic interests, and  justify the personal greed of the wealthy, self-serving establishment elite.
 

Bubbles as the neoliberal tool for wealth redistribution

The 1930s, a well researched period of balance-sheet recession, provides some interesting perspective despite large historical distance.  Roosevelt was no socialist, but his New Deal did frighten many businesses, especially large business which BTW attempted a coupe to remove him from is position. Fortunately for Roosevelt CIA did not exist yet.  And New Deal  government projects has been much bigger and bolder, then anything Obama ever tried, because Obama administration was constrained in its action by dominant neoliberal thinking. Like regulatory capture, which is an immanent feature of neoliberalism,  there is also less known and less visible ideological capture of the government. Which also makes neoliberalism more similar to bolshevism as this ideological capture and related inability of the USSR elite to modernize the economy on some "mixed" principles, when over-centralization stopped working. It, along with the collapse of the ideology,  probably was one of the main reasons of the collapse of the USSR.  Chinese leadership managed to do this and introduced "new economic policies"(NEP). 

Uner New deal regime when public investment and hence aggregate demand expanded, the economy started to grow anyway. Roosevelt did have a vision and he did convince the electorate about the way to go. Cheap optimism of Reagan, or even audacity of hope "Obama style" were not enough. After all, as Francis Bacon may remind us: “Hope is a good breakfast, but it is a bad supper” (Apophthegms, 1624).

Obama/Bernanke-style attempts to stimulate growth by pure injection of cheap money in this environment not only inflate new bubbles instead of old one, with which the fighting starts. They also lead to massive redistribution of wealth that makes the problem even worse:

Paul Krugman tells us that Larry Summers joined the camp concerned about secular stagnation in his I.M.F. talk last week, something that I had not picked up from prior coverage of the session. This is good news, but I would qualify a few of the points that Krugman makes in his elaboration of Summers' remarks.

First, while the economy may presently need asset bubbles to maintain full employment (a point I made in Plunder and Blunder: The Rise and Fall of the Bubble Economy), it doesn't follow that we should not be concerned about asset bubbles. The problem with bubbles is that their inflation and inevitable deflation lead to massive redistribution of wealth.

Larry Summers was the first establishment economist who conceded that this is the fact (Wikipedia)

... Larry Summers presented his view during November 2013 that secular (long-term) stagnation may be a reason that U.S. growth is insufficient to reach full employment: "Suppose then that the short term real interest rate that was consistent with full employment [i.e., the "natural rate"] had fallen to negative two or negative three percent. Even with artificial stimulus to demand you wouldn't see any excess demand. Even with a resumption in normal credit conditions you would have a lot of difficulty getting back to full employment."[13][14]

Robert J. Gordon wrote in August 2012:

"Even if innovation were to continue into the future at the rate of the two decades before 2007, the U.S. faces six headwinds that are in the process of dragging long-term growth to half or less of the 1.9 percent annual rate experienced between 1860 and 2007. These include demography, education, inequality, globalization, energy/environment, and the overhang of consumer and government debt. A provocative 'exercise in subtraction' suggests that future growth in consumption per capita for the bottom 99 percent of the income distribution could fall below 0.5 percent per year for an extended period of decades".[15]

One hypothesis is that high levels of productivity greater than the economic growth rate are creating economic slack, in which fewer workers are required to meet the demand for goods and services. Firms have less incentive to invest and instead prefer to hold cash. Journalist Marco Nappolini wrote in November 2013:

 "If the expected return on investment over the short term is presumed to be lower than the cost of holding cash then even pushing interest rates to zero will have little effect. That is, if you cannot push real interest rates below the so-called short run natural rate [i.e., the rate of interest required to achieve the growth rate necessary to achieve full employment] you will struggle to bring forward future consumption, blunting the short run effectiveness of monetary policy...Moreover, if you fail to bring it below the long run natural rate there is a strong disincentive to increase fixed capital investment and a consequent preference to hold cash or cash-like instruments in an attempt to mitigate risk. This could cause longer-term hysteresis effects and reduce an economy's potential output."[13] 

Cost of energy as a defining new factor

The cost of energy is probably another reason of secular stagnation along with excessive public and private debt. Rising cost of energy is deadly for capitalism.  Here are some comments that might clarify the situation:

raskolnikov:

This is the biggest crybaby column Krugman's ever written. He should be ashamed of himself and return his Nobel prize immediately. Has he ever put down Keynes long enough to read a little Marx?  Here's Robert Brenner summing it up in 2009:

 What mainly accounts for the long-term weakening of the real economy is a deep, and lasting, decline of the rate of return on capital investment since the end of the 1960s.

The failure of the rate of profit to recover is all the more remarkable, in view of the huge drop-off in the growth of real wages over the period.

The main cause, though not the only cause, of the decline in the rate of profit has been a persistent tendency to overcapacity in global manufacturing industries."

 There's more, too. Instead of siding with crackpot Summers, Krugman should expand his research and be of some use to us all.

Kievite

I am not sure that it is correct to think about public debt as internal debt. It's all about energy.

That means that public debt is to a large extent foreign due to unalterable oil consumption (and related trade deficits). And that completely changes the situation unless you are the owner of the world reserve currency.

But even in the latter case (exorbitant privilege as Valéry Giscard d'Estaing called it ) you can expect attacks on the status of the currency as world reserve currency. The growth is still supported via militarization, forced opening of foreign markets (with military force, if necessary) and conversion of the state into national security state. But as Napoleon admitted "You can do anything with bayonets except sit on them"

One positive thing about high public (and to a large extent foreign owned) debt in the USA is that it undermines what Bacevich called "new American militarism" (http://www.amazon.com/The-New-American-Militarism-Americans/dp/0195173384). Bacevich argues that this is distinct political course adopted by the "defense intellectuals," the evangelicals, and the neocons. And they will never regret their failed efforts such as Iraq invasion.

From Amazon review:

=== Quote ===

Bacevich clearly links our present predicaments both at home and abroad to the ever greater need for natural resources, especially oil from the Persian Gulf. He demolishes all of the reasons for our bellicosity based on ideals and links it directly to our insatiable appetite for oil and economic expansion. Naturally, like thousands of writers before him, he points out the need for a national energy policy based on more effective use of resources and alternative means of production.

=== End of Quote ==

Heinberg's Five Axioms of Sustainability

As Heinberg explained fossil fuels, primarily oil, permeate every aspect of our modern culture - from agriculture to cities and a long-term perspective. In the age of almost 7 billion people demanding more and more of limited resources, the media, politicians and governments tend to only report short-term perspectives and ignore Heinberg's Five Axioms of Sustainability to the extent that these concepts are taboo to be spoken, discussed or thought (Heinberg, Richard (2007) Five Axioms of Sustainability):

1. (Tainter’s Axiom): Any society that continues to use critical resources unsustainably will collapse.

Exception: A society can avoid collapse by finding replacement resources.

Limit to the exception: In a finite world, the number of possible replacements is also finite.

...

2. (Bartlett’s Axiom): Population growth and/or growth in the rates of consumption of resources cannot be sustained.

...

3. To be sustainable, the use of renewable resources must proceed at a rate that is less than or equal to the rate of natural replenishment.

...

4. To be sustainable, the use of non-renewable resources must proceed at a rate that is declining, and the rate of decline must be greater than or equal to the rate of depletion.

The rate of depletion is defined as the amount being extracted and used during a specified time interval (usually a year) as a percentage of the amount left to extract.

...

5. Sustainability requires that substances introduced into the environment from human activities be minimized and rendered harmless to biosphere functions.

In cases where pollution from the extraction and consumption of non-renewable resources that has proceeded at expanding rates for some time threatens the viability of ecosystems, reduction in the rates of extraction and consumption of those resources may need to occur at a rate greater than the rate of depletion. 

Archaeologist Joseph Tainter, in his classic study The Collapse of Complex Societies (1988), demonstrated that collapse is a frequent if not universal fate of complex societies and argued that collapse results from declining returns on efforts to support growing levels of societal complexity using energy harvested from the environment.  Jared Diamond’s popular book Collapse: How Societies Choose to Fail or Succeed (2005) similarly  makes the argument that collapse is the common destiny of societies that ignore resourse constraints. This axiom defines sustainability by the consequences of its absence—that is, collapse.

Historical periods of stagnation in the United States

Adapted from Wikipedia

Excluding the current, there were two period of stagnation in the USA history:

Construction of structures, residential, commercial and industrial, fell off dramatically during the depression, but housing was well on its way to recovering by the late 1930s.[17]

The depression years were the period of the highest total factor productivity growth in the United States, primarily to the building of roads and bridges, abandonment of unneeded railroad track and reduction in railroad employment, expansion of electric utilities and improvements wholesale and retail distribution.[17]

The war created pent up demand for many items as factories that once produced automobiles and other machinery converted to production of tanks, guns, military vehicles and supplies. Tires had been rationed due to shortages of natural rubber; however, the U.S. government built synthetic rubber plants. The U.S. government also built synthetic ammonia plants, aluminum smelters, aviation fuel refineries and aircraft engine factories during the war.[17] After the war commercial aviation, plastics and synthetic rubber would become major industries and synthetic ammonia was used for fertilizer. The end of armaments production free up hundreds of thousands of machine tools, which were made available for other industries. They were needed in the rapidly growing aircraft manufacturing industry.[18]

The memory of war created a need for preparedness in the United States. This resulted in constant spending for defense programs, creating what President Eisenhower called the military-industrial complex.

U.S. birth rates began to recover by the time of World War II, and turned into the baby boom of the postwar decades. A building boom commenced in the years following the war. Suburbs began a rapid expansion and automobile ownership increased.[17]

High-yielding crops and chemical fertilizers dramatically increased crop yields and greatly lowered the cost of food, giving consumers more discretionary income. Railroad locomotives switched from steam to diesel power, with a large increase in fuel efficiency. Most importantly, cheap food essentially eliminated malnutrition in countries like the United States and much of Europe.

Many trends that began before the war continued:

Researchers who contributed to understating secular stagnation

One of the first researchers who clearly attributed secular stagnation problem to neoliberalism was Alan Nasser, Professor Emeritus of Political Economy and Philosophy at The Evergreen State College. In his September 22, 2005 paper  ECONOMIC LAWS, STRUCTURAL TENDENCIES, SECULAR STAGNATION THEORY, AND THE FATE OF NEOLIBERALISM  he pointed out the key features of secular stagnation long before Summers started to understand the problem  and even befor the economic crash of 2008 ;-)

September 22, 2005 | alannasser.org

Alan Nasser Invited presentation, University of Lille,

"We have now grown used to the idea that most ordinary or natural growth processes (the growth of organisms, or popu- lations of organisms or, for example, of cities) is not merely limited, but self-limited, i.e. is slowed down or eventually brought to a standstill as a consequence of the act of growth itself. For one reason or another, but always for some reason, organisms cannot grow indefinitely, just as beyond a certain level of size or density a population defeats its own capacity for further growth."

Sir Peter Medawar, The Revolution of Hope

"A business firm grows and attains great strength, and afterwards perhaps stagnates and decays; and at the turning point there is a balancing or equilibrium of the forces of life and decay. And as we reach to the higher stages of our work, we shall need ever more and more to think of economic forces as those which make a young man grow in strength until he reaches his prime; after which he gradually becomes stiff and inactive, till at last he sinks to make room for other and more vigorous life."

Alfred Marshall, Principals of Economics (1890)

"Though Keynes's 'breakdown theory is quite different from Marx's, it has an important feature in common with the latter: in both theories, the breakdown is motivated by causes inherent to the working of the economic engine, not by the action of factors external to it."

Joseph Schumpeter, Ten Great Economists

In this paper I shall address two major issues. Firstly, I shall discuss the implications for economic theory of a conception of economic laws widely at variance with the empiricist and/or positivist account of what laws are, how they are discovered, and how they are related to theory. At the same time, I will reject one cornerstone of anti-positivist thought, namely the idea that one cannot provide an account of laws that is fundamentally the same for the natural and the social sciences. Thus, I shall argue that an anti-positivist account of laws is entirely compatible with a conception of scientific laws that applies to both the "hard" (natural) and the "soft" (social) sciences. I shall defend this position by showing its application to economics and economic laws. In doing so, I will compare and contrast both natural-scientific (primarily physical) laws and social-scientific (primarily economic) laws. Secondly, I will argue that perhaps the most significant economic law descriptive of mature capitalism is the law of secular stagnation. The latter states that it is the natural tendency of a developed, industrialized capitalist economy to default to a state of chronic excess capacity and underconsumption. And this is itself a result of the tendency in advanced capitalism for the economic surplus (roughly, the difference between the Gross Domectic Product and the cost of producing the GDP) to grow at a rate more rapid than the growth of profitable industrial investment opportunities. In the course of my discussion I will use the United States as a paradigm case, Much as Marx attempted to identify the underlying features of the accumulation process by reference to England during the Industrial Revulution.

This has in fact been the state of global capital since the end of the "Golden Age" and the commencement of the age of globalized Reaganism/Thatcherism, i.e. the Age of Neoliberalism. I date the transition as commencing in 1973, the last year of post-War Keynesian growth rates in the USA. In fact, I will argue, neoliberal economic policy exacerbates capitalism'a tendency to stagnation. Let me begin with an account of economic laws.

LAWS, GENERATIVE MECHANISMS AND TENDENCIES

On the Humean or radical empiricist (positivist) account of laws, the latter are descriptions of observed regularities. Presumably, the scientist observes a "constant conjunction" of different kinds of happening, and infers from the regularity of the conjunction that the latter could not be merely accidental, and so concludes that the observed pattern of regularities must be nomological or law-like. 'Sodium chloride dissolves in water' and 'Metal expands when heated' would be simple examples of the results of this account of how laws of nature are discovered.

That this empiricist account is flawed becomes evident when we consider full-fledged laws of a genuine natural science, e.g. physics. I emphasize that laws are components of theories, which themselves are constitutive of established scientific disciplines, such as physics, chemistry, and biology. In fact, the two "laws" mentioned at the end of the preceding paragraph are not laws of physics at all. Among the genuine laws of physics is, e.g., 'Falling bodies near the surface of the earth accelerate at a constant rate.' This law is certainly not established by the observation of repeated conjunctions of events. On the contrary, actually observed falling bodies in "open systems", that is, in the circumstances of everyday life, conspicuously fail to conform to this law. Yet this is not taken to refute the law. For the law describes the behavior of bodies in a vacuum, that is to say, in a "closed system", one created by the scientist, typically in a laboratory situation. Philosophers of science have tended to ignore the distinction between regularities observed only in closed systems, and conjunctions observed in everyday life, which, as such, have no value as contributions to scientific knowledge. These philosophers have, accordingly, written as if the regularities in question were features of open systems, of nature. This confusion impedes our understanding of all types of laws, from physical to economic.

This failure –until relatively recently- of philosophers of science to properly attend to the importance of laboratory work in the acquisition of scientific knowledge is due to the fact that these philosophers have focused almost exclusively on science as established theory, i.e. as a way of representing the world. They had ignored how these theories were actually established. That is, they paid little attention to experiment, which is a way of intervening in the world. This inattention to what happens in closed systems created in the laboratory led thinkers to miss the importance of the concept of tendencies or dispositions in grasping the concept of a law of science. Let us dwell on this point and its relation to economic laws.

It is not that our knowledge of natural laws is not based on observed regularities. The point, rather, is that these regularities are not found in nature. They are found in closed systems, elaborately designed experimental circumstances found in laboratories. Yet, we correctly believe that what we learn in experimental situations gives us knowledge that is not confined to these situations. We believe that what we learn from observations of repeated patterns in experiments gives us not only knowledge of the behavior of objects in laboratory circumstances, but also knowledge of these same (kinds of) objects as they behave in nature, in the open systems of everyday life. But scientifically significant repeated patterns are not found in the world of daily life. This raises profound epistemological and ontological questions.

The most significant epistemological question arises from the following consideration: Were it not for the intervention of the experimenter, closed-system regularities would not obtain. Hence, the experimenter is a causal agent of the pattern of regularities observed in the laboratory. It is these contrived conjunctions which we invoke to justify our belief in (usually causal) laws. And while these regularities are the (partial) result of the intervention of the experimenter, we do not believe that the experimenter in any way originates the laws whose existence is attested to by the contrived regularities. The question therefore arises: What justifies our (correct) belief that knowledge obtained in closed laboratory systems designed by an agent applies also in open systems, i.e. in nature, which of course is not designed by scientists and does not evidence the regularities found under designed experimental circumstances?

I want to suggest that this question comes to the same as the following question: What must nature be like, and what must experiment reveal, in order for experimental knowledge to be able to be legitimately extended to the world outside of the laboratory, i.e. to nature? Note that this is a Realist question: it asks what we must presuppose about the constitution of the world in order that our experimentally-based scientific beliefs be justified. This is the precise Realist counterpart to Kant's Idealist question: What must we presoppose our minds –as opposed to nature or the world- to be like in order for scientific knowledge to be possible? I will argue that the answer to our Realist question provides the conceptual resources to elucidate the general nature of economic laws and economic theory, and the nature of the subject matter investigated by economists.

I will argue that since we believe that what we learn by experimental observation justifies our claim to knowledge of the experimental objects as they behave in nature, we must assume that these objects possess natural structures, similar to what Aristotle and the scholastics called "natures" or "essences." A natural structure must be conceived as what Critical Realists call a generative mechanism (hereafter, GM). The latter is a specific mode of material organization. What GMs generate are tendencies or dispositions to behave in characteristic ways. The statement that a physical thing or a social institution or structure tends to generate characteristic regularities is a statement of a law. The natural structure of salt, expressed in chemistry as HCl, is such that when it is mixed with water, whose natural structure or organization is expressed as H2O, it tends to dissolve. Gases tend to expand when heated and falling bodies near the surface of the earth tend to accelerate at a constant rate. These are statements of chemical and physical laws. We shall see that precisely the same kind of analysis can be made of laws in economics.

Tendencies are not the same as trends. The latter are merely observed regularities; there need be no implication that an underlying structural feature of the thing in question generates the regularity. This feature of laws is reflected in ordinary language in non-scientific contexts: we might say "He has a tendency to exaggerate." We mean that a disposition to exaggerate is a natural expression of his underlying character. We do not usually mean that he exaggerates whenever it is possible for him to exaggerate. This is part of the meaning of 'tendency.' Thus, tendencies can exist without being exercised. This happens when, e.g. salt is not mixed with water. Salt's nomological tendency to dissolve in water remains its categorical property even in the absence of circumstances in which its tendency to dissolve can be exercised. In addition, tendencies can be exercised without being realized. This is the case in the natural sciences when we observe, in non-laboratory situations, falling bodies accelerating at different rates. Indeed, no falling body in open systems is observed to accelerate at a constant or the same rate. But of course this is not taken to falsify the law of falling bodies. In nature, GMs continue to act in their characteristic ways without producing the patterned outcomes observable in closed experimental systems. This is so because in nature a multiplicity of GMs combine, interact and collide such as to result in the (scientifically irrelevant) flux of phenomena of the everyday world. The realization of a natural tendency can, in other words, be offset by counteracting forces. Thus, empiricism's mistake is to fail to recognize that GMs operate independent of the effects they generate. That is, GMs endure and go on acting (in the way that experimental closure enables us to identify) in nature, i.e. in open systems, where patterned regularities do not prevail. Statements about tendencies are not equivalent, salva veritate, to statements about their effects. Laws may exist and exercise their tendencies or powers even though no Humean "constant conjunctions" are observed. (This would be the case if it happened that the practice of creating closed experimental conditions had never been engaged in, i.e. in a world without science.)

LAWS, GENERATIVE MECHANISMS AND TENDENCIES IN ECONOMICS

GMs are not confined to the natural world. Natural structures are not the only structures there are. Plainly, there are humanely constructed structures. Capitalism is one such structure. Structures of this kind, GMs, that are dynamic by nature, i.e. which are characteristically diachronic, be they natural or socially constituted, share the same ontology. This should not be confused with the radical empiricist (positivist) claim that the natural and the social sciences share the same method. Clearly they do not: closed experimental situations exist but are not typical i istic outcomes ceteris paribus, ie. other things being equal, i.e. ceteris absentibus, other things being absent. When we identify the tendency of a thing, we specify what will happen, as a matter of course, if interfering conditions are absent. That is the point of vacuums in the closed systems created in laboratory experiments: they permit exercised tendencies, i.e. tendencies in operation, to be realized. If we want to know what gases tend to do when acted upon by heat, we eliminate all potential counteracting forces by creating a vacuum in the chamber, so that both gas and heat can express their natures unimpeded.

Thus, implicit in both physical- and social-scientific practice is the crucial distinction between the exercise and the realization (or manifestation) of a tendency. This distinction is essential to structural analysis in economics because of the impossibility of creating the social equivalent of a vacuum in the social sciences, which deal with the open systems of everyday life, where a great many forces and tendencies collide. Accordingly, just as the law of the tendency of falling bodies to accelerate at a constant rate is not falsified by the failure of falling bodies to behave accordingly in open systems, so too, e.g., the law of the tendency of the growth of productive capacity to outpace the growth of profitable investment opportunities -the thesis of secular stagnation theory- is not undermined by the remarkable growth rates of the Golden Age. In both cases, the presence of offsetting factors prevents the structurally generated tendency from being realized or manifested. I argue that the same can be said for any putative economic law.

In social science –and this is most conspicuous in economics, the most theoretically developed of the human sciences- we compensate for the absence of experimentally closed systems by constructing their functional equivalent, which we might call, in terms redolent of Weber, an ideal-typical theoretical model. It is an unfortunate habit (perhaps a tendency in the above-elaborated sense…) of mainstream economists to employ these models as if they described the open-system observable facts of economic life. This is, I suspect, a consequence of the economic empiricist's mistake referred to above, namely to think that GMs, if they must be spoken of at all, are to be conceived as reducible to their effects. (Recall Hume's claim, inspired by his reading of Newton, to expunge all notions of "power", "generation" and "production" from his analyses.) But, as noted above, GMs in both the social and the natural sciences employ unrealistic models, i.e. models which do not pretend to offer the equivalent of a photographic representation of the world. In both natural-scientific experiments and social-scientific ideal-type models, an attempt is made to abstract from the nonessential. We seek to place the spotlight of theory on what is necessary to the situation, system or institution under investigation, and to prescind from the arbitrary and accidental. In economics we seek to identify those features of capitalism that make it what it is. This enables us to identify capitalism's distinct and characteristic tendencies, and to describe what will happen as a result of the exercise of these tendencies, ceteris absentibus.

That there are such tendencies seems to me to be uncontroversial. We all know, for example, that cyclical downturns are not mere empirical contingencies of capitalist development, but structurally generated tendencies which follow inexorably from the specific mode of organization (structure) of capitalism. And like all tendencies, their realization can be offset, as we have seen above, by counteracting factors, such as fiscal and monetary policy. Other examples would be what Marx called the tendencies of capital to concentrate and centralize. The tendency, and corresponding law, with which I will be primarily concerned in this paper is constitutive of the theory of secular stagnation, and is far more likely than the immediately foregoing examples to generate controversy. I refer to the tendency of mature capitalism to suffer from a chronic paucity of profitable industrial investment opportunities, relative to the great magnitude of its investable surplus. Let us look more closely at this tendency.

THE THEORY OF SECULAR STAGNATION

It is worth mentioning that the view that the continuous accumulation of capital is both essential to the normal development of capitalist societies and essentially self-limiting was held by virtually all of the major modern political economists, in the form of one version or another of the doctrine of the falling rate of profit. Adam Smith explained the secular decline of the profit rate by the increasing abundance of capital in a developing capitalist society. Ricardo and Mill believed that the rate of profit would be depressed by the diminishing productivity of the land which would drive up the price of wage goods and therefore of the wages of labor, and so drive down the profits of capital. Marx pointed to the increasing capital-intensity of industry and the paucity of working-class purchasing power relative to the productive capacity of the economy, as the principal threat to the profit rate. And Keynes held that in mature capitalist economies the "marginal efficiency of capital", i.e. the expected rate of return (over cost) on an additional unit of a given capital asset, would tend to decline. All these thinkers had an at least intuitive appreciation of the fact that the growth of capital tends to be terminally self-limiting. (It is worth citing a remark of Joseph Shumpeter at this point:

"Though Keynes's 'breakdown theory is quite different from Marx's, it has an important feature in common with the latter: in both theories, the breakdown is motivated by causes inherent to the working of the economic engine, not by the action of factors external to it.")

In my estimation, no one understood the underlying dynamics of the tendency to stagnation better than the Polish economist Michal Kalecki, who is known to have developed the essentials of Keynes's General Theory before Keynes himself (and to have produced far more elegant mathematical formulations thereof). Perhaps the best way to understand Kalecki's thought is to see him as having argued that certain features of a not-yet-mature industrializing economy persist after the process of industrialization has been accomplished, with the effect that the developed capitalist economy is saddled with a problem of chronic excess capacity. Let me sketch this train of thought.

In the course of their natural growth capitalist economies reach a level of industrial development characterizable as maturity, a point beyond which growth must either cease, or be sustained by exogenous (in a sense to be elucidated below) means. Straight away we are confronted with a rejection of an assumption that is implicit in mainstream neoclassical theory, viz. that both the supply and the demand curves shift, virtually automatically, to the right. On the stagnationist conceptualization of growth or development, the process of development is not everlasting, but rather is at some point accomplished. There is the period, industrialization, during which the economy is developing, and which culminates in a (finally) industrialized or developed infrastructure. At this stage there will have been built up, or "accumulated", a complement of plant and equipment in steel production, machine tools, power stations, transport systems, etc., that is capable of satisfying a level of consumption demand consistent with the moral limits of a reasonably civilized style of life, the constraints imposed by a finite fund of natural resources, and, most importantly for stagnation theory, the limited possibilities of what Marx called "expanded reproduction" imposed by the accumulation process itself.

This account point can be expanded as follows. During any period of industrialization, the growth of the capital goods industry (hereafter, following Marx, Department I, or DI) must outpace the growth of the consumption goods industries (hereafter, again following Marx, Department II, or DII). Indeed, it belongs to the nature of the process of industrialization that the demand for the output of DI cannot be a function of the behavior of consumption demand; during industrialization, investment demand is both rapid and relatively autonomous. For if the principal project is to develop the means of production, then a disproportionate share of national wealth must be devoted to investment/accumulation at the expense of consumption. Strategic capital goods such as transport and communications networks and steel mills cannot be built bit by bit. This is clear with respect to railroads (Recall Keynes's remark that "Two pyramids are better than one, and two masses for the dead better than one; but two railroads from London to York are not necessarily better than one."), but perhaps not as clear with respect to steel facilities.

Suppose 1) that the efficient production of steel requires equipment with the capacity to produce 200,000 tons of steel, and 2) that demand turns out to be for 300,000 tons. The investor has two alternatives, either to forgo an extra market or to take a chance and add another 200.000 tons. On the second alternative, the one virtually assured in a period of (rapid) industrialization, the manufacturer is left with a surplus capacity of 100,000 tons. Here we see, writ small, a crucial source of two basic tendencies of capitalist development, the unrelenting pressure to expand markets, and the tendency to overproduction of a specific kind, namely the overproduction of capital goods, the tendency to overaccumulation. Each of these tendencies is the basis of a corresponding law of economics: Wherever we find a competitive, profit-driven market economy, we must also find a system-driven tendency to expand markets, and: Wherever we find a competitive, profit-driven market economy, we must also find a system-driven tendency for the growth of productive capacity to outpace the growth of effective demand.

As we have seen, all the major classical political economists anticipated the stationary state; they all assumed that the period of development or industrialization would come to an end. Basic industries would be in place, and DI would be capable of meeting all the replacement and expansion demands of DII. Prescinding for the moment from the emergence of new industries, DI would no longer be a source of substantial expansion demand for its own output; most of DI's internal expansion demand would be extinct.

But this is not th hread of classical (and perhaps neoclassical) theory contains the assurance that the capitalist economy provides a mechanism that in the long run counteracts the tendency of the demand for the products of DI to peter out. As one might expect, this is the price mechanism, which brings about, in the circumstances described above, a falling rate of profit (or interest) and thereby a simultaneous check on accumulation and spur to consumption. The causal chain is simple: the fall of the profit rate would lower capital's share of national income, i.e. it would transfer income from capital to labor. Thus, the demand gap created by the sharp waning of DI's expansion demand would be made up by the increase in consumption demand, which would of course mean an expansion in the demand for the output of DII. Moreover, an immediate expansion of DII at the expense of DI in order to assure a rapid transition out of the stationary state would be entirely feasible given the adaptability of certain key industries in DI to new market conditions resulting from the newly-expanded purchasing power of the working class. The construction of new factories could, for example, yield to the construction of new homes.

The theoretical elegance of this scenario is impressive -almost inspirational- but, alas for illusions, the price mechanism does not work this way. For the above-mentioned transfer in national income from capital to labor is supposed to happen when industrialization comes to an end by virtue of its having been accomplished. But from the capitalists' perspective, it is as if nothing counts as industrialization coming to an end. New industries, for example, can create a situation functionally equivalent to industrialization. "Accumulate, accumulate, that is Moses and the prophets."

We have at this point arrived at a picture of a developed capitalist economy which is in a state of permanent industrialization. Excess capacity prevails and working-class income is stagnant or declining. Interestingly, this has in fact been the state of both the U.S. and the global economy since 1973. According to the foregoing analysis, this reflects the fact that the U.S. and global economies are now instances not merely of the exercise of the law of the tendency of mature capitalism to stagnate, but of its realization. To put it differently: these economies are now in their natural state.

But important questions immediately arise. Why are these economies in their natural state now? And if there is a structurally generated tendency for capitalist economies to stagnate, how shall we account for the historically unprecedented growth rates of the Golden Age? I have barely sketched an outline of a response to these challenges above: if there is indeed a tendency for capitalism to stagnate, then there must have been in operation during the Golden Age what I called "counteracting forces and tendencies" which had spent themselves by the mid-1970s. In the absence of new offsetting forces, the tendency to stagnate has, as we should expect, re-asserted itself. These claims require further elaboration, and it is to this task that I now turn.

SECULAR STAGNATION AND TRANSFORMATIONAL GROWTH

In order to account for the actual pattern of capitalist growth in the context of stagnation theory, we must reflect on the kind of growth required by capitalist economic arrangements. Mainstream theory does not distinguish between kinds of growth if and when it addresses the specific requirements of capitalist growth at all. This is, I believe, a serious error. I will begin by introducing the notion of transformational growth, which transforms the entire way of life of society and absorbs exceptionally large amounts of the investible surplus. My point shall be that a capitalist economy cannot sustain growth merely by producing more and more different types of widgets, in the absence of pervasive structural change. Growth sustained in the latter manner is transformational growth.

We are forced to introduce the concept of transformational growth for reasons related to my earlier discussion of the structural features of mature capitalism which generates a chronic tendency to stagnation. I will now embellish this analysis. It should be clear that capitalism cannot grow in the way in which a balloon grows: its growth cannot leave its proportions intact, i.e. such that there are no new products and no new processes of production. This is to say that a capitalist economy either undergoes transformational growth or it stagnates. The argument is as follows.

Investment expands productive capacity, which in turn requires that demand increase at the same rate as potential production. Without the required rate of demand growth, underutilization/excess capacity will discourage further investment or capital accumulation and the result will of course be stagnation. Let us not address this issue in the manner of the neoclassical economist, who seems to assume that both supply and demand curves can be counted on to perennially shift to the right (absent, of course, undue government interference). But this quaint assumption is belied by the enormous literature on the development and indispensability to capitalism of the marketing and advertising industries, which we might view as massive efforts to counteract Keynes's declining marginal propensity to consume by deliberately creating among the consuming masses a full panoply of "manufactured" consumption desires. These considerations point to the need constantly to exogenously stimulate consumption demand in order to narrow the demand gap generated by the tendency to overaccumulation. But they do not yet establish the need to generate a broad, nation-wide pattern of demand required by structural change and transformational growth.

What is needed at this point are concrete examples of the generators of transformational growth, and of exactly how these generators accomplish one of the fundamental features of transformational growth, the mobilization and coordination of the economic resources of the entire country into a grand national project which stimulates demand not merely for this and that consumption good, but for crucial commodities and institutions such as oil, steel rubber, and other primary products, and communication and transportation facilities. What this requires are what Paul Baran and Paul Sweezy termed, in their influential Monopoly Capital (Monthly Review Press, 1966), "epoch-making innovations". Edward Nell and Robert Heilbroner have characterized these same innovations as "transformative innovations". Let me approach transformative innovations by looking at the tendency to stagnation from yet another perspective, one which focuses on the role of competition as a major force behind the growth of both investment and consumption.

Competition reduces the need for investment by tending to increase both productivity and savings. Let us see how this happens. As a result of competition business is under continuous pressure to cut costs and produce more efficiently. To the extent that business succeeds in these respects, productive potential is increased. At the same time, competition also requires business to hold down wages and salaries and to pay out dividend and profit income relatively sparingly. Together, these pressures hold back both worker and capitalist consumption. The result is a tendency for productive capacity to expand faster than consumption. This means that there is no reason for investment to grow, for capital to achieve the required rate of accumulation, unless there are major pressures transforming the way people live. In the absence of such pressures, we may expect stagnation.

There are two dimensions of transformative innovations which are in fact two aspects of the same phenomenon. One dimension is solely technological, and the other points to changes in a population's entire way of life. Neither of these is part of a process of steady, balloon-like growth, nor is either automatically, or normally, generated by the fundamental capitalist dynamics identified by the mainstream textbooks. For this reason I have called the stimulus imparted by these innovations 'exogenous'. Let us look first at the technological dimension of transformative innovation.

This can be identified, after the owl of Minerva has spread its wings, by reflecting on some of the requirements of ideal-typical capitalism. Neoliberals correctly remind us that the bottom line is of course "freedom", primarily the freedom of capital to roam the world seeking markets, sources of cheap labor and investment opportunities. Microecenomic textbooks in fact tend to assume the perfect mobility of both capital and labor.

Let us focus on sources of power, which became especially important after the industrial revolution. Technological development resulted in the virtually total replacement of human and animal muscle power by inanimate sources of power, mainly water and steam. But reliance on water as a source of power places extreme limits on the mobility of capital, and hence on the possibilities of capitalist growth. Water power is site-specific, and the number of rivers and streams is limited. Moreover, the water had to be fast-running and productive facilities had to be located as far downstream as possible. And of course water power is only seasonally available. These restraints alone place an intolerable obstacle to the free and ongoing accumulation of capital. Here we find an overwhelming incentive to switch from water to steam power. This constitutes a huge stimulus to the accumulation of capital on a national scale.

Capitalism requires sources of power that are independent of nature and can be applied constantly wherever they are needed. And these are precisely what steam power made possible. It was now possible to set up productive facilities virtually anywhere; a major fetter to the accumulation of capital was removed. The universal mobility required by capital was now much more fully realized. At this point I want to emphasize that this technological /economic transformation was necessarily accompanied by profound social and cultural changes. For the steam engine's reduction of the seasonality of water power made possible a feature of work that is increasingly common on a global scale: the emergence of modern year-round work habits. With this change comes a dramatic transformation of our notions (and practices) of work and leisure, with all the consequences these have for the felt experience of everyday life. That is an instance of the second dimension of transformative innovation, i.e. its introduction of dramatic cultural changes, changes in the way populations live.

Much the same can be said for the subsequent shift to electrical power, which makes possible trolley cars, refrigerators (as opposed to what used to be called, in the U.S., "ice boxes"), ranges, toasters, radios, washing machines, fans, et al.

The railroad too is a transformative innovation par excellence. Consider the spectacular effects of railroad expansion: internal transport costs are sharply reduced; both new products and new geographical areas are brought into commercial markets; it is now possible to deliver exports to port with unprecedented efficiency, thereby encouraging the extensive development of the export sector; and impetus is provided to the development of the coal, iron and engineering industries. As with the steam engine, these technological and economic benefits wee necessarily accompanied by profound social and cultural changes. The railroads changed the way of life of the people by binding them as never before. The possibility now existed for mass production, mass consumption and indeed mass culture.

And of course the establishment of a national rail network absorbed massive amounts of investible capital, thereby spurring sustainable growth and offsetting the realization of the economic law that capitalist economies tend to stagnate. Apropos: in the latter third of the nineteenth century, railroad investment in the U.S. amounted to more than all investment in manufacturing industries.

And who can doubt that the transformative effects of the introduction of the automobile were epoch-making? The expansion of the automobile industry was the single most important force in the economic expansion of the 1920s. Car production increased threefold during this decade. (The automobile industry produced 12.7% of all manufactured output, employed 7.1% of all manufacturing workers, and paid 8.7% of all industrial wages.) Immediately after World War II the auto industry continued what was to be its breakneck expansion, and the possibilities created thereby constituted what was perhaps the most extensive transformation of the country's way of life in its history.

Consider the stimulus to capital accumulation and employment constituted by the following, each and all a consequence of the increasing automobilization of American society and culture: the migration of the population from the central city to the suburbs and exurbs (first made possible by the streetcar, before the major streetcar operations were bough and then quickly dismantled by the auto companies); the need for surfaced roads, road construction and maintenance, highway construction and maintenance (which had already accounted for 2% of GDP in 1929); the suburbanization of America, with the attendant construction of housing, schools, hospitals, workplaces, and more; the growth of shopping malls; the expansion of the credit industry; the spread of hotels and motels; and of course the growth of the tourism/travel industry. Never before had any population's way of living been transformed so profoundly in so short a period of time. And of course no one has failed to recognize that Americans' main symbol of their most precious possession, their personal freedom/liberty, is their ability to drive, solo, cars that have increasingly come to resemble tanks. Americans' liberty, embodied in the automobile, has become, literally, a commodity.

The long-term growth of the U.S. economy cannot be adequately explained or described without reference to these transformative innovations. None of these are required by the models of capital accumulation found in neoclassical, Keynesian or Marxian growth theory. After the civil war, growth in the last third of the nineteenth century was spurred primarily by the railroads. This stimulus fizzled, as railroad expansion began to slow down, around 1907, when, in spite of extensive electrification of urban (and even some rural) areas, the U.S. economy began a stretch of slow growth, which lasted until the outbreak of World War I. After the end of the War, the economy experienced a brief slump, which was followed by a period of fairly sustained expansion in the 1920s. The latter, as we have seen, was spurred mainly by the growth of the automobile industry. But the rate of growth of the automobile industry slowed down after 1926, and with it the rate of growth of almost all other manufacturing industries. And wages and employment had not risen as rapidly as production, productivity or profits.

In fact, the economic situation in the U.S. at the end of the 1920s bore a remarkable resemblance to the current economic situation in America. After 1926 overcapacity emerged in many key industries, the most significant of these being automobiles, textiles, and residential construction. Contractionary forces are cumulative: excess capacity caused business confidence to decline, with resulting cutbacks in spending on productive capacity in the consumer durables and capital goods industries. The economy was intensely unsound at the end of the 1920s, and the indications at the time were clear. Consumer demand was held down by a steadily growing inequality of income. Thus, an increasing percentage of total purchases were financed by credit in order to foster purchases of consumer durables. About seventy-five percent of all cars were sold on credit. Accordingly, both home mortgages and installment debt grew rapidly. This was the extension of a trend that had begun as early as 1922, when total personal debt began rising faster than disposable income. Thus, underconsumption and traces of excess capacity, key indicators of stagnationist forces, were in effect from the very beginning of the "roaring '20s". These tendencies became increasingly foregrounded over the course of the decade.

Excess capacity in key manufacturing industries was displacing workers from capital-intensive, technologically advanced sectors to industries relatively devoid of technological advance, i.e. service industries such as trade, finance and government. With capital unable to find sufficiently profitable investment opportunities in high-productivity industries, rampant speculative activity ensued, fostered by the growing concentration of income and therefore savings during the decade. More than two thirds of all personal savings was held by slightly over two percent of all families. The wanton optimism of the 1920s led those with substantial savings to want to get richer quickly, and with little effort. The stock market bubble that materialized at the end of the decade seemed to justify the expectations that fortunes could be made overnight in real estate and the stock market. When investors acted on these expectations, the existing bubble became bigger and hence more fragile. To those familiar with the current state of the U.S. economy, the present situation presents itself as history repeating itself -contra Marx- yet again as farce.

FROM GREAT DEPRESSION TO GOLDEN AGE TO NEOLIBERALISM

The mounting instabilities of the economy of the 1920s led to a Depression that was unresponsive to the Roosevelt administration's elevenfold increase in government spending. When U.S. entry into World War II finally brought about a resumption of growth, there was nonetheless an abiding fear among economists that once War spending ceased, the forces and tendencies that had generated the Depression might reassert themselves and exceptionally slow growth could resume. Instead, much to the surprise of many economists, American capitalism began the most sustained period of expansion in its entire history. The period from 1947 to 1973 has come to be called "The Golden Age", and appears, on the face of it, to be a fatal anomaly with respect to secular stagnation theory. After all, if the causes of the Great Depression were structural, and the exogenous stimulus provided by the War was what produced a resumption of growth, how was it possible that the economy, in the absence of powerful exogenous stimulus, exhibited an historically unprecedented period of long-term growth?

I have suggested that sustained national (as opposed to intra-national regional) growth has been engendered by the emergence of transformative innovations, and it is this kind of consideration that I believe offers the most plausible explanation both of Golden-Age expansion and of the petering out of this growth period and the resumption of (global) stagnation. Five stimuli to long-term growth were set in motion after the War, and these were for the most part exogenous in the sense indicated, and essentially limited. I will construe these stimuli as forces counteracting the tendency to stagnation. Once most of these stimuli had spent their potential, stagnationist tendencies re-asserted themselves, and overinvestment became evident once again. With profitable industrial investment opportunities in short supply, the economic surplus was invested instead in what became a vast proliferation of financial instruments. When the bubble created by this process finally burst, it was replaced with a housing bubble. Indeed a variety of bubbles, in financial assets, in housing, in credit, and a substantially overvalued dollar now threaten an historically unparalleled reassertion of the tendency to stagnation. But let us look first at the counteracting forces.

After the War, and as a result of wartime rationing, Americans had accumulated a very large fund of savings, and the time had come when these could finally be spent. This accounted for an immediate surge of consumption spending which temporarily averted the onset of recession. But the effectiveness of this source of spending was soon spent. What truly impelled the sustained growth of the Golden Age was 1) the resumption of a vast expansion of the automobile industry, and with it the stimulation of the broad range of investment and employment opportunities discussed above in connection with automobilization; 2) large-scale economic aid to Europe, which stimulated export demand; 3) a nationwide process of suburbanization, which, in tandem with the expansion of auto production, expanded significantly the demand for the output of every other major industry; 4) the emergence of what president Eisenhower christened the "military-industrial" complex, which provided additional stimulus to the industries most vulnerable to economic instability, the industries of DI, the capital goods sector; and finally 5) the steady and growing expansion of business and especially consumer credit, which in recent years has assumed elephantine proportions.

Three of these factors bear the two most important features of epoch-making innovations. The expansion of the auto industry, suburbanization, and the ever-increasing expansion and extension of credit all absorb massive amounts of investible surplus, and transform the mode of life of the entire population. In so doing they impart a massive push to the macro-growth process. The first two of these have their initial direct effect on investment. The third factor, the growing importance of credit, affects both investment and consumption, but the long-term trend of the credit industry in the U.S., evident now in hindsight, is much more significant in relation to consumption. There is now in the States a credit bubble of menacing proportions, with consumers now in debt to the tune of about107% of disposable income. The Marshall Plan (number 2 above) affected mainly and directly investment and employment, with boosts to consumption following thereupon. By the mid- to late-1970s, the employment-generating capacity of the military had declined. Washington determined, in the light of the defeat in Vietnam, that hi-tech warfare, which is of course technology- rather than labor-intensive, must replace traditional forms of subversion and aggression, in order to render less likely a repeat of the "Vietnam Syndrome."

It is worth mentioning that the military-industrial complex and the vast extension of consumer credit were what constituted what Joan Robinson called "bastard Keynesianism" in the United States. Recall that Keynes had insisted that fiscal and monetary policy were necessary but not sufficient conditions for avoiding stagnation. The tendency to stagnation could be offset for the long run only if some key industries were nationalized, and income redistributed. Nationalization would allow the State to offset lagging demand by providing cheap inputs to the private sector, thereby enabling lower prices. And redistributing income would transfer liquidity from those who had more than they could either consume or invest to those whose consumption demand was severely constrained.

American policymakers saw it as their challenge to reap the effects of nationalization and redistribution without actually nationalizing industries or redistributing income. The solution was ingenious: the military-industrial complex would be the functional equivalent of state-owned industries, and would, as noted above, stimulate the demand for the output of those very firms that produced capital goods. And the extension of consumer credit would allow working people to mortgage future years' incomes and spend more without a corresponding increase in either their private or their social wage.

As mentioned earlier, these forces counteracting the tendency to stagnation were all inherently limited and temporary. By the late 1960s, the automobile industry had achieved maturity, suburbanization had been accomplished, and aid to Europe had not only long ended, but had apparently created for America the economic equivalent of Frankenstein's monster. Europe and Japan were now formidable threats to U.S. economic hegemony. (Germany, for example, has overtaken the U.S. as an exporter of capital goods.) These three colossal absorbers of surplus were now no longer in operation. In the mid-1960s social spending had overtaken military spending as the larger share of government spending. And credit had begun to function as a supplement to declining real income, rather than a further addition to growing income.

These combined developments rendered the post-War counters to the realization of the tendency to stagnation obsolete. The result was the onset of stagnation not only in the U.S. but also worldwide. In America there has been overcapacity in autos, steel, shipbuilding and petrochemicals since the mid- to late-1970s.

This general picture is widely reflected in the business press. Business Week noted that "..supply outpaces demand everywhere, sending prices lower, eroding corporate profits and increasing layoffs" (Jan. 25, 1999, p. 118). The former chairman of General Electric claimed that "..there is excess capacity in almost every industry" (The New York Times, Nov. 16, 1997, p. 3). The Wall Street Journal noted that "..from cashmere to blue jeans, silver jewelry to aluminum cans, the world is in oversupply" (Nov. 30, 1998, p. A17). And The Economist fretted that " the gap between sales and capacity is "at its widest since the 1930s" (Feb. 20, 1999, p. 15). At this time excess capacity in steel is exceeding twenty percent, in autos it has fluctuated around 30%. And these figures look good in comparison to unused capacity numbers in the "industries of the future" of the "New Economy", semiconductors and telecommunications. Not long ago, ninety-seven percent of fibre optic capacity was idle.

MAINSTREAM ECONOMICS AND STAGNATION THEORY

Let us begin with the indisputable fact that the regime of neoliberalism has brought with it a substantial decline in economic growth. The most widely cited study on this issue, produced for the IECD by Angus Maddison, shows that the annual rate of growth of real global GDP fell from 4.9% in 1950-1973 to 3 % in 1973-1998, a drop of 39 %. Theoretical commitments can guide perception: neoliberal economists either denied or ignored the decline in global growth because of their reliance on Say's Law, that it is not possible for total demand to fall below full-capacity supply over the long run. In my earlier remarks I offered an explanation of sluggish growth rates since 1973. Many orthodox economics have done something similar: they have offered explanations of the initial rise in excess capacity. But what has not been explained is why global supply did not eventually adjust itself to the slower rate of demand growth, with the result that in the mid-1970s the global economy would enter a period of sluggish expansion. And it is worth mentioning that even Keynesian macro-theory is inadequate in this regard. It assumes that slow growth in aggregate demand will result in a proportionate decline in the growth of aggregate supply through its effect upon investment and therefore productivity.

An adequate explanation of the sustained character of excess capacity can be constructed from insights from Schumpeter, Marx and the contemporary economist James Crotty. The analysis that follows should be understood within the framework of the version of secular stagnation theory sketched above.

Before the shift to neoliberal policies by Jimmy Carter, Reagan and Thatcher, the global economy was already subject to downward pressures on demand growth resulting from two oil price shocks and the restrictive macro policy imposed in response to oil-price induced inflation. These impediments to demand growth were exacerbated by neoliberal policies. In combination, these forces led to a sharp rise in excess capacity in globally competing industries. At the same time competitive pressures were further intensified by the reduction of the market power of national oligopolies caused by the removal of protectionist barriers to the free movement of goods and money across national boundaries. Accordingly, competitive pressures between nations rose dramatically. In this context, normal stagnationist tendencies operated to further constrain global demand growth and further reproduce industrial capacity faster than either neoclassical or Keynesian theory could comprehend.

The Achilles Heel of neoclassical theory with respect to its inability to account for the persistence of overcapacity during the neoliberal period is its account of competition. So-called "perfect competition" is alleged to lead to maximum efficiency and the elimination of excess capacity. This claim appears inconsistent with the history of real-world, pre- and post-oligopolistic competition. Textbook-like competition has led to periodic market gluts or overproduction crises, price wars, plummeting profits, unbearable debt burdens and violent labor relations. Neoclassical theory banishes these demons with the aid of two assumptions which appear designed explicitly to make them impossible. The first assumption claims that production cost per unit rises rapidly as output increases, and the second that exit from low-profit industries is free or costless. If these assumptions were indeed true, then pure competition could not be shown to have stagnation- or depression-inducing effects. But these assumptions are, I shall suggest, false.

I will begin with the least plausible of these two assumptions. It states that there is free or costless exit from low-profit industries. But productive assets are typically immobile or irreversible, i.e., they are not liquid, and this forces a sizeable loss in the value of a firm's capital should it choose to leave an unprofitable industry. Whether they are sold on a second-hand market or reallocated to a different industry, productive assets will lose substantial value. Capital flowing out of the aerospace industry has been found to sell for one third of its replacement cost. Insolvent telecom firms in the U.S. have sold their assets for 20 cents on the dollar. And isn't this what one would expect? For it is usually poor profit prospects and/or great excess capacity that heighten a firm's incentive to leave an industry. But it is precisely those circumstances which deeply depress the price of industry-specific assets on the second-hand market, since the supply of these assets grows even as the demand for them has collapsed.

Before I turn to the slightly more plausible (yet still false) assumption -that unit production cost rises dramatically as output increases- I will outline the corollary of neoclassical theory itself which neoclassical economists seek to evade by introducing this assumption. The theory tells us that pure competition will force price down until it covers marginal cost. Now if unit production cost remained constant irrespective of the output level, then marginal production cost and average production cost per unit would be equal. When perfect competition forces price to equal marginal cost, total revenue will be equal to total production cost. But in this case there will be no revenue left over either to pay the "fixed" cost of maintaining capital stock in the face of depreciation or obsolescence, or to pay interest and/or dividends to investors. Thus, perfect competition is seen to cause the representative firm to suffer, in each production period, a loss that is equal to fixed costs. Keeping in mind that most important global industries have huge fixed costs, no industry could long survive the consequences of intense competition.

We seem to have found a tendency to stagnation or complete system breakdown where we would least expect to find it - in neoclassical theory itself. But the theory claims to have a response to this embarrassment. It simply denies the claim that appears to entail the undesired consequence, namely the claim that unit production cost remains constant no matter what the output level. Armed now with the (false) assumption that unit production cost rises rapidly as production increases, the conclusion is drawn that marginal cost and price are greater than average unit production cost. Thus, in equilibrium, the gap between price and average production cost is sufficiently large to cover all fixed costs. Let competition be as fierce as you wish, the typical firm will not lose money. Voila!

I have claimed that each of the rescuing assumptions discussed above is false. What would realistic assumptions about marginal cost and the reversibility of invested capital look like? To answer this question we must recognize the distinctive character of the dominant industries of global trade and investment. These industries include steel, autos, aircraft, shipbuilding, petrochemicals, consumer durables, electronics, semiconductors and banking. Studies of this type of industry suggest that marginal cost does not typically rise with output, with the rare exception of cases when the industry is producing near full capacity output. Marginal cost behaves as we would expect in cases of economies of scale: it remains constant or declines as capacity utilization rises. It follows that if free competition forces price to equal marginal cost in these industries, we should count on an ensuing wave of bankruptcies. Here again we see that neoclassical theory, corrected for unrealistic assumptions, seems to commit us to conceptualize mature capitalism as subject to the law of an inherent tendency to stagnation or worse.

The issue I am focusing on here turns on the dynamics of unrestricted competition among oligopolies in the context of economies of scale. The importance of economies of scale underscores the crucial similarity of all the dominant industries, including the new information-technology and telecommunications (ITC) industries. I stress this point because influential neoclassical economists have wanted to claim a significant difference, with respect to overcapacity problems, between the ITC industries and the other dominant industries. For purposes of explaining the persistence of excess capacity under neoliberalism, we want to remember that as scale economies grow, marginal costs fall as fixed costs per unit rise. Thus, the greater the economies of scale, the more destructive becomes the marginal cost pricing required by intense competition. With this in mind, we can more easily see that 1) these dynamics in especially conspicuous operation in the ITC industries, and 2) that such differences as there are between ITC and the other dominant oligopolies are insignificant for the analysis of secular stagnation theory, and of capitalist growth in general.

The key issue right now, recall, is the highly destructive consequences of the tendency of free competition among dominant industries to force price to equal marginal cost. That this is the case is easier to see in the ITC sector than in the other dominant industries. This is because in ITC marginal cost is often close to zero. Producing another copy of software or adding another customer to eBay is virtually costless. This has led many mainstream economists to argue that ITC industries are exempt from the laws of the neoclassical theory of perfect competition. Since ITC firms have marginal costs much lower than their large fixed costs, the argument goes, the possession of at least temporary monopoly power is the only guarantee of an incentive to produce anything at all. Without monopoly pricing power prices will be competed down to marginal cost and fixed costs will be unable to be covered. Thus, the motor of the "new economy" is said to be the constant pursuit of monopoly power. But, contrary to the neoclassical claim, none of this distinguishes significantly between ITC and other key industries. The drive to monopoly power is characteristic of all large corporations in the present age.

As Paul Sweezy argued in his Marshall Lectures, the typical firm in an oligopolized industry strives to be a monopolist. Each firm does this individually, and they all do it collectively. Individual firms seek monopoly status through the sales effort, where the firm's product is put forth as the best in the industry and as different from all the others. Firms within the same industry seek to approach monopoly status by collusion with respect to pricing policy, especially by agreeing to refrain from cutthroat price competition. For reasons developed at length above, therefore, all dominant firms, whether old- or new-economy operations, will tend to achieve monopoly status and to be chronically saddled with excess capacity.

A SCANDALOUSLY BRIEF LOOK AT SLOW-GROWTH CAPITALISM

We are in the midst of another unparalleled period of historical capitalism. Since the onset of stagnation, the median wage in the States has not changed at all for the vast majority of wage workers. Over the past six quarters the gowth of wage income has been negative. A brief sketch of the state of the U.S. economy toward the end of last year highlights features whose most plausible explanation may lie in the fact of secular stagnation. If stagnation theory is accurate, what follows is precisely what we would expect to find. The current state of the U.S. and the global economy is best understood, I believe, against the background too briefly elaborated above. Here is a picture of the U.S. economy today. The key to a healthy economy is job- and income-creating investment in capital goods, which in turn generates a virtuous cycle of further growth in investment, jobs and income. Ominously, the investment, growth, employment and income pictures are unprecedentedly dismal.

Compared to cyclical recoveries between 1949 and 1973, recoveries during the neoliberal period have been weak. Indeed, one or two of the post-1973 upturns has been weaker than some downturns during the Golden Age. Since the stock market collapse of four years ago, the situation has worsened. Growth rates since 2000 have been half their previous average. Even this weak performance required historically unprecedented fiscal and monetary stimulus: 13 rate cuts, three tax cuts, massive government deficits and record growth in money and credit.

Official figures mask the economy's most serious problems. Growth figures are annualized by U.S. statisticians. Thus, the much-touted 7.1% growth rate in the third quarter of 2003 was the one that would emerge after twelve months if the current trend were to continue. The same growth rate would have been reported in the eurozone as 1.8%. This is an uncommonly weak performance.

Investment data are equally misleading. Since the mid-1990s the Bureau of Economic Analysis (BEA) has adjusted upward actual business dollar outlays on computers and related equipment to take into account quality improvements (faster processors, bigger hard drives, more memory). BEA calls this "hedonic adjustment." Accordingly, the BEA estimates that business high-tech investment quadrupled between 1996 and 2002, from $70.9 to $283.7. But in actual dollars spent, the increase was only from $70.9 billion to $74.2 billion, very low by historic standards. The high-tech boom was both greatly exaggerated and misleading. After all, neither profits nor wages are taken in "hedonically adjusted" dollars.

The difference between real and hedonic outlays explains what would otherwise be a paradoxical feature of the years 2000-2003: government was reporting big increases in high-tech investment, while manufacturers were bemoaning declining sales.

Hedonic pricing has accounted for a steadily rising percentage of all reported capital investment. But if we look at actual dollars spent, we find that since 1998 the growth rate of business fixed investment has actually been declining. Real capital investment has in fact not been this weak since the Great Depression.

The fudging of investment figures also obscures the sorry state of the jobs market. The Commerce Department's figures on nonresidential investment for the third and fourth quarters of 2003 reported increases of, respectively, 12.8 and 9.6%. A closer look reveals that the "adjusted" hi-tech sector is the only bright spot, with production and capacity rising, respectively, 24.6% and 11.1% over the past year. But hi-tech is not where significant jobs increases are found. Employment in hi-tech has declined steadily through the so-called "recovery" since its 2001 peak.

In non-hi-tech manufacturing, where investment figures are not adjusted, production from January 2003 to January 2004 rose only 0.9%, while capacity actually declined -0.2%. This represents a record nineteen-straight-month decline in mainline manufacturing capacity. Since it is mainline manufacturing which employs almost 95% of all manufacturing workers, it comes as no surprise that for the first time since the Great Depression the economy has gone more than three years without creating any jobs.

The jobs crisis is even worse than it appears. Here again statistical sleight-of-hand, this time by the Bureau of Labor Statistics (BLS), obscures economic reality. Based on data gathered employing the "net birth/death adjustment," BLS announced in April, 2004, that the long-awaited jobs recovery had finally arrived. Nonfarm payrolls had allegedly surged by a whopping 308,000 in March, 2004. The birth/death model uses business deaths to "impute" employment from business births. Thus, as more businesses fail, more new jobs are imputed to have materialized through business births. This improbable statistical artefact accounts for about half of the reported 308,000 March, 2004 payroll increase.

The birth/death model is based on statistics covering 1998-2002. This was a period of explosive telecom and dot.com startups, quite unlike today's flat economic landscape. Thus, two thirds of the 947,000 new jobs BLS "imputed" for March-May, 2004, were never actually counted by BLS and never reported by any firm.

BlS's household and establishment surveys tell a more sobering story. March employment by private industry actually fell by 175,000, and the number of self-employed workers declined by 288,000. Without the simultaneous increase of 439,000 government jobs, the March job announcement would have been a calamity. And both average weekly hours and total hours worked declined markedly, even as (according to the dubious birth/death findings) the work force increased. This is the first time in U.S. history that net job growth has been negative 26 months into a recovery.

The wage and salary picture has also set grim records. During the current recovery, wage and salary growth has actually been negative, at -0.6%, in contrast to the average increase of 7.2% characteristic of this point into each of the other eight post-War recoveries. In fact, median family income in the post-War period exhibits an ominous trend. From 1947 to 1967, real median family income rose by 75%. But since 1967, it has grown by only 30%.

Labor's losses have been capital's gain: since the peak of the last recovery, in the first quarter of 2001, corporate profits have risen 62.2%, compared to the average of 13.9% at the same point in the last eight recoveries. Never in American history has any recorded recovery had such a lopsided balance in the distribution of income gains between labor and capital.

Given the dismal investment, wage/salary and employment pictures, how has it been possible for consumption to have risen to 71% of GDP in the early nineties, from its prior post-War average of 66%? The answer is a growth rate of consumer debt never seen before in America. For the first time ever, in March 2001, overall debt levels (mortgage debt plus consumer debt, mainly credit card debt and car loans) rose above annual disposable income. And from 2001 to 2004 consumer debt rose from 101% to 116% of disposable income. In the first half of 2004, consumer borrowing has been at its highest ever. It has declined slightly in the meantime. So has consumer spending. Should Americans decide to significantly increase their saving and service debts, while lowering correspondingly their consumption expenditures, the global economy could experience a major disruption.

Up until very recently, consumers had stepped up their borrowing to compensate for slowing income growth. Thus, such growth as the U.S. has experienced in recent years has been almost entirely consumption- and debt-driven. More fundamentally, it has been bubble-driven, fueled principally by bubbles in home values and credit.

Since the collapse of stock market/hi-tech bubbles in 2001, the illusory "wealth effect" has been sustained, and consumer spending thereby encouraged, by another bubble, the enormous inflation of house prices. The biggest increase in household debt came from home mortgage debt, especially home mortgage refinancing. With mortgage rates low and home prices rising, households' home equity ballooned. Bloated home equity then provided rising collateral to underwrite still more borrowing.

What makes this especially problematic is that over the last ten years, the average family has suffered under large increases in health premiums, housing costs, tuition fees and child care costs. As a result, households' and individuals' margin of protection against insolvency has dramatically declined. Filings for personal bankruptcy are approaching a record high.

There are indications that these weaknesses and imbalances in the economy are reaching a critical mass. The mortgage refi boom has fizzled, and consumer spending is beginning to decline. Two years ago the Fed's quarterly Beige Book reported a disturbing shift in the composition of credit spending: more and more families are using their credit cards to finance spending on essentials, such as food and energy.

It is no exaggeration to say that both the U.S. economy and the global economy are hugely dependent on the American consumer's increasing willingness to spend more than (s)he makes. (Imported goods have been a rising proportion of all goods purchased here.) Thus, a decline in U.S. consumer spending portends further declines in investment, jobs and income. From January to July of 2004, consumer spending rose at an annual rate of 2.8%, down from 3.3% in 2003 and 3.1 % in 2002. For perspective, during the boom years 1999-2000, growth rates were 5.1% and 4.7%.

Spending on consumer durables is the most significant indicator of healthy growth, and the drastically lower spending in this area is cause for alarm: spending for consumer durables was down to $23.5 billion in the first seven months of this year, in contrast to $71 billion on 2003 and $58 billion in 2002.

Should consumer spending continue to decline, the economy faces the genuine likelihood of a severe recession. Of course not a single American politician addresses this issue.

What is required is a shift from bubble-, debt-, and consumption-driven growth to investment- and income-driven growth. This in turn necessitates a decline in Americas principal export, jobs. Domestic job growth, a higher minimum wage, tax cuts aimed predominantly at low- and middle-income families, a sharp reduction in defense spending and a redirection of these funds to long-neglected and pressing social needs such as health care reform, the provision of universal pre-school, and across-the-board repair and upgrading of America's deteriorated infrastructure of roads, highways,tunnels and bridges, all these should be at the forefront of a Democratic administration's agenda. The restoration of infrastructure is especially labor intensive, and would generate an enormous number of productive jobs. And as a national project spearheaded by government initiative, government would emerge as a major employer.

All this si entirely incompatible with the overwhelming neoliberal bent of even the most "liberal" political leaders. It was after all Bill Clinton who urinated on the grave of Franklin Roosevelt when he proclaimed "the end of welfare as we know it".

As unfashionable as it is to suggest such a thing at a conference of economists, the only hope for the world's majority seems to be the revival of the kinds of mass movements witnessed here in May of 1968, and throughout the world during the 1960s. And time may be short.

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Alan Nasser is Professor emeritus of Political Economy and Philosophy at The Evergreen State College. His book, The “New Normal”: Persistent Austerity, Declining Democracy and the Globalization of Resistance will be published by Pluto Press in 2013. If you would like to be notified when the book is released, please send a request to nassera@evergreen.edu

Thomas Palley » Blog Archive » Explaining Stagnation Why it Matters

John Bellamy Foster and Fred Magdoff clearly identify stagnation in their 2009 book The Great Financial Crisis: Causes and Consequences (HERE). They conclude with a section titled “Back to the real economy: the stagnation problem” and they write:

“It was the reality of economic stagnation beginning in the 1970s, as heterodox economists Ricardo Belliofiore and Joseph Halevi have recently emphasized, that led to the emergence of “the new financialized capitalist regime,” a kind of “paradoxical financial Keynesianiasm” whereby demand in the economy was stimulated primarily “thanks to asset-bubbles” (Foster and Magdoff, p.129).”

My own 2009 New America Foundation report, “America’s Exhausted Paradigm: Macroeconomic Causes of the Financial Crisis and Great Recession”, concluded (HERE):

“The bottom line is macroeconomic failure rooted in America’s flawed economic paradigm is the ultimate cause of the financial crisis and Great Recession…. Now, there is a grave danger that policymakers only focus on financial market reform and ignore reform of America’s flawed economic paradigm. In that event, though the economy may stabilize, it will likely be unable to escape the pull of economic stagnation. That is because stagnation is the logical next stage of the existing paradigm.”

That report became a core chapter in my 2012 book, From Financial Crisis to Stagnation, the blurb for which reads (HERE):

“The U.S. economy today is confronted with the prospect of extended stagnation. This book explores why…. Financial deregulation and the house price bubble kept the economy going by making ever more credit available. As the economy cannibalized itself by undercutting income distribution and accumulating debt, it needed larger speculative bubbles to grow. That process ended when the housing bubble burst. The earlier post–World War II economic model based on rising middle-class incomes has been dismantled, while the new neoliberal model has imploded. Absent a change of policy paradigm, the logical next step is stagnation. The political challenge we face now is how to achieve paradigm change.”

The big analytical difference between Foster and Magdoff and myself is that they see stagnation as inherent to capitalism whereas I see it as the product of neoliberal economic policy. Foster and Magdoff partake of the Baran-Sweezy tradition that recommends deeper socialist transformation. I use a structural Keynesian framework that recommends reconstructing the income and demand generation mechanism via policies that include rebuilding worker bargaining power, reforming globalization, and reining in corporations and financial markets.

Larry Summers’ story of serial bubbles delaying stagnation has substantial similarities with both accounts but he avoids blaming either capitalism or neoliberalism. That is hardly surprising as Summers has been a chief architect of the neoliberal system and remains committed to it, though he now wants to soften its impact. Instead, he appeals to the black box of “secular stagnation” as ultimate cause and suggests fiscal policies that would ameliorate the demand shortage problem. However, those policies would not remedy the root cause of stagnation as they leave the economic architecture unchanged.

Though Summers and Krugman are relative late-comers to the stagnation hypothesis, they have still done a great public service by drawing attention to it. Now that stagnation has been identified, the real debate can begin.

The questions are what caused stagnation and what must be done to restore shared prosperity? There is no guarantee we will answer those questions correctly (my prior is mainstream economists will continue their track record of getting it wrong). But it is absolutely certain we will not get the right answer if we do not ask the right question. So thank you Larry Summers and Paul Krugman for putting stagnation on the table. Let the debate begin.

This entry was posted on Monday, February 24th, 2014 at 12:53 pm and is filed under Economics, U.S. Policy. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Summers makes the idea of secular stagnation mainstream

Larry Summers (“Why Stagnation May Prove To Be The New Normal,” The Financial Times, December 15, 2013)  suggested the current "lack of demand" is not anomaly but a feature of the current sociao-economic system.  He suggested that we have been in the throes of stagnation for a long while, but that has been obscured by years of serial asset price bubbles. His article produced great public debate and marked the point when the idea became mainstream. The debate began with Summers’ speech to the IMF’s Fourteenth Annual Research Conference in Honor of Stanley Fisher. Summers noted that the panic of 2008 was “an event that in the fall of 2008 and winter of 2009 … appeared, by most of the statistics—GDP, industrial production, employment, world trade, the stock market—worse than the fall of 1929 and the winter of 1930. …”

Tha means the major defeat for “stabilization policies” that were supposed to smooth the capitalist industrial cycle and abolish panics. And the problem preceeds the 2008 panic itself.

The highly misleading unemployment rate calculated by the U.S. Department of Labor notwithstanding, there has been a massive growth in long-term unemployment in the U.S. in the wake of the crisis, as shown by the declining percentage of the U.S. population actually working.

The current situation also refute the key tenet of neoclassical economy (which is pseudo-religious doctrine, so that only increase fanatic devotion of its well-paid adherents). Neoclassical economists insisted that since a “free market economy” naturally tends toward an equilibrium with full employment of both workers and machines, the economy should should quickly return to “full employment” after a recession. This is not the case. See also Secular Stagnation Lawrence H. Summers

There were several uncessful attempts to explaint his situation from neoclassical positions. In Secular Stagnation, Coalmines, Bubbles, and Larry Summers - NYTimes.com Paul Krugman  emphasized the liquidity trap – zero lower bound to interest rates which supposedly prevents spending from reaching a level sufficient for full employment.

Larry’s formulation of our current economic situation is the same as my own. Although he doesn’t use the words “liquidity trap”, he works from the understanding that we are an economy in which monetary policy is de facto constrained by the zero lower bound (even if you think central banks could be doing more), and that this corresponds to a situation in which the “natural” rate of interest – the rate at which desired savings and desired investment would be equal at full employment – is negative.

And as he also notes, in this situation the normal rules of economic policy don’t apply. As I like to put it, virtue becomes vice and prudence becomes folly. Saving hurts the economy – it even hurts investment, thanks to the paradox of thrift. Fixating on debt and deficits deepens the depression. And so on down the line.

This is the kind of environment in which Keynes’s hypothetical policy of burying currency in coalmines and letting the private sector dig it up – or my version, which involves faking a threat from nonexistent space aliens – becomes a good thing; spending is good, and while productive spending is best, unproductive spending is still better than nothing.

Larry also indirectly states an important corollary: this isn’t just true of public spending. Private spending that is wholly or partially wasteful is also a good thing, unless it somehow stores up trouble for the future. That last bit is an important qualification. But suppose that U.S. corporations, which are currently sitting on a huge hoard of cash, were somehow to become convinced that it would be a great idea to fit out all their employees as cyborgs, with Google Glass and smart wristwatches everywhere. And suppose that three years later they realized that there wasn’t really much payoff to all that spending. Nonetheless, the resulting investment boom would have given us several years of much higher employment, with no real waste, since the resources employed would otherwise have been idle.

OK, this is still mostly standard, although a lot of people hate, just hate, this kind of logic – they want economics to be a morality play, and they don’t care how many people have to suffer in the process.

But now comes the radical part of Larry’s presentation: his suggestion that this may not be a temporary state of affairs.

2. An economy that needs bubbles?

We now know that the economic expansion of 2003-2007 was driven by a bubble. You can say the same about the latter part of the 90s expansion; and you can in fact say the same about the later years of the Reagan expansion, which was driven at that point by runaway thrift institutions and a large bubble in commercial real estate.

So you might be tempted to say that monetary policy has consistently been too loose. After all, haven’t low interest rates been encouraging repeated bubbles?

But as Larry emphasizes, there’s a big problem with the claim that monetary policy has been too loose: where’s the inflation? Where has the overheated economy been visible?

So how can you reconcile repeated bubbles with an economy showing no sign of inflationary pressures? Summers’s answer is that we may be an economy that needs bubbles just to achieve something near full employment – that in the absence of bubbles the economy has a negative natural rate of interest. And this hasn’t just been true since the 2008 financial crisis; it has arguably been true, although perhaps with increasing severity, since the 1980s.

One way to quantify this is, I think, to look at household debt. Here’s the ratio of household debt to GDP since the 50s:

There was a sharp increase in the ratio after World War II, but from a low base, as families moved to the suburbs and all that. Then there were about 25 years of rough stability, from 1960 to around 1985. After that, however, household debt rose rapidly and inexorably, until the crisis struck.

So with all that household borrowing, you might have expected the period 1985-2007 to be one of strong inflationary pressure, high interest rates, or both. In fact, you see neither – this was the era of the Great Moderation, a time of low inflation and generally low interest rates. Without all that increase in household debt, interest rates would presumably have to have been considerably lower – maybe negative. In other words, you can argue that our economy has been trying to get into the liquidity trap for a number of years, and that it only avoided the trap for a while thanks to successive bubbles.

And if that’s how you see things, when looking forward you have to regard the liquidity trap not as an exceptional state of affairs but as the new normal.

3. Secular stagnation?

How did this happen? Larry explicitly invokes the notion of secular stagnation, associated in particular with Alvin Hansen (pdf).  He doesn’t say why this might be happening to us now, but it’s not hard to think of possible reasons.

Back in the day, Hansen stressed demographic factors: he thought slowing population growth would mean low investment demand. Then came the baby boom. But this time around the slowdown is here, and looks real.

Think of it this way: during the period 1960-85, when the U.S. economy seemed able to achieve full employment without bubbles, our labor force grew an average 2.1 percent annually. In part this reflected the maturing of the baby boomers, in part the move of women into the labor force.

This growth made sustaining investment fairly easy: the business of providing Americans with new houses, new offices, and so on easily absorbed a fairly high fraction of GDP.

Now look forward. The Census projects that the population aged 18 to 64 will grow at an annual rate of only 0.2 percent between 2015 and 2025. Unless labor force participation not only stops declining but starts rising rapidly again, this means a slower-growth economy, and thanks to the accelerator effect, lower investment demand.

By the way, in a Samuelson consumption-loan model, the natural rate of interest equals the rate of population growth. Reality is a lot more complicated than that, but I don’t think it’s foolish to guess that the decline in population growth has reduced the natural real rate of interest by something like an equal amount (and to note that Japan’s shrinking working-age population is probably a major factor in its secular stagnation.)

There may be other factors – a Bob Gordonesque decline in innovation, etc.. The point is that it’s not hard to think of reasons why the liquidity trap could be a lot more persistent than anyone currently wants to admit.

4. Destructive virtue

If you take a secular stagnation view seriously, it has some radical implications – and Larry goes there.

Currently, even policymakers who are willing to concede that the liquidity trap makes nonsense of conventional notions of policy prudence are busy preparing for the time when normality returns. This means that they are preoccupied with the idea that they must act now to head off future crises. Yet this crisis isn’t over – and as Larry says, “Most of what would be done under the aegis of preventing a future crisis would be counterproductive.”

He goes on to say that the officially respectable policy agenda involves “doing less with monetary policy than was done before and doing less with fiscal policy than was done before,” even though the economy remains deeply depressed. And he says, a bit fuzzily but bravely all the same, that even improved financial regulation is not necessarily a good thing – that it may discourage irresponsible lending and borrowing at a time when more spending of any kind is good for the economy.

Amazing stuff – and if we really are looking at secular stagnation, he’s right.

Of course, the underlying problem in all of this is simply that real interest rates are too high. But, you say, they’re negative – zero nominal rates minus at least some expected inflation. To which the answer is, so? If the market wants a strongly negative real interest rate, we’ll have persistent problems until we find a way to deliver such a rate.

One way to get there would be to reconstruct our whole monetary system – say, eliminate paper money and pay negative interest rates on deposits. Another way would be to take advantage of the next boom – whether it’s a bubble or driven by expansionary fiscal policy – to push inflation substantially higher, and keep it there. Or maybe, possibly, we could go the Krugman 1998/Abe 2013 route of pushing up inflation through the sheer power of self-fulfilling expectations.

Any such suggestions are, of course, met with outrage. How dare anyone suggest that virtuous individuals, people who are prudent and save for the future, face expropriation? How can you suggest steadily eroding their savings either through inflation or through negative interest rates? It’s tyranny!

But in a liquidity trap saving may be a personal virtue, but it’s a social vice. And in an economy facing secular stagnation, this isn’t just a temporary state of affairs, it’s the norm. Assuring people that they can get a positive rate of return on safe assets means promising them something the market doesn’t want to deliver – it’s like farm price supports, except for rentiers.

Oh, and one last point. If we’re going to have persistently negative real interest rates along with at least somewhat positive overall economic growth, the panic over public debt looks even more foolish than people like me have been saying: servicing the debt in the sense of stabilizing the ratio of debt to GDP has no cost, in fact negative cost.

I could go on, but by now I hope you’ve gotten the point. What Larry did at the IMF wasn’t just give an interesting speech. He laid down what amounts to a very radical manifesto. And I very much fear that he may be right.

Supplement 1: Of Flying Cars and the Declining Rate of Profit (reprint)

Of Flying Cars and the Declining Rate of Profit - The Baffler

David Graeber

A secret question hovers over us, a sense of disappointment, a broken promise we were given as children about what our adult world was supposed to be like. I am referring not to the standard false promises that children are always given (about how the world is fair, or how those who work hard shall be rewarded), but to a particular generational promise—given to those who were children in the fifties, sixties, seventies, or eighties—one that was never quite articulated as a promise but rather as a set of assumptions about what our adult world would be like. And since it was never quite promised, now that it has failed to come true, we’re left confused: indignant, but at the same time, embarrassed at our own indignation, ashamed we were ever so silly to believe our elders to begin with.

Where, in short, are the flying cars? Where are the force fields, tractor beams, teleportation pods, antigravity sleds, tricorders, immortality drugs, colonies on Mars, and all the other technological wonders any child growing up in the mid-to-late twentieth century assumed would exist by now? Even those inventions that seemed ready to emerge—like cloning or cryogenics—ended up betraying their lofty promises. What happened to them?

We are well informed of the wonders of computers, as if this is some sort of unanticipated compensation, but, in fact, we haven’t moved even computing to the point of progress that people in the fifties expected we’d have reached by now. We don’t have computers we can have an interesting conversation with, or robots that can walk our dogs or take our clothes to the Laundromat.

As someone who was eight years old at the time of the Apollo moon landing, I remember calculating that I would be thirty-nine in the magic year 2000 and wondering what the world would be like. Did I expect I would be living in such a world of wonders? Of course. Everyone did. Do I feel cheated now? It seemed unlikely that I’d live to see all the things I was reading about in science fiction, but it never occurred to me that I wouldn’t see any of them.

At the turn of the millennium, I was expecting an outpouring of reflections on why we had gotten the future of technology so wrong. Instead, just about all the authoritative voices—both Left and Right—began their reflections from the assumption that we do live in an unprecedented new technological utopia of one sort or another.

The common way of dealing with the uneasy sense that this might not be so is to brush it aside, to insist all the progress that could have happened has happened and to treat anything more as silly. “Oh, you mean all that Jetsons stuff?” I’m asked—as if to say, but that was just for children! Surely, as grown-ups, we understand The Jetsons offered as accurate a view of the future as The Flintstones offered of the Stone Age.

Surely, as grown-ups, we understand The Jetsons offered as accurate a view of the future as The Flintstones did of the Stone Age.

Even in the seventies and eighties, in fact, sober sources such as National Geographic and the Smithsonian were informing children of imminent space stations and expeditions to Mars. Creators of science fiction movies used to come up with concrete dates, often no more than a generation in the future, in which to place their futuristic fantasies. In 1968, Stanley Kubrick felt that a moviegoing audience would find it perfectly natural to assume that only thirty-three years later, in 2001, we would have commercial moon flights, city-like space stations, and computers with human personalities maintaining astronauts in suspended animation while traveling to Jupiter. Video telephony is just about the only new technology from that particular movie that has appeared—and it was technically possible when the movie was showing. 2001 can be seen as a curio, but what about Star Trek? The Star Trek mythos was set in the sixties, too, but the show kept getting revived, leaving audiences for Star Trek Voyager in, say, 2005, to try to figure out what to make of the fact that according to the logic of the program, the world was supposed to be recovering from fighting off the rule of genetically engineered supermen in the Eugenics Wars of the nineties.

By 1989, when the creators of Back to the Future II were dutifully placing flying cars and anti-gravity hoverboards in the hands of ordinary teenagers in the year 2015, it wasn’t clear if this was meant as a prediction or a joke.

The usual move in science fiction is to remain vague about the dates, so as to render “the future” a zone of pure fantasy, no different than Middle Earth or Narnia, or like Star Wars, “a long time ago in a galaxy far, far away.” As a result, our science fiction future is, most often, not a future at all, but more like an alternative dimension, a dream-time, a technological Elsewhere, existing in days to come in the same sense that elves and dragon-slayers existed in the past—another screen for the displacement of moral dramas and mythic fantasies into the dead ends of consumer pleasure.

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Might the cultural sensibility that came to be referred to as postmodernism best be seen as a prolonged meditation on all the technological changes that never happened? The question struck me as I watched one of the recent Star Wars movies. The movie was terrible, but I couldn’t help but feel impressed by the quality of the special effects. Recalling the clumsy special effects typical of fifties sci-fi films, I kept thinking how impressed a fifties audience would have been if they’d known what we could do by now—only to realize, “Actually, no. They wouldn’t be impressed at all, would they? They thought we’d be doing this kind of thing by now. Not just figuring out more sophisticated ways to simulate it.”

That last word—simulate—is key. The technologies that have advanced since the seventies are mainly either medical technologies or information technologies—largely, technologies of simulation. They are technologies of what Jean Baudrillard and Umberto Eco called the “hyper-real,” the ability to make imitations that are more realistic than originals. The postmodern sensibility, the feeling that we had somehow broken into an unprecedented new historical period in which we understood that there is nothing new; that grand historical narratives of progress and liberation were meaningless; that everything now was simulation, ironic repetition, fragmentation, and pastiche—all this makes sense in a technological environment in which the only breakthroughs were those that made it easier to create, transfer, and rearrange virtual projections of things that either already existed, or, we came to realize, never would. Surely, if we were vacationing in geodesic domes on Mars or toting about pocket-size nuclear fusion plants or telekinetic mind-reading devices no one would ever have been talking like this. The postmodern moment was a desperate way to take what could otherwise only be felt as a bitter disappointment and to dress it up as something epochal, exciting, and new.

In the earliest formulations, which largely came out of the Marxist tradition, a lot of this technological background was acknowledged. Fredric Jameson’s “Postmodernism, or the Cultural Logic of Late Capitalism” proposed the term “postmodernism” to refer to the cultural logic appropriate to a new, technological phase of capitalism, one that had been heralded by Marxist economist Ernest Mandel as early as 1972. Mandel had argued that humanity stood at the verge of a “third technological revolution,” as profound as the Agricultural or Industrial Revolution, in which computers, robots, new energy sources, and new information technologies would replace industrial labor—the “end of work” as it soon came to be called—reducing us all to designers and computer technicians coming up with crazy visions that cybernetic factories would produce.

End of work arguments were popular in the late seventies and early eighties as social thinkers pondered what would happen to the traditional working-class-led popular struggle once the working class no longer existed. (The answer: it would turn into identity politics.) Jameson thought of himself as exploring the forms of consciousness and historical sensibilities likely to emerge from this new age.

What happened, instead, is that the spread of information technologies and new ways of organizing transport—the containerization of shipping, for example—allowed those same industrial jobs to be outsourced to East Asia, Latin America, and other countries where the availability of cheap labor allowed manufacturers to employ much less technologically sophisticated production-line techniques than they would have been obliged to employ at home.

From the perspective of those living in Europe, North America, and Japan, the results did seem to be much as predicted. Smokestack industries did disappear; jobs came to be divided between a lower stratum of service workers and an upper stratum sitting in antiseptic bubbles playing with computers. But below it all lay an uneasy awareness that the postwork civilization was a giant fraud. Our carefully engineered high-tech sneakers were not being produced by intelligent cyborgs or self-replicating molecular nanotechnology; they were being made on the equivalent of old-fashioned Singer sewing machines, by the daughters of Mexican and Indonesian farmers who, as the result of WTO or NAFTA–sponsored trade deals, had been ousted from their ancestral lands. It was a guilty awareness that lay beneath the postmodern sensibility and its celebration of the endless play of images and surfaces.

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Why did the projected explosion of technological growth everyone was expecting—the moon bases, the robot factories—fail to happen? There are two possibilities. Either our expectations about the pace of technological change were unrealistic (in which case, we need to know why so many intelligent people believed they were not) or our expectations were not unrealistic (in which case, we need to know what happened to derail so many credible ideas and prospects).

Most social analysts choose the first explanation and trace the problem to the Cold War space race. Why, these analysts wonder, did both the United States and the Soviet Union become so obsessed with the idea of manned space travel? It was never an efficient way to engage in scientific research. And it encouraged unrealistic ideas of what the human future would be like.

Could the answer be that both the United States and the Soviet Union had been, in the century before, societies of pioneers, one expanding across the Western frontier, the other across Siberia? Didn’t they share a commitment to the myth of a limitless, expansive future, of human colonization of vast empty spaces, that helped convince the leaders of both superpowers they had entered into a “space age” in which they were battling over control of the future itself? All sorts of myths were at play here, no doubt, but that proves nothing about the feasibility of the project.

Some of those science fiction fantasies (at this point we can’t know which ones) could have been brought into being. For earlier generations, many science fiction fantasies had been brought into being. Those who grew up at the turn of the century reading Jules Verne or H.G. Wells imagined the world of, say, 1960 with flying machines, rocket ships, submarines, radio, and television—and that was pretty much what they got. If it wasn’t unrealistic in 1900 to dream of men traveling to the moon, then why was it unrealistic in the sixties to dream of jet-packs and robot laundry-maids?

In fact, even as those dreams were being outlined, the material base for their achievement was beginning to be whittled away. There is reason to believe that even by the fifties and sixties, the pace of technological innovation was slowing down from the heady pace of the first half of the century. There was a last spate in the fifties when microwave ovens (1954), the Pill (1957), and lasers (1958) all appeared in rapid succession. But since then, technological advances have taken the form of clever new ways of combining existing technologies (as in the space race) and new ways of putting existing technologies to consumer use (the most famous example is television, invented in 1926, but mass produced only after the war.) Yet, in part because the space race gave everyone the impression that remarkable advances were happening, the popular impression during the sixties was that the pace of technological change was speeding up in terrifying, uncontrollable ways.

Alvin Toffler’s 1970 best seller Future Shock argued that almost all the social problems of the sixties could be traced back to the increasing pace of technological change. The endless outpouring of scientific breakthroughs transformed the grounds of daily existence, and left Americans without any clear idea of what normal life was. Just consider the family, where not just the Pill, but also the prospect of in vitro fertilization, test tube babies, and sperm and egg donation were about to make the idea of motherhood obsolete.

Humans were not psychologically prepared for the pace of change, Toffler wrote. He coined a term for the phenomenon: “accelerative thrust.” It had begun with the Industrial Revolution, but by roughly 1850, the effect had become unmistakable. Not only was everything around us changing, but most of it—human knowledge, the size of the population, industrial growth, energy use—was changing exponentially. The only solution, Toffler argued, was to begin some kind of control over the process, to create institutions that would assess emerging technologies and their likely effects, to ban technologies likely to be too socially disruptive, and to guide development in the direction of social harmony.

While many of the historical trends Toffler describes are accurate, the book appeared when most of these exponential trends halted. It was right around 1970 when the increase in the number of scientific papers published in the world—a figure that had doubled every fifteen years since, roughly, 1685—began leveling off. The same was true of books and patents.

Toffler’s use of acceleration was particularly unfortunate. For most of human history, the top speed at which human beings could travel had been around 25 miles per hour. By 1900 it had increased to 100 miles per hour, and for the next seventy years it did seem to be increasing exponentially. By the time Toffler was writing, in 1970, the record for the fastest speed at which any human had traveled stood at roughly 25,000 mph, achieved by the crew of Apollo 10 in 1969, just one year before. At such an exponential rate, it must have seemed reasonable to assume that within a matter of decades, humanity would be exploring other solar systems.

Since 1970, no further increase has occurred. The record for the fastest a human has ever traveled remains with the crew of Apollo 10. True, the commercial airliner Concorde, which first flew in 1969, reached a maximum speed of 1,400 mph. And the Soviet Tupolev Tu-144, which flew first, reached an even faster speed of 1,553 mph. But those speeds not only have failed to increase; they have decreased since the Tupolev Tu-144 was cancelled and the Concorde was abandoned.

None of this stopped Toffler’s own career. He kept retooling his analysis to come up with new spectacular pronouncements. In 1980, he produced The Third Wave, its argument lifted from Ernest Mandel’s “third technological revolution”—except that while Mandel thought these changes would spell the end of capitalism, Toffler assumed capitalism was eternal. By 1990, Toffler was the personal intellectual guru to Republican congressman Newt Gingrich, who claimed that his 1994 “Contract With America” was inspired, in part, by the understanding that the United States needed to move from an antiquated, materialist, industrial mind-set to a new, free-market, information age, Third Wave civilization.

There are all sorts of ironies in this connection. One of Toffler’s greatest achievements was inspiring the government to create an Office of Technology Assessment (OTA). One of Gingrich’s first acts on winning control of the House of Representatives in 1995 was defunding the OTA as an example of useless government extravagance. Still, there’s no contradiction here. By this time, Toffler had long since given up on influencing policy by appealing to the general public; he was making a living largely by giving seminars to CEOs and corporate think tanks. His insights had been privatized.

Gingrich liked to call himself a “conservative futurologist.” This, too, might seem oxymoronic; but, in fact, Toffler’s own conception of futurology was never progressive. Progress was always presented as a problem that needed to be solved.

Toffler might best be seen as a lightweight version of the nineteenth-century social theorist Auguste Comte, who believed that he was standing on the brink of a new age—in his case, the Industrial Age—driven by the inexorable progress of technology, and that the social cataclysms of his times were caused by the social system not adjusting. The older feudal order had developed Catholic theology, a way of thinking about man’s place in the cosmos perfectly suited to the social system of the time, as well as an institutional structure, the Church, that conveyed and enforced such ideas in a way that could give everyone a sense of meaning and belonging. The Industrial Age had developed its own system of ideas—science—but scientists had not succeeded in creating anything like the Catholic Church. Comte concluded that we needed to develop a new science, which he dubbed “sociology,” and said that sociologists should play the role of priests in a new Religion of Society that would inspire everyone with a love of order, community, work discipline, and family values. Toffler was less ambitious; his futurologists were not supposed to play the role of priests.

Gingrich had a second guru, a libertarian theologian named George Gilder, and Gilder, like Toffler, was obsessed with technology and social change. In an odd way, Gilder was more optimistic. Embracing a radical version of Mandel’s Third Wave argument, he insisted that what we were seeing with the rise of computers was an “overthrow of matter.” The old, materialist Industrial Society, where value came from physical labor, was giving way to an Information Age where value emerges directly from the minds of entrepreneurs, just as the world had originally appeared ex nihilo from the mind of God, just as money, in a proper supply-side economy, emerged ex nihilo from the Federal Reserve and into the hands of value-creating capitalists. Supply-side economic policies, Gilder concluded, would ensure that investment would continue to steer away from old government boondoggles like the space program and toward more productive information and medical technologies.

But if there was a conscious, or semi-conscious, move away from investment in research that might lead to better rockets and robots, and toward research that would lead to such things as laser printers and CAT scans, it had begun well before Toffler’s Future Shock (1970) and Gilder’s Wealth and Poverty (1981). What their success shows is that the issues they raised—that existing patterns of technological development would lead to social upheaval, and that we needed to guide technological development in directions that did not challenge existing structures of authority—echoed in the corridors of power. Statesmen and captains of industry had been thinking about such questions for some time.

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Industrial capitalism has fostered an extremely rapid rate of scientific advance and technological innovation—one with no parallel in previous human history. Even capitalism’s greatest detractors, Karl Marx and Friedrich Engels, celebrated its unleashing of the “productive forces.” Marx and Engels also believed that capitalism’s continual need to revolutionize the means of industrial production would be its undoing. Marx argued that, for certain technical reasons, value—and therefore profits—can be extracted only from human labor. Competition forces factory owners to mechanize production, to reduce labor costs, but while this is to the short-term advantage of the firm, mechanization’s effect is to drive down the general rate of profit.

For 150 years, economists have debated whether all this is true. But if it is true, then the decision by industrialists not to pour research funds into the invention of the robot factories that everyone was anticipating in the sixties, and instead to relocate their factories to labor-intensive, low-tech facilities in China or the Global South makes a great deal of sense.

As I’ve noted, there’s reason to believe the pace of technological innovation in productive processes—the factories themselves—began to slow in the fifties and sixties, but the side effects of America’s rivalry with the Soviet Union made innovation appear to accelerate. There was the awesome space race, alongside frenetic efforts by U.S. industrial planners to apply existing technologies to consumer purposes, to create an optimistic sense of burgeoning prosperity and guaranteed progress that would undercut the appeal of working-class politics.

These moves were reactions to initiatives from the Soviet Union. But this part of the history is difficult for Americans to remember, because at the end of the Cold War, the popular image of the Soviet Union switched from terrifyingly bold rival to pathetic basket case—the exemplar of a society that could not work. Back in the fifties, in fact, many United States planners suspected the Soviet system worked better. Certainly, they recalled the fact that in the thirties, while the United States had been mired in depression, the Soviet Union had maintained almost unprecedented economic growth rates of 10 percent to 12 percent a year—an achievement quickly followed by the production of tank armies that defeated Nazi Germany, then by the launching of Sputnik in 1957, then by the first manned spacecraft, the Vostok, in 1961.

It’s often said the Apollo moon landing was the greatest historical achievement of Soviet communism. Surely, the United States would never have contemplated such a feat had it not been for the cosmic ambitions of the Soviet Politburo. We are used to thinking of the Politburo as a group of unimaginative gray bureaucrats, but they were bureaucrats who dared to dream astounding dreams. The dream of world revolution was only the first. It’s also true that most of them—changing the course of mighty rivers, this sort of thing—either turned out to be ecologically and socially disastrous, or, like Joseph Stalin’s one-hundred-story Palace of the Soviets or a twenty-story statue of Vladimir Lenin, never got off the ground.

After the initial successes of the Soviet space program, few of these schemes were realized, but the leadership never ceased coming up with new ones. Even in the eighties, when the United States was attempting its own last, grandiose scheme, Star Wars, the Soviets were planning to transform the world through creative uses of technology. Few outside of Russia remember most of these projects, but great resources were devoted to them. It’s also worth noting that unlike the Star Wars project, which was designed to sink the Soviet Union, most were not military in nature: as, for instance, the attempt to solve the world hunger problem by harvesting lakes and oceans with an edible bacteria called spirulina, or to solve the world energy problem by launching hundreds of gigantic solar-power platforms into orbit and beaming the electricity back to earth.

The American victory in the space race meant that, after 1968, U.S. planners no longer took the competition seriously. As a result, the mythology of the final frontier was maintained, even as the direction of research and development shifted away from anything that might lead to the creation of Mars bases and robot factories.

The standard line is that all this was a result of the triumph of the market. The Apollo program was a Big Government project, Soviet-inspired in the sense that it required a national effort coordinated by government bureaucracies. As soon as the Soviet threat drew safely out of the picture, though, capitalism was free to revert to lines of technological development more in accord with its normal, decentralized, free-market imperatives—such as privately funded research into marketable products like personal computers. This is the line that men like Toffler and Gilder took in the late seventies and early eighties.

In fact, the United States never did abandon gigantic, government-controlled schemes of technological development. Mainly, they just shifted to military research—and not just to Soviet-scale schemes like Star Wars, but to weapons projects, research in communications and surveillance technologies, and similar security-related concerns. To some degree this had always been true: the billions poured into missile research had always dwarfed the sums allocated to the space program. Yet by the seventies, even basic research came to be conducted following military priorities. One reason we don’t have robot factories is because roughly 95 percent of robotics research funding has been channeled through the Pentagon, which is more interested in developing unmanned drones than in automating paper mills.

A case could be made that even the shift to research and development on information technologies and medicine was not so much a reorientation toward market-driven consumer imperatives, but part of an all-out effort to follow the technological humbling of the Soviet Union with total victory in the global class war—seen simultaneously as the imposition of absolute U.S. military dominance overseas, and, at home, the utter rout of social movements.

For the technologies that did emerge proved most conducive to surveillance, work discipline, and social control. Computers have opened up certain spaces of freedom, as we’re constantly reminded, but instead of leading to the workless utopia Abbie Hoffman imagined, they have been employed in such a way as to produce the opposite effect. They have enabled a financialization of capital that has driven workers desperately into debt, and, at the same time, provided the means by which employers have created “flexible” work regimes that have both destroyed traditional job security and increased working hours for almost everyone. Along with the export of factory jobs, the new work regime has routed the union movement and destroyed any possibility of effective working-class politics.

Meanwhile, despite unprecedented investment in research on medicine and life sciences, we await cures for cancer and the common cold, and the most dramatic medical breakthroughs we have seen have taken the form of drugs such as Prozac, Zoloft, or Ritalin—tailor-made to ensure that the new work demands don’t drive us completely, dysfunctionally crazy.

With results like these, what will the epitaph for neoliberalism look like? I think historians will conclude it was a form of capitalism that systematically prioritized political imperatives over economic ones. Given a choice between a course of action that would make capitalism seem the only possible economic system, and one that would transform capitalism into a viable, long-term economic system, neoliberalism chooses the former every time. There is every reason to believe that destroying job security while increasing working hours does not create a more productive (let alone more innovative or loyal) workforce. Probably, in economic terms, the result is negative—an impression confirmed by lower growth rates in just about all parts of the world in the eighties and nineties.

But the neoliberal choice has been effective in depoliticizing labor and overdetermining the future. Economically, the growth of armies, police, and private security services amounts to dead weight. It’s possible, in fact, that the very dead weight of the apparatus created to ensure the ideological victory of capitalism will sink it. But it’s also easy to see how choking off any sense of an inevitable, redemptive future that could be different from our world is a crucial part of the neoliberal project.

At this point all the pieces would seem to be falling neatly into place. By the sixties, conservative political forces were growing skittish about the socially disruptive effects of technological progress, and employers were beginning to worry about the economic impact of mechanization. The fading Soviet threat allowed for a reallocation of resources in directions seen as less challenging to social and economic arrangements, or indeed directions that could support a campaign of reversing the gains of progressive social movements and achieving a decisive victory in what U.S. elites saw as a global class war. The change of priorities was introduced as a withdrawal of big-government projects and a return to the market, but in fact the change shifted government-directed research away from programs like NASA or alternative energy sources and toward military, information, and medical technologies.

Of course this doesn’t explain everything. Above all, it does not explain why, even in those areas that have become the focus of well-funded research projects, we have not seen anything like the kind of advances anticipated fifty years ago. If 95 percent of robotics research has been funded by the military, then where are the Klaatu-style killer robots shooting death rays from their eyes?

Obviously, there have been advances in military technology in recent decades. One of the reasons we all survived the Cold War is that while nuclear bombs might have worked as advertised, their delivery systems did not; intercontinental ballistic missiles weren’t capable of striking cities, let alone specific targets inside cities, and this fact meant there was little point in launching a nuclear first strike unless you intended to destroy the world.

Contemporary cruise missiles are accurate by comparison. Still, precision weapons never do seem capable of assassinating specific individuals (Saddam, Osama, Qaddafi), even when hundreds are dropped. And ray guns have not materialized—surely not for lack of trying. We can assume the Pentagon has spent billions on death ray research, but the closest they’ve come so far are lasers that might, if aimed correctly, blind an enemy gunner looking directly at the beam. Aside from being unsporting, this is pathetic: lasers are a fifties technology. Phasers that can be set to stun do not appear to be on the drawing boards; and when it comes to infantry combat, the preferred weapon almost everywhere remains the AK-47, a Soviet design named for the year it was introduced: 1947.

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The Internet is a remarkable innovation, but all we are talking about is a super-fast and globally accessible combination of library, post office, and mail-order catalogue. Had the Internet been described to a science fiction aficionado in the fifties and sixties and touted as the most dramatic technological achievement since his time, his reaction would have been disappointment. Fifty years and this is the best our scientists managed to come up with? We expected computers that would think!

Overall, levels of research funding have increased dramatically since the seventies. Admittedly, the proportion of that funding that comes from the corporate sector has increased most dramatically, to the point that private enterprise is now funding twice as much research as the government, but the increase is so large that the total amount of government research funding, in real-dollar terms, is much higher than it was in the sixties. “Basic,” “curiosity-driven,” or “blue skies” research—the kind that is not driven by the prospect of any immediate practical application, and that is most likely to lead to unexpected breakthroughs—occupies an ever smaller proportion of the total, though so much money is being thrown around nowadays that overall levels of basic research funding have increased.

Yet most observers agree that the results have been paltry. Certainly we no longer see anything like the continual stream of conceptual revolutions—genetic inheritance, relativity, psychoanalysis, quantum mechanics—that people had grown used to, and even expected, a hundred years before. Why?

Part of the answer has to do with the concentration of resources on a handful of gigantic projects: “big science,” as it has come to be called. The Human Genome Project is often held out as an example. After spending almost three billion dollars and employing thousands of scientists and staff in five different countries, it has mainly served to establish that there isn’t very much to be learned from sequencing genes that’s of much use to anyone else. Even more, the hype and political investment surrounding such projects demonstrate the degree to which even basic research now seems to be driven by political, administrative, and marketing imperatives that make it unlikely anything revolutionary will happen.

Here, our fascination with the mythic origins of Silicon Valley and the Internet has blinded us to what’s really going on. It has allowed us to imagine that research and development is now driven, primarily, by small teams of plucky entrepreneurs, or the sort of decentralized cooperation that creates open-source software. This is not so, even though such research teams are most likely to produce results. Research and development is still driven by giant bureaucratic projects.

What has changed is the bureaucratic culture. The increasing interpenetration of government, university, and private firms has led everyone to adopt the language, sensibilities, and organizational forms that originated in the corporate world. Although this might have helped in creating marketable products, since that is what corporate bureaucracies are designed to do, in terms of fostering original research, the results have been catastrophic.

My own knowledge comes from universities, both in the United States and Britain. In both countries, the last thirty years have seen a veritable explosion of the proportion of working hours spent on administrative tasks at the expense of pretty much everything else. In my own university, for instance, we have more administrators than faculty members, and the faculty members, too, are expected to spend at least as much time on administration as on teaching and research combined. The same is true, more or less, at universities worldwide.

The growth of administrative work has directly resulted from introducing corporate management techniques. Invariably, these are justified as ways of increasing efficiency and introducing competition at every level. What they end up meaning in practice is that everyone winds up spending most of their time trying to sell things: grant proposals; book proposals; assessments of students’ jobs and grant applications; assessments of our colleagues; prospectuses for new interdisciplinary majors; institutes; conference workshops; universities themselves (which have now become brands to be marketed to prospective students or contributors); and so on.

As marketing overwhelms university life, it generates documents about fostering imagination and creativity that might just as well have been designed to strangle imagination and creativity in the cradle. No major new works of social theory have emerged in the United States in the last thirty years. We have been reduced to the equivalent of medieval scholastics, writing endless annotations of French theory from the seventies, despite the guilty awareness that if new incarnations of Gilles Deleuze, Michel Foucault, or Pierre Bourdieu were to appear in the academy today, we would deny them tenure.

There was a time when academia was society’s refuge for the eccentric, brilliant, and impractical. No longer. It is now the domain of professional self-marketers. As a result, in one of the most bizarre fits of social self-destructiveness in history, we seem to have decided we have no place for our eccentric, brilliant, and impractical citizens. Most languish in their mothers’ basements, at best making the occasional, acute intervention on the Internet.

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If all this is true in the social sciences, where research is still carried out with minimal overhead largely by individuals, one can imagine how much worse it is for astrophysicists. And, indeed, one astrophysicist, Jonathan Katz, has recently warned students pondering a career in the sciences. Even if you do emerge from the usual decade-long period languishing as someone else’s flunky, he says, you can expect your best ideas to be stymied at every point:

You will spend your time writing proposals rather than doing research. Worse, because your proposals are judged by your competitors, you cannot follow your curiosity, but must spend your effort and talents on anticipating and deflecting criticism rather than on solving the important scientific problems. . . . It is proverbial that original ideas are the kiss of death for a proposal, because they have not yet been proved to work.

That pretty much answers the question of why we don’t have teleportation devices or antigravity shoes. Common sense suggests that if you want to maximize scientific creativity, you find some bright people, give them the resources they need to pursue whatever idea comes into their heads, and then leave them alone. Most will turn up nothing, but one or two may well discover something. But if you want to minimize the possibility of unexpected breakthroughs, tell those same people they will receive no resources at all unless they spend the bulk of their time competing against each other to convince you they know in advance what they are going to discover.

In the natural sciences, to the tyranny of managerialism we can add the privatization of research results. As the British economist David Harvie has reminded us, “open source” research is not new. Scholarly research has always been open source, in the sense that scholars share materials and results. There is competition, certainly, but it is “convivial.” This is no longer true of scientists working in the corporate sector, where findings are jealously guarded, but the spread of the corporate ethos within the academy and research institutes themselves has caused even publicly funded scholars to treat their findings as personal property. Academic publishers ensure that findings that are published are increasingly difficult to access, further enclosing the intellectual commons. As a result, convivial, open-source competition turns into something much more like classic market competition.

There are many forms of privatization, up to and including the simple buying up and suppression of inconvenient discoveries by large corporations fearful of their economic effects. (We cannot know how many synthetic fuel formulae have been bought up and placed in the vaults of oil companies, but it’s hard to imagine nothing like this happens.) More subtle is the way the managerial ethos discourages everything adventurous or quirky, especially if there is no prospect of immediate results. Oddly, the Internet can be part of the problem here. As Neal Stephenson put it:

Most people who work in corporations or academia have witnessed something like the following: A number of engineers are sitting together in a room, bouncing ideas off each other. Out of the discussion emerges a new concept that seems promising. Then some laptop-wielding person in the corner, having performed a quick Google search, announces that this “new” idea is, in fact, an old one; it—or at least something vaguely similar—has already been tried. Either it failed, or it succeeded. If it failed, then no manager who wants to keep his or her job will approve spending money trying to revive it. If it succeeded, then it’s patented and entry to the market is presumed to be unattainable, since the first people who thought of it will have “first-mover advantage” and will have created “barriers to entry.” The number of seemingly promising ideas that have been crushed in this way must number in the millions.

And so a timid, bureaucratic spirit suffuses every aspect of cultural life. It comes festooned in a language of creativity, initiative, and entrepreneurialism. But the language is meaningless. Those thinkers most likely to make a conceptual breakthrough are the least likely to receive funding, and, if breakthroughs occur, they are not likely to find anyone willing to follow up on their most daring implications.

Giovanni Arrighi has noted that after the South Sea Bubble, British capitalism largely abandoned the corporate form. By the time of the Industrial Revolution, Britain had instead come to rely on a combination of high finance and small family firms—a pattern that held throughout the next century, the period of maximum scientific and technological innovation. (Britain at that time was also notorious for being just as generous to its oddballs and eccentrics as contemporary America is intolerant. A common expedient was to allow them to become rural vicars, who, predictably, became one of the main sources for amateur scientific discoveries.)

Contemporary, bureaucratic corporate capitalism was a creation not of Britain, but of the United States and Germany, the two rival powers that spent the first half of the twentieth century fighting two bloody wars over who would replace Britain as a dominant world power—wars that culminated, appropriately enough, in government-sponsored scientific programs to see who would be the first to discover the atom bomb. It is significant, then, that our current technological stagnation seems to have begun after 1945, when the United States replaced Britain as organizer of the world economy.

Americans do not like to think of themselves as a nation of bureaucrats—quite the opposite—but the moment we stop imagining bureaucracy as a phenomenon limited to government offices, it becomes obvious that this is precisely what we have become. The final victory over the Soviet Union did not lead to the domination of the market, but, in fact, cemented the dominance of conservative managerial elites, corporate bureaucrats who use the pretext of short-term, competitive, bottom-line thinking to squelch anything likely to have revolutionary implications of any kind.

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If we do not notice that we live in a bureaucratic society, that is because bureaucratic norms and practices have become so all-pervasive that we cannot see them, or, worse, cannot imagine doing things any other way.

Computers have played a crucial role in this narrowing of our social imaginations. Just as the invention of new forms of industrial automation in the eighteenth and nineteenth centuries had the paradoxical effect of turning more and more of the world’s population into full-time industrial workers, so has all the software designed to save us from administrative responsibilities turned us into part- or full-time administrators. In the same way that university professors seem to feel it is inevitable they will spend more of their time managing grants, so affluent housewives simply accept that they will spend weeks every year filling out forty-page online forms to get their children into grade schools. We all spend increasing amounts of time punching passwords into our phones to manage bank and credit accounts and learning how to perform jobs once performed by travel agents, brokers, and accountants.

Someone once figured out that the average American will spend a cumulative six months of life waiting for traffic lights to change. I don’t know if similar figures are available for how long it takes to fill out forms, but it must be at least as long. No population in the history of the world has spent nearly so much time engaged in paperwork.

In this final, stultifying stage of capitalism, we are moving from poetic technologies to bureaucratic technologies. By poetic technologies I refer to the use of rational and technical means to bring wild fantasies to reality. Poetic technologies, so understood, are as old as civilization. Lewis Mumford noted that the first complex machines were made of people. Egyptian pharaohs were able to build the pyramids only because of their mastery of administrative procedures, which allowed them to develop production-line techniques, dividing up complex tasks into dozens of simple operations and assigning each to one team of workmen—even though they lacked mechanical technology more complex than the inclined plane and lever. Administrative oversight turned armies of peasant farmers into the cogs of a vast machine. Much later, after cogs had been invented, the design of complex machinery elaborated principles originally developed to organize people.

Yet we have seen those machines—whether their moving parts are arms and torsos or pistons, wheels, and springs—being put to work to realize impossible fantasies: cathedrals, moon shots, transcontinental railways. Certainly, poetic technologies had something terrible about them; the poetry is likely to be as much of dark satanic mills as of grace or liberation. But the rational, administrative techniques were always in service to some fantastic end.

From this perspective, all those mad Soviet plans—even if never realized—marked the climax of poetic technologies. What we have now is the reverse. It’s not that vision, creativity, and mad fantasies are no longer encouraged, but that most remain free-floating; there’s no longer even the pretense that they could ever take form or flesh. The greatest and most powerful nation that has ever existed has spent the last decades telling its citizens they can no longer contemplate fantastic collective enterprises, even if—as the environmental crisis demands— the fate of the earth depends on it.

What are the political implications of all this? First of all, we need to rethink some of our most basic assumptions about the nature of capitalism. One is that capitalism is identical with the market, and that both therefore are inimical to bureaucracy, which is supposed to be a creature of the state.

The second assumption is that capitalism is in its nature technologically progressive. It would seem that Marx and Engels, in their giddy enthusiasm for the industrial revolutions of their day, were wrong about this. Or, to be more precise: they were right to insist that the mechanization of industrial production would destroy capitalism; they were wrong to predict that market competition would compel factory owners to mechanize anyway. If it didn’t happen, that is because market competition is not, in fact, as essential to the nature of capitalism as they had assumed. If nothing else, the current form of capitalism, where much of the competition seems to take the form of internal marketing within the bureaucratic structures of large semi-monopolistic enterprises, would come as a complete surprise to them.

Defenders of capitalism make three broad historical claims: first, that it has fostered rapid scientific and technological growth; second, that however much it may throw enormous wealth to a small minority, it does so in such a way as to increase overall prosperity; third, that in doing so, it creates a more secure and democratic world for everyone. It is clear that capitalism is not doing any of these things any longer. In fact, many of its defenders are retreating from claiming that it is a good system and instead falling back on the claim that it is the only possible system—or, at least, the only possible system for a complex, technologically sophisticated society such as our own.

But how could anyone argue that current economic arrangements are also the only ones that will ever be viable under any possible future technological society? The argument is absurd. How could anyone know?

Granted, there are people who take that position—on both ends of the political spectrum. As an anthropologist and anarchist, I encounter anticivilizational types who insist not only that current industrial technology leads only to capitalist-style oppression, but that this must necessarily be true of any future technology as well, and therefore that human liberation can be achieved only by returning to the Stone Age. Most of us are not technological determinists.

But claims for the inevitability of capitalism have to be based on a kind of technological determinism. And for that very reason, if the aim of neoliberal capitalism is to create a world in which no one believes any other economic system could work, then it needs to suppress not just any idea of an inevitable redemptive future, but any radically different technological future. Yet there’s a contradiction. Defenders of capitalism cannot mean to convince us that technological change has ended—since that would mean capitalism is not progressive. No, they mean to convince us that technological progress is indeed continuing, that we do live in a world of wonders, but that those wonders take the form of modest improvements (the latest iPhone!), rumors of inventions about to happen (“I hear they are going to have flying cars pretty soon”), complex ways of juggling information and imagery, and still more complex platforms for filling out of forms.

I do not mean to suggest that neoliberal capitalism—or any other system—can be successful in this regard. First, there’s the problem of trying to convince the world you are leading the way in technological progress when you are holding it back. The United States, with its decaying infrastructure, paralysis in the face of global warming, and symbolically devastating abandonment of its manned space program just as China accelerates its own, is doing a particularly bad public relations job. Second, the pace of change can’t be held back forever. Breakthroughs will happen; inconvenient discoveries cannot be permanently suppressed. Other, less bureaucratized parts of the world—or at least, parts of the world with bureaucracies that are not so hostile to creative thinking—will slowly but inevitably attain the resources required to pick up where the United States and its allies have left off. The Internet does provide opportunities for collaboration and dissemination that may help break us through the wall as well. Where will the breakthrough come? We can’t know. Maybe 3D printing will do what the robot factories were supposed to. Or maybe it will be something else. But it will happen.

About one conclusion we can feel especially confident: it will not happen within the framework of contemporary corporate capitalism—or any form of capitalism. To begin setting up domes on Mars, let alone to develop the means to figure out if there are alien civilizations to contact, we’re going to have to figure out a different economic system. Must the new system take the form of some massive new bureaucracy? Why do we assume it must? Only by breaking up existing bureaucratic structures can we begin. And if we’re going to invent robots that will do our laundry and tidy up the kitchen, then we’re going to have to make sure that whatever replaces capitalism is based on a far more egalitarian distribution of wealth and power—one that no longer contains either the super-rich or the desperately poor willing to do their housework. Only then will technology begin to be marshaled toward human needs. And this is the best reason to break free of the dead hand of the hedge fund managers and the CEOs—to free our fantasies from the screens in which such men have imprisoned them, to let our imaginations once again become a material force in human history.


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[Oct 10, 2019] Trump, Impeachment Forgetting What Brought Him to the White House by Andrew J. Bacevich

Highly recommended!
The term "centrist" is replaced by a more appropriate term "neoliberal oligarchy"
Notable quotes:
"... Furthermore, Donald Trump might well emerge from this national ordeal with his reelection chances enhanced. Such a prospect is belatedly insinuating itself into public discourse. For that reason, certain anti-Trump pundits are already showing signs of going wobbly, suggesting , for instance, that censure rather than outright impeachment might suffice as punishment for the president's various offenses. Yet censuring Trump while allowing him to stay in office would be the equivalent of letting Harvey Weinstein off with a good tongue-lashing so that he can get back to making movies. Censure is for wimps. ..."
"... So if Trump finds himself backed into a corner, Democrats aren't necessarily in a more favorable position. And that aren't the half of it. Let me suggest that, while Trump is being pursued, it's you, my fellow Americans, who are really being played. The unspoken purpose of impeachment is not removal, but restoration. The overarching aim is not to replace Trump with Mike Pence -- the equivalent of exchanging Groucho for Harpo. No, the object of the exercise is to return power to those who created the conditions that enabled Trump to win the White House in the first place. ..."
"... For many of the main participants in this melodrama, the actual but unstated purpose of impeachment is to correct this great wrong and thereby restore history to its anointed path. ..."
"... In a recent column in The Guardian, Professor Samuel Moyn makes the essential point: Removing from office a vulgar, dishonest and utterly incompetent president comes nowhere close to capturing what's going on here. To the elites most intent on ousting Trump, far more important than anything he may say or do is what he signifies. He is a walking, talking repudiation of everything they believe and, by extension, of a future they had come to see as foreordained. ..."
"... Moyn styles these anti-Trump elites as "neoliberal oligarchy", members of the post-Cold War political mainstream that allowed ample room for nominally conservative Bushes and nominally liberal Clintons, while leaving just enough space for Barack Obama's promise of hope-and-(not-too-much) change. ..."
"... These "neoliberal oligarchy" share a common worldview. They believe in the universality of freedom as defined and practiced within the United States. They believe in corporate capitalism operating on a planetary scale. They believe in American primacy, with the United States presiding over a global order as the sole superpower. They believe in "American global leadership," which they define as primarily a military enterprise. And perhaps most of all, while collecting degrees from Georgetown, Harvard, Oxford, Wellesley, the University of Chicago, and Yale, they came to believe in a so-called meritocracy as the preferred mechanism for allocating wealth, power and privilege. All of these together comprise the sacred scripture of contemporary American political elites. And if Donald Trump's antagonists have their way, his removal will restore that sacred scripture to its proper place as the basis of policy. ..."
"... "For all their appeals to enduring moral values," Moyn writes, "the "neoliberal oligarchy" are deploying a transparent strategy to return to power." Destruction of the Trump presidency is a necessary precondition for achieving that goal. ""neoliberal oligarchy" simply want to return to the status quo interrupted by Trump, their reputations laundered by their courageous opposition to his mercurial reign, and their policies restored to credibility." Precisely. ..."
"... how does such misconduct compare to the calamities engineered by the "neoliberal oligarchy" who preceded him? ..."
"... Trump's critics speak with one voice in demanding accountability. Yet virtually no one has been held accountable for the pain, suffering, and loss inflicted by the architects of the Iraq War and the Great Recession. Why is that? As another presidential election approaches, the question not only goes unanswered, but unasked. ..."
"... To win reelection, Trump, a corrupt con man (who jumped ship on his own bankrupt casinos, money in hand, leaving others holding the bag) will cheat and lie. Yet, in the politics of the last half-century, these do not qualify as novelties. (Indeed, apart from being the son of a sitting U.S. vice president, what made Hunter Biden worth $50Gs per month to a gas company owned by a Ukrainian oligarch? I'm curious.) That the president and his associates are engaging in a cover-up is doubtless the case. Yet another cover-up proceeds in broad daylight on a vastly larger scale. "Trump's shambolic presidency somehow seems less unsavory," Moyn writes, when considering the fact that his critics refuse "to admit how massively his election signified the failure of their policies, from endless war to economic inequality." Just so. ..."
"... Exactly. Trump is the result of voter disgust with Bush III vs Clinton II, the presumed match up for a year or more leading up to 2016. Now Democrats want to do it again, thinking they can elect anybody against Trump. That's what Hillary thought too. ..."
"... Trump won for lack of alternatives. Our political class is determined to prevent any alternatives breaking through this time either. They don't want Trump, but even more they want to protect their gravy train of donor money, the huge overspending on medical care (four times the defense budget) and of course all those Forever Wars. ..."
"... Trump could win, for the same reasons as last time, even though the result would be no better than last time. ..."
"... I wish the slick I.D. politics obsessed corporate Dems nothing but the worst, absolute worst. They reap what they sow. If it means another four years of Trump, so be it. It's the price that's going to have to be paid. ..."
"... At a time when a majority of U.S. citizens cannot muster up $500 for an emergency dental bill or car repair without running down to the local "pay day loan" lender shark (now established as legitimate businesses) the corporate Dems, in their infinite wisdom, decide to concoct an impeachment circus to run simultaneously when all the dirt against the execrable Brennan and his intel minions starts to hit the press for their Russiagate hoax. Nice sleight of hand there corporate Dems. ..."
Oct 10, 2019 | consortiumnews.com

There is blood in the water and frenzied sharks are closing in for the kill. Or so they think.

From the time of Donald Trump's election, American elites have hungered for this moment. At long last, they have the 45th president of the United States cornered. In typically ham-handed fashion, Trump has given his adversaries the very means to destroy him politically. They will not waste the opportunity. Impeachment now -- finally, some will say -- qualifies as a virtual certainty.

No doubt many surprises lie ahead. Yet the Democrats controlling the House of Representatives have passed the point of no return. The time for prudential judgments -- the Republican-controlled Senate will never convict, so why bother? -- is gone for good. To back down now would expose the president's pursuers as spineless cowards. The New York Times, The Washington Post, CNN and MSNBC would not soon forgive such craven behavior.

So, as President Woodrow Wilson, speaking in 1919 put it, "The stage is set, the destiny disclosed. It has come about by no plan of our conceiving, but by the hand of God." Of course, the issue back then was a notably weighty one: whether to ratify the Versailles Treaty. That it now concerns a " Mafia-like shakedown " orchestrated by one of Wilson's successors tells us something about the trajectory of American politics over the course of the last century and it has not been a story of ascent.

The effort to boot the president from office is certain to yield a memorable spectacle. The rancor and contempt that have clogged American politics like a backed-up sewer since the day of Trump's election will now find release. Watergate will pale by comparison. The uproar triggered by Bill Clinton's " sexual relations " will be nothing by comparison. A de facto collaboration between Trump, those who despise him, and those who despise his critics all but guarantees that this story will dominate the news, undoubtedly for months to come.

As this process unspools, what politicians like to call "the people's business" will go essentially unattended. So while Congress considers whether or not to remove Trump from office, gun-control legislation will languish, the deterioration of the nation's infrastructure will proceed apace, needed healthcare reforms will be tabled, the military-industrial complex will waste yet more billions, and the national debt, already at $22 trillion -- larger, that is, than the entire economy -- will continue to surge. The looming threat posed by climate change, much talked about of late, will proceed all but unchecked. For those of us preoccupied with America's role in the world, the obsolete assumptions and habits undergirding what's still called " national security " will continue to evade examination. Our endless wars will remain endless and pointless.

By way of compensation, we might wonder what benefits impeachment is likely to yield. Answering that question requires examining four scenarios that describe the range of possibilities awaiting the nation.

The first and most to be desired (but least likely) is that Trump will tire of being a public piñata and just quit. With the thrill of flying in Air Force One having worn off, being president can't be as much fun these days. Why put up with further grief? How much more entertaining for Trump to retire to the political sidelines where he can tweet up a storm and indulge his penchant for name-calling. And think of the "deals" an ex-president could make in countries like Israel, North Korea, Poland, and Saudi Arabia on which he's bestowed favors. Cha-ching! As of yet, however, the president shows no signs of taking the easy (and lucrative) way out.

The second possible outcome sounds almost as good but is no less implausible: a sufficient number of Republican senators rediscover their moral compass and "do the right thing," joining with Democrats to create the two-thirds majority needed to convict Trump and send him packing. In the Washington of that classic 20th-century film director Frank Capra, with Jimmy Stewart holding forth on the Senate floor and a moist-eyed Jean Arthur cheering him on from the gallery, this might have happened. In the real Washington of "Moscow Mitch" McConnell , think again.

The third somewhat seamier outcome might seem a tad more likely. It postulates that McConnell and various GOP senators facing reelection in 2020 or 2022 will calculate that turning on Trump just might offer the best way of saving their own skins. The president's loyalty to just about anyone, wives included, has always been highly contingent, the people streaming out of his administration routinely making the point. So why should senatorial loyalty to the president be any different? At the moment, however, indications that Trump loyalists out in the hinterlands will reward such turncoats are just about nonexistent. Unless that base were to flip, don't expect Republican senators to do anything but flop.

That leaves outcome No. 4, easily the most probable: while the House will impeach, the Senate will decline to convict. Trump will therefore stay right where he is, with the matter of his fitness for office effectively deferred to the November 2020 elections. Except as a source of sadomasochistic diversion, the entire agonizing experience will, therefore, prove to be a colossal waste of time and blather.

Furthermore, Donald Trump might well emerge from this national ordeal with his reelection chances enhanced. Such a prospect is belatedly insinuating itself into public discourse. For that reason, certain anti-Trump pundits are already showing signs of going wobbly, suggesting , for instance, that censure rather than outright impeachment might suffice as punishment for the president's various offenses. Yet censuring Trump while allowing him to stay in office would be the equivalent of letting Harvey Weinstein off with a good tongue-lashing so that he can get back to making movies. Censure is for wimps.

Besides, as Trump campaigns for a second term, he would almost surely wear censure like a badge of honor. Keep in mind that Congress's approval ratings are considerably worse than his. To more than a few members of the public, a black mark awarded by Congress might look like a gold star.

Restoration Not Removal

So if Trump finds himself backed into a corner, Democrats aren't necessarily in a more favorable position. And that aren't the half of it. Let me suggest that, while Trump is being pursued, it's you, my fellow Americans, who are really being played. The unspoken purpose of impeachment is not removal, but restoration. The overarching aim is not to replace Trump with Mike Pence -- the equivalent of exchanging Groucho for Harpo. No, the object of the exercise is to return power to those who created the conditions that enabled Trump to win the White House in the first place.

Just recently, for instance, Hillary Clinton declared Trump to be an "illegitimate president." Implicit in her charge is the conviction -- no doubt sincere -- that people like Donald Trump are not supposed to be president. People like Hillary Clinton -- people possessing credentials like hers and sharing her values -- should be the chosen ones. Here we glimpse the true meaning of legitimacy in this context. Whatever the vote in the Electoral College, Trump doesn't deserve to be president and never did.

For many of the main participants in this melodrama, the actual but unstated purpose of impeachment is to correct this great wrong and thereby restore history to its anointed path.

In a recent column in The Guardian, Professor Samuel Moyn makes the essential point: Removing from office a vulgar, dishonest and utterly incompetent president comes nowhere close to capturing what's going on here. To the elites most intent on ousting Trump, far more important than anything he may say or do is what he signifies. He is a walking, talking repudiation of everything they believe and, by extension, of a future they had come to see as foreordained.

Moyn styles these anti-Trump elites as "neoliberal oligarchy", members of the post-Cold War political mainstream that allowed ample room for nominally conservative Bushes and nominally liberal Clintons, while leaving just enough space for Barack Obama's promise of hope-and-(not-too-much) change.

These "neoliberal oligarchy" share a common worldview. They believe in the universality of freedom as defined and practiced within the United States. They believe in corporate capitalism operating on a planetary scale. They believe in American primacy, with the United States presiding over a global order as the sole superpower. They believe in "American global leadership," which they define as primarily a military enterprise. And perhaps most of all, while collecting degrees from Georgetown, Harvard, Oxford, Wellesley, the University of Chicago, and Yale, they came to believe in a so-called meritocracy as the preferred mechanism for allocating wealth, power and privilege. All of these together comprise the sacred scripture of contemporary American political elites. And if Donald Trump's antagonists have their way, his removal will restore that sacred scripture to its proper place as the basis of policy.

"For all their appeals to enduring moral values," Moyn writes, "the "neoliberal oligarchy" are deploying a transparent strategy to return to power." Destruction of the Trump presidency is a necessary precondition for achieving that goal. ""neoliberal oligarchy" simply want to return to the status quo interrupted by Trump, their reputations laundered by their courageous opposition to his mercurial reign, and their policies restored to credibility." Precisely.

High Crimes and Misdemeanors

The U.S. military's "shock and awe" bombing of Baghdad at the start of the Iraq War, as broadcast on CNN.

For such a scheme to succeed, however, laundering reputations alone will not suffice. Equally important will be to bury any recollection of the catastrophes that paved the way for an über -qualified centrist to lose to an indisputably unqualified and unprincipled political novice in 2016.

Holding promised security assistance hostage unless a foreign leader agrees to do you political favors is obviously and indisputably wrong. Trump's antics regarding Ukraine may even meet some definition of criminal. Still, how does such misconduct compare to the calamities engineered by the "neoliberal oligarchy" who preceded him? Consider, in particular, the George W. Bush administration's decision to invade Iraq in 2003 (along with the spin-off wars that followed). Consider, too, the reckless economic policies that produced the Great Recession of 2007-2008. As measured by the harm inflicted on the American people (and others), the offenses for which Trump is being impeached qualify as mere misdemeanors.

Honest people may differ on whether to attribute the Iraq War to outright lies or monumental hubris. When it comes to tallying up the consequences, however, the intentions of those who sold the war don't particularly matter. The results include thousands of Americans killed; tens of thousands wounded, many grievously, or left to struggle with the effects of PTSD; hundreds of thousands of non-Americans killed or injured ; millions displaced ; trillions of dollars expended; radical groups like ISIS empowered (and in its case even formed inside a U.S. prison in Iraq); and the Persian Gulf region plunged into turmoil from which it has yet to recover. How do Trump's crimes stack up against these?

The Great Recession stemmed directly from economic policies implemented during the administration of President Bill Clinton and continued by his successor. Deregulating the banking sector was projected to produce a bonanza in which all would share. Yet, as a direct result of the ensuing chicanery, nearly 9 million Americans lost their jobs, while overall unemployment shot up to 10 percent. Roughly 4 million Americans lost their homes to foreclosure. The stock market cratered and millions saw their life savings evaporate. Again, the question must be asked: How do these results compare to Trump's dubious dealings with Ukraine?

Trump's critics speak with one voice in demanding accountability. Yet virtually no one has been held accountable for the pain, suffering, and loss inflicted by the architects of the Iraq War and the Great Recession. Why is that? As another presidential election approaches, the question not only goes unanswered, but unasked.

Sen. Carter Glass (D–Va.) and Rep. Henry B. Steagall (D–Ala.-3), the co-sponsors of the 1932 Glass–Steagall Act separating investment and commercial banking, which was repealed in 1999. (Wikimedia Commons)

To win reelection, Trump, a corrupt con man (who jumped ship on his own bankrupt casinos, money in hand, leaving others holding the bag) will cheat and lie. Yet, in the politics of the last half-century, these do not qualify as novelties. (Indeed, apart from being the son of a sitting U.S. vice president, what made Hunter Biden worth $50Gs per month to a gas company owned by a Ukrainian oligarch? I'm curious.) That the president and his associates are engaging in a cover-up is doubtless the case. Yet another cover-up proceeds in broad daylight on a vastly larger scale. "Trump's shambolic presidency somehow seems less unsavory," Moyn writes, when considering the fact that his critics refuse "to admit how massively his election signified the failure of their policies, from endless war to economic inequality." Just so.

What are the real crimes? Who are the real criminals? No matter what happens in the coming months, don't expect the Trump impeachment proceedings to come within a country mile of addressing such questions.

Andrew Bacevich, a TomDispatch regular , is president and co-founder of the Quincy Institute for Responsible Statecraft . His new book, " The Age of Illusions: How America Squandered Its Cold War Victory ," will be published in January.

This article is from TomDispatch.com .


Mark Thomason , October 9, 2019 at 17:03

Exactly. Trump is the result of voter disgust with Bush III vs Clinton II, the presumed match up for a year or more leading up to 2016. Now Democrats want to do it again, thinking they can elect anybody against Trump. That's what Hillary thought too.

Now the Republicans who lost their party to Trump think they can take it back with somebody even more lame than Jeb, if only they could find someone, anyone, to run on that non-plan.

Trump won for lack of alternatives. Our political class is determined to prevent any alternatives breaking through this time either. They don't want Trump, but even more they want to protect their gravy train of donor money, the huge overspending on medical care (four times the defense budget) and of course all those Forever Wars.

Trump could win, for the same reasons as last time, even though the result would be no better than last time.

LJ , October 9, 2019 at 17:01

Well, yeah but I recall that what won Trump the Republican Nomination was first and foremost his stance on Immigration. This issue is what separated him from the herd of candidates . None of them had the courage or the desire to go against Governmental Groupthink on Immigration. All he then had to do was get on top of low energy Jeb Bush and the road was clear. He got the base on his side on this issue and on his repeated statement that he wished to normalize relations with Russia . He won the nomination easily. The base is still on his side on these issues but Governmental Groupthink has prevailed in the House, the Senate, the Intelligence Services and the Federal Courts. Funny how nobody in the Beltway, especially not in media, is brave enough to admit that the entire Neoconservative scheme has been a disaster and that of course we should get out of Syria . Nor can anyone recall the corruption and warmongering that now seem that seems endemic to the Democratic Party. Of course Trump has to wear goat's horns. "Off with his head".

Drew Hunkins , October 9, 2019 at 16:00

I wish the slick I.D. politics obsessed corporate Dems nothing but the worst, absolute worst. They reap what they sow. If it means another four years of Trump, so be it. It's the price that's going to have to be paid.

At a time when a majority of U.S. citizens cannot muster up $500 for an emergency dental bill or car repair without running down to the local "pay day loan" lender shark (now established as legitimate businesses) the corporate Dems, in their infinite wisdom, decide to concoct an impeachment circus to run simultaneously when all the dirt against the execrable Brennan and his intel minions starts to hit the press for their Russiagate hoax. Nice sleight of hand there corporate Dems.

Of course, the corporate Dems would rather lose to Trump than win with a progressive-populist like Bernie. After all, a Bernie win would mean an end to a lot of careerism and cushy positions within the establishment political scene in Washington and throughout the country.

Now we even have the destroyer of Libya mulling another run for the presidency.

Forget about having a job the next day and forget about the 25% interest on your credit card or that half your income is going toward your rent or mortgage, or that you barely see your kids b/c of the 60 hour work week, just worry about women lawyers being able to make partner at the firm, and trans people being able to use whatever bathroom they wish and male athletes being able to compete against women based on genitalia (no, wait, I'm confused now).

Either class politics and class warfare comes front and center or we witness a burgeoning neo-fascist movement in our midst. It's that simple, something has got to give!

[Oct 09, 2019] Ukrainegate as the textbook example of how the neoliberal elite manipulates the MSM and the narrative for purposes of misdirecting attention and perception of their true intentions and objectives -- distracting the electorate from real issues

Highly recommended!
Oct 09, 2019 | economistsview.typepad.com

EMichael , October 09, 2019 at 02:07 PM

His entire life trump has been a deadbeat.

"The president is dropping by the city on Thursday for one of his periodic angry wank-fests at the Target Center, which is the venue in which this event will be inflicted upon the Twin Cities. (And, just as an aside, given the events of the past 10 days, this one should be a doozy.) Other Minneapolis folk are planning an extensive unwelcoming party outside the arena, which necessarily would require increased security, which is expensive. So, realizing that it was dealing with a notorious deadbeat -- in keeping with his customary business plan, El Caudillo del Mar-a-Lago has stiffed 10 cities this year for bills relating to security costs that total almost a million bucks -- the company that provides the security for the Target Center wants the president*'s campaign to shell out more than $500,000.

This has sent the president* into a Twitter tantrum against Frey, who seems not to be that impressed by it. Right from when the visit was announced, Frey has been jabbing at the president*'s ego. From the Star-Tribune:

"Our entire city will stand not behind the President, but behind the communities and people who continue to make our city -- and this country -- great," Frey said. "While there is no legal mechanism to prevent the president from visiting, his message of hatred will never be welcome in Minneapolis."

It is a mayor's lot to deal with out-of-state troublemakers. Always has been."

https://www.esquire.com/news-politics/politics/a29416840/trump-feud-minneapolis-mayor-security-rally/

ilsm , October 09, 2019 at 03:03 PM
When it comes to Trump not going full Cheney war monged in Syria Krugman is a Bircher!l
likbez , October 09, 2019 at 03:22 PM
This is not about Trump. This is not even about Ukraine and/or foreign powers influence on the US election (of which Israel, UK, and Saudi are three primary examples; in this particular order.)

Russiagate 2.0 (aka Ukrainegate) is the case, textbook example if you wish, of how the neoliberal elite manipulates the MSM and the narrative for purposes of misdirecting attention and perception of their true intentions and objectives -- distracting the electorate from real issues.

An excellent observation by JohnH (October 01, 2019 at 01:47 PM )

"It all depends on which side of the Infowars you find yourself. The facts themselves are too obscure and byzantine."

There are two competing narratives here:

1. NARRATIVE 1: CIA swamp scum tried to re-launch Russiagate as Russiagate 2.0. This is CIA coup d'état aided and abetted by CIA-democrats like Pelosi and Schiff. Treason, as Trump aptly said. This is narrative shared by "anti-Deep Staters" who sometimes are nicknamed "Trumptards". Please note that the latter derogatory nickname is factually incorrect: supporters of this narrative often do not support Trump. They just oppose machinations of the Deep State. And/or neoliberalism personified by Clinton camp, with its rampant corruption.

2. NARRATIVE 2: Trump tried to derail his opponent using his influence of foreign state President (via military aid) as leverage and should be impeached for this and previous crimes. ("Full of Schiff" commenters narrative, neoliberal democrats, or demorats.) Supporters of this category usually bought Russiagate 1.0 narrative line, hook and sinker. Some of them are brainwashed, but mostly simply ignorant neoliberal lemmings without even basic political education.

In any case, while Russiagate 2.0 is probably another World Wrestling Federation style fight, I think "anti-Deep-staters" are much closer to the truth.

What is missing here is the real problem: the crisis of neoliberalism in the USA (and elsewhere).

So this circus serves an important purpose (intentionally or unintentionally) -- to disrupt voters from the problems that are really burning, and are equal to a slow-progressing cancer in the US society.

And implicitly derail Warren (being a weak politician she does not understand that, and jumped into Ukrainegate bandwagon )

I am not that competent here, so I will just mention some obvious symptoms:

  1. Loss of legitimacy of the ruling neoliberal elite (which demonstrated itself in 2016 with election of Trump);
  2. Desperation of many working Americans with sliding standard of living; loss of meaningful jobs due to offshoring of manufacturing and automation (which demonstrated itself in opioids abuse epidemics; similar to epidemics of alcoholism in the USSR before its dissolution.
  3. Loss of previously available freedoms. Loss of "free press" replaced by the neoliberal echo chamber in major MSM. The uncontrolled and brutal rule of financial oligarchy and allied with the intelligence agencies as the third rail of US politics (plus the conversion of the state after 9/11 into national security state);
  4. Coming within this century end of the "Petroleum Age" and the global crisis that it can entail;
  5. Rampant militarism, tremendous waist of resources on the arms race, and overstretched efforts to maintain and expand global, controlled from Washington, neoliberal empire. Efforts that since 1991 were a primary focus of unhinged after 1991 neocon faction US elite who totally controls foreign policy establishment ("full-spectrum dominance). They are stealing money from working people to fund an imperial project, and as part of neoliberal redistribution of wealth up

Most of the commenters here live a comfortable life in the financially secured retirement, and, as such, are mostly satisfied with the status quo. And almost completely isolated from the level of financial insecurity of most common Americans (healthcare racket might be the only exception).

And re-posting of articles which confirm your own worldview (echo chamber posting) is nice entertainment, I think ;-)

Some of those posters actually sometimes manage to find really valuable info. For which I am thankful. In other cases, when we have a deluge of abhorrent neoliberal propaganda postings (the specialty of Fred C. Dobbs) which often generate really insightful comments from the members of the "anti-Deep State" camp.

Still it would be beneficial if the flow of neoliberal spam is slightly curtailed.

[Oct 08, 2019] Job Growth Remains Slow in September

Oct 08, 2019 | economistsview.typepad.com

anne , October 04, 2019 at 09:24 AM

http://cepr.net/data-bytes/jobs-bytes/jobs-2019-10

October 4, 2019

Job Growth Remains Slow in September, but Unemployment Rate Falls to 3.5 Percent
By Dean Baker

Manufacturing employment hit a record low as a share of private sector employment.

The Bureau of Labor Statistics reported that the economy added 136,000 jobs in September, after adding 168,000 in August. The 157,000 average for the last three months is considerably slower than the 179,000 average for the last year, but this slowing is expected in a tight labor market.

The September job growth led to a 0.2 percentage point drop in the unemployment rate to 3.5 percent, a fifty-year low. The employment-to-population ratio (EPOP) rose 0.1 percentage point to 61.0 percent, a new high for the recovery that is 0.6 percentage points above the year-ago level.

The EPOPs for both prime-age (ages 25 to 54) men and women rose by 0.1 percentage point in September. The 74.0 percent rate for women is a new high for the recovery, although still below the peak of 74.9 percent hit in April of 2000. The 86.4 percent rate for men is 0.3 percentage points below the March level and 1.6 percentage points below the prerecession peak.

The unemployment rate for Hispanics fell to 3.9 percent, the lowest on record, 0.6 percentage points below the year-ago level. The unemployment rate for workers without a high school degree also fell sharply to 4.8 percent, 0.8 percentage points below the year-ago level. The share of unemployment due to voluntary quits, a measure of workers' confidence in their labor market prospects, jumped 1.7 percentage points to 14.6 percent, a level more typical for a strong labor market.

Other data in the household survey were more mixed. While the mean duration of unemployment spells edged down 0.1 weeks to 22.0 weeks, the median duration rose 0.5 weeks to 9.4 weeks. The share of long-term unemployed also rose by 2.1 percentage points to 22.7 percent.

The number of involuntary part-time workers edged down by 31,000. The number of workers choosing to work part-time also fell, dropping by 124,000 in September. The percentage of the workforce choosing to work part-time has been dropping over the last year, after rising sharply following the implementation of the ACA. This likely due to workers having greater difficulty getting health care outside of employment.

Another negative item is an increase in the number of multiple job holders, especially among women. The share of employed women who have multiple jobs rose to 5.9 percent, 0.5 percentage points above the year-ago level. The vast majority of these women report that they work a second job in addition to a full-time job.

The picture on the establishment side is more negative. Slower job growth is to be expected in a tighter labor market, but it has virtually stopped altogether on the goods-producing side. The goods-producing sector has added a total of just 2,000 jobs over the last three months, with construction adding 8,000 jobs, manufacturing adding 4,000, and mining and logging losing 10,000. A big part of this is the fallout from the trade war and the resulting drop in investment. Also, lower world oil prices are a big hit to the mining sector. The manufacturing share of private sector employment sunk to a new all-time low in September of 9.96 percent.

On the service side, job growth in the high-paying professional and technical services sector has slowed sharply in the last two months, added an average of 13,900, compared to an average of 23,900 over the last year. Restaurant employment has also slowed sharply, with the sector adding an average of just 1,500 jobs over the last four months. This should be expected in a tight labor market, where workers have higher-paying options. Retail lost 11,400 jobs in September, bringing its losses over the last year to 60,900, just under 0.4 percent of total employment.

A big job gainer in recent months is health care, which added 38,800 jobs in September after adding 37,200 in August. The sector has accounted for almost a third of job growth in the private sector over the last two months.

In contrast to the evidence of a tight labor market in the household survey, wage growth appears to be slowing slightly. The average hourly wage rose 2.9 percent over the last year, although the annualized rate of wage growth, comparing the last three months (July, August, September) with the prior three months (April, May, June), was a slightly higher 3.4 percent.

[Graph]

This is a generally positive report with some serious warning signs. The goods sector is very weak and likely to get weaker, according to a wide variety of measures of manufacturing. The evidence of slowing wage growth is also striking in a labor market with 3.5 percent unemployment.

[Oct 06, 2019] How An Ever Sanctioning Superpower Is Losing Its Status

Notable quotes:
"... Combat crews of S-400, in Astrakhan Region, held combat exercises against hypersonic target-missiles "Favorit PM" and destroyed all targets. The statement of the press-service of Western Military District announced. The crews of S-400 Triumphs were from the units of air-defense of Leningrad Army of Air Force and Air Defense of Western Military District. ..."
Oct 06, 2019 | www.moonofalabama.org

" When Ukraine's Prosecutor Came After His Son's Sponsor Joe Biden Sprang Into Action | Main October 04, 2019 How An Ever Sanctioning Superpower Is Losing Its Status

The Russian President Vladimir Putin spoke yesterday at the yearly Valdai Discussion Club meeting in Sochi. A video with English translations and excerpts of the transcript are here .

With regards to the global system Putin made an interesting historic comparison:

in the 19th century they used to refer to a "Concert of Powers." The time has come to talk in terms of a global "concert" of development models, interests, cultures and traditions where the sound of each instrument is crucial, inextricable and valuable, and for the music to be played harmoniously rather than performed with discordant notes, a cacophony. It is crucial to consider the opinions and interests of all the participants in international life. Let me reiterate: truly mutually respectful, pragmatic and consequently solid relations can only built between independent and sovereign states .

Russia is sincerely committed to this approach and pursues a positive agenda.

The Concert of Europe was the balance of power system between 1815 to 1848 and from 1871 to 1914:

A first phase of the Concert of Europe, known as the Congress System or the Vienna System after the Congress of Vienna (1814–15), was dominated by five Great Powers of Europe: Prussia, Russia, Britain, France and Austria. [...] With the Revolutions of 1848 the Vienna system collapsed and, although the republican rebellions were checked, an age of nationalism began and culminated in the unifications of Italy (by Sardinia) and Germany (by Prussia) in 1871. The German Chancellor Otto von Bismarck re-created the Concert of Europe to avoid future conflicts escalating into new wars. The revitalized concert included France, Britain, Austria, Russia, and Italy with Germany as the main continental power economically and militarily.

Bismark's concert kept peace in a usually warring Europe for 43 years. If Putin wants to be the new Bismarck I am all for it.

Putin also made a rather extraordinary announcement :

Russian president Vladimir Putin has said that Moscow is helping China build a system to warn of ballistic missile launches.

Since the cold war, only the United States and Russia have had such systems, which involve an array of ground-based radars and space satellites. The systems allow for early spotting of intercontinental ballistic missiles.

Speaking at an international affairs conference in Moscow on Thursday, Putin said Russia had been helping China develop such a system. He added that "this is a very serious thing that will radically enhance China's defence capability".

His statement signalled a new degree of defence cooperation between the two former Communist rivals that have developed increasingly close political and military ties while Beijing and Washington have sunk into a trade war.

That is as good for China as it is for Russia. China has an immediate need for such a system because the U.S. is taking a significantly more bellicose posture against it.

The U.S. left the Intermediate-Range Nuclear Forces Treaty with Russia to build a nuclear missiles force in South Asia that will aim at China. It is now looking for Asian countries in which it could station such weapons. China is using its economic might to prevent that but the U.S. is likely to succeed.

While China has capable weapons and can defend itself against a smaller attack the U.S. has about 20 times more nuclear warheads than China. It could use those in an overwhelming first strike to decapitate and destroy the Chinese state. An early warning system will give China enough time to detect such an attack and to launch its own nuclear deterrent against the U.S. The warning systems will thus checkmate the U.S. first strike capability.

Over the last two years Russia and China both unveiled hypersonic weapons. Currently the U.S. has neither such weapons nor any defensive system that can protect against these.

Russia was smart enough to develop both - the super fast offensive weapon and a defense against it. Via Andrei Martyanov we learn of a recent Russian press notice:

Translation: Combat crews of S-400, in Astrakhan Region, held combat exercises against hypersonic target-missiles "Favorit PM" and destroyed all targets. The statement of the press-service of Western Military District announced. The crews of S-400 Triumphs were from the units of air-defense of Leningrad Army of Air Force and Air Defense of Western Military District.

And what this "Favorit PM" missile-target complex is? Very simple, it is deeply modernized good ol' S-300 P series which allows to use missiles of types 5V55 which have their explosives removed and are capable of atmospheric maneuverable flight with the velocities of Mach=6 (in excess of 7,000 kilometers per hour). These are genuine hyper-sonic missile-targets and, evidently, and I don't have any reasons to doubt it, S-400 had very little problems shooting them down.

On top of the missile warning system China will also want to have that most capable air and missile defense system. Russia will make it a decent offer.

Foreign Minister Sergei Lavrov's talked a day earlier than Putin. His speech and the Q & A with him are here . The talk was mostly about the Middle East and Lavrov's tone was rather angry while he passed through a long list of U.S. sins in the region and beyond. There were also some interesting remarks about Turkey, Syria and the Ukraine. The most interesting passage was his response to a question about U.S. sanction against Russia to which some senators want to add even more. Lavrov said:

I have heard that Marco Rubio and Ben Cardin are two famous anti-Russia-minded members of the US Congress. I don't think that this implies that they have any foresight. Those with a more or less politically mature opinion of the situation should have realised long ago that the sanctions don't work in the direction they wanted them to work. I believe that they will never work. We have a territory and its riches that were bestowed on us by God and our ancestors, we have a feeling of personal dignity, and we also have the armed forces. This combination makes us very confident. I hope that economic development and all the investment that has been made and continues to be made will also pay off in the near future.

The U.S. loves to dish out sanctions left and right and the Trump administration has increased their use. But sanctions, especially unilateral ones, do not work. The U.S. has not recognized that because it has never assessed whether those sanctions fulfill their aims. A recent Government Accountability Office report found :

The Departments of the Treasury (Treasury), State (State), and Commerce (Commerce) each undertake efforts to assess the impacts of specific sanctions on the targets of those sanctions. [...] However, agency officials cited several difficulties in assessing sanctions' effectiveness in meeting broader U.S. policy goals , including challenges in isolating the effect of sanctions from other factors as well as evolving foreign policy goals. According to Treasury, State, and Commerce officials, their agencies have not conducted such assessments on their own.

The U.S. sanctions and sanctions and sanctions but never checked if sanctions work to the intended purpose. The efforts to sanction Russia have surely led to some unintended consequences. They are the reason why the alliance between China and Russia deepens every day. The U.S. has the exorbitant privilege of having its own currency being used as the international reserve. The sanctioning of U.S. dollar transactions is the reason why the U.S. is now losing it :

Russia's Rosneft has set the euro as the default currency for all its new export contracts including for crude oil, oil products, petrochemicals and liquefied petroleum gas, tender documents showed.

The switch from U.S. dollars, which happened in September according to the tender documents published on Rosneft's website, is set to reduce the state-controlled firm's vulnerability to potential fresh U.S. sanctions.

Washington has threatened to impose sanctions on Rosneft over its operations in Venezuela, a move which Rosneft says would be illegal.

Iran has taken comparable steps. It now sells oil to China and India in either local currencies. Other countries will surely learn from this and will also start to use other currencies for their energy purchases. As the transactions in dollars decrease they will also start to use other currencies for their reserves.

But the U.S. is not losing its financial or sole superpower status because of what China or Russia or Iran have done or do. It is losing it because its has made too many mistakes.

Those states who, like Russia, have done their homework will profit from it.

Posted by b on October 4, 2019 at 18:03 UTC | Permalink


Don Bacon , Oct 4 2019 18:33 utc | 1

next page " b: [Iran] now sells oil to China and India
Not to India, but India has said that that will change. India has to be deliberate because it is angling for a permanent seat in the UNSC.
Red Ryder , Oct 4 2019 18:35 utc | 2
Russia is building a network of missile defense, early warning, electronic weapons systems that will ring Greater Eurasia, not just the Russian Federation.

Russia may not produce smart phones and have their own Amazon or Alibaba scale e-commerce platform, but they have the world class defenses and leading edge counter-strike weapons that overwhelm anything the US has or will have for a decade to come.

Putin and Lavrov have laid out the diplomatic talking points for a safer, saner world.

And as the saying goes, if you don't talk to Lavrov, then you can talk with Shoigu (MOD).

The Russians have warned the West. Maybe the West is hard of hearing.
But what is clear, the rest of the world has heard it and they are gravitating toward Russia and China.

Don Bacon , Oct 4 2019 18:36 utc | 3
b: The U.S. sanctions and sanctions and sanctions . . .
It even sanctions itself, with tariffs. Free trade is dead!
Jackrabbit , Oct 4 2019 18:38 utc | 4
It is losing it because its has made too many mistakes.

A statement that deserves to be unpacked. I think at the core of the "mistakes" is a certain exceptionalist attitude which carries with it a combination of greed and hubris that promotes moral turpitude.

Kiza , Oct 4 2019 18:38 utc | 5
When the re-alignment of Russia and China started, I compared them to two soldiers, standing back-to-back, defensively pointing their guns forward. This is becoming an integrated continental defense now. Do you think that the two missile warning system will remain separate? It is sad that it had to come to this, but the AngloZionist mindset of domination and exploitation is what it is. Russia and China are not benevolent, but a big majority of countries prefers their economic approach to the Western military - bombed and killed if you do not comply with master's wishes. Simply, the West is a one-trick-pony in decline,
Beibdnn. , Oct 4 2019 18:39 utc | 6
As the U.S.A.slowly petrifies into an ever more fragile state of existence will the blow that finally causes it to fracture into a state of catastrophic impotence,( in it's eyes ) mean that it will die with a whimper or a bang?
Will the politik of the U.S.A.wake up before it's demise and re-orientate it's ethos so as to integrate with the new order instigated from the east or, like an enraged, immature being try to bring the rest of the world down with it?
I hope wiser minds than those in the Senate prevail. However I'm not really that optimistic that they are capable of serious self reflection.
Sally Snyder , Oct 4 2019 18:39 utc | 7
Here is an article that looks at a WikiLeaks document that explains how the United States Army is preparing to help Washington achieve its national strategic objectives:

https://viableopposition.blogspot.com/2019/04/us-power-wielding-unconventional.html

This Army manual gives us a very clear view of how Washington uses manipulation through its influence on the World Bank, IMF, OECD and other "global" groups to wage unconventional warfare on any nation that doesn't share its view of how the world should function and that threatens America's control of the globe, including nations like Venezuela, Iran, Russia and North Korea.

Barovsky , Oct 4 2019 18:41 utc | 8
While China has capable weapons and can defend itself against a smaller attack the U.S. has about 20 times more nuclear warheads than China. It could use those in an overwhelming first strike to decapitate and destroy the Chinese state.

b, in a nuclear exchange, all it takes is a tiny fraction of the US/China/Russia's nuclear arsenals to finish off human civilisation, so numbers are irrelevant. Radiation knows no borders.

Paul Damascene , Oct 4 2019 18:46 utc | 9
Such contributors and Don Bacon, Grieved and Karlof1 might help me (dis)confirm this, but my impression is that Russia is or could make a case for selling only or primarily defensive weapons, to pretty much anyone ... with the effect and, say, the intent, to make wars of aggression, particularly pre-emptive strikes, much less tempting.

By shifting the field advantage towards defense, can it be plausibly proposed that Russia is working to make the world, overall, a safer place (even if their primary intent might be to make it safer from attacks initiated by the Unipolar Axis)?

Barovsky , Oct 4 2019 18:49 utc | 10
Posted by: Don Bacon | Oct 4 2019 18:36 utc | 3

b: The U.S. sanctions and sanctions and sanctions . . .
It even sanctions itself, with tariffs. Free trade is dead!

Don, there's NEVER been free trade, ever, no matter how far back you look in history. Free trade is imperial speak for the dominant economies dictating to the weaker.

William H Warrick , Oct 4 2019 18:50 utc | 11
These Globalist maniacs we are supposed to fear are unbelievably stupid.
Barovsky , Oct 4 2019 18:53 utc | 12
Posted by: Paul Damascene | Oct 4 2019 18:46 utc | 9
my impression is that Russia is or could make a case for selling only or primarily defensive weapons, to pretty much anyone ...

Isn't this exactly what they're doing. Martynov's writings reveal this proces in detail. It's a process that has its origins in WWII, a process that also has economic implications for Russia.

psychohistorian , Oct 4 2019 18:56 utc | 13
Thanks for the posting b

I agree with Barovsky in comment # 8 about the MAD nature of any nuclear war

I also want to posit that until China has its own air and missile defense system that Russia will use its to insure that any nuclear attack on China will result in global MAD

@ b who wrote
"
But the U.S. is not losing its financial or sole superpower status because of what China or Russia or Iran have done or do. It is losing it because its has made too many mistakes.
"
it is not the US necessarily that has the sole financial superpower status but the cult of global private finance ownership that is international and not just the US. And now that financial superpower status is not just being challenged from outside the Western nations of empire but from within as I continue to write about in the latest Open Thread. The US state of California has instantiated public finance for the state...it was signed into law this past Wednesday and the Western MSM has yet to report or comment on this game changing initiative.....speaks volumes to the threat it creates to global private finance because California has the 5th largest GDP in the world.

Casey , Oct 4 2019 19:09 utc | 14
I had been leaning toward the scenario where the Empire would, eventually, have to be put down in a violent confrontation, with a CBG sunk, but I am really feeling now, given the Singapore deal in the EAEU with India and Iran in the wings and the missile-shield over PRC and Rosneft selling product in Euros and Syria and Iran and Venezuela not being wiped out, that maybe, just maybe, the Empire will be left in the dust, with no climactic confrontation required. Maybe I am being naive, but there seems to be evidence to support that idea.
rt4 , Oct 4 2019 19:31 utc | 15
I wish since a while for an US American Gorbachov. This kind of person only is able to bring down the still running war economy. You would expect some hero like spiritual leader is necessary. The only thing what was special about the russian version for that job, he was young. Able to imagine a world without that permanent pressure, that everybody can feel in every cell of society. Of course, I hoped that trump maybe will do this, but he is twisted in his own challenges, already old, no real love for the people around him in general. The actual task is to lead down US from the sole position of power to become the most important country in the world. I hope US Americans can fell save one day without spending half of world's expanses on war, which equals that US budget is more than half for this reason. Who will be able to explain to voters, this isn't a sound deal?
Barovsky , Oct 4 2019 19:34 utc | 16
Posted by: Casey | Oct 4 2019 19:09 utc | 14

I'm loathe to posit this but if the US follows the demise of previous empires, then only war will accomplish this but perhaps, just perhaps the mold (or is that mould?) has been broken? After all, WWI and WWII came about because of competition between dominant economies and ultimately a redivision of the world into new blocs. But then again, the emergence of the USSR changed everything, the most momentous event of the 20th century. So perhaps we need a new USSR but this time a transnational USSR?

Barovsky , Oct 4 2019 19:37 utc | 17
PS: Let's call it WUSR, the World Union of Socialist Republics?
Summer Diaz , Oct 4 2019 19:39 utc | 18
My country is in a sorry state of affairs indeed, and listening to those around me, a common theme occurs, a wish that that slow-coming line in the sand which will truly mark the end of our illusion of exceptionalism would just get here and be done, so we, or those of us who are left afterward, can work through those damnable five stages of grieving, and begin the process of reconstruction and healing what remains.

Judging by comments made here, I've withdrawn hope of either party having anything to present the citizenry as a way out of our demise, so coast toward that necessary line we do. Is that too negative?

Barovsky , Oct 4 2019 19:39 utc | 19

Posted by: William H Warrick | Oct 4 2019 18:50 utc | 11

These Globalist maniacs we are supposed to fear are unbelievably stupid.

Stupid maybe but incredibly dangerous!

Kiza , Oct 4 2019 19:49 utc | 20
Slightly off topic, but is not the Western use of children for nefarious purposes increasing? From the first Hong King rioter who got shot for attacking a policeman, at all of his 14 years of age, through Epstein's sexual use of young girls for blackmail, to Greta and the climate change screaming kids. If you are younger than 18, and without or with weak parental oversight due to challenging economic conditions (struggle to survive), you are a fair game for the Western "elite". Earn some pocket money by burning down Hong Kong.

This will only increase, because it runs parallel to the tactics of turning adults against each other to miss to notice the "elite's" hand in all of their pockets. Fight each other people and send your children into the front lines. That is how they channel anger toward's "elite's" alternative-model enemies (China) and away from the real perpetrators and the real issues. This is why the images of Hong Kong riots overlap with the two minute hate from the movie 1984.

Finally, the Communist elite used children too, to do the dying in revolutions, to report their own parents the communist authorities and to severely punish ideological opponents. The use of children is nothing new, but it shows total moral depravity.

Don Bacon , Oct 4 2019 20:02 utc | 21
@ Sally Snyder 7
Thank you for that! And I thought Special Forces was only interested in assassinations.

As you indicate, it's surprising that they put such self-damaging information in print. They think they're invincible, so we need more Lavrovs to set them straight.

uncle tungsten , Oct 4 2019 20:22 utc | 22
re Paul Damascene #9, I see mutually assured defense as a highly desirable strategy emerging from Russia and China. If that new 'mad' is expanded to friendlies in the middle east then a very large sector of the planets continents can be enclosed in a single defensive frame.

I see this as a mighty good potential to arrest the lunatic tendency to war constantly being chanted by the five eyes and their vassal toadies.

Certainly the elimination of nuclear weapons entirely should be the global objective. Failing that, the prevention of ground blasts with the consequent dust and threat of nuclear winter is desirable in my view. High altitude interception may prevent premature detonation of attacking warheads but it will most likely lead to highly contaminated hot spots on ground.

There is an evil in warmongering that is utterly beneath contempt.

imoverit , Oct 4 2019 20:46 utc | 23
I see on AMN, the Syrian News site, an article speaking about a new KFC in terrorist-held Idlib ...

If this isn't a statement about who is collaborating in these wars I don't know what is !! It is partially about the globalists wanting to increase the extent of their reach (apart from all the religious and cultural issues too)

Hoarsewhisperer , Oct 4 2019 20:47 utc | 24
...
...but my impression is that Russia is or could make a case for selling only or primarily defensive weapons, to pretty much anyone ... with the effect and, say, the intent, to make wars of aggression, particularly pre-emptive strikes, much less tempting.

By shifting the field advantage towards defense, can it be plausibly proposed that Russia is working to make the world, overall, a safer place (even if their primary intent might be to make it safer from attacks initiated by the Unipolar Axis)?
Posted by: Paul Damascene | Oct 4 2019 18:46 utc | 9

Imo that's a perfectly sane assessment. It's just an unfortunate prerequisite, and a sign of the times, that M.A.D. had to be looming in the background before the wisdom could be recognised and de-escalation could commence.

Don Bacon , Oct 4 2019 20:47 utc | 25
@ PD 9
shifting the field advantage towards defense

>Actually all nations are supposed to concentrate on defense. The US changed its War Dept to Defense Dept. --( to throw us off? ) There are few nations that have an overwhelming offensive capability. Its expensive and requires a lot of people, including mostly draftees.
> The F-35 jet fighter now goes for about $150 million per copy, in large part because it is stealthy and can get through enemy defenses. At least that's the plan. But after eighteen years (and counting) of development, the F-35 still has not been approved for full production. That's an offensive weapon.
> Another expensive piece of gear is the aircraft carrier, now going for $13 billion per copy, and several of the newfangled complex features on the new carrier design don't work. High maintenance, too. Of eleven carriers only two are deplorable currently, none on the east coast. Carriers have been mostly used to facilitate bombing runs over defenseless third-world countries. They need a cheap defense.
> Regarding soldiers, few countries have a draft, or a large draft, any longer. No more major land armies, required for offense. People are expensive, and 70% of US youth don't qualify for service.
> The US Marine Corps is now going through a change with a new commandant. The main US enemy now is China, and there's no thought of any war on China itself, only on allied islands they might grab. So the Marines want to back out of their land warfare stance and concentrate on Iwo-Jima type operations like the good old days. New USMC Commandant Berger: "We are too heavy, too cumbersome. We're built for another Desert Storm. We have to go on a diet. . .we're not going to go head-to-head, tank-on-tank," he said
> The recent Houthi attack on Saudi Arabia was a wake-up call. Drones and missiles, inexpensive unstoppable and effective.
> So there's a lot of work to do, but yes one can say there is a trend from offense to defense, and little by little the world might be safer against offensive actions.

Don Bacon , Oct 4 2019 20:54 utc | 26
@25 - carriers
Make that deployable, not deplorable. Freudian slip.
Barovsky , Oct 4 2019 21:03 utc | 27
@#9:
I see mutually assured defense as a highly desirable strategy emerging from Russia and China. If that new 'mad' is expanded to friendlies in the middle east then a very large sector of the planets continents can be enclosed in a single defensive frame.

Excellent observation Uncle! It's the Empire (and its vassals) versus the planet.

vk , Oct 4 2019 21:03 utc | 28
@ Posted by: rt4 | Oct 4 2019 19:31 utc | 15

There will never be an American Gorbachev because the American system is completely different from the Soviet system.

In the USSR, the Communist Party was everything and commanded all the sociometabolical aspects of society through a centralized State. When the Gorbachev killed the Party, he killed the USSR. That's why it simply collapsed overnight and in a relatively peaceful way.

The USA is a pure-blood capitalist society. It functions through a confederation of capitalists, who command and owns different parts of the means of production. The State, albeit powerful, is just one instutition among many others in this free market anarchy. The USA, therefore, is a relatively decentralized society (for its size, it is incredibly decentralized). In this sense, the USA is more akin to the old Roman Empire than any other recent liberal or late-feudal empire.

My guess is the USA will degenerate slowly and very violently and chaotically, with a succession of weak POTUS over a course of at least many decades. It can or cannot lose territory in this process (I don't think it ever will, unless you're talking about Puerto Rico and other possessions in the Southwestern Pacific). It almost certainly will provoke many more wars against foreign nations in the process. It will be a very dangerous period of Humanity's History, if not mark its end (if a total nuclear war happens).

--//--

I don't think Putin wants to be "the next Bismarck". Bismarck's new Concert was a failure: it didn't relieve pressure between the imperialist powers in Europe and only gathered pressure overtime in order to create an even bigger meatgrinder (WWI), which generated an even bigger revolution (1917). By all intents and purposes, Bismarck's foreign polices were an abject failure. His domestic record, on the other side, is stellar, since he turned Germany into a world superpower which, by 1900, had already surpassed the UK in industrial terms to reach second place overall (behind only the much bigger USA).

Taffyboy , Oct 4 2019 21:03 utc | 29
..."But the U.S. is not losing its financial or sole superpower status because of what China or Russia or Iran have done or do. It is losing it because its has made too many mistakes."...

The cadaver that is the USA, a ruptured spleen of financial criminality, is in it's end stage of sucking the life of the world, it's host. Russia, China, and like minded sovereign states are backstopping the US buck into oblivion with their gold purchases. Gold continues to show the absurdities of the financial status of the US dollar. Gold is inoculating these states that are being sanctioned and financially harassed. The USA, is a drunken bum in the gutter looking for his next drink. Time is running short as the world economies are now contracting into a spiral down the toilet drain taking the great financial criminal with it.

DontBelieveEitherPr. , Oct 4 2019 21:03 utc | 30
If any politicians on the global chessboard can rival the statesmanship and intellect in strategy, it sure is Putin.
Before him maybe de Gaulle, Helmut Schmidt or Churchill. But now? No where in the western states.

To the growing ties with China and Russia: Irony is, Putin warned the western world, that if his and Russia's preference of joining the western states would be denied, Russia would be forced into China's arms, even though they are culturally and religiously much more tied to Europe and the western world.

US and NATO policy brought the Russians to see the former "yellow menace" as their only hope; Equally China was forced into the arms of its Russian neighbor, despite the Chinese tradition of seeing the Russians equally as a not much loved neighbor.
So the "social Imperialists" and "Barbarians" of Russia and the "Yellow Menace" were forced to overcome their old prejudices.

De Gaulle once said: "One day the Russians will realize again that they are white." Meaning, when the Soviet system would come crashing down, the Russians would realize, that they and their culture are European, and not Asian.
When this prophecy actually came true, and Yeltsin and Putin tried to rebuild the bridges back to their cultural fellow European states, the Neocons destroyed that historic chance of healing decades and century old wounds.

Putin and Russia actually tried for over a decade to avert this. Only most recently the fight in the Russian bureaucracy is leading into going into the partnership with China more broadly. It still is a partnership not of love or true desire, but of simple survival. And that won't likely ever change.

I am currently reading a great book of the legendary German-French journalists and author Peter Scholl-Latour about the new cold war against Russia. he published it IIRC over 12 years ago, with research since the 90s for it, and including previous reports from his visits in Russia since 1958.
He saw what he discusses here 20 years ago. And the strategic consequences of this idiotic rejection of Russia's wish to come back into the fold of European nations by the US will haunt us for generations to come, if it is not fixed.

Only way to that would be if we would have politicians in the EU and Europeans states like Putin; more concrete: With the backbone, strategic insight, and a strong stand on national sovereignty.

But with the current politicians in the EU and its states? Certainly no one on the left, as "sovereignty" is now seen as "Nazi", and left politicians at least here in Germany being "educated" by NATO think tanks, supporting military "interventions". The only ones who realize how important sovereignty is for any country, are the new right like Salvini, Le Pen, and the Nigel Farage. Which maybe a big part of why they are so hysterically attacked by the MSM and establishment.

But sovereignty is important for the left too, and historically e.g. the older generations social democrats here knew that. People like Helmut Schmidt realized that no people can be free, and exercise its self-determination as a nation, without true sovereignty.

But the time of politicians of this class and caliber in the west is long gone. Maybe another reason, why our politicians hate Putin so much. ;)

Barovsky , Oct 4 2019 21:05 utc | 31
Apologies, @#22 not #9
Ian2 , Oct 4 2019 21:19 utc | 32
It should be obvious to anyone that we're going to see some kind of a joint Sino-Russian military organization like NORAD. I was wondering about this after Russia sold their S-400 to China. However, I'm not sure if the Chinese, or Russia, would be open to a Warsaw Pact version 2. IMO, the inevitable collapse would be like the Soviet Union as WMDs will prevent a war fought directly between the larger powers. In the meantime, expect more proxy wars fought globally.

Kiza | Oct 4 2019 19:49 utc | 20:

It's always been like this as that is the most impressionable stage of one's life. I don't know if this is an increase or not, but I see these useful idiots as activation of sleeper cells cultivated in educational institutions.

steven t johnson , Oct 4 2019 21:20 utc | 33
The "Concert of Powers" was marked by numerous wars. Great power conflict in Europe was avoided in favor of colonial wars. England against Indians, Africans and Asians, but Russia against Turks too. So much for "truly mutually respectful..." relations. Putin speaks gibberish. Today, "sovereign" means claiming the right to wage war at will. This is not a premise for solid relationships, but shifting alliances against the current enemy.

It is incidentally highly unlikely that a basket of currencies could possibly substitute for a single reserve. If people couldn't make bimetallism work, making bi-, tri-, poly-fiat currency work isn't happening either. The fluctuations in relative value will destabilize the financial systems of smaller powers.

Kooshy , Oct 4 2019 21:31 utc | 34
Don
I don't see possibility of India getting a UNSC permanent seat any time coming soon, it's a permanent wishful thinking on India's part. India will need to resolve her problems with Kashmir and Pakistan before even she be considered. Indian realist analyst know this well. As matter of fact I don't see any hope that anytime soon we can see a structural change in UN. It's more possible UN be dissolved like the League was before it be reformed. US and India only can be short term tactical allies against China, and not even strategic allies since they both have different postures toward the subcontinent's, Indian Ocean states.
Sorghum , Oct 4 2019 21:33 utc | 35
@ 27 Barofsky

Exactly, which is why I am both confused and frustrated by people taking a side in the Ukraine-gate farce. Does it matter which flavor of evil is currently provably less corrupt? They all have almost the same goals: peanuts and platitudes to placate the peasants at home and Full Spectrum Imperial Dominance abroad. I get trying to figure out the Gordian Knot, but the Make Believe of Good Cop/Bad Cop is annoying.

Willy2 , Oct 4 2019 21:39 utc | 36
- No, when Rosneft is chosing the Euro as its trading currency then that will increase - IMO - the risk of a (MAJOR) war.
dh , Oct 4 2019 21:40 utc | 37
@23 It's true! A KFC opened in Idlib. Here is a video with some amusing comments.

http://www.abovetopsecret.com/forum/thread1247614/pg1

Willy2 , Oct 4 2019 21:51 utc | 38
- Wars like WW 1 & WW 2 are not going to happen anymore because such wars have simply too expensive. But instead we'll see a series of smaller wars or proxy wars.
lysias , Oct 4 2019 21:53 utc | 39
Germany before Hitler was a pluralist capitalist society like America has been. Didn't stop Hitler from centralizing everything.

If Germany could have a Hitler, America can have its Gorbachev.

Jen , Oct 4 2019 21:54 utc | 40
VK @ 28:

I should think that one reason for the failure of the Second Concert of Europe was that Britain was determined to eliminate Germany as an economic and political rival and as an example of what centralised government economic and social planning could do to improve people's lives and the conditions in which they lived and worked. The reforms that Bismarck brought to Germany, if only to keep 1848-style revolutions at bay, challenged the prevailing laissez-faire economic policies (precursor to neoliberalism in our day) in Britain that favoured the landowning and military elites.

The period 1871 - 1914 was one in which British aristocracy "revitalised" itself (for want of a better term) by taking brides from American families that made their wealth from investing in railway development across the US and in new American industries. (Perhaps "vampirising" American money is the better term.) The classic examples of such marriages are those of Consuelo Vanderbilt, of the wealthy Vanderbilt family, marrying into the Spencer-Churchill family; and of Winston Churchill's mother marrying his father. Acquiring American wealth in this way was one way in which British elites could maintain enough power to keep a grip on British politics and British colonial politics.

The same period was also one in which European powers competed to chop up Africa and Asia into colonies or "spheres of influence". So in a sense, the Europeans were already at war with each other (and the Second Concert was a facade, just as the Cold War of the late 20th century was a facade): they conducted this war away from their own publics, in areas distant and remote enough, that most incidents of mass violence or outright land theft could be covered up. The major exception was Belgian King Leopold's treatment of the area that is now the Democratic Republic of Congo / Congo (Kinshasa) as he ruled it in the manner of a mediaeval feudal lord and the atrocities committed there by his government were on a scale too huge to ignore.

c1ue , Oct 4 2019 21:54 utc | 41
@Paul Damascene #9
Not strictly true.
Two nations, one with sword and shield but the other with only a shield. The first nation can attack with little fear of reprisal.
Russia is still not going to sell defensive weapons to anyone unless there is a clear overall strategic benefit.
lysias , Oct 4 2019 21:57 utc | 42
Norman Angell argued in "The Great Illusion" that a great war was no longer economically possible. Published in 1909.
lysias , Oct 4 2019 22:06 utc | 43
Ironic that the Great War had to wait until 1914, when Britain's Liberal government was adopting many of Bismarck's social welfare measures.

I suspect that America's increasing hostility to China reflects a fear of contagion from the more successful and fairer Chinese system. Just like Britain and Germany in 1914.

Peter AU 1 , Oct 4 2019 22:16 utc | 44
A number of the S-300 standard missiles are just into the hypersonic range.
Missile spec section in wikipedia give missile velocity and maximum target velocity.
https://en.wikipedia.org/wiki/S-300_missile_system#Missiles

Two are listed as being good for target velocity up to 6,415 mph which is well into hypersonic range.
Another two, target velocities up to 11,185mph - mach 14.7 according mph to mach converter.

lysias , Oct 4 2019 22:19 utc | 45
Helmut Schmidt's books on China are impressive, but it's striking that in the first one, "Nachbar China," of 2006, he totally failed to anticipate the economic collapse of 2008.
Barovsky , Oct 4 2019 22:42 utc | 46
Posted by: lysias | Oct 4 2019 22:06 utc | 43

Actually, that's not true. When the UK went to war in 1914, they discovered that their soldiers were so undernourished and unfit to fight for the Empire, that a series of 'social reforms' were enacted to improve the lot of the working class (or cannon fodder).

Annie , Oct 4 2019 22:50 utc | 47
"While China has capable weapons and can defend itself against a smaller attack the U.S. has about 20 times more nuclear warheads than China. It could use those in an overwhelming first strike to decapitate and destroy the Chinese state."

B, I read your analysis of the China weapons parade and came away with the impression that US air & sea superiority was over. I thought China already had the S-400 too. I had no idea that the US was in possession of more nukes than China. I hope that China gets that system set up quickly, as well as the S-400.

The US is a psychopathic control freak, whose mask has slipped, yet the only one who doesn't know that is Washington, but when it realizes it, that's when it will become far more dangerous and may think that their time for a US first nuke strike is running out. Let's hope they are not that stupid.

Ian2 , Oct 4 2019 23:07 utc | 48
Anybody that believes China have only 290 nukes are naive. Look at all those DF-41 and JL-2/3 missiles they've made. Some of those missiles have MIRV capability.
William Gruff , Oct 4 2019 23:21 utc | 49
Ian2 @48

What point does lying that way about a deterrence weapon serve? China only has nukes to deter America from attacking them. The nukes are not intended to ever actually be used, so why would they lie and pretend to have less than they really have? That makes no sense. If anything they would lie and pretend to have more than they really do to enhance their deterrence.

Secret weapons do not make an effective deterrence.

On the other hand, like Japan China probably has big stockpiles of fissile materials sufficiently enriched that they could make many hundreds of additional nukes in a matter of a couple weeks, or maybe even just days, if they needed to.

William Gruff , Oct 4 2019 23:42 utc | 50
Ian2 @48

Just to clarify, a 100kg solid chunk of iron traveling at hypersonic speeds and with decent accuracy would ruin the day for an American aircraft carrier. No nuke is needed.

Furthermore, if China has only 290 nukes, but 5,000 launch vehicles, which ones out of that 5,000 are armed and have to be destroyed if America does a first strike and wants to avoid several dozen of its biggest cities being turned into glowing craters in response? Hint: All 5,000.

So you see, China doesn't really need much more than 290 nukes to prevent America from attacking, assuming Americans are not stupid. Unfortunately that could very well be a losing bet.

Josh , Oct 4 2019 23:45 utc | 51
Washington is not a nation. It is only a city. If the rest of the world wants an honest glimpse of what this city intends, all it has to do is look at what it has done, and is still doing, to America's population. Take an honest look, disregarding all testimony. When you completely disregard the narrative of dc and the media, the picture becomes quite stark quite quickly.
FKA_Realist , Oct 5 2019 0:00 utc | 52
> Washington is not a nation. It is only a city.
Posted by: Josh | Oct 4 2019 23:45 utc | 51

The only "city" you should worry about is The City of London. The root of evil on this planet, for the past few centuries.

---
[Iran] now sells oil to China and India

Posted by b on October 4, 2019 at 18:03 UTC | Permalink

The exploitation of Iranian national wealth continues to support the Cabal's projects.

lysias , Oct 5 2019 0:13 utc | 53
The reason for the constitutional crisis in Britain in 1910, which resulted in the House of Lords losing most of its power, was that the Lords refused to approve Lloyd George's People's Budget, which, according to Wikipedia, "introduced unprecedented taxes on the lands and incomes of Britain's wealthy to fund new social welfare programs." The upshot of the crisis was that the budget became law.
Don Bacon , Oct 5 2019 0:16 utc | 54
. . . picked this up on the web:
In his seminal work On War, Carl von Clausewitz famously declared that, in comparison to the offense, "the defensive form of warfare is intrinsically stronger than the offensive."

The defender being in his homeland contributes to defensive strength. It's certainly contributed to US offensive failures in the last fifty years. It took the mighty US Army four years and over a thousand deaths to pacify Baghdad. So what to do, the US has reverted to high-level aerial bombing and long-range artillery to kill foreigners. This increases US opposition, creating more enemies. No shortage of them.

karlof1 , Oct 5 2019 0:44 utc | 55
lysias @53--

Gotta give you a big Shout-Out for providing that ultra important fact as that marked the beginning of the reaction to Classical Economists in the UK which was already happening within the Outlaw US Empire, thus the seed of UK's Neoliberalism was planted and watered. It also brought the UK and US elite together mind-set-wise.

Josh @51--

Your observation is 100% on the mark! The utterly gross neglect of the USA's human capital's been ongoing for decades, and was given a great boost by the adoption of Neoliberalism as basic policy during Carter's presidency, which was subsequently turbocharged by Reagan/Bush. Profit before people had always been present; but after the "Saving the bond-holders" deliberately deep recession caused by Volker from 1979-1982, there would be no more policies aimed at improving social welfare. Instead, they were targeted for destruction as the Full Employment Act of 1946 was 100% ignored by both Rs & Ds as jobs went offshore and the Rust Belt oxidized.

--//--

Today, the hollowed-out Outlaw US Empire is a mere Paper Tiger reduced to using terrorists and terrorism as its policy tools. Slowly, the nations of the world are enacting a de facto form of containment that will eventually result in the diminishment of The Empire's abilities and force it to become a normal nation for the first time in its history--hopefully without a nuclear conflagration.

ben , Oct 5 2019 0:46 utc | 56
Putin is a voice of reason in a very sick and twisted world, one that is dominated by an evil empire whose only purpose seems to be global corporate hegemony.

His voice should be heard by the American people.

Grieved , Oct 5 2019 1:28 utc | 57
@2 Red Ryder - Russia is building a network of missile defense, early warning, electronic weapons systems that will ring Greater Eurasia, not just the Russian Federation.

Always good to see your sweeping strategic view from the commanding heights. I quoted your opening sentence because it makes such total sense, and also sounds so good. Mackinder has no need to turn in his grave - the heartland has upended the world to save him the trouble ;)

There will be the invulnerable Eurasia, and the outside.

~~

I'm enjoying all the comments jumping onto the notion of Mutual Assured Defense. It seems a concept that many here can readily relate to - and sign me up for sure. Thanks to Paul Damascene for the concept, and uncle tungsten for coining the phrase.

Sharmine Narwani in her recent interview with Ross Ashcroft cited a Twitter comment somebody made, to the effect that the S-400 was Russia's foreign policy. She was struck by how perfectly this actually works as a policy. In a world where everybody has an S-400, no war. Mutually assured defense.

I have long theorized, without a grain of collateral to prove it, that there is only one security strategy for Russia. If I had a border as extensive as Russia's, I would see that the only security possible for me would rest in an entire world at peace.

Therefore Russia works towards peace. It's how she conquers the world. As we saw in Chechnya and in Syria, Russia builds and not destroys. Syria in particular over a long period showed us precisely how Russia fights - not to "win", not to destroy an enemy, but purely to lock down the peace and make everything safe. Only those restless souls who would not become still were killed.

China too shares this same understanding of the Tao - not surprisingly of course. The game is not to crush the opponent but to render the fight unnecessary. If China conquers the world it will mean the Mandate Of Heaven has come to rule everywhere. The fight will become unnecessary.

~~

Federico Pieraccini in his latest article had this to say about China's strategy:

Beijing's strategy seems to be designed to progress in phases, modulating according to the reaction of the US, whether aggressive or mild; a kind of capoeira dance where one never actually hits one's opponent even when one can.

I had to look it up, Brazil's amazing contribution to world peace, the capoeira. I had never heard of it and now I will never forget it. A brilliant comment from Pieraccini.

Peace is coming to the world faster than war is being left room to break out. And this is because peacemaking is as dynamic an activity as warmaking . But by its very nature of not breaking things, it is far less visible.

Don Bacon , Oct 5 2019 1:47 utc | 58
. . .from Putin
Truly mutually respectful, pragmatic and consequently solid relations can only built between independent and sovereign states.
. . .from the UN Charter
The Organization is based on the principle of the sovereign equality of all its Members.
somebody , Oct 5 2019 2:25 utc | 59
Putin is pointing backwards not forwards when you think it through.

No "souvereign" state can be independent in the age of global supply chains and markets, refugees and global warming. The world is interdependent and always has been since the evolution of the human species in Africa.

"Souvereignty" and statehood has always been achieved (and lost) by military power. It is a recipe for war.

This is for the theory. Now for the practice. Of course, Russia has been intervening in the affairs of other "souvereign" states. Of course Iran has been striving for dominance in the Middle East. And of course Eastern European states feel squeezed between Russia, the US and Germany. And of course China pressures Vietnam for the resources of the South China Sea.

Putin is talking about being polite.

Europe will have neither economic nor political or military power dealing with Russia, the US or China as individual "sovereign" states. And this is what this populist dance is about.

The US has not lost influence because of the sanctions, they have lost influence because they have no longer the technological edge and "souvereign states" have the alternative of allying with Russia and China. That is a binary choice, not souvereinty.

Paul Damascene , Oct 5 2019 2:36 utc | 60
ciue @ 41:
An intelligent observation, thanks. Though I find myself wondering if the world in which everyone has a shield, and only one, a sword, is not, perhaps, a world quite changed.

In reading Don Bacon @ 58 and Grieved @ 57, something slid into place for me. As a child of the Enlightenment, pained as I have been--for all its failings--to see it slip under the waves, it has been especially painful to see the West despoiling its legacies of democracy and universal human rights. Nothing has done these more damage than our corrupt, cynical exploitation of them. When I look to the emergent multipolar model with not inconsiderable relief, I see it as one in which democracy will not necessarily be a central value or form of polity.

But if this multipolar principle of the sovereign equality among all of its members is considered from a certain vantage point, the principle's equivalent in a democratic system of individuals would be an acceptance of its various citizens as of fundamentally equal worth regardless of their ideologies or beliefs.

Perhaps if that feature of our own systems were not so close to being lost, a glimpse of this quality of an international comity wouldn't come to me now as a revelation.

somebody , Oct 5 2019 2:44 utc | 61
Posted by: Grieved | Oct 5 2019 1:28 utc | 57

I guess it is a Rorschach test. I don't see how anything in Syria has been resolved peacefully, I just don't. I am not blaming Russia for it. Putin virtually waited until it became clear that the US (Obama) would not intervene.

Russians had the worst WWI and WWII experience, plus Chechnya and Afghanistan. No Russian leader would be able to motivate them for anything else but defense. It took the Moscow apartment bombings to motivate them for the Chechen war.

Political power in China has grown out of the barrel of a gun - since Mao Tse Tung. It has grown out of the barrel of a gun world wide since the invention of gun powder.

Peace might come not because of defense systems but because of cheap and simple technology to defeat these defense systems.

snake , Oct 5 2019 2:49 utc | 62
weaponized economics USA says it has ability to affect the economic environment, says it can influence international financial institutions .. says it can use such abilities and influence to cement multinational coalitions for unconventional warfare campaigns or dissuade adversary nation-state governments from supporting competitors"

financial blackmail .[nations either join/suffer], the stores of value can be exploited.. the economic space is a war zone the tax, interest rates, legal and bureaucratic measures used locally, by target states, can be [manipulated] to persuade adversaries, allies, and surrogates to modify their behavior.. Entire agencies specialize in identifying. opportunities where financial weapon(s) can be used to provide leverage [to achieve goals]? Thank you Sally Snyder @ 7 for that link and great explanation. I want to add that I see evidence the USA uses that same strategy domestically against the leaders of its states, its cities, its counties, its political parties and privately against the leaders and activist the world over. Americans rarely have the opportunity you afforded @7 to understand why things are happening in the USA the way they are.

new subject:
The Great War had to wait until 1914, when Britain's Liberal government was adopting many of Bismarck's social welfare measures.to Lysias @ 43 <==I certainly do agree with your reason.. Consider the following

The great war was on hold since 1897, waiting on the British and French bankers to create a means to finance the war. That financing required the warriors in Europe to invade and overthrow the US Constitutional prohibition (Article I, Section 9, paragraph 4) which prohibited Capitation or other direct taxes, not based in proportion to the population. Amendment 16 ratifed on February 3, 1913 reads, the Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.
Within minutes after the US. Supreme court took up taking non proportional taxes from the pockets of working Americans the privately owned Federal reserve bank was created, and made by congress the central bank of the world (1913). So to recap, British adoption of Bismarck's measures had little to do with the war in Europe, instead it was the the money to be taken by taxation from the pockets of every American that satisfied the bankers requirement of suitable and ample capital (Federal Reserve Act of 1913); USA taxes on Americans would collateral the FR lending, and the USA would guarantee the taxes would be collected and rendered as required. Once constitutional intent was thwarted, the federal Reserve could lend to the global warriors who wanted to destroy Germany and take the oil rich land (entire Middle East) from the Ottoman. It took two world wars and trillions of tax dollars, not to mention millions of lives, for the pubic nations states to enable the private theft of the oil rich Middle East lands owned by the Ottomans.

additionally .. Barovsky responded also to lysias @ 43 with "Actually, that's not true. When the UK went to war in 1914, they discovered that their soldiers were so undernourished and unfit to fight for the Empire, that a series of 'social reforms' were enacted to improve the lot of the working class (or cannon fodder).by: Barovsky @ 46

Don Bacon , Oct 5 2019 2:55 utc | 63
@ somebody 61
I don't see how anything in Syria has been resolved peacefully, I just don't.
Russia's strategy of giving foes a choice of fighting or being bused elsewhere, a choice they took, was a truly unique peaceful resolution. Never been done before, to my knowledge. Revolutionary. Wonderful. Peaceful. I liked it.
Don Bacon , Oct 5 2019 3:08 utc | 64
@ PD 60

If I may: A big part of national strategy is to have the populace focusing on "foreign threats" which takes citizens' minds of their domestic problems. Part of "sovereign equality" is (at the national level) to mind our own business, not somebody else's.

George Washington dedicates a large part of his farewell address to discussing foreign relations and the dangers of permanent alliances between the United States and foreign nations, which he views as foreign entanglements.

Later, we have "War is the Health of the State"
by Randolph Bourne (1918) . . here
". . .The republican State has almost no trappings to appeal to the common man's emotions. What it has are of military origin, and in an unmilitary era such as we have passed through since the Civil War, even military trappings have been scarcely seen. In such an era the sense of the State almost fades out of the consciousness of men. With the shock of war, however, the State comes into its own again. The Government, with no mandate from the people, without consultation of the people, conducts all the negotiations, the backing and filling, the menaces and explanations, which slowly bring it into collision with some other Government, and gently and irresistibly slides the country into war. . ."

b4real , Oct 5 2019 3:10 utc | 65
I think we are seeing more like russia/china using a strategy similar to Muhammad Ali's rope a dope against the u.s. They are both spending their money wisely on building effective military forces, both defensive and offensive, but they are not wasting their treasure on imperialist adventures. At the same time, everywhere U.S. has tried to corner a market or extend itself, they have been getting cut off at the knees by either Russia or China. Russia put a monkey wrench in U.S. goals in Ukraine, Syria and Venezuela. U.S. went after Iran and China stepped in with a huge oil purchase and development project. Now I'm reading that Russia is getting ready to assist Cuba in a major way.

Was it napoleon who said, "when you see your enemy making mistakes, let him"? (paraphrase) I think they are going to continue trying to avoid a fight while they wait for the U.S. to either come to its senses, collapse or come to blows, but they won't be the instigator.

U.S. is capitalist and this kind of society is more likely to destruct through a financial collapse or a civil war than declaring war on either China or Russia. Not that war with China or Russia can be ruled out, but if it occurred I think it would probably start as a result of U.S. accidental blowing something up with one of our smart missiles....

This (entertaining) article was written by some street fellow in ukraine around the time Yanukovich was ousted, but the similarities between Ukraine and US shares a common perspective of a lot of USA common folk. In usa,you don't ever get to own much (its all leased or financed) and even if you do, its not hard for them to find a way to liberate it from you.


b4real

chu teh , Oct 5 2019 4:14 utc | 66
Barovsky | Oct 4 2019 22:42 utc | 46

re WW1 UK malnourished soldiers

I recall US journalist George Seldes remarking his observations as he met the UK conscripts coming to the WW1 front. His on-the-scene notes of malnourishment and inability to handle repetitive lifting of ammunition to feed mortars/small cannon, relative to German conscripts, were telling. Explains the postwar emphasis on sports and diet just to prep for the next war. Lessons perhaps also applied to American emphasis on spoprts may just be the overt signs of underlying gov covert funding/subsidies and legislation enabling "league" monopolies.

Ian2 , Oct 5 2019 4:23 utc | 67
@William Gruff:

Why the understatement? It's the same reason why militaries don't showcase their latest greatest hardware to the public. Secrecy provides maneuvering room and is only revealed when appropriate. It's also about managing fear and public opinion in hopes of exerting some influence over your adversary.

AFAIK, China have not officially stated their holdings. The 290 figure is really an estimate given by various NGOs.

ziogolem , Oct 5 2019 4:25 utc | 68
Time is on the side of the new eastern powers, that is, with each passing month the US military (& economic) superiority shrinks.
I think that is why China has been able to exercise such restraint with HK, they can put up with the tantrums till 2047.

The big danger is if those who own the USA try to use their advantage before they lose it.

They already assume that an apocalypse is inevitable;
When the elite retreat to bunkers and private islands in Hawaii, New Zealand, Tasmania or Patagonia , their main concern is how to keep the deplorable's grubby hands off their stuff when the shit finally hits the fan.

chu teh , Oct 5 2019 4:51 utc | 69
...re China's invention of gun powder. IIRC Marco Polo brought it back to Europe in 1400s at a time when China had already advanced it to hand-held-cannon status.

Note well that Europe itself was already in an advanced state of acquisitive madness, as much as could be enabled by formations of swords and horses occasionally being an overwhelming weapon .

With gunpowder, force-of-arms were now an overwhelming weapon in far more areas of the continent.

Then, and only then, could a Columbus et al have set out on voyages of discovery with confident ability to claim any "new" lands for some king who would fund the mission.

I submit, there is no way a Columbus could set-sail unless he had on-board such overwhelming weapons.

Else, landing anywhere without such would only permit some sly smiling and trading and scouting. Any overtly aggressive landing party would be slaughtered by the sheer numbers of home-team locals.

Re "power corrupts; absolute power corrupts absolutely", gunpowder was the 1st overwhelming weapon that enabled conquest.

The 2nd overwhelming weapon was the atom-bomb. But IMO, some heroic figures understood the ramifications its overwhelming-nature; thus they felt motivated to force its sharing, bec a monopoly guaranteed its use to permit limitless conquering.

Then at that point, science was funded by .govs to invent the next overwhelming weapon and use it before any delicious target could duplicate it. We are here.

The acquisitive-syndrome.

FSD , Oct 5 2019 4:54 utc | 70
Lavrov: "Those with a more or less politically mature opinion of the situation should have realised long ago that the sanctions don't work in the direction they wanted them to work."


Oswald Spengler is good here. What he called Western 'money-thinking' is moving at the moment in contrary, self-extinguishing, directions. Full spectrum dominance, bankrolled by reserve currency status, seeks the whole enchilada and potentially once had the wherewithal to achieve it --if not for the punitive subtractions necessitated by sanctions regimes. Compounding matters, the exiled nations, having escaped the comforts of the lab, develop fearsome powers of self-reliance (what North Korea proudly calls juche). Banded together, these hardened exiles will some day go on to decimate the King's Army:


"Spengler, more poet than historian, offers the penetrating eye of the stranger. His prescience for the Russian destiny is paraphrased by Kerry Bolton here:

The Russian soul is not the same as the Western Faustian, as Spengler called it, the 'Magian' of the Arabian civilization, or the Classical of the Hellenes and Romans. The Western Culture that was imposed on Russia by Peter the Great, what Spengler called Petrinism, is a veneer The Russian soul expresses its own type of infinity, albeit not that of the Westerner's Faustian soul, which becomes enslaved by its own technics at the end of its life-cycle."

Many of those 'technics' fall under what Spengler called "money-thinking". At the twilight of its life-cycle the West threatens to withhold its toxicity from all those who don't 'play fair', plying its financial sanctions like an overused tool-set: fractional reserve banking, impudent debt-money that arrives ex nihilo seeking its keep from God-knows-where, leverage that belabors ever-narrowing denominators of intrinsic value."

https://thesaker.is/sins-without-recourse-beast-without-remorse/

The Western debt pyramid can ill-afford meting out the punishment of exile. On the contrary it needs everything on Earth plus the minerals of passing meteors and Martian water. However its petulance and hubris can't resist banishing nations that displease it. When its petulance exceeds its own diminishing critical mass, the seesaw tips against it.

Peter AU 1 , Oct 5 2019 4:58 utc | 71
Re ""power corrupts; absolute power corrupts absolutely", gunpowder was the 1st overwhelming weapon that enabled conquest."
The history of empires is as long as the history of agriculture and herding, nearly ending with the advent of nuclear weapons and MAD.
Only one country left trying that needs some sense knocking into it.
somebody , Oct 5 2019 6:05 utc | 72
Posted by: Don Bacon | Oct 5 2019 2:55 utc | 63

I don't think the bussing to Idlib was Russian strategy. The Syrian civil proxy war was a lot about demographics, Hezbollah tried to save Shiites from mixed areas, dito the Syrian state with their supporters. It was a local solution that was necessary as Jihadi fighters come with huge families. Turkey might have had a part as their interest was to have the Jihadis at the border to fight against the Kurdish groups. You may have noticed that the Syrian government with support of Russia now attacks the Jihadi fighters in Idlib.

Russia's strategy was to force Turkey on its side without alienating Iran or Syrians. Iran at one stage seemed ready to support a religious power share the type of Lebanon. The Russian intervention stopped that idea.

Russia saved the Syrian state and the Syrian state insisted on being secular and getting rid of all internal ennemies. That is a kind of peace but the peace of the graveyard.

somebody , Oct 5 2019 6:27 utc | 73
Actually it is quite funny that Putin has started to go back to the 19th century, to "development models, interests, cultures and traditions " and the "concert of power".

After the Congress of Vienna there was the Russio-Persian war, the Russio-Turkish war, the battle of Warsaw against Poland, the Crimean war against the Ottoman empire, Britain and France, advancement in Central Asia and one of the tsars banned Ukrainian language in print. Never mind the tsars successfully fighting the rebellions of the Russian middle classes. Though in 1861 Russian serfs were finally freed as they were needed in newly developing industries. The century ended in 1900 with the Russification of Finland, making Russian the official language.

Never trust a historic reference.

psychohistorian , Oct 5 2019 6:29 utc | 74
@ Peter AU 1 who wrote about the history of empires
"
Only one country left trying that needs some sense knocking into it.
"
That is occurring as we write our textual white noise about the details but the approach is not a Western knocking some sense into it but an Eastern Art of War approach.

It came to me today that instead of WWIII we need to think of what the world is going through as a Civilization war or evolution, assuming we make it out the other side of the conflict. The current empire is trying everything in its quiver of arrows short of MAD to retain control over the form of social organization with private finance at its core.

But the social organization of the East does not think like that and wants to spread the wealth and ownership broadly. The East has been taken advantage of and maligned by the West for centuries and they are not going to continue to let that happen. So they have organized themselves to beat the West at its own game but are doing so according to the Art of War meme instead of trying to knock some sense into the West. Since the East is good at playing the long game in relation to the West they are incrementally wearing down and constraining the West until it collapses of its inability to bully and Might-Makes-Right itself forward.

As we are watching the end game of those efforts, IMO. I don't see the West holding its control on empire for much longer because the East is giving example of a better and more equitable way that will be and is winning over country after country that have been client states of empire held in place by the jackboot of global private finance.

We are witnessing a Civilization war of our species and it is quite the spectacle, eh?

Tom , Oct 5 2019 6:52 utc | 75
Another example of the ever sanctioning superpower is losing its status. "Whistleblower accuses largest US military shipbuilder of putting 'American lives at risk' by falsifying tests on submarine stealth coating" Another day, another example of failure of the MIC to deliver.

Huntington Ingalls Industries, which spun-off from Northrop Grumman in 2011, "knowingly and/or recklessly" filed falsified records with the Navy claiming it had correctly applied a coating, called a Special Hull Treatment, to Virginia-class attack submarines which would allow the vessels to elude enemy sonar, the Sept. 26 complaint alleges.
Instead, the complaint said, Huntington Ingalls' Newport News Shipbuilding facility in Virginia took shortcuts that allegedly "plagued" the class of submarines with problems, and then retaliated against the employee who spoke up about the issues. At this rate most of the US navy will be tied up at their home port waiting for repairs.

According to the complaint, Lawrence, a senior engineer at Huntington Ingalls who has worked there since 2001, has provided evidence of the alleged issues at the company's Newport News Shipbuilding facility in Virginia. Stay safe Lawrence.

https://taskandpurpose.com/lawsuit-huntington-ingalls-whistleblower

Peter AU 1 , Oct 5 2019 6:53 utc | 76
psychohistorian

My thoughts also. And we do live in very interesting times for sure.
When I say knocking some sense into, that includes something along the lines of a soviet style collapse which is the preferable option.

albagen , Oct 5 2019 7:11 utc | 77
@ b4real
re: napoleon quote

replace 'let him' with 'don't interrupt him'

MadMax2 , Oct 5 2019 7:56 utc | 78
~By The Western debt pyramid can ill-afford meting out the punishment of exile.~
71 FSD

Yeah, it is curious. You would think, with an understanding of its own system - infinite growth backed by debt - that empire would wisely choose to employ its tentacles, not deny them. Especially with most states outside of North Korea being open for business in some shape or form. At this rate the US Treasury will need to authorize the advance sale of mortgages to the burgeoning colonies on the moon.

To navigate to the summit for the best part of a century. And to squander those gains within the space of half a young lifetime.

Barovsky , Oct 5 2019 7:58 utc | 79
Posted by: Peter AU 1 | Oct 5 2019 4:58 utc | 71

"power corrupts; absolute power corrupts absolutely"

Correction: It's the quest for power that corrupts....

Jack Garbo , Oct 5 2019 8:30 utc | 80
Putin's concept of strong defense is sound. You don't attack if the other side can defend itself. You negotiate. In Thailand, we rarely see street fights (except between drunk foreigners).
Why? The national sport is lethal Muay Thai (kick boxing), so you never start a fight, since the other side can fight, too. You talk it over, negotiate.
A User , Oct 5 2019 8:38 utc | 81
Lot of nonsense in this thread. From "gunpowder was the 1st overwhelming weapon that enabled conquest." When it is trivially simple to argue that the trained, uniformed and properly regimented Roman Army which came 1500 years earlier was both a better example and likely not the first.
Equally facile is the claim that "It's the quest for power that corrupts" Whilst its probably true that some have been corrupted reaching for power it is equally true that many who for various reasons were not corrupted in the quest, either because they acquired it through serendipity by way of hereditary or accident, came into power as naive or ideologically principled upstarts yet as with every leader, they were corrupted by power as they were convinced no one else could do it (be the bossfella) as well as they.

Emperor Claudius comes to mind as an earlyish big time boss destroyed by power, but callow youths thrust into power as clan leader when dad and/or older bros were killed in battle and went on to become bigger arseholes than Dad, are examples which go back to when us mob first walked upright.

Peter AU 1 , Oct 5 2019 8:47 utc | 82
Barovsky
I quoted a sentence by chu teh and was replying to the piece about gunpowder.

As for the power corrupts part, take a look at the US prior to the fall of the Soviet Union and then what it has become during the time it held virtually absolute power..

Elora Danan , Oct 5 2019 9:18 utc | 83
Yesterday night The Godfather was broadcasted in a foreign private channel....

I saw a comrade telling about that and arguing that this movie contains the world...and it is that indeed it encompasses the history of the USA...

"I have "worked" all my life for the welfare of my family, and I have always refused to be a puppet moved by the threads of the powerful. With you I had other projects Michael. I thought that one day you could move those threads. Senator Corleone, Governor Corleone, or more".

Even in the meeting of all the mafia families in New York for to reach a "pact of no agression" someone states:

"After all, we are not communists..."

somebody , Oct 5 2019 9:18 utc | 84
Posted by: Peter AU 1 | Oct 5 2019 8:47 utc | 82


As for the power corrupts part, take a look at the US prior to the fall of the Soviet Union and then what it has become during the time it held virtually absolute power

That's a myth .

In the decades since the 1972 Watergate scandal, more charges of corruption have been leveled against members of presidential administrations than in the preceding two centuries. Perhaps the most lasting achievement of Ronald Reagan's presidency was the astonishingly successful campaign to delegitimate government itself, at least in the eyes of many citizens, and to enshrine individual economic self-interest, manifested in unregulated "private enterprise," as the paramount value of American life. That transformation, like the rise of so-called rational choice and utility maximization as the governing paradigms in the social sciences, has encouraged citizens to seek wealth -- and to avoid paying taxes or participating in civil society -- as the only sensible strategy. As a result, the homely virtues of self-discipline, moderation, and reciprocity preached by Enlightenment thinkers such as Benjamin Franklin, John Adams, and Abigail Adams now strike many Americans as outmoded advice for suckers. If "greed is good," as the Wall Street character Gordon Gekko asserted, then Donald J. Trump's career of swindling, debt dodging, and tax evasion might serve as a model to emulate rather than an object lesson in the mainstreaming of corrupt business practices.1

Peter AU 1 , Oct 5 2019 9:29 utc | 85
somebody
US has always been corrupt. Now it can scarcely function. Like a drug pusher consuming too much of the product.
Russ , Oct 5 2019 9:39 utc | 86
No one familiar with Alexander Hamilton, Roger "open the purses of the people" Morris or the roots of the Shay's Rebellion, Whiskey Rebellion, North Carolina Regulator movement and other people's movements and actions, or the 1787-88 counter-revolutionary coup carried out by the Constitutional Convention for the purpose of centralizing economic and military power toward social control and building a continental empire (anyone in any doubt about that should read the proceedings and the Federalist Papers; Hamilton was especially forthcoming about the imperial motivation), would have any illusions about how deeply corruption is inherent in the US system.

Same for imperialism. And all subsequent US history starting and continuing with the genocide of the First Nations bears this out.

Elora Danan , Oct 5 2019 10:11 utc | 87
With respect to sanctions, the EU central power ( i.e. Germany ) impossed harsh sanctions that ended being implemented in full only by southern countries like Spain, who are those who have seen their commercial excahnges with Russia diminished to the least with the conseuqent loses for national business, while, in fact, German business continue their exchnage with Russia as if nothing had happened...

Now that Trump impose import tariffs to Europe, the most affected are, again, those who fulfilled the US sanctions plan towayds Russia at the letter, i.e. Spain and southern countries...

If these Southern European Countries would have a sovereign government with any respect for the people who vote them, they will extract the consequent lesson from all of this...and would apply the recipe for all this with respect to Russia, Iran, and so on...

The lesson would translate like "the more you comply with US mandate on sanctions against any other country you have nothing against, even at the price of harming badly your own economy, the more sanctions/import tariffs will be impossed on yourself at the first necessity...", which is the old lesson from primary school, "the more weak you would show in front of a bully...more beating will come..., oor already in grown mafiosi, "more "special tax" for "protection" to pay"...

Then it is Spain who hosts most of US nuclear deterrence and AFRICOM central command...If Spain would have a sovereign government with a hint of respect for the people who vote it, an ultimatum will be possed in front of the yankees, "eliminate import tariffs, stop meddling with national economy, or pack your things and go home"

Elora Danan , Oct 5 2019 10:27 utc | 88
1.3 billion paper money to prevent the collapse of the Wall Street Stock Exchange.


The Federal Reserve of the United States has injected about 278,000 million dollars in the money market in four days. After injecting 53,000 million dollars earlier this week, the Federal Reserve renewed these operations three times for astronomical amounts representing 75,000 million per day, and has already announced that it will continue to do so daily until October 10.

The newspaper Le Figaro (1) describes as "astronomical" that jet of fiat money that, however, does not seem to worry the New York Stock Exchange, with a Dow Jones index that remained above 27,000 points throughout week. It is normal because, as the Efe agency says, "Wall Street feeds on the flexibility of the Fed" (2), that is, the massive emissions of paper money.

It has no different menu to nourish itself and, as specialists say, "the reasons that lead to lower interest rates are usually not good."

The resistance of Wall Street is explained because these operations only affect the interbank market, which is short of liquidity "temporarily". Banks that are financed on a daily basis in this market would suffer a shortage of liquidity as a result of large debt issues by the Treasury and a strong demand for liquidity from companies facing fiscal maturities.

But there are more than enough reasons for speculators to worry. "The reasons may be not only technical," says the newspaper. Some financial institutions have refused to make their funds available to the market, indicating the possible vulnerability of a participant (bank or companies) who may not be able to repay the amounts borrowed on a day-to-day basis. If this situation is confirmed, which is synonymous with the loss of mutual trust in the interbank market, it could be a more serious crisis than in 2008.

The President of the Federal Reserve, Jerome H. Powell, who took office in February last year, has no different alternative. He has been a member of the board of governors of the Federal Reserve since 2012 and knows nothing more than routine: since the late 1970s he is the first president of the Federal Reserve that does not even have a bachelor's degree in economics. Does he need it?

The question is whether the gigantic mass of fiat money that it has put into circulation will be sufficient to avoid a collapse like that of 2007, or another even greater collapse will occur.

snake , Oct 5 2019 10:38 utc | 89
Russ @ 86.. can you tell me more about the continental congress. where can the biographies and histories be had which might shed some real light on John Hanson first president(1781-1783) of the United States in Congress Assembled(1776-1789) .. and Samuel Huntington (Conn), and Thomas McKeen (Delaware) and the others who were elected and served as Presidents of the [Continental Congress<= the government that defeated the British and that existed between 1776 and 1789}, before the lobbyist imposed ratification to install the US Constitution {a document that cut off (terminated) the right of self determination and denied bottom up democracy to the people of the several nations that were in America at the time]. Before the constitution, the people could and did impose democracy on those who were in charge of the local, state and central governments (The Articles of Confederation, central government from 1776 to 1789] after the Constitution, [the governed were never heard from again. ]. ..
Russ , Oct 5 2019 12:47 utc | 90
@ snake 89

Here's a piece I wrote some years ago on the 1787-88 convention and its goals.

https://attempter.wordpress.com/2012/05/01/the-american-revolution/

William Gruff , Oct 5 2019 13:19 utc | 91
somebody @59 sez: ""Souvereignty" and statehood ... is a recipe for war."

This is the mindset of the hegemon (or the servant of hegemony, whatever). They cannot even imagine "Truly mutually respectful, pragmatic and consequently solid relations" between nations any more than they can imagine others seeking that. They assume that everyone else is motivated to dominate as they are. They project their own damage from having been born into an intensely competitive, egotistical, identity -obsessed culture onto the rest of humanity out of sheer ignorance that things could possible be any different elsewhere.

Western culture, with the purest expression being in the United States, exalts in the individual. That sounds like a noble and wonderful thing on the surface, but the practical effect is to atomize society into isolated and competing hermetic entities. Community is displaced to accommodate the self. This environment favors the sociopath and the psychopath, which is why in the West sociopaths and psychopaths most easily accumulate power and rise to the tops of all of those societies' institutions. It is not surprising that those born into such an environment imagine it to be the natural order and human nature because that is all they know and experience.

But of course that is not human nature. The species would have died out far more than a hundred thousand years ago if it were. Human nature is to build community, and given the opportunity that is precisely what they do. Community, though, is a threat to the power of the psychopaths who ascend to the top of capitalist society, so in all institutions in which those psychopaths gain power they discourage and fight and dismantle community and replace it with social order built around themselves.

This psycho-driven culture grew to dominate in the West because, like slave-based societies before, it was economically progressive. Due to the immaturity of communication technology, individual psychos could assemble and coordinate larger social organizations directed at production than the population could naturally assemble on its own. But technology progresses and naturally formed human communities grow in scale and scope over time. This made slave-based economies obsolete, and is now in the process of obsoleting psycho-centric economies. It should come as no surprise that this replacement is occurring most rapidly in cultures where the psycho-centrism had not fully established itself.

Considering the above, my bet is that as we see China's BRI project mature in Africa, that continent will experience a Renaissance of epic proportions, perhaps even dwarfing China's accomplishments of the last half century. This is because African cultures are similar to the Chinese and other Asian cultures in that they have not yet been fully assimilated into the western worship of "individualism" , so their natural human tendencies towards community-building are not yet corrupted and subverted.

If China's transition to the dominant progressive power on the planet doesn't shatter the dangerous American myth of exceptionality, then big portions of Africa moving into first world status surely will. That's still some decades away, but we should be able to see undeniable signs of movement in that direction by about 2030 to 2040 (growth in industrial output and movement up the value added chain, dramatic development of infrastructure, rapid increases in academic attainment, significant declines in poverty, etc).

Naturally, that is something that few westerners, particularly Americans, can wrap their heads around because they have a flawed (Hobbesian) understanding of human nature. As they do with China now, westerners will deny the evidence from their own eyes with regards to Africa for as long as they can.

bevin , Oct 5 2019 13:27 utc | 92
wikipedia makes no mention of it but for a long time Thomas McKeen was famous as the villain in William Cobbett's The Democratic Judge or The Equal Liberty of the Press.
McKeen was a very nasty piece of work-his origins in Delaware are coincidental
bevin , Oct 5 2019 13:33 utc | 93
"...that is not human nature. The species would have died out far more than a hundred thousand years ago if it were. Human nature is to build community, and given the opportunity that is precisely what they do. Community, though, is a threat to the power of the psychopaths who ascend to the top of capitalist society, so in all institutions in which those psychopaths gain power they discourage and fight and dismantle community and replace it with social order built around themselves..."
How true, if a little unfair to psychopaths.
financial matters , Oct 5 2019 13:37 utc | 94
Elora Danan @ 88

Very interesting.
I don't think it's the use of fiat money itself that's so important but what it's used for. The money you describe as being used to support Wall Street is a great example of the wrong use. Supporting a derivative led financial speculation benefitting the 1% vs the belt and road which is oriented to real economic development which would be a wise productive use of fiat.
-------------

In a famous critical remark directed at China's heavy reliance on western-style, debt-led growth – an anonymous author (thought to be Xi or close colleague), noted (sarcastically) the notion that big trees could be grown 'in the air'. Which is to say: that trees need to have roots, and to grow in the ground. Instead of the 'virtual', financialised 'activity' of the West, real economic activity stems from the real economy, with roots planted in the earth. The 'Belt and Road' is just this: intended as a major catalyst to real economics.When the music stops and the derivative structure starts unraveling showing multiple claims on ownership who will prevail. I think that there's a new sheriff in town with the power to back up the 'roots in the ground' team.Posted by: financial matters | Jan 22, 2019 8:46:28 AM | 100

snake , Oct 5 2019 13:42 utc | 95
The 1776 Constitution was on a vector. By contrast, the 1788 Constitution was designed to foreclose any further democratic movement. On the contrary, its main vector was to concentrate power and wealth up the hierarchy, and to help build an empire for this new ruling class.] the empire class ...needed a constitution which would centralize government, strongly concentrate it, turn it into a versatile and brutal weapon on behalf of finance assaults, military aggression, and police repression. There's only one path forward: We must resume the American Revolution. by Russ @ 90..


very interesting.. 2012 .. discussion.. your paper .thanks . but still no background on the people who brought about the 1776 government. and who operated it between its inception 1776 and the Bankers coup that regime changed the 1776 government into the 1788 Constitution of the United States of America.
As you said in your article, everyone should know about Article 6 in the constitution of the United States of America (the 1788 government) it saved British and French Aristocracy <=and kept in power the very people the Americans had sought to remove=> from the Americans who fought the war. It says All Debts contracted and Engagements entered into, shall be as valid against the US under this Constitution, as under the confederation (but no where do I see court cases that say under the 1776 government, that claims to lands, granted by foreign kings and Queens (land grant estates) were valid? In fact, what I see is that the Articles of Confederation government was planning to deny title to, and confiscate the lands which traced to the land grants (G. Washington owned half of West Virginia and all of Virginia) and the AoC plan was to distribute the land grant lands so confiscated among the people who lived in America equally?

Don Bacon , Oct 5 2019 13:47 utc | 96
@WG 91
. . . as we see China's BRI project mature in Africa, that continent will experience a Renaissance of epic proportions
Yes, and they've got a head start:
African countries with GDP growth rates above 5% in 2018
Libya, Rwanda, Ethiopia, Ivory Coast, Djibouti, The Gambia, Senegal, Uganda, Burkina Faso. Kenya, Guinea, Ghana, Egypt, Niger.
Also: China 6.5, US 2.8, France 1.5, Germany 1.4, UK 1.3 . . here
BM , Oct 5 2019 13:52 utc | 97
Lot of nonsense in this thread. From "gunpowder was the 1st overwhelming weapon that enabled conquest."
Posted by: A User | Oct 5 2019 8:38 utc | 81

...re China's invention of gun powder. IIRC Marco Polo brought it back to Europe in 1400s at a time when China had already advanced it to hand-held-cannon status.
Posted by: chu teh | Oct 5 2019 4:51 utc | 69

Agree with the lot of nonsense bit, although there is also a lot of interest. It is true that China discovered gunpowder, but not sure about the "hand-held-canon status". My version of reality had it that due to differences of perspective between East and West, China discovered gunpowder and used it for firecrackers, and (allegedly) never thought of using it for weapons. Similarly knowledge of the configuration of the stars in relation to location was discovered by the arabs, long before this knowledge was exploited by Europeans for navigation. The claim being, that the practical Europeans put scientific discovery to use for practical benefits while the East - which discovered important segments of that scientific discovery long before - had "merely" put it to spiritual, cultural and other transcendent uses.

I absorbed the above factoids (gunpowder and the stars) over half a century ago before I would have looked at such claims sufficiently critically; to what extent such factoids might be really true I am not quite sure, although I remain somewhat sceptical about the "hand-held-canon" claim. The broader claim though about the application of scientific discovery needs to be reexamined more impartially.

William Gruff , Oct 5 2019 14:03 utc | 98
Ian2 @67: "Secrecy ... is only revealed when appropriate."

And the appropriate moment to reveal a strategic doomsday arsenal that only exists to prevent attack is when that arsenal is fielded. This point is so obvious that it was raised with humorous intent in the 1964 Kubrick movie Dr. Strangelove .

You only keep weapons systems secret that you intend to use in attacks in order to surprise your victims. Since America is violently aggressive and regularly attacks other countries, the US maintains this sort of policy. America is exceptional in this regard, though. America's focus is on offensive weaponry to attack other countries with, so keeping those weapons secret helps limit America's victims' abilities to prepare and defend themselves. Military secrecy is therefore the tool of the aggressor intended to facilitate sucker-punching its victims. Weapons intended to discourage such attacks must be advertised loud and clear for their intended deterrence to succeed. This is why Russia openly announces their new weapons and why China shows theirs off in parades.

China does not intend to use their nukes. They are not like America which is building tactical nukes to make atomic weapons more palatable to use in practice. There are no countries in the world that China has shown any interest in attacking anyway, unlike America which maintains a list of target countries that it is working itself up to attacking.

braindead , Oct 5 2019 14:07 utc | 99
aaaaand the 1 mirrion $ question is: who funds the army?

- the people in the tent cities
- the oligarchs
- none of the above

jo6pac , Oct 5 2019 14:22 utc | 100
Who says V Putin doesn't have sense of humor as trolls Amerika.

https://www.youtube.com/watch?v=ATBSulMeXhU

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[Oct 05, 2019] Elisabeth Warren: Is Time for the United States to Stand Up to China in Hong Kong

Notable quotes:
"... The intemperate comments of an imperial-minded candidate for the presidency ..."
"... The democrat coup/impeach/coup machine suffers is bi-polar disorder. Every they way fill the military industry complex trough! In their war manic state they supress freedom fighters, and arm their jailers, in their war depress state they support rioters in Hong Kong. If Donbass rebels were in Macao they would get US support, in Dobass the US will suppress freedom. ..."
"... With Ukraine, because the democrat neocons want to surround Russia, US national security arms Ukriane to forcibly put down Donbass as they attempt some form of "self determination". ..."
"... In the case of Hong Kong because US is enemy to the PRC (Red China at Menzie Chinn blog) the US is all for self determination, like Hitler was for pulling Sudetenland out of Czechoslovakia in 1938! ..."
"... This bipolar morality fits with deep state surveillance on Trump in 2016 and in 2019 claiming Trump doing it to Biden so that Trump/DoJ cannot fight corrupt (all) democrats ever! ..."
Oct 05, 2019 | economistsview.typepad.com

Is Time for the United States to Stand Up to China in Hong Kong
Tweets aren't enough. Washington must make clear that it expects Beijing to live up to its commitments -- and it will respond when China does not.
By ELIZABETH WARREN


anne -> anne... , October 04, 2019 at 09:28 AM

https://foreignpolicy.com/2019/10/03/it-is-time-for-the-united-states-to-stand-up-to-china-in-hong-kong/

October 3, 2019

It Is Time for the United States to Stand Up to China in Hong Kong
Tweets aren't enough. Washington must make clear that it expects Beijing to live up to its commitments -- and it will respond when China does not.
By ELIZABETH WARREN

[ Shocking and appalling; unethical and immoral; discrediting. The intemperate comments of an imperial-minded candidate for the presidency. ]

EMichael -> anne... , October 04, 2019 at 09:40 AM
You need to find out what "imperial-minded" means, and address your opposition to Warren's thoughts with reality.
ilsm -> EMichael... , October 04, 2019 at 01:41 PM
The democrat coup/impeach/coup machine suffers is bi-polar disorder. Every they way fill the military industry complex trough! In their war manic state they supress freedom fighters, and arm their jailers, in their war depress state they support rioters in Hong Kong. If Donbass rebels were in Macao they would get US support, in Dobass the US will suppress freedom.

With Ukraine, because the democrat neocons want to surround Russia, US national security arms Ukriane to forcibly put down Donbass as they attempt some form of "self determination".

In the case of Hong Kong because US is enemy to the PRC (Red China at Menzie Chinn blog) the US is all for self determination, like Hitler was for pulling Sudetenland out of Czechoslovakia in 1938!

This bipolar morality fits with deep state surveillance on Trump in 2016 and in 2019 claiming Trump doing it to Biden so that Trump/DoJ cannot fight corrupt (all) democrats ever!

[Oct 03, 2019] Warren vs Biden vs Trump

Oct 03, 2019 | economistsview.typepad.com

JohnH -> kurt... , October 02, 2019 at 06:00 PM

More unfounded assertions from kurt.

1) We don't know for certain what Shokin was investigating and what he wasn't.

2) Ukraine was rife with corruption. But most likely Biden was more concerned with uprooting pro-Russian elements calling them corrupt as shorthand. Pro-Western corruption was most likely overlooked.

3) We don't know why Hunter Biden was appointed to the Burisma board along with one of Joe Biden's big bundlers and the CIA-friendly former President of Poland. We do know that Hunter was put on the board immediately after the color revolution in Ukraine and that he served a stint on the National Democratic Institute, which promotes regime change. Much more needs to be learned about what the Bidens were up to in Ukraine and whether they were carpet baggers cashing out.

As I have said, I would be delighted if Trump went down and took Joe Biden with him. The last thing this country needs is a Joe Lieberman with a smiling face serving as President which is basically what Joe Biden is.

likbez -> JohnH... , October 02, 2019 at 08:51 PM
"As I have said, I would be delighted if Trump went down and took Joe Biden with him."

Biden was already destroyed by Ukrainegate, being Pelosi sacrificial pawn (and for such semi-senile candidate exit now looks the most logical; he can hand around for longer but the question is why? ), but it is unclear how this will affect Trump.

In any case each accusation of Trump boomerang into Biden. And Biden China story probably even more interesting then his Ukrainian gate story.

CIA ears over all Ukraine-gate are so visible that it hurts Pelosi case. Schiff is a sad clown in this circus, and he has zero credibility after his well publicized love story with Russiagate.

The fact that Warren is now favorite increases previously reluctant Wall Street support for Trump, who is becoming kind of new Hillary, the establishment candidate.

And if you able to think, trump now looks like establishment candidate, corrupt interventionist, who is not that far from Hillary in foreign policy and clearly as a "hard neoliberal" aligns with Hillary "soft neoliberal" stance in domestic policy.

As Warren can pretend that she is better Trump then Trump (and we are talking about Trump-2016 platform; Trump action were betrayal of his electorate much like was the case with Obama) she has chances, but let's do not overestimate them.

Pelosi help with Trump re-election can't be underestimated.

[Sep 30, 2019] Some longtime Democratic donors are reportedly considering throwing their backing behind Donald Trump

If Krugman is surprised that some Democratic donors will support Trump over Warren, he is not an analyst.
And Obama was a Wall Street prostitute, much like bill Clinton, no questions about it. Trump betrayal of his voters actually mirror the Obama betrayal. May suspect that Warren will be malleable with will fold to Wall Street on the first opportunity, governing like Trump-lite.
Sep 30, 2019 | economistsview.typepad.com

anne , September 30, 2019 at 03:53 PM

https://www.nytimes.com/2019/09/30/opinion/elizabeth-warren-wealth-tax.html

September 30, 2019

Warren Versus the Petty Plutocrats. Why do they hate her? It's mainly about their egos.
By Paul Krugman

Remember when pundits used to argue that Elizabeth Warren wasn't likable enough to be president? It was always a lazy take, with a strong element of sexism. And it looks ridiculous now, watching Warren on the campaign trail. Never mind whether she's someone you'd like to have a beer with, she's definitely someone thousands of people want to take selfies with.

But there are some people who really, really dislike Warren: the ultrawealthy, especially on Wall Street. They dislike her so much that some longtime Democratic donors are reportedly considering throwing their backing behind Donald Trump, corruption, collusion and all, if Warren is the Democratic presidential nominee.

And Warren's success is a serious possibility, because Warren's steady rise has made her a real contender, maybe even the front-runner: While she still trails Joe Biden a bit in the polls, betting markets currently give her a roughly 50 percent chance of securing the nomination.

But why does Warren inspire a level of hatred and fear among the very wealthy that I don't think we've seen directed at a presidential candidate since the days of Franklin Delano Roosevelt?

On the surface, the answer may seem obvious. She is proposing policies, notably a tax on fortunes exceeding $50 million, that would make the extremely wealthy a bit less so. But delve into the question a bit more deeply, and Warren hatred becomes considerably more puzzling.

For the only people who would be directly affected by her tax proposals are those who more or less literally have more money than they know what to do with. Having a million or two less wouldn't crimp their lifestyles; most of them would barely notice the change.

At the same time, even the very wealthy should be very afraid of the prospect of a Trump re-election. Any doubts you might have had about his authoritarian instincts should have been put to rest by his reaction to the possibility of impeachment: implicit death threats against whistle-blowers, warnings of civil war and claims that members of Congress investigating him are guilty of treason.

And anyone imagining that great wealth would make them safe from an autocrat's wrath should look at the list of Russian oligarchs who crossed Vladimir Putin -- and are now ruined or dead. So what would make the very wealthy -- even some Jewish billionaires, who should have a very good idea of the likely consequences of right-wing dominance -- support Trump over someone like Warren?

There is, I'd argue, an important clue in the "Obama rage" that swept Wall Street circa 2010. Objectively, the Obama administration was very good to the financial industry, even though that industry had just led us into the worst economic crisis since the 1930s. Major financial players were bailed out on lenient terms, and while bankers were subjected to a long-overdue increase in regulation, the new regulations have proved fairly easy for reputable firms to deal with.

Yet financial tycoons were furious with President Barack Obama because they felt disrespected. In truth, Obama's rhetoric was very mild; all he ever did was suggest that some bankers had behaved badly, which no reasonable person could deny. But with great wealth comes great pettiness; Obama's gentle rebukes provoked fury -- and a huge swing in financial industry political contributions toward Republicans.

The point is that many of the superrich aren't satisfied with living like kings, which they will continue to do no matter who wins next year's election. They also expect to be treated like kings, lionized as job creators and heroes of prosperity, and consider any criticism an unforgivable act of lèse-majesté.

And for such people, the prospect of a Warren presidency is a nightmarish threat -- not to their wallets, but to their egos. They can try to brush off someone like Bernie Sanders as a rabble-rouser. But when Warren criticizes malefactors of great wealth and proposes reining in their excesses, her evident policy sophistication -- has any previous candidate managed to turn wonkiness into a form of charisma? -- makes her critique much harder to dismiss.

If Warren is the nominee, then, a significant number of tycoons will indeed go for Trump; better to put democracy at risk than to countenance a challenge to their imperial self-esteem. But will it matter?

Maybe not. These days American presidential elections are so awash in money that both sides can count on having enough resources to saturate the airwaves.

Indeed, over-the-top attacks from the wealthy can sometimes be a political plus. That was certainly the case for F.D.R., who reveled in his plutocratic opposition: "They are unanimous in their hate for me -- and I welcome their hatred."

So far Warren seems to be following the same playbook, tweeting out articles about Wall Street's hostility as if they were endorsements, which in a sense they are. It's good to have the right enemies.

I do worry, however, how Wall Streeters will take it if they go all out to defeat Warren and she wins anyway. Washington can bail out their balance sheets, but who can bail out their damaged psyches?

ilsm -> Fred C. Dobbs... , September 30, 2019 at 04:59 AM
"Deductive reasoning" within the media message is mob control.

"It ain't what you know... it's what you know that ain't so"#. Keep reading the mainstream media!

Given enough time [and strategy wrt 2020 election] we will get to the bottom of Obama's "criminal influence" on 2016 election.

It takes a lot more to debunk the Biden, Clinton, Nuland, Obama Ukraine drama. To my mind, Ukraine needs to be clean as driven snow* to "earn" javelins to kill Russian speaking rebels.

Why do US from Obama+ fund rebels in Syria (Sunni radicals mainly) and want to send tank killers to suppress rebels where we might get in to the real deal?

# conservatives have been saying that about the 'outrage' started by the MSM for decades.

* not possible given US influenced coup in 2014

+Clinton in Serbia!

[Sep 30, 2019] The best alternative to the current situation: Get Liz Warren elected. But it is completely unclear whether the impeachment favors Warren or Trump

Sep 30, 2019 | economistsview.typepad.com

Fred C. Dobbs said in reply to Fred C. Dobbs... , September 29, 2019 at 06:46 AM

Best alternative to the above?

Get Liz Warren elected, IMO.

likbez,

Warren might be an improvement over the current situation. Moreover she has some sound ideas about taming the financial oligarchy

"Best alternative to the above? Get Liz Warren elected, IMO."

True. IMHO Warren might be an improvement over the current situation. Moreover she has some sound ideas about taming the financial oligarchy.

The idea of taking on financial oligarchy will find strong support of voters and in some respects she is "a better Trump then Trump" as for restoring the honor and wellbeing of the working people mercilessly squeezed and marginalized by neoliberalism in the USA.

Her book "The two income trap"(2004) suggests that this is not just a classic "bait and switch" election trick in best Obama or Trump style.

And I would say she in her 70 is in better shape then Trump in his 73+. He shows isolated early signs of neurologic damage (some claim sundowning syndrome: https://www.youtube.com/watch?v=wwh6Fu9BcAw slurring speech patterns, repetitions, disorientation, etc), which is natural for any person in his 70th subjected to his level of stress.

But it is completely unclear to me whether the impeachment favors Warren or Trump. the treat of impeachment already cemented fractures in Trump base which now, judging from comments in forums, is really outraged.

Some people are talking about armed resistance, which is, of course, hopeless nonsense in the current national-security state, but does show the state of their mind.

Also nobody here can even imagine the amount of dirt Obama administration accumulated by their actions in Ukraine. They really supported a neo-fascist party and cooperated with neo-Nazi (other important players were Germany, Poland and Sweden). Just to achieve geopolitical victory over Russia. Kind of total reversion of WWII alliance for me.

That avalanche of dirt can affect Warren indirectly as she proved to be a weak, unsophisticated politician by supporting Pelosi drive for impeachment instead of pretending of being neutral. Which would be more appropriate and much safer position.

Neoliberal democrats despite all Pelosi skills ( see https://mediaequalizer.com/martin-walsh/2017/12/gifford-heres-how-pelosi-learned-mob-like-tactics-from-her-father ) really opened a can of worms with this impeachment.

Also it looks like all of them, including Pelosi, are scared of CIA:
https://galacticconnection.com/nancy-pelosi-admits-congress-scared-cia/

== quote ==
In response to Senator Dianne Feinstein’s speech last week calling out the CIA for spying on her staffers, Rep. Nancy Pelosi was asked to comment and gave what might be the most revealing comments to date as to why Congress is so scared of the CIA:


“I salute Sen. Feinstein,” Pelosi said at her weekly news conference of the chairwoman of the Senate Intelligence Committee. “I’ll tell you, you take on the intelligence community, you’re a person of courage, and she does not do that lightly. Not without evidence, and when I say evidence, documentation of what it is that she is putting forth.”

Pelosi added that she has always fought for checks and balances on CIA activity and its interactions with Congress: “You don’t fight it without a price because they come after you and they don’t always tell the truth.
==end==

I strongly doubt that Trump will ever risk to drop a bomb by declassifying documents about Obama dirty actions in Ukraine; so to speak go "all in" against neoliberal Democrats and part of intelligence community (and possibly be JFKed).

But Trump is unpredictable and extremely vindictive. How he will behave after being put against the wall on fake changes is completely unclear. I wonder if Pelosi correctly calculated all the risks.

[Sep 30, 2019] Wall Street fear and loathing of Elizabeth Warren, suggesting that it has more to do with threatened egos than with money per se

Sep 30, 2019 | economistsview.typepad.com

anne , September 29, 2019 at 08:34 AM

https://twitter.com/paulkrugman/status/1178303352570089473

Paul Krugman @paulkrugman

I wrote the other day about Wall Street fear and loathing of Elizabeth Warren, suggesting that it has more to do with threatened egos than with money per se 1/

Some more thoughts on reports that Wall Street Democrats will back Trump over Warren. Obviously it's hard to know how big a deal this is -- how many of these guys are there, were they ever really Dems, and will they back Trump as more revelations emerge 1/

https://www.cnbc.com/2019/09/26/wall-street-democratic-donors-may-back-trump-if-warren-is-nominated.html

6:39 AM - 29 Sep 2019

So I remembered a sort of time capsule from the eve of the financial crisis that nicely illustrated how these guys want to be perceived, and retrospectively explains their fury at no longer getting to pose as economic heroes 2/

http://www.nytimes.com/2007/07/15/business/15gilded.html

The Richest of the Rich, Proud of a New Gilded Age

The new titans often see themselves as pillars of a similarly prosperous and expansive age, one in which their successes and their philanthropy have made government less important than it once was.

The thing is, even at the time the idea that financial deregulation had ushered in a golden age of prosperity was flatly contradicted by the data 3/

[Graph]

And of course the financial crisis -- which is generally considered to have begun just three weeks after that article was published! -- made utter nonsense of their boasting 4/

But they want everyone to forget about the hollowness of their claims to glory; and Warren won't let that happen, which makes her evil in their minds 5/

anne -> anne... , September 29, 2019 at 08:44 AM
https://fred.stlouisfed.org/graph/?g=p1hb0

January 30, 2018

Real Median Family Income in United States, 1954-2018

(Indexed to 2018)

anne -> anne... , September 29, 2019 at 12:11 PM
Correcting link:

https://fred.stlouisfed.org/graph/?g=p1hb

January 30, 2018

Real Median Family Income in United States, 1954-2018

(Indexed to 2018)

[Sep 29, 2019] Did Warren benefitted from killing Hillary's ring in 2016

Sep 29, 2019 | caucus99percent.com

Warren would be more likely to bite off Hillary's finger @Steven D

When Bill was president Warren met with Hillary and persuaded her to talk Bill into killing Biden's increased protection for lenders from rapacious borrowers. When Hillary was senator she supported the Bill. Warren gave an interview on the subject before she was involved in politics. She was not happy.

Warren was the single female Democratic senator who declined to give Hillary an endorsement before the primaries started. That's an event of some significance.

During the debates Warren took actions that helped Bernie on several occasions. Someone, I think Paul Krugman, said Glass Stegall would have done nothing to stop the meltdown because it didn't deal with shadow banking. Bernie was able to respond that he supported Warren's proposed Glass Stegall bill, which did have provisions to regulate shadow banking. On another occasion someone pointed out that Warren's bill did not break up big banks. Warren stated publicly that the bill didn't propose breaking up too big to fail banks but she supported the idea.

Warren and Sanders both supported Clinton when she had the nomination locked up. It was Bernie's responsibility to defend his supporters from Team Clinton's smears and insults during and after the convention.

It wasn't Warren that Clinton invited to the Hamptons to be introduced to a few dozen of her favorite fundraisers. It was Harris.

up 3 users have voted.

Alligator Ed on Sat, 09/28/2019 - 6:06pm

If this is documented, it is quite important

@FuturePassed

It wasn't Warren that Clinton invited to the Hamptons to be introduced to a few dozen of her favorite fundraisers. It was Harris.

But, even if so, Harris was to be nothing more than a Clinton place-holder to be swept aside one HER decided to resurrect the same Dimocratic party, which she has still not successfully destroyed, even with minor assistance from Barack, JoJo and Wild Bill. Nope. My contention is that Hillary Rodent Clinton will sweep the field of duped pseudo-contenders in a fixed horse race. HRC -- still with her!~

[Sep 28, 2019] The Real Winner of Impeaching Trump? Liz Warren by Patrick J. Buchanan

Notable quotes:
"... The first casualty of Pelosi's cause is almost certain to be the front-runner for the party nomination. Joe Biden has already, this past week, fallen behind Senator Elizabeth Warren in Iowa, New Hampshire, and California. ..."
"... By making Ukraine the focus of the impeachment drive in the House, Pelosi has also assured that the questionable conduct of Biden and son Hunter will be front and center for the next four months before Iowa votes. ..."
"... What did Joe do? By his own admission, indeed his boast, as vice president, he ordered then-Ukrainian president Petro Poroshenko to either fire the prosecutor who was investigating the company that hired Hunter Biden for $50,000 a month or forego a $1 billion U.S. loan guarantee that Kiev needed to stay current on its debts. ..."
"... There is another question raised by Biden's ultimatum to Kiev to fire the corrupt prosecutor or forego the loan guarantee. Why was the U.S. guaranteeing loans to a Kiev regime that had to be threatened with bankruptcy to get it to rid itself of a prosecutor whom all of Europe supposedly knew to be corrupt? ..."
"... This is bad news for the Biden campaign. And the principal beneficiary of Pelosi's decision that put Joe and Hunter Biden at the center of an impeachment inquiry is, again, Warren. ..."
"... Patrick J. Buchanan is the author of ..."
"... . To find out more about Patrick Buchanan and read features by other Creators writers and cartoonists, visit the Creators website at www.creators.com. ..."
"... the Movers and Shakers in the Democrat Party have wanted Warren as their standard bearer on the belief that Biden is "yesterday" and that the rest of the field is either too loony (O'Rourke), nondescript (Booker) or -- potentially -- too corrupt (Harris).. ..."
"... Warren is the most pro-establishment candidate of all the non-establishment candidates, that is true ..."
"... Roughly 37% of Americans love Trump and will never change their mind. On the other side there are 38% who already supported impeachment based on previous investigations. That leaves 25% of Americans who are likely to be swayed one way or the other over this. In any case, those 25% are unlikely to be on this website. ..."
"... It'll be interesting to see what the voter turnout will be in 2020. 2016 --one of the most pivotal and controversial elections in modern times--saw 42% of the electorate stay home. This was a shockingly high numbter, little noted in the press. If you tack on the 6% who voted for Gary Johnson or Jill Stein, that would mean that 48% of the electorate--nearly half--did NOT vote for either Trump or Clinton. ..."
"... Well, given that Trump has already released the transcript and Zelensky has already confirmed there were no pressure in their conversation plus said that Hunter's case is to be investigated by the AG, any impeachment hearings can only be damaging to those who decide to go further with them, because, as it turns out, there is no basis for such hearings and they were started a year before the election, showing what those who started them think regarding their own chances to win. ..."
Sep 28, 2019 | www.theamericanconservative.com

Even before seeing the transcript of the July 25 call between President Donald Trump and Ukrainian President Volodymyr Zelensky, Nancy Pelosi threw the door wide open to impeachment.

Though the transcript did not remotely justify the advanced billing of a "quid pro quo," Pelosi set in motion a process that is already producing a sea change in the politics of 2020.

The great Beltway battle for the balance of this year, and perhaps next, will be over whether the Democrats can effect a coup against a president many of them have never recognized as legitimate and have sought to bring down since before he took the oath of office.

Pelosi on Tuesday started this rock rolling down the hill.

She has made impeachment, which did not even come up in the last Democratic debate, the issue of 2020. She has foreclosed bipartisan compromise on gun control, the cost of prescription drugs, and infrastructure. She has put her and her party's fate and future on the line.

With Pelosi's assent that she is now open to impeachment, she turned what was becoming a cold case into a blazing issue. If the Democrats march up impeachment hill, fail, and fall back, or if they vote impeachment only to see the Senate exonerate the president, that will be the climactic moment of Pelosi's career. She is betting the future of the House, and her party's hopes of capturing the presidency, on the belief that she and her colleagues can persuade the country to support the indictment of a president for high crimes.

One wonders: do Democrats, blinded by hatred of Trump, ever wonder how that 40 percent of the nation that sees him as the repository of their hopes will react if, rather than beat him at the ballot box, they remove him in this way?

The first casualty of Pelosi's cause is almost certain to be the front-runner for the party nomination. Joe Biden has already, this past week, fallen behind Senator Elizabeth Warren in Iowa, New Hampshire, and California. The Quinnipiac poll has her taking the lead nationally for the nomination, with Biden dropping into second place for the first time since he announced his candidacy.

'Ukraine-gate' Will Endanger Biden, Not Trump The Impeachment Train Finally Stops for the Democrats

By making Ukraine the focus of the impeachment drive in the House, Pelosi has also assured that the questionable conduct of Biden and son Hunter will be front and center for the next four months before Iowa votes.

What did Joe do? By his own admission, indeed his boast, as vice president, he ordered then-Ukrainian president Petro Poroshenko to either fire the prosecutor who was investigating the company that hired Hunter Biden for $50,000 a month or forego a $1 billion U.S. loan guarantee that Kiev needed to stay current on its debts.

Biden insists the Ukrainian prosecutor was corrupt, that Hunter had done no wrong, that he himself was unaware of his son's business ties. All these assertions have been contradicted or challenged.

There is another question raised by Biden's ultimatum to Kiev to fire the corrupt prosecutor or forego the loan guarantee. Why was the U.S. guaranteeing loans to a Kiev regime that had to be threatened with bankruptcy to get it to rid itself of a prosecutor whom all of Europe supposedly knew to be corrupt?

Whatever the truth of the charges, the problem here is that any investigation of the potential corruption of Hunter Biden, and of the role of his father, the former vice president, in facilitating it, will be front and center in presidential politics between now and New Hampshire.

This is bad news for the Biden campaign. And the principal beneficiary of Pelosi's decision that put Joe and Hunter Biden at the center of an impeachment inquiry is, again, Warren.

Warren already appears to have emerged victorious in her battle with Bernie Sanders to become the progressives' first choice in 2020. And consider how, as she is rising, her remaining opposition is fast fading.

Senator Kamala Harris has said she is moving her campaign to Iowa for a do-or-die stand in the first battleground state. Senator Cory Booker has called on donors to raise $1.7 million in 10 days, or he will have to pack it in. As Biden, Sanders, Harris, and Booker fade, and "Mayor Pete" Buttigieg hovers at 5 or 6 percent in national and state polls, Warren steadily emerges as the probable nominee.

One measure of how deeply Biden is in trouble, whether he is beginning to be seen as too risky, given the allegations against him and his son, will be the new endorsements his candidacy receives after this week of charges and countercharges.

If there is a significant falling off, it could be fatal.

Patrick J. Buchanan is the author of Nixon's White House Wars: The Battles That Made and Broke a President and Divided America Forever . To find out more about Patrick Buchanan and read features by other Creators writers and cartoonists, visit the Creators website at www.creators.com.


Mark B. 2 days ago

Then the Dems are doing themselves a favor. Biden stands no chance against Trump, Warren does.
Alex (the one that likes Ike) Mark B. 2 days ago
They would be, if it were Sanders to get the nomination. Warren's chances are, obviously, better than Biden's - anyone's, save for complete fringe wackos, are - but, if they really wanted to win, they would need Sanders. Or, even better, Gabbard. But Sanders is too independent, dangerously so, and Gabbard is an outright enemy of their totalitarian cult. Hence, they pick Warren, who might be vaaaaaaaaaaguely considered Sanders-lite. But lite is not enough against someone like Trump. Or, even worse for them, they resort to all possible and impossible machinations to still get Biden nominated. It'll be a screaming mistake, but it's not excluded at all, given how easily the've just been lured into a trap.
Connecticut Farmer Mark B. a day ago
Happened to tune in to Rush Limbaugh yesterday just as he was saying that Pelosi's motivation to spin the wheels was at least in part to kill two birds with one stone--Trump AND Biden. Mehhh...maybe, but it's been clear from the beginning that the Movers and Shakers in the Democrat Party have wanted Warren as their standard bearer on the belief that Biden is "yesterday" and that the rest of the field is either too loony (O'Rourke), nondescript (Booker) or -- potentially -- too corrupt (Harris)..
Mark B. Connecticut Farmer 21 hours ago
Warren is the most pro-establishment candidate of all the non-establishment candidates, that is true . Incrowd-lite. Bernie of course is the big unknown. Will he prevail over Warren?
impedocles 2 days ago
If this scandal sinks Biden and Trump together, the Dems will come out ahead because they are not committed to Biden as their nominee. I think Warren will be the biggest net winner. My prediction is that we see an impeachment with the Senate voting on party lines to acquit. That could still be very damaging to Trump's election chances, if the portion of the public who dislikes Trump decide that he abused his power.

Roughly 37% of Americans love Trump and will never change their mind. On the other side there are 38% who already supported impeachment based on previous investigations. That leaves 25% of Americans who are likely to be swayed one way or the other over this. In any case, those 25% are unlikely to be on this website.

The main question, other than whether there is something damning that shows up, is whether the majority of voters think a quid pro quo is necessary for corruption to be an impeachable offense. It is required in a criminal bribery conviction, but impeachment isn't a criminal trial. Is the president using a diplomatic call to pressure a foreign government to dig up dirt on his political rivals something the 25% will be okay with? If they believe the story of Biden's corruption, will they see that as justification for using a diplomatic talk to push for an investigation into it? Will moderate voters who have a high opinion of Biden from the his time as Vice President view this as an unfair attack on him or will they change their view of him to match Trump's narrative?

Biden is in a tough spot, because he will be smeared here whether he is guilty or not. Trump is very good as slinging mud to distract from his actions. And most Americans are very unlikely to parse through the information overload to figure out whether the fired prosecutor is corrupt, whether the decision to fire him came from Joe or the state department/UK/EU/local protest, whether Hunter Biden was qualified for the job with his ivy law degree/experience on corp boards/previous consulting experience, and whether the investigation into Burisma was actuall ongoing when Shokin was fired. Who has time to read through everything and figure out which side is manufacturing a controversy?

But if Biden decides to go down a Martyr, it wouldn't be difficult for him to take Trump with him.

Connecticut Farmer impedocles a day ago
It'll be interesting to see what the voter turnout will be in 2020. 2016 --one of the most pivotal and controversial elections in modern times--saw 42% of the electorate stay home. This was a shockingly high numbter, little noted in the press. If you tack on the 6% who voted for Gary Johnson or Jill Stein, that would mean that 48% of the electorate--nearly half--did NOT vote for either Trump or Clinton.

These numbers are ominous and do not bode well for the future of this thing of ours.

Alex (the one that likes Ike) impedocles a day ago
Well, given that Trump has already released the transcript and Zelensky has already confirmed there were no pressure in their conversation plus said that Hunter's case is to be investigated by the AG, any impeachment hearings can only be damaging to those who decide to go further with them, because, as it turns out, there is no basis for such hearings and they were started a year before the election, showing what those who started them think regarding their own chances to win. If Democrats want to cut losses, they should stop it now and, using military terms, regroup immediately, nominating Gabbard who consistently opposed this stillborn impeachment stupidity. But something makes me think they won't. Their visceral hatred to an anti-war candidate like her is simply too strong.
Clyde Schechter Alex (the one that likes Ike) 21 hours ago
Update: Tulsi Gabbard came out in favor of impeachment today.
Alex (the one that likes Ike) Clyde Schechter 4 hours ago
And how does it change the fact that a) given the transcript, Democrats merrily fell into a trap b) they hate her because of her anti-war positions?

What has she specifically said, by the way?

Mata L Seen impedocles a day ago
I think you are missing that Trump's lawyers can subpoena people and drag up a lot of dirt on the Democrats too. I think it can go both ways.

Still Warren can be tough for Trump. She is not tainted by Clinton. She is a chameleon; will sound sufficiently WASP in New England and sufficiently woke in California and new York. If Buttgig becomes her sidekick he can get all the gays on-board.

Rick Steven D. Mata L Seen 12 hours ago
You're missing one thing about Warren: she's a wonk. And she actually has some good ideas alongside the more crazy ones. Even Tucker Carlson praised her book.

But Warren is an absolute stiff. Zero charisma. Like Kerry or Gore on their very worst day. And in this day and age, where the only thing that counts for the overwhelming majority of low information voters are soundbites and how telegenic you come off in a debate, someone like Trump will chew her up and spit her out for breakfast.

Sea Hunt 2 days ago
Warren? OK. I don't see how she could be any worse than Trump. Plus, we might not feel like we were snorkeling in a cesspool all the time, like we do now.
Eric Patton a day ago
"Warren already appears to have emerged victorious in her battle with
Bernie Sanders to become the progressives' first choice in 2020."

Buchanan evidently knows few progressives.

marisheba Eric Patton a day ago
Literally every progressive I know save one is team Warren. I think there might be an age divide. Progressives under thirty are more likely to be for Sanders, and over thirty for Warren.
Nowandthen marisheba a day ago
Warren is a progressive of convenience. Her record speak otherwise.

She claim to back M4A insinuating support for Bernies plan by using that term yet has failed to explain her plan which is more baby steps or buy in.

Eric Patton marisheba 12 hours ago • edited
You evidently know few progressives.
Don Quijote a day ago
She has foreclosed bipartisan compromise on gun control, the cost of prescription drugs, and infrastructure.

There was never going to be any compromise on any of these issues, so what is the loss?

WorkingClass a day ago
I have no idea what will happen with the election. But if Trump wins it after the Dems have done nothing for four years except impeach him - every day is going to be like Christmas.
Libertarianski a day ago
notice how it's all womyn @ Fauxcahontas's speeches,
how she gonna win with such a focused group??
Connecticut Farmer a day ago
Hey, did anybody inquire as to whether Biden cleared all this stuff with his boss first? Haven't heard that question posed to date.
Arclight a day ago
I sincerely hope that Trump is right in thinking that Biden is his biggest threat, because this affair is going to ensure Warren is the nominee. I think a lot of proggy Dems know this as well, which partly explains their enthusiasm for impeachment at this particular moment (not that they haven't been itching for this since November 8, 2016).
Salt Lick a day ago
Agree that Biden is toast. Best question from a reporter to Biden since the scandal broke: "Is Hunter dating Ukraine?"

But so is Warren toast against Trump:

View Hide
Ho Hum a day ago
I agree Biden and Bernie are toast but Warren is far from a sure thing. Of all the democratic candidates Tulsi is the most attractive in more ways than one and I could see Tulsi appealing to the many Trump voters who voted for him because he claimed to be non-interventionist only to discover he is a war-pig like the rest of them. Imagine Tulsi in a debate with Trump! If not Tulsi I would bet another high profile Dem will enter the race because Warren is un-electable and I would not be surprised to see Hillary get in the race at the last minute. American's love re-matches and come-back stories.
Barry_D a day ago
Not an honest word. Then again, none was expected.
Alex (the one that likes Ike) Barry_D a day ago
Not a single counterargument from you. Just emotioning, pure in its meaninglessness. Then again, none was expected.
Alex (the one that likes Ike) a day ago
In breaking news: Pelosi has just revealed who was behind all this. It's Cardinal Richelieu Russians again.

Does the girl even understand that, by saying so, she's, basically, stating that she's the chief Russian agent out there, because she was the one who initiated that freak show?

Jesus Harold Christ, what a travelling circus. And this passes for a parliament these days.

Barry F Keane a day ago
Ukrainegate is Watergate in reverse. The farcical impeachment unintentionally acts as a foil, amplifying the significance of the Ukraine stories in the press (John Solomon, Andrew McCarthy) which reveal a culture of corruption and venality permeating the Democratic leadership: the Clintons, the Bidens, the DNC, the current Democratic caucus, and the entire deep state remnants of the obama administration. We haven't seen election interference like this since the Watergate break-in and coverup. This impeachment is the coup-de-grâce of the Democratic Party not just Biden. The Democrat faithful now have a choice between Scylla and Charybdis - self-proclaimed socialists with a tenuous hold on reality, or the discredited establishment. As an old-school Democrat, I can only hope that Trump buries them in 2020, so that the Democrats finally get the message and return to their pre-Clinton roots.
ObamasThirdTerm a day ago • edited
It is insane to pursue impeachment this late in a divisive President's mandate. The Democrats should spend their efforts selecting a moderate nominee that doesn't show signs of cognitive decline (Only candidate that matches these requirements is Tulsi Gabbard. ) rather than make Trump a "victim" in the eyes of many.

Drama Don is doing a good enough job himself to make sure that the Democrats win in 2020. "Trump fatigue" is going to be the most used expression next fall if Trump runs. If Trump is pushed out before the election, the Republicans may choose a charismatic new nominee who actually has a chance to win in 2020. The biggest asset that the Democrats have in 2020 is Trump.

samton909 a day ago • edited
Somebody, somewhere, had decided that Democrats stand little chance with Biden, because he is so old and gaffe prone. So they have put their money on Warren. Warren will choose Buttigieg as VP candidate, primarily because they want all that gay billionaire money flowing in. At the same time, they tick the SJW boxes -woman, gay candidates, so the left will love them. The fix is in.

Hence the stupid "impeachment " controversy, which is obviously a sham to knock Biden out.

Mark Krvavica a day ago
I don't wish U.S. Senator and "Queen" Elizabeth Warren well in 2020.
Will Wilkin a day ago
I voted for Trump, not as a Republican because I despise both political parties. I voted for him based on the need for a nationalist trade policy, and especially because I was so against the TPP --and President Trump rewarded me for that vote his first week in office by pulling the US out of TPP negotiations. Also I have great respect for you, Mr. Buchanan, and learned much from the 3 of your books I've read and recommended to others. But it looks like President Trump has been using his office for personal political gain, so I am sorry to admit I support the impeachment investigation to bring the facts to light and make a judgement of whether it is true he used the office to solicit a foreign country to help undermine his political opponent. But even before this, I'd decided I will not vote for him again, mainly because I have become alarmed at the looming climate crisis, and believe we need urgent policy towards full decarbonization of the global energy economy. But that doesn't motivate me to support the impeachment inquiry, a path I hate and regret...but it seems there is no other way to demand the President not abuse his office and manipulate foreign governments to help his political career. That is no patriot, that is corrupt and an embarrassment to our nation.
Alex (the one that likes Ike) Will Wilkin 4 hours ago
Well, he has just released the transcript. Which specific abuse was there?
Rick Steven D. 13 hours ago • edited
"...effect a coup against a president many of them have never seen as legitimate and have sought to bring down since before he took the oath of office."

Every single word of that describes the Republicans in Congress during the eight years Obama was president. Every single syllable.

Remember that birth certificate? And remember that Dick Tracy villain, Pocket-Neck McConnell, an excrescence that still infects us, standing up and actually saying, with a straight face, "Our ONLY goal is to make Obama a one-term president." Never mind an economy that was in free-fall, right Mitch? Or a couple of bothersome wars going on?

And what about how, for the very first time in history, Standard and Poor's downgraded America's credit rating, all because of completely meaningless Republican obstruction about the debt ceiling? And when I say completely meaningless, I mean completely meaningless. Now, under Trump, the deficit is approaching a trillion, and those very same Republicans couldn't give a hoot.

It's all in the great 2012 book, It's Even Worse Than it Looks, by Ornstein and Mann. We've had partisanship and gridlock before. But what was new is how the Republicans behaved under Obama: they treated him as completely illegitimate from the word go, and absolutely refused to work with him under any and all circumstances. The stimulus, which by the way saved the entire world economy from complete meltdown, didn't get a single Republican vote.

But Republicans can feel proud of one thing: their disgusting, scorched-earth, win-at-all-costs tactics are now business-as-usual in Washington. Probably for all time. Nice going, guys.

dupree 7 4 hours ago
Warren is the best candidate to defeat Trump. She is super smart ,honest and works hard as heck for the non 1% to get more of a fair shake. If she softens her hard left positions she could be a great candidate

[Sep 28, 2019] Joining this witch hunt greatly damages standing of Warren exposing her as a mediocre, malleable politician ( unlike Tulsi )

Sep 28, 2019 | economistsview.typepad.com

im1dc , September 25, 2019 at 05:23 PM

Interesting day in Presidential politics today.

I assume most here are sick of hearing about it further today.

I enjoy speculating on what Speaker Pelosi might do with the results of the Impeachment Inquiry by the House.

Assumption: The House finds grounds for Impeaching Trump and hands it to Pelosi.

What will she do or rather what can she do?

She can have the full House vote to Impeach and march the Articles over to the Senate.

She can have the House Censure Trump, not vote to Impeach, and go no further at this time. That brings Trump's crimes to light, but saves the country from a Political Trial in the Senate, that won't convict Trump.

She can hold the Committee's report for review and not go forward until and unless she see's the POLITICAL need.

She can, IMO, have the House vote Articles of Impeachment and then HOLD them in the House waiting to take them to the Senate at a much later date of her choice or never.

The Senate cannot act until the Speaker delivers the Articles of Impeachment. No where does the Constitution declare WHEN those Articles, once voted, must be delivered, only that they are to be.

She can set a new precedent if she desires. Who can stop her?

This would allow the Articles to float over Trump's head - and the Re-Election campaign serving to restrain Trump, like a cudgel over his head - preventing or at least limiting more of Trump's outrageous unconstitutional and illegal acts in Office until Election 2020.

Simultaneously this would allow The House to continue its multiple investigations of Trump, including the IRS Whistle Blower complaint, further checking Trump, and even to open more investigations into Trump's abuse of Office, e.g., his use of AG Barr on Ukraine/Biden as well as investigations of AG Barr pursuing Ukraine/Biden.

Not to mention other investigations into Trump including NY's pursuit of Trump's Tax Returns, which could well be as revealing as the Ukraine phone call transcript.

So, while today was interesting in D.C., the future is far more so, imho.

likbez said in reply to im1dc... , September 25, 2019 at 06:17 PM
Let's face it:

1. Biden is now a zombie and has less then zero changes to beat Trump. Even if nothing explosive will be revealed by Ukraine-gate, this investigation hangs like albatross around his neck. Each shot at Trump will ricochet into Biden. Add to this China and the best he can do is to leave the race and claim unfair play.

2. Trump now probably will be reelected on the wave of indignation toward Corporate Dems new witch hunt. People stopped believing neoliberal MSM around 2015, so now neolibs no longer have the leverage they get used to. And by launching Ukraine-gate after Russiagate they clearly overplayed their hand losing critical mass of independents (who previously were ready to abandon Trump_

3. If unpleasant facts about neolib/neocon machinations to launch Ukraine-gate leak via alternative press via disgruntled DNC operatives or some other insiders who are privy to the relevant discussions in the Inner Party, they will poison/destroy the chances of any Dem candidate be it Warren or anybody else. Joining this witch hunt greatly damages standing of Warren exposing her as a mediocre, malleable politician ( unlike Tulsi )

4. Instead of running on policy issues the Democrats again tried to find vague dirt with which they can tarnish Trump. This is a huge political mistake which exposes them as political swindlers.

Neolib/neocon in Democratic Party from now on will be viewed as "The Children of Lieutenant Schmidt" (a fictional society of swindlers from the 1931 classic "The Little Golden Calf" by Ilf and Petrov).

I would say that Pelosi might now be able to understand better the situation in which Wasserman-Shultz had found herself in 2016 and resign.

IMHO this is a king of zugzwang for neoliberal Dems. There is no good exit from this situation.

After two years of falsely accusing Trump to have colluded with Russia they now allege that he colluded with Ukraine.

In addition to overpaying their hand that makes it more difficult for the Democrats to hide their critical role in creating and promoting Russiagate.

Here is one post from MA which tries to analyse this situation:

== quote ==
nil , Sep 25 2019 19:37 utc | 24
I think what's going in the brain trust of the DNC is something like this:

i. Biden is a non-starter with the public. He'll be devoured alive by the Republicans, who only need to bring up his career to expose his mendacity.

ii. Warren might be co-opted, having been a Republican and fiscal conservative up to the mid-90s, but what if she isn't?

iii. Sanders is a non-starter, but with the "people who matter". Rather than having to threaten him with the suspicions around his wife, or go for the JFK solution, they'd rather [make that] he didn't even get past the primaries, much less elected.

iv. As a CNN talking head said weeks ago, it's better for the wealthy people the DNC is beholden to that their own candidate loses to Trump if that candidate is Sanders.

So better to hedge their bets start impeachment hearings, give Trump ammunition to destroy Sanders or Warren. That way, the rich win in all scenarios:

a. If Biden wins the nomination, the campaign will be essentially mudslinging from both sides about who is more corrupt. The rich are fine with whoever wins.

b. If Warren gets the nomination and is co-opted, the media will let the impeachment hearings die out, or the House themselves will quickly bury it.

c. If Warren gets the nomination and is not co-opted, or if Sanders get it, the impeachment will suck up all the air of the room, Trump will play the witchhunt card and will be re-elected.

likbez -> ken melvin...

, September 25, 2019 at 07:53 PM

That's a very good idea to concentrate on your job instead of some fluff, or worse, criminal activity.

Millions of dollars, millions of manhours of political discourse and newsmedia coverage, were wasted on Russiagate. That's a typical "control fraud." Control fraud occurs when a trusted person in a high position of responsibility in a company, corporation, or state subverts the organization and engages in extensive fraud (in this case a witch hunt) for personal gain.

Those hours could have been used researching and discussing country foreign policy, economic policy, healthcare policy, industrial policy, environment policy and other important for this nation topics.

Instead the Dems chased a ghost (and they knew that this a ghost) for 3 years and now Pelosi have just signaled that they will spend the next 6 months chasing another ghost -- trying to impeach Trump for his attempt to re-launch (in his trademark clumsy, bulling way) investigating Joe Biden's family corruption in Ukraine. Action which is in full compliance with The Foreign Corrupt Practices Act of 1977 (FCPA)

During the last two years there were actions of Trump that probably deserved launching impeachment proceeding. For example, attempt of regime change in Venezuela. But neoliberal Dems were fully on board with that. So the main loss which this bunch of swindlers can't settle with is the the loss in their ability to defraud the country: I feel that the neoliberal Democrats' real problem with Trump is that he ended their scheme of defrauding the country in favor of his own.

Now with this Ukraine-gate scandal the US voters have, in effect, are being defrauded by a group of the same sophisticated political swindlers that ruled the county during Clinton and Obama administrations.

Joe -> likbez...

, September 26, 2019 at 11:42 PM

Right on all accounts.

Except this:

"Instead of running on policy issues the Democrats again tried to find vague dirt with which they can tarnish Trump."

If Warren is nominated she can run on dirt because she does not have the sewage history. If she runs on policy people will remember that she will fce 20 million families who got a $500/month Obamacare tax. These are the families that cost Dems four elections. She should not mention medicare at all, once she has the nomination.

Impeachment is what happens when a President has sex and lies about it. So it has become meaningless, thanks to Repubs.

If I were Trump, I would take the impeachment and run with it. Trump will claim he got impeached because he was hunting for Biden sewage, and there is no Biden, thanks to the impeachment. His team agrees, take the impeachment and run with it.

Who liked Biden? None of the young turks, they want Biden out as badly as they want Trump out. I just have this feeling, Biden is a gonner, sort of a bipartisan play if you ask me.

Joe , September 25, 2019 at 06:12 PM
For The First Time, Warren Beats Out Biden For No. 1 Spot In National Poll
--

Biden gone. Harris gone. Pete gone. Beto gone. It is between Bernie and Liz. Both of whom will be telling 10 million families that health care is free and they will not get hit with a $500/month tax. Problem is, voters regret on this is lifelong, a ot of voters, right here in this blog, think Obamacare was deceptive. But these same voters now put the cost on the federal debt machine, courtesy of Trump, and they prefer that.

Trump wins as long as there is no blue bar and Repubs avoid mass shootings in Florida or Texas. We, this group and our favorite economists have lost credibility on medical programs.

likbez -> Joe... , September 25, 2019 at 07:35 PM
"It is between Bernie and Liz. "
Looks like it is just Liz. She is younger ;-)

[Sep 27, 2019] Sanders endorsed the impeachment proceedings

Sanders is spend force in any case. His endorsement does not matter much. But for Warren this is a blunder. Tulsi is the only one out of this troika who proved to be capable politician.
Sep 27, 2019 | www.moonofalabama.org
karlof1 , Sep 26 2019 19:23 utc | 51
bevin @41--

As I reported on the previous thread, Sanders endorsed the impeachment proceedings in a tweet I linked to and cited. Gabbard is apparently the only D-Party candidate that said this decision is a mistake. This article about her stance is actually balanced. Citing her recent interview by FOXNews :

"'I have been consistent in saying that I believe that impeachment in this juncture would be terribly divisive for our country at a time when we are already extremely divided,' Gabbard explained. 'Hyper-partisanship is one of the things that's driving our country apart.'

"'I think it's important to defeat Donald Trump. That's why I'm running for president, but I think it's the American people who need to make their voices heard, making that decision,' she said.

"Regardless of how you feel about Gabbard, you have to give her credit on this front. America is extremely divided today and politicians in Washington play into that. The impeachment saga is a prime example of their role in this division ." [My Emphasis]

When one digs deeper into the forces Gabbard's attacking, she's the most patriotic one of the entire bunch, including the Rs. I haven't looked at her election websites recently, but from what I see of her campaign appearances, her and Sanders seem to be sharing each other's policy proposals, although they both choose to place more emphasis on some than others. For Gabbard, its the wonton waste and corruption of the Empire that keeps good things from being done for all citizens at home, whereas Sanders basically inverts the two.

[Sep 26, 2019] You Can Have Brandeis or You Can Have Debs

Sep 26, 2019 | jacobinmag.com

Elizabeth Warren understands better than most the difference between her and Bernie Sanders.

"He's a socialist," Warren explains , "and I believe in markets." She's a " capitalist to [her] bones ," and Sanders is a democratic socialist .

Minor quibbles aside -- Warren presumably doesn't derive most of her income from capital owner-ship, and markets are compatible with socialism -- the Massachusetts senator is right. She and Sanders draw their lineage from distinct political traditions.

Warren is a regulator at heart who believes that capitalism works well as long as fair competition exists; Sanders is a class-conscious tribune who sees capitalism as fundamentally unjust . Warren frames her most ambitious reforms as bids to make capitalism " accountable "; Sanders pushes legislation called the " Stop BEZOS Act " and denounces ceos for exploiting workers . Warren seeks a harmonious accord between workers and employers; Sanders encourages workers to fight back.

Foreign policy differences spring from their respective traditions as well. While both are suspicious of military interventionism, Vermont's junior senator has shown himself much more willing to criticize the crimes of US empire -- famously proclaiming in a 2016 debate with Hillary Clinton that "Henry Kissinger is not my friend." Warren, though a critic of Bush-style adventurism, sees America's role in more conventional terms, arguing in a Foreign Affairs essay this year that we should "project American strength and values throughout the world."

Warren's political tradition is the left edge of middle-class liberalism; Sanders hails from America's socialist tradition. Or, to put the distinction in more personal terms: Warren is Louis Brandeis , Sanders is Eugene Debs .

[Sep 26, 2019] "Secular stagnation" is the result of systemic crisis of neoliberalism which started in 2008

Sep 26, 2019 | economistsview.typepad.com

likbez

likbez -> Paine... , September 20, 2019 at 06:58 AM
"secular stagnation" is the result of systemic crisis of neoliberalism which started in 2008.

Larry Summers:

"Secular Stagnation – a prolonged period in which satisfactory growth can only be achieved by unsustainable financial conditions –- may be the defining macro-economic challenge of our times. "

It is similar to the period of stagnation the USSR experienced in starting with 70th till its dissolution.

The causes are systemic, stemming from a perverted way neoliberalism organizes the society ("Greed is good" "free market", "I am from the government... " "Individual responsibility", shareholder values and other pseudo-religious symbols of faith ) as well as hypertrophy, lack of control and the level of political power of the financial sector under neoliberalism.

Neoliberalism, like Bolshevism before it is a Catch 22 and can't be reformed only abolished.

In any case due to deregulation of the financial sector and decimation of New Deal safeguards (thanks to Clinton) the US society stepped on the same rake as before Great Depression.

As Galbraith aptly said "The man who is admired for the ingenuity of his larceny is almost always rediscovering some earlier form of fraud. The basic forms are all known, have all been practiced."

[Sep 25, 2019] Warren most probably will win the Democratic nomination

Look also at the story about Warren daughter and Working Families Party -- https://www.youtube.com/watch?v=jugq-wdI_7I
Notable quotes:
"... Rudy Drops New Bombs: Slams Obama Cabinet 'Pattern Of Corruption'; Claims China 'Bought' Biden ..."
"... Warren wins the nomination because the issue is Swamp Sewage and she hasn't been around long enough to emit much of it. Biden has a ton of it. Trump has three years of it. ..."
Sep 25, 2019 | economistsview.typepad.com

Joe , September 25, 2019 at 10:26 AM

Rudy Drops New Bombs: Slams Obama Cabinet 'Pattern Of Corruption'; Claims China 'Bought' Biden

---

Rudy on a roll. Go look it up on a safe site.

Warren wins the nomination because the issue is Swamp Sewage and she hasn't been around long enough to emit much of it. Biden has a ton of it. Trump has three years of it.

[Sep 25, 2019] Tulsi is the only talented politician among those who are running on Democratic Platform; Warren proved to be a mediocre politician. I still believe that Warren has chances to win against Trump. But with such moves by Dem leadership this might no longer be true.

Notable quotes:
"... Warren proved to be a very weak, mediocre politician. By joining the calls to "Impeach Trump" she proved this again. And this is not the first time she made a very bad call. Looks like she is completely malleable candidate. The candidate without spine outside his favorite re-regulation issues. ..."
"... Ukraine-gate impeachment process (aka another attempt to demonize Trump after Russiagate fiasco) is what Trump badly needs now, as it will cement his voting block and might bring back those voters who are appalled by his betrayal of almost all election promises. ..."
"... As Ukraine-gate is based on a false rumor and actually implicates Biden, not Trump (and after Trump decision to open the transcript Dems now need to move goalposts like it was with the inner party member Parteigenosse Mueller witch hunt ). ..."
"... It portrays the Dems as clueless political scum who are ready to resort to dirty tricks in order to protect neoliberal warmonger Biden, and maintain Wall-Street favorable status quo. ..."
Sep 25, 2019 | economistsview.typepad.com

Plp -> im1dc... , September 24, 2019 at 11:56 AM

The Senate republicans should be forced to block trumps impeachment. This is a good election issue in deep purple states with a senator up for re election. Plus a good house issue. Let the people judge both party wagons

Trump and Biden make a perfect pair of party Totem heads

likbez -> Plp... , September 25, 2019 at 08:28 AM
Tulsi is the only talented politician among those who are running on Democratic Platform.

And I applaud her courage to stand against the mob

Warren proved to be a very weak, mediocre politician. By joining the calls to "Impeach Trump" she proved this again. And this is not the first time she made a very bad call. Looks like she is completely malleable candidate. The candidate without spine outside his favorite re-regulation issues.

She essentially gave Trump additional ammunition to attack her and poach her supporters. I would now attack her along the lines:

"Do not believe anything Warren say; she does have spine. Look how easily she was co-opted to join this witch-hunt. If Warren wins, she will instantly fold and will do what bought by Wall Street Dems leadership will ask her. I am not perfect but I withstood Russiagate witch-hunt and that proves that with all my faults I am the only independent politician in this race, who can go against the flow and deliver what was promised; please give additional time and I will deliver"

Of course, this is disingenuous projection as Trump did the same, but that's politics ;-)

I still believe that Warren has chances to win against Trump. But with such moves by Dem leadership this might no longer be true. Why Warren does not attack Trump disastrous domestic and foreign policy record instead of making such questionable calls is not clear to me. Just a diagram "Trump promises vs reality" as election advertisement might improve her chances.

Ukraine-gate impeachment process (aka another attempt to demonize Trump after Russiagate fiasco) is what Trump badly needs now, as it will cement his voting block and might bring back those voters who are appalled by his betrayal of almost all election promises.

As Ukraine-gate is based on a false rumor and actually implicates Biden, not Trump (and after Trump decision to open the transcript Dems now need to move goalposts like it was with the inner party member Parteigenosse Mueller witch hunt ).

It portrays the Dems as clueless political scum who are ready to resort to dirty tricks in order to protect neoliberal warmonger Biden, and maintain Wall-Street favorable status quo.

[Sep 25, 2019] Warren would try to re-negotiate another Iran Nuclear Deal.

Sep 25, 2019 | economistsview.typepad.com

im1dc -> anne... , September 23, 2019 at 07:37 AM

Does anyone know S. Warren's position on this?

Has she said she will re-enter the Iran Nuclear Agreement?

I assume so but don't know.

Fred C. Dobbs said in reply to im1dc... , September 23, 2019 at 07:52 AM
Where 2020 Democratic hopefuls stand on Iran
https://go.shr.lc/2FrKc4I
via @commondreams - June 23

Senator Elizabeth Warren (D-Mass.), who has supported the nuclear agreement since its inception, has levied criticism toward the White House. On June 18, in response to a New York Times report titled, "Trump Adds Troops After Iran Says It Will Breach Nuclear Deal" (a questionable media framing given that the U.S. had already violated the deal), she tweeted:

"I hope Iran chooses a different path. But let's be clear: Trump provoked this crisis. He has no strategy to contain it, he's burned through our friends and allies, and now he's doubling down on military force. We can't afford another forever war."

While Warren was correct to argue against war, she opens by appearing to place blame against Iran, neglecting to acknowledge the U.S.'s role in villainizing Iran in the first place.

On June 20, after reports of the Navy drone were published, Warren elaborated on her comments, adopting a stronger oppositional stance to the prospect of war with Iran.

"Trump provoked this crisis, and his reckless foreign policy by tweet will only worsen it. I've co-sponsored legislation to prohibit a war with Iran. We need to de-escalate tensions -- not let the war hawks in this administration drag us into conflict. #NoWarWithIran"

That same day, she followed with

"Donald Trump promised to bring our troops home. Instead he has pulled out of a deal that was working and instigated another unnecessary conflict. There is no justification for further escalating this crisis -- we need to step back from the brink of war."

Here, Warren uses stronger language to denounce Trump's actions, but still falls short of a moral denunciation of U.S. violence or a more incisive analysis of the Iran nuclear deal's power relations. Meanwhile, Warren's vote for new sanctions against Iran in 2017 weakens her legislative record. ...

Fred C. Dobbs said in reply to Fred C. Dobbs... , September 23, 2019 at 07:57 AM
Warren is far more progressive than mainstream Democrats like Joe Biden. She calls for withdrawing U.S. troops from Afghanistan, Iraq and Syria. Warren campaigns for the United State to rejoin the nuclear accord with Iran and to end trade pacts that hurt workers.

"Warren's foreign policy positions have shifted a fair amount in recent years, particularly during the past few months," says Stephen Zunes, a professor of politics at the University of San Francisco, who provides foreign policy advice to the Warren campaign.

Elizabeth Warren on War and Peace
https://go.shr.lc/2MjA563 via @commondreams

im1dc -> Fred C. Dobbs... , September 23, 2019 at 04:52 PM
Thank you, Fred.

S. Warren would try to re-negotiate another Iran Nuclear Deal.

[Sep 25, 2019] Capitalism, Alone: Four important -- but somewhat hidden -- themes by Branko Milanovic

Sep 25, 2019 | economistsview.typepad.com

anne , September 24, 2019 at 10:26 AM

https://glineq.blogspot.com/2019/09/capitalism-alone-four-important-but.html

September 24, 2019

Capitalism, Alone: Four important--but somewhat hidden--themes

I review here four important, but perhaps not immediately apparent, themes from my Capitalism, Alone. The book contains many other, more topical, subjects that are likely to attract readers' and reviewers' attention much more than the somewhat abstract or philosophical issues briefly reviewed here.

1. Capitalism as the only mode of production in the world. During the previous high point of the British-led globalization, capitalism shared the world with various feudal or feudal-like systems characterized with unfree labor: forced labor was abolished in Austria-Hungary in 1848, serfdom in Russia in 1861, slavery ended in the US in 1865, and in Brazil only in 1888, And labor tied to land continued to exist in India and to a lesser degree in China. Then, after 1917, capitalism had to share the world with communism which, at its peak, included almost a third of the world population. It is only after 1989, that capitalism is not only a dominant, but the sole, system of organizing production (Chapter 1).

2. The global historical role of communism. The existence of capitalism (economic way to organize society) throughout the world does not imply that the political systems must be organized in the same way everywhere. The origins of political systems are very different. In China and Vietnam, communism was the tool whereby indigenous capitalism was introduced (explained below). The difference in the "genesis" of capitalism, that is, in the way capitalism was "created" in various countries explains why there are at least two types of capitalism today. I am doubtful that there would ever be a single type of capitalism covering the entire globe.

To understand the point about the different origins, one needs to start from the question of the role of communism in global history and thus from the interpretation (histoire raisonéee) of the 20th century (Chapter 3).

There are two major narratives of the 20th century: liberal and Marxist; they are both "Jerusalem"-like in the Russian philosopher Berdiaff's terminology. They see the world evolving from less developed toward more developed stages ending in either a terminus of liberal capitalist democracy or Communism (society of plenty).

Both narratives face significant problems in the interpretation of the 20th century. Liberal narrative is unable to explain the outbreak of the First World War which, given the liberal arguments about the spread of capitalism, (peaceful) trade, and interdependence between countries and individuals that ostensibly abhor conflict should never have happened, and certainly not in the way it did -- namely by involving in the most destructive war up to date all advanced capitalism countries. Second, liberal narrative treats both fascism and communism as essentially "mistakes" (cul de sacs) on the road to a chiliastic liberal democracy without providing much of reasoning as to why these two "mistakes" happened. Thus the liberal explanations for both the outbreak of the War and the two "cul de sacs" are often ad hoc, emphasizing the role of individual actors or idiosyncratic events.

Marxist interpretation of the 20th century is much more convincing in both its explanation of World War I (imperialism as the highest stage of capitalism) and fascism (an attempt by the weakened bourgeoise to thwart left-wing revolutions). But Marxist view is entirely powerless to explain 1989, the fall of communist regimes, and hence unable to provide any explanation for the role of communism in global history. The fall of communism, in a strict Marxist view of the world, is an abomination, as inexplicable as if a feudal society having had experienced a bourgeois revolution of rights were suddenly to "regress" and to reimpose serfdom and the tripartite class division. Marxism has therefore given up trying to provide an explanation for the 20th century history.

The reason for this failure lies in the fact that Marxism never made a meaningful distinction between standard Marxist schemes regarding the succession of socio-economic formations (what I call the Western Path of Development, WPD) and the evolution of poorer and colonized countries. Classical Marxism never asked seriously whether the WPD is applicable in their case. It believed that poorer and colonized countries will simply follow, with a time lag, the developments in the advanced countries, and that colonization and indeed imperialism will produce the capitalist transformation of these societies. This was Marx's explicit view on the role of English colonialism in Asia. But colonialism proved too weak for such a global task, and succeeded in introducing capitalism only in small entropot enclaves such as Hong Kong, Singapore and parts of South Africa.

Enabling colonized countries to effect both their social and national liberations (note there was never a need for the latter in advanced countries) was the world-historical role of communism. It was only Communist or left-wing parties that could prosecute successfully both revolutions. The national revolution meant political independence. The social revolution meant abolishment of feudal growth-inhibiting institutions (power of usurious landlords, labor tied to land, gender discrimination, lack of access to education by the poor, religious turpitude etc.). Communism thus cleared the path for the development of indigenous capitalism. Functionally, in the colonized Third World societies, it played the same role that domestic bourgeoisies played in the West. For indigenous capitalism could be established only once feudal institutions were swept away.

The concise definition of communism is hence: communism is a social system that enabled backward and colonized societies to abolish feudalism, regain economic and political independence, and build indigenous capitalism.

3. The global dominion of capitalism was made possible thanks to (and in turn it exacerbates) certain human traits that, from an ethical point, are questionable . Much greater commercialization and greater wealth have in many ways made us more polished in our manners (as per Montesquieu) but have done so using what were traditionally regarded as vices -- desire for pleasure, power and profit (as per Mandeville). Vices are both fundamental for hyper-commercialized capitalism to be "born" and are supported by it. Philosophers accept them not because they are by themselves desirable, but because allowing their limited exercise allows the achievement of a greater social good: material affluence (Smith; Hume).

Yet the contrast between acceptable behavior in hyper-commercialized world and traditional concepts of justice, ethics, shame, honor, and loss of face, create a chasm which is filled with hypocrisy; one cannot openly accept that one has sold for a sum of money his/her right to free speech or ability to disagree with one's boss, and thus arises the need to cover up these facts with lies or misrepresentation of reality.

From the book:

"The domination of capitalism as the best, or rather the only, way to organize production and distribution seems absolute. No challenger appears in sight. Capitalism gained this position thanks to its ability, through the appeal to self-interest and desire to own property, to organize people so that they managed, in a decentralized fashion, to create wealth and increase the standard of living of an average human being on the planet by many times -- something that only a century ago was considered almost utopian.

But this economic success made more acute the discrepancy between the ability to live better and longer lives and the lack of a commensurate increase in morality, or even happiness. The greater material abundance did make people's manners and behavior to each other better: since elementary needs, and much more than that, were satisfied, people no longer needed to engage in a Hobbesian struggle of all against all. Manners became more polished, people more considerate.

But this external polish was achieved at the cost of people being increasingly driven by self-interest alone, even in many ordinary and personal affairs. The capitalist spirit, a testimony to the generalized success of capitalism, penetrated deeply into people's individual lives. Since extending capitalism to family and intimate life was antithetical to centuries-old views about sacrifice, hospitality, friendship, family ties, and the like, it was not easy to openly accept that all such norms had become superseded by self-interest. This unease created a huge area where hypocrisy reigned. Thus, ultimately, the material success of capitalism came to be associated with a reign of half-truths in our private lives."

4. Capitalist system cannot be changed. The dominion of hyper-commercial capitalism was established thanks to our desire to permanently keep on improving our material conditions, to keep on getting richer, a desire which capitalism satisfies the best. This has led to the creation of a system of values that puts monetary success as its top. In many ways it is a desirable evolution because "believing" in money alone does away with other traditional and discriminatory hierarchical markers.

In order for capitalism to exist it needs to grow and to expand to ever new areas and new products. But capitalism exists not outside of us, as a external system. It is individuals, that is, us, who, in our daily lives, create capitalism and provide it with new fields of action -- so much that we had transformed our homes into capital, and our free time into a resource. This extraordinary commodification of almost all, including what used to be very private, activities was made possible by our internalization of the system of values where money acquisition is placed on the pinnacle. If this were not the case, we would not have commodified practically all that can be (as of now) commodified.

Capitalism, in order to expand, needs greed. Greed has been entirely accepted by us. The economic system and the system of values are interdependent and mutually reinforcing. Our system of values enables hyper-commercialized capitalism to function and expand. It then follows that no change in the economic system can be imagined without a change in the system of values that underpins it, which the system promotes, and with which we are, in our everyday activities, fully comfortable. But to produce such a change in values seems, at present, to be an impossible task. It has been tried before and ended in the most ignominious failure. We are thus locked in capitalism. And in our activities, day in, day out, we support and reinforce it.

-- Branko Milanovic

[Sep 24, 2019] Warren improved her chances to beat Biden in Iowa

Sep 24, 2019 | www.nakedcapitalism.com

"Warren's rise shakes up Democratic field" [ The Hill ]. "A new poll showing Sen. Elizabeth Warren (D-Mass.) leading former Vice President Joe Biden in Iowa has shaken up the Democratic nomination battle -- and insiders across the party are gaming out what it all means. Warren currently has 22 percent support to Biden's 20 percent, according to the well-respected Des Moines Register–CNN–Mediacom poll, released Saturday night. The two are well clear of the rest of the field, with Sen. Bernie Sanders (I-Vt.) in third place with 11 percent support . With more than four months to go, the experts all agree that it's too early to make solid predictions. But the battle for Iowa is heating up by the day."

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dcrane , September 24, 2019 at 3:09 pm

Re: Warren triumphalism/polls

Is there any reason to see what is going on as more than just Biden support bailing to "Plan C", i.e., the next most establishment-friendly candidate who has any apparent chance of winning? Sanders' support seems solid. Admittedly, I would much rather see Sanders slowly eating away at the "pro-establishment" fraction of Dem voters, but there is nothing to suggest that he is losing support.

nippersmom , September 24, 2019 at 2:25 pm

The more I see of Warren, the less I like her- and I would not have voted for her to begin with. I'm getting very tired of moderate Republicans being packaged and sold as "progressives".

hunkerdown , September 24, 2019 at 3:28 pm

To her credit, Warren does have a theory of change:

After dinner, "Larry leaned back in his chair and offered me some advice," Ms. Warren writes. "I had a choice. I could be an insider or I could be an outsider. Outsiders can say whatever they want. But people on the inside don't listen to them. Insiders, however, get lots of access and a chance to push their ideas. People -- powerful people -- listen to what they have to say. But insiders also understand one unbreakable rule: They don't criticize other insiders.

"I had been warned," Ms. Warren concluded.

Message received and understood!

jsn , September 24, 2019 at 3:54 pm

"• I'm not sure I agree. There are many, many, many of those "boutique lobbying or consulting shops" -- "

And how is Trump's shakedown hotel any different from DNC dialing for dollars? Or would it be better if he limited himself just renting out the Lincoln Bedroom like the Clintons did?

Lambert Strether Post author , September 24, 2019 at 4:03 pm

I want to reiterate the point that Yglesias seems incapable of recognizing* that a network of small shops could create more damage than one guy, even a titan. Look at health care policy, for example. It looks like Elizabeth Warren's daughter runs a body-shop for the kind of person Yglesias regards as harmless. Thread:

Samuel Douglas Retweeted Samuel Douglas

I spent some time looking into Warren Tyagi's consulting firm (Business Talent Group), and I learned some interesting things 1/

Samuel Douglas ‏ @ CANCEL_SAM Aug 25

Replying to @ philosophrob

Elizabeth Warren's daughter co-founded HealthAllies, a venture capital-backed health benefits firm which was later acquired by United Health Group, the second largest health insurer in the U.S.

NOTE * Incapable of recognizing, because obviously professionals don't have class interests.

Baby Gerald , September 24, 2019 at 5:23 pm

Wow, thanks for this, Lambert. See my link to the story in a reply above for yet another shady bit about Warren's daughter. I wouldn't normally find myself on RedState, but searching 'WARren daughter WFP' in the googlygoo brought this up first and after a read-through, seems pretty straight-up. It even includes reporting from Jordan Chariton in the meat of the story.

It's time for Warren to drop out. She's way too compromised.

[Sep 24, 2019] Trump To UN The Future Does Not Belong To Globalists

Sep 24, 2019 | www.zerohedge.com

Trump To UN: The Future Does Not Belong To Globalists by Tyler Durden Tue, 09/24/2019 - 21:45 0 SHARES

Authored by Graham Noble via LibertyNation.com,

President Donald Trump delivered a measured speech to the United Nations General Assembly this morning. Ever the showman who usually likes to go off-script, Trump was almost painfully presidential – the UN, after all, is not the forum for off-the-cuff remarks. The speech was wide-ranging, but the overriding theme was the importance of national pride and sovereignty to every country. "The future," Trump told the assembly, "does not belong to globalists." In addition to providing an overview of America's foreign policy challenges, the president berated China for its unfair trade practices and its violation of obligations made to the people of Hong Kong. He called for the empowerment of women and for the rights of the LGBT community to be protected.

Adversaries Singled Out

Taking aim at the World Trade Organization (WTO) for admitting China , Trump pointed out that 60,000 American factories have closed since China became a member-state.

"The World Trade Organization needs drastic change," the president said. "The second-largest economy in the world should not be permitted to declare itself a developing country in order to game the system at others' expense."

Trump also singled out the governments of Iran and Venezuela . Of the former, the president made it clear that US sanctions would not be lifted while the Iranian government continues its aggressive behavior. At the same time, the US leader expressed sympathy and support for the Iranian people. Such a distinction is important.

Of Venezuela's dictator, Nicolas Maduro – whose role as that country's legitimate leader is now in dispute – Trump said: "[He] is a Cuban puppet, protected by Cuban bodyguards, hiding from his own people while Cuba plunders Venezuela's oil wealth to sustain its own corrupt communist rule."

Expanding on the issue of the Venezuelan government's catastrophic political and economic policies, Trump warned that "one of the most serious challenges our countries face is the spectrum of socialism," which he described as "the wrecker of nations and destroyer of societies."

The Injustice Of Illegal Mass Migration

The president also devoted part of his address to the issue of mass illegal immigration . Acknowledging that this was not just an American problem but a global one, Trump told the gathering that every country has the right to secure its own borders. He had a direct message, though, for open-borders activists whom he accused of cloaking themselves "in the rhetoric of social justice":

"Your policies are not just. Your policies are cruel and evil. You are empowering criminal organizations that prey on innocent men, women, and children. You put your own false sense of virtue before the lives, well-being in [sic] countless innocent people."

It is indeed ironic that the same people who champion the alleged right of people from Central America to flow unchecked into the United States also feign concern for the economic deprivation that exists in those countries from which these migrants are coming. Trump made the counterpoint in succinct fashion:

"[T]hese nations cannot reach their potential if a generation of youth abandon their homes in search of a life elsewhere."

A Jab At Domestic US Politics

In a continuation of the anti-globalist, sovereign-nations theme, Trump warned against totalitarianism and the erosion of democracy and individual freedoms. "We must always be skeptical of those who want conformity and control," he told the assembly. "Even in free nations, we see alarming signs and new challenges to liberty."

In what seemed to be a thinly veiled reference to the efforts of Democrats and left-wing activists in the US to reverse the result of the 2016 presidential election, the Commander-in-Chief went on:

"A permanent political class is openly disdainful, dismissive, and defiant of the will of the people."

He was not done. Though it would have been entirely inappropriate to openly call out his political opponents, Trump dwelt on the topic while presenting it as a problem faced by all free nations – which, in fact, it is:

"A faceless bureaucracy operates in secret and weakens democratic rule. Media and academic institutions push flat-out assaults on our histories, traditions, and values a free society must not allow social media giants to silence the voices of the people and a free people must never, ever be enlisted in the cause of silencing, coercing, canceling, or blacklisting their own neighbors."

Still on the subject of individual liberty, the president also warned the UN that Americans would not be deprived of their Second Amendment rights: "There is no circumstance," he warned, "under which the United States will allow international actors to trample on the rights of our citizens, including the right to self-defense." To emphasize the point, the president reminded the assembly that America would not ratify the UN Arms Trade Treaty.

To close his address, the president delivered to the gathered world leaders and ambassadors a message of unity, peace, and recognition that, like the US, every country in the world should, first and foremost, act in the interests of its own people. "Lift up your nations," he told them, "cherish your culture, honor your histories, treasure your citizens, make your country strong and prosperous and righteous. Honor the dignity of your people and nothing will be outside of your reach."


Noob678 , 34 seconds ago link

Trump's UN speech puts his commerce secretary to sleep

Bob_Sacamano , 36 seconds ago link

Trump's speech was the same boilerplate BS he wheels out all of the time - Israel, Iran, black and Mexican unemployment, pissing away Trillions on strengthening the military, etc.

Noob678 , 2 minutes ago link

Throwing stones in a glass house: Trump criticizes the world, but his words are best applied to the US

[Sep 23, 2019] Tucker Carlson labelled the liberal Massachusetts senator and top contender for the Democratic presidential nomination a "joke" and a "living tragedy."

Sep 23, 2019 | economistsview.typepad.com

Fred C. Dobbs , September 15, 2019 at 06:59 AM

(An op-ed heavy on irony.)

How Donald Trump just might save
the Republican Party -- and the country
https://www.bostonglobe.com/ideas/2019/09/06/how-donald-trump-just-might-save-republican-party-and-country/qbew52NeSqBhmFGQ6t6GaM/story.html?event=event25 via @BostonGlobe

David Scharfenberg - September 6

FOX NEWS HOST Tucker Carlson was saying nice things about Elizabeth Warren again.

Well, not entirely nice things.

Speaking at a conference of conservative journalists and intellectuals this summer (*), he took a moment to label the liberal Massachusetts senator and top contender for the Democratic presidential nomination a "joke" and a "living tragedy."

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

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

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

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

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

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

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

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

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

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

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

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

. . .

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

"This is our independence day," said Yoram Hazony, an Israeli political theorist and chief organizer of the event, in his spirited opening remarks. "We declare independence from neoconservatism, from libertarianism, from what they call classical liberalism."

"We are national conservatives," he said.

Any effort to build a right-of-center nationalism circa 2019 inevitably runs into questions about whether it will traffic in bigotry.

And one of the speakers, University of Pennsylvania law professor Amy Wax, seemed to do just that -- suggesting that "cultural compatibility" should play a role in deciding which migrants are allowed into the country.

"In effect," she said, this "means taking the position that our country will be better off with more whites and fewer nonwhites."

But Wax's speech, however discomfiting, stood out because it was so discordant.

Conference organizers took pains to prevent hate-mongers from attending -- ultimately rejecting six applicants. ...

"Your ideas," he said, "are not welcome here." ...

* At the National Conservatism Conference, an
'Intellectual Trumpist' Movement Begins to Take Shape
https://www.nationalreview.com/2019/07/national-conservatism-conference-intellectual-trumpist-movement/

[Sep 22, 2019] Trump May Get Much of the World's Manufacturing Out of China, but It Won't Be Coming Back to the US

Notable quotes:
"... I always thought globalization was about the opportunity for a handful of businesses and corporations to control major industries around the world. ..."
"... There is an anti-China hawks faction based in the Republican party that has made its present felt. People like Robert Lighthizer, Peter Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but they have not reached the stage where they are asking: "Are you now, or have you ever been, born Chinese?". ..."
"... We have also seen hawk factions against Russia, Iran and not long ago Venezuela. The ones for Russia and Iran have been long going but the ones against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do the same against Cuba and threaten any country that does trade with them. Who knows what other country may fall within his sights? ..."
"... it seems business people in the government are being pushed aside by hawkish factions who do not care what effect it has on the economy or the country. Great! ..."
"... Those are the same "hawks" that are busy destroying the rest of America as well. ..."
"... As it is now, China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals consumed by US patients alone creates a serious vulnerability. ..."
"... Situating the manufacturing in countries that are part of the Chinese sphere of influence won't help much in a conflict. China would probably be able to sweep through much of Southeast Asia quickly or interdict shipments if there was war. ..."
"... the world wide presence/threat of the USA military and diplomatic corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic "spreading of democracy" around the world via military actions is a factor in USA job loss. This is yet another cost of the bloated military to the general USA population. ..."
"... Trump, as usual, got his strings pulled by the Deep State when he went for actual implementation of a campaign promise. The DS doesn't care about working Americans, they are simply against China. ..."
"... as Julius Krein, editor of American Affairs, writes: "United States industry is losing ground to foreign competitors on price, quality and technology. In many areas, our manufacturing capacity cannot compete with what exists in Asia." ..."
"... Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills, and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever direction, and everybody's eyes move in unison. ..."
"... The argument/discussion is not about how and where to outsource our jobs, it's about how stupid it was to do it in the first place ..."
"... Also the Chinese internal market continues to attract MNC's and this attraction will continue to grow far into the future. China's middle class is already larger than the total population of the US and it continues to grow rapidly. While down presently the Chinese internal consumption continues to grow at an annual rate of some 8.5%. ..."
"... Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market, and incentivizing the Chinese to offer better conditions to Co's of the rest of the world. How can that help the US ? ..."
"... The relentless neoliberal race to the bottom, outsourcing, and austerity that marked the death blow to American Labor is over. In that light it makes little difference whether our corporations pull out of China, go to Vietnam, or come home. The exploitation of the poorest is coming to an end. And none too soon. ..."
"... I hope some candidates discuss the imperative to have the US start making it's own medications again. ..."
"... I could not believe the government has allowed the entire supply chain of building blocks of ALL our antibiotics to be sourced almost solely from China. To me THAT'S the national security issue we need to deal with immediately. As well as other vital drugs.. ..."
"... Chinese manufacturers have the wealth and experience to teach production line workers and make things anywhere. Western companies manufacturing in China have belatedly looked for facilities in neighboring countries and found the Chinese are already there. ..."
"... Trump doesn't give a damn about getting manufacturing jobs back into the United States! (Or at least his advisors don't). ..."
"... Low housing costs, lead to lower wages so UK employers were able to compete in a free trade world. William White (BIS, OECD) talks about how economics really changed over one hundred years ago as classical economics was replaced by neoclassical economics. ..."
"... He thinks we have been on the wrong path for one hundred years. Free trade requires a low cost of living and what was known in the 19th century had disappeared by the 20th. The West's high cost of living means high wages and an inability to compete in a free trade world. ..."
Sep 21, 2019 | www.nakedcapitalism.com

By Marshall Auerback, a market analyst and commentator. Produced by Economy for All, a project of the Independent Media Institute

"Chimerica" is a term originally coined by the historian Niall Ferguson and economist Moritz Schularick to describe the growing economic relationship between the U.S. and China since the latter's entry into the World Trade Organization (WTO) in 2001. In the words of Ferguson : "The Chinese did the saving, the Americans the spending. The Chinese did the exporting, the Americans the importing. The Chinese did the lending, the Americans the borrowing." Much of the pre-crisis boom in global trade was driven by this economic symbiosis, which is why successive American presidents tolerated this marriage of convenience despite the increasing costs to the U.S. economy . The net benefits calculation, however, began to change after 2008, and the conflict has intensified further after the 2016 presidential election result. Today, the cumulative stress of Donald Trump's escalating trade war is leading to if not an irreparable breach between the two countries, then certainly a significant fraying. The imminent resumption of trade talks notwithstanding, the rising cost of the tariffs is already inducing some U.S. manufacturers to exit China. But in most instances, they are not returning to home shores.

It may have taken Trump to point out the pitfalls of the Chimerica link, but coming up with a coherent strategy to replace it is clearly beyond the president's abilities. America is likely to remain a relative manufacturing wasteland, as barren as Trump's own ill-conceived ideas on trade. At the same time, it's not going to be an unmitigated victory for China either, as Beijing is increasingly suffering from a large confluence of internal and external pressures.

Chimerica helped to launch China as a global trade power. To the extent that this marriage helped the U.S. economy, it skewed toward the largely blue state coastal regions. Wall Street banks located on the East Coast happily collected lucrative commissions and investment banking fees, as China's export proceeds were recycled into U.S. treasuries, stocks, and high-end real estate while the capital markets boomed; on the West Coast, "new economy" companies thrived, their growth and profitability unhindered by the onslaught of Chinese manufactured exports. By contrast, facilitated by technological advances that permitted large-scale outsourcing by U.S. manufacturers, Chimerica laid waste to much of what was left of America's Rust Belt, and the politics of many of the displaced workers mutated to the extent that Donald Trump became an appealing alternative to the establishment in 2016.

The major legacy of Chimerica, then, is that too many American workers have been semi-permanently replaced by low-cost offshored labor. Prior to great advances in technology, along with globalization, displacement of the current labor force could only have occurred through immigration of workers into the country. Historically, displacement by immigrants generally began at the menial level of the labor force, and became more restrictive as when it became correlated with significant unemployment. Given the rise of globalization and the corresponding liberalization of immigration in the past few decades, however, policy no longer arrests the displacement of American workers. The policy backlash has consequently manifested itself more via trade protectionism. Trump has sought to consolidate his Rust Belt base of supporters by launching a trade war, especially versus Beijing, the ultimate effects of which he hoped would be to re-domicile supply chains that had earlier migrated to China.

Early on in his presidency, there was some hope that Trump's protectionism was at best a bluff or, at worst, an aberration, and that the return of a Democrat to the White House in 2020 would eventually reestablish the status quo ante. But the president still can't get a wall, and his protectionism has become more pronounced almost as if to compensate. The problem today is that even if Trump is voted out of office in 2020, corporate America is becoming less inclined to wait out the end of his presidency to return to the pre-Trump status quo of parking the bulk of their manufacturing in China. There is too much risk in putting all of one's eggs in the China basket, especially given growing national security concerns . Hence, U.S. companies are taking action. In spite of decades of investment in these China-domiciled supply chains, a number of American companies are pulling out: toy manufacturer Hasbro , Illinois-based phone accessories manufacturer Xentris Wireless, and lifestyle clothing company PacSun are a few of the operators who are exiting the country.

But they are not coming back to the U.S., relocating instead to places like Vietnam, Bangladesh, Mexico, the Philippines and Taiwan. The chief financial officer of Xentris, Ben Buttolph, says that the company will never return to China: "We are trying to have multiple locations certified for all of our products, so that if all of a sudden there's an issue with one of the locations, we just flip the switch." Likewise, the CEO of Hasbro, Brian Goldner, recently spoke of "great opportunities in Vietnam, India and other territories like Mexico."

All is not lost for the U.S., however, as Goldner did celebrate the success of Hasbro's facility in East Longmeadow, Massachusetts, which has resumed production of Play-Doh in the U.S. for the first time since 2004 . It is doubtful, however, that this represents the recapturing of the high value-added supply chains that Trump envisaged when he first launched his trade assault on Beijing.

In general, as Julius Krein, editor of American Affairs , writes: "United States industry is losing ground to foreign competitors on price, quality and technology. In many areas, our manufacturing capacity cannot compete with what exists in Asia."

These are not isolated examples. Defense One also notes the following development:

It came without a breaking news alert or presidential tweet, but the technological competition with China entered a new phase last month. Several developments quietly heralded this shift: Cross-border investments between the United States and China plunged to their lowest levels since 2014, with the tech sector suffering the most precipitous drop. U.S. chip giants Intel and AMD abruptly ended or declined to extend important partnerships with Chinese entities. The Department of Commerce halved the number of licenses that let U.S. companies assign Chinese nationals to sensitive technology and engineering projects.

This development consequently makes it hard to proclaim Beijing a winner in this dispute either. The country still needs access to U.S. high tech. The government announced yet another fiscal stimulus to the economy earlier this month in response to a cluster of weakening economic data, much of which is related to the trade shock. It is also the case that China is being buffeted politically, both externally and internally: externally, in addition to the escalating trade war, China's own efforts to counter the effects of rising protectionism by creating a " reverse Marshall Plan " via the Belt and Road Initiative is floundering . China's "iron brother," Pakistan, is increasingly being victimized by India's aggressive Hindu-centric nationalism . It is hard to imagine the Modi government opportunistically taking the step of annexing Kashmir and undermining Pakistan, had it not sensed Beijing's increasing vulnerability.

Internally, Beijing is finding it increasingly challenging as it seeks to enforce its "One China" policy in Hong Kong and Taiwan. The withdrawal of the controversial extradition law that first precipitated widespread demonstrations in Hong Kong has not alleviated the political pressures in the territory, but simply allowed an even bigger protest culture to take root and strengthen an independent political mindset. Similarly, Taiwan has also openly supported the Hong Kong protesters, pledging help to those seeking asylum . Both regions now constitute both a huge humiliation and challenge to the primacy of China's ruling Communist Party. And now on top of that, foreign manufacturers are leaving the country, weakening a totally leveraged manufacturing complex.

The implications of this divorce go well beyond the U.S. and China. They constitute another step toward regionalization, another step away from a quaint ideological "post-history" construct that saw Washington, D.C., as the head office and the rest of the world as a bunch of branch plants for "America, Inc." It's hardly comforting to contemplate that the last time we reached this historic juncture was the early 1900s, when a similarly globalized economy broke down, followed by the Great War. As Niall Ferguson points out , "a high level of economic integration does not necessarily prevent the growth of strategic rivalry and, ultimately, conflict." There's no doubt that both Washington and Beijing will likely making soothing noises to the markets in order to create favorable conditions for the trade talks in October, but their actions suggest that they are both digging in for a longer struggle . Today's trade wars, therefore, are likely to morph into something more destructive, which is a lose-lose in an era where human advancement depends on greater integration between economic powers.

somecallmetim , September 21, 2019 at 2:43 am

So ultimately trade peace or symbiosis is chimerical?

John , September 21, 2019 at 4:09 am

I always thought globalization was about the opportunity for a handful of businesses and corporations to control major industries around the world.

Who knew that there were people in any country that benefit?

The first country that would address affordable housing, healthcare and education so that people don't need more jobs will win.

The Rev Kev , September 21, 2019 at 4:30 am

There may be another aspect to this development and that is of geopolitics. You can see that in Marshall's article when the CFO of Xentris said: "We are trying to have multiple locations certified for all of our products, so that if all of a sudden there's an issue with one of the locations, we just flip the switch." There is an anti-China hawks faction based in the Republican party that has made its present felt. People like Robert Lighthizer, Peter Navarro and Steve Bannon. I have seen this sentiment spill over into Australian politics but they have not reached the stage where they are asking: "Are you now, or have you ever been, born Chinese?".

So we have seen a long string of sanctions and tariffs at play so that China will change its laws and institutions to suit American interests. Yeah, I can't see that happening anytime soon but hey, America First, Baby. We have also seen hawk factions against Russia, Iran and not long ago Venezuela. The ones for Russia and Iran have been long going but the ones against China and Venezuela were sudden and new. It may be that tomorrow that Trump will do the same against Cuba and threaten any country that does trade with them. Who knows what other country may fall within his sights?

That being the case if you were running an international country, you can no longer just have your manufacturing base or service operations just in one country. If Xentris is an example, US companies may have to split manufacturing into several countries in case one fine day that Trump will sanction yet another country that your company depends on.

I would imagine that it would not be so efficient but it seems business people in the government are being pushed aside by hawkish factions who do not care what effect it has on the economy or the country. Great!

Leroy , September 21, 2019 at 11:51 am

Those are the same "hawks" that are busy destroying the rest of America as well. Another four years of this will, effectively, dismantle what democracy is left. The world trade won't be the big issue. The departure of millions of Americans will.

drumlin woodchuckles , September 22, 2019 at 4:42 pm

If that happens, be sure to thank the Catfood Democrats for it. Because they are the people who will do their very best and hardest to throw the next election to Trump, one way or another.

jeremyharrison , September 21, 2019 at 5:23 am

It seems like diversification of supply chains can only be a good thing. As it is now, China literally has the US by the jewels, and if a serious conflict ever arose, could squeeze them hard. Just their dominance in manufacturing a large percentage of the pharmaceuticals consumed by US patients alone creates a serious vulnerability.

I really don't think it matters if manufacturing jobs are repatriated to the US, or just set up and spread around elsewhere for now – since they'll be obsolete jobs in the near future anyway, as robotics and AI get increasingly efficient at doing the work that human workers currently do.

rd , September 21, 2019 at 5:25 pm

Situating the manufacturing in countries that are part of the Chinese sphere of influence won't help much in a conflict. China would probably be able to sweep through much of Southeast Asia quickly or interdict shipments if there was war.

Dan , September 21, 2019 at 6:28 am

So the status quo was preferable? The tone of the article seems to suggest that America should accept it place as a third-world manufacturer, as if these Asian nations have some magical sauce that can't be replicated. Gawd.

The US does have a lot of magic. Like one third of FDI related to tax evasion. Pulling Mac Book manufacturing out of Austin for the lack of one 'screw', etc. So is the premise of going after China on trade and IP policies good. I would agree. Maybe not in strategy, but at least someone has opened the box.

John Wright , September 21, 2019 at 3:26 pm

I agree with your comment, the article suggests the status quo was preferable. Of note, Trump has shown his supporters that something CAN be done other than follow the "resistance is futile" path of the Bill Clinton/Bush Jr./Obama administrations.

I also suggest that the world wide presence/threat of the USA military and diplomatic corps allows globalization to be less risky for USA businesses, so, in effect, the patriotic "spreading of democracy" around the world via military actions is a factor in USA job loss. This is yet another cost of the bloated military to the general USA population.

I worked in the electronics industry for 30+ years and watched high margin manufacturing move to Asia. Now the lower level component manufacturers (PCBs, passives) are firmly established in Asia as the USA companies have helped train worthy competitors overseas. It took 25+ years to move much of USA manufacturing overseas, indicating to me that it will take a long time to bring it back significantly, well outside the Trump time frame.

But I suspect Trump voters will appreciate Trump's headline efforts. If the Democrats push for more Free Trade as good for the USA, it will hurt them at the ballot box.

GramSci , September 21, 2019 at 6:51 am

The second time as farce. How tragicomic that Trump has succeeded in little more than repatriating the manufacture of Play-Doh. On the other hand, the shipping cost of unbaked brick seems a rational factor in Hasbro's decision. A GND that shortens supply lines would be more effective in repatriating heavy industry, but then printed circuit boards aren't all that heavy .

a different chris , September 21, 2019 at 8:42 am

The thing is Trump, as usual, got his strings pulled by the Deep State when he went for actual implementation of a campaign promise. The DS doesn't care about working Americans, they are simply against China.

So he goes and puts tariffs on a country, not a product. And surprise, said product doesn't come back on-shore. Comical (and yeah, cosmically a bit just) that Vietnam is getting so much of that manufacturing. Wasn't what he was elected for.

Glen , September 21, 2019 at 9:44 am

In general, as Julius Krein, editor of American Affairs, writes: "United States industry is losing ground to foreign competitors on price, quality and technology. In many areas, our manufacturing capacity cannot compete with what exists in Asia."

As a engineer up to my elbows in manufacturing for forty years, this was awfully easy to predict way back then (I gave up complaining about it about 2000), and then watch happen – real time. And to once again state the obvious, China did not TAKE American jobs, American CEOs GAVE them our jobs. We will not fix this problem until we identify and fix the root cause.

Now the only way to fix it is (once again obviously) massive government investment such as mandated by the GND. We need the GND, it is not only required to save the world, it will save our country.

Leroy , September 21, 2019 at 11:57 am

Fully agree Glen. How can we say China stole our "technology" when we placed it on their doorstep and asked them to make some of these for us please ?

Watt4Bob , September 21, 2019 at 3:19 pm

Agree, it was predictable, and it was predicted. What we've been talking about is the "Giant sucking sound" Ross Perot foretold would happen prior to the passing of NAFTA. It wasn't hard back then to see that he was right, but it took a few decades for the public to feel the impact, boiling frogs and all that.

Back in the early 80s I saw a massive warehouse full of machine tools, Bridgeport mills, and such lined up, it seemed forever, the guy there said they were going to China. I asked my Dad about it, and he told me we were selling them to the Chinese for the price of scrap. The whole thing is mindless and pathetic, but the really maddening thing is the slippery way our 'leaders' can keep dodging the blame by simply pointing a finger in whatever direction, and everybody's eyes move in unison.

rd , September 21, 2019 at 5:39 pm

NAFTA and China are two completely separate things. I have actually supported NAFTA in principle because we should encourage trade to be focused on our immediate neighbors. A wealthier and safer Mexico and Central America would create markets for us and virtually eliminate illegal immigrants as the southern border.

China is on the other side of the world and is not part of NAFTA. While we should have cordial relations with it, if we are looking for inexpensive labor, south of the border is the better place to focus on that. So Trump's tariffs on China are not the wrong thing to do per se. The problem is that they are being done in a vacuum of general trade policy where he is looking at everything as transaction bilateral relations with every country on the planet, which requires an immense amount of detailed thought and negotiation, neither of which appear to be a focus of this administration.

The countries that the companies are talking about moving their operations to are generally part of the new TPP which the US is not part of. So, we have removed ourselves from having trade relations with countries US CEOs are setting up operations in, but those countries are now starting to work together to counter both China (original TPP purpose) and the US (now that the US has bailed on it). Sounds like a recipe for a replay of China's giant sucking sound.

Watt4Bob , September 21, 2019 at 6:48 pm

The argument/discussion is not about how and where to outsource our jobs, it's about how stupid it was to do it in the first place. Anyone smart enough to breath knows that Mexico is next door, and China is on the other side of the world, but they are both part of the same giant sucking sound. The fact that you support both NAFTA ,think it was unwise to back out of the TPP, and think the issue is the present administration's lack of " detailed thought and negotiation " indicate a truly unbelievable level of denial.

drumlin woodchuckles , September 22, 2019 at 4:47 pm

NAFTA and MFN for China were two different actions towards the same goal . . . the use of Free Trade to dismantle thingmaking in America and re-mantle thingmaking in foreign export-aggression platforms to use against America.

Free Trade is the new Slavery. Militant Belligerent Protectionism is the new Abolition.

John Wright , September 21, 2019 at 5:41 pm

I remember when a Midwest Democrat (Stabenow?) tried to get a law passed that would prohibit a US corporation from deducting, from their federal taxes, the cost of moving factories overseas. A very minor disincentive, but a disincentive nonetheless. The Repubs beat it down as "anti-business". Concern about American workers is something to express in political speeches around election time but not in legislation.

eg , September 21, 2019 at 7:31 pm

This. As so ably described in Judith Stein's "Pivotal Decade" https://yalebooks.yale.edu/book/9780300171501/pivotal-decade

And the consequences of which forewarned in James Goldsmith's "The Trap" https://www.goodreads.com/en/book/show/2091182.The_Trap

https://m.youtube.com/watch?v=wwmOkaKh3-s

Ignacio , September 21, 2019 at 10:41 am

Hidden within this narrative is the fact that some countries, and not only China, have for long been playing beggar-thy-neighbor policies by restraining internal consumption and redirecting savings to the rest of the world that in turn finance their exporting machines. IMO, the biggest mistake made by China has been not to force fast enough a transition from a saving economy to a consumer economy with more balanced external relationships.

These kind of policies are confrontational. As confrontational as tariffs or even as economic sanctions in my view. Yet, the prevailing economic narrative is that saving and exporting is the right economic thing to do. In this sense I think it matters a lot to which countries are being re directed investments of american companies leaving China. My intuition is that, for instance, Vietnam migth be willing to play this game while Mexico not. Investing in countries that save too much migth be counterproductive.

I very much regret this aggressive narrative that has become common place in which countries are identified simply as competitors, if not enemies, in a global chess game. Political moves are confrontational and or humiliating. These Game of Thrones dynamics are played precisely when some international consensus in more important things like figthing climate change would be more than desirable. We are headed to truly bad times.

laodan , September 21, 2019 at 11:33 am

Here is an article by Steve Dickinson from the layers office Harris Bricken McVay Sliwoski that is based on his Co's China practice. Steve's conclusion goes as follows:

The Chinese system put in place from 1992 to 2005 was a unique system and not likely to be replaced in S.E./South Asia or in any other region of the world. So for manufacturers, moving to a new region means doing the analysis from the ground up. Simply taking what they do in China and moving it to a new location is not likely to be a workable solution.

Also the Chinese internal market continues to attract MNC's and this attraction will continue to grow far into the future. China's middle class is already larger than the total population of the US and it continues to grow rapidly. While down presently the Chinese internal consumption continues to grow at an annual rate of some 8.5%.

Personal savings deposited in bank accounts reach the equivalent of some $US 30 Trillion ! Compare that to consumer debt at some $US 6.5 Trillion. In other words China is growing into the largest consumer market on earth and the biggest advantage that its internal market procures is its 'economies of scale' that make Chinese productions hyper-competitive. In other words China is gaining the kind of advantage that the US had along the 20th century. The advantage of a super large market size that dwarfs other national markets.

Trump's approach to trade is isolating the US, blocking its Co's from the Chinese market, and incentivizing the Chinese to offer better conditions to Co's of the rest of the world. How can that help the US ?

The biggest problem of the West and particularly the US is its ideological approach to economics. The Chinese adopted a pragmatic approach and it has served them well. Time to relearn the meaning of political economics (économie politique).

JTMcPhee , September 21, 2019 at 3:42 pm

I read Dickinson's PR piece linked by laodan. I used to work for a big law firm that had an international p