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Financial skeptic

The more things change in the USA casino capitalism the more they stay the same

Cruise to Frugality Island for stock holding  401K Lemmings

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“When the capital development of a country becomes a by-product
of the activities of a casino, the job is likely to be ill-done.”

John Maynard Keynes

"Life is a school of probabilities."

Walter Bagehot

Note: Some thoughts  on 2019  added on Jan 3, 2019.

Neoliberal economics (aka casino capitalism) function from one crash to another. Risk is pervasively underpriced under neoliberal system, resulting in bubbles small and large which hit the economy periodically. The problem are not strictly economical or political. They are ideological. Like a country which adopted a certain religion follows a certain path, The USA behaviour after adoption of neoliberalism somewhat correlate with the behaviour of alcoholic who decided to booze himself to death. The difference is that debt is used instead of booze.

Hypertrophied role of financial sector under neoliberalism introduces strong positive feedback look into the economic system making the whole system unstable. Any attempts to put some sand into the wheels in the form of increasing transaction costs or jailing some overzealous bankers or hedge fund managers are blocked by political power of financial oligarchy, which is the actual ruling class under neoliberalism for ordinary investor (who are dragged into stock market by his/her 401K) this in for a very bumpy ride. I managed to observe just two two financial crashed under liberalism (in 2000 and 2008) out of probably four (Savings and loan crisis was probably the first neoliberal crisis). The next crash is given, taking into account that hypertrophied role of financial sector did not changes neither after dot-com crisis of 200-2002 not after 2008 crisis (it is unclear when and if it ended; in any case it was long getting the name of "Great Recession").

Timing of the next crisis is anybody's guess but it might well be closer then we assume. As Mark Twain aptly observed: "A thing long expected takes the form of the unexpected when at last it comes" ;-):

This morning that meant a stream of thoughts triggered by Paul Krugman’s most recent op-ed, particularly this:

Most of all, the vast riches being earned — or maybe that should be “earned” — in our bloated financial industry undermined our sense of reality and degraded our judgment.

Think of the way almost everyone important missed the warning signs of an impending crisis. How was that possible? How, for example, could Alan Greenspan have declared, just a few years ago, that “the financial system as a whole has become more resilient” — thanks to derivatives, no less? The answer, I believe, is that there’s an innate tendency on the part of even the elite to idolize men who are making a lot of money, and assume that they know what they’re doing.

As most 401K investors are brainwashing into being "over bullish", this page is strongly bearish in "perma-bear" fashion in order to serve as an antidote to "Barrons" style cheerleading. Funny, but this page is accessed mostly during periods of economic uncertainty. At least this was the case during the last two financial crisis(2000 and 2008). No so much during good times: the number of visits drops to below 1K a month.

Some thoughts  on 2019

It was clear that 2017 stock market run was detached from fundamentals. Mostly speculative run. And the current stock market decline could well happen three months aerler or three month later but it was in the cards. It is difficult to estimate the power of inertia in such speculative runs. Also layoffs and decline of the standard liming of workers and lower middle class still can continue to improve the balance sheet until "Yellow Vests" moment stops them.

Jobs created now are mostly "inferior" low paid or temp/contractor jobs and the numbers just mask the cruel reality of the USA job market.

Which in reality is dismal, especially for young and old workers. several more or less paid specialties disappeared in 2018 due to automation (cash office worker is one). automatic cashier is supermarkets are also now more visible.  So spontaneous cases of vandalism, killings of coworkers and other form of "action of desperation" (as well as the rate of death from opioids -- which is yet another form of the same) would not be too surprising in such an atmosphere. Even with the power of the current national security state. Trump is playing with fire trying to cut on food stamps and implementing some other action in this program of "national neoliberalism" which is in internal policy is almost undistinguishable from neofascism.  He risk facing "Macron situation" sooner or later.

In any case at some point Minsky moment should arrive for the stock market. I am not sure that the current decline is that start of such an event. It might be postponed further down the line for a year or two.  But it will eventually come.  We can only guess what form it might take, but with the current Apple troubles and valuations of tech sector I think it might take the form of something similar to dot-com bubble deflation No.2

I do not see Amazon, Google, Facebook and Microsoft and other tech high flyers completely immune to the stock crash of 50% magnitude or more. For example, Google is overly dependent on advertising revenue which can grow only by strangulating small sites owners which use it as the advertizing platform (which it successfully implements fro several years now). But at some point owners might revolt and start dropping it for Microsoft or other platform.  Facebook might face a backlash, if people understand that selling data about them in the part of the business model, not an aberration.

One of the most unexplainable things that happened in 2018 was dramatic fall of oil prices in the Q4. This was quite surprising (and destructive) after the period of little or no capital investment in the new fields for three years or so.  Shale oil production increases in the USA are only possible if junk bonds can be produced along with it. Junks bonds that will never be paid. With the current debt load and prices below $50 most of the USA shale oil companies are zombies. Most if not all of thenm are losing money.  Only return of ~$70 oil prices can save them, if anything at all. WSJ touched this topic recently.

So this surprising fall of oil prices (from around $70 to around $43 WTI) looks connected to the speculations in the "paper oil" market.

Financialization allows for oil price to be completely detached from fundamentals for a year or even two (Saudis need over $80 I think to balance the budget, I think; this represents "fair price" as they are one of the three largest producers).

But you will never know this unless there are shortages at gas stations. The difference is covered by inflated statistics from IEA and similar agencies as well as "paper oil" -- future contracts which are settled in dollars.

This is the reality of "casino capitalism" ( aka neoliberalism ) with its rampant and destructive financialization.


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[Jan 09, 2021] The line of investigation initiated by Upton Sinclair into the shared Board memberships at key elite universities within the USA that erased the traditional teaching of political-economy and replaced it with the mathematical economics which lie at the root of Neoliberalism's Junk Economics

Jan 09, 2021 | www.moonofalabama.org

karlof1 , Jan 9 2021 0:37 utc | 124

Digital Spartacus @105--

I've been following her work for several months now and think her premises much sounder than Matthew Ehret's, who are actually on the same Canadian team. Generally, the three of us are working on exposing the rise and spread of what's now known as Neoliberalism. And of course, there's Dr. Hudson who's ahead of us all.

The line of investigation initiated by Upton Sinclair into the shared Board memberships at key elite universities within the USA that erased the traditional teaching of political-economy and replaced it with the mathematical economics which lie at the root of Neoliberalism's Junk Economics

I see as very promising as they're also prominent bankers and Old Money with social connections to England's Royalty and Nobility--the primary members of Europe's Rentier Class . When I look over the comments, many have forgotten just what Class owns the Duopoly and controls the federal government. Trump was never allowed into their circle but was used by some of its members in the pursuit of interests that are still shrouded in fog. My working hypothesis there is they were quite worried that too much industrial capacity had been foreclosed and moved such that it caused a real threat to national security; thus the need for MAGA.

With the rise of the Eurasian Bloc, the "threat" isn't military; it's economic. As I wrote earlier today, an economy based on consumerism will collapse when the consumers can no longer consume. Hudson's 100% correct that debt's that can't be repaid won't. The current degree of economic polarization is miniscule compared to what might ensue if the Bidenites don't forestall it--200 Million people bankrupt while 100 Million have good paying jobs and can afford their debts--the remaining 40-50 Million are mostly impoverished children. This time the part of the public that gets shafted as in 2009 under Obama isn't going to sit still, and what happened in DC will be repeated elsewhere with meaning this time. A genuine MAGA Fascist wanting control will need to disarm the Rentier Class and the Swamp thus ousting the current "Friendly Fascist" regime--and that would require a paramilitary since that's basically what composes the Swamp--Civil War between two Factions of Reaction that would also split the military. Wonder what barflies think of all that?

karlof1 , Jan 9 2021 1:11 utc | 135

Earlier in the week I linked to the latest Renegade Inc program which had Dr. Hudson as one of the guests. That show's transcript is now available. Here's an excerpt with Ross Ashcroft asking a question:

"Ross: What do you think are the megatrends that we should be looking at in 2021? What do you think is the direction of travel, if you like, for so-called developed economies?

"Michael Hudson: Well, the big trend in any economy is the growth of debt, because the debt grows exponentially. The economy has painted itself into a debt corner. We can see that in real estate. We can see that for small business. There's also almost no way to recover. The Federal Reserve has been printing quantitative easing to keep stock and bonds high. But for the real economy, the trend is polarization and lower employment.

"The trend also is that state and local finances are broke, especially in the biggest cities, New York City, San Francisco and Los Angeles. They're not getting income tax revenue from the unemployed or closed businesses. They're not getting the real estate tax with so many defaults and mortgage arrears. In New York City there's talk of cutting back the subways by 70 percent. People will be afraid to take the subways when they're overcrowded with people with the virus. So you're having a breakdown not only in state and local finances, but of public services that are state run – public transportation services, health services, education is being downsized. Everything that is funded out of state and local budgets is going to suffer.

"And living standards are going to be very sharply downward as people realize how many services they got are dependent on public infrastructure."

And this one I must also include:

"Ross: What is the one thing that has really surprised you in 2020? What have you laughed at? What has given you a chuckle?

"Michael Hudson: The surprise – that I really shouldn't have been surprised at – is how naive Bernie Sanders supporters were in thinking that they were going to get a fair deal and that the elections were going to be fair. The illusion is that people were actually going to have a fair election when the last thing the vested interests wanted was Bernie Sanders or Elizabeth Warren or any kind of reformer. So what happened to Sanders is what happened to Corbyn in Britain and the Labour Party's neoliberal leadership.

"So what's for laughs? I guess, Tulsi Gabbard's takedown of Kamala Harris was absolutely wonderful. Everybody just broke out laughing, cheering for her. And of course, that's why she was marginalized, and now we have Kamala Harris as the senior vice president."

Of course, none of the dire economic news is being reported with the focus instead on Wall Street's markets, with much of the public just as brainwashed about it as Trump. The last third focuses on politics, which is what most barflies want to read about. So, click the link and read what Dr. Hudson sees in the tea leaves.

[Jan 04, 2021] Byron Wien Releases 10 Surprises For 2021- MMT, Trump TV, A -Return To Normal- By Memorial Day

Jan 04, 2021 | www.zerohedge.com
  1. The economy develops momentum on its own because of pent-up demand, and depressed hospitality and airline stocks become strong performers . Fiscal and monetary policy remain historically accommodative. Nominal economic growth for the full year exceeds 6% and the unemployment rate falls to 5%. We begin the longest economic cycle in history, surpassing the cycle that lasted from 2010 to 2020.

  2. The Federal Reserve and the Treasury openly embrace Modern Monetary Theory as their accommodative policies continue. As long as growth exceeds the rate of inflation, deficits don't seem to matter. Because inflation increases modestly, gold rallies and cryptocurrencies gain more respect during the year.

  3. Even as energy company executives cut estimates for long-term growth, near-term opportunities are increasing. The return to "normal" increases both industrial activity and mobility, and the price of West Texas Intermediate oil rises to $65/bbl. Rig counts increase and energy high yield bonds rally soundly. Energy stocks are among the best performers in 2021.

  4. The equity market broadens out. Stocks beyond health care and technology participate in the rise in prices. "Risk on" is not without risk and the market corrects almost 20% in the first half, but the S&P 500 trades at 4,500 later in the year. Cyclicals lead defensives, small caps beat large caps and the "K" shaped equity market recovery unwinds. Big cap tech is the source of liquidity, and the stocks are laggards for the year.

  5. The surge in economic growth causes the 10-year Treasury yield to rise to 2%. The yield curve steepens, but a concomitant increase in inflation keeps real rates near zero. The Fed wants the strength in housing and autos to continue. As a result, it extends the duration of bond purchases in order to prevent higher rates at the long end of the curve from choking off credit to consumers and businesses.

  6. The slide in the dollar turns around. The post-vaccine strength of the U.S. economy and financial markets attracts investors disenchanted with the rising debt and slower growth of Europe and Japan. Treasurys maintain a positive yield and the carry trade continues.

[Jan 01, 2021] Military And Political Trends Of 2020 That Will Shape 2021 - ZeroHedge

Jan 01, 2021 | www.zerohedge.com

The past year began with the assassination of the Iranian military genius General Qasem Soleimani by the United States, and it ended with the murder of the prominent scholar Mohsen Fakhrizadeh by the Israelis. In early January, Iran, expecting another aggressive action from the West, accidently shot down a Ukrainian civil aircraft that had inexplicably altered its course over Tehran without request nor authorization. Around the same time, Turkey confirmed the deployment of its military in Libya, beginning a new phase of confrontation in the region, and Egypt responding with airstrikes and additional shows of force. The situation in Yemen developed rapidly: taking advantage of the Sunni coalition's moral weakness, Ansar Allah achieved significant progress in forcing the Saudis out of the country in many regions. The state of warfare in northwestern Syria has significantly changed, transforming into the formal delineation of zones of influence of Turkey and the Russian-Iranian-Syrian coalition. This happened amid, and largely due to the weakening of U.S. influence in the region. Ankara is steadily increasing its military presence in the areas under its responsibility and along the contact line. It has taken measures to deter groups linked to Al-Qaeda and other radicals. As a result, the situation in the region is stabilizing, which has allowed Turkey to increasingly exert control over most of Greater Idlib.

ISIS cells remain active in the eastern and southern Syrian regions. Particular processes are taking place in Quneitra and Daraa provinces, where Russian peace initiatives were inconclusive by virtue of the direct destructive influence of Israel in these areas of Syria. In turn, the assassination of Qasem Soleimaniin resulted in a sharp increase in the targeting of American personnel, military and civil infrastructure in Iraq. The U.S. Army was forced to regroup its forces, effectively abandoning a number of its military installations and concentrating available forces at key bases. At the same time, Washington flatly rejected demands from Baghdad for a complete withdrawal of U.S. troops and promised to respond with full-fledged sanctions if Iraq continued to raise this issue. Afghanistan remains stable in its instability. Disturbing news comes from Latin America. Confrontation between China and India flared this year, resulting in sporadic border clashes. This situation seems far from over, as both countries have reinforced their military posture along the disputed border. The aggressive actions of the Trump administration against China deepen global crises, which has become obvious not only to specialists but also to the general public. The relationship between the collective West and the Russian Federation was re-enshrined in "the Cold War state", which seems to have been resurrected once again.

The turbulence of the first quarter of 2020 was overshadowed by a new socio-political process – the corona-crisis, the framework of which integrates various phenomena from the Sars-Cov2 epidemic itself and the subsequent exacerbation of the global economic crisis. The disclosure of substantial social differences that have accumulated in modern capitalist society, lead to a series of incessant protests across the globe. The year 2020 was accompanied by fierce clashes between protesters professing various causes and law enforcement forces in numerous countries. Although on the surface these societal clashes with the state appear disassociated, many share related root causes. A growing, immense wealth inequality, corruption of government at all levels, a lack of any meaningful input into political decision making, and the unmasking of massive censorship via big tech corporations and the main stream media all played a part in igniting societal unrest.

In late 2019 and early 2020 there was little reason for optimistic projections for the near future. However, hardly anyone could anticipate the number of crisis events and developments that had taken place during this year. These phenomena affected every region of the world to some extent.

Nevertheless, Middle East has remained the main source of instability, due to being an arena where global and regional power interests intertwine and clash. The most important line of confrontation is between US and Israel-led forces on the one hand, and Iran and its so called Axis of Resistance. The opposing sides have been locked in an endless spiral of mutual accusations, sanctions, military incidents, and proxy wars, and recently even crossed the threshold into a limited exchange of strikes due to the worsening state of regional confrontation. Russia and Turkey, the latter of which has been distancing itself from Washington due to growing disagreements with "NATO partners" and changes in global trends, also play an important role in the region without directly entering into the confrontation between pro-Israel forces and Iran.

As in the recent years, Syria and Iraq remain the greatest hot-spots. The destruction of ISIS as a terrorist state and the apparent killing of its leader Abu Bakr al-Baghdadi did not end its existence as a terror group. Many ISIS cells and supporting elements actively use regional instability as a chance to preserve the Khalifate's legacy. They remain active mainly along the Syria-Iraq border, and along the eastern bank of the Euphrates in Syria. Camps for the temporary displaced and for the families and relatives of ISIS militants on the territory controlled by the Syrian Democratic Forces (SDF) in north-eastern Syria are also breeding grounds for terrorist ideology. Remarkably, these regions are also where there is direct presence of US forces, or, as in the case of SDF camps, presence of forces supported by the US.

The fertile soil for radicalism also consists of the inability to reach a comprehensive diplomatic solution that would end the Syrian conflict in a way acceptable to all parties. Washington is not interesting in stabilizing Syria because even should Assad leave, it would strengthen the Damascus government that would naturally be allied to Russia and Iran. Opposing Iran and supporting Israel became the cornerstone of US policy during the Trump administration. Consequently, Washington is supporting separatist sentiments of the Kurdish SDF leadership and even allowed it to participate in the plunder of Syrian oil wells in US coalition zone of control in which US firms linked to the Pentagon and US intelligence services are participating. US intelligence also aids Israel in its information and psychological warfare operations, as well as military strikes aimed at undermining Syria and Iranian forces located in the country. In spite of propaganda victories, in practice Israeli efforts had limited success in 2020 as Iran continued to strengthen its positions and military capabilities on its ally's territory. Iran's success in establishing and supporting a land corridor linking Lebanon, Syria, Iraq, and Iraq, plays an important role. Constant expansion of Iran's military presence and infrastructure near the town of al-Bukamal, on the border of Iraq and Syria, demonstrates the importance of the project to Tehran. Tel-Aviv claims that Iran is using that corridor to equip pro-Iranian forces in southern Syria and Lebanon with modern weapons.

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The Palestinian question is also an important one for Israel's leadership and its lobby in Washington. The highly touted "deal of the century" turned out to be no more than an offer for the Palestinians to abandon their struggle for statehood. As expected, this initiative did not lead to a breakthrough in Israeli-Palestinian relations. Rather the opposite, it gave an additional stimulus to Palestinian resistance to the demands that were being imposed. At the same time, Trump administration scored a diplomatic success by forcing the UAE and Bahrain to normalize their relations with Israel, and Saudi Arabia to make its collaboration with Israel public. That was a historic victory for US-Israel policy in the Middle East. Public rapprochement of Arab monarchies and Israel strengthened the positions of Iran as the only country which not only declares itself as Palestine's and Islamic world's defender, but actually puts words into practice. Saudi Arabia's leadership will particularly suffer in terms of loss of popularity among its own population, already damaged by the failed war in Yemen and intensifying confrontation with UAE, both of which are already using their neighbor's weakness to lay a claim to leadership on the Arabian Peninsula.

The list of actors strengthening their positions in the Red Sea includes Russia. In late 2020 it became known that Russia reached an agreement with Sudan on establishing a naval support facility which has every possibility to become a full-blown naval base. This foothold will enable the Russian Navy to increase its presence on key maritime energy supply routes on the Red Sea itself and in the area between Aden and Oman straits. For Russia, which has not had naval infrastructure in that region since USSR's break-up, it is a significant diplomatic breakthrough. For its part. Sudan's leadership apparently views Russia's military presence as a security factor allowing it to balance potential harmful measures by the West.

During all of 2020, Moscow and Beijing continued collaboration on projects in Africa, gradually pushing out traditional post-colonial powers in several key areas. The presence of Russian military specialists in the Central African Republic where they assist the central government in strengthening its forces, escalation of local conflicts, and ensuring the security of Russian economic sectors, is now a universally known fact. Russian diplomacy and specialists are also active in Libya, where UAE and Egypt which support Field Marshal Khaftar, and Turkey which supports the Tripoli government, are clashing. Under the cover of declarations calling for peace and stability, foreign actors are busily carving up Libya's energy resources. For Egypt there's also the crucial matter of fighting terrorism and the presence of groups affiliated with Muslim Brotherhood which Cairo sees as a direct threat to national security.

The Sahel and the vicinity of Lake Chad remain areas where terror groups with links to al-Qaeda and ISIS remain highly active. France's limited military mission in the Sahara-Sahel region has been failure and could not ensure sufficient support for regional forces in order to stabilize the situation. ISIS and Boko-Haram continue to spread chaos in the border areas between Niger, Nigeria, Cameroun, and Chad. In spite of all the efforts by the region's governments, terrorists continue to control sizable territories and represent a significant threat to regional security. The renewed conflict in Ethiopia is a separate problem, in which the federal government was drawn into a civil war against the National Front for the Liberation of Tigray controlling that province. The ethno-feudal conflict between federal and regional elites threatens to destabilize the entire country if it continues.

The explosive situation in Africa shows that post-colonial European powers and the "Global Policeman" which dominated that continent for decades were not interested in addressing the continent's actual problem. Foreign actors were mainly focused on extracting resources and ensuring the interests of a narrow group of politicians and entities affiliated with foreign capitals. Now they are forced to compete with the informal China-Russia bloc which will use a different approach that may be a described as follows: Strengthening of regional stability to protect investments in economic projects. Thus it is no surprise that influential actors are gradually losing to new but more constructive forces.

Tensions within European countries have been on the rise during the past several years, due to both the crisis of the contemporary economic paradigm and to specific regional problems such as the migration crises and the failure of multiculturalism policies, with subsequent radicalization of society.

Unpleasant surprises included several countries' health care and social protection networks' inability to cope with the large number of COVID-19 patients. Entire systems of governance in a number of European countries proved incapable of coping with rapidly developing crises. This is true particularly for countries of southern Europe, such as Italy, Spain, Portugal, and Greece. Among eastern European countries, Hungary's and Romania's economies were particularly badly affected. At the same time, Poland's state institutions and economy showed considerable resilience in the face of crisis. While the Federal Republic of Germany suffered considerable economic damage in the second quarter of 2020, Merkel's government used the situation to inject huge sums of liquidity into the economy, enhanced Germany's position within Europe, and moreover Germany's health care and social protection institutions proved capable and sufficiently resilient.

Coronavirus and subsequent social developments led to the emergence of the so-called "Macron Doctrine" which amounts to an argument that EU must obtain strategic sovereignty. This is consistent with the aims of a significant portion of German national elites. Nevertheless, Berlin officially criticized Macron's statements and has shown willingness to enter into a strategic partnership with Biden Administration's United States as a junior partner. However, even FRG's current leadership understands the dangers of lack of strategic sovereignty in an era of America's decline as the world policeman. Against the backdrop of a global economic crisis, US-EU relations are ineluctably drifting from a state of partnership to one of competition or even rivalry. In general, the first half of 2020 demonstrated the vital necessity of further development of European institutions.

The second half of 2020 was marked by fierce mass protests in Germany, France, Great Britain, and other European countries. The level of violence employed by both the protesters and law enforcement was unprecedented and is not comparable to the level of violence seen during protests in Russia, Belarus, and even Kirgizstan. Mainstream media did their best to depreciate and conceal the scale of what was happening. If the situation continues to develop in the same vein, there is every chance that in the future, a reality that can be described as a digital concentration camp may form in Europe.

World media, for its part, paid particular attention to the situation in Belarus, where protests have entered their fourth month following the August 9, 2020 presidential elections. Belarusian protests have been characterized by their direction from outside the country and choreographed nature. The command center of protest activities is officially located in Poland. This fact is in and of itself unprecedented in Europe's contemporary history. Even during Ukraine's Euromaidan, external forces formally refused to act as puppetmasters.

Belarus' genuinely existing socio-economic problems have led to a rift within society that is now divided into two irreconcilable camps: proponents of reforms vs. adherents of the current government. Law enforcement forces which are recruited from among President Lukashenko's supporters, have acted forcefully and occasionally harshly. Still, the number of casualties is far lower than, for example, in protests in France or United States.

Ukraine itself, where Western-backed "democratic forces" have already won, remains the main point of instability in Eastern Europe. The Zelenskiy administration came to power under slogans about the need to end the conflict in eastern Ukraine and rebuild the country. In practice, the new government continued to pursue the policy aimed at maintaining military tension in the region in the interests of its external sponsors and personal enrichment.

For the United States, 2020 turned out to be a watershed year for both domestic and foreign policy. Events of this year were a reflection of Trump Administration's protectionist foreign policy and a national-oriented approach in domestic and economic policy, which ensured an intense clash with the majority of Washington Establishment acting in the interests of global capital.

In addition to the unresolved traditional problems, America's problems were made worse by two crises, COVID-19 spread and BLM movement protests. They ensured America's problems reached a state of critical mass.

One can and should have a critical attitude toward President Trump's actions, but one should not doubt the sincerity of his efforts to turn the slogan Make America Great Again into reality. One should likewise not doubt that his successor will adhere to other values. Whether it's Black Lives Matter or Make Global Moneymen Even Stronger, or Russia Must Be Destroyed, or something even more exotic, it will not change the fact America we've known in the last half century died in 2020. A telling sign of its death throes is the use of "orange revolution" technologies developed against inconvenient political regimes. This demonstrated that currently the United States is ruled not by national elites but by global investors to whom the interests of ordinary Americans are alien.

This puts the terrifying consequences of COVID-19 in a new light. The disease has struck the most vulnerable layers of US society. According to official statistics, United States has had about 20 million cases and over 330,000 deaths. The vast majority are low-income inhabitants of mega-cities. At the same time, the wealthiest Americans have greatly increased their wealth by exploiting the unfolding crisis for their own personal benefit. The level of polarization of US society has assumed frightening proportions. Conservatives against liberals, blacks against whites, LGBT against traditionalists, everything that used to be within the realm of public debate and peaceful protest has devolved into direct, often violent, clashes. One can observe unprecedented levels of aggression and violence from all sides.

In foreign policy, United States continued to undermine the international security system based on international treaties. There are now signs that one of the last legal bastions of international security, the New START treaty, is under attack. US international behavior has prompted criticism from NATO allies. There are growing differences of opinion on political matters with France and economic ones with Germany. The dialogue with Eastern Mediterranean's most powerful military actor Turkey periodically showed a sharp clash of interests.

Against that backdrop, United States spent 2020 continuously increasing its military presence in Eastern Europe and the Black Sea basin. Additional US forces and assets were deployed in direct proximity to Russia's borders. The number of offensive military exercises under US leadership or with US participation has considerably increased.

In the Arctic, the United States is acting as a spoiler, unhappy with the current state of affairs. It aims to extend its control over natural resources in the region, establish permanent presence in other countries' exclusive economic zones (EEZ) through the use of the so-called "freedom of navigation operations" (FONOPs), and continue to encircle Russia with ballistic missile defense (BMD) sites and platforms.

In view of the urgent and evident US preparations to be able to fight and prevail in a war against a nuclear adversary, by defeating the adversary's nuclear arsenal through the combination of precision non-nuclear strikes, Arctic becomes a key region in this military planning. The 2020 sortie by a force of US Navy BMD-capable AEGIS destroyers into the Barents Sea, the first such mission since the end of the Cold War over two decades ago, shows the interest United States has in projecting BMD capabilities into regions north of Russia's coastline, where they might be able to effect boost-phase interceptions of Russian ballistic missiles that would be launched in retaliatory strikes against the United States. US operational planning for the Arctic in all likelihood resembles that for South China Sea, with only a few corrections for climate.

In Latin America, the year of 2020 was marked by the intensification Washington efforts aimed at undermining the political regimes that it considered to be in the opposition to the existing world order.

Venezuela remained one of the main points of the US foreign policy agenda. During the entire year, the government of Nicolas Maduro was experiencing an increasing sanction, political and clandestine pressure. In May, Venezuelan security forces even neutralized a group of US mercenaries that sneaked into the country to stage the coup in the interests of the Washington-controlled opposition and its public leader Juan Guaido. However, despite the recognition of Guaido as the president of Venezuela by the US and its allies, regime-change attempts, and the deep economic crisis, the Maduro government survived.

This case demonstrated that the decisive leadership together having the support of a notable part of the population and working links with alternative global centers of power could allow any country to resist to globalists' attacks. The US leadership itself claims that instead of surrendering, Venezuela turned itself into a foothold of its geopolitical opponents: China, Russia, Iran and even Hezbollah. While this evaluation of the current situation in Venezuela is at least partly a propaganda exaggeration to demonize the 'anti-democratic regime' of Maduro, it highlights parts of the really existing situation.

The turbulence in Bolivia ended in a similar manner, when the right wing government that gained power as a result of the coup in 2019 demonstrated its inability to rule the country and lost power in 2020. The expelled president, Evo Morales, returned to the country and the Movement for Socialism secured their dominant position in Bolivia thanks to the wide-scale support from the indigenous population. Nonetheless, it is unlikely that these developments in Venezuela and Bolivia would allow to reverse the general trend towards the destabilization in South America.

The regional economic and social turbulence is strengthened by the high level of organized crime and the developing global crisis that sharpened the existing contradictions among key global and regional players. This creates conditions for the intensification of existing conflicts. For example, the peace process between the FARC and the federal government is on the brink of the collapse in Colombia. Local sources and media accuse the government and affiliated militias of detentions and killings of leaders of local communities and former FARC members in violation of the existing peace agreement. This violence undermine the fragile peace process and sets conditions for the resumption of the armed struggle by FARC and its supporters. Mexico remains the hub for illegal migration, drug and weapon trafficking just on the border with the United States. Large parts of the country are in the state of chaos and are in fact controlled by violent drug cartels and their mercenaries. Brazil is in the permanent state of political and economic crisis amid the rise of street crime.

These negative tendencies affect almost all states of the region. The deepening global economic crisis and the coronavirus panic add oil to the flame of instability.

Countries of South America are not the only one suffering from the crisis. It also shapes relations between global powers. Outcomes of the ongoing coronavirus outbreak and the global economic crisis contributed to the hardening of the standoff between the United States and China.

Washington and Beijing have insoluble contradictions. The main of them is that China has been slowly but steadily winning the race for the economic and technological dominance simultaneously boosting own military capabilities to defend the victory in the case of a military escalation. The sanction, tariff and diplomatic pressure campaign launched by the White House on China since the very start of the Trump Presidency is a result of the understanding of these contradictions by the Trump administration and its efforts to guarantee the leading US position in the face of the global economic recession. The US posture towards the South China Sea issues, the political situation in Hong Kong, human rights issues in Xinjiang, the unprecedented weapon sales to Taiwan, the support of the militarization of Japan and many other questions is a part of the ongoing standoff. Summing up, Washington has been seeking to isolate China through a network of local military alliances and contain its economic expansion through sanction, propaganda and clandestine operations.

The contradictions between Beijing and Washington regarding North Korea and its nuclear and ballistic missile programs are a part of the same chain of events. Despite the public rhetoric, the United States is not interested in the full settlement of the Korea conflict. Such a scenario that may include the reunion of the North and South will remove the formal justification of the US military buildup. This is why the White House opted to not fulfill its part of the deal with the North once again assuring the North Korean leadership that its decision to develop its nuclear and missile programs and further.

Statements of Chinese diplomats and top official demonstrate that Beijing fully understands the position of Washington. At the same time, China has proven that it is not going to abandon its policies aimed at gaining the position of the main leading power in the post-unipolar world. Therefore, the conflict between the sides will continue escalating in the coming years regardless the administration in the White House and the composition of the Senate and Congress. Joe Biden and forces behind his rigged victory in the presidential election will likely turn back from Trump's national-oriented economic policy and 'normalize' relations with China once again reconsidering Russia as Enemy #1. This will not help to remove the insoluble contradictions with China and reverse the trend towards the confrontation. However, the Biden administration with help from mainstream media will likely succeed in hiding this fact from the public by fueling the time-honored anti-Russian hysteria.

As to Russia itself, it ended the year of 2020 in its ordinary manner for the recent years: successful and relatively successful foreign policy actions amid the complicated economic, social and political situation inside the country. The sanction pressure, coronavirus-related restrictions and the global economic crisis slowed down the Russian economy and contributed to the dissatisfaction of the population with internal economic and social policies of the government. The crisis was also used by external actors that carried out a series of provocations and propaganda campaigns aimed at undermining the stability in the country ahead of the legislative election scheduled for September 2021. The trend on the increase of sanction pressure, including tapering large infrastructure projects like the Nord Stream 2, and expansion of public and clandestine destabilization efforts inside Russia was visible during the entire year and will likely increase in 2021. In the event of success, these efforts will not only reverse Russian foreign policy achievements of the previous years, but could also put in danger the existence of the Russian statehood in the current format.

Among the important foreign policy developments of 2020 underreported by mainstream media is the agreement on the creation of a Russian naval facility on the coast of the Red Sea in Sudan. If this project is fully implemented, this will contribute to the rapid growth of Russian influence in Africa. Russian naval forces will also be able to increase their presence in the Red Sea and in the area between the Gulf of Aden and the Gulf of Oman. Both of these areas are the core of the current maritime energy supply routes. The new base will also serve as a foothold of Russia in the case of a standoff with naval forces of NATO member states that actively use their military infrastructure in Djibouti to project power in the region. It is expected that the United States (regardless of the administration in the White House) will try to prevent the Russian expansion in the region at any cost. For an active foreign policy of Russia, the creation of the naval facility in Sudan surpasses all public and clandestine actions in Libya in recent years. From the point of view of protecting Russian national interests in the Global Oceans, this step is even more important than the creation of the permanent air and naval bases in Syria.

As well as its counterparts in Washington and Beijing, Moscow contributes notable efforts to the modernization of its military capabilities, with special attention to the strategic nuclear forces and hypersonic weapons. The Russians see their ability to inflict unacceptable damage on a potential enemy among the key factors preventing a full-scale military aggression against them from NATO. The United Sates, China and Russia are in fact now involved in the hypersonic weapon race that also includes the development of means and measures to counter a potential strike with hypersonic weapons.

The new war in Nagorno-Karabakh became an important factor shaping the balance of power in the South Caucasus. The Turkish-Azerbaijani bloc achieved a sweeping victory over Armenian forces and only the involvement of the Russian diplomacy the further deployment of the peacekeepers allowed to put an end to the violence and rescue the vestiges of the self-proclaimed Armenian Republic of Artsakh. Russia successfully played a role of mediator and officially established a military presence on the sovereign territory of Azerbaijan for the next 5 years. The new Karabakh war also gave an additional impulse in the Turkish-Azerbaijani economic and military cooperation, while the pro-Western regime in Armenia that expectedly led the Armenian nation to the tragedy is balancing on the brink of collapse.

The Central Asia traditionally remained one of the areas of instability around the world with the permanent threat of militancy and humanitarian crisis. Nonetheless, despite forecasts of some analysis, the year of 2020 did not become the year of the creation of ISIS' Caliphate 2.0 in the region. An important role in preventing this was played by the Taliban that additionally to securing its military victories over the US-led coalition and the US-backed Kabul government, was fiercely fighting ISIS cells appearing in Afghanistan. The Taliban, which controls a large part of Afghanistan, was also legalized on the international scene by direct talks with the United States. The role of the Taliban will grow and further with the reduction of the US military presence.

While some media already branded the year of 2020 as one of the worst in the modern history, there are no indications that the year of 2021 will be any brighter or the global crises and regional instability will magically disappear by themselves. Instead, most likely 2020 was just a prelude for the upcoming global shocks and the acute standoff for markets and resources in the environment of censorship, legalized total surveillance, violations of human rights under 'democratic' and 'social' slogans' and proxy wars.

The instability in Europe will likely be fueled by the increasing cultural-civilizational conflict and the new wave of newcomers that have acute ideological and cultural differences with the European civilization. The influx of newcomers is expected due to demographic factors and the complicated security, social situation in the Middle East and Africa. Europe will likely try to deal with the influx of newcomers by introducing new movement and border restrictions under the brand of fighting coronavirus. Nonetheless, the expected growth of the migration pressure will likely contribute to the negative tendencies that could blow up Europe from inside.

The collapse of the international security system, including key treaties limiting the development and deployment of strategic weapons, indicates that the new detente on the global scene will remain an improbable scenario. Instead, the world will likely move further towards the escalation scenario as at least a part of the current global leadership considers a large war a useful tool to overcome the economic crisis and capture new markets. Russia, with its large territories, rich resources, a relatively low population, seems to be a worthwhile target. At the same time, China will likely exploit the escalating conflict between Moscow and the US-led bloc to even further increase its global positions. In these conditions, many will depend on the new global order and main alliances within it that are appearing from the collapsing unipolar system. The United States has already lost its unconditional dominant role on the international scene, but the so-called multipolar world order has not appeared yet. The format of this new multipolar world will likely have a critical impact on the further developments around the globe and positions of key players involved in the never-ending Big Game.

* * *

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[Dec 30, 2020] Stock market might well be close to the start of a selloff, says veteran trader Larry Williams

Usually such prediction are not worth electrons to are needed to display them on the screen but the idea that "[paper gold" offer no hadge might be sound. Whether natural gat wil rally as he predicts is another story ("Buy natural gas because Williams expects it to rally.") If the stock market followed his forecasts he probably would be billionaire, especially with his tendency to trade futures.
It is not clear how long the market can levitate at current high but some kind of 2008 reckoning might be in the cards. When and what might be the trigger is not clear. But as one commenter said "I don't believe that all of the damage caused by our pandemic has been adequately summed up" The disconnect between the actual economy and the stock market can't last forever.
marketwatch.com

I've watched Williams accurately call many market twists and turns in the 15 years I've known him. I know of more than a few money managers who trust his judgement. Williams has won or placed well in the I've watched Williams accurately call many market twists and turns in the 15 years I've known him. I know of more than a few money managers who trust his judgement. Williams has won or placed well in the World Cup Trading Championship several times since the 1980s To make market calls, Williams uses his own time-tested mix of fundamentals, seasonal trends, technical signals and intelligence gleaned from the Commitment of Traders report from the Commodity Futures Trading Commission (CFTC). Here's how he thinks about the three types of positions the CFTC reports. Williams considers positioning by commercial traders or hedgers and users and producers of commodities to be the smart money. He thinks large traders, mainly big investment shops, and the public are contrarian indicators. Williams mainly trades futures because he thinks that's where you can make the big money. But we can apply his calls to stocks and exchange traded funds, too. Here's how he's positioning for the next few weeks and through the end of the year, in some of the major asset classes and stocks. To make market calls, Williams uses his own time-tested mix of fundamentals, seasonal trends, technical signals and intelligence gleaned from the Commitment of Traders report from the Commodity Futures Trading Commission (CFTC). Here's how he thinks about the three types of positions the CFTC reports. Williams considers positioning by commercial traders or hedgers and users and producers of commodities to be the smart money. He thinks large traders, mainly big investment shops, and the public are contrarian indicators. Williams mainly trades futures because he thinks that's where you can make the big money. But we can apply his calls to stocks and exchange traded funds, too. Here's how he's positioning for the next few weeks and through the end of the year, in some of the major asset classes and stocks. To make market calls, Williams uses his own time-tested mix of fundamentals, seasonal trends, technical signals and intelligence gleaned from the Commitment of Traders report from the Commodity Futures Trading Commission (CFTC). Here's how he thinks about the three types of positions the CFTC reports. Williams considers positioning by commercial traders or hedgers and users and producers of commodities to be the smart money. He thinks large traders, mainly big investment shops, and the public are contrarian indicators. Williams mainly trades futures because he thinks that's where you can make the big money. But we can apply his calls to stocks and exchange traded funds, too. Here's how he's positioning for the next few weeks and through the end of the year, in some of the major asset classes and stocks. Williams mainly trades futures because he thinks that's where you can make the big money. But we can apply his calls to stocks and exchange traded funds, too. Here's how he's positioning for the next few weeks and through the end of the year, in some of the major asset classes and stocks. Williams mainly trades futures because he thinks that's where you can make the big money. But we can apply his calls to stocks and exchange traded funds, too. Here's how he's positioning for the next few weeks and through the end of the year, in some of the major asset classes and stocks.

Expect an extended stock market selloff

To make market calls in September, Williams turns to what he calls the Machu Picchu trade, because he discovered this signal while traveling to the ancient Inca ruins with his wife in 2014. Williams, who is intensely focused on seasonal patterns that consistently play out over time, noticed that it's usually a great idea to sell stocks -- using indexes, mostly -- on the seventh trading day before the end of September. (This year, that's Sept. 22.) Selling on this day has netted profits in short-term trades 100% of the time over the past 22 years.

... ... ...

One caveat: Watch the advance-decline line, one of Williams' favorite indicators. If fewer stocks are declining relative to advancers on days the stock market is weak, or if there is a broadening out of participation on up days, this is a sign the any selloff may be coming to a close.

"If great breadth comes in to the market [on up days], then I will get bullish," he says.

Gold offers no hedge

A lot of people think gold serves as a hedge during stock market declines, but this isn't true, says Williams. Gold has slumped along with stocks in most of the major market selloffs. He expects the same over the next three to four weeks. He's advising gold traders to sell any rallies now, and then revisit when gold falls later this year to buy back lower.

To make this call, Williams looks at the typical seasonal pattern for gold that plays out every year, and also the historical trends in election years. The conclusion: Gold typically peaks around the middle of September then weakens for most of the rest of the year. This year, gold has underperformed its typical seasonal pattern, which is bearish for the metal.

"Gold has not been able to stay in step with what happened in the past, therefore the seasonal pattern should work this year," he says.

Another sign of potential weakness is the "crazy bullishness on gold" among the right-wing pundits like Ron Paul who have a long-standing affinity for the medal.

"They're all on the bandwagon because of the rally in gold," he says.

As with gold, he expects a similar seasonal pattern in other precious metals and copper. They will be weak from now through the end of the year, with a possible bounce in the middle of October.

Michael Brush is a Manhattan-based financial writer who publishes the stock newsletter Brush Up on Stocks. Brush has covered business for the New York Times and The Economist group. He attended Columbia Business School in the Knight-Bagehot program. Günter Wolfeschlegelsteinhausenbergerdorff 11 hours ago Only this September there is a the Fed, a pandemic, Robinhood and Trump, and his corrupt administration. Factor in those variables and it's impossible to predict what the market is going to do. Will remain in all cash till after the election. Stuart Young 11 hours ago I don't believe that all of the damage caused by our pandemic has been adequately summed up. Our U.S. Government may suffer huge consequences as a result of trillions of dollars in new debt. The law of gravity can be defied on so long. LT Murray 1 day ago Valualtions are now about where they were in the summer when there was all the talk about a V-shaped recovery that is now known not to be the case.

[Dec 30, 2020] 8 Reasons Why Covid-19 Damage to the Economy Will Be Deep and Lasting

The epidemic was almost certainly the knockout punch for many businesses that were already barely surviving before the shock.
Notable quotes:
"... Needless to say, a rebound from the lockdowns was inevitable. All sorts of activities like dentist appointments on hold (and dentistry personnel accounted for 10% of the job gains), and so there's pent up demand for medical procedures and treatments, as well as more mundane services that many regard as critical, like haircuts. ..."
"... Multiple factors are working together to bias observers to underestimate the severity of Covid-19 economic damage. ..."
"... The first is that it has hit parts of the economy that are relatively removed from media coverage: low income service workers and small business owners. ..."
"... Second is that in the middle income to better off sections of the country, things still look reassuringly normal. ..."
"... Third is that due to optimism bias and/or having experienced the 1987 crash, the dotcom bust, and 9/11, many people are predisposed to believe that even if the pain of spring 2020 is acute, that the economy will rebound and nearly all of the damage will be erased by year end or say at worst, mid 2021. Underscoring that it a widespread tendency to see Mr. Market at the economy. ..."
"... Colleges will have a lot of trouble this fall. ..."
"... PPP loans are keeping workers on the books through late June-mid July, depending on when the loan came in. Many employers, ranging from museums to small manufacturers are saying they have to make deep headcount cuts then ..."
"... Cutting across all the categories of businesses suffering from Covid-19 damage .restaurants, shops in office districts, merchants in college towns, small manufacturers ..."
"... State and local governments are already hemorrhaging jobs and it will get worse ..."
"... But wages have been largely stagnant since at least 2000, and spending increases since 2010 were powered by rising personal and corporate debts. ..."
"... Both 4-year and 2-year community colleges produce RN's. Both have clinical (hospital) requirements. Of course, 4-year colleges produce RN's with greater academic depth. Doesn't mean they are better nurses. But they are the ones roaming the ICU's because they have the greater depth of knowledge. ..."
"... governments will seemingly fail to recognize that strong keynesian intervention is mandated and has to be maintained for long if they don't want depression to keep its course while the usual hawks are already asking for termination of state aid programs. We had first epidemic negationism and now we face economic negationism as if the value of stocks would by itself fix everything back to normal. Harder times ahead unfortunately. ..."
"... I think most of the long-term job losses will be low income jobs (less than $40k/year). This is the group that recent statistics showed is at spending levels similar to last year, but much of that is supported by federal stimulus money ($600/wk unemployment, $1,200 check, PPP). When that dries up, that spending will likely decline. Many of those low income jobs will not have come back for two years as they are in hospitality and entertainment types of sectors. The drive-thru fast-food and takeout restaurants are doing fine – everything else is suffering and many will go permanently out of business. It is going to be a bloodbath in downtown areas in major cities. ..."
"... Combined with a 3 trillion dollar spending bill, we have an unprecedented increase in aggregate demand from the average American. Now that the economy starts to open up a bit, there is actually something to spend the money on other than Amazon purchases. ..."
"... One of the biggest ironies of all is that the health care industry is suffering because the expense of treating coronavirus is not offset by enough income but it is still crowding out other services. I doubt any big hospitals will go under, but the small rural ones have been dropping like flies for a few years now. ..."
"... people are putting off going in for imaging procedures and lab work because they are afraid the clinics and hospital labs are dangerous places. ..."
"... My son's lender gave him 3 months "forbearance". At the end of the three months they billed him for a triple mortgage payment. ..."
"... One of the difficult things about the current situation is the remarkable shortage of PPE and the difficulty the manufacturing sector seems to have both meeting the existing demand and coming up with improved products at scale. Since PPE is safety-critical (failures will cause injury or death), and since almost all manufacturing seems to have been outsourced to China where quality is suspect at best, it's hard to be optimistic about the situation improving. In fact, as new protocols evolve around the world in which PPE is the new normal, shortages and counterfeit products seem likely to get worse. ..."
"... Sporting events (not that I follow any) have economic impact and there will not be any residual demand when they are permitted. ..."
"... While not directly connected to the pandemic, it is overlapping in timing of the economic damage. The collapse of oil prices has laid waste to the shale revolution. ..."
"... GDP growth . Forget it, it's over . De-growth is the new normal. This reality will become apparent as the parasites – hedge funds, private equity et al – begin to fall later this year. ..."
"... for retirees (who are of course at higher risk of COVID-19 fatality spectrum) there is no -- absolutely zero -- desire to hit the malls and the large stores. ..."
"... The mid-level pub and restaurant trade will be decimated. There was over-supply before and this is now chronically exposed. All we passed were shuttered -- some offering take-out, which might be a life line but they are typically too far from the town centres to compete with the cheap kebab, chicken and Indian walk-ups. Plus, people won't pay a gourmet premium to spoon something out of a foil tray themselves. However, at the lower end of the market, those fast-food places with drive-thrus will be fine -- queues round the block at McDonalds, KFC and Starbucks. ..."
"... Here in Oregon we have had a serious outbreak of Covid in a seafood packing plant in Newport. And we learn that the majority of the workforce come from Guatemala, Serbia, and Ukraine. How can this make economic sense? ..."
"... A large greenhouse (64 acres under glass) near here was the largest COVID cluster outside of NYC. Two hundred "guest" workers were housed 4 to a room, 2 in each bed at cheap motels. The Canadian owners pay local workers and "guests " $13/hour. But the labor contactor gets an amount on top, plus there is the housing, food and transportation for the "guests". ..."
"... Home sales here are really hot – a big exodus from Seattle is driving it. ..."
"... real wages for USA men at the 50% percentile level are down -5.1% over the 1979 to 2018 time frame. ..."
"... Given that the USA has had infrastructure declining (lowering quality of life), housing, medical and educational costs rising in excess of inflation, USA wage earners were hurting, at the median level, well before Covid-19 and well before 2000. ..."
"... Shops are already going under here in Silicon Valley. I've driven down Santa Cruz Ave. in Menlo Park a few times over the last week and there are a fair number of empty storefronts. It is the fancy shopping street in town. Since I don't actually shop there I couldn't tell what sorts of shops had closed. ..."
"... It's going to be deep and lasting because it only increases the systemic problem of growing income inequality. There were viruses before and there will be more after. In this case, the response was to grow the ghetto, faster. Fintech has to go in for the kill shot here ..."
"... DC control technology can only increase income inequality so long as it is the primary recipient of MMT. It's one and zeroes, a completely arbitrary binary outcome. ..."
Jun 18, 2020 | www.nakedcapitalism.com

Too many people who should know better are taking a big bounce in retail sales as a sign that an economic recovery is well underway. It is, but only in the sense that going from the ICU to a hospital bed could also be defined as a recovery. In keeping, the Atlanta Fed's GDPNow forecast for the second quarter has improved from negative 52.8% to a sunny negative 45.5%.

Needless to say, a rebound from the lockdowns was inevitable. All sorts of activities like dentist appointments on hold (and dentistry personnel accounted for 10% of the job gains), and so there's pent up demand for medical procedures and treatments, as well as more mundane services that many regard as critical, like haircuts.

Nevertheless, stock indices rising to new highs looks remarkably out of touch in light of the baked-in and certain-to-continue-for-long-enough-to-matter damage. The true believers are in "Central banks are on the case and will save us" mode. Perhaps they need to heed the warning, "Past results are no guarantee of future performance."

Multiple factors are working together to bias observers to underestimate the severity of Covid-19 economic damage.

The first is that it has hit parts of the economy that are relatively removed from media coverage: low income service workers and small business owners. Tell me how often CNN goes to interview the owner of a dry cleaner or auto lube shop, even though small businesses have long been the generator of new jobs. Similarly, notice how reports of Covid-19 infections at food processing facilities isn't covered until the capacity taken out rises to a level where it might impact consumers. In keeping, Bloomberg had a story today, More Food Shortages Loom With Outbreaks at 60 U.S Plants , of outbreaks at non-meat processing facilities, like fruit and vegetable packers and bakeries.

Second is that in the middle income to better off sections of the country, things still look reassuringly normal. The lockdowns froze activity including business closures. I now live in a twee suburb, and in the local shopping districts, there are not yet any vacant storefronts, even though some businesses in not so prominent locations (a liquor store, the restaurant with the best pizza in the area, and an Olive Garden branch, for starters) have folded; a lot of better restaurants have not reopened even though the lockdown ended a couple of weeks ago.

On top of that, houses in tony suburban and exurban areas are in keen demand. So on top of feeling good about their stock portfolios, upper middle class homeowners in those areas are positively chuffed about reports of brisk property sales at strong prices.

Third is that due to optimism bias and/or having experienced the 1987 crash, the dotcom bust, and 9/11, many people are predisposed to believe that even if the pain of spring 2020 is acute, that the economy will rebound and nearly all of the damage will be erased by year end or say at worst, mid 2021. Underscoring that it a widespread tendency to see Mr. Market at the economy.

This is far from a comprehensive list, but below are eight reasons why the deep damage to the economy won't be reversed any time soon.

1. Business travel is not coming back any time soon. People are getting accustomed to Zoom. And word may also get out that domestic flying is much worse than it used to be, which will be a deterrent to those who might be so bold as to want to get on a plane. That is a fundamental blow to airlines, airport vendors, hotels, restaurants, and convention centers. Hotel occupancy in April was 24.5% which if anything seems high based on my personal datapoints. The pricings I see say that hotel operators are not expecting much if any improvement through the summer. And as we discussed, hotels are at risk of creating a vicious cycle: they've cut service levels drastically as a way to reduce the bleeding of the low occupancy rates. But even at knocked-down prices, the degraded experience is enough to make travelers think twice about getting on the road.

2. White collar workers will not be going back to offices in the old numbers. Elevators and public transport, particularly commuter trains, are perceived as big risks. And a lot of cities can't cope well with people driving in. NYC is extreme here but it's now short of parking space even with midtown looking freakily underpopulated. Moreover, many large corporations, having had to figure out how to make work from home manageable, have decided they can cope with it or even like it, so they plan to cut their office space when lease renewals come up. That development will thin out tons of businesses near office buildings

Estimates vary, but in New York City, both retail and office space payments are way down. 40% seems a reasonable guesstimate based on the panic level.

... ... ...

4. Colleges will have a lot of trouble this fall. First, they are losing nearly all their full-freight-paying Chinese students, between concern over US Covid-19 risks, Administration hostility, and travel restrictions. That alone is a big blow.

On top of that, some are planning to reopen but MIT's announcement yesterday, that it will not allow all students to return to campus, probably represents a new normal. Well-placed MIT alumni read the university's decision as driven significantly by a desire to protect faculty and staff; I hear from sources with contacts at other universities that administrators that they see no way to put kids in dorms without running unacceptably high Covid risks. Remember, even though kids almost never die of Covid-19, but there is a risk of serious damage. 1/2 the asymptomatic cases on the Diamond Princess now show abnormal lungs. And remember those cruises have half the people on board as crew, and the crew skews young. College is a lot less appealing if you don't stay in a dorm.

Just as diminished activity in central business districts has negative knock-on effects to nearby business, so to do hollowed-out colleges and universities have for their communities, as described in more depth in a recent Bloomberg story .

5. PPP loans are keeping workers on the books through late June-mid July, depending on when the loan came in. Many employers, ranging from museums to small manufacturers are saying they have to make deep headcount cuts then. Continuing unemployment claims already show that new hires are still being pretty much equaled by job losses.

6. Cutting across all the categories of businesses suffering from Covid-19 damage .restaurants, shops in office districts, merchants in college towns, small manufacturers Small business owners have to guarantee loans personally unless they are able to finance their operations by borrowing against real estate. Even SBA loans require a personal guarantee. So when consumers cheerily say that restaurant owners or other operators will just declare Chapter 7 or 11 and then start their venture afresh, they miss that these capitalists will be wiped out. They won't have the money to start over again. And they may not have the pain tolerance either.

7. State and local governments are already hemorrhaging jobs and it will get worse. And in some, perhaps many communities, the budget cuts will be so deep that they will degrade service levels. Less frequent garbage collection and street repair is not good for business either.

8. The EU is not going to do enough stimulus to offset its own Covid-19 damage and Brexit is coming, a shock to the EU and UK when both are already on the ropes. Roughly 25% of S&P earnings come from Europe. The odds Italian banks will blow is rising all the time and that could be a CreditAnstalt-level event.

I'm sure readers can come up with additional items, but this list alone ought to be enough to curb the enthusiasm of the economy cheerleaders. As Marshall Auerback said by e-mail:

American household spending in the 1960s was powered by rising wages and growing home equity. But wages have been largely stagnant since at least 2000, and spending increases since 2010 were powered by rising personal and corporate debts. House values are now stagnant at best, and will likely fall in the months ahead. Faced with radical uncertainty, US consumers will save more and spend less. Even if the government replaces their lost incomes for a time, people know that stimulus is short term. What they do not know is when the next job offer – or layoff – will come along.

Moreover, people do distinguish between needs and wants. Americans need to eat, but they mostly don't need to eat out. They don't need to travel. Restaurant owners and airlines therefore have two problems: they can't cover costs while their capacity is limited for public-health reasons, and demand would be down even if the coronavirus disappeared. This explains why many businesses are not reopening even though they legally can. Others are reopening, but fear they cannot hold out for long. And the many millions of workers in America's vast services sector are realizing that their jobs are simply not essential.


The Rev Kev , June 18, 2020 at 10:44 am

Universities have been very adept at squeezing themselves into occupations to make them a required third party. So nursing was once an occupation that a lot of people could do but in many countries now, if you want to be a nurse you have to be university qualified.

In previous times an apprenticeship was the main requirement with state given examinations at the end of it. I think that this could be true of doctors as well. But no in ore and more occupations, unless you have the university qualifications, you can't do the job.

juno mas , June 18, 2020 at 4:31 pm

Let me just say that having college trained, licensed RN's are important. They are the one's who actually make a hospital function. The skills needed to be a qualified RN are well beyond apprenticeship.

I've spent some critical time in a hospital and the ability of attending RN's (both ICU and general unit) to understand the broader implications of a doctor's directive and the comprehension of computational details involved with medicine application is beyond me. It's too much work for my mind; and I'm one of those licensed professionals mandated by the state.

And this ignores the "soft skills" needed to provide care to patients. (If you've ever been tended by a male nurse, you'll know what I'm saying.)

HotFlash , June 18, 2020 at 5:08 pm

Erm, I have been tended by a male nurse and I don't know what you mean.

What I have observed (as a patient and friend-of-patient) is that community college trained nurses, who, in my part of the world, start working on wards in the first week, are better nurses than the university-trained ones who don't see a patient until year two. Many would have washed out early on if they had actually contact with patients right away. You can generally spot them, they clutch their clipboards as if they were shields and flee to positions in admin ASAP.

juno mas , June 18, 2020 at 8:17 pm

Both 4-year and 2-year community colleges produce RN's. Both have clinical (hospital) requirements. Of course, 4-year colleges produce RN's with greater academic depth. Doesn't mean they are better nurses. But they are the ones roaming the ICU's because they have the greater depth of knowledge.

My main point was a simple one: modern day nursing skills cannot be gained through apprenticeship. It requires sustained study, instruction, and clinical experience.

Ignacio , June 18, 2020 at 7:31 am

The epidemic was almost certainly the knockout punch for many businesses that were already barely surviving before the shock.

And governments will seemingly fail to recognize that strong keynesian intervention is mandated and has to be maintained for long if they don't want depression to keep its course while the usual hawks are already asking for termination of state aid programs. We had first epidemic negationism and now we face economic negationism as if the value of stocks would by itself fix everything back to normal. Harder times ahead unfortunately.

Fox Blew , June 18, 2020 at 10:10 am

Well said, Ignacio. I would add that this may be a knockout punch for globalization as we know it. John Ralston Saul suggested this already happened two decades ago (it takes awhile for ideologies to die in the minds of the elite, right?). I don't know how we are going to functionally transition to "positive nationalism" (ie. citizen based economics) but you presented a key ingredient, IMHO, when you wrote: "strong keynesian intervention is mandated and has to be maintained for long if they don't want depression to keep its course"

Ignacio , June 18, 2020 at 2:00 pm

There is only one reason to remove or not implement Federal support for the population at large and SMEs: The "hawks" want (for them or for their clients) to buy properties and stuff on the cheap.

SonoftheSouth , June 18, 2020 at 10:40 am

Yves, the "forgiveness terms" on the PPP loans have been amended from the initial up to 75% of $100,000 spent on salaries within eight weeks of PPP loan distribution to a 24 week period. I believe this change will allow smaller businesses to survive for a longer period.

IanB , June 18, 2020 at 11:16 am

I think these changes will help employees of only a limited subset of businesses, those businesses that hadn't previously applied but which will now apply because of the changed terms. The new terms don't increase the amount of the loan, they just change how much of it will be forgiven. My company received a PPP loan under the original terms, the changes make the amount forgiven somewhat greater, but the cash won't last any longer. The real beneficiaries of the changes will be owners (including myself), who now will have to repay less of the loan.

Yves Smith Post author , June 18, 2020 at 3:58 pm

No, this is the reverse. It's not a matter of distribution, it's a matter of how long the business can afford to keep the staff.

Even assuming the PPP paid enough for full salary recovery (for some businesses, it doesn't; a friend with a manufacturing business got only $420K versus her $700K payroll because some of her employees are high skill and make over $100K), extending the time helps only for businesses that were entirely closed, like restaurants. It did NOT increase the amount distributed. That was set based on 8 weeks of payroll as 75% of the total distributed.

So if after paying full payroll for eight weeks (now eight weeks from when you started supporting salaries) and your business clearly can't support the payroll, you will cut staff.

Moreover, the amendment on the fly was of limited help. A lot of business like restaurants (per a WSJ story yesterday( didn't apply because the 8 week requirement was in affect when the program had funds to distribute.

polecat , June 18, 2020 at 2:26 pm

A zigzag economy. Or even better, stairsteppin down to lower states of 'commerce', much of it 'informal', out of the prying noses of taxman everywhere .. that too, uh, works in my admittedly cloudy seer's eye.

at least until StrongMan 2.0 takes hold

occasional anonymous , June 18, 2020 at 9:41 pm

At what part of the letter (?) do the food riots start?

TiPs , June 18, 2020 at 7:40 am

If ever there was a time for a job guarantee program

Mikel , June 18, 2020 at 10:43 am

If ever there was a time that the establishment would fight a job guarantee program it is now.

When they say they need to be able to "compete" it's all about bringing wages down. Nothing does that more than mass unemployment. Every industry is going to squeeze wages to make up for lost demand that you nor your children should hold your breath about returning. Sports and entertainment – big squeeze. Keep a close eye on the battles with the unions.

I see people desperately mincing about like there will be a return to "like it was in 2019."
Wandering around in their deluded dreamworld as if all of this was like a season of the tv series Dallas back in the eighties – an entire season written off as another characters dream.

Tom Stone , June 18, 2020 at 8:50 am

In my little town of Sebastopol at least half the restaurants will go out of business, the one used bookstore is shuttered and quite a few of the tourist dependent shops will be going out of business. Vacation rentals are being allowed again, it's too early to tell if they will be OK yet.

July 4th will be a good indicator. Real Estate prices are looking wobbly. I did get my first haircut since January and now sport bright blue mohawk.

rd , June 18, 2020 at 9:11 am

I think most of the long-term job losses will be low income jobs (less than $40k/year). This is the group that recent statistics showed is at spending levels similar to last year, but much of that is supported by federal stimulus money ($600/wk unemployment, $1,200 check, PPP). When that dries up, that spending will likely decline. Many of those low income jobs will not have come back for two years as they are in hospitality and entertainment types of sectors. The drive-thru fast-food and takeout restaurants are doing fine – everything else is suffering and many will go permanently out of business. It is going to be a bloodbath in downtown areas in major cities.

The economy will lose a significant amount of consumer spending when the below median income have significantly lower income because they spend that income. That will reduce corporate revenues and sales tax collection.

White collar workers working from home will do fine. They will also continue saving money instead of spending it since they won't be travelling for pleasure or business or going out for food or entertainment. Recent statistics indicate that in early June, the top 25% income category reduced their credit card spending by 17% compared to pre-coronavirus while the lower income people reduced their spending 4%. This is the same reason that the Republican tax cuts don't work to boost the economy – they give the money to people who don't spend it, so it doesn't create economic growth, although it does create asset bubbles.

Reduced state and local tax revenues means the layoffs are already starting in the public sector. There are so many public sector layoff requirements that saving a dollar in salary is only saving $0.30 in the first year after laying off the employee. So the layoffs are likely to be deep. A cost effective approach is that state and local governments will simply not hire to fill positions of recent retirees because then they get 100% savings, so younger folks hoping for government work are going to be disappointed for at least a couple of years. State and local governments reduciton in spending was a significant damper on the fianncial crisis recovery and will be one here as well.

I think we are staring at 10% unemployment for at least 2 years. Real unemployment may be significantly higher as discouraged workers don't get counted. Also, with so many baby boomers entering Social Security eligibility, they may be forced to retire early and take reduced social security payments for the rest of their lives. That will be a drag on the economy for the next 30 years as social security benefits recirculate in the same month they get paid.

jerry , June 19, 2020 at 11:33 am

I don't think you are appreciating the magnitude of months on end of low wage workers salaries being doubled, combined with a huge drop in federal tax revenue. Also, congress is certainly not stupid enough to allow the additional unemployment benefits to expire going into an election (afterwards, certainly). Combined with a 3 trillion dollar spending bill, we have an unprecedented increase in aggregate demand from the average American. Now that the economy starts to open up a bit, there is actually something to spend the money on other than Amazon purchases.

Consumption is our economy, and if you don't think we are going to continue seeing huuuge retail sales numbers > earnings > GDP then you are way off base IMO. We are effectively already instituting a generous UBI. Yes, many small businesses have and will tragically fail and we are in a complete mess in many ways, but sectoral balance always wins out. The private sector hasn't had a surplus like this since I don't even know when? WWII maybe? This certainly blows away the response we had in 2008.

All this spells term #2 for the Donald in my outlook. The dems threw everything they possibly could at him and it failed miserably. And it serves them right, run a real candidate with real policy positions instead of incessantly whining about the guy who is in there now. Not sure how long it is going to take for the left to wake up

allan , June 18, 2020 at 9:17 am

9. Low income people, with the most propensity to spend, can't if they don't have income for a long time.

Here's a horrifying thread with video and pics of an 8 hour wait to apply for UI in Kentucky. And there are people who applied in March and April who still haven't been serviced.

As an extra bonus, (nonperformative) mask usage in the line looks like it's about 50%, so some of these poor souls will soon have other things to worry about.

Mitch's solution for his hard-pressed constituents: More judges.

polecat , June 18, 2020 at 2:38 pm

Well, it's a good thing then that mr. Stone above ain't living in the Ken tuck ee, home of the Big A$$ Smoke-ster, mohawk or no ..

Susan the other , June 18, 2020 at 9:29 am

One of the biggest ironies of all is that the health care industry is suffering because the expense of treating coronavirus is not offset by enough income but it is still crowding out other services. I doubt any big hospitals will go under, but the small rural ones have been dropping like flies for a few years now.

I had my yearly yesterday and my new doc is voicing her frustration with the way information is so mishandled, not to mention that the tests for antibodies are virtually useless, and she thinks it will take at least a year to get some kind of yearly shot for corona.

We might never see an actual vaccination. She mentioned that people are putting off going in for imaging procedures and lab work because they are afraid the clinics and hospital labs are dangerous places.

WhoaMolly , June 18, 2020 at 9:34 am

> What is forbearance? It is a lender's temporary willingness not to collect interest or principal payments on a loan.

My son's lender gave him 3 months "forbearance". At the end of the three months they billed him for a triple mortgage payment. Fortunately he was able to remain employed and had banked the 3 payments. I expect he is one of the only people to do so. Such "forbearance" sounds like a vicious scam.

Yves Smith Post author , June 18, 2020 at 9:42 am

It is not at all a well known concept. It just lets you pay late with no penalty. It does not relieve you of your obligation.

Having said that (and I need to turn in so I am not about to find the link) I am told a NY Post article said that tenants in NYC were pretty much paying as usual, so they seemed to appreciate that this forbearance business was not much of a break.

polecat , June 18, 2020 at 2:54 pm

Just wait till federal tax time become 'un'-deferred. How many, especially the precarious within the middleclasses, not be able to pay what's owed? .. or .. incensed at the transparently unfair government/fed reserve plays, just throw up their proverbial hands, and say 'Screw this!!! Wall Street made Bank thankyouverymuch! .. why am I not held to the Same standard??'

Tax headcounts may possibly roll . away!

Pelham , June 18, 2020 at 10:33 am

A minor point: I've read that if absolutely everyone wore a mask we could resume many of our activities. Maybe. But personally, I find them semi-suffocating, even the fairly loose-fitting cloth variety. I believe in their worth but the nauseating experience of light oxygen deprivation causes me to avoid most outings or activities that require them. I can't imagine how medical professionals wear these things so often. Maybe it takes some getting used to.

Is anyone else similarly annoyed? Again, I believe in the value of mask wearing; I just find it nearly unbearable.

XXYY , June 18, 2020 at 11:06 am

I find the most objectionable thing to be glasses fogging, with suffocation a close second. I imagine one can eventually get used to it, since, e.g., surgeons wear them for hours at a stretch every day of their working lives.

One of the difficult things about the current situation is the remarkable shortage of PPE and the difficulty the manufacturing sector seems to have both meeting the existing demand and coming up with improved products at scale. Since PPE is safety-critical (failures will cause injury or death), and since almost all manufacturing seems to have been outsourced to China where quality is suspect at best, it's hard to be optimistic about the situation improving. In fact, as new protocols evolve around the world in which PPE is the new normal, shortages and counterfeit products seem likely to get worse.

Obviously this is one area where a wartime level of federally driven domestic production efforts would make total sense, but this would require acknowledging that coronavirus is real, and with Donald "nothing to see here" Trump in the White House this seems unlikely to happen any time soon.

a different chris , June 18, 2020 at 11:22 am

I don't even notice mine, to the point where I sometimes try to spoon food thru it

I dunno, maybe it's because I used to have a beard? In combination with the fact that I was an avid bicyclist so just walking around, let alone sitting in front of a computer, just doesn't require much air?

Ian Ollmann , June 18, 2020 at 8:16 pm

I don't care for them, but since I am working at home and don't go anywhere -- my lovely and talented wife also does shopping -- I only needed a mask once for an unavoidable shopping trip. She had a birthday. We got a very nice pear torte from the local chocolaterie!

I do work, play games with the kids, and eat well. I putter about in the wood shop. (Hand tools are the secret for avoiding masks there.) I'm really quite a bit happier than before the outbreak. We seem to be able to hide out from the virus on our homestead in the Santa Cruz Mountains redwoods. With that, the clean air, decreased car noise and no commute, I'm wondering why we didn't do this before!

I'm sure it will all come crashing down when school starts again, but for the moment, life is grand.

Duke of Prunes , June 18, 2020 at 11:31 am

While I agree with this, I wonder if it's missing the other side. For example, when more people work from home, they still need to eat and don't necessarily have time to cook. Will suburban and neighborhood restaurants and delivery services see an uptick? Obviously, this doesn't help the city center businesses, but maybe it evens out a bit when spread across the entire economy. That is, a lot of current businesses are in a bad way, but maybe the economy will restructure around the "new normal".

Yves Smith Post author , June 18, 2020 at 4:01 pm

Takeout is way less profitable than sitdown. Restaurants here closed after briefly trying takeout because they could not make it work (three in a less than ten minute driving distance). The only ones I anticipate that will do OK are venues with tiny sit down spaces, where they were set up as mainly takeout.

Upstater , June 18, 2020 at 11:37 am

Sporting events (not that I follow any) have economic impact and there will not be any residual demand when they are permitted. And surely some people will be reluctant to enter arenas with thousands of screaming fans. Locally, Syracuse has SU football and basketball (drawing 20-40,000), a triple A baseball team and a minor league hockey team. I don't know how many game nights there are locally, but I'd guess 100+. There is a certain amount of out of town people attending same.

Same is true for live entertainment or the NY State Fair (close to 100,000 daily attendance for a 2 week run). All these things are cancelled and there won't be make up dates or residual demand.

The impact of non-events (like forgone haircuts or meals out) will take some time to work through the broader economy. Also, habits will change even if there is a vaccine or miracle cure.

Yves Smith Post author , June 18, 2020 at 4:02 pm

I failed to include live entertainment and sports. Thanks for the addition.

David , June 18, 2020 at 11:58 am

I suspect that the really interesting and alarming consequences are going to come from the interaction of a number of these factors, sometimes in unforeseeable ways. Consider, for example, what other industries or sectors are impacted by business travel: travel companies, foreign exchange companies, airport duty free shops, taxi companies, car hire companies, makers of business travel applications for smartphones, translators and interpreters, portable computers and electronics of all kinds, adapter plugs, expensive luggage of all kinds, upper-tier restaurants and hotels where foreign languages are spoken, sources of business entertainment, certain personal services, um, sometimes sought by travelling businessmen, security staff at hotels, insurance companies, risk-management consultancies, medical and vaccination services, dry-cleaning services, spas and beauty services, legal advisers on doing business, even the little shop in the lobby that sells business books, expensive souvenirs and overpriced essentials that you typically forget.

None of these industries will necessarily disappear, but all will lose the most lucrative part of their business.

In conjunction with fewer tourists though, (which must now be a given) some or all of them may go down, or at least be drastically reduced. And it's likely that there'll be a general retrenchment of staff deployed abroad and the presence of international organisations. So if you do eventually get that trip to exotic destination you have been promising yourself for some years, you may find that there are no decent hotels or restaurants and no proper taxi service to your run-down hotel where nobody speaks English.

The other thing is tertiary education, where the problems go well beyond a lack of Chinese students (who can still register to study remotely of course). A number of universities in Europe have simply cancelled all in-person classes next year, and there is a huge and rather ill-directed effort under way to establish complete online learning systems. Nobody has any idea what the long-term consequences of this will be, for jobs, research, careers and even the survival of many institutions, but they won't be pretty. A lot of degrees simply can't be done on line. And of course the economies of many towns and cities are partially dependent on students and staff spending money, and buying and renting houses.

So if you live in a small but pleasant university town with a flourishing tourist industry, a science park and an international conference centre, you own a restaurant and your brother owns a taxi company, it might be time to consider something else.

Adam1 , June 18, 2020 at 12:17 pm

While not directly connected to the pandemic, it is overlapping in timing of the economic damage. The collapse of oil prices has laid waste to the shale revolution. Prior to the oil price war oil production and the money being poured into it was actually a substantial portion of GDP growth. That isn't likely coming back soon if every.

templar555510 , June 18, 2020 at 3:39 pm

GDP growth . Forget it, it's over . De-growth is the new normal. This reality will become apparent as the parasites – hedge funds, private equity et al – begin to fall later this year.

Clive , June 18, 2020 at 12:21 pm

Anecdotals from my visit the past two days with my mother-in-law. A lot of pent-up cash from well-heel'ed pensioners who had booked expensive vacations but have now cancelled. Several are going to replace not old but not new either cars using the holiday fund. So some uptick will come from that.

As for retail, the garden centres were doing a good trade at the checkouts but the upscale cafes which are usually attached are still closed and this is what makes the difference in this sector of retail's business model here between break-even (at best) and good profits. But they'll survive.

However, for retirees (who are of course at higher risk of COVID-19 fatality spectrum) there is no -- absolutely zero -- desire to hit the malls and the large stores. Even if it wasn't for trying to maintain social distances, the prospect if you're in your seventies or eighties to queue (usually for a time in the open air) for an uncertain wait just to get in is a huge disincentive.

Add in the lack of catering and this is going to be hit very hard if my sampling is anything to go by.

The mid-level pub and restaurant trade will be decimated. There was over-supply before and this is now chronically exposed. All we passed were shuttered -- some offering take-out, which might be a life line but they are typically too far from the town centres to compete with the cheap kebab, chicken and Indian walk-ups. Plus, people won't pay a gourmet premium to spoon something out of a foil tray themselves. However, at the lower end of the market, those fast-food places with drive-thrus will be fine -- queues round the block at McDonalds, KFC and Starbucks.

Residential real estate is also mixed. Nice places in good lots in ready-to-move-into condition have sold -- retirees moving from London and the Home Counties have lots of equity and are buying for the long term (well, as long term as you get aged 65-75) so aren't interested in the losing sleep over the possibility of a 10 or 20% correction if one happens -- they want to move usually to be nearer family, to get out of over-developed London and the South East and to enjoy a retirement lifestyle.

However, properties which are not retiree-friendly (e.g. not bungalows or apartments in full-service blocks with lifts) are a serious drag on the market. This https://www.rightmove.co.uk/property-for-sale/property-70609848.html had hung around for ages for the vendor. I suspect it is an executor sale. Traditionally, disaster-areas like this property is would get bought by developers (usually builders) to flip after gutting and refurbing but of course, this business-model is utterly dependent on not overpaying in the first place in a falling market. Here, the owner is just calling it quits and auctioning it off (very unusual in the UK property market but probably the right thing to do as at least it'll be settled and they'll get their money without the hassle and stress of something that might sit there unsold incurring maintenance costs and property taxes for a year and even if it does sell, it'll be a low offer because of the condition it is in and would entail possibly a collapse-prone chain that could all fall through at any minute). So residential real estate here in the UK -- a crucial part of what props up the wider economy -- is showing early signs of stagnation and is very quality- and price-dependent.

Alex Cox , June 18, 2020 at 12:46 pm

Here in Oregon we have had a serious outbreak of Covid in a seafood packing plant in Newport. And we learn that the majority of the workforce come from Guatemala, Serbia, and Ukraine. How can this make economic sense?

Clearly the wages are too low for native Oregonians. But Newport Seafood must pay gangmasters whose fees include travel (bus from Guatemala, several planes from Serbia and Ukraine) plus accommodation for the crews.

The set-up seems both crazy and an excellent way to spread the virus. Added to which many of the Guatemaltecos speak a dialect called Mam which makes contract tracing more difficult. Surely paying decent wages, in Oregon, Guatemala, Serbia and Ukraine, would be a tidier solution for all of us.

upstater , June 18, 2020 at 1:28 pm

A large greenhouse (64 acres under glass) near here was the largest COVID cluster outside of NYC. Two hundred "guest" workers were housed 4 to a room, 2 in each bed at cheap motels. The Canadian owners pay local workers and "guests " $13/hour. But the labor contactor gets an amount on top, plus there is the housing, food and transportation for the "guests".

If one were cynical /s/ one might think the game is to have a reserve army of "guests", ready, willing and able to displace any uppity locals.

Maybe if the Canadian owners paid $25/hour for locals, no guests would be required. BTW, they pay no property tax on the $100M facility and get cut rate electricity.

lordkoos , June 18, 2020 at 4:53 pm

Here in our small town (pop. around 14,000) the local food processing plant which cans peas, corn, and other vegetables was the site of a 400% increase in CV cases. It is the biggest spike we have seen, going went from 18 cases to almost 90 in the space of a couple of weeks, although our county is still doing pretty well in general. The plant was shut down for a couple of week but now seems to be running again, I assume with greater safety measures now implemented. At one time it was mostly local white guys who worked in the plant but nowadays there is a much larger percentage of Hispanic workers.

Phemfrog , June 18, 2020 at 3:52 pm

Here in the suburbs of DFW houses are selling like hotcakes. Not exaggerating. Multiple offers and prices over list. Selling in days after listing. I can't fathom this in Covid times. The uncertainty alone makes that impossible to consider.

A family down the street just sold to move into a house a couple miles away that has a pool. Are they not noticing that the economy is in shambles? Does it not occur to them that the knock-on effects might eventually affect their household? Even if your job is safe now, it doesn't mean that it will be in the future! Maybe now is not the right time to make a major upgrade like that! I just can't

In the meantime my taxes and insurance are going up.

lordkoos , June 18, 2020 at 5:53 pm

Home sales here are really hot – a big exodus from Seattle is driving it.

Amfortas the hippie , June 18, 2020 at 6:45 pm

Exodus from San Antone and Austin (and everywhere else) is what worries me bunch of rich folks invading this place is the last thing i want.

Local PTB kept it in check for a long while yammering on about the radium in the water (you'd hafta keep a sink-full overnight, in a closed up house, for 75 years for it to have a measurable effect)

Most of this clandestine effort was to keep the big cities from taking our groundwater but it had the ancillary effect of limiting ingress to rich anti-science types(sigh).

The people who can afford to move right now I assume are not people i'd want as neighbors Todds and Karens, bringing Civilisation to us hill people.

Ian Ollmann , June 18, 2020 at 8:29 pm

If you have plenty of cash, a downturn is the time to buy, assuming prices are cheaper. I'm not sure they are, yet. Not enough forced sales yet, I'd imagine.

On the flip side, once you realize that your employer will probably let you telecommute from Vail, CO, the condo in the big city may seem inconvenient to the slopes. I imagine there is some demand in that dimension too. For the less adventurous, there are always the 'burbs.

polecat , June 18, 2020 at 3:19 pm

I live on the North Olympic Peninsula. 'Tourism' is probably gonna suck going forward, especially if lockdowns resume due to any future viral hotspot flareups. Our downtown has partially opened up, but for how long ??

We also have 2 large building projects going on downtown – construction having begun last summer, came to a standstill when the virus hit, then resumed. Both venues predicated to some extent on out of towners spending their $$$ here. I think the virus just put the kibosh on those rosy plans.

John Wright , June 18, 2020 at 4:29 pm

Re: "American household spending in the 1960s was powered by rising wages and growing home equity. But wages have been largely stagnant since at least 2000"

Starting the clock at 2000 glosses over the wage data from earlier years, which was none too good.

Per table 1 in https://fas.org/sgp/crs/misc/R45090.pdf , real wages for USA men at the 50% percentile level are down -5.1% over the 1979 to 2018 time frame.

When women's earnings are added in the real wages at the 50% percentile level have risen a total of 6.1% over the 40 year inclusive time frame.

Given that the USA has had infrastructure declining (lowering quality of life), housing, medical and educational costs rising in excess of inflation, USA wage earners were hurting, at the median level, well before Covid-19 and well before 2000.

One might argue that many wage earners have adjusted to this new normal BEFORE Covid-19 and this could steel them somewhat for Covid-19 effects.

kareninca , June 18, 2020 at 5:31 pm

Shops are already going under here in Silicon Valley. I've driven down Santa Cruz Ave. in Menlo Park a few times over the last week and there are a fair number of empty storefronts. It is the fancy shopping street in town. Since I don't actually shop there I couldn't tell what sorts of shops had closed.

This piece appeared on Zero Hedge today! ( https://www.zerohedge.com/economics/8-reasons-why-covid-19-damage-economy-will-be-deep-and-lasting )

Yves Smith Post author , June 19, 2020 at 12:25 am

Thanks for the kind words.

It is hardly the most important detail in the story, but I see 24 Hour Fitness is closing 100 locations. I would visit one when I was in Dallas. It was the best gym I've been to, lots of very well selected equipment, the only place I ever saw with 2.5 dumbbell increments up to 52.5 lbs, many trainer toys, pleasant space. This is a real shame, and I am sure other readers will see names of businesses they patronized and liked.

K teh , June 18, 2020 at 8:49 pm

It's going to be deep and lasting because it only increases the systemic problem of growing income inequality. There were viruses before and there will be more after. In this case, the response was to grow the ghetto, faster. Fintech has to go in for the kill shot here.

DC control technology can only increase income inequality so long as it is the primary recipient of MMT. It's one and zeroes, a completely arbitrary binary outcome.

K teh , June 18, 2020 at 9:43 pm

Q: when does 1 + 0 =0?

A: when the only difference is perception, electronic money.

Relative to the planet, let alone the universe, there is no such thing as an expert. Having tribes of experts competing to see who gets to play God on any particular day can only result in a completely artificial world.

It doesn't get better from a phantom abutment.

occasional anonymous , June 18, 2020 at 9:49 pm

The video game industry are making out like bandits, for now at least. Wonder how this will impact the coming console generation though. How many people will have four or five hundred spare smackers for a new system (or twice that for both new systems), plus new games at 60 bucks each?

And will the assembly lines in Taiwan and China even be running? Nintendo was expecting to have its production back up by this month, yet the Switch is still out of stock almost everywhere. And that's for an existing, well established production line.

[Dec 20, 2020] The US government has been financialized like the majority of the Fortune 500. Since the 1970's the trajectory in the US has been to reduce government spending on social safety net programs and privatize the Social Security Insurance program. While SSI was raped by Reagan/Greenspan/Congress and taken from the independence of actuaries and made a political budget football including false claims of being and "entitlement" program the safety net social programs fared worse

Dec 20, 2020 | www.moonofalabama.org

psychohistorian , Dec 19 2020 7:11 utc | 136

@ Grieved | Dec 19 2020 6:01 utc | 135 with the rant about the Dems and Medicare for All

The US government has been financialized like the majority of the Fortune 500. Since the 1970's the trajectory in the US has been to reduce government spending on social safety net programs and privatize the Social Security Insurance program. While SSI was raped by Reagan/Greenspan/Congress and taken from the independence of actuaries and made a political budget football including false claims of being and "entitlement" program the safety net social programs fared worse. In the early 1970's, when I was familiar with the planning for and provision of social services like for developmental disabilities, alcoholism, mental health, job search help, infancy care (WIC) and drug abuse, the concept of continuum of care helped the different agencies collaborate and really help folks. Then the Fed stared changing the rules of the way money was to be spent that developed columns of services that don't interact/coordinate with each other as well as reducing overall low income support.

I also want to add to what you wrote earlier that humanity use to make other than the throw-away-to-churn-the-money-mill products that were both designed and built better/to last. It fits with our throw away food system with all that packaging and none of it refillable, seemingly by design.....
....
....
because as I continue to write here, its all about the God of Mammon instead of the support of the masses social structure with the underpinning of the God of Mammon way of life is controlled by the global private financed owned elite and the support of the masses way of life is exampled biggly currently by China.

[Dec 20, 2020] Almost 8 million Americans have fallen into poverty since the start of the pandemic

Dec 20, 2020 | www.moonofalabama.org

vk , Dec 19 2020 13:51 utc | 147

Three tales about the USA:

Meanwhile, almost 8 million Americans have fallen into poverty since the start of the pandemic

The poverty myth that there is little or no poverty is all too common. In fact, the United States has one of the highest poverty rates in the developed world. One study ranked the United States 29 of 31 OECD countries in 2012. When it comes to child poverty, things are even worse. A UNICEF report found that the United States ranked 34 of 35 developed countries – only Romania had a higher child poverty rate.

Do you think a nation like this has the means to build Medicare for All? I don't think so.

Combined wealth of America's 651 billionaires has jumped by more than $1 trillion since pandemic started

This is what Marx called "centralization of capital".

Numbers don't lie:

"Trickle down" comprehensively refuted. It was "trickle up".

[Dec 12, 2020] On the Demise of Universities

Dec 12, 2020 | www.nakedcapitalism.com

Yves here. Friend of the site Erasmus e-mailed Lambert and me about his post on Covid accelerating the conversion of universities from institutions of learning to money generators. As you'll see, Erasmus has direct experience with some of the pathologies, which extend beyond colonization by MBAs.

By Erasmus, an academic in the humanities

Thank you for the Dec 7 post on the demise of universities . I know this terrain all too well.

Universities have become far more profit-oriented, and corrupted by administrative bloat and bullshit jobs (Graeber)/make-work (like "assessment" mandates), as well as by the customer service mentality of pleasing and placating students to the detriment of standards and solid education. There are plenty of books about various facets of academe, including satirical novels. The Chronicle of Higher Education and Inside Higher Ed are useful, but there are plenty of silly articles there too, often written by well-intentioned administrators or English faculty. Parkinson's Law and all his other insights should be rigorously imposed on the whole mess.

Standards have declined precipitously, which no one admits except curmudgeon tenured senior faculty. Grade inflation is a related problem. There is cheating and lack of study skills, lack of attention span, lack of discipline. A Harvard professor, Harvey Mansfield, has denounced grade inflation publicly, which is excellent, but most cannot do that. The high schools do not teach much, so students cannot handle college work, and there is a lot of partying and dysfunction and anxiety and superficial learning, often done in groups. The pseudoscientific obsession with metrics instead of the hard work of engagement and informed judgment means that student course evaluations (numbers) are important, and that corrupts the teacher-student relationship.

On tenure. Tenure can be legally revoked, but it is rare, and usually due to gross misconduct or something serious. Probably every college and university faculty handbook has a boilerplate section on emergency situations in which the administration can eliminate academic departments and lay off tenured faculty – this has happened. It has been rare up to now, but we will probably see more of it. The Medaille place mentioned in the post is a nothing school, but it is ominous.

Legally the university is a corporation, and you can usually find the faculty handbook on its website. Interesting reading. There are business/executive types on boards of trustees who don't understand and/or don't care about university customs and would love to eliminate all tenure. It is happening incrementally, with tenured faculty retirements being replaced with low-wage, contingent adjuncts, lecturers, "clinical" faculty, "assistant teaching professors", and the like. Gigs instead of stable positions with the traditional ranks: assistant, associate, and full professor. In the UK a lecturer is a higher status than in the US system. Germany and France and Italy have their own systems. Of course, as you would expect, the Italian system (today) is the nuttiest, and unfortunately there is a lot of nepotism there, to the detriment of serious research and teaching. Italy gave us Vico and Eco and others though, so there's that.

In my view, it is a massive, systemic fail of the faculty to not stand up to the bad decisions and greed of administrators and prevent a lot of this. Faculty governance is a pleasant myth, but faculty have lost a lot of ground over the decades. Some faculty are in denial and believe that what is customary will prevail. They do not understand the difference between custom and law. The faculty handbook is a ratified document, in force for making decisions.

Most faculty are cowards and careerists and sycophants who just want to be comfortable or gain status with peers, but this neglects the institution. They are politically inept, like the progressives (as Matt Stoller has observed). Most of them do not know how to get anything done. They do not understand power. It used to be that mediocre faculty tended to go into administration, but now there is an expanding administrative class that rules over the budget and faculty, and this is detrimental to the institution. Tenured faculty have not prevented the exponential growth in the use (exploitation) of adjuncts for undergraduate teaching. I say this as a person with a PhD from a public university that has had a unionized faculty for decades. It didn't make much difference. My institution was the only one in the US charging tuition to PhD students teaching on its undergrad campuses – taking back money paid for teaching in the system (extremely low-paid, of course). This is one reason why I will never donate.

Yep, academic freedom is being undermined. It's elusive if one can't pay the rent and is a gig laborer for an institution run like a brutal plantation.

Yep, teaching is not job training. George Carlin had a few words on this topic – obedient workers are the desired product of the school system. There are various brilliant scholars who wrote worthwhile books on teaching, usually forgotten.

One insidious practice I have seen is the notion of "collegiality" being a factor in tenure decisions. The traditional categories, usually weighted, are teaching, research, and service. People have been sabotaged and denied tenure due to collegiality issues, which can hide bullying and nasty dept politics or bigotry. There are legal cases about it. It is vague and subjective, and there is no way for it to be imposed fairly as a standard. The AAUP has position papers for various issues on its site, as does the MLA (Modern Language Assn).

Books: Higher Education?, The Last Professors, many others document what has been happening.

Jacques Barzun foresaw a lot of what is happening in his book The American University . He dissected the parasitical centers and institutes that infest campuses. He has a chapter in there on an essay by William James (if I recall) on the "PhD octopus" which exemplifies the expansion of credentials and degrees. Barzun's book Teacher in America is also excellent and worthwhile, in my opinion.

Camille Paglia (I know Yves views her work as uneven, but when Paglia talks about academia, she is perceptive) has written since the 1990s about the intellectual corruption in the humanities, and many other topics. In fairness, she has been teaching undergraduates for decades, and she was exiled from having a "normal" academic career because she was and is outspoken and direct. She is very serious about education and students. She was in the culture wars. She sees what is happening now.

There was a professor, Richard Mitchell, who wrote a delightful newsletter, The Underground Grammarian, later published as books . He also foresaw the coming idiocy. He denounced idiocy coming out of schools of education, and deconstructed the poor thought in their convoluted prose, which is similar to administrative prose. There are entire journals devoted to such bloviation.

The brutal economic conditions caused by the pandemic (well, due to lack of support from DC) are only accelerating processes that were already well underway for many years in US colleges and universities.

It is not enough to throw money at the problem – there needs to be substantial reform, and no upper administrator wants to cut off the branch s/he is sitting on. There was great expansion in the 1960s and 1970s, and some of those places might die out. Neoliberalism again.

When I look back at the wonderful teachers and professors I have known across multiple disciplines, and see the tremendous impoverishment of students today, it is heartbreaking.


LowellHighlander , December 11, 2020 at 6:10 am

When I was employed as an economist within the Bureau of Labor Statistics, I was required to interview authorities in certain occupations and industries for my work. For that reason, I interviewed people at professional engineering associations, and one or two of them confirmed for me that the land-grant system (and consequently the GI Bill arising out of WWII) had given the U.S. a major advantage over other countries. This was because many, many graduate programs in engineering had sprung up or expanded in the 1950s and 1960s, in large part because so many more students (than prior to WWII) were now able to attend university, and the U.S. as a consequence did indeed produce much more "human capital", particularly in science and engineering.

And, as an economist, I fully agree that the neo-liberal model is destroying all this in its corrupting the institutions of academia so that they become "profit centers". [Certainly, the ever-widening maldistribution of wealth and income, as seen in states' decisions to steadily decrease funding for their public universities, also contributed mightily to this trend.] But this is what happens in empires: institutions become so corrupted that they no longer function. The sooner we all realize that the U.S. has become such a polity, the sooner we might be able to reverse course [although, I admit, I am anything but sanguine].

John A , December 11, 2020 at 6:14 am

Not sure if the 1980s British play 'Educating Rita' ever made it across the Atlantic, though it was made into a film with Michael Caine, so maybe. Rita is a hairdresser wanting to better herself by attending Open University and has tutorials with a worldweary English lit lecturer, Frank. The pair gradually get to know each other. At one point, Rita asks Frank if he could ever be fired from his secure tenure. His response is that the only sackable offence would be 'buggering the bursar'.
How times change.

The Rev Kev , December 11, 2020 at 9:28 am

A great film that as well as a great book. I have some of the author's – Willy Russell – other works and when you read about his early life, you realize that Rita's story is really his own story in disguise. But that era of ordinary people achieving higher education may be gone now. Mark Blyth once remarked that if today's education system was around when he was young, that he would have ended up as just some yobbo hanging around the streets of Glasgow.

icancho , December 11, 2020 at 9:37 pm

Yes, indeed. There are (small) legions of us provincial, working class kids who lucked out by growing up in the UK in that magic quarter century or so (~'45–'75) when, if you did well enough in O- and A-levels to secure an offer of a place at uni, all expenses were paid direct, and you got a living allowance on top! (£375 p.a. -- sounds like a pittance, but, with care, and not too much beer, you could save on it).
I'm with Mark Blyth -- not in Glasgow -- but without that visionary national social policy, I'd have been in the same boat, in another northern town.

Patrice , December 11, 2020 at 10:02 am

"Educating Rita" with Michael Caine, is on YouTube, if interested.

savedbyirony , December 11, 2020 at 11:18 am

Great movie. MIchael Caine, Julie Walters, Michael Williams – what a wonderful cast. Saw it my junior year of HS and just loved it. Still a big fan of Dame Julie.

jackiebass , December 11, 2020 at 7:14 am

A big negative effect of this is the quality of research. At one time university research was trusted as valid. Now money has corrupted it to the point a lot of the research is questionable and not trust worthy.

KLG , December 11, 2020 at 8:02 am

True. Credit most of this to the Bayh-Dole Act of 1980, along with the substantial decrease, adjusted for inflation, in federal support (NSF, NIH) for essential, fundamental scientific research during the neoliberalization of all things. Gresham's Law in action, the bad money did drive out the good.

David , December 11, 2020 at 11:03 am

But even outside the big money areas, research has become a race to publish as much as you can, irrespective of quality, to get the right metrics for you and your institution. There are profit-making companies whose sole job is to act as F***b**ks for academics, signing them up and encouraging them to obsessively pore over how many people have read their work and how many, um, "likes" they have received.

Fox Blew , December 11, 2020 at 7:41 am

Thank you very much for this, Erasmus. Most especially citing Jacques Barzun. (Another darn book for me to read as Lambert would put it. Ha!) It all seems spot on to what I have personally witnessed in my little college town since the late 80's. I would like to add John Ralston Saul to the list of folks to read/listen/watch on this subject too.

Peconomist , December 11, 2020 at 9:03 am

One more author, the late Canadian writer Robertson Davies who has much to say about the decline of the University as a teaching/scholarly institution.

CanCyn , December 11, 2020 at 9:24 am

As someone who just retired from the community college system in Ontario, all of this rings true to me. Especially the cowardice of full-time faculty (it isn't called tenure in the college system in Ontario, but effectively that is what it is). Voting for pay increases contract after contract while the holes in the collective agreement just kept getting bigger and bigger year after year. Old timers protecting their bank accounts and youngsters living under the delusion that things would stay the same, not wanting to rock the boat.
And yes the bloat of administration. And the contracting of private sector consultants to do everything from re-decorate to write curriculum. Assessments done by outside firms so that the college didn't own the data and was therefore not subject to Freedom of Information requests. More and more administrators who know or care nothing for education. Bloated grades and high school graduates who arrive incapable of doing the work – and thus a whole new wing of non-academic support personnel created to help them succeed.
This post also brought to mind IM dr's comments of the other day the about the know-nothing, unmotivated residents he is encountering at his hospital. I came across many nursing students who needed remedial math and science help to get by in their college level courses. And watched this play out in real life – once when my father was in the hospital, I listened while two young nurses tried to figure out the drip rate for an IV for a new drug prescribed by the doctor. The IV bag was a different strength than what was prescribed so they needed to do some figuring. I had to intervene and have them call the doctor as they were clearly hopeless at the math required to determine the correct drip rate. So, indeed neoliberalization is not just hurting bank accounts, the crapification of our educational institutes is now having detrimental effects in many parts of our society. It is scary.

HeadInClouds , December 11, 2020 at 10:11 am

I'm currently working in the Ontario community college system (on contract) and see little hope of improvement. Full time faculty (i.e. tenured) have little incentive to rock the boat because they are comfortable and secure – this is in spite of the fact that many are left-leaning and consider themselves champions of social justice. Contract faculty (i.e. adjuncts) are too cowed to speak out because it could mean non-renewal of teaching contracts. Better to put your head down and hope you eventually win the full time lottery.

The strike three years ago ended up being the longest ever, and then went to arbitration that resulted in no improvement for contract faculty (aside from superficial gestures). Most full time faculty I spoke to were begrudging participants. Some complained about the five weeks of pay they gave up to be on strike. A couple examples: One guy was disappointed because he was expecting 2017 to be the first year he made six figures, until the strike. Another told me he had to delay a bathroom reno. Boohoo, I thought sarcastically, but I held my tongue because, you know, solidarity.

Meanwhile, things will only get worse. The pandemic is accelerating a shift to more online learning, and has given the colleges an excuse to freeze full time faculty hiring. Will be looking for a way out of the mess in 2021

CanCyn , December 11, 2020 at 1:43 pm

You're right about that last strike. It was long and, in the end, pointless. I was a faculty librarian for most of my career and decided to try my hand at admin before I retired and had just become a low level manager when that strike happened. Being on the admin side I was shocked by the disdain for faculty openly expressed by many administrators. Between that us vs. them status quo and the faculty unwilling to rock the boat, I don't see things changing for the better, ever. I had a 5 years-to-retirement plan when I got the management gig. I only lasted 3 years, just couldn't take the nonsense anymore. Lucky for me I could afford to go. Good luck to you!

Kouros , December 11, 2020 at 1:47 pm

I wanted to comment separately but the mentioning of the two nurses inability to calculate the drip rate is a combination of insufficient education as well as lack of training.

I see education as providing the knowledge as well as furthering the ability to understand the nature of things. Training would refer to the ability to better and more efficiently deploy this knowledge by strengthening the pathways (brain and flesh muscles) that enable the realization of any objective/task.

Somebody in the post that started this discussion also tried to emphasize the role of training and I totally agree that it is important. A deep level of professionalism does involve mastering of the knowledge and having the ability to skilfully deploy that knowledge.

An example at limit: Stephen Hawkins had the brains, but in the end, he did rely on some very smart, skilled young ones, that were able to carry on many of the calculations necessary for his theorizing. Oh, the graduate student, the other lab rat of the research environment.

CanCyn , December 11, 2020 at 4:13 pm

I agree that some on the job training is required but those nurses were on their own on the floor, they should have known how to calculate the drip rate. Nursing education is not pure theoretical learning, they get a lot of hands on 'training' along with their math, science and anatomy curriculum and should arrive on the job with those skills and abilities. That said, I agree that on the job training is an important aspect of work and one that we don't do anymore. Now it is 'orientation and 'on boarding' by HR, company propaganda for the most part. One of my early part time jobs was a cashier in a grocery store. We were toured through every isle, seeing what was where. We learned how to identify produce (there were no stickers on fruit in those days). We actually had to go through the produce dept before every shift to see what was on sale and what seasonal produce was available so we could identify it and ring it in properly. We were even taught the proper way to open a roll of coins! Unroll carefully, do not bang on side of coin drawer at risk of coins falling everywhere if you were wondering ;

G , December 11, 2020 at 2:20 pm

I know of a university student in a teacher's ed program who asked the professor for help on an upcoming test: "I don't understand this adding fractions thing." No trace of embarrassment. Nor was the professor fazed. This is normal. This potential future teacher cannot add 2/3 + 1/2.

Many faculty have problems with writing. I'm not talking English as second language (ESL) problems – those I can understand – I'm talking native speakers who don't know how to use a comma.

Grading student writing, I decided to ignore most grammar errors. On the one hand, many ESL students were flat-out incapable of assembling correct sentences. I didn't particularly blame them: but I couldn't let them off the hook while penalizing native speakers (assuming I could even determine who was who, probably a no-no). On the other hand, many native speakers were at least as bad. I basically had a choice: fail half of them on English or grade them on the course content. I graded them on the course content.

There's an attitude problem too. There are students employed to edit writing for publication. When their errors are caught and corrected, they rise up in rebellion. "That's how I like to do it." "You need to respect my positionality."

Dictionary.com: "Positionality is the social and political context that creates your identity in terms of race, class, gender, sexuality, and ability status." Like my child in public school, I suppose they are being taught novel pronouns, but not English grammar; how many genders there are, but not how to count them. The consensus on multiplication tables with other parents I've talked to: learn them on your own, or not at all. (What happens to the kids of the often working class parents who haven't the time, patience or ability to do that?)

Universities are changing mottoes and mission statements. It's no longer about finding truth. It's about changing the world. My fear is that they will succeed.

Lambert Strether , December 11, 2020 at 2:25 pm

> "You need to respect my positionality."

No. Really? Seems like that's the attitude at the New York Times, though

G , December 11, 2020 at 3:23 pm

This is the story I heard from someone not familiar with the term, who had no idea it was an idpol thing. The main thing though is the sensitivity: whether they try out some ridiculous claim like that, or just act huffy or hurt, the students feel it's not ok to be corrected.

The Rev Kev , December 11, 2020 at 11:56 pm

Maybe they were just channeling their inner Eric Cartman-

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

CanCyn , December 11, 2020 at 4:25 pm

Students' sensitivity to correction is at unbelievable heights. I once explained the difference between a tattletale and a whistleblower to a student who called himself the the latter, saying, "I ain't no whistleblower" when he clearly meant tattletale. I was smiling and clearly not giving him 'heck' but his angry reaction was as though I had just yelled and called him stupid. I was shocked. That was quite a few years ago, it has only gotten worse. I can't even remember how long ago I was told that teachers shouldn't correct work with a red pen because it is considered too harsh! I don't understand how things have changed so much and it is not as though kids are particularly happy at school. They're constantly talking about all the stress they're under. I say this as someone who understands that the world has changed and there's is much to be stressed about, but still, it is school for goodness sake. I had a math teacher in high school who used to throw chalk at us when we were wrong and I am pretty sure I had way more fun in school than kids today.

G , December 11, 2020 at 4:43 pm

Some of my favourite teachers were mean. One took positvie evil glee in calling on students for answers and humiliating them when they got them wrong. But he was equal opportunity: the better the student, the harder he tried, until he got what he wanted. When one survived the attack and got it right (which was probably most of the time), he played all disappointment. Every right answer came with a flash of pride.

The effect was to make us study hard and build camaradarie. He was a dedicated teacher who truly loved his students, and I think we loved him back.

In my experience, there are few things more discouraging than praise for mediocre work. The best teachers make you work for it: but when you suceed (if you're just not very talented, success can be something others might consider minor), you own it, and it's worth it.

Today, a teacher like would probably be called up on abuse or something. But I bet his students would stand by him.

G , December 11, 2020 at 5:15 pm

It occurs to me that this dynamic of humiliation, pride, failure, triumph and camaradarie are only possible in a physical classroom.

As an introvert who is happy to read a book, I have long wondered why we spend so much on classes. This social and emotional framework is the best example I can think of of something a book or a video (or a Zoom call) cannot replace.

Of course universities are trying hard to commodify instruction. They want a course to be a package they can own, deliver, and reuse, while charging an arm and a leg. So the trend of draining all potential unpleasantness from education (even if in the long run it results in more stress) indirectly works to their advantage, making it even less likely that they would reverse course.

fajensen , December 12, 2020 at 12:23 am

There is a bright side to this: In 30 years no weapons designs will be possible because nobody will be able to do the figuring and manual writing without getting into duelling over where the decimal goes and which symbols to use. :p.

430MLK , December 11, 2020 at 8:12 am

I think I posted Part 1 of this community college look at the state of higher ed in the comments to this week's earlier post about universities. Here's part two, which looks at some different marketing strategies and my college's choice of a "Buy 9, get the 10th free" model.

https://noclexington.com/free-coffee-and-customer-retention/

As a side note to the piece posted above–I wonder how much universities are even related to the ideas of learning and scholarship anymore. Where I live, the flagship for the state of Kentucky has a $2 billion+ budget that spans running healthcare/hospitals and Top 10 basketball programs to accumulating a surprisingly large cache of city and state real estate.

Scholarship (mostly by Ivy and Ivy-adjacent trained scholars who have zero intellectual or emotional understanding of their city and region) is just how they get the tax breaks.

KLG , December 11, 2020 at 1:50 pm

Nice to see that North of Center has returned. The first iteration was an excellent counter to the local cheerleading in Lexington. Regarding the University of Basketball, yes, it has a huge budgetary footprint. Twenty-plus years ago something called the Research Challenge Trust Fund (RCTF) was implemented as part of an initiative to make UK a Top-20 Public Research University by 2020. Fine. When it was pointed out that would require running three times faster than those ahead of UK who were not standing still (UCLA, Michigan, Berkeley, Wisconsin even Florida and Georgia), crickets. And after all that money was spent UK is still the University of Basketball. But even that seems to be in disarray. Just the other day the Wildcats were taken absolutely apart by Georgia Tech. Oops.

Long but a good look at the asininity of the University of Basketball's plans, from the first iteration of North of Center , is also a good summary of what neoliberalization of everything education has produced:
https://noclexington.com/wages-of-a-top-20-education-nougat-re-post/

seabos84 , December 11, 2020 at 8:37 am

Sadly for us lowly peeee-on$, for decades The Noble Liberal Cla$$ has exalted their Tomes of Truth! & had pretty much nothing but contempt for the hard work of actually making stuff work. They have done a stellar job of looking out for themselves.

"There was, thus, a turning point, which had not yet reached a clarity of options. No country moves forward more by ideas than America. And one of the problems of 1972 was that the idea system had become clogged by its own excessive outpourings. American intellectuals had written the Constitution, engineered turn-of-the-century reform, provided Franklin Roosevelt with his blueprints of reorganization, armed America with marvels of technology during th Second World War. They had been rewarded with a gush of approval, with an outpouring of funds, private and public, that had all but choked off fresh ideas – like a garden over-seeded and over-fertilized. The American idea system poured out paper after paper, study after study, learned investigation after learned investigation on the race problem, the urban problem, the environment problem, the television problem, the violence problem, the identity problem, until clear thinking was suffocated by the mattress of scholary investigation."

Prologue – The End Of The Postwar World, xxviii

The Making of The President 1972, Theodore H. White, published 1973.

[Background – White's first "Making of the President 1960" won him a Pulitzer Prize. He grew up on Boston, went to Boston Latin & then Harvard, and was in Nationalist China during WW2 working for Time or Life? magazine.]

jefemt , December 11, 2020 at 8:38 am

Irony or paradox: banner ads accompanying this article on viewers right on my computer feature an ad for the sole four year university in the great state of Wyoming UW. Go Cowboys!

NB Wyoming made a strategic decision scores of years ago to have a single University, to gather any of the scarce resources for higher ed into a single grantee/ beneficiary.

CH , December 11, 2020 at 8:57 am

So, let me get this straight. Navigation of this system is considered to be the "meritocracy" and those who manage to do it are deserving of their riches while the rest of us deserve our precarious and part-time gig work? Just checking.

anon y'mouse , December 11, 2020 at 11:33 am

considering the number of tertiary degree and higher holders who enjoy p/t work at the local starbucks, it ain't just you!

i knew a chem degree holding pizza delivery man for awhile. eventually he packed it in for the Electrician's union.

Arizona Slim , December 11, 2020 at 1:27 pm

Same thing happened to me back in the 1980s. I found that my university economics degree qualified me for such lofty positions as dishwasher, cashier, and shelf stocker.

Color me as someone who is VERY skeptical of higher education.

John Wright , December 11, 2020 at 2:40 pm

I remember the words of my late father, who graduated with a Notre Dame business degree in the 1930's.

He told of spending sleepless nights wondering what he would do.

Eventually he interviewed for a job as a butcher at Safeway.

He believed he got the job, over many other applicants, because of his experience at my grandparents' small family grocery store.

During the interview, he related that his experience "could help Safeway sell more meat" and told them how he would do this.

He remained skeptical of investing too much in higher education.

Hepativore , December 12, 2020 at 1:05 am

An unlucky histologist here. I enjoyed my degree program and wanted to go into pure biotechnology research. To my chagrin I found out that most of the much-vaunted STEM fields particularly the S and E portions of it were being destroyed in the private sector by a combination of gig work, offshoring and insourcing with cheap guestworkers from overseas. This was part of process that has been happening since the Regan era.

Now, I work in retail at a pet store with the only thing my degrees have gotten me is several thousand dollars in student loan debt which I am still paying off in my meager income. I honestly do not think that my job prospects are going to improve for the forseeable future. I am 36 and most R&D companies consider anybody older than their early-30's to be over-the-hill.

In all honesty, if I knew then what I know now after graduating from high school I would not have bothered with college. After all, few people work in their intended fields after obtaining their degrees and you will be shackled with student loan debt that you may never pay off. Many of my coworkers also have advanced degrees in various subjects but many of us have resigned ourselves to being retail wage slaves for the rest of our lives. Retirement is probably out of the question for many people younger than Gen-X.

Likewise, I watched as my father had his tenured position as a university professor at the University of River Falls in Wisconsin instantly snatched away retroactively by governor Scott Walker. My father had been tenured for ten years and after Walker got rid of tenure for all public university professors within the state, many universities in Wisconsin responded by firing all of their older full-time faculty and replacing them with adjunct staff.

My father was made an offer by the president of the university to be hired as an adjunct the following semester. It would have been a one-semester position for $12,000 and no benefits or promises of returning to the school next year. There was no way my parents could live off of that so they were forced to sell their house and move to Missouribecause of the low cost of living there. My father now works as a manager at an Ace Hardware store as that was the only job he could find at 65 and being at academia all of his career.

The Rev Kev , December 12, 2020 at 1:35 am

So sorry to hear what happened to you and your family. The word disgusted does not even begin to cover it. Not surprised that Scott Walker's name comes into the mix though. There is no thought here about building up capacity in countries like the US and making use of talent. The sheer amount of talent and abilities going to waste must be staggering. Must be because most managers do not think much past this financial quarter.

Robert Gray , December 12, 2020 at 10:25 am

' and [a] after Walker got rid of tenure for all public university professors within the state, [b] many universities in Wisconsin responded by firing all of their older full-time faculty and replacing them with adjunct staff.'

This is total fantasy. Scott Walker was a disaster but neither 'a' nor 'b' ever happened.

Moreover, there is no such place as 'the University of River Falls'. And, in the UW system, 'the president of the university' does not make contract offers to individual faculty or academic staff members at the constituent campuses.

Hepativore , December 12, 2020 at 11:39 am

Yes, UWRF does exist.

https://www.uwrf.edu/

Scott Walker did indeed get rid of tenure for public university professors within the state as part of a 2015 budget deal just like he got rid of the right of collective bargaining for public employees in 2011. During his terms, Walker tried to systemically destroy higher education and the careers of academic faculty while in office.

https://www.politico.com/story/2015/07/scott-walker-college-professor-tenure-120009

My father was not given a "formal" offer by the UWRF president, it was an email circulated to all of the liquidated professors that they would be given priority hiring for the adjunct positions that their jobs were being replaced with.

cocomaan , December 11, 2020 at 9:05 am

As someone with experience in higher ed, and a couple of humanities degrees, Camille Paglia's criticisms of the humanities cut so deep, so great to see her referenced here.

https://vimeo.com/247848325

This is a good example of her talking about teaching the humanities and what modern humanities have come to. I was blown away by this.

I do agree that Paglia can be uneven, but that's what the humanities is all about.

lyman alpha blob , December 11, 2020 at 10:40 am

Thanks for that – I always enjoy listening to Paglia. Her criticism of the postmodernists as 'word choppers' is spot on. I think that may be one of the worst results of neoliberalism – destroying the meanings of words to the point it becomes difficult to communicate at a societal level. And while the rest of us argue over what the meaning of 'is' is, the criminals in power are robbing us blind.

Neoliberalism has also done a number on numbers. The article notes the overliance on assessments, presumably 'data driven' ones. We have had two successive school superintendents in my area who have openly admitted that math is not their strong point and yet they rely heavily on data driven assessments and will produce metrics for everything. I don't believe they have a clue what they're looking at. Our current superintendent was publicly embarrassed a couple years ago when a parent who does understand math pointed out at a well attended school board meeting that the grading software he relied on was a complete joke in dramatic fashion. As an accountant, I'm well aware that numbers can be manipulated to make them seem like they mean pretty much whatever the manipulator wants them to mean. Silicon Valley has made billions preying on people who don't understand math to the point where we have unnecessary software for everything, tracking and monetizing every little action we make, and we are obviously at this point not the better for it.

cocomaan , December 11, 2020 at 1:53 pm

I absolutely identify with the lousy data nonsense.

In my work, I often had to work with the Institutional Effectiveness Office, which should be called the "Statistics Office".

I respect them and their knowledge, but often, these offices are tasked with producing data for whatever pet project is being promoted by administration at the time. That's why I saw tons of turnover happen in that area, plus constant stress and alcoholism in the director. Lots of race-based statistics making that had to represent that the institution was failing to be accommodating to students of color on one hand, but also succeeding in every metric on the other. No wonder the poor woman turned to drink. "Let's bake a cake using flour, but it has to be keto-friendly."

Alrus , December 11, 2020 at 11:15 am

It's unfortunate that this is hosted by Peterson. He starts the interview off by asking about "Neomarxism" which starts the whole thing off on the wrong foot. I don't expect I'm going to hear about the corrupting influence of Capitalism and money in universities.

cocomaan , December 11, 2020 at 1:49 pm

Yeah, you have to accept that he's there if you're not a Peterson fan (I like him but many don't), but the interview does come across as Peterson interviewing her, and trying to understand her ideas, rather than him overwhelming the conversation with his usual.

Kouros , December 11, 2020 at 1:55 pm

I some – not few – aspects, Peterson is a hack. And he'll embrace the paradigm of the overseers, as long as he will have the ability to monetize his continuous gospel.

lyman alpha blob , December 11, 2020 at 1:57 pm

I've never really listened to or read much by Peterson before but about halfway through the interview it started getting pretty clear why he is widely disliked.

Paglia is uneven – at one point she's arguing that historically men and women never shared labor duties and my grandmother who milked a few dozen cows by hand twice a day along with my grandfather, and then went in and did all the housework too would surely disagree – but she hits the nail on the head on a lot and plus is always a hoot.

Nivek , December 12, 2020 at 10:34 am

A very, very thorough assessment (reaming) of Peterson's oeuvre by Nathan J. Robinson: The Intellectual We Deserve.

John B , December 11, 2020 at 9:10 am

On top of all that, the raw material that universities must work with -- high school students -- is about to become much, much worse due to the coronavirus, at least in the US. They will have even fewer study skills, and much more mental illness. Those who can afford it may add another post-graduate year before college to compensate, but there are very few such programs; community colleges should start them.

cocomaan , December 11, 2020 at 9:15 am

Yikes, you're right, and that's depressing.

My cousin is an English teacher in a rural area, economically challenged. He was telling me that the kids are getting stupider by the day. He is watching the assignments handed in degrade in quality.

The older I get, the more I realize that learning is not about facts, but understanding how you yourself can learn new things. School is as much about the habit of learning as it is the content and we now have an entire cohort of kids whose habits have been undone.

JWP , December 11, 2020 at 2:33 pm

By design. grades, grades, grades. That's all there is. taking time to enjoy learning, something I have worked on, has led to lower grades because it requires time and going outside of the textbook and homework. Kids are able to enjoy what they learn if given the opportunity, yet from a young age it never presents itself. The advent of tech dominated lives and short attention spans makes it all worse too.

Kurtismayfield , December 11, 2020 at 11:41 am

The quality of work has dropped off a cliff. The kids are fried, and they do not think they will be/should be held responsible for their actions or work.

Administrations are just doing a collective CYA exercise, because the failure rates have tripled.

Parents don't know what to do. At this point probably the most productive thing a parent can do with a remote/hybrid learning student is watch them work. Just watch them. See what they are doing, and how many distractions they have in their lives. One of the advantages of grade school environments is that the distraction is removed (for the most part) during class time. Not anymore.

Eudora Welty , December 11, 2020 at 7:35 pm

This is slightly tangential, but I was 7/8 years old in 1967, and I remember noticing all the popular culture things I had to be current on (the Monkees, etc), and I specifically thought that the powers-that-be are making up all these things to pay attention to so that we aren't paying attention to the things that actually matter. I was OK when I was a little kid.

Lou Mannheim , December 11, 2020 at 9:26 am

I spent a year as a "Career Coach" at an absurdly priced East Coast university. My job was a mix of office hours, hosting events for students/alumni/hiring managers, and creating Excel and Bloomberg training classes (there weren't any).

It was fun for a bit, until I realized the students had no concept of how competitive finance is. Everybody that came to me had big plans for a career on Wall Street – that's nothing new. However, hardly any of them were going to get a look – their grades were middling, their communication skills needed work, and not nearly enough evidenced critical thinking skills (although on a conference call a hiring manager explicitly stated they're not looking for that. Sigh).

And then I made a presentation to the Alumni Committee, and that's when I realized how this school is run. It was littered with wealthy PE and sell-side people, and the mantra was they wanted more alumni in the business. Why? Ego. It doesn't matter that they're ready or qualified, just get'r done or I'll donate elsewhere.

My brother has a PhD in History and taught for several years. He had to leave because he couldn't support his family. He was also very discouraged by student apathy and all the administrative BS.

I think this excellent post is part and parcel with the Great Inflation of the past 40 years. All the provosts and new layers, new buildings, coordination with private business, grade inflation, sports entertainment and the big contracts, all the bells and whistles that are entirely unnecessary for LEARNING.

There is no solution.

Anonymous , December 11, 2020 at 9:42 am

Most faculty are cowards and careerists and sycophants who just want to be comfortable or gain status with peers, but this neglects the institution. They are politically inept, like the progressives (as Matt Stoller has observed). Most of them do not know how to get anything done. They do not understand power.

I know this is tangential to the thrust of the article but I wish the writer had given examples of the evaluation of progressives?

1. I wonder who the writer would define as progressives. For example Neera Tanden is billing herself as a progressive but that is to laugh.
2. Maybe someone at NC could explain?
Matt never responds to me on Twitter or I'd go ask him. In fact I did do that.

I think Bernie (who is a Progressive), did an excellent job of speaking truth to power as well as organizing a movement. The fact that the powers that be ganged up on him to stomp on the movement is the reality of entrenched power these days. That is why I'm advocating for the formation of a new national party. The historical analogy I'm using is the anti-slavery movement. I would ask that people find everything they can and study up on that segment of American history as to how to proceed against today's entrenched neo-liberals.

freebird , December 11, 2020 at 10:24 am

Bernie did a fantastic job right up til they ganged up on him right before Super Tuesday. From then until he conceded, had he been more politically 'ept', he would have used the power he had from the support of many millions of people to demand a concession or two before conceding. Such as Medicare for All, a 2d round of stimulus, police reform, or something. But he didn't, instead he conceded and then campaigned harder for Biden than Biden did for himself. Pretending that he would get his 'good friend Joe' to actually do something progressive if asked nicely.

I think this is what the author is getting at, the failure to play hardball LBJ style to get some compromise deals done whenever possible. And you don't have to look only at 'real' progressives. If you look at the faux progressives like Nancy Pelosi etc., they have for many years started at the middle and allowed conservatives to call the tune. This is deliberate on behalf of donors/bribers, but some pundits still think it's because of ineptness.

Anonymous , December 11, 2020 at 12:16 pm

Thanks for the bit of analysis. And too, I just had my second cup of tea so I'm more wide awake now.

You're 100% correct about Bernie-he's never been one to dig in when the opposition mounts a concerted attack. That really makes him much like the other members of the Democratic party who are more adept at slugging it out in intramural sporting events with other Dems than they are with taking on the true opponents in the GOP and big business. And in fact the blood thirsty cheerleaders who are on the outside of government (at least officially); those are who we should all be pushing on in a steady and consistent manner until we force them to yield.

You're right too about Bernie conceding to not make waves-he did that with Hillary. So he tries to avoid real confrontations when he needs to take a stand. Even when its not fun. So there's a time to fight and a time to join. Bernie's too easily swayed to be a joiner.

Someday another Bernie Sanders type will come along and do what he did not-run as an independent and shred the Democratic Party: even if it means losing a battle to the GOP in order to win the larger war. Again, looking back at the formation of the Republican Party-the leaders gave up on the Whigs and that party finally died off but the new party-headed by Lincoln, carried the torch.

Oh of another Abraham Lincoln.

albrt , December 11, 2020 at 11:49 pm

"Someday another Bernie Sanders type will come along and do what he did not-run as an independent and shred the Democratic Party"

How much time do you think humans have?

tegnost , December 11, 2020 at 10:45 am

when I see progressive I think left leaning centrist. Incrementalism is the tell

Kouros , December 11, 2020 at 2:05 pm

Good luck with getting a third party running in the US. Since it is the states legislation that operationalize elections, you will probably find out that a third party to be put on the ballot (not for president, but for representatives), in many a state would need more supporters and signatures than there are democrats and republicans combined. Mobilizing such numbers is a daunting task that would be possible only if more than 50% of the population were to be unemployed AND HUNGRY.

And if that were to happen, other legal technicalities would be brought up.

And then the NSA, FBI, State Police, and the local sheriff would also be brought in. A lot of male candidates would start o be accused of childhood pornography, etc., etc., etc

Carolinian , December 11, 2020 at 9:43 am

Perhaps it's not just universities. Cities now compete with each other on the quality of their school systems. In my town a functional but aging 1960 high school was just replaced with a billion dollar megaplex complete with stadium, basketball "arena," and fully equipped performing arts center. This spare no expense approach is apparently seen as necessary to compete with charter schools and private schools not to mention other towns.

Which is to say that the neoliberals have introduced competitive pressure into the government/nonprofit world while seeking to reduce or eliminate it in the business world. I have no idea whether this change in culture is turning out better students but it almost seems as though these institutions have taken on a life of their own with education somewhere down the list.

Lou Mannheim , December 11, 2020 at 10:23 am

The competition is everywhere, I think. Government jobs are tough to come by, in fact anything that offers benefits and a stable wage is tough to get, and this was before the pandemic hit. There are a lot of people with advanced degrees and not nearly enough jobs.

But at least the Nation got sports entertainment this year.

J7915 , December 11, 2020 at 12:19 pm

Few years ago had to go north of Manhattan, nyc over the East River to yonkers anyway beyong 208 st stop on the Ind. Anyway was chocked at the Columbia U stadium on the east river it would have severly embarassed the Union HS in Tulsa, Ok. And that stadium is being remodelled an embellished, with skyboxes no doubt. Have to drive by and see.

Rod , December 11, 2020 at 9:57 am

from CanCyn, as seen with my own two eyes:
And yes the bloat of administration. And the contracting of private sector consultants to do everything from re-decorate to write curriculum. Assessments done by outside firms so that the college didn't own the data and was therefore not subject to Freedom of Information requests. More and more administrators who know or care nothing for education. Bloated grades and high school graduates who arrive incapable of doing the work – and thus a whole new wing of non-academic support personnel created to help them succeed.
Like Lampreys.

and cocoman, seeing the other part, with my bold:

the more I realize that learning is not about facts, but understanding how you yourself can learn new things. School is as much about the habit of learning as it is the content and we now have an entire cohort of kids whose habits have been undone.

imo -- the desire to Learn and acquire Knowledge must be developed first–any benefit–tangible or intangible–emanates from that center. It is not Performative.

cocomaan , December 11, 2020 at 1:54 pm

Thanks Rod! Agree with you 100%

CanCyn , December 11, 2020 at 6:54 pm

Yeps and absolutely. Curiosity and interest in the world are driven out early. And you can't really learn without them. Give me the wonder of a wide eyed child over the apathy and need to conform of teens and young adults with their focus on their phones and social media any day.

fajensen , December 12, 2020 at 3:51 am

To be honest, there has always been a trend in American education towards teaching "Facts", and "Procedures" rather than teaching "free-form"reasoning. At least within Engineering.

The ideal seemed to be to have a few really bright experts like Feynman figure out optimal solutions, then "communicate" their Thinking and Reasoning into checklists, nomographs, tabulated values and flowcharts for the lesser talents to follow. I believe it was considered to be some kind of efficient allocation of talent, not that "one didn't want too much thinking around the place".

The Electrical Code in America is prescribing how to reach the design goals, the European one is the opposite, stating the goals, and not how to get there. Many, many discussions will flow from that in a multinational project!

With "digitalisation" of course anything that can be packetised as binary choices will be boosted enormously by being very easy to digitise and once digital, costs nothing to distribute. Driving a tsunami of "rote learning" and "rote thinking" within all academic fields, meeting "the requirements" is what moves one forward, not understanding.

Exemplified with essay grading "AI", where Just mashing keywords into the text is what triggers the "learning objective", which now is The Grade and not The Writing and Making a Coherent Argument.

IMO, this way of learning allows too many to succeed. People with "frontal-lobe issues", expressed by weak self regulation, lack of internal motivation and brains glitching out when corrected, instead of maturing and then making progress, we now have "Gamegate" minds showing up "early" at university level!

Then they can use their credentials to move on into positions where they have authority and a budget.

It will be one hell of a ride!

David , December 11, 2020 at 10:01 am

I've followed this at first hand in universities in several countries. It's heartbreaking.
At least it is for me, but apparently not for lots of others. Why?
It has to do, I think, with what you think a university (or any form of education) is actually for. In Britain, which I know best, education of any type has always been seen by the ruling class as a ticket to a better life, and a means of preserving their privileges, but never as an end in itself. They sent their children to "public" (ie private) schools less for the education than to make social contacts and acquire a cachet which would financially benefit them for the rest of their lives. It was thus an investment with a promised return. The more intelligent of the ruling class's children would go to Oxford or Cambridge, again less for the education than for the fact of having been there and getting to know people. They would then be best placed to get high-paying jobs in the City, or elsewhere in the Establishment, so that the ruling class could perpetuate itself.

For the rest of us, especially those who studied humanities rather than subjects like law and medicine, education was an end in itself, and a way to escape from our origins into a better world. Fifty years ago, my Head of Department welcomed new students by posing the hypothetical question, Why Study Literature, as opposed to say, Engineering? It was, he said, a self-justifying activity. Such statements were as common then as they are unthinkable now. And more widely, successive governments then believed that an educated population was better than an uneducated one. But those were the days when the newly-elected Labour Prime Minister was a grammar-school educated economist who believed in technology. Twenty-five years later, the newly elected Labour leader was a public-school educated lawyer who believed in God.

So what happened was that British elites, for whom education was first and last an individual financial investment, wrested back control of education from the more progressive forces of the postwar boom years. Above all, if individuals had to pay for their education, if failing their exams was a disaster, and if a degree was a minimum passport to anything like a decent life, elites could be assured of generations of servile, well-behaved students, unlike the bolshy lot that I was part of.

Finally, this wouldn't have been so bad if it hadn't been for parallel social trends after the 1960s. The mindless worship of the individual, the infantilisation of young people and the move from seeing higher education as a privilege that had to be earned to a commodity that could be bought, has combined with the mangerialisation of institutions to produce something like a perfect storm. In my experience, students are less mature, intellectually and personally, less well-educated, more demanding of support and comfort, more frightened of failing and generally less well suited to university education than even twenty years ago. And the sterile managerialism and the cancerous growth of "administration" has actually exacerbated the problem. In the circumstances it's surprising that things are not worse than they are.

Not every country has suffered to the same extent. France, with its effectively free education, and its tradition of Republican education as a liberating device, was better until recently. But even there the poison is seeping in, as anglo-saxon management and grievance politics have started to take over French universities. The reaction of French student unions to the virus has been to demand better treatment, less to learn, less to write, more free time, and of course lower requirements for "vulnerable and marginalised groups" etc. etc.

And the end of all of this? Societies where people have worthless degrees, where they can't actually do the jobs they've been recruited for, where the best teachers leave, where the quality of teaching declines (never mind research) and the spiral goes ever downwards. As I said, it's heartbreaking.

SoCal Rhino , December 11, 2020 at 10:11 am

In an engineering program decades ago, several of my professors openly expressed contempt at the lack of demands being placed on current students, with far too little time spent in classes and out of class work, and the ridiculous notion of grading on a curve,(Thinking a bit, these were all in the Physics department) at a time when incoming students were warned not to try to hold part time jobs and to expect to spend at least 40 hours per week on work outside of class. My student experience confirms that this trend started a long time ago.

Robert Gray , December 11, 2020 at 10:14 am

'Erasmus' mentions in passing the late (d. 2002) lamented Prof Richard Mitchell. I subscribed to The Underground Grammarian back in the day and I will always remember an observation from Ben Jonson that Mitchell quoted as a sort of epigram:

Neither can his mind be thought to be in tune, whose words do jarre;
nor his reason in frame, whose sentence is preposterous.

flora , December 11, 2020 at 11:13 am

Great post! Thank you.

In tandem, China rises on the world stage.

JustAnotherVolunteer , December 11, 2020 at 11:23 am

The University of Oregon is currently offering a buy out package to long serving faculty and officers of administration:

https://hr.uoregon.edu/benefits/retirement/2021-retirement-incentive

This pool includes both tenured faculty and career faculty and OAs who fall into the PERS tier1/tier2 buckets. Current new hires come in at tier 4 – a very different critter.

Those who remember the IBM "voluntary transition" buyouts of the 90s will recognize the strategy. This undercuts tenure, may reduce some departments in ways that are not recoverable, and reduces pension liability since the sweetener here is a one time payout for health insurance rather then PERS support.

The target pool are skeptical but the long term health of the UO is also dicey.

Rock and a hard place.

juno mas , December 11, 2020 at 12:39 pm

These "retirement" buy-outs are happening in the California community college system (~1 million students). They are offered to both administrators and tenured profs alike. Cutting costs is imperative when the incoming high school enrollment is down an average of 7-8%; AND International (Chinese) enrollment (high fee students) is more than 50% lower. My local community college has a $4M shortfall. (That's huge, actually.)

Faculty members have lobbied for tenured backfill of their lost positions. Only five positions have been approved; but not yet funded. The faculty is now predominately adjuncts (gig workers) at 70%. Yet people still strive for that Ph Ed. (which is shortened to PhD in their resume' and administrative title).

I expect the educational game will return to normal as the emergency vaccines prove effective over the Spring and Summer. My college is planning on in-person instruction Fall 2021.

Calypso Facto , December 11, 2020 at 12:11 pm

I'm more well-known around these parts for attempting to demystify Big Tech's functional machinations thanks to being a tech worker this past miserable decade, but I actually left the industry over the summer. In an attempt to switch careers I enrolled in a US undergrad state program that is well-regarded for remote learning and girded myself for jumping on the undergrad wagon in my upper 30s. I had gone to a non-university school in my 20s for something utterly unrelated to tech – fashion design – and had a tech support job through that round of school. When I left in 2011 it made more sense to stay in tech than make clothes. Earlier this year it seemed to make more sense to learn soil science or botany remotely while doing lesser-grade tech work remotely.

Unfortunately I barely lasted two weeks because the remote learning experience – my own several years of working remotely and 2020's exceptional pandemic/political fireworks aside – was so bad I was immediately infuriated at the cost and teaching style that I knew I would not be able to complete years of it, it would not train me for a job in any way, and I would be better served to get out ASAP and avoid the debt.

Years of tech work has acutely attuned me to recognizing the software fabric behind any technical implementation, and the schools that were all recognized as remote learning leaders prior to the pandemic are firmly built on big tech's toolset. I'm less bothered in this specific case by the security/data issues inherent there than the understanding of how colossally bloated and sh!tty the apps running the schools (Canvas in the front, Gainsight in the back for student admin, Google Apps for document, a patchwork for branded tech services for things like authentication, library services, collaboration) – because that means multiple layers of the school are dependent on the bloat inherent in those tech platforms that make their ecampus work. That means it will never get better, it will never get cheaper, and it will always get worse year over year as bigger teams have to be hired by school admin to keep up with the sales quotas issued by all those tech services they're using.

And then the classes themselves were in some cases links to Youtube videos of history documentaries made for tv, for discussion in the Canvas forum app. I thought I was going to faint from rage the first time I saw it and then I realized this is just how it is now. If my goal is to do more meaningful work with soil and plants I can get there by planting a garden and designing some open source hardware for monitoring in my spare time. I don't know how to really comment effectively on what universities used to be – I know before I went in I thought they were still more-or-less a place where you went to learn and contribute to the body of human knowledge – fashion school was set up like an oldschool dressmaker's academy, we cut patterns and sewed and were judged on the quality of our work rather than lecture. But what I experienced was not in any way job training or teaching how to learn or think critically. It was standard big tech marketing magic laid over a combo powerpoint and commenting module-making application, and i was expected to pay tens of thousands for the privilege. No.

Arizona Slim , December 11, 2020 at 1:56 pm

If you're in an area where there's Master Gardener certification, go for it. Although it's a location-specific curriculum, the training is excellent. Link:

https://ahsgardening.org/gardening-resources/master-gardeners/

And I'm VERY impressed with your fashion school training. Sounds like practical education within a worthwhile body of knowledge.

Calypso Facto , December 11, 2020 at 3:24 pm

Thanks Slim!!

Yeah the apprentice-style model is vastly superior to teaching any kind of trade or skilled handiwork. For something like plant science I expected a lot of organic chemistry transitioning into greenhouse labs (that I'd be able to do in person after the pandemic ended). Imagine my disappointment to find that most upper level botany and plant biologist 'jobs' available now are computational (genomics). Years of learning to code for Big Tech and saving to leave for the verdant groves of academe only to find out that even the plant sciences are being driven to the software mines.

edit to add: probably the most revolutionary act one can do now is refuse to learn to code and reject the entire premise for software eating the world

Dirk77 , December 11, 2020 at 11:14 pm

Yet, I have found working as a coder useful for the same reason you have: I easily recognize the [family blog] in using software where it isn't needed and is actually harmful.

Brian Westva , December 11, 2020 at 1:47 pm

I agree that higher education is failing. Sports, buildings, administrators, and social life is much more important than the over-priced "education" that students get. I teach forestry at a very small college in a rural state that has been struggling financially for years mostly due to poor management and a focus on athletics. The college has been saddled with a tremendous amount of debt to renovate buildings and build new buildings (for athletics) despite declining enrollment. It surprises me that the college was able to sell so many bonds. I surely wouldn't buy any.

I've been leery of the online classes and entire programs that are online. How can the majority of students learn online? I know most of my students don't like online because they don't learn as much. I think that online classes are mostly bull****. Sure they might work for some motivated learners but most college kids don't fit into that category. When the history of our time is written online classes will be amongst TV, air conditioning, video games, fast food, cars, and neoliberalism that led to our demise.

The thing that really gets me about higher education is all of the assessment and accreditation that can apparently be so easily gamed by the colleges. There is a large consulting industry to help colleges meet the criteria. The amount of critical thinking and review that goes into the accreditation process is minimal. It is more about creating a narrative that the college is meeting the criteria than actually self-reflecting on how do we improve.

I know that many college students aren't learning very much while they are at our school. Yet those students are eligible for sports and even get scholarships. All the while other students are paying full tuition and working hard to pass their classes.

In our program we try to hold the line. We have expectations for our students. We make students do homework, papers, lab reports, lab activities, readings, projects, etc. we make students go out in the field even when it is cold or rainy. I'm always amazed to hear from students that professor X just has 4 tests in his/her class. That is shameful. Students have to interact with faculty and have to engage with the material. They have to think about what they are learning. They have to practice what they are learning. They have to demonstrate what they have learned. Not just pick one out of four answers on a multiple choice test.

COVID should be a wake up call to higher education. Colleges need to cut out the BS ( admin, sports, etc) and focus on rigorously preparing the next generation. They will face challenges greater than any in the 20th century.

Arizona Slim , December 11, 2020 at 3:37 pm

The part about making students go out into the field even when it's cold and rainy brought a smile to my face. Because, no matter how bad the weather, the trees have to stay outside and cope with it.

Alexandra , December 11, 2020 at 2:26 pm

Just some further observations from someone who has been in the trenches and is still trench-adjacent (lots of family and friends who are/were teachers or academics)–with apologies for length:

I taught for 10-ish years as an adjunct at a couple of public universities in the Midwest (science and social sciences). Over that time I saw a precipitate decline in students' ability to reason, learn, and communicate verbally.

By the end, I found them incapable of basic "if then" logical inference and they had little understanding of analogy. If I taught them that A + B = C, then asked on a test C – B = ?, they were totally lost. Their only learning skill was (poor) memorization, and they appeared to experience not just frustration but almost an existential terror when encountering subjects that either had no single answer, or where they were asked to discover the answer.

My closest friend, one of the few who actually managed to secure a tenure-track position*, was recently telling me how she has to stay absolutely au courant with political correctness and rigorously self-police her own language because a single offended student could end her career. A slip up as slight as addressing a group as "you guys" is all it could take to tank her life's work.

*I don't know of a single one of my former colleagues who has secured a tenure-track job unless they were (1) engaged in quantitative, scientific research or (2) male. If you're female and in the humanities/social sciences, I guess you better learn to code.

She has commented many times that her students can be ruthlessly judgmental and their judgments do not take context into account. This is how they've been trained to be from early childhood: totally literal, nuance-free memorizers of "content" and generators of "metrics," trusting in any so-called authority figure to give them "the answers" (so long as that authority doesn't use forbidden words), willing and eager to prove their own worth by policing their fellows Perfect Orwellian employees and citizens.

Are the universities broken or are they working as intended? I actually hope it's the former.

flora , December 11, 2020 at 7:10 pm

Their only learning skill was (poor) memorization, and they appeared to experience not just frustration but almost an existential terror when encountering subjects that either had no single answer, or where they were asked to discover the answer.

Congress passed the No Child Left Behind Act in 2001. It was promoted as a way to improve struggling schools, but it was soon clear the real payload was cutting public school funding for schools whose students did poorly on tests. This quickly created a 'teach to the test' k-12 public school evironment. So 10 years ago, say, students entering college were products of at least 7 or eight years of high-stakes, k-12, teach to the test teaching and memorization demands. Teaching was in too many cases replaced with rote drill; a change made necessary for public schools not to be docked funding and for teachers to keep their jobs. Silicon Valley digital education companies made money, of course. I think this form of teaching has had a very negative effect on students and teachers. It seems like a way to destroy what's best in public k-12 education. (The rationales used to pass NCLB were based on questionable international testing metrics.) My 2 cents.

https://eric.ed.gov/?id=EJ1011096

Michael Fiorillo , December 11, 2020 at 10:20 pm

And the Common Core curriculum, largely funded by the Gates Foundation, explicitly rejected teaching context, instead focusing on sterile "close reading" of excerpts. Kids are barely reading short stories, let alone novels, in high school anymore. Increasingly, the kids don't have the attention span or cognitive stamina to do it.

Dirk77 , December 12, 2020 at 1:26 am

As a commenter stated in Lambert's column about academia last week: "You educate humans and train animals". Turning that around, if you train humans, but don't educate them, what you will get are animals.

JWP , December 11, 2020 at 2:29 pm

"The university is a corporation" can easily be turned into "the university is an extension of corporations" which is at the heart of why there's no learning. The courses, especially econ, business, and other FIRE precursor departments have their curriculum basically laid out by the largest local employers and wall street players. So now everyone is learning tailored curriculum that ignores fundamentals and denies criticism in favor of trends and profitable models. No one like to learn this, it is boring, time consuming, and inapplicable in daily life unless you are at work for one of these places. This leads the average student, who is made abundantly clear they need a 3.5 or above to land a job at one of those places (the only well playing jobs), to do anything possible to get the grade including cheating and streamlining studying to answer specific questions as opposed to understanding concepts. I myself have done this because the material is so boring and I merely want to get the grade and get out of the class.

Tack on the relentless pursuit of career centers, recruitment fairs, and emails with the subjects like "is your resume interview ready" every other day, it is an assembly line for turning students into corporate drones. Yet almost all students recognize it to some degree and either through economic, cultural, or familial pressures know its alm sot impossible to have a stable life without giving in, hence widespread depression and anxiety on campuses. I'd say upward of 80% of the student population has one of these at any given time.

Edward , December 11, 2020 at 3:03 pm

Higher education does have problems and it is not organized to tackle this situation. Everybody is absorbed with their own problems and responsibilities. It is easier just to contend with your immediate situation and put off the long-term and global problems. The government is in the best position to respond to this society-wide problem, but we haven't seen this kind of leadership in a long time. The demise of American education probably started under Reagan.

One factor in the financial problems of colleges might be the wars and the bailouts. Does giving vast sums of money to the banks and military make everyone else poorer? That is my suspicion.

An old carpenter , December 11, 2020 at 3:15 pm

This is an issue which has been discussed over a long time. One could start with Pitirim Sorokin's " Social and Cultural Mobility " (1959), followed by Neil Postman's " Technopoly: The Surrender of Culture to Technology " (1993) and " The End of Education: Redefining the Value of School " (1996) and, then, Christopher Lasch's " The Revolt of the Elites and the Betrayal of Democracy " (1996). The concepts in these books could then be combined with Clark Kerr's analysis in " The Uses of the University " (1963). IMO such an exercise would show why the present situation, explained in detail by Benjamin Ginsberg in " The Fall of the Faculty and the Rise of the All-Administrative University and Why It Matters " (2011) was inevitable. Further cogitation might also show the part non-deplorable elites played/play in this saga.

dmc , December 11, 2020 at 4:01 pm

Best post on higher ed I have read in recent memory, and I have read a lot of them.

IMHO, cultural and organizational problems like these (and to this list I'd add the growth in student debt) are frequently the result of economic mistakes (misallocation of resources, ridiculous subsidies, etc.) We might as well admit it: in this case, the mistake is that there are too damned many universities in the US.

So Erasmus can recommend "reform," and he or she is correct, but the only reform that would make a difference is one that changes the economics. My recommendation would be for the Feds to get out of the student loan businesses and require the universities to make and hold the loans themselves. (Maybe the feds could stay in the game with needs-tested grants, or a program to buy down the interest rates.)

Wah-la! Fewer universities. Fewer slacker students wasting their money and ours. Better focus among the schools and the students that remain. Lesser burden on the taxpayer.

Major pain for faculty, I know, but there is major pain now, especially among underemployed and indebted graduates. Adjustment always hurts.

Extra bonus: Nice real estate available to retirees.

PS My Dad, a career K-12 superintendent, said that there is no such thing as higher ed, it's just later ed.

TBellT , December 11, 2020 at 4:16 pm

So Erasmus can recommend "reform," and he or she is correct, but the only reform that would make a difference is one that changes the economics. My recommendation would be for the Feds to get out of the student loan businesses and require the universities to make and hold the loans themselves. (Maybe the feds could stay in the game with needs-tested grants, or a program to buy down the interest rates.)

Maybe but first you have to change the economics that life in America without a college degree for most is cruelty stacked upon misery. Pretty much every other developed country treats non-college grads better than we do.

dmc , December 11, 2020 at 5:18 pm

Agreed but part of the point is that American misery is gradually extending to more and more of us and a college "education" is no prophylactic. Given a choice between minimum-wage-slavery-or-unemployment without debt, and with, I'd take the former. Most people would; we can read Hobbes and Proust on our own. Fewer worthless degrees and less educational debt are a loss to no one except the higher ed institutions themselves. The revolution may or not arrive; but in the meantime perhaps we can get our universities to stop lying to us about what we'll get in exchange for our dollars and our years and our hopes. And we can save our subsidy dollars, if any are left, for real bargains or the truly needy.

Edward , December 11, 2020 at 5:19 pm

I wonder if paying students a salary could change some of the negative dynamics. Being a student is somewhat like working at a job, but without renumeration, at least in the immediate term. It would allow teachers to demand more from the students and probably reduce or eliminate grade inflation.

doily , December 11, 2020 at 4:46 pm

This is a painful subject for me and there is much that resonates in the post and in a number of the comments (the decline of secondary education, reducing universities to garbage-in-garbage-out; the insolubility of treating students as customers while employers who call the shots want them to be products; the political naivete and cowardice of faculty who have abdicated university governance) . I have lived through the "rock and a hard place" dilemma between sticking with an academic career or taking the package, as one's university, indeed one's entire national system of universities, is ground into the neoliberal dust (I chose the hard place and learned to code).

There were a few comments under Lambert's original post from University of Chicago alumni. I am one as well (BA Economics class of 1982). The College of the University of Chicago was an incredible place in the late 1970s. There were fewer undergraduates than law school or MBA students, fewer even than some large suburban high schools. In my final year I had classes with fewer than a dozen students. It cost my parents and I very little (with financial aid and low interest loans). I started off determined to get to law school or get an MBA, but I was a student willing to be malleable, to be formed and produced by teachers who believed that inquiry was self-justifying and who controlled a core curriculum that included Marx, Freud, Dostoevsky, Joyce, Marcuse I don't know what's on the core curriculum these days. I think they teach you how to code.

Perry Anderson has a long historical perspective on the UK going back to Atlee's Labour government in the 1940s in a recent New Left Review. In a section on the vicissitudes of the intelligentsia (if that's what it can even be called anymore after the Blair era), I was struck solidly in the chest by this summary. In Blair's early years, Anderson writes:

"[In the Academy], hopes that [New Labour policies] would repair the damage left by the Thatcher period were soon gone, as it became clear that, on the contrary, the new regime was going not only to accept, but extend it, with still more far-reaching measures of managerial control and marketization. By the end of the New Labour era, the universities had been battered thrice over. First, with deep spending cuts and subjection of scholarship to crudely quantified targeting of output under Thatcher; then by imposition of corporate management systems, inflating bureaucracy at the expense of teaching and research; then by the introduction of fees converting students into customers, and of public -- sc. market -- 'impact' as a criterion of promotion and funding. No other country in the advanced capitalist world saw a reduction of higher education to commercial logic so extreme. What was the reaction? Within the academy, a single scholar, Stephan Collini, published two books of eloquent protest, each well received; outside it, a single independent researcher, Andrew McGettigan, produced two books dismantling the economics of the changes, each well documented.* Neither to the smallest visible effect. The intelligentsia on the receiving end of two decades of brutal neo-liberal assault lifted scarcely a finger of collective resistance to it. Finally, after twenty-five years, when even its pensions were cut, token strikes (absences of a fortnight at a time), bungled by the union, ignored the majority of university teachers, and shutting down not a single campus, began in fits and starts in 2018, petering out fruitlessly in 2020 -- all belated, all confined to narrowly economic issues, none raising broader structural questions."

* Stafan Collini, What are Universities For? , London 2012, and Speaking of Universities , London 2017; Andrew McGettigan, False Accounting , London 2012, and The Great University Gamble , London 2013.

Why did I quit? It wasn't because of the transparent stupidity of inflating bureaucracy at the expense of teaching and research, the transparent stupidity of treating students as customers, the transparent stupidity of the 'employability' cross-curricular themes. And it was not about the sycophants, the cowards, the dysfunctional union, and the complete absence of organised pushback. The last straw was the 'impact' thing. I remember sitting in an "impact case study session" looking an ass dean across the table in the eye while we were literally being taught how to fudge and make shit up on our case studies, surrounded by young lecturers earnestly taking notes. It felt like a hopeless, intellectually bankrupt place to be.

We could start all over with mutual aid societies, as Lambert suggested, but we would need to take over the libraries and the labs first.

Dirk77 , December 12, 2020 at 2:36 am

Given how all the factories that weren't shipped to China were sold pennies on the dollar, I'm sure you could get the library and labs cheap, as long as someone's bonus was tied to it.

HotFlash , December 11, 2020 at 4:51 pm

I was going to set this as a reply to Alexandra , but then it seemed a good response to JWP just below, Edward, and more up top. So yes, Alexandra, the universities and other educational institutions are working as intended, at least since 1971. That was the year that Lewis Powell wrote this memorandum (text courtesy of his alma mater, Washington and Lee University) at the request of his friend Eugene B. Sydnor Jr., who was education director of the US Chamber of Commerce, the original Big Business lobby. The program was accepted and carried out, funded by old-money tycoons like Richard Mellon Scaife and the cough-drop Smiths, as well as those johnny-come-lately oligarchs, the Kochs. They founded and funded business-oriented think tanks, speakers bureaus (available to college campuses and the 'rubber-chicken' circuit of Rotary, Lions, and other small-town service clubs, or really. They starteded magazines and, eventually, ALEC -- yes, that ALEC .

You see, they took Joe Hill's advice , and we did not.

HotFlash , December 11, 2020 at 4:58 pm

I was going to set this as a reply to Alexandra , but then it seemed a good response to JWP just below, Edward, and more up top. So yes, Alexandra, the universities and other educational institutions are working as intended, at least since 1971. That was the year that Lewis Powell wrote this memorandum (text courtesy of his alma mater, Washington and Lee University) at the request of his friend Eugene B. Sydnor Jr., who was education director of the US Chamber of Commerce, the original Big Business lobby. The program was accepted and carried out, funded by old-money tycoons like Richard Mellon Scaife and the cough-drop Smiths, as well as those johnny-come-lately oligarchs, the Kochs. They founded and funded business-oriented think tanks, speakers bureaus (available to college campuses and the 'rubber-chicken' circuit of Rotary, Lions, and other small-town service clubs, or really any group. They started magazines and, eventually, ALEC -- yes, that ALEC .

You see, they took Joe Hill's advice , and we did not.

Ep3 , December 12, 2020 at 9:01 am

First i want to thank YVes for the ability for me to run my mouth freely about the following:

In my mid 20s i quit my full time job to go back to college and finish my accounting degree, as that was supposedly better than a factory job with retirement. I wasn't totally blinded by teenage optimism. This is a big ten school. The professors all went on and on about the starting pay, and not to be tempted by leaving a firm too soon chasing that even bigger money. They laughed it off like everyone had such opportunity. They brought in former students to talk about this. Then when it came to the material, professors constantly waved off further lecture and questions about several topics, stating "you will learn that once you get working in a firm". Then when testing time came, the tests were overly complex and detailed. Materials were reviewed beforehand. But testing, like the grading, is being based on a curve. So while i was getting Cs & Ds on tests, i would end the class with a 3.0-3.5 final grade. I feel they were whittling us out to get only the smartest (maybe not fastest, but quickest to adapt) students, while not really teaching everyone in the class. Heck it was really a ranking for their benefactors, the top 4 firms. (Funny story, Arthur Anderson's name was everywhere one year. Then the next year it disappeared). Most professors were former employees who still maintained their connections in the firm.
I went there to get a great education from a top business school. But my intentions were never to go work at the Top 4 and spend half my time living in one town, while traveling the country the rest of the time.
I can only imagine what it's like now. I was attending in 2003-2006. Half my accounting professors were former alumni that had been teaching there for decades. Then the other ones were younger persons who spent the majority of their time doing research.

juno mas , December 12, 2020 at 12:05 pm

Here"s a link to a LA Times article about the current condition of the largest on-site research University system in the world:

https://www.latimes.com/california/story/2020-12-12/uc-chancellors-tuition-increase

[Dec 10, 2020] The Transnational Financiers as aliens hell-bent of conquering the Earth population

Dec 10, 2020 | zerohedge.com

Dec 4, 2020 10:14 PM Reply to Le Chat Noir

The wonderful world you talk about was not experienced by the peoples of Guatemala, Iran, Chile, Honduras, Nicaragua, Mexico, Argentinia, Haiti, Vietnam, Laos, Cambodia, Iran, Iraq, Libya, Syria and many of the homeless and destitute in the US, UK, Japan etc. The wonderful world you describe is an illusion.

There is a line from the 1960s Science Fiction series called the Invaders from another galaxy who wish take over the world. At the beginning of each episode the narrator says " they wish to take over the world and make it their world".

The Transnational Financiers have been working towards that goal for centuries!!!!

[Nov 26, 2020] The Ruling Elite's War on Truth by Chris Hedges

Notable quotes:
"... Trump and Giuliani are vulgar and buffoonish, but they play the same slimy game as their Democratic opponents. The Republicans scapegoat the deep state, communists and now, bizarrely, Venezuela; the Democrats scapegoat Russia. The widening disconnect from reality by the ruling elite is intended to mask their complicity in the seizure of power by predatory global corporations and billionaires. ..."
"... Silicon Valley billionaires, including Facebook cofounder Dustin Moskovitz and ex-Google CEO Eric Schmidt, donated more than $100 million to a Democratic super PAC that created a torrent of anti-Trump TV ads in the final weeks of the campaign to elect Biden. The heavy infusion of corporate money to support Biden wasn't done to protect democracy. It was done because these corporations and billionaires know a Biden administration will serve their interests. ..."
"... Democratic Senator Chris Murphy told CNN during this campaign that Russian disinformation efforts are "more problematic" than in 2016. He warned that "this time around, the Russians have decided to cultivate U.S. citizens as assets. They are attempting to try to spread their propaganda in the mainstream media." ..."
"... This will be the official mantra of the Democratic Party, a vicious redbaiting campaign without actual reds, especially as the country spirals out of control. The reason I have a show on Russia-funded RT America ..."
"... Voice of America ..."
"... World Socialist Web Site, ..."
"... We let these companies get this monopolistic share of the distribution system. Now they're exercising that power. ..."
"... In the Soviet Union the truth was passed, often hand to hand, in underground samizdat documents, clandestine copies of news and literature banned by the state. The truth will endure. It will be heard by those who seek it out. It will expose the mendacity of the powerful, however hard it will be to obtain. Despotisms fear the truth. They know it is a mortal threat. If we remain determined to live in truth, no matter the cost, we have a chance. ..."
"... The New York Times, ..."
"... The Dallas Morning News ..."
"... The Christian Science Monitor ..."
Nov 23, 2020 | scheerpost.com
40 Comments on Chris Hedges: The Ruling Elite's War on Truth American political leaders display a widening disconnect from reality intended to mask their complicity in the seizure of power by global corporations and billionaires. By Chris Hedges / Original to ScheerPost

Joe Biden's victory instantly obliterated the Democratic Party's longstanding charge that Russia was hijacking and compromising US elections. The Biden victory, the Democratic Party leaders and their courtiers in the media now insist, is evidence that the democratic process is strong and untainted, that the system works. The elections ratified the will of the people.

But imagine if Donald Trump had been reelected. Would the Democrats and pundits at The New York Time s , CNN and MSNBC pay homage to a fair electoral process? Or, having spent four years trying to impugn the integrity of the 2016 presidential race, would they once again haul out the blunt instrument of Russian interference to paint Trump as Vladimir Putin's Manchurian candidate?

Trump and Giuliani are vulgar and buffoonish, but they play the same slimy game as their Democratic opponents. The Republicans scapegoat the deep state, communists and now, bizarrely, Venezuela; the Democrats scapegoat Russia. The widening disconnect from reality by the ruling elite is intended to mask their complicity in the seizure of power by predatory global corporations and billionaires.

... ... ...

The two warring factions within the ruling elite, which fight primarily over the spoils of power while abjectly serving corporate interests, peddle alternative realities. If the deep state and Venezuelan socialists or Russia intelligence operatives are pulling the strings no one in power is accountable for the rage and alienation caused by the social inequality, the unassailability of corporate power, the legalized bribery that defines our political process, the endless wars, austerity and de-industrialization. The social breakdown is, instead, the fault of shadowy phantom enemies manipulating groups such as Black Lives Matters or the Green Party.

"The people who run this country have run out of workable myths with which to distract the public, and in a moment of extreme crisis have chosen to stoke civil war and defame the rest of us – black and white – rather than admit to a generation of corruption, betrayal, and mismanagement," Matt Taibbi writes.

These fictional narratives are dangerous. They erode the credibility of democratic institutions and electoral politics. They posit that news and facts are no longer true or false. Information is accepted or discarded based on whether it hurts or promotes one faction over another. While outlets such as Fox News have always existed as an arm of the Republican Party, this partisanship has now infected nearly all news organizations, including publications such as The New York Times and The Washington Post , along with the major tech platforms that disseminate information and news. A fragmented public with no common narrative believes whatever it wants to believe.

... ... ...

The flagrant partisanship and discrediting of truth across the political spectrum are swiftly fueling the rise of an authoritarian state. The credibility of democratic institutions and electoral politics, already deeply corrupted by PACs, the electoral college, lobbyists, the disenfranchisement of third-party candidates, gerrymandering and voter suppression, is being eviscerated.

Silicon Valley billionaires, including Facebook cofounder Dustin Moskovitz and ex-Google CEO Eric Schmidt, donated more than $100 million to a Democratic super PAC that created a torrent of anti-Trump TV ads in the final weeks of the campaign to elect Biden. The heavy infusion of corporate money to support Biden wasn't done to protect democracy. It was done because these corporations and billionaires know a Biden administration will serve their interests.

The press, meanwhile, has largely given up on journalism. It has retreated into competing echo chambers that only speak to true believers. This catering exclusively to one demographic, which it sets against another demographic, is commercially profitable. But it also guarantees the balkanization of the United States and edges us closer and closer to fratricide.

When Trump leaves the White House millions of his enraged supports, hermetically sealed inside hyperventilating media platforms that feed back to them their rage and hate, will see the vote as fraudulent, the political system as rigged, and the establishment press as propaganda. They will target, I fear, through violence, the Democratic Party politicians, mainstream media outlets and those they demonize as conspiratorial members of the deep state, such as Dr. Anthony Fauci. The Democratic Party is as much to blame for this disintegration as Trump and the Republican Party.

The election of Biden is also very bad news for journalists such as Matt Taibbi, Glen Ford, Margaret Kimberley, Glenn Greenwald, Jeffrey St. Clair or Robert Scheer who refuse to be courtiers to the ruling elites. Journalists that do not spew the approved narrative of the right-wing, or, alternatively, the approved narrative of the Democratic Party, have a credibility the ruling elite fears.

The worse things get – and they will get worse as the pandemic leaves hundreds of thousands dead and thrusts millions of Americans into severe economic distress –the more those who seek to hold the ruling elites, and in particular the Democratic Party, accountable will be targeted and censored in ways familiar to WikiLeaks and Julian Assange, now in a London prison and facing possible extradition to the United States and life imprisonment.

Barack Obama's assault on civil liberties, which included the repeated misuse of the Espionage Act to prosecute whistleblowers, the passage of Section 1021 of the National Defense Authorization Act (NDAA) to permit the military to act as a domestic police force and the ordering of the assassination of U.S. citizens deemed to be terrorists in Yemen, was far worse than those of George W. Bush. Biden's assault on civil liberties, I suspect, will surpass those of the Obama administration.

The censorship was heavy handed during the campaign. Digital media platforms, including Google, Twitter, YouTube and Facebook, along with the establishment press worked shamelessly as propaganda arms for the Biden campaign. They were determined not to make the "mistake" they made in 2016 when they reported on the damaging emails, released by WikiLeaks, from Hillary Clinton's campaign chairman John Podesta. Although the emails were genuine, papers such as The New York Times routinely refer to the Podesta emails as "disinformation." This, no doubt, pleases its readership, 91 percent of whom identify as Democrats according to the Pew Research Center. But it is another example of journalistic malfeasance.

Following the election of Trump, the media outlets that cater to a Democratic Party readership made amends. The New York Times was one of the principal platforms that amplified Russiagate conspiracies, most of which turned out to be false. At the same time, the paper largely ignored the plight of the disposed working class that supported Trump. When the Russiagate story collapsed, the paper pivoted to focus on race, embodied in the 1619 Project. The root cause of social disintegration -- the neoliberal order, austerity and deindustrialization -- was ignored since naming it would alienate the paper's corporate advertisers and the elites on whom the paper depends for access.

Once the 2020 election started, The New York Times and other mainstream outlets censored and discredited information that could hurt Biden, including a tape of Joe Biden speaking with former Ukrainian President Petro Poroshenko, which appears to be authentic. They gave credibility to any rumor, however spurious, which was unfavorable to Trump. Twitter and Facebook blocked access to a New York Post story about the emails allegedly found on Hunter Biden's discarded laptop.

Twitter locked the New York Post out of its own account for over a week. Glenn Greenwald, whose article on Hunter Biden was censored by his editors at The Intercept, which he helped found, resigned. He released the email exchanges with his editors over his article. Ignoring the textual evidence of censorship, editors and writers at The Intercept engaged in a public campaign of character assassination against Greenwald. This sordid behavior by self-identified progressive journalists is a page out of the Trump playbook and a sad commentary on the collapse of journalistic integrity.

The censorship and manipulation of information was honed and perfected against WikiLeaks. When WikiLeaks tries to release information, it is hit with botnets or distributed denial of service attacks. Malware attacks WikiLeaks' domain and website. The WikiLeaks site is routinely shut down or unable to serve its content to its readers. Attempts by WikiLeaks to hold press conferences see the audio distorted and the visual images corrupted. Links to WikiLeaks events are delayed or cut. Algorithms block the dissemination of WikiLeaks content. Hosting services, including Amazon, removed WikiLeaks from its servers. Julian Assange, after releasing the Iraqi war logs, saw his bank accounts and credit cards frozen. WikiLeaks' PayPal accounts were disabled to cut off donations. The Freedom of the Press Foundation in December 2017 closed down the anonymous funding channel to WikiLeaks which was set up to protect the anonymity of donors. A well-orchestrated smear campaign against Assange was amplified and given credibility by the mass media and filmmakers such as Alex Gibney. Assange and WikiLeaks were first. We are next.

Democratic Senator Chris Murphy told CNN during this campaign that Russian disinformation efforts are "more problematic" than in 2016. He warned that "this time around, the Russians have decided to cultivate U.S. citizens as assets. They are attempting to try to spread their propaganda in the mainstream media."

This will be the official mantra of the Democratic Party, a vicious redbaiting campaign without actual reds, especially as the country spirals out of control. The reason I have a show on Russia-funded RT America is the same reason Vaclav Havel could only be heard on the US-funded Voice of America during the communist control of Czechoslovakia. I did not choose to leave the mainstream media. I was pushed out. And once anyone is pushed out, the ruling elite is relentless about discrediting the few platforms left willing to give them, and the issues they raise, a hearing.

"If the problem is 'American citizens' being cultivated as 'assets' trying to put 'interference' in the mainstream media, the logical next step is to start asking Internet platforms to shut down accounts belonging to any American journalist with the temerity to report material leaked by foreigners (the wrong foreigners, of course – it will continue to be okay to report things like the 'black ledger')," writes Taibbi , who has done some of the best reporting on the emerging censorship. "From Fox or the Daily Caller on the right , to left-leaning outlets like Consortium or the World Socialist Web Site, to writers like me even – we're all now clearly in range of new speech restrictions, even if we stick to long-ago-established factual standards."

Taibbi argues that the precedent for overt censorship took place when the major digital platforms – Facebook, Twitter, Google, Spotify, YouTube – in a coordinated move blacklisted the right-wing talk show host Alex Jones.

"Liberal America cheered," Taibbi told me when I interviewed him for my show, " On Contact ":

They said 'Well this is a noxious figure. This is a great thing. Finally, someone's taking action.' What they didn't realize is that we were trading an old system of speech regulation for a new one without any public discussion. You and I were raised in a system where you got punished for speech if you committed libel or slander or if there was imminent incitement to lawless action, right? That was the standard that the Supreme Court set, but that was done through litigation. There was an open process where you had a chance to rebut charges. That is all gone now.

Now, basically there's a handful of these tech distribution platforms that control how people get their media.

They've been pressured by the Senate, which has called all of their CEOs in, and basically ordered them, 'We need you to come up with a plan to prevent the sowing of discord and spreading of misinformation.' This has finally come into fruition. You see a major reputable news organization like the New York Post -- with a 200-year history -- locked out of its own Twitter account.

The story [Hunter Biden's emails] has not been disproven. It's not disinformation or misinformation. It's been suppressed as it would be suppressed in a Third World country. It's a remarkable historic moment. The danger is that we end up with a one-party informational system. There's going to be approved dialogue and unapproved dialogue that you can only get through certain fringe avenues. That's the problem. We let these companies get this monopolistic share of the distribution system. Now they're exercising that power.

In the Soviet Union the truth was passed, often hand to hand, in underground samizdat documents, clandestine copies of news and literature banned by the state. The truth will endure. It will be heard by those who seek it out. It will expose the mendacity of the powerful, however hard it will be to obtain. Despotisms fear the truth. They know it is a mortal threat. If we remain determined to live in truth, no matter the cost, we have a chance.


[Chris Hedges writes a regular original column for ScheerPost every two weeks. Click here to sign up for email alerts.]

Chris Hedges Chris Hedges is a Pulitzer Prize–winning journalist who was a foreign correspondent for fifteen years for The New York Times, where he served as the Middle East Bureau Chief and Balkan Bureau Chief for the paper. He previously worked overseas for The Dallas Morning News , The Christian Science Monitor , and NPR. He is the host of the Emmy Award-nominated RT America show On Contact. paul easton NOVEMBER 23, 2020 AT 10:28 AM

It seems like the masters are just as deluded as the slaves. But the situation is unsustainable. When many millions of slaves become homeless and hungry that reality will become unavoidable. Who will they blame? Will they attack one another or will they revolt against the system? Soon we will see. Carolyn L Zaremba NOVEMBER 24, 2020 AT 10:30 AM

I share only alternative media since I don't trust "mainstream" media one iota. I post articles from the World Socialist Web Site, Consortium News, the Grayzone, Caitlin Johnstone and others all the time. I am a socialist. I was only banned from posting on FB once, for criticizing Israel. No surprise there. But I suspect FB of shadow banning, i.e., making it look like you've posted an article but making it invisible to others in their news feeds. I first learned of this practice from Craig Murray, another whose articles I post regularly. paul easton NOVEMBER 25, 2020 AT 1:35 AM

That is a chilling thought. I was shadow banned by medium.com a few years ago. It appeared to me that my posts and comments went in, but no one else could see them. At least with them I could tell something was wrong because I had regular conversations with some people. With FB I don't know if you could ever be sure. R Zwarich NOVEMBER 25, 2020 AT 5:37 AM

Mr. Easton is indeed correct. It is VERY chilling, especially if people would imagine what THEY would do, if they had our Enemy's morally depraved motivations, and if they had the control our Enemy has over ALL our communications switches.

There are three basic types of mass communications. One to many. Many to one. And many to many.

The Enemy has complete access to 'one to many' communications, and complete control over anyone's else's access to same. Many to one communications are ineffective for intrinsic reasons. Many to many communications offer myriad methods of cunningly creative control.

If we send out group emails, for example, in simple old-fashioned list-serves, they who control the switches could easily 'filter', to determine who among addressees gets any message, and who doesn't.

I used to write comments in the Boston Globe, the wholly owned plaything of a VERY weird old Billionaire and his proud and beautiful young trophy wife. (Less than half his age, of course). At first I thought the Globe NEVER censored. I could write anything, and it would post. Ahh but then I learned that the Globe is a HEAVY handed censor, but was clever enough to put a 'cookie' in your browser folder to tell their server to let you see your own comments, so you would not even know that no one else could see them. It was 'stealth censorship'.

We should try to remember that these people are morally depraved, in their constant paroxysms of raw Greed and raw Lust. No force exists any longer in our nation to restrain them. Anything we can 'see' that they CAN do, we can pretty much figure they already DO do, or else sooner or later will. Carol Shapiro NOVEMBER 23, 2020 AT 1:44 PM

While I don't agree with you, Chris Hedges, all the time, I believe you are our one. true. journalist. Thankful for your honesty. Insight. Huge intellect. Global experience. I am an "unenrolled" voter -- an extremely disillusioned former Bernie Sanders supporter. Truly, I feel like he would have been our closest attempt to achieving a real "citizen government". What a laughable term that is these days. Bernie never would have had a chance running as a Democrat – absurd. He should have walked out of that convention four years ago and taken his supporters with him. Oh wait- you said that. Never NOVEMBER 23, 2020 AT 2:59 PM

Don't forget that the selective coverage by the NY Times in this campaign didn't start when Biden became the nominee. Up to that time, the Times ran one or two articles on Sanders it seems. Whatever the number, it was miniscule. They almost completely ignored one of the most significant campaigns in modern history, thus helping to ensure it died on the vine. And when they did cover it one or two times, it was always negative.

Thank you, Chris, for your tireless work in defense of our stolen democracy. yuri NOVEMBER 23, 2020 AT 4:37 PM

US liberals more fascist than conservatives–long observed by historians/social philosophers
"amerikans do not converse as Tocqueville wrote, amerikans entertain each other. amerikans do not exchange ideas, they exchange images. the problem w amerikans is not Orwellian–it is huxleyan: amerikans love their oppression: Neil Postman Stephen Morrell NOVEMBER 24, 2020 AT 1:18 AM

Glenn Greenwald's points need stressing: (i) some of the most vociferous proponents of online censorship are mainstream and 'alternative' 'journalists' who on repeated occasions have egged on the carriers to shut sites, pages, accounts or postings; (ii) these 'journalists' aren't just serving the narrowest band of oligarchic media empires in history, but also are ivy-league bourgeois brats with no interest at all in exposing the injustices or malfeasance of bourgeois society, unlike many journalists of the past; and (iii) that it's not in the immediate material interests of the carriers to conduct the censorship, especially in the longterm, since it consumes resources and lowers traffic and profits. They'd much rather the government do it and for them to be compensated at taxpayer expense.

To avoid future potential government antitrust measures or nationalisation (heaven forbid!), Zuckerberg and his ilk have been censoring in heavyhanded and hamfisted ways that aren't so 'autonomous' but for the moment at least can be traced along the usual Democrat-controlled thinktank and CIA/FBI lines, which of course also are beyond public scrutiny. Despite the prospects for freedom of reach (and reach is what it's really about) apparently growing dimmer with each senate committee appearance by the carrier oligarchs, ways and means will be found to circumvent their draconian measures. While alternative non-censoring platforms have yet to gain significant traction, it likely won't take much for one to catch on, perhaps sparked by an outrageous event of suppression, that turns Facebook, Twitter, etc, into museum pieces. One might imagine, for instance, Wikileaks-style YouTube, Facebook, Twitter equivalents that act as true carriers, purely machine-based and devoid of human interference, that precludes them becoming the 'moral guardians' that Twitter, Facebook etc, are quickly metamorphising into.

As increasing swathes of the population appear not to be aligning within the bourgeoisie's preset ideological 'tribal' boundaries, there's a certain schadenfreude in seeing the rulers in dread of the truth getting out and spreading uncontrollably. Their tailored counter-narratives simply are too enfeebled and slight to square with the hard reality that's hitting everyone, from the most educated and brainwashed to the least. That ivy-league stenographers are being pressed into the service of censorship gives some indication of the desperation of the rulers. We all know, as do they but can never admit it publicly, that censorship and repression are frank admissions that they've lost all 'arguments' for their very existence.

To an extent, Trump has been responsible for letting the genie out of the bottle, as the first president probably since before Andrew Jackson to have failed, repeatedly, to put lipstick on the racist, capitalist imperial pig. The efforts by the ruling class at censorship and naked suppression of freedom of reach and of access to sources of truthful information will only increase in desperation as their myth-making narratives become ever more unable to rationalise a crisis that's they're beginning to see as intractable and endangering their rule.

[Nov 22, 2020] Covid-19 pandemic could bring economic crisis on scale of 'Great Depression,' Putin tells G20 warns of poverty social dis

Nov 22, 2020 | www.rt.com

Russian President Vladimir Putin has warned that the coronavirus pandemic could lead to a global economic collapse that would have a significant impact on the lives of millions of people across the world.

Speaking at the virtual G20 summit of international leaders on Saturday, Putin warned that, "despite some positive signals, the main risk is still the so-called stagnant mass unemployment with a subsequent increase in poverty and social disorder."

"The coronavirus epidemic, the global lockdown and the freezing of economic activity launched a systemic economic crisis, which the modern world has not known since the Great Depression," he added.

Putin also lavished praise on the "massive contribution" of the US, which, along with other countries, has joined together to "create a stimulus package for the world economy to the tune of $12 trillion." Mainly put forward by large economies, including Russia's, the stimulus is thought to have played a role in buoying fragile world markets.

[Nov 16, 2020] COVID-19 -Restriction-- U.S. Set to Lose 9.2 Million Jobs in Tourism and Travel Sector - Global ResearchGlobal Research - Centre for Research on Globalization

Notable quotes:
"... A staggering 9.2 million jobs could be lost in the U.S. Travel & Tourism sector in 2020 if barriers to global travel remain in place, the World Travel & Tourism Council (WTTC) revealed. ..."
Nov 16, 2020 | www.globalresearch.ca

By World Travel & Tourism Council Global Research, November 13, 2020 World Travel & Tourism Council 11 November 2020 Region: USA

8

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A staggering 9.2 million jobs could be lost in the U.S. Travel & Tourism sector in 2020 if barriers to global travel remain in place, the World Travel & Tourism Council (WTTC) revealed.

The new figure comes from WTTC's latest economic modelling, which looks at the punishing impact of COVID-19 and travel restrictions on the Travel & Tourism sector.

According to the latest data, 7.2 million jobs in the U.S. have been impacted. If there is no immediate alleviation of restrictions on international travel, as many as 9.2 million jobs – more than half of all jobs supported by the sector in the U.S. in 2019 – would be lost.

WTTC has identified the four top priorities which should be addressed, including the adoption of a comprehensive and cost-effective testing regime at departure to avoid transmission, the re-opening of key 'air corridors' such as between New York and London, and international coordination.

The challenge of restoring safe travels in the new normal is one of the biggest issues facing the U.S. as it grapples with a depressed economy devastated by the COVID-19 pandemic, which has hit the Travel & Tourism sector particularly hard.

The WTTC Economic Impact Report for 2019 revealed that Travel & Tourism contributed $1.84 trillion to the U.S. economy and was responsible for more than one in 10 (10.7%) American jobs.

[Nov 12, 2020] Which groups of the USA elite played major role in 2020 elections

Notable quotes:
"... The grouping is thus; 1) Coastal Elites/Wall Street/City of London/Private Banking/Atlantacism/Libertarian Free Market Economics aka finance capitalism ..."
"... The middle of America is land power, and is opposed to Atlantacism, rim theory, blue water navy power projection, importation of third world people, and export of jobs and factories. ..."
Nov 12, 2020 | www.unz.com

Mefobills says: November 11, 2020 at 4:30 pm GMT • 7.2 hours ago 300 Words

Indeed, one can't help but wonder whether the historic American nation would fare better under outright foreign occupation than a hostile elite which considers itself our rulers and treats us with open contempt, if not hatred.

Russia or China would not flood the historic American nation with "third world people" in order to chase after a dollar. A good argument could be made that China or Russia would be a better government for Heartland America than the "international" coastal elites.

The coastal elites are wedded to finance capitalism. This group of people want a thin veneer of Oligarchs (themselves) controlling a mixed race, or brown population in their factories. Finance Capital wants to make illicit gains. Finance capital could care less about improving labor ability of the native population.

The grouping is thus; 1) Coastal Elites/Wall Street/City of London/Private Banking/Atlantacism/Libertarian Free Market Economics aka finance capitalism . (In short, the coastal elites are for an "international world order" with them in charge, with them making their finance nut with usury, rents, and unearned income. Lying and cheating is ok, because only money matters. Their capital is fungible, meaning it can fly anywhere in the world to make gains, and to them labor has legs and is also fungible, to then lower prices – to make gains.)

Land Powers, such as China and Russia are not "international" in their thinking. Although they do some power projection into blue water as a form of defense. They are interested in improving their sovereign population.

The middle of America is land power, and is opposed to Atlantacism, rim theory, blue water navy power projection, importation of third world people, and export of jobs and factories.

The American system of economy of the founders was the first industrial capitalism, and the "credit of the nation" went toward infrastructure, public health, and improving the commons.

The Jew and English finance capitalism method, first combined together in 1694, and has always been at war with heartland America. The parasite is dug in deep.

[Nov 09, 2020] Biden victory in some ways looks like Catch 22 for neoliberal Dems

Highly recommended!
Notable quotes:
"... But while they now have the power, globalists do not have solutions to the country problems, and the crisis of neoliberalism (which started in 2008) will continue, the far-right nationalism will stay and may even gain strength. This suggests that in 2024 is somebody like Tucker Carlson will lead the ticket. And Tucker is a more dangerous opponent to neoliberal Dems than Trump ever been. "Trumpism without Trump" will live, so to speak. ..."
Nov 09, 2020 | crookedtimber.org

Hidari 11.08.20 at 8:20 pm

Interesting piece by Beinart about the obvious question that isn't being asked: Why did Trump lose? After all he had the advantages of incumbency, until February the stock market was booming, wages were rising, things were going great.

Answer: because he was not nearly radical enough. Because he was a weak leader who was captured by the Republican elite (not the other way round). Also (rather ironic this) because he was and is a terrible negotiater. He continually caved into the likes of Mitch McConnell, and, well the rest is history.

Question: will 'super Trump' in 4 or 8 years time manage to follow the Eastern European template and create a genuine populist party? (economically social democratic, particularly concentrating on pensioners: extremely hostile to immigration, skeptical of environmental issues, culturally conservative?). If so the future is the Republicans' but it's a big if.

https://www.nybooks.com/daily/2020/11/07/how-trump-lost/

likbez 11.09.20 at 4:20 pm (no link)

@Hidari 11.08.20 at 8:20 pm

...he was a weak leader who was captured by the Republican elite (not the other way round). Also (rather ironic this) because he was and is a terrible negotiator. He continually caved into the likes of Mitch McConnell, and, well the rest is history.

All true. But Biden victory in some ways looks like Catch 22 for neoliberal Dems (Will the Democrats Ever Make Sense of This Week? – New Republic):

In sum, if the results we have hold, Joe Biden will win the election and preside over a divided Congress. A chastened and anxious Democratic caucus will continue to hold the House.

A triumphant Senate Republican caucus will obviously destroy his major legislative agenda. Biden will assuredly turn to policy by executive action, just as Barack Obama did late in his legislatively stymied administration.

When he does, Republicans will do all they can to send those actions to a 6–3 conservative Supreme Court Biden will be unable to pack or meaningfully reform.

In defeating Trump, Democrats will have avoided their worst-case scenario. Instead, they will have won the worst possible Biden victory, a political situation that will be a nightmare all its own.

Trump, with his "national neoliberalism," was an anomaly in its own right. And such things do not last long. So this is a kind of "return to normal" -- return to power of the "internationalist" faction of Oligarchy who is linked to globalization (and constitutes the majority of the US oligarchy), which was unexpectedly defeated in 2016 and since then foght tooth and nail for the return to power. And such "normalization" is the most logical outcome of the 2020 elections and is to be expected.

But while they now have the power, globalists do not have solutions to the country problems, and the crisis of neoliberalism (which started in 2008) will continue, the far-right nationalism will stay and may even gain strength. This suggests that in 2024 is somebody like Tucker Carlson will lead the ticket. And Tucker is a more dangerous opponent to neoliberal Dems than Trump ever been. "Trumpism without Trump" will live, so to speak.

That may spell troubles for the well-being of the PMC (professional and management class) to which we all belong.

I would add that the fact that Biden victory legitimized Russia-gate and abuse of their power by intelligence agencies is also a problem. I suspect that Neo-McCarthyism, in the long run, might backfire.

[Nov 07, 2020] Supporters of the Democratic Party are mainly demotic elites who benefit from globalization and liberalization of the global economy, and those who support the Republican Party are middle- and lower-class people, and religious conservatives

Nov 07, 2020 | www.moonofalabama.org

karlof1 , Nov 6 2020 18:58 utc | 113

Wow! Today's Global Times editorial about the election and its outcome is very perceptive in its entirety making it very hard to determine an excerpt. I decided on the center 4 paragraphs as they're a coherent whole:

"Every society has internal divergences and contradictions. The design of the US system indulges and even encourages the fermentation of contradictions. Mechanisms help maintain the balance between interests and power. For a long time, this performed relatively well, but new challenges are changing the conditions of US mechanisms, and changing relations between the effectiveness of US mechanisms and the difficulties US society faces.

"The fundamental change is that the US has been consuming its accumulated advantages against the backdrop of globalization. Its pattern of interests has been fixated, and the overall competitiveness of the country has been sliding. The welfare it has made for the people cannot match people's demands and expectations. The mechanism that distributes interests solidifies and further erodes social ability of promoting unity.

"In the internet era, identity politics is rising. People can easily feel that their rights are deprived because they are from a certain social class. Maintaining social unity has become an increasingly arduous and sensitive task. Obviously, the US needs political reforms more than many other countries to enhance its ability to promote unity.

"But in the past four years, the Trump administration, incited by the US election system, has pushed the country into a risky path where it enhances division to boost the existing pattern of political interests. There are so many social woes in US society, be it between different races and classes, between new immigrants and old ones, and between different regions, let alone partisan. But now the objective of society has been cast on Trump's reelection. This objective has to a great extent squeezed the room of US society to pursue maximum common interests."

But I really insist reading the entire editorial.

In an op/ed by a professor at the Center for American Studies of Fudan University, we learn what some close observers from outside see as the primary contradictions within the Outlaw US Empire:

"There are two main contradictions in the US. First, contradictions between the whites and ethnic minorities. The advantageous position of the whites continues to decrease and they would lose their dominance over the country in the future. This makes their tolerance and confidence in ethnic minorities decrease as well. The ratio of the population of ethnic minorities is rising. This increases their demand for equality and rights.

"It is normal for ethnic minorities to demand for corresponding political, social, economic and cultural positions, but this will pose a severe challenge to the cultural, religious and racial nature of the US. As the US population continues to lose balance, related conflicts will break out or even become a periodic and escalating crisis.

"Second, contradictions between elites and ordinary people. Supporters of the Democratic Party are mainly demotic elites who benefit from globalization and liberalization of the global economy, and those who support the Republican Party are middle- and lower-class people, and religious conservatives. This is very clear in the county-based electoral maps. Trump-supporting counties that are vast, under populated and economically backward, surround cities and counties that support the Democratic Party, while Democrat-dominated counties and cities use their economic and population advantages to lead the political pattern in some states. The contradictions between elites and ordinary people will not end with the election."

Not stated clearly IMO is that these contradictions are Centrifugal in their affects on the overall society thus impeding attempts to reform the polity and gain control over the forces exerting actual control that are beyond government.

[Nov 06, 2020] The elites may control who gets nominated but no matter how flawed or repugnant their candidate is or how obvious that the candidate was chosen for them the flocks that follow the candidates act as if they did the choosing.

Nov 06, 2020 | www.moonofalabama.org

jinn , Nov 5 2020 13:48 utc | 27

The elites may control who gets nominated but no matter how flawed or repugnant their candidate is or how obvious that the candidate was chosen for them the flocks that follow the candidates act as if they did the choosing.

Trump was given 10 times the free advertising than all the other primary candidates combined and yet his followers think they picked him.

And Biden will go down in history as the candidate who got more popular votes than any other candidate ever has and yet he is about as popular as a hemorrhoid.

[Nov 06, 2020] Here's Your Historical Analogy Menu- Rome, The USSR, Or Revolutionary France

Notable quotes:
"... One camp within the elites recognizes the danger and seeks reforms , but the reforms are too little, too late, and in any event, the elites who cling most ardently to the past stability fight the reform movement to a standstill. ..."
"... So take your pick, America: what's the closest analogy? A sclerotic Politburo of elders living in the past, an elite fiddling while the nation disintegrates, or an elite so out of touch with reality that it claims inflation is zero while the populace can no longer afford bread? ..."
Nov 05, 2020 | www.zerohedge.com

Rome, the USSR and Revolutionary France are all compelling analogies due to the hubristic cluelessness of their fractured elites as the pretensions of stability collapsed around them. Even though Nero didn't actually fiddle while Rome burned and Marie Antoinette didn't gush "Let them eat brioche" when notified that the peasants had no bread (or more accurately, could no longer afford it), these myths are handy encapsulations of the disconnect from reality that infested the elites in the last years before the deluge of non-linear chaos overwhelmed the regimes.

While historians gather evidence of tipping points such as pandemics, ecological damage, invasions, droughts, inflation, etc., the core dynamic is ultimately the loss of social cohesion within the ruling elites and in the social order at large.

As a generality, the permanence of the status quo is taken for granted by elites, who then feel free to squabble amongst themselves over the spoils of wealth and power. Distracted by their own infighting, the elites are blind to the erosion of the foundations of their power.

As coherence in the elites unravels, the ties uniting the elites with the masses unravel as well.

One camp within the elites recognizes the danger and seeks reforms , but the reforms are too little, too late, and in any event, the elites who cling most ardently to the past stability fight the reform movement to a standstill.

As social cohesion unravels, systems that once seemed immutable (i.e. linear ) suddenly display non-linear dynamics in which modest changes that would have made little difference in the past now unleash regime-shattering disorder.

So take your pick, America: what's the closest analogy? A sclerotic Politburo of elders living in the past, an elite fiddling while the nation disintegrates, or an elite so out of touch with reality that it claims inflation is zero while the populace can no longer afford bread?

They all lead to the same destination.


richsob , 1 hour ago

I know a lot of history and I think we will go the route of Rome. We will have a slow slide into total failure from a debased currency, an over extended military, tax revolts, unmanageable immigration and an internal war among the elites.

HRH of Aquitaine 2.0 , 1 hour ago

My name is an indirect reference to France and the French Revolution.

When Pelosi was photo'd in front of two massive Sub Zero fridges with gourmet ice cream, that was the equivalent of "let them eat brioche." She is fvucking clueless. A tool that is barely coherent, much like Joe.

People see through it. The greed of the politicians, and their apparatchiks, the bureaucrats, is obvious to anyone willing to look. FFS apparatchiks can retire with six fixure salaries after being a government employee! People are sick to death of their arrogance, their greed, their out-and-out abuse of the taxpayer!

The other analogy, which I think is valid, is to ancient Rome. I was a philosophy major / Latin minor so took quite few courses involving the classes, reading the classics, or translating them. I also spent a semester in Rome, tramping through the Forum and walking underground and overground. In 1997 Rome was a beautiful city, mostly safe.

Anyhow, ancient Rome ended up debasing their currency, literally. Which the US (and other central banks) are doing with excessive money printing.

Excessive taxation drove away the tax base of ancient Rome. The first jingle keys event was there. Why? Taxes were too high. People will work hard if there is a profit incentive and they are able to earn a good return from their labor. Once that incentive was gone, people abandoned their farms and property and left. Where did they go? Away. Away from the tax collectors, which were richly rewarded for any taxes they were able to collect. I suppose at the end, the collection methods became quite brutal. At that point, when it is your money or your life, you throw the tax collector your money and flee with your life. You walk away from land that you love and start over.

Never an easy choice to abandon one's land and home. But that is exactly what happened.

Central bankers and governments, along with the common citizen, would do well to heed historical precedents.

MAOUS , 31 minutes ago

I see it more like The Godfather Part I & II. We were betrayed by the stupidest simpletons of our own family (citizenry) that sold us out for trinkets, false promises of grandeur and propaganda from Rival Mafia Families who wanted to rub our family out, kill our leader and take over. "I didn't know until today, it was Barzini all along." Yeah, but Fredo was the turn coat that made it all possible. Meet the simpletons of our Family known as your fellow American voter. "A Republic, if you can keep it." We lost it, kiss it goodbye. Say hello to the new Black Hand on the block.

Omega Point , 1 hour ago

One of the best articles on ZH in a while. The elites are so full of hubris, they behave as if the state of affairs since the post-WWII era has always been the state of affairs throughout history and are immutable. They believe that they are cause of America's dominance, not the individuals who built this country on whose goodwill they are now quickly draining.

I think we're like Rome. Currency debasement, no border security, massively corrupt politicians, most of population on welfare, and games and circuses to distract from the rot.

The elites will soon be surprised how quickly things will decline, just as shocked as the Romans when the Visigoths came through the city walls and looted the Imperial City in 410 AD.

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sbin , 1 hour ago

The USSR was very similar with decrepit old party hacks ruining everything.

Unfortunately American exceptional lunatics will try to destroy the world before excepting reality.

Never been a group so corrupt and delusional with so much destructive weaponry.

Dr Strangelove is more appropriate.

RKKA , 1 hour ago

In the summer of 1941, the 4th Panzer Division of Heinz Guderian, one of the most talented German tank generals, broke through to the Belarusian town of Krichev. Parts of the 13th Soviet Army were retreating. Only one gunner, Nikolai Sirotinin, did not retreat - very young, short, thin.

On that day, it was necessary to cover the withdrawal of troops. “There will be two people with a cannon here,” said the battery commander. Nikolai volunteered. The second was the commander himself.

On the morning of July 17, a column of German tanks appeared on the highway.

Nikolai took up a position on the hill right on the field. The cannon was sinking in the high rye, but he could clearly see the highway and the bridge over the river. When the lead tank reached the bridge, Nikolai knocked it out with the first shot. The second shell set fire to the armored personnel carrier that closed the column.

We must stop here. Because it is still not entirely clear why Nikolai was left alone at the cannon. But there are versions. He apparently had just the task - to create a "traffic jam" on the bridge, knocking out the head car of the Nazis. The lieutenant at the bridge and adjusted the fire, and then, disappeared. It is reliably known that the lieutenant was wounded and then he left towards the withdrawing positions. There is an assumption that Nikolai had to move away, having completed the task. But ... he had 60 rounds. And he stayed!

Two tanks tried to move the lead tank off the bridge, but they were also hit. The armored vehicle tried to cross the river not across the bridge. But she got stuck in a swampy shore, where another shell found her. Nikolai shot and shot, knocking out tank after tank ...

Guderian's tanks rested on Nikolai Sirotinin, like the Chinese wall, like the Brest fortress. Already 11 tanks and 6 armored personnel carriers were on fire! For almost two hours of this strange battle, the Germans could not understand where the gun was firing from. And when we reached the position of Nikolai, he had only three shells left. The Germans offered him to surrender. Nikolai responded by firing at them with a carbine.

This last battle was short-lived ...

11 tanks and 7 armored vehicles, 57 soldiers and officers were lost by the Nazis after the battle, where they were blocked by the Russian soldier Nikolai Sirotinin.

The inscription on the monument: "Here at dawn on July 17, 1941 entered into combat with a column of fascist tanks and in a two-hour battle repulsed all enemy attacks, senior artillery sergeant Nikolai Vladimirovich Sirotinin, who gave his life for the freedom and independence of our Motherland."

"After all, he is a Russian soldier, is such admiration necessary?" These words were written down in his diary by Chief Lieutenant of the 4th Panzer Division Henfeld: “July 17, 1941. Sokolnichi, near Krichev. An unknown Russian soldier was buried in the evening. He alone stood at the cannon, shot a convoy of our tanks and infantry for a long time, and died. Everyone was amazed at his courage ... Oberst (Colonel) before the grave said that if all the soldiers of the Fuehrer fought like this Russian soldier, they would have conquered the whole world! Three times they fired volleys from rifles. After all, he is a Russian soldier, is such admiration necessary? "

Ordinary people were ready to defend and die for the USSR. And who is Gorbachev, who destroyed the USSR. A traitor who betrayed everything and everyone. A stupid dilettante who imagines himself a world-class politician. The main drawback of the USSR was that the power was too concentrated in the hands of one person, who was trusted without question. But when people realized where he was leading the country, it was too late.

Max21c , 2 hours ago

It's a mix between Nazi Germany and its criminality and thievery and persecution machinery, and Bolshevist Russia and its criminality and thievery and persecution machinery and many third world banana republics and their criminality and thievery and political persecution machinery.

Face it Washingtonians are evil.

ZeroTruth , 1 hour ago

Americuck in and of its entirety is just a criminal organization. I know a restaraunteur that started his business in the Bay Area selling drugs using a fleet of vehicles that had hidden compartments everywhere. Each vehicle was capable of holding up to half a key of yay and powdered molly already grammed up. Drivers were issued burner phones and given orders via dispatcher.

Last I checked, he had 7 restaurants that did amazing business and those vehicles were still on the road providing the other service. That's just one of the many I know of and it's small time compared to what the US government is doing.

ZeroTruth , 1 hour ago

Americuck in and of its entirety is just a criminal organization. I know a restaraunteur that started his business in the Bay Area selling drugs using a fleet of vehicles that had hidden compartments everywhere. Each vehicle was capable of holding up to half a key of yay and powdered molly already grammed up. Drivers were issued burner phones and given orders via dispatcher.

Last I checked, he had 7 restaurants that did amazing business and those vehicles were still on the road providing the other service. That's just one of the many I know of and it's small time compared to what the US government is doing.

DeeDeeTwo , 2 hours ago

The elites, Big Tech, Media and Deep State threw the kitchen sink at this election and did not move the needle. Regardless of who is next President, nothing changes. This is a tribute to the stability of the American system. In fact, the pendulum is swinging against the subversives who are becoming increasingly reckless and discredited.

TBT or not TBT , 2 hours ago

What did Huxley call the future country depicted in Brave New World?

[Nov 05, 2020] Before the War of Secession, the South was richer in USD terms than the North - but war quickly revealed most of the South's "GDP" was financialization (speculation over the slaves' prices).

Nov 05, 2020 | www.moonofalabama.org

Zanon , Nov 3 2020 18:41 utc | 9

Actually economy is doing better than expected. Even though Covid will contintue to be a threat against economic growth.
"U.S. GDP booms at 33.1% rate in Q3, better than expected"
https://www.cnbc.com/2020/10/29/us-gdp-report-third-quarter-2020.html


Mr Funchu , Nov 3 2020 20:31 utc | 60

@zanon: "Actually economy is doing better than expected. Even though Covid will contintue to be a threat against economic growth.
"U.S. GDP booms at 33.1% rate in Q3, better than expected"

LMAO. I guess you also think the stock market is an economic indicator that reflects the well-being of normal people.

And yeah, if you pump $4,000,000,000,000 into a bunch of corporations and the ludicrous stock market casino, the "economy" of any country will "do better".

If Greece during it's financial crisis had $4 trillion to spare and gave it all to their oligarchs and robber barons, would Greece's "economy" mean the country was doing great? Give me a break.

vk , Nov 4 2020 4:31 utc | 161

This:

The US economy – some facts

Explains this:

@EmmaVigeland

No matter the outcome, the fact that this election is so close is a clear indicator that Americans aren't connecting material conditions on the ground -- a depression, pandemic, low wages, etc -- to the consequences of politics. Which is an abject, disgusting failure of Democrats.

We can observe the American economy has declined since 1980 relatively - but not by much. It was China that skyrocketed.

This is why the political polarization in the USA right now is being fought mainly on moral/ideological grounds. The American people still thinks it has sufficient time and resources to first fight among itself (put the proverbial traun back on its tracks) - only to then subjugate the rest of world (like it did in 1946 and 1992).

The Americans are still rationalizing in moral-ethic-ideological terms because their economy stagnated and is degrading - but not collapsing. This still gives them a material base to fuel their pride.

But pay attention: those data are in USD terms. Its industry was what declined the most in the linked fact sheet above. Before the War of Secession, the South was richer in USD terms than the North - but war quickly revealed most of the South's "GDP" was financialization (speculation over the slaves' prices).

[Nov 02, 2020] WTO was formed in 1995 after the fall of Eastern blocks, to dominate and control the world trade in US fiat currency specially when China with her cheap skilled labor was to become major world manufacturers of goods.

Nov 02, 2020 | www.moonofalabama.org

Kooshy , Nov 1 2020 20:46 utc | 31

Like the petrodollars, WTO better known as globalization, was formed in 1995 after the fall of Eastern blocks ,to dominate and control the world trade in US fiat currency specially when China with her cheap skilled labor was to become major world manufacturers of goods. Basically like oil America agreed not to impose tariff on goods they consumed if you trade and exported on their fiat currency which costed US nothing to produce. Obviously unlike oil trade this globalization of trade in US dollar could not work, since unlike oil trade America couldn't politically dominated and control the good manufacturing countries, like it could, with small oil producing countries. The period of free trade in goods and energy is coming to an end, therefore US needs to lower her standards of living, or to go to major wars with other resources hungry powers to continue colonizing the third world resources and labor. Either way the end result will be the sam as for, not so Great Britain, ottomans, Spanish, Persian empires, the only obvious difference shorter empire.

Kooshy

[Nov 02, 2020] The banks and another excellent write up at Wall Street on Parade.

Nov 02, 2020 | www.moonofalabama.org

uncle tungsten , Nov 1 2020 21:59 utc | 42

The banks and another excellent write up at Wall Street on Parade .

Again Ferdinand Pecora harking back to the 1930's as discussed in the past weeks commentaries:-

Wilmarth's writing is so insightful and profound in its analysis of the similarities between the banks of the late 1920s and today that it feels like the ghost of Ferdinand Pecora might have been whispering in Wilmarth's ear. Pecora was a former prosecutor from New York who was chosen to preside over much of the early 1930s Senate Banking hearings and investigations of the corrupt Wall Street structure that led to the 1929 crash and Great Depression.

Three banking names that played significant roles in the crash of 1929 and the ensuing Great Depression were National City Bank, JP Morgan, and Chase National Bank. National City Bank was the precursor to today's Citigroup, the bank that would have collapsed in 2008 except for the largest taxpayer and Federal Reserve bailout in global banking history. JPMorgan and Chase combined in 2000 to create today's JPMorgan Chase.

[Nov 02, 2020] Variant Perception Macro Chief Discusses The Reinflation Trade And Looming 'Commodity Supercycle' -

Nov 02, 2020 | www.zerohedge.com

Variant Perception Macro Chief Discusses The Reinflation Trade And Looming 'Commodity Supercycle' by Tyler Durden Sun, 11/01/2020 - 14:30 Twitter Facebook Reddit Email Print

For weeks now, we've been been pointing to expectations that a Joe Biden victory, accompanied by a Democratic sweep of the Senate, could accelerate a "reflation" trade , as the world witnesses the shift toward fiscal policy in the form of massive fiscal stimulus supplant QE as the preferred vehicle for the central bank carrying out its monetary policy objectives.

This fusion between fiscal and monetary policy is an inevitable consequence of the Fed's shouldering the burden of promoting economic "equality", or at least combating "inequality" - a laughably ironic objective for the Fed, which has done more than any other single entity in blowing the equity asset bubble that's driven economic inequality in the US back to levels last seen during the Gilded Age.

Well, after having MMT pioneer Stephanie Kelton, best known as the go-to economic policy advisor for AOC and Bernie Sanders, on the show, MacroVoices this week followed up with an individual who has examined the potential blowback caused by this historic policy shift.

This week, MV host Erik Townsend interviewed Tian Yang, the head of macro at Variant Perception, an established research shop that frequently produces opinion columns in the financial press. During this week's interview, Yang outlines the findings from a slide deck that was provided free by MacroVoices to all members (membership is free)

After the historic drubbing endured by crude in the US earlier this year, Yang is among a group of strategists who have been warning about the reflationary blowback that the Fed is risking now that it has explicitly decided to allow inflation to run hot.

Yang outlines some of these concepts in the interview, which we have excerpted below:

* * *

Erik: And where do you see the inflation story coming into this?

Central Banks Must 'Play Their Part'

Tian : So I think we need to think about inflation both from a structural point of view and a cyclical point of view. So the thing to say is cyclically, when unemployment rates are still quite high, when there's still capacity in the economy, you don't expect to see kind of immediate pickup in core inflation. Headline could tick up a little bit when commodity prices industrial commodity, so forth, initiate pickup, so on the cyclical front, there's not necessarily as much inflation pressure right now.

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

But structurally, we've seen some truly seismic shifts in the kind of policy landscape and the structure of the economy actually just this year. When you see governments and developed market governments around the world start to run giant fiscal deficits funded by central banks, that's obviously a very dramatic shift away from independent central banking and the focus on inflation.

This is very much going back to the old Keynesian kind of playbook of essentially, fiscal led growth and at the same time, we've seen the US Federal Reserve do a number of quite dramatic shifts this year. Firstly, moving to average inflation targeting is obviously quite a big mission that they don't really know where the NAIRU (Non-accelerating inflation rate of unemployment) is, they don't really care what the NAIRU is, they are just going to run the economy and let it run hot.

And such a policy is also pretty timing consistent because it's not well defined, what's the period over which we're targeting average inflation. The incentive will always be as inflation picks up for policymakers to just run their heart because it's easier to kind of keep the party going.

So, both fiscal and monetary policy are starting to become a lot more expansionary and loose. And the historical precedents for this kind of price action would probably go back to World War 2 with a fair-trade record, that essentially meant fiscal deficits would be very large. But there was a moral imperative for the central banks to finance the government deficits, and that ended up creating a lot of inflation.

And this time around, the moral imperative is that the central bank's got to play their part with the pandemic. And going into the future, the central bank probably has to play their part was addressing inequality, climate change, or any of these big issues that essentially justifies why central banks should finance government deficits.

So that's quite dramatic policy shift, the other thing that's happened is that the Fed is now proactively kind of destroying the quality of its balance sheet. So again, as extreme, we could go back to when we were on the gold standard, if you look at central bank balance sheet, most currencies backed by gold, right.

So $1 is an asset for us but for the central bank $1 is a liability so previously they backed it on the asset side of their balance sheet with gold. Obviously, over time we abandoned the gold standard, so forth, the quality of assets on the central bank's balance sheet is getting worse and worse. And obviously, this year, the fact that they started buying corporate bonds, the fact that, they're willing to take on fallen angels, hide your debt and take on more credit risk is just another reflection of just the weakening central bank balance sheets.

It's not necessarily a immediate concern, but it lays the foundations for people to kind of increase inflation expectations and to really worry about what the value of the dollar is. And so when you have these kind of structural shifts in policy coming together in a couple ways to make a kind of deterioration in central bank balance sheets and government balance sheets. That's typically been the recipe for inflation expectations to become unhinged.

From A Lake To An Ocean

Erik: Tian, I love the picture on page five where you're talking about lake and ocean regimes of inflation. Needless to say, you're not talking about a necessarily a really calm easy day out on the ocean, but maybe a stormy day.

Now I want to go back to what you said because it seems to me that the game is very different this time around in that you drew an analogy to, okay, after World War 2 we move to a whole lot of deficit spending, which should be inflationary. The thing is, after World War 2 we were still, as you said, on a gold standard. And the big inflation didn't really get unleashed until we came after the gold standard with the breakdown of Bretton Woods in 1971.

Now, this time around, we're going to have I think the same if not a greater shift to a public policy emphasis on major spending programs with a lot of deficit spending. But we're already in a pure fiat environment, so nobody's pretending there's a constraint on how much money you can print in order to finance government spending.

I would think that means that the inflation is certainly not delayed by 20 years the way it was after World War 2, but is it immediate? Or is there still a lag of several years before that inflation really hits the system in terms of consumer price inflation after those pre generated factors like deficit spending kick in? How long does it take before we really see the inflation start to get away?

Tian: Yeah, I mean, that's a great question. I guess it's a little bit like when they think about how people go bankrupt, right, it happens very slowly and or all at once. I think this is kind of the analogy we're kind of drawing here because we're talking about a shift in inflation expectations, which is obviously predicated on just the general belief in the system.

These things are obviously inherently fairly hard to predict but what we can do is kind of position for when it already makes sense. So when markets are already not pricing in much inflation risk premiums and also as the economy cyclically picks up, those things are going to help just drive a more normal reflation cycle.

So right now, if you position for that, then when the tail comes through and potentially more inflation picks up later, you're kind of on the right side of it. In terms of the mechanism it could, as you say, potentially happen quickly or you could take a few years. I mean, if we're in this kind of 1960 style environment then what you need to do is go along for the excess capacity in the economy to be used up first, and then have inflation pick up.

And then you will need that to feed into shifting hecs inflation expectations higher, and then you should move into more of a wage price spiral. Then when people think inflation is going higher, they're going to demand higher wages and that's what really kicks off the more uncontrolled inflation right now.

Arguably right now for a lot of people, you know say live in the United States, the actual cost of living inflation is actually already been a lot higher than what CPI would be saying if you look at shadow stats, inflation and these kind of different projections. They would say inflation has be running a 4-5% annually for the past 20 years, if you get rid of a lot of the hedonic adjustments and so forth. And arguably, it's actually this mismatch between what official CPI says and what people feel is their true cost of living. That gap is also fueling a lot of the populism and the kind of general discontent that we have been seeing in society and, by the way, this isn't a new, it's just quite rare that we see it in developed markets.

If you take emerging market economies like Argentina or these places that have been known to have huge inflation's, this is typically what happens. The population doesn't believe in the CPI, they think their real cost of living is going up a lot higher, so when it comes to wage negotiations, they demand CPI plus 5-10%.

No more '60/40'?

Erik: Tian, let's talk about how this translates for portfolios, it sounds like we're very much in agreement that inflation is coming, but it's kind of hard to know exactly when and how it shows up. Probably when it does show up, it shows up in a big way, you don't want to be caught by surprise, but you don't know that it's happening right away. So what do you do in terms of your portfolio in order to be ready for that?

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Tian: Yeah, well that's kind of the million-dollar question at the moment isn't it? So the first thing to know is, I think I mentioned briefly at the start, clearly more traditional portfolio construction, the kind of 60/40 or the heavy allocation to fixed income, it's naturally kind of getting to the end of the road. I think most people recognize that as yields bump up against the zero bound, the ability for your fixed income portion to really offer a diversified impact or a hedge to equity risk is going to diminish.

So, going forward, what's very interesting about commodities is that one of the unique properties of commodities is typically when commodity volatility is high commodity prices actually tend to go up a lot. And this is quite different to equities because normally for equities only when equities are crashing that volatility picks up, whereas for commodities, the volatility tends to be to the upside. Now, the thing to say about commodities is that one of the big reasons why it tends to be very high volatility is that there tends to be quite prolonged periods of demand and supply mismatches for the industry. Just because typically supply responses can take a long time if you're going to build a new mine, or drill a new well, or build a new plant, it could sometimes you could take up to three to five years. Obviously, if it's like the super-efficient shell well, maybe it takes one year to get to get it going.

But for a lot of commodity sites if you're going to build a refinery or build a chemical plant or things like that, it's going to be three to five years. And because of that very delay supply response it is where you end up with this prolonged period of demand supply mismatches. And so that that's kind of what we're starting to see right now, where for a lot of commodity sectors are more capital scarce.

This being a prolonged period of a lack of investment, a lack of capex, and so these are sectors that we would expect to have quite explosive upside as the as the economy recovers and as demand comes back. So I think in the slide deck there's a section on page 15 where I mentioned the capital cycle. So, I think this is a very interesting framework to actually think about when we're trying to decide where to invest in.

So for the capital cycle I think that the best thing that I've read that's really inspired us on this was some pieces written by Marathon Asset Management. And it was basically collated together in a book called "Capital Returns: Investing Through the Capital Cycle", and the book was put together by Edward Chancellor. And so the basic idea is that, if there's a lot of money flowing to a particular industry or sector, then that inflow of money will cause a lot more competition within that industry which drives down returns and then as returns fall very low then nobody in the industry can make a profit.

Listen to the rest of the interview below:

[Nov 02, 2020] Oil investments are drying up as crude demand falters

In reality only passenger feet and commercial aviation consumption are highly elastic. Other pasts oil consumption, including consumption by military and commercial tracking are much less elastic.
And Amazon consumption partially compesates for drop is passenger car traffic :-)
In general oil consumption is a proxy of economic activity. As economic activity is resorting the same will happen with oil consumption.
Nov 02, 2020 | www.rt.com

Thirty-five percent: this is the size of the spending cuts oil and gas companies are likely to have made this year in response to the effects that the coronavirus pandemic is having on demand, according to the International Energy Agency. And this is just the spending slump in upstream oil and gas. This is just part of a wider trend of investment cuts in the energy industry, according to the IEA, which earlier this month published an update of its World Energy Investment report, first released in late spring.

At the time, some thought we were seeing the worst of the pandemic. They were, apparently, wrong.

ALSO ON RT.COM Oil prices hit 4-month low over fear new coronavirus lockdowns will crush demand

Demand for oil has certainly improved in some parts of the world, notably in Asia, where governments have been more successful in containing the spread of the coronavirus than their counterparts in Europe and North and South America. But even in China – the world's oil demand recovery driver –the rebound is slowing down. After all, even though its domestic demand may be improving, if regional and global demand is stalling, this will have a negative effect on China as well.

READ MORE OPEC in trouble as oil outlook worsens OPEC in trouble as oil outlook worsens

According to the IEA, the impact that the pandemic is having on investments in the oil industry will continue to be felt for years to come. This is hardly surprising: the agency noted a 45-percent cut in investments by US shale oil companies this year, combined with a 50-percent jump in financing costs .

The number of active drilling rigs in the US may be rising, suggesting the beginning of a recovery, but the total was still down 564 rigs on the year as of last week, so that recovery will take a while.

Meanwhile, fuel stock updates from the Energy Information Administration are offering mixed signals: last week, for instance, saw a major drawdown in distillate fuel stocks, which should be good news suggesting demand for distillates is improving. The problem is that it is likely that this improvement is a temporary occurrence rather than a trend. Air travel is still greatly constrained, and the chances of any change in the status quo are slim.

Uncertainty: this is the keyword for not just the oil industry but for all others affected by the pandemic to such a grave extent as to force changes in business models. Europe's Big Oil majors are doing just that with their push into renewables and plan to greatly reduce the contribution of their core business to overall earnings. USmajors are sticking with oil, and they may well have a good reason to do it.

There has been a lot of government and activist talk about a green recovery from the pandemic crisis. But the pandemic is still raging, and not only is it not abating, but it is gathering strength. This would mean more money needed for stimulus measures. This, in turn, would mean less money to spend on renewables, because despite the celebrated cost declines in solar and wind, financial and regulatory support from governments remains essential for their increased deployment.

ALSO ON RT.COM Central Bank of Russia does not rule out another pandemic wave & $25 oil price

The future remains marred in uncertainty that extends to the possibility of a rebound in oil investments. According to some, such as BP, we are already past peak oil demand, so that would mean less investment in oil production growth globally. Others, such as OPEC producers, hope things will sooner or later return to normal, and the world's appetite for more oil will continue to grow for at least a few more years before plateauing. And yet even OPEC is preparing for a worst-case scenario.

The extended cartel OPEC+ is considering a delay in the next relaxation of oil production cuts, from January 2021 to April, in response to the latest trends in Covid-19 infections. One thing seems relatively clear, however. The longer the surge in new infections continues, the longer it would take the industry to return on the path of recovery and growth.

This article was originally published on Oilprice.com

[Nov 01, 2020] Which two wings of the USA oligarchy Biden and Trump represents

Nov 01, 2020 | www.moonofalabama.org

Down South , Nov 1 2020 7:04 utc | 122

I keep on reading this narrative that there is no difference between Trump and Biden and no matter who you vote for the blob wins. That the effort to unseat Trump and overturn the 2016 election results, to derail his 2020 campaign is all some elaborate game of 52D chess that we are too stupid to understand.

Here is my problem with that narrative.

The political scene in the US is split between two factions 1) the US globalists (Democrats/Establishment Republicans/Deep State/Big Tech/MSM/WallStreet) and on the other side 2) US Nationalists (Trump/the deplorables).

When Trump was campaigning in 2016 he made it clear that he intended to bring back the supply chain to the US. All those manufacturing jobs that were outsourced to third world countries to maximise the profits of the large corporations we're going to be brought back and the way he intended on doing that was to exit free trade agreements that harmed US national interest and introduce protectionist policies (tariffs/ low corporate taxes etc) which would entice/induce/force manufacturers to open factories in the US again.

This horrified the globalists as they have for the past decades been implementing a controlled disintegration of the US

The great "liberalization" of world commerce began with a series of waves through the 1970s, and moved into high gear with the interest rate hikes of Federal Reserve Chairman Paul Volcker in 1980-82, the effects of which both annihilated much of the small and medium sized entrepreneurs, opened the speculative gates into the "Savings and Loan" debacle and also helped cartelize mineral, food, and financial institutions into ever greater behemoths. Volcker himself described this process as the "controlled disintegration of the US economy" upon becoming Fed Chairman in 1978. The raising of interest rates to 20-21% not only shut down the life blood of much of the US economic base, but also threw the third world into greater debt slavery, as nations now had to pay usurious interest on US loans.
https://thesaker.is/what-the-great-reset-architects-dont-want-you-to-understand-about-economics/

What is the eventual end goal of the globalists ?

false solutions to a crisis of global proportions are being promoted in the form of a "Great Global Reset" which aims at creating a new economic order under the fog of COVID. This emerging "new order", as it is being promoted by Mark Carney, George Soros, Bill Gates and other minions of the City of London is shaped by a devout commitment to depopulation, world government and master-slave systems of social control.

By attempting to tie the new system of "value" to economic practices which are designed to crush humanity's ability to sustain itself in the form of "reducing carbon footprints", "sustainable green energy", cap and trade, carbon taxes and green infrastructure bonds, humanity is being set up to accept a system of governance onto our children and grandchildren which will subject them to a dystopic world of fascism the likes of which even Hitler could not have dreamed.

https://thesaker.is/one-last-chance-to-revive-americas-forgotten-constitutional-traditions-and-avoid-wwiii/

Exiting NAFTA, implementing protectionist measures, lowering corporate taxes, starting a trade war with China (that is where the majority of the outsourced jobs went) he is trying to undo the controlled disintegration of the US. That is why the globalists hate him so much.

[Oct 30, 2020] Tsunami Of Empty College Dorms Risks Student Housing Market Implosion

Did not most collages behaved like bandits raising tuition fees from 1980 till 2020. That's 40 years.
Oct 30, 2020 | www.zerohedge.com

Fall enrollment has plunged , some colleges are shuttering operations, revenues across the entire higher education industry are collapsing, and the shift from physical to virtual education due to the virus pandemic could prick the next bubble: the student housing debt market.

Our warning about the coming implosion of the higher education industry (see here from 2014) , as a whole, has become louder and louder over the last six-plus years as the student debt bubble has recently swelled to more than $1.6 trillion. Years ago, no one at the time, could've forecasted a virus pandemic would doom colleges and universities.

Credit rating agency Moody's recently downgraded the entire higher education sector to negative from stable, and the American Council on Education estimates colleges and universities will experience a $23 billion decline in revenues over the next academic year.

Bloomberg outlines the increase of virtual education in a virus pandemic has resulted in an abundance of empty dorms at colleges and universities, creating a $14 billion headache for the student housing debt market.

"West Virginia State University, already hit with a 10% enrollment drop, plans to give money to a school foundation so it can meet its bond covenants for residence hall debt. A community college in Ohio is using part of a $1.5 million donation for a financially-strapped student housing project. And officials at New Jersey City University, which serves largely first-generation and lower-income students and has recorded years of deficits, are prepared to shore up a dorm there," Bloomberg said.

The squeeze on university finances comes as the National Student Clearinghouse Research Center warned about a 16% drop in first-year undergraduate students enrolled for the fall semester. This means new revenue streams are quickly drying up for overleveraged colleges and universities.

"The limiting factor is some of these schools themselves are facing uncertainty with many of their revenue streams," S&P Global Ratings analyst Amber Schafer said in an interview. "It's a matter of not only willingness, but if they're able to support the project."

"Typically, privatized student housing debt is paid off by the revenue generated by the dorms -- meaning there's little recourse for bondholders if things go south," Bloomberg said. With occupancy rates already declining as coronavirus cases are surging, well, this could be bad news for colleges and universities heading into 2021.

"Borrowers have begun revealing how empty residence halls are as the pandemic spurs many campuses to keep classes online. According to the school foundation that sold the debt, West Virginia State University's dorm is 71% full, putting it about 20 percentage points from where it needs to be to satisfy debt covenants. Other privatized student housing projects, like two on Howard University's campus, are virtually empty due to online-only instruction there," Bloomberg said.

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Bloomberg warns: "Privatized dorms are struggling the most given that they weren't structured to withstand 20% to 30% drops in occupancy -- or no students at all."

"West Virginia State University may have to step in to help student housing bonds at risk of violating a debt service coverage ratio, Moody's warned this month. The historically-black college faces "considerable" challenges in backstopping the bonds, Moody's said.

The nearly 290-bed residence hall with rents of $3,881 per semester was just 71% occupied this fall, while it needed to be about 92% occupied, said Patricia Schumann, president of the university foundation that sold the debt. Schumann said the university is projected to provide a $75,000 payment in January. In the meantime, she said the school was working to bolster its financial position and boost recruitment and donations.

"We're not standing still," she said.

Ohio's Terra State Community College, which has more than 2,100 students, was downgraded deeper into junk over the risk posed by a dorm owned by a nonprofit, given that the school "appears to provide an unconditional guarantee" to meet the debt obligations, Moody's said. The project was financed through a bank note.

The dorm's occupancy fell to 62%, and the college is using a previously-received donation to cover a shortfall in project revenue amounting between $500,000 to $600,000, the ratings company said in a report this month.

At New Jersey City University, a student housing project financed though a separate entity will likely miss a required debt service coverage ratio. The public school having to step in to help the bonds would be a challenge, but a surmountable one, said Jodi Bailey, the university's associate vice president for student affairs. The student housing bonds aren't a debt of the university, so the school would be choosing to provide financial support, according to bond documents .

The school is working to cut expenses related to the dorm. "Is it a harder year? Most definitely," she said.

The student housing bonds, issued by West Campus Housing LLC in 2015, were slashed deeper into junk in September by S&P, which said in a report that residence halls' occupancy there had fallen to 56% so the school could accommodate social-distancing guidelines," said Bloomberg.

To summarize, plunging enrollments, resulting in falling occupancy rates for dorms, is a debt bomb waiting to go off for many overleveraged colleges and universities that are panicking at the moment to divert enough funds to service debts, as the usual revenue streams, that being rent checks from students, are nowhere to be found as virtual learning keeps young adults in their parents' basements and out of dorms.

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If occupancy rates continue to slide through 2021, then we must revisit what we said months before the virus pandemic began in the US:

"...20% of colleges and universities will shut down or merge in the next ten years , and probably more."

Absent of a federal bailout, things could get ugly for colleges and universities in 2021.

[Oct 22, 2020] Goldman Expects A Structural Bull Market For Commodities In 2021, Sees Gold Hitting $2300 -

Oct 22, 2020 | www.zerohedge.com

A weaker U.S. dollar, rising inflation risks and demand driven by additional fiscal and monetary stimulus from major central banks will spur a bull market for commodities in 2021, Goldman's chief commodity strategist Jeffrey Currie said on Thursday, also predicting that "all commodity markets are in, or moving toward, a deficit with inventories drawing in all but cocoa, coffee and iron ore."

The bank, which notes that markets are increasingly concerned about the return of inflation, forecast a return of 28% over a 12-month period on the S&P/Goldman Sachs Commodity Index (GSCI), with a 17.9% return for precious metals, 42.6% for energy, 5.5% for industrial metals and a negative return of 0.8% for agriculture.

A key catalyst for the bank's bullish call is that "nearly all commodity markets are in, or moving toward, a deficit with inventories drawing in all but cocoa, coffee and iron ore."

As Currie adds, "such broad-based deficits are usually only seen late in the business cycle, underscoring the unique environment markets are in. Given that inventories are drawing this early in the cycle, we see a structural bull market for commodities emerging in 2021." In the strategist's view, the bull market will be driven by three major themes:

  1. structural under-investment in the old economy,
  2. policy driven demand and
  3. macro tailwinds from a weakening dollar and rising inflation risks. "These drivers remain consistent with the bank's bullish views from the start of this year, and have now been intensified by COVID-19 disruption and the subsequent global policy response."

Some more thoughts from Currie on the tightening in commodity markets:

Commodity markets have been mostly range bound since this summer, in our view caught between a longer-term bullish outlook for 2021 and near-term concerns around the timing of a vaccine amid rising COVID cases across Europe and the US Midwest (see Exhibit 4). However, it is important to emphasize that nearly all commodity markets are in, or moving toward, a global deficit with inventories drawing in all but cocoa, coffee and iron ore. Such broad-based deficits are usually only seen late in the business cycle,underscoring the unique environment markets are in.

As global demand remains tepid for consumer-related commodities like oil, the deficits further underscore how significant the drop in supply has been and how the supply response function has changed. For oil, the sharp drop in capex is now having an impact on non-OPEC decline rates, with capital markets refusing to fund shale drilling, only debt rollovers. In metals, we have seen a sharp drop in maintenance capex and supply disruptions dragging into 2021. This suggests that even if demand falters in coming weeks as winter exacerbates COVID-19, markets will likely continue to rebalance, barring an outright collapse in demand. In our view, base metals and agriculture have more near-term upside than oil, with smaller inventories to move through before prices begin to rise.

Goldman then shows the following chart which reveals the growing deficit across key commodities, as well as the key macro catalysts for higher commodity prices in coming months:

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Hedging that even if demand falters in coming weeks as winter exacerbates COVID-19, Goldman still expect markets will continue to rebalance, "barring an outright collapse in demand." Goldman takes a more contained view on energy saying that while inventories of oil remain high, "upside in energy prices will likely come after winter." However, non-energy commodities face immediate upside as balances have tightened ahead of expectations, driven by large Chinese demand and adverse weather shocks, according to the Goldman strategist.

Focusing on Gold, Currie said that expansionary fiscal and monetary policies in developed market economies continue to drive interest rates lower and create demand for hedging the tail risks of inflation, lifting demand for precious metals. As a result, Goldman forecasts gold prices at an average of $1,836 per ounce in 2020 and $2,300 per ounce in 2021, and expects silver prices to be at around $22 per ounce in 2020 and $30 per ounce next year .

Non-energy commodities could see an "immediate upside" as the market balances tighten ahead of expectations on strong demand from China and weather-driven risks, the Goldman Sachs analysts said.

The bank maintained a "neutral" view on commodities in the near term and "overweight" in the medium term.

[Oct 20, 2020] Big Tech goes all in- Silicon Valley launches $100 million anti-Trump ad blitz

Another face of iron law of oligarchy: money as the way to misinform and lure the voters ;-)
Oct 20, 2020 | www.rt.com

The $100-plus million blitz includes at least $22 million from Facebook co-founder Dustin Moskovitz, according to an exclusive report from Recode, a subdivision of Vox. Another Democratic megadonor involved is former Google and Alphabet CEO Eric Schmidt, currently advising the Pentagon on technology innovation. Home USA News Big Tech goes all in: Silicon Valley launches $100 million anti-Trump ad blitz – report 20 Oct, 2020 20:08 Get short URL Big Tech goes all in: Silicon Valley launches $100 million anti-Trump ad blitz – report FILE PHOTO © AFP / Getty Images ; SCOTT OLSON 121 3 Follow RT on RT A super PAC bankrolled by Silicon Valley moguls is preparing a massive TV advertising campaign to help boost Democratic candidate Joe Biden against President Donald Trump in the final days before the 2020 US election.

The $100-plus million blitz includes at least $22 million from Facebook co-founder Dustin Moskovitz, according to an exclusive report from Recode, a subdivision of Vox. Another Democratic megadonor involved is former Google and Alphabet CEO Eric Schmidt, currently advising the Pentagon on technology innovation.

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Called Future Forward, the super PAC has filed federal paperwork on Tuesday disclosing that it has raised $66 million between September 1 and October 15. It has contracted for $106 million of TV ads between September 29 and November 3, according to media tracking firm Advertising Analytics. This makes it the largest Biden booster outside the Democrats' campaign itself, already a fundraising juggernaut.

Recode also reported that Future Forward "has been recommended in private communications by the team of Reid Hoffman." He is the LinkedIn co-founder and Democratic megadonor previously caught funding a disinformation campaign during the 2017 special Senate election in Alabama, in which a company called New Knowledge created a Twitter army of 'Russian bots' pretending to back the Republican candidate. It was unclear from the Recode story whether Hoffman had contributed any funding to Moskovitz's super PAC.

[Oct 18, 2020] The main reason corporate Dems want so desperately to beat Trump in this election cycle

Notable quotes:
"... Corporate Democrats' anxiety and fear that they could lose control over the party became quite evident during latest party convention, as they tried hard to "bury" their own progressives while gave plenty of time to neoliberal Republicans and war criminals to speak. ..."
Oct 07, 2020 | failedevolution.blogspot.com

globinfo freexchange
As we explained previously, what we see now in the United States with Trump, is a counter-attack by the part of the American capital against the globalist faction. The faction that is primarily consisted by the liberal plutocracy. Therefore, as the capitalist class splits, the capitalists around Trump are now taking with them the most conservative part of the American society, as they need electoral power. They have the money and their own media network. Their first big victory was Trump in the US presidency and this explains why the liberal media attack him so hard and so frequently.

The COVID-19 pandemic added more chaos in the ongoing civil war between capitalists and (as always), the working class is paying the price for the additional mess.

The DNC establishment fought hard, one more time, to get rid of Bernie Sanders in order to impose its own - fully controllable and fully dedicated to the neoliberal status quo - Joe Biden/Kamala Harris duo. Obviously, this was an attempt by the corporate Democrats to challenge and beat Trump without harming neoliberal order through a Socialist like Sanders in the leadership of the Democratic Party. Still, the DNC establishment couldn't take full control of the whole situation as the most popular progressives, like Alexandria Ocasio-Cortez, renewed their position in the party through big victories in the 2020 primaries. Furthermore, the progressive army came out stronger through significant additional victories like Cori Bush's.

Corporate Democrats' anxiety and fear that they could lose control over the party became quite evident during latest party convention, as they tried hard to "bury" their own progressives while gave plenty of time to neoliberal Republicans and war criminals to speak.

And, actually, this is the main reason that the corporate Democrats want so desperately to beat Trump in November's election.
With a potential Biden victory the corporate Dems will re-establish their position in the party against progressives, as they will be able to play the Trump-scare card for four more years.

During that time, they will get all the help they want from the liberal media to bury forever the most popular Socialist policies. Simply by claiming that the Trump nightmare could return in 2024. Therefore, they will demand "unity" from all party members under their own terms, in short, under full restoration of the neoliberal status quo. Under these circumstances, corporate Democrats will have plenty of time to assist the liberal plutocrats to take over directly the party in 2024.

On the contrary, with a potential Trump victory the Trump-scare card will be burned for good and corporate Democrats won't be able to use it as Trump won't be able to have another term in 2024.

In that case, corporate Democrats will receive additional pressure from the progressive wing and progressive voters, as these will demand radical changes inside the party towards popular policies. The liberal capitalist faction will face the serious threat to be left without political power, which by 2024, will be restricted to some moderate Republicans who are dedicated to the neoliberal doctrine. The dream of the liberal plutocrats to take over political power directly will die forever.

And this could be proved decisive for the outcome of the endo-capitalist war between the liberal plutocrats and the Trump-affiliated capitalists.

...

[Oct 15, 2020] At this point American politics is a dispute among two Jewish factions, Trump is a pawn of the Zionist faction and was targeted for destruction by the Cosmopolitan faction.

Oct 15, 2020 | www.unz.com

Hugo Silva , says: October 13, 2020 at 6:30 pm GMT

@Ghali

At this point American politics is a dispute among two Jewish factions, Trump is a pawn of the Zionist faction and was targeted for destruction by the Cosmopolitan faction. Whoever wins, we loose!

TRM , says: October 13, 2020 at 7:41 pm GMT
@Ghali ary. The Israeli/Zionist elites care about their constituents opinions about as much as the elites in any group. ZERO. There's a big club and we ain't in it.

The Israeli/Zionist elites wanted war with Iran or slapping them back economically to the middle ages. Hillary was going to leave the Iran deal in place and Trump was going to tear it up.

Trump paid for his re-election by murdering Solemani. Trump felt he couldn't start a war in his first term so offered that up to get their support. He will be re-elected in big part because he solidified his position with them as the anti-Iran candidate.

[Oct 15, 2020] Trump Vs Deep State- Will Trump Upend Neocolonial World Order- -

That's naive. Trump is part of Neocolonial world order. He just belong to a different faction then Hillary and friends.
Oct 15, 2020 | www.zerohedge.com

Submitted by Nauman Sadiq,

Former Republican presidential candidate Mitt Romney released an extraordinary statement on Tuesday, decrying a political scene he said "has moved away from spirited debate to a vile, vituperative, hate-filled morass, that is unbecoming of any free nation." "The world is watching America with abject horror," he added.

Romney tweeted his statement under the title "My thoughts on the current state of our politics." "I have stayed quiet," he said, "with the approach of the election." "But I'm troubled by our politics," the sole Republican to vote to impeach Trump added in his statement.

"The president calls the Democratic vice-presidential candidate 'a monster'. He repeatedly labels the Speaker of the House 'crazy.' He calls for the justice department to put the prior president in jail. He attacks the governor of Michigan on the very day a plot is discovered to kidnap her. Democrats launch blistering attacks of their own, though their presidential nominee refuses to stoop as low as others," Romney, a Utah senator who was the 2012 Republican nominee for president, complained in the statement.

Though superficially trying to appear "fair and balanced" in the didactic sermon patronizingly delivered by the only adult in the room full of political upstarts, Romney's perceptible bias in the polemical diatribe was hard not to be noticed.

It defies explanation if he didn't watch the presidential debate or consciously elided over the sordid episode where the Democratic presidential nominee contemptuously sneered at his political rival with derogatory epithets such as "a clown, a racist and Putin's puppy."

I'm not sure if Biden was high on meth during the debate, as Trump had repeatedly been insinuating, or he lacks basic etiquette to act like a dignified statesman, but only amphetamines could make a person take leave of his senses and insolently yell at the president of the US, "Will you shut up, man," while ironically complaining, "This is so unpresidential."

Though a longtime Republican senator, Mitt Romney's loyalty to the GOP was compromised due to a personal spat with Trump. In the Republican primaries of the 2016 US presidential elections, Romney severely castigated Trump, calling him "a phony and a fraud."

After Trump was elected president, he dangled the carrot of the secretary of state appointment to Romney, invited him to a dinner in a swanky New York restaurant, made him eat his words and fawn all over Trump like a servile toady. But later, he gave one of the most coveted appointments in the US bureaucratic hierarchy to oil executive Rex Tillerson.

Romney felt humiliated to the extent that in Trump's vulnerable moment, after impeachment proceedings were initiated against him in the Senate in February, Romney became the only US senator in the American political history who voted against his own Republican Party president.

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Though lacking intellect and often ridiculed for frequent spelling errors on his Twitter timeline, such as "unpresidented" and "covfefe," implying he gets his news feed from television talk shows and rarely reads book and articles, Donald Trump is street smart and his anti-globalization agenda and down-to-earth attitude appeal to the American working classes.

Nevertheless, it's quite easy for the neuroscientists on the payroll of the national security establishment to manipulate the minds of such impressionable politicians and lead them by the nose to toe the line of the deep state, particularly on foreign policy matters. No wonder national security shills disparagingly sneer at the president as the "toddler-in-chief."

In 2017, a couple of caricatures went viral on social media. In one of those caricatures, Donald Trump was depicted as a child sitting on a chair and Vladimir Putin was shown whispering something into Trump's ears from behind. In the other, Trump was portrayed sitting in Steve Bannon's lap and the latter was shown mumbling into Trump's ears, "Who is the big boy now?" And Trump was shown replying, "I am the big boy."

The meaning conveyed by those cunningly crafted caricatures was to illustrate that Trump lacks the intelligence to think for himself and that he was being manipulated and played around by Putin and Bannon. Those caricatures must have affronted the vanity of Donald Trump to an extent that after the publication of those caricatures, he became ill-disposed toward Putin and sacked Bannon from his job as the White House Chief Strategist in August 2017, only seven months into the first year of the Trump presidency.

Bannon was the principal ideologue of the American alt-right movement. Though the alt-right agenda of the Trump presidency has been scuttled by the deep state, Trump's views regarding global politics and economics are starkly different from the establishment Democrats and Republicans pursuing neocolonial world order masqueraded as globalization and free trade.

Besides the Trump supporters in the United States, the far-right populist leaders in Europe are also exploiting popular resentment against free trade and globalization. The Brexiteers in the United Kingdom, the Yellow Vest protesters in France and the far-right movements in Germany and across Europe are a manifestation of a paradigm shift in the global economic order in which nationalist and protectionist slogans have replaced the free trade and globalization mantra of the nineties.

Donald Trump withdrawing the United States from multilateral treaties, restructuring trade agreements and initiating a trade war against China are meant to redress, at least cosmetically, the legitimate grievances of the American working classes against the wealth disparity created by laissez-faire capitalism and market fundamentalism.

Michael Crowley reported for the New York Times last month that American allies and former US Officials fear Trump could seek NATO exit in a second term. According to the report, "This summer, Mr. Trump's former national security adviser John R. Bolton published a book that described the president as repeatedly saying he wanted to quit the NATO alliance. Last month, Mr. Bolton speculated to a Spanish newspaper that Mr. Trump might even spring an 'October surprise' shortly before the election by declaring his intention to leave the alliance in a second term."

The report notes, "In a book published this week, Michael S. Schmidt, a New York Times reporter, wrote that Mr. Trump's former chief of staff John F. Kelly, a retired four-star Marine general, told others that 'one of the most difficult tasks he faced with Trump was trying to stop him from pulling out of NATO.' One person who has heard Mr. Kelly speak in private settings confirmed that he had made such remarks."

Crowley adds, "Donald Trump now relies on 'a team of inexperienced bureaucrats' and has grown more confident and assertive, as he has already sacked seasoned national security advisers, including John F. Kelly; Jim Mattis, another retired four-star Marine general and Trump's first defense secretary; and H.R. McMaster, a retired three-star Army general and Trump's former national security adviser."

In fact, the Trump administration announced plans in July to withdraw 12,000 American troops from Germany and sought to cut funding for the Pentagon's European Deterrence Initiative. About half of the troops withdrawn from Germany were re-deployed in Europe, mainly in Italy and Poland, and the rest returned to the US.

Similarly, although full withdrawal of US troops from Afghanistan was originally scheduled for April next year, according to terms of peace deal reached with the Taliban on February 29, President Trump hastened the withdrawal process by making an electoral pledge this week that all troops should be "home by Christmas." "We should have the small remaining number of our BRAVE Men and Women serving in Afghanistan home by Christmas," he tweeted last week.

Even the arch-foes of the US in Afghanistan effusively praised President Trump's peace overtures. Taliban spokesman Zabihullah Mujahid told CBS News in a phone interview last week, "We hope he will win the election and wind up US military presence in Afghanistan."

The militant group also expressed concern about President Trump's bout with the coronavirus. "When we heard about Trump being COVID-19 positive, we got worried for his health, but it seems he is getting better," another Taliban senior leader confided to reporter Sami Yousafzai.

Moreover, Iran-backed militias recently announced "conditional" cease-fire against the US forces in Iraq on the condition that Washington present a timetable for the withdrawal of its troops. The US-led coalition has already departed from smaller bases across Iraq and promised to reduce its troop presence from 5,200 to 3,000 in the next couple of months, though Iraq's parliament passed a resolution urging the full withdrawal of US troops in January.

There is no denying the fact that the four years of the Trump presidency have been unusually tumultuous in the American political history, but if one takes a cursory look at the list of all the Trump aides who resigned or were otherwise sacked, almost all of them were national security officials.

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In fact, scores of former Republican national security officials recently made their preference public that they would vote in the upcoming US presidential elections for Democrat Joe Biden instead of Republican Donald Trump against party lines.

What does that imply? It is an incontrovertible proof that the latent conflict between the deep state and the elected representatives of the American people has come to a head during the Trump presidency.

Although far from being a vocal critic of the deep state himself, the working-class constituency that Trump represents has had enough with the global domination agenda of the national security establishment. The American electorate wants the US troops returned home, and wants to focus on national economy and redress wealth disparity instead of acting as global police waging "endless wars" thousands of miles away from the US territorial borders.

Addressing a convention of conservatives last year, Trump publicly castigated his own generals, much to the dismay of neoliberal chauvinists upholding American exceptionalism and militarism, by revealing: "I learn more sometimes from soldiers what's going on, than I do from generals. I do. I hate to say it. I tell the generals all the time."

At another occasion, he ruffled more feathers by telling the reporters: "I'm not saying the military's in love with me. The soldiers are. The top people in the Pentagon probably aren't because they want to do nothing but fight wars so all of those wonderful companies that make the bombs and make the planes and make everything else stay happy."

me name=


[Oct 09, 2020] Goldman Finds The Pandemic Recession Was Actually Not That Bad - Zero Hedge

Oct 09, 2020 | www.zerohedge.com

Goldman Finds The Pandemic Recession Was Actually Not That Bad by Tyler Durden Wed, 10/07/2020 - 20:35 Twitter Facebook Reddit Email Print

In a note which we are confident will go swimmingly with millions of Americans who lost their jobs in the past six months, Goldman's economics team writes that "scarring effect" from the pandemic recession has been "surprisingly limited" and the "damage has so far been much less than initially feared" in what is likely the most upbeat take on the current economy and one wonders if it involved any research outside of Tribeca.

After saying tthat the early weeks of the virus shock the Goldman economists "began to closely track measures of long-term damage to businesses and the labor force" with many businesses facing near-total collapses in revenue and 25 million jobs lost in little over a month, "the threat of deep scarring effects loomed over the US economy." Instead, things have been far better than expected.

Looking at the business sector first, Jan Hatzius and team write that the "scarring effects on the business sector remain surprisingly limited" as commercial bankruptcy filings have run below the pre-pandemic trend, most business closures during the worst months of the pandemic have proved temporary, and new business formation has surged recently.

A similar cheerful conclusion emerges when Goldman looks at the labor force, with the Goldman economists writing that "scarring effects on the labor force have also been less severe than feared" , as unemployment has fallen sharply, "and most of the remaining job losers are either still on temporary layoff or are in industries that should largely recover with a vaccine." In addition, Goldman observes, "labor demand has rebounded much more quickly than last cycle, reducing the risk of widespread long-term unemployment."

Ludicrous? Insane? Hilarious? Perhaps all three, yet here are some of the data Goldman used to reach its arguably offensive to tens of millions of Americans conclusion:

The left side of Exhibit 1 shows that total commercial bankruptcy filings reported by the American Bankruptcy Institute have actually run below the pre-pandemic trend. While a recent San Francisco Fed report noted with alarm that Chapter 11 bankruptcies are running at the fastest pace since 2013, this largely reflects recent changes to the bankruptcy code and it has been more than offset by declines in other commercial bankruptcy filings.

The right side of Exhibit 1 shows that Bloomberg's count of bankruptcies at large companies did briefly spike to a level that approached the financial crisis peak. But as our credit strategists have shown, the majority of these were firms already on a path to default before the pandemic, not otherwise healthy businesses needlessly sunk by an unprecedented shock.

In other words, Goldman contends that while there was a spike in defaults, it was largely among those companies that were already levered to the hilt and would have filed anyway. The covid crisis merely accelerated their demise, which come to thing of it, is what the covid virus is also doing with most of the elderly people it affects and who die not so much from the virus as due to other underlying, chronic or acute conditions, whose impact is merely accentuated to the point of lethality by covid.

What about Goldman's optimistic take on the labor market?

Here the economists argue that the silver lining of the employment collapse was the very high share of temporary layoffs shown in Exhibit 3, historically something which they say is "a reliable signal of rapid recovery" even as those permanently laid off is an dangerously high number, the highest since 2013, Goldman's spin notwithstanding.

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To elucidate their point, Goldman next claims that just five months later, the number of newly unemployed workers since the virus shock has indeed declined dramatically, and about half still report that they are on temporary layoff. While not all of these workers will return to their old positions, this nevertheless points to further outsized job gains in coming months.

Here Bank of America disagrees, and lays out three cyclical forces today that spell out far greater pain for the labor force than GOldman is willing to admit, to wit:

While Goldman acknowledges this, saying that "not all workers who lost jobs in virus-sensitive industries will return to them when a vaccine becomes available, and many layoffs are likely to prove permanent" but then adds that "workers who have to switch jobs or even occupations already face much better prospects for re-employment than after previous recessions."

So it's all good, see? Well, maybe not: even Goldman had to concede that long-term unemployment rose in September and is likely to rise somewhat further in the October jobs report as more workers who lost their jobs in the first month of the pandemic cross the half-year mark. But even here Goldman finds a silver lining, and writes that "the rapid recovery of labor demand and faster pace of labor reallocation is a striking contrast with past recessions that should help most workers avoid the very long unemployment spells seen last cycle."

In short, there is virtually nothing about the devastation endured by businesses and workers that Goldman's well-trained economists can't spin into a positive outcome, and as they summarize "scarring effects on businesses and the labor force have so far proven much less severe than initially feared."

This, they conclude, "bodes well for the economy's medium-term recovery prospects and is one more reason for Goldman's above-consensus 2021 growth forecast." What about the withdrawal of fiscal support which has forced Americans to draw down drastically on their savings which were boosted by the massive fiscal stimulus ...

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... and to resume paying down credit card debt for the first time in months?

Surely at least that has to be positive? Well, as Hatzius agrees, it does raise some risks over the next few months, but then the chief economist counters that "we expect a vaccine and further fiscal support next year -- including another round of small business funding, even in a divided government scenario -- to limit the long-term damage and keep the economy on track for a much more rapid than usual recovery."

To this all one can say is wow : and while we certainly would urge the Goldman economists to read something like " A devastating experience:' Temporary layoffs just became permanent for millions of American workers , and " Ex-Bankruptcy Judge Says Worse Is Yet To Come ", we have two questions: just why did Goldman publish such a puff piece - what does it stand to gain by gutting its reputation for at least pretend-objective analysis - and question number two: has anyone on the Goldman economics team actually stepped one foot outside their academic tri-state ivory tower in the past year?

[Oct 06, 2020] How an "Act of God" Pandemic is Destroying the West by Michael Hudson

Notable quotes:
"... WHEN CHINA SNEEZES: From the Coronavirus Lockdown to the Global Politico-Economic Implications ..."
Oct 06, 2020 | www.unz.com

How an "Act of God" Pandemic Is Destroying the West The U.S. is Saving the Financial Sector, not the Economy MICHAEL HUDSON AUGUST 28, 2020 4,400 WORDS 142 COMMENTS REPLY Tweet Reddit 5 Share Share 3 Email Print More 8 SHARES

Before juxtaposing the U.S. and alternative responses to the corona virus's economic effects, [1] I would like to step back in time to show how the pandemic has revealed a deep underlying problem. We are seeing the consequences of Western societies painting themselves into a debt corner by their creditor-oriented philosophy of law. Neoliberal anti-government (or more accurately, anti-democratic) ideology has centralized social planning and state power in "the market," meaning specifically the financial market on Wall Street and in other financial centers.

At issue is who will lose when employment and business activity are disrupted. Will it be creditors and landlords at the top of the economic scale, or debtors and renters at the bottom? This age-old confrontation over how to deal with the unpaid rents, mortgages and other debt service is at the heart of today's virus pandemic as large and small businesses, farms, restaurants and neighborhood stores have fallen into arrears, leaving businesses and households – along with their employees who have no wage income to pay these carrying charges that accrue each month.

This is an age-old problem. It was solved in the ancient Near East simply by annulling these debt and rent charges. But the West, shaped as it still is by the legacy of the Roman Empire, has left itself prone to the massive unemployment, business closedowns and resulting arrears for these basic costs of living and doing business.

Western civilization distinguishes itself from its Near Eastern predecessors in the way it has responded to "acts of God" that disrupt the means of support and leave debts in their wake. The United States has taken the lead in rejecting the path by which China, and even social democratic European nations have prevented the corona virus from causing widespread insolvency and polarizing their economies. The U.S. corona virus lockdown is turning rent and debt arrears into an opportunity to impoverish the indebted economy and transfer mortgaged property and its income to creditors.

There is no inherent material need for this fate to occur. But it seems so natural and even inevitable that, as Margaret Thatcher would say, There Is No Alternative.

But of course there is, and always has been. However, resilience in the face of economic disruption always has required a central authority to override "market forces" to restore economic balance from "above."

Individualistic economies cannot do that. To the extent that they have a strong state, they are not democratic but oligarchic, controlled by the financial sector in its own interest, in tandem with its symbiotic real estate sector and monopolized infrastructure. That is why every successful society since the Bronze Age has been a mixed economy. The determining factor in whether or not an economic disruption leaves a crippled economy in its wake turns out to be whether its financial sector is a public utility or is privatized from the debt-strapped public domain as a means to enrich bankers and money-lenders at the expense of debtors and overall economic balance.

China is using an age-old policy common ever since Hammurabi and other Bronze Age rulers promoted economic resilience in the face of "acts of God." Unless personal debts, rents and taxes that cannot be paid are annulled, the result will be widespread bankruptcy, impoverishment and homelessness. In contrast to America's financialized economy, China has shown how natural it is for society simply to acknowledge that debts, rents, taxes and other carrying charges of living and doing business cannot resume until economic normalcy is able to resume.

Near Eastern protection of economic resilience in the face of Acts of God

Ancient societies had a different logic from those of modern capitalist economies. Their logic – and the Jewish Mosaic Law of Leviticus 25, as well as classical Greek and Roman advocates of democratic reform – was similar to modern socialism. The basic principle at work was to subordinate market relations to the needs of society at large, not to enrich a financial rentier class of creditors and absentee landowners. More specifically, the basic principle was to cancel debts that could not normally be paid, and prevent creditors from foreclosing on the land of debtors.

All economies operate on credit. In modern economies bills for basic expenses are paid monthly or quarterly. Ancient economies operated on credit during the crop year, with payment falling due when the harvest was in – typically on the threshing floor. This cycle normally provided a flow of crops and corvée labor to the palace, and covered the cultivator's spending during the crop year. Interest typically was owed only when payment was late.

But bad harvests, military conflict or simply the normal hardships of life frequently prevented this buildup of debt from being paid. Mesopotamian palaces had to decide who would bear the loss when drought, flooding, infestation, disease or military attack prevented the payment of debts, rents and taxes. Seeing that this was an unavoidable fact of life, rulers proclaimed amnesties for taxes and these various obligations incurred during the crop year. That saved smallholders from having to work off their debts in personal bondage to their creditors and ultimately to lose their land.

For these palatial economies, resilience meant stabilization of fiscal revenue. Letting private creditors (often officials in the palace's own bureaucracy) demand payment out of future production threatened to deprive rulers of crop surpluses and other taxes, and corvée labor or even service in the military. But for thousands of years, Near Eastern rulers restored fiscal viability for their economies by writing down debts, not only in emergencies but more or less regularly to relieve the normal creeping backlog of debts.

These Clean Slates extended from Sumer and Babylonia in the 3 rd millennium BC to classical antiquity, including the neo-Assyrian, neo-Babylonian and Persian Empires. They restored normal economic relations by rolling back the consequences of debts personal and agrarian debts – bondage to creditors, and loss of land and its crop yield. From the palace's point of view as tax collector and seller of many key goods and services, the alternative would have been for debtors to owe their crops, labor and even liberty to their creditors, not to the palace. So cancelling debts to restore normalcy was simply pragmatic, not utopian idealism as was once thought.

The pedigree for "act-of-God" rules specifying what obligations need not be paid when serious disruptions occur goes back to the laws of Hammurabi c. 1750 BC. Their aim was to restore economic normalcy after major disruptions. §48 of Hammurabi's laws proclaim a debt and tax amnesty for cultivators if Adad the Storm God has flooded their fields, or if their crops fail as a result of pests or drought. Crops owed as rent or fiscal payments were freed from having to be paid. So were consumer debts run up during the crop year, including tabs at the local ale house and advances or loans from individual creditors. The ale woman likewise was freed from having to pay for the ale she had received from palace or temples for sale during the crop year.

Whoever leased an animal that died by an act of god was freed from liability to its owner (§266). A typical such amnesty occurred if the lamb, ox or ass was eaten by a lion, or if an epidemic broke out. Likewise, traveling merchants who were robbed while on commercial business were cleared of liability if they swore an oath that they were not responsible for the loss (§103).

It was realized that hardship was so inevitable that debts tended to accrue even under normal conditions. Every ruler of Hammurabi's dynasty proclaimed a Clean Slate cancelling personal agrarian debts (but left normal commercial business loans intact) upon taking the throne, and when military or other disruptions occurred during their reign. Hammurabi did this on four occasions. 2

Bronze Age rulers could not afford to let such bondage and concentration of property and wealth to become chronic. Labor was the scarcest resource, so a precondition for survival was to prevent creditors from using debt leverage to obtain the labor of debtors and appropriate their land. Rulers therefore acted to prevent creditors from becoming a wealthy class seeking gains by impoverishing debtors and taking crop yields and land for themselves.

By rejecting such alleviations of debts resulting from economic disruption, the U.S. economy is subjecting itself to depression, homelessness and economic polarization. It is saving stockholders and bondholders instead of the economy at large. That is because today's rentier interests take the economic surplus in the form of debt service, holding labor and also corporate industry in bondage. Mortgage debt is the price of obtaining a home of one's own. Student debt is the price of getting an education to get a job. Automobile debt is needed to buy a car to drive to the job, and credit-card debt must be run up to pay for living costs beyond what one is able to earn. This deep indebtedness makes workers afraid to go on strike or even to protect working conditions, because being fired is to lose the ability to pay debts and rents. So the rising debt overhead serves the business and financial sector by lowering wage levels while extracting more interest, financial fees, rent and insurance out of their take-home pay.

Debt deflation and the transition from finance capitalism to an Austerity Economy

By injecting $10 trillion into the financial markets (when Federal Reserve credit is added to U.S. Treasury allocation), the CARES act enabled the stock market to recover all of its 34 percent drop (as measured by the S&P 500 stocks) by June 9, even as the economy's GDP was still plunging. The government's new money creation was not spent to revive the real economy of production and consumption, but at least the financial One Percent was saved from loss. It was as if prosperity and living standards would somehow return to normal in a V-shaped recovery.

But what is "normal" these days? For 95 percent of the population, their share of GDP already had been falling ever since the Obama Depression began with the bank bailout in 2009, leaving an enormous bad-debt overhead in place. The economy's long upswing since World War II was already grinding to an end as it struggled to carry its debt burden, rising housing costs, health care and related monthly "nut." 3

This is not what was expected 75 years ago. World War II ended with families and businesses rife with savings and with little debt, as there had been little to buy during the wartime years. But ever since, each business cycle recovery has started with a higher ratio of debt to income, diverting more revenue from business, households and governments to pay banks and bondholders. This debt burden raises the economy's cost of living and doing business, while leaving less wage income and profit to be spent on goods and services.

The virus pandemic has merely acted as a catalyst ending of the long postwar boom. Yet even as the U.S. and other Western economies begin to buckle under their debt overhead, little thought has been given to how to extricate them from the debts and defaults that have accelerated as a result of the broad economic disruption.

The "business as usual" approach is to let creditors foreclose and draw all the income and wealth over subsistence needs into their own hands. Economies have reached the point where debts can be paid only by shrinking production and consumption, leaving them as strapped as Greece has been since 2015. Rejecting debt writedowns to restore social balance was implanted at the outset of modern Western civilization. Ever since Roman times it has become normal for creditors to use social misfortune as an opportunity to gain property and income at the expense of families falling into debt. Blocking the emergence of democratic civic regimes empowered to protect debtors, creditor interests have promoted laws that force debtors to lose their land or other means of livelihood to foreclosing creditors or sell it under distress conditions and have to work off their debts.

In times of a general economic disruption, giving priority to creditor claims leads to widespread bankruptcy. Yet it violates most peoples' ideas of fairness and distributive justice to evict debtors from their homes and take whatever property they have if they cannot pay their rent arrears and other charges that have accrued through no fault of their own. Bankruptcy proceedings will force many businesses and farms to forfeit what they have invested to much wealthier buyers. Many small businesses, especially in urban minority neighborhoods, will see yeas of saving and investment wiped out. The lockdown also forces U.S. cities and states to cope with plunging sales- and income-tax revenue by slashing social services and depleting their pension funds savings to pay bondholders. Balancing their budgets by privatizing hitherto public services will create monopoly rents and new corporate empires

These outcomes are not necessary. They also are inequitable, and instead of being a survival of the fittest and most efficient economic solutions, they are a victory for the most successfully predatory. Yet such results are the product of a long-pedigreed legal and financial philosophy promoted by banks and bondholders, landlords and insurance companies reject economy-wide debt relief. They depict writing down debts and rents owed to them as unthinkable. Banks claim that forgiving personal and business rents would lead absentee landlords to default on their mortgages, threatening bank solvency. Insurance companies claim that to make their policy holders whole would bankrupt them. 4 So something has to give: either the population's broad economic interests, or the vested interests insisting that labor, industry and the government must bear the cost of arrears that have built up during the economic shutdown.

As in oligarchic Rome, financial interests in today's world have gained control of governments and captured the political and regulatory agencies, leaving democratic reformers powerless to suspend debt service, rent arrears, evictions and depression. The West is becoming a highly centrally planned economy, but its planning center is Wall Street, not Washington or state and local governments.

Rising real estate arrears prompt a mortgage bailout

Canada and many European governments are subsidizing businesses to pay up to 80 percent of employee wages even though many must stay home. But for the 40 million Americans who haven't been employed during the closedown, the prospect is for homelessness and desperation. Already before the crisis about half of Americans reported that they were living paycheck to paycheck and could not raise $400 in an emergency. When the paychecks stopped, rents could not be paid, nor could other normal monthly living expenses.

America is seeing the end of the home ownership boom that endowed its middle class with property steadily rising in price. For buyers, the price was rising mortgage debt, as bank credit was the major factor in raising property prices. (A home is worth however much a bank will lend against it.) For non-whites, to be sure, neighborhoods were redlined against racial minorities. By the early 2000s, banks began to make loans to black and Hispanic buyers, but usually at extortionately high interest rates and stiffer debt terms. America's white home buyers now face a fate similar to that which they have long imposed on minorities: Debt-inflated purchase prices for homes so high that they leave buyers strapped by mortgage and compulsory insurance payments, with declining public services in their neighborhoods.

When mortgages can't be paid, foreclosures follow. That causes declines in the proportion of Americans that own their own homes. That home ownership rate already had dropped from about 58 percent in 2008 to about 51 percent at the start of 2020. Since the 2008 mortgage-fraud crisis and President Obama's mass foreclosure program that hit minorities and low-income buyers especially hard, a more landlord-ridden economy has emerged as a result of foreclosed properties and companies bought by speculators and vast absentee-owner companies like Blackstone.

Many businesses that closed down did not pay the landlords. Realizing that if they are held responsible for paying full rents that accrued during the shutdown, it would take them over a year to make up the payment, leaving no net earnings for their efforts. That was especially the case for restaurants with compulsory limited "distance" seating and other stores obliged to restrict the density of their customers. Many restaurants and other neighborhood stores decided to go out of business. For hotels standing largely empty, some 19 percent of mortgage loans had fallen into arrears already by May, along with about 10 percent of retail stores. 5

The commercial real estate sector owes $2.4 trillion in mortgage debt. About 40 percent of tenants did not pay their rents for March, April and May, from restaurants and storefronts to large national retail markets. A moratorium on evictions put them off until August or September 2020. But in the interim, quarterly state and local property taxes were due in June, which also was when the annual federal income-tax payment was owed for the year 2019, having been postponed from April in the face of the shutdown.

The prospective break in the chain of payments of landlords to their banks may be bailed out by the Federal Reserve, but nobody can come up with a scenario whereby the debts owed by non-elites can be paid out of their own resources, any more than they were rescued from the junk-mortgage frauds that left over-mortgaged homes (mainly for low-income victims) in the wake of Obama's decision to support the banks and mortgage brokers instead of their victims. In fact, it takes a radical scenario to see how state and local debt can be paid as public budgets are thrown into limbo by the virus pandemic.

The fiscal squeeze forces governments to privatize public services and assets

Since 1945, the normal Keynesian response to an economic slowdown has been for governments to run budget deficits to revive the economy and employment. But that can't happen in the wake of the 2020 pandemic. For one thing, tax revenue is falling. Governments can create domestic money, of course, but the U.S. government quickly ran up a $2 trillion deficit by June 2020 simply to support Wall Street's financial and corporate markets, leaving a fiscal squeeze when it came to public spending into the real economy. Many U.S. states and cities have laws obliging them to balance their budgets. So public spending into the real economy (instead of just into the financial and corporate markets) had to be cut back.

Sales taxes from restaurants and hotels, income taxes, and property taxes from landlords not receiving rents. U.S. states and localities are having a huge tax shortfall that is forcing them to cut back basic social services and infrastructure. New York City mayor de Blasio has warned that schools, the police and public transportation may have to be cut back unless the city is given $7 billion. The CARES act passed by the Democratic Party in control of the House of Representatives made no attempt to allocate a single dollar to make up the widening fiscal gap. As for the Trump administration, it was unwilling to give money to states voting Democratic in the presidential or governorship elections.

The irony is that just at the time when a pandemic calls for public health care, political pressure for that abruptly stopped. Logically, it might have been expected the virus to have become a major catalyst for single-payer public health care, not least to prevent a wave of personal bankruptcy resulting from high medical bills. But hopes were dashed when the leading torch bearer for socialized medicine, Senator Bernie Sanders, threw his support behind Joe Biden and other opponents for the presidential nomination instead of focusing the primary elections on what the future of the Democratic Party would be. It decided to focus the 2020 U.S. election merely on the personality of which candidate would impose neoliberal policy: Republican Donald Trump, or his opponent running simply on a platform of "I am not Trump."

Both candidates – and indeed, both parties behind them –sought to downsize government and privatize as much of the public sector as possible, leaving administration to financial managers. Past government policy would have restored prosperity by public spending programs to to rebuild the roads and bridges, trains and subways that have fallen apart. But the fiscal squeeze caused by the economic shutdown has created pressure to Thatcherize America's crumbling transportation and urban infrastructure – and also to sell off land and public enterprises, basic urban health, schools – and at the national level, the post office. Fiscal budgets are to be balanced by selling off this infrastructure, in lucrative Public-Private Partnerships (PPPs) with financial firms.

The neoliberal rent-extractive plan is for private capital to buy monopoly rights to repair the nation's bridges by turning them into toll bridges, to repair the nation's roads and highways by making the toll roads, to repair sewer systems by privatizing them. Schools, prisons, hospitals and other traditionally public functions. Even the police are to be privately owned security-guard agencies and managed for profit – on terms that will provide interest and capital gains for the financial sector. It is a New Enclosures movement seeking monopoly rent much as landlords extract land rent.

Having given $10 trillion dollars to support financial and mortgage markets, neoliberals in both the Republican and Democratic parties announced that the government had created so large a budget deficit as a result of bailing out the banking and landlord class that it lacked any more room for money creation for actual social spending programs. Republican Senate leader Mitch McConnell advised states to solve their budget squeeze by raiding their pension funds to pay their bondholders.

For many decades, public employees accepted low wage growth in exchange for pensions. Their patient choice was to defer demands for wage increases in order to secure good pensions for their retirement. But now that they have worked at stagnant wages for many years, the money ostensibly saved for their pensions is to be given to bondholders. Likewise at the federal level, pressure was renewed by both parties to cut back Social Security, Medicare and Medicaid, with Obama's 2010 Simpson-Bowles Commission on Fiscal Responsibility and Reform to reduce the deficit at the expense of retirees and the poor.

In sum, money is being created to fuel the financial sector and its stock and bond markets, not to increase the economy's solvency, employment and living standards. The corona virus pandemic did not create this shift, but it catalyzed and accelerated the power grab, not least by pushing public-sector budgets into crisis.

It doesn't have to be this way

Every successful economy has been a mixed public/private economy with checks on the financial sector's power to indebt society in ways that impoverish it. Always at issue, however, is who will control the government. As American and European industry becomes more debt ridden, will they be oligarchic or democratic?

A socialist government such as China's can keep its industry going simply by simply writing down debts when they can't be paid without forcing a closedown and bankruptcy and loss of assets and employment. The world thus has two options: a basically productive public financial system in China, or a predatory financial system in the United States.

China can recover financially and fiscally from the virus disruption because most debts ultimately are owned to the government-based banking system. Money can be created to finance the material economy, labor and industry, construction and agriculture. When a company is unable to pay its bills and rent, the government doesn't stand by and let it be closed down and sold at a distressed price to a vulture investor.

China has an option that Western economies do not: It is in a position to do what Hammurabi and other ancient Near Eastern palatial economies did for thousands of years: write down debts so as to keep the economy resilient and functioning. It can suspend scheduled debt service, taxes, rents and public fees from having to be paid by troubled areas of its economy, because China's government is the ultimate creditor. It need not contend with politically powerful bankers who insist that the economy at large must lose, not themselves. The government can write down the debt to keep companies in business, and also their employees. That's what socialist governments do.

The underlying problem is finance capitalism. Its roots lie at the heart of Western civilization itself, rejecting the "circular time" permitting economic renewal by Clean Slates in favor of "linear time" in which debts are permanent and irreversible, without public oversight to manage finance and credit in the economy's overall long-term interest.

It often is easier to get rich in such times of disaster and need than in times of normal prosperity. While the U.S. economy polarizes between creditors and debtors, the stock market anticipates fortunes being made quickly from the insolvency of business with assets and property to be grabbed. Coupled with the Federal Reserve's credit creation to support the financial and real estate markets, asset prices are soaring (as of June 2020) for companies that expect to get even richer from the widespread distress to come in autumn 2020 when evictions and foreclosures ae scheduled to begin again.

In that respect, the corona virus's effect has been to help defeat the financial sector's enemy, governments strong enough to regulate it. The fiscal squeeze resulting from widespread unemployment, business closedowns, rent and tax arrears is being seized upon as a means of dismantling and privatizing government at the federal, state and local levels, at the expense of the citizenry at large.

Notes

[1] WHEN CHINA SNEEZES: From the Coronavirus Lockdown to the Global Politico-Economic Implications , Edited by Cynthia McKinney, Chapter 9, Economic Impact.

[2] I provide a detailed history of Clean Slate acts from the Bronze Age down through Biblical times and the Byzantine Empire in " and forgive them their debts" (ISLET 2018).

[3] I provide the details in Killing the Host: How Financial Parasites and Debt Destroy the Global Economy ((SLET, 2015).

[4] Lawsuits are exploding over the role of insurance companies supposed to protect business from such interruptions. See Julia Jacobs, "Arts Groups Fight Their Insurers Over Coverage on Virus Losses," The New York Times , May 6, 2020, reports that "insurance companies have issued a torrent of denials, prompting lawsuits across the country and legislative efforts on the state and federal levels to force insurers to make payments. The insurance industry has argued that fulfilling all of these requests would bankrupt the industry."

[5] Conor Dougherty and Peter Eavis, "In Commercial Real Estate, the Domino Effect Escalates," The New York Times , June 9, 2020.

[Oct 06, 2020] Who is the dumbest economic Nobel Prize winner?

Oct 06, 2020 | www.moonofalabama.org

vato , Oct 5 2020 9:03 utc | 104

Michael Hudson's newest interview on the Macro N Cheese Podcast either as a transcript or via audio is all about the coming debt deflation and what he calls the Neofeudal Empire.
If you haven't already known, Hudson reminds you that:

Who is the dumbest economic Nobel Prize winner? [Paul Krugman?] Paul Krugman. That's right. He was given a Nobel Prize for not understanding what money was. If he would have understood it, that would've excluded him from getting the Nobel Prize.

[Oct 06, 2020] https://www.wsj.com/articles/u-s-retail-bankruptcies-store-closures-hit-record-in-first-half-11601371800

Oct 06, 2020 | www.wsj.com


All over the country, big companies are laying off thousands of workers, and in some cases the numbers are even larger than that. Meanwhile, we have been seeing businesses fail at a pace that is absolutely stunning. According to the Wall Street Journal, this year we are on pace to set new records for retail stores closings, retail bankruptcies, and retail liquidations
Also
https://news.bloomberglaw.com/bankruptcy-law/new-york-region-sees-40-bankruptcy-surge-braces-for-more
https://www.dailymail.co.uk/news/article-8787099/Disney-layoff-28-000-employees-
coronavirus-continues-decimate-theme-parks.html
The airline industry is actually on the verge of a historic implosion, and we are being told that 100,000 workers could soon lose their jobs if they don't get a massive bailout from the federal government.
https://wolfstreet.com/2020/09/28/facing-crappiest-recovery-ever-airlines-demand-new-25-billion-bailout-for-50-billion-total-after-having-burned-45-billion-on-share-buybacks/
32,000 jobs !!!!
https://edition.cnn.com/2020/09/30/business/airline-job-cuts/index.html
https://www.cbsnews.com/news/transcript-american-airlines-doug-parker-on-face-the-nation-september-27-2020/
KPMG, one of the so-called Big Four accounting firms, laid off 1,400 of its 35,000 US employees on Tuesday.
https://www.businessinsider.com/kpmg-layoffs-1400-employees-professional-services-struggle-job-cuts-2020-9?r=DE&IR=T
https://www.zerohedge.com/markets/goldman-cuts-400-jobs-covid-19-layoff-moratorium-ends
https://www.foxbusiness.com/markets/shell-plans-to-cut-up-to-9000-jobs-in-transition-plan
But for many Americans, this economic downturn has quickly become a horror show.
https://edition.cnn.com/2020/09/28/success/hotel-workers-pandemic-layoffs/index.html
https://edition.cnn.com/2020/10/04/business/unemployed-workers-permanent-job-losses/index.html
If the tourists - only slowly, slowly - fully return
https://www.thehour.com/business/article/The-covid-19-recession-is-the-most-unequal-in-15609728.php
Signs That America's Economic Depression Is Accelerating
Almost 90 percent of NYC bars and restaurants couldn't pay August rent !!!!
https://nypost.com/2020/09/21/almost-90-percent-of-nyc-bars-and-restaurants-couldnt-pay-august-rent/
Additional 787,000 workers seek unemployment
https://eu.usatoday.com/story/money/2020/10/01/unemployment-more-workers-file-jobless-claims-cuts-persist/5874518002/
All 546 of its theaters across US, UK and Ireland will be closed
https://www.dailymail.co.uk/news/article-8803287/Regal-owner-Cineworld-close-U-S-UK-Irish-screens.html

Hunger In Texas: No End In Sight For Pandemic Food Lines
https://www.keranews.org/texas-news/2020-09-25/hunger-in-texas-no-end-in-sight-for-pandemic-food-lines

Thousands of cars form tightly packed lines across the state every week now to receive food.

From Chihuahuan Desert border towns and cities to the staked plains of the panhandle, across the piney wood of deep East Texas, down to the Rio Grande and back cars stack, growing into steel and fiberglass caterpillars, hungry.
These events have distributed tens of millions of pounds of food over the past six months.
And...
Wildfires to escalate as intense heat dome builds this weekend
https://www.stamfordadvocate.com/news/article/Wildfire-danger-in-West-to-escalate-as-intense-15590810.php
California's Wildfires record burned 4 million acres
https://abc7ny.com/california-wildfires-fires-glass-fire-homes-burned-wildfire/6768129/
US West Coast wildfires air quality deteriorates to the worst
https://duckduckgo.com/?q=US+west+coast+wildfires+air+quality+deteriorate+to+the+worst&ia=web

Posted by: Ashino | Oct 5 2020 13:18 utc | 113

[Oct 05, 2020] The first man put at the helm will be a good one. Nobody knows what sort may come afterwards. The executive will be always increasing here, as elsewhere, till it ends in a monarchy

Oct 05, 2020 | www.moonofalabama.org

Richard Steven Hack , Oct 5 2020 4:25 utc | 96

Posted by: snake | Oct 5 2020 4:02 utc | 93 430,000,000 virgin Americans

Thought the population as of this year was 331 million? Typo?

True, dissatisfaction with states appears to be on the rise world-wide. The problem is that people still are still thoroughly brainwashed into believing the problem is *their* state, not "state" in the abstract. And because of that, *any* change they make is likely to be for the worse, a la National Socialism. The likelihood of some form of "Chinese Communism" in this country is next to zero - not that I would welcome that, either, but some here would. France might swing toward some form of "council socialism", given their previous history with left revolutions, but I don't see that spreading anywhere else; maybe Spain given their anarchism history. No, I don't see any evidence that the state itself is under any significant threat anywhere. States may collapse, even in the US, but they will reform almost immediately. Any positive changes will be unlikely and even if implemented will quickly be eroded.

The *only* solution is extermination of the ruling class. "The world will only be free when the last politician is strangled with the guts of the last priest." And even then, without some kind of "re-education" of everyone else, it won't last. A new ruling class will simply arise.

Just looked up that Ben Franklin quote:

First reported by James McHenry, a Maryland delegate to the Constitutional Convention. This is what he wrote: "A lady asked Dr. Franklin Well Doctor what have we got a republic or a monarchy. A republic replied the Doctor if you can keep it." Another of his famous quotes from that era comes just after Washington had been elected the first president. "The first man put at the helm will be a good one. Nobody knows what sort may come afterwards," he said. But that isn't the full quote. He continued, "The executive will be always increasing here, as elsewhere, till it ends in a monarchy."

Well, here we are. We didn't keep it. And here we are: a lunatic in office who thinks he's King George.

[Sep 28, 2020] Semitism and Capitalism by Andrew Joyce

Sep 28, 2020 | www.unz.com

"The middleman and the host society come in conflict because elements in each group have incompatible goals. To say this is to deny the viewpoint common in the sociological literature that host hostility is self-generated (from psychological problems or cultural traditions)."
Edna Bonacich, "A Theory of Middleman Minorities," 1973. [1]

An interesting accompaniment to Nathan Cofnas's 2018 attempted debunking of Kevin MacDonald's work on Jews was the subtle resurfacing of Steven Pinker's claim that a more plausible theory of the Jewish historical experience can be found in "Thomas Sowell's convincing analysis of 'middleman minorities' such as the Jews, presented in his magisterial study of migration, race, conquest, and culture." Pinker first involved himself in criticism of MacDonald's work in a letter to Slate , in January 2000, where he made the above comment. A mere teenager in January 2000, it was only in the wake of the Cofnas affair that I first discovered and read Pinker's initial response to MacDonald's theory. It goes without saying that I disagreed with almost everything Pinker had to say, but I was especially vexed by his invocation of the "middleman minority" theory, something I've been familiar with for over a decade and always found strongly lacking. Pinker himself, of course, has relatively little expertise in the area, his only comment on the theme coming from a quasi-memoir on Jewish intelligence written for New Republic . Additionally, his gushing use of persuasive language ("convincing," "magisterial") to describe Thomas Sowell's extremely derivative and now rather dated Migrations and Cultures: A World View (1996) struck me as a wholly contrived inflation of what isn't really a rival theory at all, and certainly not a Sowell innovation. In fact, the history of "middleman minority" theory, and especially its application to the Jews, has a patchy, chequered, and ambiguous history that is worth exploring in its own right. The following essay is intended to provide such a history, as well as to broadly assess the merits and inadequacies of exploring Jewish history through this lens, and also the ways it complements, and falls short of, Kevin MacDonald's theory.

History of the Theory

The comparing of Jews with other sojourning or diaspora trading peoples is far from new, and has even been a staple of anti-Jewish writing since at least the Enlightenment. Voltaire, for example, wrote in his Oeuvres Complètes (Geneva, 1756) and Dictionnaire Philosophique (Basle, 1764) that "The Guebers [Parsis in the modern terminology], the Banyans [Indian merchants] and the Jews, are the only nations which exist dispersed, having no alliance with any people, are perpetuated among foreign nations, and continue apart from the rest of the world." [2] In the course of his essay, however, Voltaire concluded that, some surface similarities aside, "It is certain that the Jewish nation is the most singular that the world has ever seen." Bruno Bauer (1809 -- 1882), the German Protestant theologian, philosopher and historian, also used the example of the Parsis and Overseas Indians, writing in The Jewish Problem (1843),

The base [of the tenacity of the Jewish national spirit] is lack of ability to develop with history, it is the reason of the quite unhistorical character of that nation, and this again is due to its oriental nature. Such stationary nations exist in the Orient, because there human liberty and the possibility of progress are still limited. In the Orient and in India, we still find Parsees [sic] living in dispersion and worshipping the holy fire of Ormuz. [3]

After Voltaire, commentary on the relationship between the economic activity of the Jews and other aspects of their behavior and history, a key theme in modern middleman minority theory, were common points of discussion and debate. Jakob Friedrich Fries (1773 -- 1843), an avowedly anti-Semitic German philosopher, argued in his essay On the Danger to the Well-Being and Character of the Germans Presented by the Jews (1816), that Jews adopted their historical middleman role willingly, out of a hunger for profit and an innate sense of separateness, rather than being forced into it by broader economic structures and contexts (which again are a major focus of modern middleman minority theory). For Fries,

Both in Germany and abroad the Jews had free states where they enjoyed every right, and even countries where they reigned -- but their sordidness, their mania for deceitful, second-hand dealing always remained the same. They shy away from industrious occupations not because they are hindered from pursuing them but simply because they do not want to.

Following Bauer and Fries -- and before modern scholarship on the subject, the most prominent invocation of ideas similar to modern middleman minority theory can be observed in the work of Karl Marx. In fact, Marx's essay On the Jewish Problem is an explicit reply to Bauer, with Marx accusing Bauer of "a one-sided conception of the Jewish problem." [4] Marx decried Bauer's focus on religious matters, perceiving the roots of the Jewish problem to reside instead in resource competition and raw economics. In many of his arguments and assessments of the economic and sociological position of the Jews, Marx anticipated Edna Bonacich (1940 -- ), the Jewish Marxist anti-Zionist sociologist who essentially invented middleman minority theory in its modern form (and whose work will be discussed below), in arguing for a structural-contextual explanation of the middleman role of the Jews. In this view, the historical development of Capital essentially invites and entices certain sojourning or diaspora groups, including the Jews, to adopt lucrative but exploitative and antagonistic roles within society. In the words of Marx, "we recognize therefore in Judaism a generally present anti-social element which has been raised to its present peak by historical development , in which the Jews eagerly assisted ." [emphasis added] These antagonistic roles then generate host hostility, which reinforces ethnocentrism and negative characteristics in the minority, accelerating and deepening conflict.

Marx's emphasis on economic opportunity and the capitalist superstructure influenced later writers such as the German economist Wilhelm Roscher (1817 -- 1894), Werner Sombart (1863 -- 1941), Max Weber (1864 -- 1920), and Georg Simmel (1858 -- 1918), all of whom attempted in some form to trace the relationship of ethnicity to occupational choice (a major concern of modern middleman minority theory), with particular attention paid to the Jews. In keeping with his flamboyant Marxism, Sombart was closest to Marx's ideas on the Jews, arguing in The Jews and Modern Capitalism (1911) that Capital had drawn Jews into their influential, exploitative, and lucrative roles in such a comprehensive manner that Jews had become a kind of ur-middleman minority, and thus were both the prime movers of modern capitalism and the very embodiment of exploitative capital itself. Later, in Der moderne Kapitalismus (1913), Sombart claimed that the middleman nature of the Jews had become endemic in society, creating generations of mere "traders," a bourgeois "Jewish species" whose entire intellectual and emotional world is "directed to the money value of conditions and dealings, who therefore calculates everything in terms of money." This "spirit of Moloch" compelled the entrepreneur to "make money relentlessly until at last he conceives this as the real goal of all activity and all existence." [5] For Sombart, the origins of the worst of modern capitalism can be found in the early middleman role of the Jews, their medieval semi-nomadic quest for usury-derived profit and Victorian hawking of shoddy goods being a precursor to modern advertising and the mass production of superfluous and quickly obsolete consumer products.

Max Weber's interpretation of the Jewish middleman role was slightly softer, with Weber advancing the notion of "pariah capitalism." Pariah capitalists, who include the Jews as well as the Parsis, the Overseas Indians, and the Overseas Chinese, are groups whose characteristics and situational contexts make them prone to willingly adopt socially negative positions in order to obtain wealth and influence. For Weber, capitalism itself was not intrinsically bad. The Puritans, with their industry and hard work, were held up in Weber's The Protestant Ethic and the Spirit of Capitalism (1904/5) as exemplars of positive, "rational" capitalism. Jews, and other pariah capitalists, however, invariably advanced a negative "irrational" capitalism typified by consumer credit, speculation, and colonialism. According to Weber, middleman minorities or "pariah capitalist groups" perverted the essentially good nature of capitalism because of their practice of "dual ethics," or moral double-standards, which was itself a product of their sojourning nature and situational context. Weber also perceived Judaism itself as reinforcing the Jewish preference for pariah capitalism. [6]

Softer still were the ideas of Wilhelm Roscher, one of the founders of the historical school of political economy. Roscher was part of the historical economist or European Institutionalist movement (which also influenced Weber) that argued for a study of economics based on empirical work that laid special methodological emphasis on context, rather than logical philosophy. Roscher's emphasis on context and the historical development of capitalism are exemplified in his 1875 essay "The Status of the Jews in the Middle Ages Considered from the Standpoint of Commercial Policy."[7] In this essay, Roscher presented capitalism as neither inherently good or bad, and he made the argument that Jews, who like other middleman minorities were economic modernizers, were positive influences and crucial to the development of a burgeoning economic trading system. Gideon Reuveni offers the following summary:

According to Roscher, the modernizing role of the Jews explains the change in attitudes within the social majority: from tolerance and acceptance to exclusion and persecution. In other words, once, in the eyes of the majority the role of the Jews becomes superfluous, resentments towards the Jews become more prevalent. This cycle in relations towards Jews, Roscher observed, was not specific to the relationship between Jews and non-Jews but was rather a general development among many peoples who allow their economies to be administered by a foreign and more highly cultivated people, but later, upon having reached the necessary level of development themselves, often after intense struggles, try to emancipate themselves from this tutelage. According to Roscher, "one may defiantly speak in this connection of a historical law here." [8]

Similar to Roscher's ideas were the theories of the Jewish Marxist anti-Zionist Abram Leon (1918 -- 1944). Leon, a Polish Jew said to have been executed at Auschwitz at the age of 26, published The Jewish Question: A Marxist Interpretation around 1942, in which he proposed that Jews were a "people-class." For Leon, "Judaism mirrors the interests of a pre-capitalist mercantile class." He explains,

Judaism was an indispensable factor in precapitalist society. It was a fundamental organism within it. That is what explains the two-thousand-year existence of Judaism in the Diaspora. The Jew was as characteristic a personage in feudal society as the lord and the serf. It was no accident that a foreign element played the role of "capital" in feudal society. Feudal society as such could not create a capitalist element; as soon as it was able to do so, precisely then it ceased being feudal. Nor was it accidental that the Jew remained a foreigner in the midst of feudal society. The "capital" of precapitalist society existed outside of its economic system. From the moment that capital begins to emerge from the womb of this social system and takes the place of the borrowed organ, the Jew is eliminated and feudal society ceases to be feudal. It is modern capitalism that has posed the Jewish problem. Not because the Jews today number close to twenty million people (the proportion of Jews to non-Jews has declined greatly since the Roman era) but because capitalism destroyed the secular basis for the existence of Judaism. Capitalism destroyed feudal society; and with it the function of the Jewish people-class. History doomed this people-class to disappearance; and thus the Jewish problem arose. The Jewish problem is the problem of adapting Judaism to modern society.

Georg Simmel, an ethnically Jewish sociologist, philosopher, and critic, moved in much the same theoretical direction as Roscher and Leon, as evidenced in his famous and still influential essay "Der Fremde" ("The Stranger") (1908). Simmel argued that certain groups like Jews and other diaspora peoples may be members of host nations in a spatial sense but not in a social sense. They may be in the nation, but not of it. These groups are both near and far, familiar and foreign. This contextual scenario influences the behavior of "stranger" groups by permitting them freedom from convention and allowing them access to an alleged greater objectivity. For Simmel, "the Stranger," the classic example of which in his estimation is the Jew, is "the person who comes today and stays tomorrow. He is, so to speak, the potential wanderer: although he has not moved on, he has not quite overcome the freedom of coming and going." [9] This freedom, argues Simmel, makes "the Stranger" ideally suited to fulfil the role of middleman minority. [10] As with Roscher's theory, which is markedly contradicted in several key areas of the historical record, there are a number of obvious logical and evidential problems with Simmel's theory, and these will be discussed later.

Between Simmel's 1908 essay and the 1970s, middleman minority theories continued to be advanced. With the exception of Philip Curtin and his Cross-cultural Trade in World History (1984), these efforts were developed primarily by Jewish scholars, and overwhelmingly within the context of trying to explicitly or implicitly explore, explain, or offer apologetics for the Jewish experience. For example, Abner Cohen (1921 -- 2001), was an anthropologist at the University of London, who advanced, in his influential work Urban Ethnicity (1974) and numerous other publications, the idea that there are "trading diasporas." [11] Of particular interest are Cohen's ideas about "visibility strategies" pursued by such groups:

The use of symbols to maintain group boundaries can thus be seen as a cultural strategy. In fact, many groups in traditional and modern societies find that their interests are guarded better through invisible organisations such as cousinhoods, membership in a common set of social clubs, religious ties, and informal networks, than through a highly visible, formally recognised institution. At times, ethnic groups may need to heighten their visibility as strangers to maintain their interests while in other instances they may wish to lower their profile and appear to be an integral part of the society. [12]

This bears a striking similarity to the sixth chapter of Kevin MacDonald's Separation and Its Discontents , which is concerned with visibility strategies, especially among crypto-Jews, and concludes with the argument that "this attempt to maintain separatism while nevertheless making the barriers less visible is the crux of the problem of post-Enlightenment Judaism." [13] In fact, beginning in the 1970s, middleman minority theory began to develop several ideas that dovetail very well with the concept of Judaism as a group evolutionary strategy. Nowhere is this more apparent than in the work of Edna Bonacich.

Although the modern refinement of middleman minority theory is often traced to Hubert Blalock's 1967 Toward a Theory of Minority-Group Relations , the greater scholarly interest has been shown in Edna Bonacich's 1973 American Sociological Review article "A Theory of Middleman Minorities." [14] Bonacich sought to refine and systematize Blalock's theory within an anti-capitalist framework, essentially making the argument that all group conflict in such scenarios is the result of a rational competition for resources in which group characteristics and interests play a crucial role. A Jewish Marxist and anti-Zionist, Bonacich's interpretations borrow heavily from Marx, Sombart, Weber, Roscher, and Leon, to the extent that Bonacich essentially concurs that capitalism created opportunities for exploitative middleman communities and the Jews and other middleman minorities, who possess certain predisposing characteristics including dual loyalty and a level of unscrupulousness, willingly and enthusiastically engaged in these roles.

Bonacich is well-known for her work on East Asian middleman minorities in the United States, especially her 1980 monograph The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community , but her earliest work on middleman minorities clearly demonstrates a concern with the Jewish experience. [15] In her discussion of middleman minorities in the 1973 article, Bonacich describes Jews as "perhaps the epitome of the form." Some of the key features of the 1973 article include the arguments that Jews and other middleman minorities are essentially economic "teams," and that these teams rely upon very high levels of ethnocentrism and related social and economic strategies, which in turn enable them to succeed in individualistic societies. Bonacich writes,

The modern industrial capitalist treats his workers impartially as economic instruments; he is as willing to exploit his own son as he is a stranger. This universalism, the isolation of each competitor, is absent in middleman economic activity, where primordial ties of family, region, sect, and ethnicity unite people against the surrounding, often individualistic economy . [emphasis added] [16]

Bonacich makes some very interesting, and controversial, remarks on the nature of conflict between middleman minorities and their hosts, with special reference to Jews. For Bonacich, accusations that Jews have simply been scapegoats for the woes of Europeans are based on nothing more than a "surface impression." [17]
While noting that middleman minorities "are noteworthy for the acute hostility they have faced," it remains that,

host members have reason for feeling hostile toward middleman groups. Even the extremity of the host reaction can be understood as "conflict" behavior. The reason is that the economic and organisational power of middleman groups makes them extremely difficult to dislodge. The difficulty of breaking entrenched middleman monopolies, the difficulty of controlling the growth and extension of their economic power, pushes host countries to ever more extreme reactions. One finds increasingly harsh measures, piled on one another, until, when all else fails, "final solutions" are enacted. [18]
[emphasis added]

Bonacich has also argued that Jews and other middleman minorities do engage in economic and social "dual loyalty," and that middleman minorities do in fact "drain" resources away from host populations and can become very powerful as a result. This then frequently causes host elites and masses to unite against the sojourning element, a conflict that can escalate rapidly if the sojourning element refuses to give up its monopolies. Bonacich explicitly rejects any idea that "host hostility is self-generated (from psychological problems or cultural traditions)," arguing instead that "the middleman and the host society come in conflict because elements in each group have incompatible goals." With her apparent justification of host violence against middleman minorities, including Jews, as well as her objective view of certain Jewish characteristics, Bonacich's theory has been heavily criticized in some quarters, despite its ongoing influence in contemporary sociology. Robert Cherry, for example, has lamented that Bonacich's ideas on middleman minorities "reinforce persistent, negative Jewish stereotypes." [19]

Discussion

Before moving to an assessment of the merits and inadequacies of middleman minority theory in explaining Jewish history, it's worth reflecting on the history of the theory in light of Steven Pinker's claim that it represents a rival, or "more convincing," analysis of the Jewish historical trajectory. The first problem, of course, is that, despite Pinker's lavish praise, Thomas Sowell is not remotely regarded within scholarship as a leading or original thinker in the area of middleman minority theory. Not only does discussion of middleman minorities form a relatively small element of Sowell's Migrations And Cultures , but what does appear is highly derivative of the work of Edna Bonacich, Walter Zenner, and others.

A further problem is Pinker's assumption that there exists a single, unified theory on middleman minorities that will help explain the Jewish historical experience, and that somehow this will also be sufficient to counter the theory of Kevin MacDonald, or at least offer a more convincing framework that would allow MacDonald's ideas to be dispensed with. As should already be clear from this brief, and incomplete, bibliographical overview, within middleman minority theory there is a plethora of often competing interpretations, as well as a general problem of definitions. Walter Zenner, a key proponent of middleman minority theory, concedes that "we tend to make our definitions and models fit the prototypical group. For decades, the Jews were the archetype." [20] In other words, for a considerable time, middleman minority theory was built around trying to explain the experience of Jews, with other groups haphazardly mapped onto the theory in way that tried to give the impression of similarity, even where these similarities were thin to non-existent. Bonacich has made roughly the same argument, asserting that middleman minority theory should be regarded as incomplete because it can only point to an "ideal type," and

In reality there are problems of fit between any actual ethnic group and this picture, problems in establishing which or how many of the traits a population need have before it can be classified as a middleman minority. [21]

Bonacich, very reasonably in my opinion, proposes that middleman minority theory, of which she herself is a pioneer, is something of a misnomer and should be regarded as little more than "a useful sensitiser to a host of interrelated variables." [22]
One is therefore pressed by Pinker's claim to ask not only which of the many strands of middleman minority theories Steven Pinker is praising, but also just how "convincing" and "magisterial" he can find it given the field's leading contemporary thinkers regard their work in such ambiguous terms.

Finally, it is not at all clear how any of the aspects of middleman minority theory obviate the need for a deeper theoretical framework in which to understand the behaviors and contexts under study. Middleman minority theory, as remarked above, is an incomplete tool, and has little to offer in terms of deeper explanatory value for such relevant key concepts under discussion as resource competition, ecological strategies, visibility strategies, psychological attitudes toward the majority, and social identity theory. One of the strong points of Kevin MacDonald's work, which is truly cross-disciplinary and unusually well-equipped in terms of the relevant historical literature, is that is does offer such an analysis, and can be argued to fill a lot of the logical and evidential gaps of middleman minority theory. This is not to say that the two frameworks are in opposition, but that the concept of a group evolutionary strategy can be usefully and seamlessly integrated into middleman minority theory, especially in relation to Jews.

It's been continually remarked by many scholars in the field that Jews should be regarded as either an "ideal type," "the epitome of the form," a singular example, or otherwise unique case -- even within the context of broad comparative approaches with other trading diaspora peoples. The qualities that have made Jews so unique -- cultural, historical, religious, and even biological -- are rarely remarked or elaborated upon in sociological studies of middleman minorities, which are often lacking in depth in terms of their historical analysis. As will be discussed below, Zenner, in particular, has highlighted ways in which Jews do not fit the standard middleman minority pattern, especially in terms of their extravagant and influential involvement in the culture and politics of the host nation (see also MacDonald's Diaspora Peoples on the Overseas Chinese, xlii ff). Unfortunately, middleman minority literature has little to say in terms of further explanatory theory on how or why Jews came to both define and exceed the middleman typology. Here, middleman minority theory not only isn't a rival for MacDonald's work, it positively cries out for it.

"American Jews do not fit the sojourner pattern, since their political involvement goes far beyond the support of Jewish causes. Much Jewish political activity, whether right, center, or left, can be related to a perception of how to make America and the world safe for Jews. American Jewish support for domestic liberalism and internationalism can be interpreted in this way."
Walter Zenner, "American Jewry in the light of Middleman Minority Theories," 1980. [23]

Merits of Middleman Minority Theory

The most obvious merit of middleman minority theory is that, like Kevin MacDonald's theory of a group evolutionary strategy, it places an unusual and welcome emphasis on rational resource competition as the basis for social conflict involving certain minorities. By offering a socio-economic explanation for hostility toward Jews, middleman minority theory represents a unique space within academia where the otherwise ubiquitous "pure prejudice" idea that host hostility is self-generated (from psychological problems or cultural traditions) is summarily and comprehensively dismissed. Although this has not come without criticism, as seen in Robert Cherry's denunciation of Edna Bonacich's work as reinforcing bigotry [24] , this emphasis has been able to continue largely untroubled thanks to its advancement under a hardline traditional Marxist interpretive veneer.

Middleman minority theory, especially the variant advanced by Bonacich, also insists that host populations do have interests, and that these interests are genuinely and seriously threatened by middleman minorities who drain away resources. These minorities then use their accumulated resources to build up power and influence, sometimes even to the extent of gaining considerable economic, social, and political monopolies over the hosts. Since these monopolies can be very difficult to dislodge, and since monopolies may satisfy some interests of host populations or segments of host populations, middleman minority theory insists that it is rational and somewhat inevitable that increasingly harsh and even violent measures will be taken against the offending minority. As a result, middleman minority theory offers a far more plausible and objective understanding of group conflict than many of the ideas that dominate the academic discussion of group conflict, especially conflict involving Jews. In addition, the outright rejection of "scapegoat" theories as "superficial," and the lack of appeals to concepts of victimhood in such a framework, can only be described in the context of the current academic climate as utterly refreshing.

A second major merit of middleman minority theory is the emphasis that some strands place on the characteristics of the minorities themselves. Middleman minority theory contains within it three basic theoretical approaches. Context-based theories like that of Roscher, and revived to some degree by Nathan Cofnas (who is particularly concerned with the urban environment-context), argue that middleman minorities are essentially creatures of the societies in which they are found, and are for the most part created by opportunities, status gaps, and vacuums over which they have no control and which have nothing to do with their inherent characteristics (a slight advantage in intelligence being the only characteristic that Cofnas feels comfortable in applying). Situational theories, like that advanced by Simmel are similar, but place more emphasis on the culturally-located role of the trader, the Stranger, and the "sojourner as trader," as the determinant factor in the creation of middleman minorities. Culture-based, or characteristic-based, middleman minority theories, however, tend to be more numerous, and more convincing. These theories, like that advanced by Weber and given tacit assent by Bonacich and Zenner, place strong emphasis on the broad range of traditions, ideologies, behaviors, and aptitudes of middleman minority groups.

The most frequently highlighted of such traits within middleman minority theory is ethnocentrism, which again dovetails with the primary emphasis of Kevin MacDonald's theory. Ethnocentrism is acknowledged as a central factor in the maintenance of self-segregation among middleman minority groups, and is often supported by ideological beliefs such as the caste system, or what Zenner describes as "the Chosen People complex." [25] Ethnocentrism in middleman minorities is presented as crucial to understanding host hostility not only because of the way it facilitates the draining of resources from the host population, but also because of highly antagonistic correlates such as dual loyalty and a willingness to engage in lucrative but morally destructive (for the host) trading. Walter Zenner speaks of a "double standard of morality" that is

Expressed in dealings with outsiders, such as lending to them with interest, unscrupulous selling practices, and providing outsiders with illicit means of gratifying their appetites, while at the same time, denying the same means to in-group members. [26]

An excellent example of this process in action is the fact Israel is the largest producer and host of international online gambling sites , while making it illegal for its own citizens to use such sites. Of course, we are talking here about a nation state rather than a minority population, but this contradiction, and the nature of Israel within the international community, will be discussed in a critique of the narrowness of middleman minority theory later.

A further merit of middleman minority theory is the heavy emphasis the cultural-characteristic interpretation places on group strategies. Middleman minorities, again with Jews being held up by both Zenner and Bonacich as an exemplar or especially acute case, are said to engage in constantly adaptive activity in order to manage their visibility, ensure their safety, advance their interests, accumulate power and wealth, and entrench themselves ever deeper within the host. Bonacich has indicated that Jews are especially keen to remain entrenched in the West, and the United States in particular, because it is financially and politically lucrative, and only a catastrophic weakening of their monopolies would bring an end to existing strategies. [27] Zenner goes as far as to claim that "much of the content of American Jewish life can be seen as visibility strategies. Strategy here includes both unconscious mechanisms of coping with situations and consciously formulated plans." [28] Zenner speaks of a "dynamic process" whereby Jews minimise visibility to avoid hostility, maximise visibility when pursuing certain interests, and generally work unceasingly to make their image more favorable in the minds of the host. Again, all of this corresponds very well with one of the central themes of the Culture of Critique -- the idea that Jewish involvement in certain intellectual movements could be seen in the context of a pursuit of Jewish interests either consciously or in ways that involved unconscious motivations and self-deception. It also maps very closely to MacDonald's framework on Jewish crypsis and other attempts to mitigate anti-Semitism, advanced in the sixth chapter of Separation and Its Discontents .

Problems in Middleman Minority Theory

Given the prevalence of Jews in the development and promotion of the modern incarnation of middleman minority theory, including Georg Simmel, Edna Bonacich, Abner Cohen, Abram Leon, Walter Zenner, Werner Cahnman, [29] Donald Horowitz, [30] Gideon Reuveni, [31] Ivan Light, Steven J. Gold, [32] and Robert Silverman, [33] a reasonable concern might be that middleman minority theory is itself an intellectual "visibility strategy." Just as it has been posited that Jews tend to support mass migration because it will result in Jews becoming "one among many" ethnic minorities, and thus in their logic less conspicuous and therefore safer, middleman minority theory can act to reduce Jewish visibility by offering the idea that Jews are just one among many diaspora trading groups and their history and behavior is therefore not unique or worthy of special attention. It remains the case that even in those interpretations which highlight negative Jewish behavior and portray host responses as rational (e.g. the work of Bonacich and Zenner), the proposed framework still insists on some level of commonality, no matter how tenuous, with the experiences of other minority groups, and it ultimately places the blame for conflict on a much broader context, often the impersonal historical development of capitalism.

In other words, while the framework can deny that Jews are "victims" of host nations, these theories also deny that host nations are truly the victims of Jewish exploitation. Both are simply argued to be the victims of capitalism, and any sense of individual or group agency is rhetorically dissolved. Again, this acts to lower Jewish visibility and culpability and remains attractive for that reason. There are certainly good reasons along this line of thought for proposing that Steven Pinker's promotion of the theory over Kevin MacDonald's ideas has less to do with a serious engagement with the content of the work of Bonacich et al. and significantly more to do with deflecting the entire conversation into an area of discussion in which Pinker feels Jews are less visible.

A major problem with middleman minority theory is that it has a very uncomfortable and unsatisfactory way of handling the obviously unique aspects of the Jewish experience, especially in relation to the unprecedented involvement of Jews in post-Enlightenment Western culture and politics, something for which there is absolutely no parallel among other diaspora trading groups anywhere. As has been discussed, middleman minority theory was essentially first created, consciously or unconsciously, by scholars anxious to find a way to explain the Jewish experience. Attempts to connect this experience, amounting to some two millennia of history, with the much more modern and straightforward experiences of, for example, the Chinese in the Philippines or the Japanese in America, have been doomed to the grossest of generalizations and the clumsiest of associations. This has resulted in a steady stream of admissions within the field that the best way to interpret middleman minority theory is simply that it proposes an "ideal type" (essentially the Jews) with unfortunate "problems of fit between any actual ethnic group and this picture [the Jewish experience]." [34] Zenner has conceded that the concept has been very "difficult to define so as to cover all groups so designated." [35] All of which calls into question whether this concept possesses any real efficacy as an analytical or predictive tool in a comparative sense at all.

An interesting point of difference between the Jewish experience and that of other diaspora trading peoples is that the latter are acknowledged as possessing a genuine sense of sojourn. In other words, their first generations tend to be truly temporary, semi-nomadic groups who aim to make money before eventually returning to a homeland. A subtly different experience is observed in the Jews, as noted by Jack Kugelmass in his 1981 PhD thesis Native Aliens: The Jews of Poland as a Middleman Minority . For Kugelmass, "the so-called "middleman" character of the Jew is seen as an aspect of the Jewish sense of sojourn, which unlike most sojourns is ideological rather than sociological in nature ." [emphasis added] Another way of phrasing this would be to say that the Jewish sense of sojourn is cultural-biological rather than contextual, and since the concept of sojourning has been a major feature of Jewish life since at least the writing of the Exodus, this difference between other groups is really so stark as to require a distinct analysis -- something offered to an unparalleled degree in Kevin MacDonald's A People That Shall Dwell Alone . In this analysis, it would appear that, unlike a relatively small number of other peoples who have merely adopted some tactics in order to pursue a specific diaspora trade role, Jews have, from time immemorial, given themselves over entirely to these strategies as an entire way of life -- the "middleman minority" as a raison d'être .

This absolutely crucial distinction is linked to the remarkable fact of contemporary political life that the state of Israel exists largely according to the same strategies employed by Jews when in a diaspora condition. As stated above, an excellent example of the dual morality process in action is the fact Israel is the largest producer and host of international online gambling sites , while making it illegal for its own citizens to use such sites. The creation of the state of Israel has also exacerbated, rather than ameliorated, issues of dual loyalty in Jewish minority populations, even if these issues are more or less kept out of the public eye through diplomatic soothing around Israeli spying and the maintenance of certain taboos in the mass media. Israel itself would appear to be a kind of middleman minority archetype within the international community, cultivating close and lucrative ties with the elite (the United States), while engaging in more or less unchallenged exploitative and oppressive activities against lower social orders (Palestinians, and other vulnerable or indebted population groups in South America).

Like the "ideal type" of middleman minority, Israel heavily drains the resources even of its allies (U.S. military and diplomatic aid) and pursues its strategies in a ceaseless quest for security, while maintaining moral double standards and being rather shameless in engaging in what Zenner has described as the classic overrepresentation of middleman minorities in "morally shady" activities. [36]
Even in recent years, Israel has become notorious in the international organ trade , moneylending , and allegations of humanitarian atrocities. Israeli newspapers have also described their country as a " monopoly nation " due to the intense tendency towards economic monopoly in the country's business life -- a key feature of middleman minority life that Jews appear to continue to embody to an extent unparalleled in any other ethnic group. Further evidence for the apparently deep-seated, rather than contextual, nature of "middleman" traits in Jews might be found in studies indicative of a biological underpinning to Jewish ethnocentrism, such as that described by Kevin MacDonald in the Preface to the Culture of Critique :

Developmental psychologists have found unusually intense fear reactions among Israeli infants in response to strangers, while the opposite pattern is found for infants from North Germany. The Israeli infants were much more likely to become "inconsolably upset" in reaction to strangers, whereas the North German infants had relatively minor reactions to strangers. The Israeli babies therefore tended to have an unusual degree of stranger anxiety, while the North German babies were the opposite -- findings that fit with the hypothesis that Europeans and Jews are on opposite ends of scales of xenophobia and ethnocentrism.

As well as dealing poorly with obviously unique aspects of the Jewish experience, a significant portion of middleman minority theory is devoted to context-based narratives that are often in stark contrast to, or completely disproven by, the historical record. With the exception of the work of Kevin MacDonald, which demonstrates a very extensive engagement with works of history, a general weakness in all of the late twentieth-century sociological studies discussed above is the fact that, despite their incredibly ambitious claims about the historical trajectory of capitalism or middleman minority populations, there is a quite serious neglect of any of the relevant historiography. This leads, in the case of the modern adherents of Simmel, Roscher, and Leon, to the constant repetition of error-laden tropes such as the idea that Jews turned to commerce because they were prohibited from owning land (rather than arriving as profit-seeking financiers), that Jews were most often invited into nations by elites seeking a financial stimulus, or that Jews were banished from countries once their position as loan merchant was superfluous. In fact, these three tropes, all of which remove Jewish agency and characteristics from consideration, are essentially the pillars of context-based middleman minority theory pertaining to Jews, and are absolutely crucial to Roscher's ideas in particular.

The historical record is now acknowledged as more or less complete in relation to the issue of the Jewish ownership of land. It has been conclusively established, for example, that the general trend across Europe was that Jews were in fact able to possess and own land during the centuries immediately following their initial spread and expansion in Europe (c.1000 -- 1300). Restrictions on land ownership were later enacted as penalties for exploitation or as part of a system of elite land transfer -- e.g., the desire of the English kings to obtain the land of indebted lesser knights, and doing so by financially compensating Jewish moneylenders for forfeited lands they could no longer legally hold.

One of the correlates of the land ownership trope is the astonishingly naive assumption that land ownership would preclude involvement in financial speculation. Again, the historical record contradicts this. Mark Meyerson's Princeton-published A Jewish Renaissance in Fifteenth-Century Spain (2010), for example, offers an expansive analysis of Jewish landowners in Spain who "did not necessarily cultivate the land themselves" and combined wine production operations worked by non-Jewish peasants with "lending operations and tax farming." [37] Pointing to the prevalence of early Jewish land ownership in Poland, France, and Germany, in which Jews enjoyed a "privileged status available to few Christians," Norman Roth has described the trope that Jews were forced out of agriculture by restrictive laws and the violence of the Crusades as "patently absurd." [38]

The theory that Jews, and by tenuous implication other middleman minorities, were most often invited into nations by elites seeking a financial stimulus or to fill a "status gap," is also contradicted by the historical record. The early entry and expansion of Jews in Europe is relatively well-documented, the dominant trend being that Jews either presented themselves before elites in order to solicit business, or that they acted as financiers for conquest and then followed in the wake of the conquerors (e.g., the well-documented role of Jewish financiers in Norman Conquest of England and Strongbow's conquest of Ireland). [39] Ireland's Annals of Innisfallen (1079 A.D.) record: "Five Jews came from over sea with gifts to Tairdelbach [King of Munster], and they were sent back again over sea." Unless Tairdelbach (Turlough O'Brien, 1009 -- 86) had undergone a dramatic change of mind, it's likely that the arrival of the Jews hadn't been preceded by an invitation. In fact, unsolicited approaches for request to settle and establish financial activities are in evidence from the time of O'Brien to the 1655 "Humble Address" of Manasse ben Israel to the English government.

A very common form of government documentation found in the study of Early Modern Jewish communities are the charters outlining their terms of settlement, and these are very revealing. Rather than act as economic catalysts, Jews are more frequently observed following the trail of already economically improving areas, hoping to profit from their advancement. As Felicitas Schmeider has pointed out, in terms of the German context, "permission to settle Jews in a newly privileged town is one thing kings were frequently, if not regularly, asked for, especially in the thirteenth and fourteenth centuries." [40]

The theory that Jews were banished from countries once their position as loan merchant or general role as a middleman minority was superfluous is also forcefully contradicted by the historical record. Just as medieval Jews perceived that they were the innocent victims of evil Gentiles, so Jewish historiography has overwhelmingly portrayed the expulsions as the result of "rumors, prejudices, and insinuating and irrational accusations." [41] Context-based middleman minorities theories absorbed these tropes and reinvented them in narratives that blamed the expulsions on the fact that Capital had simply exhausted the usefulness of the Jews. Such understandings of the expulsions have only very recently come to be revised, most saliently in the work of Harvard historian Rowan W. Dorin, whose 2015 doctoral thesis and subsequent publications have for the first time helped to fully contextualize the mass expulsions of Jews in Europe during the medieval period, 1200 -- 1450. [42]

Dorin points out that Jews were never specifically targeted for expulsion qua Jews, but as usurers, and notes that the vast majority of expulsions in the period targeted "Christians hailing from northern Italy." Jews were expelled, like these Christian usurers, for their actions, choices, and behaviors. What the period witnessed was not a wave of irrational anti-Jewish actions, or for that matter an impersonal reflex of glutted Capital, but rather a widespread ecclesiastical reaction against the spread of moneylending among Christians that eventually absorbed Jews into its considerations for common sense reasons. A number of laws and statutes, for example Usuranum voraginem , were designed in order to provide a schedule of punishments for foreign/travelling Christian moneylenders. These laws contained provisions for excommunication and a prohibition on renting property in certain locales. The latter effectively prohibited such moneylenders from taking up residence in those locations, and compelled their expulsion in cases where they were already domiciled. It was only after these laws were in effect that some theologians and clerics began to question why they weren't also applied to Jews who, in the words of historian Gavin Langmuir, were then "disproportionately engaged in moneylending in northern Europe by the late 12th century." [43] The Church had historically objected to the expulsion of Jews in the belief that their scattered presence fulfilled theological and eschatological functions. It was only via the broader, largely common sense, application of newly developed anti-usury laws that such obstructions to confrontations with Jews became theologically and ecclesiastically permissible, if not entirely desirable. And once this Rubicon had been crossed, it paved the way for a rapid series of expulsions of Jewish usury colonies from European towns and cities, a process that accelerated rapidly between the thirteenth and fifteenth centuries.

The lack of engagement with developments in historiography is worsened to a large extent by the absence of a truly cross-disciplinary approach in most, if not all, existing middleman minority analyses. This is particularly glaring in the works of Bonacich and Zenner which, while making multiple and apparently crucial references to conscious and unconscious group "strategies," fail to engage in any kind of historiographical or psychological scholarly contextualization. How exactly such strategies as "visibility strategies" can operate at group level are left completely unexplained and without any substantial evidence beyond common sense observations of Jewish behavior. The lack of a cross-disciplinary approach in such instances doesn't necessarily mean that these ideas are wrong, or that "visibility strategies" don't exist, but it does mean that explanations and evidence are still required. To date, the only convincing attempt to fill in such gaps, and offer a truly cross-disciplinary approach (incorporating history, sociology, and psychology) to the idea of group strategies, is found in the work of Kevin MacDonald.

Conclusion

As stated at the outset of this essay, it isn't at all clear how any of the aspects of middleman minority theory obviate the need for a deeper theoretical framework in which to understand the behaviors and contexts under study. Middleman minority theory, as remarked above, is an incomplete tool, and has little to offer in terms of deeper explanatory value for such relevant key concepts under discussion as resource competition, ecological strategies, visibility strategies, and social identity theory. Middleman minority theory, or at least some strands of it, is useful and valuable in the study of Jews to the extent that it places an unusual emphasis on group conflict as arising from resource competition, the characteristics of Jews (including Jewish ethnocentrism), and the existence of group strategies. There are, however, multiple, serious inadequacies in middleman minority theory, including the possibility that it is in part itself a "visibility strategy," that is has a general problem of definitions, that it fails to adequately deal with unique qualities of the Jews and their experiences, that it generally fails to engage with the historical record, and that it has no real explanatory or predictive frameworks for many of the ideas it discusses, including group strategies. I am forced to concur with Edna Bonacich that, in regards to the study of Jews, middleman minority theory should be conceived, at best, as "a useful sensitiser to a host of interrelated variables." [44]

Notes

[1] Bonacich, Edna. "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94, (589).

[2] Francois-Marie Arouet de Voltaire, Oeuvres Complètes (Geneva, 1756), Vol. 7. Ch.1. See also Dictionnaire Philosophique (Basle, 1764), Vol. 14 .

[3] B. Bauer, The Jewish Problem ( Die Judenfrage , 1843) ed Ellis Rivkin and trans. Helen Lederer (Cincinnati: Hebrew Union College -- Jewish Institute of Religion, 1958).

[4] K. Marx, On the Jewish Problem ( Zur Judenfrage , 1844) ed Ellis Rivkin and trans. Helen Lederer (Cincinnati: Hebrew Union College -- Jewish Institute of Religion, 1958).

[5] W. Sombart, Der moderne Kapitalismus , Munich and Leipzig 1913. This work was published in an English translation by E. Epstein under the title, The Quintessence of Capitalism , London, 1915.

[6] W. P. Zenner, Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 5.

[7] W. Roscher, "Die Stellung der Juden im Mittelalter, betrachtet vom Standpunkt der allgemeine Handelspolitik," Zeitschrift für die gesamte Staatswissenschaft Bd. 31 (1875) S. 503 -- 526.

[8] G. Reuveni, "Prolegomena to an "Economic Turn" in Jewish History," in G. Reuveni (ed) The Economy in Jewish History: New Perspectives on the Interrelationship Between Ethnicity and Economic Life (Berghahn, 2011), 3.

[9] As the son of Catholic and Lutheran converts from Judaism, Simmel's relationship to his Jewishness is fascinating in itself. See A. Morris-Reich, The Quest for Jewish Assimilation in Modern Social Science , (New York: Routledge, 2008), chapter 4. For the influence of Simmel's stranger minority theory see Werner Cahnman, "Pariahs, Strangers, and Court Jews -- A Conceptual Classification," Sociological Analysis, 35 (1974); C. R. Hallpike, "Some problems in Cross-Cultural Comparison," in The Translation of Culture , T. Beidelman (ed), (London: Tavistock, 1971); Hilda Kuper, "Strangers in Plural Societies: Asians in South Africa and Uganda," in Pluralism in Africa , Leo Kuper and M. G. Smith (eds) (Berkeley: University of California Press, 1971); Jack H. Porter, "The Urban Middleman: A Comparative Analysis," Comparative Social Research , 4 (1981); R. A. Reminick, "The Evil Eye Belief among the Amhara of Ethiopia," Ethnology, 13 (1974), W. Shack and E. Skinner, Strangers in African Societies (Berkelely: University of California Press, 1979); Paul Siu, "The Sojourner," American Journal of Sociology , 58, (1952).

[10] J. Stone, Racial Conflict in Contemporary Society , (Cambridge: Harvard University Press, 1985), 96.

[11] This coinage is frequently attributed to Philip Curtin, who employs the term in his Cross-cultural Trade in World History (1984), but the term was in use by Cohen, within a strict thematic sense, as early as the latter's 1974 chapter "Cultural Strategies in the Organisation of Trading Diasporas," in C. Meillassoux (ed) The Development of Indigenous Trade and Markets in West Africa (London, 1971).

[12] Quoted in W. P. Zenner, Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 8.

[13] K. MacDonald, Separation and Its Discontents: Toward an Evolutionary Theory of Anti-Semitism , 187.

[14] E. Bonacich, "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94.

[15] E. Bonacich, The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980).

[16] Ibid, 589.

[17] Ibid.

[18] Ibid, 592.

[19] R. Cherry, "American Jewry and Bonacich's Middleman Minority Theory," Review of Radical Political Economics , 22 (2 -- 3), 158 -- 173, 161.

[20] W. P. Zenner, Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 10. See also W. Zenner, "American Jewry in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11 -- 30, 18. Zenner argues that "As a synthetic concept, the phrase "middleman minority" is difficult to define so as to cover all groups so designated."

[21] E. Bonacich, The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980), 22. See also E. Bonacich, "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583 -- 94, 585.

[22] Ibid, 24.

[23] W. Zenner, "American Jewry in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11-30, 18.

[24] R. Cherry, "American Jewry and Bonacich's Middleman Minority Theory," Review of Radical Political Economics , 22 (2-3), 158-173, 161.

[25] W. P. Zenner, Minorities in the Middle: A Cross-Cultural Analysis (Albany: State University of New York, 1991), 18.

[26] Ibid.

[27] E. Bonacich, "A Theory of Middleman Minorities." American Sociological Review 38, no. 5 (1973): 583-94, 592.

[28] W. Zenner, "American Jewry in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11-30, 23.

[29] W. Cahnman, "Pariahs, Strangers and Court Jews," Sociological Analysis 35, 3 (1974): 155-66.

[30] D. Horowitz, Ethnic Groups in Conflict (Berkeley: University of California Press, 1985).

[31] G. Reuveni (ed) The Economy in Jewish History: New Perspectives on the Interrelationship Between Ethnicity and Economic Life (Berghahn, 2011).

[32] I. Light & S. J. Gold, Ethnic Economies (Bingley: Emerald, 2000).

[33] R. Silverman, Doing Business in Minority Markets (New York: Garland, 2000).

[34] E. Bonacich, The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community (Berekely: University of California Press, 1980), 22.

[35] W. Zenner, "American Jewry in the light of middleman minority theories," Contemporary Jewry , 5:1 (1980), 11-30, 13.

[36] Ibid, 15.

[37] M. D. Meyerson, A Jewish Renaissance in Fifteenth-Century Spain (Princeton: Princeton University Press, 2010), 111.

[38] N. Roth, Medieval Jewish Civilization: An Encyclopedia (New York: Routledge, 2003),

[39] J. Hillaby, "Jewish Colonisation in the Twelfth Century," in P. Skinner (ed), The Jews in Medieval Britain: Historical, Literary, and Archaeological Perspectives (Woodbridge: Boydell Press, 2003), 36.

[40] F. Schmeider, "Various Ethnic and Religious Groups in Medieval German Towns? Some Evidence and Reflections," in, Segregation, Integration, Assimilation: Religious and Ethnic Groups in the Medieval Towns of Central and Eastern Europe (Burlington: Ashgate, 2009), 15.

[41] Joseph Pérez, History of a Tragedy: The Expulsion of the Jews from Spain (Chicago: University of Illinois Press, 2007), 60.

[42] R. W. Dorin, Banishing Usury: The Expulsion of Foreign Moneylenders in Medieval Europe, 1200 -- 1450 (Harvard PhD dissertation, 2015); R. W. Dorin, "Once the Jews have been Expelled," Intent and Interpretation in Late Medieval Canon Law," Law and History Review , Vol. 34, No. 2 (2016), 335-362.

[43] G. Langmuir, History, Religion, and Antisemitism (Los Angeles: University of California Press, 1990), 304.

[44] Ibid, 24.


Reg Cæsar , says: September 19, 2020 at 12:36 am GMT

@Vergissmeinnicht

Sowell’s A Conflict of Visions has nothing to say about race, but it and its successors pretty much nail what is wrong with today’s progressives. And it’s the same as what was wrong with yesterday’s progressives.

If we survive 2020, this volume will be what he’s remembered for.

obwandiyag , says: September 19, 2020 at 2:02 am GMT

What about Gujaratis and 7-11s and midwestern motels?

And Greeks and diners?

In San Francisco, they call the local corner store, “the Arab store.” What’s up with that?

J , says: September 19, 2020 at 7:31 am GMT

The Zionist thinkers understood the unnatural and dangerous situation of the Jews in the Diaspora, and seized the first opportunity to re-reform the Jewish people as a normal nation in its homeland. In only one generation, all the Jewish communities in the Eastern lands liquidated their affairs and joined movement. The same with the powerful Russian and Ukrainian communities, they moved (mostly) to Israel. Last year, about 30,000 American Jews gave up their precious citizenship and moved to Israel. I foresee in two generations a more or less Jew-less America. What I am saying is that the Jews do not like their middleman foreigner status. In Marx etc. time there were no alternatives. Now there is Israel. Some 55% of the Jews have already moved there.

brabantian , says: September 19, 2020 at 3:48 pm GMT

Regarding

Israel is the largest producer and host of international online gambling sites, while making it illegal for its own citizens to use such sites

It should be noted that Monaco does the same thing with its gambling casinos. It has long been unlawful for Monaco’s own Monégasque citizens to enter into those casinos to gamble.

Also, the ultra-high level of Jewish involvement in pornography sales is another relevant area here.

One of those Jewish pornography-meisters was Jimmy ‘Jimbo’ Wales, afterwards recruited to head the CIA-Mossad Wikipedia, where paedophilic persons have been able to persistently post fake biographies of themselves and smears against their victims. Jimmy Wales has attended birthday parties of Israeli Presidents, and received a $1 million ‘prize’ from Tel Aviv University.

Chris Moore , says: • Website September 19, 2020 at 3:55 pm GMT

The most obvious merit of middleman minority theory is that, like Kevin MacDonald’s theory of a group evolutionary strategy, it places an unusual and welcome emphasis on rational resource competition as the basis for social conflict involving certain minorities. By offering a socio-economic explanation for hostility toward Jews, middleman minority theory represents a unique space within academia where the otherwise ubiquitous “pure prejudice” idea that host hostility is self-generated (from psychological problems or cultural traditions) is summarily and comprehensively dismissed.

The Jews like to cast themselves as “just another struggling minority trying to make it among the oppressive majority.” This ignores the international Zionist (Jewish supremacist) agenda, and the pathological Jewish drive for totalitarian control.

Where does that drive originate? Jesus of Nazareth, apparently Hebrew, preached the opposite, and called organized Jewish hypocrisy, greed, corruption and double standards “the Synagogue of Satan.” Of course, the corrupt Jewish Moneychangers (the Jewish establishment of his era) in bed with the Roman Empire didn’t like that one bit, and so instigated his murder. When the cosmopolitan Hebrew mob, prompted by the corrupt Jewish establishment, chose the criminal Barabbas over Jesus, the Jews made their choice for ideological evil and corruption.

That is a choice they affirm time and again, day after day, year after year, century after century.

Whether one wants to read this decision as a cosmic moral judgement on the Jews, or simply as a rational economic decision by the Jews (choosing systematic corruption and shady insider back room deals over honest work) makes no difference. They chose the path they chose, and they affirm that decision every day through their corrupt, criminal and murderous international Zionist works.

One doesn’t have to be a Christian to wear the Jon Carpenter sunglasses from The Live which allow one to see that the Judeo-Imperial “ruling class are [social] aliens concealing their appearance and manipulating people to spend money, breed, and accept the status quo with subliminal messages in mass media,” but it helps.

One doesn’t have to be a Christian to know that Jewish infiltrated Empires working in concert with a corrupt establishment are bad news, but again, it helps.

Oliver Elkington , says: September 19, 2020 at 11:46 pm GMT

In Britain Jews are clearly influential but the Norman ruling class has had it’s grip on the UK ever since they landed here in 1066, indeed William the Conqueror was mentioned in the article above, he certainly had his uses for Jews, there is little information available though as to just how many Jews arrived and what lead King William 1 to bring them over with his troops. As of present much of inner London is owned by aristocratic families who can trace their descent to King Williams troops

https://whoownsengland.org/2017/10/28/who-owns-central-london/

Also a considerable proportion of high status people in Britain were educated at just a few private schools including a great deal of our present government

https://www.theguardian.com/society/2019/jun/25/britains-top-jobs-still-in-hands-of-private-school-elite-study-finds

In Britain it is often a case of who you know, not what you know that determines whether you will reach the top of society or not, compared to other European countries like Germany and Finland in Britain there is a tendency for the higher classes to promote people on the basis of whether they have a background in common with them rather than merit, just like the Jews.

Supply and Demand , says: September 20, 2020 at 12:41 am GMT
@obwandiyag

When I was going to university there, the corner stores were all Chinese. As were the Laundromats. I suspect the children all became doctors and lawyers and graduated from the need to continue operating them.

Tom Verso , says: September 21, 2020 at 2:39 pm GMT

Jews are a Nation!

As per usual, Andrew Joyce demonstrates that he is an objective social scientific historian by flooding his article with a preponderance of documentable verifiable factual data.

However, to my mind there is one ‘word’ in this 8,000+ word tour de force; one very important word that all lovers of Western history and culture dedicated to the perpetuation of that history and culture should focus on … one word: ‘NATION’!

At the very top of his essay Joyce quotes Voltaire:

“Voltaire concluded that, some surface similarities aside ,
‘It is certain that the Jewish nation is the most singular that the world has ever seen. ’ ”

Similarly he quotes Bruno Bauer:

“The base [of the tenacity of the Jewish national spirit ] … the character of that [Jewish] nation. ..”

Some say Jews are a ‘ race’ , some say they are an ‘ethnicity’, some say they are a ‘religion’. The case can be and is made for all these, in Voltarie’s words, “surface similarities” . However, none capture the essence of what constitutes the basis for Jewish POWER.

Jews are a worldwide profoundly unified ideological NATION. And that ideological unity is the basis of their national power.

This unity was succinctly captured in an interview with a Mossad agent when he said:
“I can knock on the door of any Jew in the world and I will be invited in.”

Ideological unified nations are powerful nations, and are conquers. The Jews are one of the most ideologically unified nations in the world. The power derived from that unity has allowed them to conquer the most economically and militarily powerful country in the world – America.

Further, by conquering America, the wealthiest and most powerful country in Western Civilization, the Jews have de facto conquered the whole of the West.

Ideological unified nations are strong.
Ideological dis-unified nations are weak.
So call ‘Color Revolutions’ are manifestations of dis-unified nations who in turn are weak and conquerable by strong unified nations.

We have seen numerous weak nation color revolutions in Africa, Middle East and Europe. Now we are experiencing an American color revolution.

The American ‘color revolution’ is the Jewish nation delivering the ‘coup de grace’ to America and the West.

Thomasina , says: September 22, 2020 at 8:18 am GMT

Andrew Joyce, your articles are so God-damned good!

Jewish behavior reminds me of narcissism: sense of entitlement, self-centered, feeling of superiority, manipulative and deceitful behavior, desire for power and control, will suck a host dry, and once they’ve gotten what they want, will easily discard the host. Highly competitive, status-oriented.

Don’t dare call them out on anything because that causes them to feel shame, and that’s like driving a stake through them. They work behind the scenes, secretly. They must always be seen in a good light. They will smear and destroy you (your reputation, your job, your life) if you expose them. They will retaliate in ways you would never be able to because they don’t have a conscience, and this is why they win and are so hard to fight. Very vindictive. No qualms about lying or twisting the truth.

They are never content, always working to change things in their favor, to get the upper hand. Most people just want to live their lives, so they acquiesce, but this is a mistake because one day you turn around to realize they now own the farm! If they don’t get their way, they just regroup and come at you from another angle. They keep wearing you down, chipping away at you until you give in. It is really something to behold because you just can’t believe their gall.

Their rabbis keep them in line by using fear (fear of the other), and fear is the greatest motivator/persuader. Keeps them solidly as one. They’re constantly reminded of the Holocaust, the ovens that are lurking around every corner, as well as the injustices they have suffered (through no fault of their own – ha!). Keeps them neurotic and they don’t stray.

Highly destructive destroyers.

Amerimutt Golems , says: September 24, 2020 at 12:27 pm GMT
@Oliver Elkington rville, Fitzroy, Marshall, and Spencer. The Guardian , Independent and Telegraph wrote articles in 2011 and 2013 alleging such persons still ‘run’ Britain. Lefties use this ploy to attack the Conservative Party whose members tend to be wealthy like champagne socialists.

Back to the point raised by neutral , none of the above mentioned newspapers would run similar stories on Jewry. That is the litmus test of who really rules.

Despite being a tiny minority Jews have shaped modern Britain. This has been documented here by Joyce, Langdon and others.

Anon [238] • Disclaimer , says: September 26, 2020 at 12:14 pm GMT

Those christian usurers probably were cripto jews

Spogus Bogus , says: September 28, 2020 at 5:36 am GMT

Sure the middle man theory explains everything, but needs some footnotes:
-These middle men are specifically encouraged to cheat us, it’s written in their holy books
-they regard us as animals in human form, with either no souls or much lesser souls
-they regard us as having been created ONLY to serve them.

NOW the theory makes perfect sense!

Louis Hissink , says: September 28, 2020 at 8:05 am GMT

Biological lifeforms endure parasites. Perhaps understanding parasitism might be a usefal path to travel?

Alfred , says: September 28, 2020 at 10:29 am GMT
@J ain. The Jews did not profit from German hyperinflation to buy up property cheaply. Always the victims.

Due to Brexit, Jews seek passports from countries that oppressed their ancestors
Concerned over losing valuable rights for traveling and staying in the 26-country Schengen Area, more Jewish Brits are turning to Spain, Portugal and Germany for citizenship

Mefobills , says: September 28, 2020 at 1:08 pm GMT

Let’s fix Bonacich’s comment and add to it:

The modern industrial capitalist treats his workers impartially as economic instruments; he is as willing to exploit his own son as he is a stranger. This universalism, the isolation of each competitor, is absent in middleman economic activity, where primordial ties of family, region, sect, and ethnicity unite people against the surrounding, often individualistic economy.

The modern finance capitalist …..

Industrial capitalism after it was invented in the American Colonies, was characterized by injection of state capital (not Jewish finance capital) into industry, to then improve the labor value of the population. American labor was in short supply relative to the large land mass available.

Industrial Capitalist will treat his workers as valuable contributors, because their labor value is constantly being improved upon by improved public health, and improved infrastructure such as roads and phone systems. Industrial Capitalist economic method is to raise up the existing people, and not import low wage “coolie labor.”

The highest form of industrial capitalism was probably Germany, which adopted the American System through Frederick List.

Workers in industrial capitalist Germany had access to best facilities of that era, their work hours were made sensible (no longer exploitative). Autobahns were built, and industry was built up using state capital (not finance capital) to high levels of productivity.

Finance Capitalism is Jewish usury method. Finance Capitalism is middleman theory taken to extremes.

The middleman is a hidden string puller whose god is Moloch. The middleman is the third entity in man’s relations, usurping the role of the King.

It is the King who is to have the role of settling disputes, dispensing with just law, and overseeing high civilization. It is impossible to have high civilization with Jews operating as middlemen.

Finance capitalism’s big bang event is traced to Amsterdam’s Jews invading Britain.

1) Debt Spreading Private Banking .. the Bank of England in 1694. This event stripped the sovereign King of his money power and transferred it to hidden bank stock owners.

2) Stock Market Capital. Absentee ownership of Companies. Hidden String Pullers control corporations, rather than the employees of said companies. The first manifestation was both the Dutch and English India Companies.

3) Allowing Company stock to be on-sold into markets. The logic of prices and money (Moloch) is now tied to private banking ledger credit entry. BOE creates the private bank credit that is used in “free markets.”

4) Corporation charters are now perpetual, and corporations are held up as being more than a god created human. Being perpetual is more than being a human, where said human has a finite life span.

Jews are anti-logos, so everything they touch turns to shit. There is a religious and spiritual element to Jews, who are against the natural order.

Virtually all of the “American System” politicians were assassinated. Countries that attempted to adopt “industrial capitalism” of the American system were invaded and destroyed in world wars. The world wars were engineered in back room deals, using hidden string pulling tactics.

America was turned in 1912, and is now under Jewish finance capitalism control. The founding fathers of America would be appalled if they were alive today.

Moi , says: September 28, 2020 at 1:20 pm GMT
@Sher Singh

Hindus are like Jews–they love money and believe themselves to be a special people (as exemplified by your PM Modi and his RSS buddies). Because of the caste system, Hindus barely tolerate lower caste Hindus.

Mefobills , says: September 28, 2020 at 2:15 pm GMT

This comment is aimed at Andrew Joyce, the writer of the article. Good job Andrew.

In addition to finance big bang event I discuss above, there was also the attack on Christianity. So the big bang event was multi-dimensional, and informs today’s reality.

Here is your quote on Sombart:

For Sombart, the origins of the worst of modern capitalism can be found in the early middleman role of the Jews, their medieval semi-nomadic quest for usury-derived profit and Victorian hawking of shoddy goods being a precursor to modern advertising and the mass production of superfluous and quickly obsolete consumer products.

Here is another quote from Sombart, which I think is critical:

https://www.unz.com/mhudson/finance-capitalism-vs-industrial-capitalism/#comment-3876284

Werner Sombart in his book “The Jews and Modern Capitalism” came to an important conclusion.”That which is called Puritanism is in reality Judaism.”

Our Jewish friends in Amsterdam created puritan Judeo-Christianity, which is a perversion of Jesus’ teachings. Jesus started his mission on the Jubilee year, aiming precisely at the Pharisee class. Jesus also whipped the money changers, his only act of violence.

Weber also has some problems in his non treatment of usury:

Max Weber’s book, “The Protestant Ethic and the Spirit of Capitalism,” created a split definition. Jewish capitalism on one side, and Puritan (Calvanist) on the other. Jewish capitalism was speculative pariah capitalism, while Puritan was bourgeois organization of labor. Weber excluded the problem of usury, thus obscuring what is necessary to see. The Puritan was excluded from blame.

AaronB , says: September 28, 2020 at 2:23 pm GMT
@J m their own country won’t either).

Let that sink for a moment. I think you understimate – as did I – just how radical this site and it’s owner are, as well as the majority of the commenters, and just what they are tiptoeing around, and have been for some time. I also think within another few years, their position will become explicit.

Incidentally, I argely agree that in a few decades most Jews will be flourishing in Israel, but I do think the US will always have a large and prosperous Jewish community as well, forever. It isn’t going anywhere.

Richard B , says: September 28, 2020 at 3:03 pm GMT
@Tom Verso th the surface of JSI’s success that they rarely, if ever, see beheath that surface to what is obviously the real cancer of the human race. That’s why what we’re witnessing today is nothing less than

The Pyrrhic Victory of Jewish Supremacy Inc.

For evidence look at the following:

City – New York
State – California
Country – The USA
Continent – Europe
Civilization – The West

They have conquered the above the way a tumor conquers a human organism.

AaronB , says: September 28, 2020 at 3:46 pm GMT
@Not Only Wrathful

He can’t – yet – express what he is really trying to say clearly and simply, he has to bury it in a thicket of dense verbiage which is tedious to cut through.

In a few years, I think Unz will have developed to the point where writers like Joyce can make their point crystal clear in simple language.

Not Only Wrathful , says: September 28, 2020 at 4:32 pm GMT
@AaronB e that they have developed may eventually topple under its own weight, thereby liberating them from their tragic quest to find and hold external phantoms responsible for their own traumas.

Clarity for Joyce would likely be something like “my father was mean, controlling and made me feel bad, he was always trying to bring me low to make him feel big, I now need to heal to come to terms with it.”

Sorry Joyce that you feel bad. That’s real. Stop doing yourself the disservice of pretending your hurt is actually your concern for the world or whatever. That is stupid.

Anon [381] • Disclaimer , says: September 28, 2020 at 5:08 pm GMT

Judaism is an ethnic/religious supremacist ideology that sees the rest as nothing more than cattle to be exploited, so according to Jewish dogmas if you don’t declare the Jews to be your masters, you are technically anti-Semitic.

BEING FREE IS LITERALLY ANTI-SEMITIC

[Sep 28, 2020] Ruling class consists of two strata: (a) the highest stratum; and (b) second stratum. The highest stratum is the core of the ruling class but it could not sufficiently lead and direct the society unless the second stratum helps.

Sep 28, 2020 | dergipark.org.tr

Formation of the ruling classes has a close relation with the level of civilization and the type of society. Ruling class under every condition try to reproduce itself particularly by domination on political forces like power, wealth and the ruling class tends to be come hereditary. In fact, descents of ruling class members have a high life chances to have the traits necessary to be a ruling class member (Mosca 1939, pp. 60-61). In general, prior to democracy, membership of ruling class was not only de facto but also de jure. In democracy, de jure transfer of political possession to descendants of ruling class members impossible and not legitimized but it is now de facto.

According to Mosca, historically, ruling class try to justify its existence and policies by using some universal moral principles, superiority etc., lately, scientific theory and knowledge like Social Darwinism, division of labor is also employed for the same purposes. Mosca particularly rejects these two theses to use in political purposes. To Mosca, at a certain level of civilization, ruling classes do not justify their power exclusively by de facto possession of it, but try to find a moral and legal basis for it. This legal and moral basis or principles on which the power of the political class rests is called "political formula" by Mosca. The formula has a unique structure in all societies.

"lTjhe political formula must be based on the special beliefs and the strongest sentiments of the current social group or at least upon the beliefs and sentiments of the particular portion of that group which hold political preeminence"(Mosca 1939, p.71,72).

In fact ruling class like Pareto's elite strata consist of two strata: (a) the highest stratum; and (b) second stratum. The highest stratum is the core of the ruling class but it could not sufficiently lead and direct the society unless the second stratum helps. Second stratum is the larger than the higher stratum in number and has all the capacities of leadership in the country. Even autocratic systems do have it. Not only political but also any type of social organization needs the second stratum in order to be possible (Mosca 1939, p.404, 430).

The members of the ruling class are recruited almost entirely from the dominant, majority group in the society. If the society has a number of minorities and if this rule is not followed due to weaknesses of dominant group, political system can meet serious political crisis. The same thing occurs when there are considerable differences between in the culture, and in customs of the ruling class and subject classes (Mosca 1939, p.l05,106-7).

Weaknesses of dominant group in society and isolation of lower classes from the ruling classes can lead to political upheaval in the country and as a result of this upheaval subject classes' representatives can have places in the ruling class. Because when isolation takes place, another ruling class emerges among the subject classes that often hostile to the old ruling class (Mosca 1939, pp. 107- 8). Furthermore, due to reciprocal isolation of classes, the character of upper classes change, they become weak in bold and aggressiveness and richer in "soft" remissive individuals. On the same track, when there is fragmentation in the society, new groups form and each one of them makes up of its own leaders and followers. In fact, revolutions are another source of replacement of ruling class (Mosca 1939, p.163, 199).

When Mosca compares the political systems, he says that communist and socialist societies would beyond any doubt managed by officials and he sees these regimes as utopia. On democracy, he says, although gradual increase of universal suffrage, actual power has remained partly in wealthiest and the middle classes. At the same time, for Mosca, middle class is necessary for democracy, and when middle class declines, politic regimes in democratic countries turns to a plutocratic dictatorship, or bureaucratic dictatorship. (Mosca 1939, p.391).

According to Mosca, ruling class has a responsive character to social change in the society and there is a close relation between level of civilization and character of ruling classes. According to these two complementary proposition, it can be said that ruling class is subject of social change rather than actor of it. For example, change in division of labor from lower to higher and change in political force from military to wealth have changed the type of state from federal to bureaucratic state (Mosca 1939, p. 81, 83 ). There it seems that Mosca admits a linear social change in history, as opposite to Pareto.

As seen, Mosca's theory is basically based on organized minorities' superiority over unorganized majority. This organized minority consists of ruling class, but for Mosca it is not necessarily mean that always interest of ruling class and subject classes are different. To him ,in contrast they coincide many times. He saw the future of socialist system by saying that it will be governed by officials.

This feature of socialist system is well documented by Milovon Dijilas in his work: New Classes. But Mosca failed to see that one day, majority will also be able to organize. As C. W. Mills pointed put, democratic western societies have experienced important transformations: (1) from the organized minority and unorganized majority to relatively unorganized minority and organized majority, and (2) from the elite state to an organized state.( Mills 1965, pp. 161-162).

Therefore minorities and elites in today's society are less powerful than majorities. Elites have relatively lost their privileges, and more importantly, their monopoly over society.

[Sep 28, 2020] Peter Turchin Intra-Elite Competition- A Key Concept for Understanding the Dynamics of Complex Societies by Peter Turchin

Pictures removes. See the original for full text.
Notable quotes:
"... Elites are a small proportion of the population (on the order of 1 percent) who concentrate social power in their hands (see my previous post and especially its discussion in the comments that reveal the complex dimensions of this concept). In the United States, for example, they include (but are not limited to) elected politicians, top civil service bureaucrats, and the owners and managers of Fortune 500 companies (see Who Rules America? ). ..."
"... As individual elites retire, they are replaced from the pool of elite aspirants . There are always more elite aspirants than positions for them to occupy. Intra-elite competition is the process that sorts aspirants into successful elites and aspirants whose ambition to enter the elite ranks is frustrated. Competition among the elites occurs on multiple levels. ..."
"... Excessive elite competition, on the other hand, results in increasing social and political instability. The supply of power positions in a society is relatively, or even absolutely, inelastic. For example, there are only 435 U.S. Representatives, 100 Senators, and one President. A great expansion in the numbers of elite aspirants means that increasingly large numbers of them are frustrated, and some of those, the more ambitious and ruthless ones, turn into counter-elites . In other words, masses of frustrated elite aspirants become breeding grounds for radical groups and revolutionary movements. ..."
"... Intense intra-elite competition, however, leads to the rise of rival power networks, which increasingly subvert the rules of political engagement to get ahead of the opposition. Instead of competing on their own merits, or the merits of their political platforms, candidates increasingly rely on "dirty tricks" such as character assassination (and, in historical cases, literal assassination). As a result, excessive competition results in the unraveling of prosocial, cooperative norms (this is a general phenomenon that is not limited to political life). ..."
"... Because the supply of power positions is relatively inelastic, most of the action is on the demand side. Simply put, it is the excessive expansion of elite aspirant numbers (or "elite overproduction") that drives up intra-elite competition ..."
"... There are two main "pumps" producing aspirants for elite positions in America: education and wealth. On the education side, of particular importance are the law degree (for a political career) and the MBA (to climb the corporate ladder). Over the past four decades, according to the American Bar Association, the number of lawyers tripled from 400,000 to 1.2 million. The number of MBAs conferred by business schools over the same period grew six-fold (details in Ages of Discord ). ..."
"... It's contradictory to bemoan the spread of the 'neoliberal' ethos, and simultaneously talk about elite fragmentation. The evidence Turchin marshalls for elite fragmentation is basically the bimodal distribution of lawyers' incomes, and the degree of legislative polarisation. He ignores the much wider evidence of capitalist unity and concentration in support of 'neoliberal' policies. ..."
"... while elites have colluded to capture the political process we might not expect them to all agree on what to do with the political process once it has been captured. ..."
"... There is no intra-capitalist unity. Some elites shouldn't even be called capitalists because the monopoly power they seek completely eliminates the free market. Other elites who want to control the political process do want a free market. They are in conflict. ..."
"... The concept of "ecological overshoot and collapse" applies to human ecology too. We're certainly in overshoot, so some form of collapse is coming (even if a technological miracle occurred, like cheap energy from nuclear fusion, it would only postpone the day of reckoning). ..."
"... As to "intra-elite competition", it is well underway in much of the upper middle class and the 1%, according to the statistics documented by Peter Turchin above. But it is just revving up among the super-elites – the billionaire class, with Trump being the first really visible eruption. ..."
"... When an imperial economy can longer expand easily, all of Peter's dynamics come into play with greater force, not just the elite competition, but the increasing exploitation of the common people in order to maintain elite expansion. The latter has been going on since Reagan in the form of escalating economic inequality. = popular immiseration. ..."
"... I liked the intra-elite discussions in "Ages of Discord" and it made me an even more strident believer in term limits. At least moving people out of the Congress after eight years will "free up" some space for other elite aspirants. ..."
"... Political elites are the proxies PT uses as evidence for his theory, but as he himself says, "American power holders are wealth holders". And I believe the definition I have effectively used here, "owners of capital", is consistent with his concept of elites or magnates in Secular Cycles -- a book I admire tremendously. ..."
"... Your average Congressman is not as powerful today as he was 100 years ago. Cabinet members used to do something of substance and now act more like front men, while policy making is centralized in the White House. You have more and more aspirants for fewer and fewer positions of substance. That ramps up intensity of competition even more than just over-production of JDs and MBAs. ..."
"... Agreed, the overproduction of elites developed in parallel with the change in social norms that extolled competition and downplayed cooperation. But these two dynamics may be causally related -- it's not a pure coincidence that the two trends developed in parallel. ..."
"... It seems to me that one of the most important factors in intra-elite competition, is the degree of skill of the frustrated aspirants. If there are lots of people who want to be elite but can't crack the system to get in, that may not be a problem if those frustrated aspirants aren't particularly good at organization, motivation, leadership, etc. ..."
"... If, on the other hand, the frustrated aspirants are nearly as good at this sort of thing as those actually in power, and especially if they are better at it than the incumbents (who somehow through tradition or family connections or what-have-you remain on top), then you have a much better chance of the frustrated aspirants being able to kick up trouble. ..."
"... I wonder if any of the commentators here have considered that the [neoliberal] cabal now in power in the US (not elsewhere) are not in power to "take power" except for a temporary period. They don't want to run the federal government, they want to destroy it, except for the police state and the military. ..."
Dec 30, 2016 | peterturchin.com

elites , norms , social change , structural-demographic 72 Comments

Intra-elite competition is one of the most important factors explaining massive waves of social and political instability, which periodically afflict complex, state-level societies. This idea was proposed by Jack Goldstone nearly 30 years ago . Goldstone tested it empirically by analyzing the structural precursors of the English Civil War, the French Revolution, and seventeenth century's crises in Turkey and China. Other researchers (including Sergey Nefedov, Andrey Korotayev, and myself) extended Goldstone's theory and tested it in such different societies as Ancient Rome, Egypt, and Mesopotamia; medieval England, France, and China; the European revolutions of 1848 and the Russian Revolutions of 1905 and 1917; and the Arab Spring uprisings. Closer to home, recent research indicates that the stability of modern democratic societies is also undermined by excessive competition among the elites (see Ages of Discord for a structural-demographic analysis of American history). Why is intra-elite competition such an important driver of instability?

Elites are a small proportion of the population (on the order of 1 percent) who concentrate social power in their hands (see my previous post and especially its discussion in the comments that reveal the complex dimensions of this concept). In the United States, for example, they include (but are not limited to) elected politicians, top civil service bureaucrats, and the owners and managers of Fortune 500 companies (see Who Rules America? ).

As individual elites retire, they are replaced from the pool of elite aspirants . There are always more elite aspirants than positions for them to occupy. Intra-elite competition is the process that sorts aspirants into successful elites and aspirants whose ambition to enter the elite ranks is frustrated. Competition among the elites occurs on multiple levels. Thus, lower-ranked elites (for example, state representatives) may also be aspirants for the next level (e.g., U.S. Congress), and so on, all the way up to POTUS.

Moderate intra-elite competition need not be harmful to an orderly and efficient functioning of the society; in fact, it's usually beneficial because it results in better-qualified candidates being selected. Additionally, competition can help weed out incompetent or corrupt office-holders. However, it is important to keep in mind that the social effects of elite competition depend critically on the norms and institutions that regulate it and channel it into such societally productive forms.

Excessive elite competition, on the other hand, results in increasing social and political instability. The supply of power positions in a society is relatively, or even absolutely, inelastic. For example, there are only 435 U.S. Representatives, 100 Senators, and one President. A great expansion in the numbers of elite aspirants means that increasingly large numbers of them are frustrated, and some of those, the more ambitious and ruthless ones, turn into counter-elites . In other words, masses of frustrated elite aspirants become breeding grounds for radical groups and revolutionary movements.

Another consequence of excessive competition among elite aspirants is its effect on the social norms regulating politically acceptable conduct. Norms are effective only as long as the majority follows them, and violators are punished. Maintaining such norms is the job for the elites themselves.

Intense intra-elite competition, however, leads to the rise of rival power networks, which increasingly subvert the rules of political engagement to get ahead of the opposition. Instead of competing on their own merits, or the merits of their political platforms, candidates increasingly rely on "dirty tricks" such as character assassination (and, in historical cases, literal assassination). As a result, excessive competition results in the unraveling of prosocial, cooperative norms (this is a general phenomenon that is not limited to political life).

Death of Gaius Gracchus (François Topino-Lebrun) Source

Intra-elite competition, thus, has a nonlinear effect on social function: moderate levels are good, excessive levels are bad. What are the social forces leading to excessive competition?

Because the supply of power positions is relatively inelastic, most of the action is on the demand side. Simply put, it is the excessive expansion of elite aspirant numbers (or "elite overproduction") that drives up intra-elite competition. Let's again use the contemporary America as an example to illustrate this idea (although, I emphasize, similar social processes have operated in all complex large-scale human societies since they arose some 5,000 years ago).

There are two main "pumps" producing aspirants for elite positions in America: education and wealth. On the education side, of particular importance are the law degree (for a political career) and the MBA (to climb the corporate ladder). Over the past four decades, according to the American Bar Association, the number of lawyers tripled from 400,000 to 1.2 million. The number of MBAs conferred by business schools over the same period grew six-fold (details in Ages of Discord ).

On the wealth side we see a similar expansion of numbers, driven by growing inequality of income and wealth over the last 40 years. The proverbial "1 percent" becomes "2 percent", then "3 percent" For example, today there are five times as many households with wealth exceeding $10 million (in 1995 dollars), compared to 1980. Some of these wealth-holders give money to candidates, but others choose to run for political office themselves.

Elite overproduction in the US has already driven up the intensity of intra-elite competition. A reasonable proxy for escalating political competition here is the total cost of election for congressional races, which has grown (in inflation-adjusted dollars) from $2.4 billion in 1998 to $4.3 billion in 2016 ( Center for Responsive Politics ). Another clear sign is the unraveling of social norms regulating political discourse and process that has become glaringly obvious during the 2016 presidential election.

Analysis of past societies indicates that, if intra-elite competition is allowed to escalate, it will increasingly take more violent forms. A typical outcome of this process is a massive outbreak of political violence, often ending in a state collapse, a revolution, or a civil war (or all of the above).

... .. ..

72 Comments
  1. Gene Anderson December 30, 2016 at 5:43 pm

    Works for China too. One can see two main sources: The Imperial family, which with vast-scale polygyny grew inordinately in a short time; and the examination system, producing more and more successful candidates over time (this was a problem mainly after Song greatly expanded the exams). The poor Imperial family deserves some pity–toward the end of a dynasty you had all these 13th cousins 10 times removed starving to death on the Russian frontier. (I exaggerate only slightly. By the end of the empire in 1911, there were tens of thousands of Imperial relatives.) Naturally the competition got pretty fierce late in the dynasties. When the empire thrived, the system could blot all these people up, and find places for them. When the empire was going down hill, or conflicted, it meant trouble.

  2. pseudoerasmus December 30, 2016 at 5:51 pm

    I believe Peter Turchin is deeply mistaken about elite competition in modern societies. I repeat my comment on intra-elite competition from a previous post:

    In an agrarian society, elite wealth was based on land, more specifically, on extracting a fraction of the output of the commoners working the land. When there was a demographic crisis (land-labour ratio fell and immiseration set in), elite incomes fell, and elites sought to maintain their lifestyles by increasing the rate of extraction. But squeezing peasants even more when there's already a demographic crisis only exacerbates popular immiseration. At some point the only way for elites to increase, or even just preserve, their incomes was at the expense of other elites. Thus you have elite fragmentation and internecine competition. And thus sociopolitical instability. Makes a lot of sense. It fits a lot of historical cases.

    However, this theory makes no sense in modern industrial societies.

    (1) Wealth is no longer fixed in the long run. Modern economies reliably grow at 1-2% rates. Much of that growth is concentrated at the top, even when measured income inequality is relatively low. So the competitive pressure within elites is much less than in any agrarian society governed by Malthusian-Ricardian-Brennerian-Goldstone-Turchin cycles.

    (2) Besides, in a modern society, you need *more*, not less, intra-elite cooperation (a) in order to increase economic inequality; (b) in order for the elites to capture a greater share of the economic growth; (c) in order for capitalists reduce the bargaining power of labour; and (d) in order for elites to capture the state.

    In fact, politics in a modern society is a pretty small part of the field in which elites can play compared with anti-competitive practices -- i.e., collusion, mergers, monopolies, trusts, and other ways of reducing competition and concentrating power in the supply of goods and the demand for labour. These are all acts of elite cooperation. Capitalists are, right now, in unprecedented unity. They agree on unions, immigration, wages, trade, regulations, etc. That unity is necessary to generate the inequality in the first place.

    Therefore, state capture and rent-seeking are now *cooperative*: conspiracies to rig the rules and increase markups against the public interest require collusion. Owners of one mobile telephony operator don't have to clash with the owners of another mobile telephony operator: they can band together to lobby the government. Compared with the rise of monopoly concentration, elites wrangling over Trump or Brexit is a sideshow.

    Almost everybody who is concerned about rising inequality implicitly recognises this: from Krugman to Stiglitz to Milanovic to even Turchin's friends at Evonomics, they have argued that inequality stems in great measure from anti-competitive practises.

    It's contradictory to bemoan the spread of the 'neoliberal' ethos, and simultaneously talk about elite fragmentation. The evidence Turchin marshalls for elite fragmentation is basically the bimodal distribution of lawyers' incomes, and the degree of legislative polarisation. He ignores the much wider evidence of capitalist unity and concentration in support of 'neoliberal' policies.

    • Fernando E.Mora December 31, 2016 at 4:05 am

      I think you must read Fred Hirsch's "Social Limits to Growth" to understand the difference between the always possible growth in MATERIALl wealth and the (no-)growth of POSITIONAL wealth in which Peter's point can also be solidly (and perhaps more accurately) based.

      • pseudoerasmus December 31, 2016 at 8:16 am

        I would certainly agree that if economic growth were zero or negative, PT's elite competition theory might make more sense. Which is why I think SD theory is still quite applicable to many contemporary developing countries, such as those in the Arab world. Also, the collapse into civil wars in many African countries in the 1980s and 1990s was preceded by a large expansion of educated people at the same time economic growth more or less came to a halt.

    • Peter Turchin January 1, 2017 at 7:17 pm

      This comment requires a lengthier rebuttal, but for now just two points:

      1. In the blog post I specifically used the political elites to illustrate my major point. Your response, unfortunately, is a standard economic one that measures everything in money. As I said, I will probably have to write another post to explain why this is wrong-headed.

      2. Why do you assume that the "capitalist class" will be automatically able to cooperate to impose their will on the rest of the society? There is, after all, the problem of collective action.

      • Stephen Morris January 1, 2017 at 8:04 pm

        Speaking as a former investment banker involved in the privatisation of public assets – who has seen at first hand generations of politicians captured by business interests – I suggest that anyone with direct experience of this matter would realise that any collective action problem faced by the capitalist class in negligible in comparison which the collective action problem faced by citizens under the non-democratic system of purely "elective" goverrnment (i.e. "government-by-politicians').

      • pseudoerasmus January 1, 2017 at 8:04 pm

        Re #1 -- No, I do not measure everything in money, so please do not write a whole post as though that's what I argued. I said that elites now *collude* to capture the political process, which they do. They don't need to compete for political positions because they cooperate in capturing it. Goldman Sachs has access to the Treasury department whether the party in power is Republican or Democratic. (Besides, you also use some money proxies for intra-elite competition/cooperation: the distribution of lawyers' salaries, or the Great Merger Movement.)

        Re #2 -- I do not assume it. The evidence is overwhelming that concentration is increasing, markups are rising, monopoly power is expanding. All of that is evidence of intra-capitalist cooperation and unity.

      • pseudoerasmus January 1, 2017 at 8:11 pm

        Peter Turchin frequently cites the work of Martin Gilens, who has repeatedly shown that public policy largely reflects the preferences of the very richest of US society. That's not elite competition. That's elite cooperation in capturing of the political process. The problem with Turchin's framework is that he sees even modern societies through the Roman framework of Optimates v. Populares.

        • edwardturner January 2, 2017 at 11:52 am

          pseudoerasmus, I pretty much agree with what you say. However, while elites have colluded to capture the political process we might not expect them to all agree on what to do with the political process once it has been captured.

          There is no intra-capitalist unity. Some elites shouldn't even be called capitalists because the monopoly power they seek completely eliminates the free market. Other elites who want to control the political process do want a free market. They are in conflict.

          The common thread here is the presence of powerful elites who cooperate. Historically the monopoly power elites have cooperated without much resistence but the free market elites have begun to cooperate against them and have had success in the election of Donald Trump.

          If it is people power we want then the general trend will look like cooperation as whoever wins the conflict will be cooperating economic elites.

    • Steve Roth January 2, 2017 at 9:41 am

      I question whether there is a qualitative difference today. It's still about the claims embodied by "wealth," and the power those claims impart to wealthholders. The mechanisms are different, but the wealth/power relationships are pretty much the same.

      The crux, in my view, is concentration of wealth (hence power). Which has the virtue of being nicely quantifiable, in concept if not necessarily in practice.

      My favorite graph of this:

      http://www.asymptosis.com/household-net-worth-by-quintile-62-09-be-prepared-to-scroll.html

      As concentration increases and the "elite" gets smaller, the rope-ladder hanging down from the elite gets shorter and rattier. eg: The 90% were always excluded. Now the 2%-10% are. That change could result in a different type or intensity of social conflict.

      On the other hand that intra-"elite" competition might just be a by-product and analytical distraction. The elite vs "the rest" is the issue, and all we need to look at is the size of the elite. That could be nicely encapsulated in a "wealth concentration" metric.

      Problem is getting a consistent measure of that wealth concentration. Hell, the U.S. national accounts didn't even tally wealth until 2006, and still don't even touch on wealth distribution.

      http://evonomics.com/economists-dont-know-think-wealth-profits/

      Assembling such a (validly consistent) measure across historical societies would be tough. Atkinson, Wolff, Piketty&Co, etc. have managed over recent decades to assemble data on richer countries going back a century or so. Perhaps one could do similar for the Roman Empire, at least roughly? But across many societies and millennia? Tough.

      • pseudoerasmus January 2, 2017 at 10:39 am

        In agrarian societies, the wealth that conferred status -- land and state offices -- were fixed in the long run. In modern societies, the supply of status positions is not fixed and is in fact highly elastic.

        • Steve Roth January 2, 2017 at 11:10 am

          Yes the quantity of wealth was fixed. But I'm talking about the concentration of wealth and power. Compare a society in which the 1% has all the wealth and (real) power, compared to one where it's more broadly distributed among the 10%.

          IOW, whaddaya mean by "elite," buster?

          • >the supply of status positions is not fixed and is in fact highly elastic

          Totally agree. Increasing wealth does not mean that the quantity of status positions is increasing. The absolute or percentage count of "the elite" could shrink (wealth could concentrate) even as wealth increases.

          Increasing wealth might be presumed to give more entree to aspirants than a fixed-wealth scenario, but I just have no idea whether that is actually the case.

  3. Dick Burkhart December 30, 2016 at 6:47 pm

    You claim that "wealth is no longer fixed in the long run", yet that claim is the most fundamental fallacy of contemporary economics. "Limits-to-growth" is not a choice but a fact of science. Already the global economy is stagnating, mostly for this reason, and it is headed toward contraction sometime during the coming generation, despite all the hype about new technologies.

    The concept of "ecological overshoot and collapse" applies to human ecology too. We're certainly in overshoot, so some form of collapse is coming (even if a technological miracle occurred, like cheap energy from nuclear fusion, it would only postpone the day of reckoning).

    As to "intra-elite competition", it is well underway in much of the upper middle class and the 1%, according to the statistics documented by Peter Turchin above. But it is just revving up among the super-elites – the billionaire class, with Trump being the first really visible eruption. In fact, Donald Trump's election is the perfect example of how this competition plays out once it hits the main stage. So don't confuse tactical cooperation among increasingly greedy factions of the elites with the kind of yawning political fractures that are now opening up as unscrupulous opportunists like Trump discover that they can exploit a disgruntled part of the populace to "trump" the more conventional elites. And as "limits-to-growth" blocks the customary relief valve of expansion, then elite exploitation and popular revolt will increase until something there is some kind of show stopper.

      • Dick Burkhart December 30, 2016 at 8:29 pm

        Like most economists, you've got it totally backward: The non-material part is completely dependent on cheap resources, especially cheap, and compatible ecosystem conditions. Those resources only seem to disappear from the economy, because they are so cheap. But, as in the rest of nature, all that complexity comes from the surplus of energy and other resources.

        After all, we could not live without good air. Yet it costs nothing most of the time, so doesn't even enter into conventional economics.

        • pseudoerasmus December 30, 2016 at 9:04 pm

          Well, Dick Burkhart, as I said earlier, even if ecological exhaustion and collapse were coming, (a) that is not related to current economic problems; and (b) it's also not part of Peter Turchin's diagnosis.

          • Dick Burkhart December 31, 2016 at 9:19 pm

            In fact climate change is already taking an increasing economic toll – from extreme weather events, ocean acidification, desertification in some areas, etc. These costs could increase rapidly if certain tipping points are reached.

            But, yes, the larger immediate effects are coming from resource depletion, especially the peaking of conventional oil in 2006. Unconventional oil, like tar sands and fracked oil, is much more expensive, hence produces less wealth, less economic growth. Even much of the newer conventional oil is less productive, as it is often harder to find or requires tertiary methods of recovery. Similar dynamics apply to coal, natural gas, and many other resources, except that depletion may not be as far advanced as for oil. Economic growth has slowed dramatically even in China, despite their phony growth numbers, and I expect increasing political turmoil there, too, over the next decade or two.

            When an imperial economy can longer expand easily, all of Peter's dynamics come into play with greater force, not just the elite competition, but the increasing exploitation of the common people in order to maintain elite expansion. The latter has been going on since Reagan in the form of escalating economic inequality. = popular immiseration.

      • Paolo Ghirri December 31, 2016 at 2:34 pm

        "current problems have nothing to do with anything ecological or resource constraints."

        yes they have: for a pre industrial civilization what is vital is energy surplus, energy surplus that came from agriculture production. so as an example 18 have to work to produce food and 2 can live as soldier, priest and so on.

        for a industrial civilization energy surplus came from oil. from 1973 to 2016 the energy surplus pro-capita is falling: in a developed country the pro capita surplus now is 75% lower than in 1973.

        the gap is covered with debt. so in the short run we have: 1) energy price escalation (in real term the 2016 average oil price is the double of 2000) 2) agricultural stress: more frequent spike in food price, combined with food shortfall in the most vulnerable country (arab spring: food price in 2011 are 229% higher than the 2000-2004 average) 3) energy sprawl: investment in energy infrascructure will absorb rising proportion 4) economic stagnation: fail to recover from setbacks as robustly as it has in the past 5) inflation
        with the single exception of inflation (but if we check only necessary to live item i'm not so sure) all of the above features has already become firnly established in recent years, wich underlines the point that energy-surplus economy has reached its tipping point

  4. Terry Lowman December 30, 2016 at 7:20 pm

    The reason the elites cooperate is to get a leg up in the competition. It recently occurred to me that the Forbes 400 list of America's wealthiest families gives people a rank, a competitor. Without the list, one might be complacent with a mere $3 billion, but knowing others have tens of billions, makes you a "just ran". Better tune up your capitalist machine so you can outshine everyone else, right?

    • Peter Turchin January 1, 2017 at 7:19 pm

      The supply of "status" is by its nature inelastic. There is only one top person in anything, and only ten in the Top 10.

      • edwardturner January 2, 2017 at 11:57 am

        True but people who cannot be the king of general things will be happy to be known as the king of their specialism.

        The more specialisms that exist for people to get to the top of the more stable a society will be.

      • edwardturner January 2, 2017 at 12:02 pm

        you could say that the king of the military is the king of kings but in the age of nuclear buttons it's simply boring. you can't blow anything up without getting blown up yourself. you can use non-nuclear military power but non-nuclear power in the age we are living in only wins you the war, it doesn't win you the war and the peace. to win the peace today you need to be king of something other than the military.

  5. Rick Derris December 30, 2016 at 9:50 pm

    I liked the intra-elite discussions in "Ages of Discord" and it made me an even more strident believer in term limits. At least moving people out of the Congress after eight years will "free up" some space for other elite aspirants. I don't care if your politics are on the side of Strom Thurmond or Ted Kennedy – both were in the Congress for far too long.

    Of course, term limits did nothing to keep a 2nd Cuomo out of the NY Governor's mansion, but at least it means we only have to watch one Cuomo on CNN.

  6. Rich December 31, 2016 at 1:09 am

    Pseudoerasmus, good arguments. The consolidation of money, as well as markets, is very large right now and it does seem like that would take coordination of an ownership class or at least similar lines of thinking among those elites. But, are we talking about a different set of elites? There may be different populations of elites: capitalist and political. Personally, I think the proxies Peter use describe a political elite population rather than a capitalist elite population. The two combine for many, but there may be distinct capitalist and political populations with each having distinct behavior patterns. The worrisome insight for me is that it's the political elites that end up bringing us to our knees.

    • pseudoerasmus December 31, 2016 at 7:43 am

      "Personally, I think the proxies Peter use describe a political elite population rather than a capitalist elite population.

      Political elites are the proxies PT uses as evidence for his theory, but as he himself says, "American power holders are wealth holders". And I believe the definition I have effectively used here, "owners of capital", is consistent with his concept of elites or magnates in Secular Cycles -- a book I admire tremendously.

      Note also that PT uses the Great Merger Movement in US history (1895-1905) as evidence of the beginnings of elite cooperation. Well, another wave of capital concentration has existed now for decades, since the 1980s.

      • Rich Howard December 31, 2016 at 4:40 pm

        Political elites may be more likely to be rich, but the rich is a larger population with only a fraction politically aspirant. PT'S model relates political aspirants to political breakdown. And because it works so well, in so many cases, it suggests there is a more universal social process at work than rich/poor, unemployment rates, too many weapons, resource depletion etc.

  7. Jason December 31, 2016 at 7:42 am

    I like the theory but isn't there more to the story. On one side you have elite aspirant overproduction. On the other side, you have increasing concentration of power -- the iron law of oligarchy (in the sense of this wikipedia link: https://en.wikipedia.org/wiki/Iron_law_of_oligarchy )

    Your average Congressman is not as powerful today as he was 100 years ago. Cabinet members used to do something of substance and now act more like front men, while policy making is centralized in the White House. You have more and more aspirants for fewer and fewer positions of substance. That ramps up intensity of competition even more than just over-production of JDs and MBAs.

    Plus the barriers to entry for competition has lowered too. Now celebrities fight with JDs for political positions. Rap stars compete with MBAs for business tycoon success.

    At all levels of society, you have greater and greater competition for fewer and fewer rewards. Hyper-competition all around. Now perhaps the competition at the gateway to the elite is particularly important because elites are important, and failure to get in makes them the aspirants powerful disgruntled people, but I think the mechanism is more than just over-production of JDs and MBAs.

    I think it might have started as a well intentioned project to increase the quality of our elites by introducing competition and lowering barriers to entry. And at the the same time, increasing the rewards to winners (incentivizing max effort). Result though is brutal intra-elite fighting. Particularly in times of overall lowered growth.

    • Peter Turchin January 1, 2017 at 7:24 pm

      Agreed, the overproduction of elites developed in parallel with the change in social norms that extolled competition and downplayed cooperation. But these two dynamics may be causally related -- it's not a pure coincidence that the two trends developed in parallel.

  8. Ross Hartshorn December 31, 2016 at 1:43 pm

    One point I haven't seen discussed much is that the number of "powerful" positions is fixed, by law, but not unchangeable. For example, in the 19th century it was arguably more important to be a city councilman or state legislator than a Congressmen, because more actual decisions were being made at the city and state level and the percentage of the economy under the control of the federal government was smaller. If there is less federal largesse to distribute, then there is less power in helping to decide how it is distributed. It is somewhat analogous to why being a U.S. Senator now is more important than being a U.N. functionary; the United Nations may represent a larger domain, but it has a lot less control over that domain than a national government.

    Thus, one would expect that the more centralized control of a region is, the more intra-elite competition there will be, because there are fewer positions which really matter. A modern example of this might be that the transfer of power from national to European Union administration would result in more intra-elite competition. On the other hand, devolving power back down to a lower level would result in more positions that have some power, and less competition for each.

    • Jason January 1, 2017 at 12:49 am

      That's exactly what I was getting at too, Ross. The number of good positions available depends on the power gradient of the society. How much power is centralized vs distributed. The whole Iron Law of Oligarchy developed in recognition that over time, power tends to centralize, so it's not fixed by law and unchangeable for all time. It's not so much inequality between ordinary people and the elite, but among elites.

      Plus it ossifies, in that these enhanced elite positions are then passed out patrilineally, which results in fewer actual positions being open to aspirants.

      The net result is heightened competition for entry and promotion within the elite, with more and more of the victories happening by methods outside the norm, e.g. dirty tricks, patronage, fake news etc.

      This probably happens in all societies, but growth (creating more opportunities), wars (resetting the table), inefficiency (placating the failed aspirants with consolation prizes) keep internal collapse at bay. It's when you have a dynamic of High Inequality, Low Growth, High Efficiency / Lean, No Wars that Elite Competition starts getting out of hand.

      (I say this despite hating wars, but you can't argue with their effect on resetting the table. Hate bribes/corruption too, but things like congressional pork barrels kept congressman feeling important and in-line. Efficiency is also a self evident good, but that means no consolation prizes for failure. Growth may eventually run into limits due to carrying capacity of ecosystem .).

      To me, it resembles a game of musical chairs with too few chairs, and when the music is playing much too fast. As Chuck Prince famously said in the Global Financial Crisis: "As long as the music is playing, you've got to get up and dance." Whether or not dancing is destructive, elites have to keep dancing to keep their chair.

      https://en.wikipedia.org/wiki/Charles_Prince

      • Ross Hartshorn January 1, 2017 at 6:00 pm

        I also hate wars, but I am reminded of Mancur Olson's theory that nations recovering from a major disaster or a major military defeat usually have above-average growth for a few decades. The idea is that when, as with the South in the U.S. after the Civil War or with Germany and Japan after WWII, the elite in society have suffered a setback so severe that their hold on society is disrupted, there will be a period during which they are less able to set government policy in their favor rather than the collective welfare.

        SDT would have a somewhat different explanation of this. I agree with you that rapid growth would be another way to reduce the intra-elite competition; it seems the most likely explanation for the "missing" peak in non-governmental violence in the U.S. in the 1820's that Peter Turchin pointed out earlier.

        • Peter Turchin January 1, 2017 at 7:32 pm

          Historically, rapid growth coupled with equitable redistribution of its gains is typically associated with peaceful and internally stable periods. But you need both (growth and equity).

  9. Ross Hartshorn December 31, 2016 at 1:52 pm

    This idea is kind of half-formed, but I'll put it out there. It seems to me that one of the most important factors in intra-elite competition, is the degree of skill of the frustrated aspirants. If there are lots of people who want to be elite but can't crack the system to get in, that may not be a problem if those frustrated aspirants aren't particularly good at organization, motivation, leadership, etc.

    If, on the other hand, the frustrated aspirants are nearly as good at this sort of thing as those actually in power, and especially if they are better at it than the incumbents (who somehow through tradition or family connections or what-have-you remain on top), then you have a much better chance of the frustrated aspirants being able to kick up trouble.

    Of course, part of being good at leadership is getting the opportunity to practice, and a post-secondary education almost always includes some practice at a more professional set of social skills. But if the people getting spots in power remain better at political organization than the people who don't, it is less likely to result in disruption, I think. It seems that trouble would come when the ruling elite is either not especially good at leading (e.g. they inherited their position or bought their way in with somebody else's money), or they were good at leading in a previous time, and changes in society or technology have changed what skills are necessary for leadership.

    In all these cases, I think "good at leadership" would be a relative term, which is to say the current elite relative to the frustrated aspirants. How you could measure such skill, of course, is the key question about which I have as of yet nothing to say (I did say the idea was half-formed).

  10. steven t johnson January 1, 2017 at 8:10 am

    Although intra-elite competition and inter-elite competition are conceptually distinct, is that true in practice? Is Carlos Slim an intraelite competitor with Jeff Bezos, in the form of rivalry between the New York Times and the Washington Post? If this is interelite competition, how does structural-demographic theory address the issues of how external factors impinge on the cycle? (I'm a little shaky on how interior and exterior are defined in the first place. As for example, was there a cycle for Burgundy?)

    • Peter Turchin January 1, 2017 at 7:34 pm

      Unlike "intra-elite competition", "inter-elite competition" is not a concept in SDT (and like you I would be hard put to think what it could refer to).

  11. edwardturner January 1, 2017 at 12:34 pm

    The supply of power positions in a society is relatively, or even absolutely, inelastic. For example, there are only 435 U.S. Representatives, 100 Senators, and one President.

    This is not quite true. The supply of power positions can be elastic to a point.

    How about the growth in number of CEOs and NGOs and the heads of INGOs over the last 50 years? So-called non-state actors have become powerful as they influence the law-making processes in a variety of ways.

    These big chiefs are positions of power and influence. In many cases, they call the shots and Presidents and Prime Ministers are only the PR guys.

    The US President is not the most powerful person in the world. He doesn't have the highest security clearance in the United States. He is not allowed to know everything.

    The idea the US President is the most powerful man is a claim based on a theory of how the US political system works in idealised sense, and on simple US nationalism.

    The fact that the supply of power positions is elastic – that there has been a flouresence of alternative power structures to the state hierarchy – suggests that wealth can to a degree put off or delay elite competition.

    It is only when the rug is pulled from under the alternative prestigious hierarchies and the state tries to dominate all on its own – that is when problems will begin. Keep the funding going, maintain non-state avenues for prestige and create even more, the fluoresence will continue.

    • edwardturner January 1, 2017 at 12:36 pm

      interested readers might like to read my report for Cliodynamics: Why Has the Number of International Non-Governmental Organizations Exploded since 1960?

      http://escholarship.org/uc/item/97p470sx

  12. Nikhil ns January 1, 2017 at 4:12 pm

    A point made in arthashastra, that fight among princes is more dangerous than fight among commoners. However, I wud like to ask what predictions are u unable to do. There is no real knowledge which doesnt admit what its limitations are, or admits inability to explain something. Even in physics, where humans have gained incredible knowledge, there is much to know. Also, on issue of religion, could one argue that but for christianity & islam world wud have devekped faster as information in math/science wud have gathered pace, exchanged between different lands easily.Thank you.

  13. Peter Turchin January 1, 2017 at 7:43 pm

    Interesting that Arthashastra foresees a major message of the SDT.

    On the role of religion there are a lot of recent books from the cultural evolutionary perspective, including David Wilson, Ara Norenzayan, and Dominic Johnson (I might also mention my own Ultrasociety).

    • Dick Burkhart January 1, 2017 at 11:16 pm

      Even direct democracy is not a cure-all. Here in Washington State, our initiative and referendum process has been corrupted at times by big money interests: First put together a sophisticated campaign around some catch phrases that will have popular support on a topic where the opposition, even if widespread, is likely to be diffuse. Then sneak in some coded language that privileges a wealthy special interest. Then use paid signature gatherers. Then assemble a massive advertising campaign, one that will outspend the likely opposition, maybe even by 10 to 1.

      Certain people get very good at this and quickly learn to sell their services to the highest bidder. The current master of such campaign here is a guy named Tim Eyman, and he has been quite successful. But some companies, like Costco, have done the same thing all by themselves.

      Moral: You need to get "money out of politics" in all ways, and it's a never ending battle until you've eliminated concentrated wealth and power itself.

    • Peter Turchin January 2, 2017 at 10:01 pm

      Stephen Morris: you will find my response in an old post:

      http://peterturchin.com/cliodynamica/the-pipe-dream-of-anarcho-populism/

  14. Jason January 2, 2017 at 9:35 am

    Prof Turchin, is there any data on the Supply of Elite Positions in Historic Societies?

    It doesn't feel instinctively right that it's inelastic, but perhaps there's really the case. It feels slightly more likely to be right to say that it's capped somehow (inelastic as to upside, more elastic as to downside).

    But it seems like the sort of thing you should be able to answer with a History Database. Has there been any attempts to measure this?

    • Peter Turchin January 2, 2017 at 10:06 pm

      In fact, your are in luck, because we provide such statistics for a number of historical societies in Secular Cycles
      http://peterturchin.com/secular-cycles/

      Note, I didn't say it was inelastic. In most cases, it's relatively inelastic, so that the growth in the number of aspirants greatly overmatches the growth in the supply of the positions. Only in few instances the supply is absolutely inelastic (only one POTUS).

  15. Jonathan January 6, 2017 at 1:21 pm

    Deficiencies in the concept of elite competition
    Let's start with the definition of elite: "small proportion of the population that concentrates power in their hands"
    His theory lacks an aspect that must be fundamental before even proceeding in a discussion on the "dynamics" of the elites and is that it is not able to explain in a satisfactory way the origin of the so-called "elites". According to its definition it seems that the elites are rather the manifestation of a particular phenomenon that is "concentration of power"; A phenomenon that manifests itself socially in the form of the so-called "elite", which hereafter I call the ruling class (I think it is a terminology in which we can all agree).
    But if we assume that the dominant classes are only a manifestation of the phenomenon of the concentration of power, our attention must first be fixed in that aspect so we try to break it down into its fundamental parts
    . Apparently the concept of power gives to understand the concept of dominion (some will have other words in mind but as surely they closely resemble the concept of domain I think that it suffices to refer us to this one) and we do not refer to any type of domain but to a domain Of social nature, a social domain. We will now say that this social domain manifests itself in the form of economic and political dominion, I think we will agree on this point.
    Now let us collect the fruits of these arguments. We have a different and more precise definition, which in no way invalidates the original, and we say: The ruling class is that small proportion of the population that concentrates economic and political dominion in their hands. I believe that we will agree that economic dominance is nothing but greater possession of capital and that political dominance is but a major influence on a state structure (the word "state" is used in a modern sense).
    Now we have: the ruling class is that small proportion of the population that concentrates the greatest possession of capital and the greatest influence within a state structure in their hands. The last part of " in your hands" is understood by what we can eliminate it and we have the following:
    The ruling class is that small proportion of the population that concentrates the greatest possession of capital and the greatest influence on a state structure.
    Now the possession of capital depends on its production or of the association with someone who produces capital. And it is revealed to us that the ruling class, apart from having influence in a state structure, needs to produce capital or be associated with someone who produces capital directly or indirectly.
    Thanks to this we see clearly that competition between elites is a competition for economic benefits and influence. Obviously the economic aspect is more significant than the aspect of influence. It follows that a fall in economic profits, ie a fall in capital production (a crisis), would directly or indirectly exacerbate the competition for greater economic benefits, that is, increase the number of aspirants to elitist . The competition of elites is not the cause of the crisis is one of the consequences of the crisis.

    • Jonathan January 6, 2017 at 2:40 pm

      I must make a small correction in my analysis. By capital I wanted to let you understand profit, so the use of that term in this argument is actually inappropriate because I wanted to use the word capital in a Marxist sense.

  16. Federico January 8, 2017 at 5:23 pm

    Hello Dr Turchin, I was wondering if you are familiar with Richard Lachmann's "elite conflict theory". It is a verbal theory, but one that he has successfully used to explain fiscal crises, hegemonic cycles, and the rise of modern capitalist economies. What do you think about it?
    Best,
    Federico

  17. Shaun Bartone February 27, 2017 at 3:47 pm

    I wonder if any of the commentators here have considered that the [neoliberal] cabal now in power in the US (not elsewhere) are not in power to "take power" except for a temporary period. They don't want to run the federal government, they want to destroy it, except for the police state and the military.

    They want to eliminate the EPA, vacate the State Dept and many other Depts, except for a few high-placed cronies, wipe all financial, labour, consumer and environmental regulations off the books; eliminate or reduce to a bare minimum federal health insurance, medicaid, medicare and Social Security, crush public education, privatize everything they can sell, and so on. They are not in power to "govern" but to destroy government. This is all being done with a fairly unified agenda: to free "the market" from any restrictions whatsoever, so that they -- global elites -- can make as much money as possible. It's a cabal of global corporations, militarists, Christian sovereign white supremacists, fossil fuel giants and bankers, and I think there's a high degree of cooperation for the agenda. The revolution is the cabal run by Trump/Bannon who are more extreme and ideological than any previous faction, who have no tolerance for compromise. They have an apocalyptic vision of grinding it all down to a bare minimum police state.

[Sep 28, 2020] Massive Labor Income Losses Worldwide As Recovery Falters

Sep 28, 2020 | www.zerohedge.com

The latest data compiled by the International Labour Organization (ILO) sheds new light on COVID-19's "devastating" impact on the labor market reveals a "massive" drop in labor income and hours for workers worldwide.

Global labor income plunged 10.7%, or $3.5 trillion, in the first nine months of 2020, compared with the same period in 2019, ILO's new report found, which is one of the first measurements to quantify the deep economic scarring that has left the global economy paralyzed. The figure excludes income derived by governments to compensate for labor loss during the pandemic.

The report, titled " ILO Monitor: COVID-19 and the world of work. Sixth edition," was published on Wednesday (Sept. 23), notes how global labor hour losses in the first nine months of 2020 have been "considerably larger" than the estimate from the previous report issued in late June.

The report found the largest income loss was primarily in lower-middle income countries, where the labor income losses reached 15.1%.

"Workplace closures continue to disrupt labor markets around the world, leading to working-hour losses that are higher than previously estimated," ILO said.

The United Nations agency said global working-hour losses are expected to remain elevated in 3Q20, at 12.1%, or equivalent to 345 million full-time equivalent (FTE) jobs (based on a 48-hour working week). The revised downside projections for 4Q20 suggest a more pessimistic outlook for the global economy is ahead .

ILO's baseline scenario, for working-hour losses, in the fourth quarter, is -8.6%. The most optimistic is +5.7%, while the most pessimistic is -18%.

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

"The latest data confirm that working-hour losses are reflected in higher levels of unemployment and inactivity, with inactivity increasing to a greater extent than unemployment. Rising inactivity is a notable feature of the current job crisis calling for strong policy attention. The decline in employment numbers has generally been greater for women than for men," ILO said.

The driver behind increased working-hour losses in developing and emerging economies is that informal employment continues to be affected by strict public health orders to mitigate the virus spread.

ILO said there's a "clear correlation" between how much fiscal stimulus a country does and working-hour losses. For example, more stimulus has offset a reduction in working hours. Many of these stimulus packages have been observed in high-income countries, as emerging and developing economies had limited borrowing capacity to finance such measures.

ILO Director-General Guy Ryder warned about a "huge fiscal stimulus gap," and the dire need for governments to unleash more fiscal stimulus to mitigate additional stresses in the global labor market.

"Just as we need to redouble our efforts to beat the virus, so we need to act urgently and at scale to overcome its economic, social, and employment impacts. That includes sustaining support for jobs, businesses, and incomes," Ryder said in a statement.

The report debuted as the US entered the 53rd day of the fiscal cliff. As discussed extensively in late July in" ' Look Out Below': Why The Economy Is About To Fly Off A Fiscal Cliff " , a lapse in stimulus has the risk in reversing the economic recovery.

A record of 25% of all personal income in the US is derived from the government via stimulus programs. Without stimulus, the economy craters.

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With ILO's report noting more labor market stress is ahead for the final quarter of the year, it all suggests there will be no "V"- shaped recovery in 2H20.

And this could be the moment where Wall Street realizes the shape of the recovery was never a "V," resulting in the next wave down in stocks.


[Sep 22, 2020] Why does neoclassical economics produce ponzi schemes of inflated asset prices?

Sep 22, 2020 | www.zerohedge.com

Sound of the Suburbs , 54 minutes ago

Why does neoclassical economics produce ponzi schemes of inflated asset prices?

  1. It makes you think you are creating wealth by inflating asset prices
  2. Bank credit flows into inflating asset prices, debt rises faster than GDP and you eventually get a financial crisis.
  3. No one notices the private debt building up in the economy as neoclassical economics doesn't consider debt.

This economics still has its 1920s problems. What is the fundamental flaw in the free market theory of neoclassical economics? The University of Chicago worked that out in the 1930s after last time. Banks can inflate asset prices with the money they create from bank loans.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

Henry Simons and Irving Fisher supported the Chicago Plan to take away the bankers ability to create money.

"Simons envisioned banks that would have a choice of two types of holdings: long-term bonds and cash. Simultaneously, they would hold increased reserves, up to 100%. Simons saw this as beneficial in that its ultimate consequences would be the prevention of "bank-financed inflation of securities and real estate" through the leveraged creation of secondary forms of money."

https://www.newworldencyclopedia.org/entry/Henry_Calvert_Simons

The IMF re-visited the Chicago plan after 2008.

https://www.imf.org/external/pubs/ft/wp/2012/wp12202.pdf

It looks like they did have some idea what the problem was.At the end of the 1920s, the US was a ponzi scheme of inflated asset prices. The use of neoclassical economics and the belief in free markets, made them think that inflated asset prices represented real wealth accumulation.

1929 – Wakey, wakey time. Why did it cause the US financial system to collapse in 1929? Bankers get to create money out of nothing, through bank loans, and get to charge interest on it.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

What could possibly go wrong?

Bankers do need to ensure the vast majority of that money gets paid back, and this is where they get into serious trouble.

Banking requires prudent lending.

If someone can't repay a loan, they need to repossess that asset and sell it to recoup that money. If they use bank loans to inflate asset prices they get into a world of trouble when those asset prices collapse.

As the real estate and stock market collapsed the banks became insolvent as their assets didn't cover their liabilities.

They could no longer repossess and sell those assets to cover the outstanding loans and they do need to get most of the money they lend out back again to balance their books.

The banks become insolvent and collapsed, along with the US economy.

When banks have been lending to inflate asset prices the financial system is in a precarious state and can easily collapse.

What was the ponzi scheme of inflated asset prices that collapsed in Japan in 1991?

Japanese real estate.

They avoided a Great Depression by saving the banks.

They killed growth for the next 30 years by leaving the debt in place.

https://www.youtube.com/watch?v=8YTyJzmiHGk

Debt repayments to banks destroy money, this is the problem.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

What was the ponzi scheme of inflated asset prices that collapsed in 2008?

"It's nearly $14 trillion pyramid of super leveraged toxic assets was built on the back of $1.4 trillion of US sub-prime loans, and dispersed throughout the world" All the Presidents Bankers, Nomi Prins.

They avoided a Great Depression by saving the banks.

They left Western economies struggling by leaving the debt in place, just like Japan.

It's not as bad as Japan as we didn't let asset prices crash in the West, but it is this problem has made our economies so sluggish since 2008.

In 2020, the world is a ponzi scheme of inflated asset prices.

The use of neoclassical economics and the belief in free markets, made them think that inflated asset prices represented real wealth accumulation.

The central banks have to keep pumping in liquidity to stop all the ponzi schemes collapsing.

If the ponzi schemes collapse, this feeds back into the financial system when bankers have been lending to inflate asset prices.


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Sound of the Suburbs , 1 hour ago

Bankers make the most money when they are driving your economy towards a financial crisis.

You don't want to leave them to their own devices.

On a BBC documentary, comparing 1929 to 2008, it said the last time US bankers made as much money as they did before 2008 was in the 1920s.

Bankers make the most money when they are driving your economy into a financial crisis.

https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6

At 18 mins.

The bankers loaded the US economy up with their debt products until they got financial crises in 1929 and 2008.

As you head towards the financial crisis, the economy booms due to the money creation of bank loans.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

The financial crisis appears to come out of a clear blue sky when you use an economics that doesn't consider debt.

The economics of globalisation has always had an Achilles' heel.

The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn't look at debt, neoclassical economics.

Not considering private debt is the Achilles' heel of neoclassical economics.

Sound of the Suburbs , 1 hour ago

Come on.

Wakey, wakey.

You are just repeating 1920s mistakes.

The Americans wrapped a new ideology, neoliberalism, around 1920s economics and repeated the economic mistakes of the 1920s.

Policymakers couldn't see what Glass-Steagall did, as they thought banks were financial intermediaries.

It separates the money creation side of banking from the investment side of banking, and stops bankers producing securities; they buy themselves with money they create out of nothing.

https://www.bankofengland.co.uk/-/media/boe/files/quarterly-bulletin/2014/money-creation-in-the-modern-economy.pdf

(There are intermediaries involved so it's not obvious, but this is effectively what is happening)

The whole thing turns into a ponzi scheme and you get a 1929 or 2008 type event.

1929 and 2008 look so similar because they are.

https://www.youtube.com/watch?v=vAStZJCKmbU&list=PLmtuEaMvhDZZQLxg24CAiFgZYldtoCR-R&index=6

At 18 mins.

1929 and 2008 -- Minsky Moments, the financial crises where debt has over whelmed the economy.

They did save the banks this time, which avoided another Great Depression.

They left the debt in place, which caused a balance sheet recession.

As a CEO, I can use the company's money to do share buybacks, to boost the share price; get my bonus and top dollar for my shares.

Share buybacks were found to be a cause of the 1929 crash and made illegal in the 1930s.

What lifted US stocks to 1929 levels in 1929?

Margin lending and share buybacks.

What lifted US stocks to 1929 levels in 2019?

Margin lending and share buybacks.

A former US congressman has been looking at the data.

https://www.youtube.com/watch?v=7zu3SgXx3q4

"The Great Crash 1929" John Kenneth Galbraith

"By early 1929, loans from these non-banking sources were approximately equal to those from the banks. Later they became much greater. The Federal Reserve Authorities took it for granted that they had no influence over these funds"

He's talking about "shadow banking".

They thought leverage was great before 1929; they saw what happened when it worked in reverse after 1929.

Leverage acts like a multiplier.

It multiplies profits on the way up.

It multiplies losses on the way down.

Today's bankers seem to have learnt something from past mistakes.

They took the multiplied profits on the way up.

Taxpayers picked up the multiplied losses on the way down.

Mariner Eccles, FED chair 1934 -- 48, observed what the capital accumulation of neoclassical economics did to the US economy in the 1920s.

"a giant suction pump had by 1929 to 1930 drawn into a few hands an increasing proportion of currently produced wealth. This served then as capital accumulations. But by taking purchasing power out of the hands of mass consumers, the savers denied themselves the kind of effective demand for their products which would justify reinvestment of the capital accumulation in new plants. In consequence as in a poker game where the chips were concentrated in fewer and fewer hands, the other fellows could stay in the game only by borrowing. When the credit ran out, the game stopped"

The problem; wealth concentrates until the system collapses.

"The other fellows could stay in the game only by borrowing." Mariner Eccles, FED chair 1934 -- 48

Your wages aren't high enough, have a Payday loan.

You need a house, have a sub-prime mortgage.

You need a car, have a sub-prime auto loan.

You need a good education, have a student loan.

Still not getting by?

Load up on credit cards.

"When the credit ran out, the game stopped" Mariner Eccles, FED chair 1934 -- 48

...... etc .....

x_Maurizio , 1 hour ago

DISAGREE ON EVERY SINGLE WORD, in particular with this:

rules/regulations/capital requirements have infected the global banking system and rendered it a harvesting operation for retail and a derivatives rule/regulation/capital requirment evasion device for the pursuit of profit

absolutely false.

Banking system is in the 4th part of a cycle that they have created !

  1. The first part has been capital harvesting (1970-1980)
  2. The second part has been deregulation and hunt for stellar return on investment
  3. The third part is financialisation and plunder of real economy
  4. The fourth part is the destruction of real economy through debt, deflation, extreme financial activity seeking for Yields. The banks have been the fortresses of globalisation. Commercial banking has been absorbed by investment banking. In this deflationary environment Commercial Banking has practice NO ROI.

You want to see the Banks working again? Reintroduce the Glass Steagall and separate again investment and commercial banking. Repeal all what has been done between 1987 and 1999. THAT will stop globalisation, that will stop the slow bleeding-to-death of westerne economies, that will save commercial banking and our capitalistic societies.

Pumpkin , 1 hour ago

Fake money, fake banks. All lies die in the end.

[Sep 21, 2020] Trump's Attack on Social Security

Sep 21, 2020 | www.moonofalabama.org

AntiSpin , Sep 20 2020 17:10 utc | 14

Trump's Attack on Social Security
Has Started!

For eight-and-a-half decades, most Republican legislators (and some Democrats) have been trying to get rid of Social Security .

The first step in Trump's assault on Social Security's funding took effect Sept. 1st.

On Trump's orders, the IRS ordered corporations to stop withholding Social Security contributions from paychecks, through the end of the year.

Speaking on Fox Business recently, Trump advisor Larry Kudlow said that later this year Trump will order the IRS to continue the deferral indefinitely.

Social Security's chief actuary wrote that if Social Security is defunded, some benefits will be reduced next year, and that benefits will disappear entirely by the end of 2023.

If you are, or if you know someone on Social Security, please pass the word!

[Sep 20, 2020] The Criminal Prosecution Of Boeing Executives Should Begin

Sep 20, 2020 | www.zerohedge.com

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jayman21 , 2 hours ago

The invisible hand will do its job.

WedgeMan , 1 hour ago

Afraid not, it is too busy giving hand jobs.

Zero-Hegemon , 34 minutes ago

Invisible Hand jobs?

[Sep 20, 2020] David Stockman- How The Stock Market Got To Be So Out Of Touch With Reality -

Sep 20, 2020 | www.zerohedge.com

David Stockman: How The Stock Market Got To Be So Out Of Touch With Reality by Tyler Durden Sat, 09/19/2020 - 19:30 Twitter Facebook Reddit Email Print

Via InternationalMan.com,

International Man : Thanks to the shutdowns, economic activity on main street is at a standstill. Government, corporate, and personal debt is skyrocketing. Yet, the stock market is in a mania. Has the stock market become out of touch with reality, and if so, what are the consequences of that?

David Stockman : Both ends of the Acela Corridor have lost their marbles. This year, Uncle Sam borrowed $4 trillion in six months, the Fed printed $3 trillion in three months, and Wall Street drove the S&P 500 to 52X reported LTM earnings in the context of a deeper economic plunge than occurred in the worst quarter of the 1930s.

Therefore, Washington has become disconnected from any semblance of fidelity to sound money and fiscal rectitude, while Wall Street has turned into an outright casino, valuing stocks based on endless Fed liquidity injections and the delusion that momentum chasing is an investment strategy.

With respect to the rampant folly in the Imperial City, Treasury Secretary Stevie Mnuchin has always reminded us of Alfred E. Neuman of "Me Worry?" fame at Mad Magazine. Recently, he more than earned that moniker when, in the context of the current monetary and fiscal lunacy, he proclaimed that, "Now is not the time to worry about shrinking the deficit or shrinking the Fed balance sheet."

That was the so-called Conservative Party speaking, and it is a shrill reminder that the Trumpified GOP has gone utterly AWOL when it comes to its true job in American democracy, namely, resisting the Government Party (Dems) and its affinity for feeding the Leviathan on the Potomac.

That is to say, according to even the Keynesian deficit apologists at the CBO, Uncle Sam will spend $6.6 trillion during the current fiscal year (FY 2020) while collecting only $3.3 trillion in revenue. That's Banana Republic stuff -- borrowing 50% of every dollar spent.

Yet the advisory ranks of the potentially incoming Kamala Harris regency are even worse. They are loaded with "deficits don't matter" ideologues and MMT crackpots who noisily argue that massive monetization of the public debt is not just a virtue, but utterly imperative.

Needless to say, this bipartisan commitment to all-in stimulus is financial catnip to the Wall Street gamblers because they are actually capitalizing into today's nosebleed stock prices, not the present drastically impaired economy on Main Street but a pro forma simulacrum of future prosperity based on the delusional presumption that massive debt and money-pumping actually create economic growth and wealth.

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The fact is, industrial production in August posted at a level first achieved in March 2006, and manufacturing output weighed in at levels originally attained in December 2004. So the misbegotten lockdowns and COVID-hysteria have cost the US economy 14–16 years of industrial production growth, yet this massive setback was not caused by some mysterious Keynesian-style faltering of "demand" that can allegedly be compensated for by new Fed credits plucked from thin air.

To the contrary, the current depression is the result of the visible shutdown and quarantine orders of the state, which are likely to linger for months to come or even intensify as the fall-winter flu season arrives. Undoubtedly, the Virus Patrol will spur further outbreaks of public fear based on "bad numbers" from the CDC, which are actually an agglomeration of cases and deaths from normal influenza, pneumonia, and a myriad of life-threatening comorbidities, not pure cases of the COVID alone.

But beguiled by "stimulus" and hopium, Wall Street completely ignores the contradiction between over-the-top demand stimulus and what amounts to supply-side contraction owing to economic martial law.

So, at 3400 on the S&P 500, the current LTM price-to-earnings ratio ranges between 52.1 times the earnings CEOs and CFOs certify on penalty of jail time ($65 per share) or 27 times the Wall Street brush-stroked and curated version ($125 per share), from which all asset write-offs, restructuring charges, and other one-timers/mistakes have been finessed out.

Of course, these deleted GAAP charges reflect the consumption of real corporate resources, such as purchase price goodwill that gets written off when a merger or acquisition goes sour, or the write-down of investments in factories, warehouses, and stores that get closed. As such, they absolutely do diminish company resources and shareholder net worth over time.

But for decades now, Wall Street has so relentlessly and assiduously ripped anything that smells like a "one-timer" out of company earnings filings with the Securities and Exchange Commission (SEC) that it no longer even knows what GAAP earnings actually are.

And it pretends that these discarded debits (and credits) to income are simply lumpy things that even out in the wash over time. They do not.

If ex-items reporting was merely a neutral smoothing mechanism, reported GAAP earnings and "operating earnings" would be equal when aggregated over several years, or even a full business cycle.

Yet during the last 100 quarters, there have been essentially zero instances in which reported GAAP earnings exceeded "operating income."

So, in aggregate terms, several trillions of corporate write-downs and losses have been swept under the rug.

During the second quarter of 2020, for example, GAAP earnings reported to the SEC totaled $145.8 billion for the S&P 500 companies, while the ex-items earnings curated by the street posted at $222.3 billion. That amounts to the deletion of nearly $77 billion of write-downs and mistakes, and it inflated the aggregate earnings number by more than 52%.

The game is all about goosing the earnings number in order to minimize the apparent price-to-earnings multiple, thereby supporting the fiction that stocks are reasonably valued and that nary a bubble is to be found, at least in the broad market represented by the S&P 500.

Still, valuing the market at 52 times trailing-12-month earnings during the present parlous moment in time -- or even 27 times if you want to give the financial engineering jockeys in the C-suites a hall-pass for $77 billion of mistakes and losses this quarter alone -- is nothing short of nuts.

Yet, the gamblers in the casino hardly know it.

Wall Street has already decided that current-year results don't matter a whit: the nosebleed-level trailing P/E multiples currently being racked up are simply being shoved into the memory hole on the presumption that the sell side's evergreen hockey sticks will come true about four quarters into the future, and if they don't, a heavy dose of ex-items bark-stripping will gussy up actual earnings when they come in.

Still, if you think that a forward P/E multiple of, say, 17.5 times is just fine and that flushing the one-timers is OK, then you still need $193 per share of operating earnings by the second quarter of 2021 to justify today's index level.

Then again, a 54% gain in operating earnings over the next four quarters ($193 per share in the second quarter of 2021 versus $125 per share in the second quarter of 2020) is not simply a tall order; it's downright delusional.

International Man : What could derail the Fed's ability to pump up the stock market casino with all this easy money? They simultaneously want zero interest rates and more inflation. It seems something has to give.

David Stockman : Yes, what's going to "give" sooner or later is the entire house of monetary cards erected by the Fed and its fellow-traveling global central banks over the last several decades. What they are doing is based on the triple error that inflation is too low, that deeply repressed and falsified interest rates fuel real growth, and that private savers are a hindrance to optimal economic function and need to be euthanized via confiscation of the real (after-inflation) value of their capital.

In the first place, as Paul Volcker pointedly reminded, there is nothing in the pre-1990 textbooks that says 2.00% inflation is desirable and is to be pursued with fanatical intensity -- even if actual inflation comes in only a few basis points below the magic target.

Indeed, if the 2% target is zealously pursued via prolonged pegging of interest rates to the zero bound and the massive purchase of bonds and other securities, the result is actually inimical to economic growth and sustainable gains in real wealth.

That's because falsified interest rates and inflated financial asset values lead to massive malinvestment via rampant financial engineering in the corporate sector and reckless borrowing to fund transfer payments and economic waste in the public sector.

Nor is that a mere theoretical possibility. The rolling 10-year real GDP growth rate has now fallen to just 1.5% per annum, or barely one-third of the 3–4% per year rolling averages which prevailed during the heyday of reasonably sound money and fiscal rectitude prior to 1971.

Beyond that, there really hasn't been any inflation shortfall from the 2% target, unless measured by the Fed's flakey yardstick called the PCE deflator. For instance, since December 1996, when Greenspan uttered his irrational exuberance warning, the CPI is up by 2.09% per annum and the more stable 16% trimmed-mean CPI is up by 2.12% per annum.

That hardly constitutes a "shortfall" from target, but the Eccles Building money-printers make the claim anyway because the PCE deflator gained slightly less over that 23 year period, averaging an increase of 1.71 per annum.

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The truth is, no one except groupthink besotted central bankers would think that a mere 30 basis point shortfall over more than two decades justifies the massive financial fraud of pumping trillions of fiat credit into the financial system.

That's especially the case because the PCE deflator drastically underweights shelter costs and doesn't even measure the purchasing power of money against a fixed basket of goods and services over time, anyway. Instead, it is actually a tool of GDP accounting that reflects the changing mix of goods and services supplied to the household sector.

That is to say, if someone chooses to live in a tepee and spend nearly all of their paycheck on computers, TVs, and other high-tech gadgets that have been rapidly falling in price, that doesn't improve the exchange value of the dollar wages they earn; it just means that their tepee may be getting crowded with tech gadgets.

The same is true of the aggregate level. Just because the mix of goods and services changes over time, that doesn't miraculously rescue the purchasing power of the dollar from the ravages of inflation .

Nor does it alleviate the savaging of lower- and middle-class living standards that are the direct product of the Fed's misguided commitment to inflation targeting. In fact, during that same 23-year period, the annual rate of increase for professional services, shelter, food away from home, medical services, and education expense has been 2.6%, 2.7%, 2.8%, 3.5%, and 4.5%, respectively.

So once you set aside the foolishness of 2% inflation targeting and the Fed's sawed-off inflation measuring stick (the PCE deflator), what you really have is growth stunting monetary madness. There is no other way to explain a Fed balance sheet that went from $4.2 trillion on March 4 this year to $7.2 trillion by June 10.

After all, the first $3 trillion of Fed balance sheet took nearly 100 years to generate, from its opening in 1914 to breaching the $3 trillion marker for the first time in March 2013. That the Fed has now become a monetary doomsday machine, therefore, is no longer in doubt.

* * *

The truth is, we're on the cusp of a economic crisis that could eclipse anything we've seen before. And most people won't be prepared for what's coming. That's exactly why bestselling author Doug Casey and his team just released a free report with all the details on how to survive an economic collapse. Click here to download the PDF now.


[Sep 20, 2020] Newton, Physics, The Market Bubble -

Sep 20, 2020 | www.zerohedge.com

Newton, Physics, & The Market Bubble by Tyler Durden Sat, 09/19/2020 - 20:30 Twitter Facebook Reddit Email Print

Authored by Lance Roberts via RealInvestmentAdvice.com,

I have previously discussed the importance of understanding how "physics" plays a crucial role in the stock market. As Sir Issac Newton once discovered, "what goes up, must come down."

Andy Kessler, via the Wall Street Journa l, recently discussed a similar point with respect to the momentum in stock prices. To wit:

"Does this sound familiar: Smart guy owns stock in March at $200, sells it in June at around $600, but then buys it back in July and August for between $900 and $1,000. By September it's back at $200. Ouch. Tesla this year? Yahoo in 2000? Nope. That was Sir Isaac Newton getting pulled into the great momentum trade of the South Sea Co., which cratered 300 years ago this month. He lost the equivalent of more than $3 million today. Newton, whose second law of motion is about the momentum of a body equaling the force acting on it, didn't know that works for stocks too."

To understand what happened to the South Sea Corporation, you need a bit of history.

The South Sea History

In 1720, in return for a loan of £7 million to finance the war against France, the House of Lords passed the South Sea Bill, which allowed the South Sea Company a monopoly in trade with South America.

England was already a financial disaster and was struggling to finance its war with France. As debts mounted, England needed a solution to stay afloat. The scheme was that in exchange for exclusive trading rights, the South Sea Company would underwrite the English National Debt. At that time, the debt stood at £30 million and carried a 5% interest coupon from the Government. The South Sea company converted the Government debt into its own shares. They would collect the interest from the Government and then pass it on to their shareholders.

Interesting Absurdities

At the time, England was in the midst of rampant market speculation. As soon as the South Sea Company concluded its deal with Parliament, the shares surged to more than 10 times their value. As South Sea Company shares bubbled up to incredible new heights, numerous other joint-stock companies IPO'd to take advantage of the booming investor demand for speculative investments.

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Many of these new companies made outrageous, and often fraudulent, claims about their business ventures for the purpose of raising capital and boosting share prices. Here are some examples of these companies' business proposals (History House, 1997):

A Speculative Mania

However, in the midst of the "mania," things like valuation, revenue, or even viable business models didn't matter. It was the "Fear Of Missing Out," which sucked investors into the fray without regard for the underlying risk.

Though South Sea Company shares were skyrocketing, the company's profitability was mediocre at best, despite abundant promises of future growth by company directors.

The eventual selloff in Company shares was exacerbated by a previous plan of lending investors money to buy its shares. This "margin loan," meant that many shareholders had to sell their shares to cover the plan's first installment of payments.

As South Sea Company and other "bubble " company share prices imploded, speculators who had purchased shares on credit went bankrupt. The popping of the South Sea Bubble then resulted in a contagion that spread across Europe.

Newton's Folly

Sir Issac Newton, the brilliant mathematician, was an early investor in South Sea Corporation. Newton quickly made a lot of money and recognized the early stages of a speculative mania. Knowing that it would eventually end badly, he liquidated his stake at a large profit.

However, after he exited, South Sea stock experienced one of the most legendary rises in history. As the bubble kept inflating, Newton allowed his emotions to overtake his previous logic and he jumped back into the shares. Unfortunately, it was near the peak.

It is noteworthy that once Newton decided to go back into South Sea stock, he moved essentially all his financial assets into it. In general, Newton was intimately familiar with commodities and finance. As Master of the Mint, his post required him to make many decisions that depended on market prices and conditions.

The story of Newton's losses in the South Sea Bubble has become one of the most famous in popular finance literature. While surveying his losses, Newton allegedly said that he could "calculate the motions of the heavenly bodies, but not the madness of people."

For More On The History Of Speculative Bubbles: "Devil Take The Hindmost."

History Never Repeats, But It Rhymes

Throughout financial history, markets have evolved from one speculative "bubble," to bust, to the next with each one being believed "it was different this time."

The slides below are from a presentation I made to a large mutual fund company.

What we some common denominators between all previous bubbles and now.

The table below shows a listing of assets classes that have experienced bubbles throughout history, with the ones related to the current environment highlighted in yellow.

It is not hard to see the similarities between today and the previous market bubbles in history. Investors are currently chasing "new technology" stocks from Zoom to Tesla, piling into speculative call options, and piling into leverage. What could possibly go wrong?

Oh, by the way, the slides above are from a 2008 presentation just one month before the Lehman crisis.

The point here is that speculative cycles are always the same.

The Speculative Cycle

Charles Kindleberger suggested that speculative manias typically commence with a "displacement" which excites speculative interest. The displacement may come from either an entirely new object of investment (IPO) or from increased profitability of established investments.

The speculation is then reinforced by a "positive feedback" loop from rising prices. which ultimately induces "inexperienced investors" to enter the market. As the positive feedback loop continues, and the "euphoria" increases, retail investors then begin to "leverage" their risk in the market as "rationality" weakens.

The full cycle is shown below.

During the course of the mania, speculation becomes more diffused and spreads to different asset classes. New companies are floated to take advantage of the euphoria, and investors leverage their gains using derivatives, stock loans, and leveraged instruments.

As the mania leads to complacency, fraud and manipulation enter the market place. Eventually, the market crashes and speculators are wiped out. The Government and Regulators react by passing new laws and legislations to ensure the previous events never happen again.

The Latest Mania

Let's go back to Andy for a moment:

"When bull markets get going, investors come out of the woodwork to pile in. These momentum investors -- I call them momos -- figure if a stock is going up, it will keep going up. But usually, there is some source of hot air inflating stocks: either a structural anomaly that fools investors into thinking ever-rising stock prices are real or a source of capital that buys, buys, buys -- proverbial 'dumb money.' Think of it as a giant fireplace bellows, an accordion-like contraption that pumps in fresh oxygen to keep flames growing." – Andy Kessler

We have seen these manias repeated throughout history.

In 2020?

What about today? Look back at the chart of the South Sea Company above. Now, the one below.

See any similarities.

Yes, that's Tesla

However, you can't solely blame the Federal Reserve as noted by Andy:

"Most simply blame the Federal Reserve -- especially today, with its zero-interest-rate policy -- for pumping the hot air that gets the momos going. Fair enough, but that's only part of the story. Long market runs have always allured investors who figure they're smart to jump in, even if it's late.

Everyone forgets the adage, 'Don't mistake brains for a bull market.'"

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As stated, while no two financial manias are ever alike, the end results are always the same.

Are there any similarities in today's market? You decide.

"From SPACs, or special purpose acquisition companies, which are modern-day blind pools that often don't end well. Today's momos also chase stock splits, which mean nothing for a company's actual value. Same for a new listing in indexes like the S&P 500. Isaac Newton could explain the math." – Andy Kessler

You get the idea. But one of the tell-tale indications is the speculative chase of "zombie" companies which are only still alive primarily due to the Federal Reserve's interventions.

Fixing The Cause Of The Crash

Historically, all market crashes have been the result of things unrelated to valuation levels. Issues such as liquidity, government actions, monetary policy mistakes, recessions, or inflationary spikes are the culprits that trigger the "reversion in sentiment."

Importantly, the "bubbles" and "busts" are never the same.

I previously quoted Bob Bronson on this point:

"It can be most reasonably assumed that markets are efficient enough that every bubble is significantly different than the previous one. A new bubble will always be different from the previous one(s). Such is since investors will only bid prices to extreme overvaluation levels if they are sure it is not repeating what led to the previous bubbles. Comparing the current extreme overvaluation to the dotcom is intellectually silly.

I would argue that when comparisons to previous bubbles become most popular, it's a reliable timing marker of the top in a current bubble. As an analogy, no matter how thoroughly a fatal car crash is studied, there will still be other fatal car crashes. Such is true even if we avoid all previous accident-causing mistakes."

Comparing the current market to any previous period in the market is rather pointless. The current market is not like 1995, 1999, or 2007? Valuations, economics, drivers, etc. are all different from cycle to the next.

Most importantly, however, the financial markets always adapt to the cause of the previous "fatal crash."

Unfortunately, that adaptation won't prevent the next one.

Yes, this time is different.

"Like all bubbles, it ends when the money runs out." – Andy Kessler


[Sep 14, 2020] Gundlach Says High-Yield Bond Defaults May Almost Double - Bloomberg

Sep 14, 2020 | www.bloomberg.com

High-yield bond default rates may double as companies struggle with a protracted economic downturn even as the Federal Reserve props up valuations, said Jeffrey Gundlach.

The investment grade corporate debt market has skewed toward lower quality BBB- rated debt, but if just 50% of that were to be downgraded it could fuel a near doubling of the high-yield market, Gundlach said Tuesday on a webcast for his firm's flagship DoubleLine Total Return Bond Fund .

Gundlach's views reflect broad skepticism about the market's connection to economic realities. He criticized the Fed's emergency actions as buoying asset prices and spurring unsustainable corporate borrowing binges.

Risk assets such as equities and high yield credit markets are responding to this support, and government stimulus, disproportionately as the Covid-19 pandemic remains a threat to the recovery, he said.

"It's foolhardy to believe that one can have this kind of a shock to an economy and it just gets healed through a one-shot deal" from the Treasury, he said.

Gundlach pointed out that the global GDP forecast is -3.9%, whereas the U.S. lags at -5% despite the country's response to the Covid-19 crisis being "one of the highest in the world."

Highlighting the effect of the weekly $600 stimulus checks, he called it a distortion of the personal-income spending picture akin to the Fed's effect on the markets.

"This is a large incentive to stay on public assistance," Gundlach said, noting that benefit payments have exceeded many workers' regular income.

Gundlach also snubbed one of the market's favorite trades on a U.S. recovery, saying he's "betting against" the inflation-linked bond market. TIPS products have seen some of the strongest monthly inflows in four years, and market-implied expectations for inflation have touched a 2020 high. Gundlach repeated that the impact of the pandemic is deflationary.

[Sep 12, 2020] Nineteen years since 9/11 Nobel Laureate Paul Krugman attempt to Infects Readers With 9/11 Dementia

Sep 12, 2020 | www.moonofalabama.org

psychohistorian , Sep 11 2020 16:05 utc | 2

The price for the worst tweet of the year goes to Paul Krugman .


bigger

In the real world the U.S. reacted to 9/11 by doing extremely bad and ridiculous things as well as this :

In the days, weeks, and months immediately following the 9/11 attacks, Arab-Americans, South Asian-Americans, Muslim-Americans, and Sikh-Americans were the targets of widespread hate violence. Many of the perpetrators of these acts of hate violence claimed they were acting patriotically by retaliating against those responsible for 9/11.
...
Just after September 11, numerous Arabs, Muslims, and individuals perceived to be Arab or Muslim were assaulted, and some killed, by individuals who believed they were responsible for or connected to the attacks on the World Trade Center and Pentagon. The first backlash killing occurred four days after September 11.

Balbir Singh Sodhi was shot to death on September 15 as he was planting flowers outside his Chevron gas station. The man who shot Sodhi, Frank Roque, had told an employee of an Applebee's restaurant that he was "going to go out and shoot some towel heads." Roque mistakenly thought Sodhi was Arab because Sodhi, an immigrant from India, had a beard and wore a turban as part of his Sikh faith. After shooting Sodhi, Roque drove to a Mobil gas station a few miles away and shot at a Lebanese-American clerk. He then drove to a home he once owned and shot and almost hit an Afghani man who was coming out the front door. When he was arrested two hours later, Roque shouted, "I stand for America all the way."

The next two killings were committed by a man named Mark Stroman. On September 15, 2001, Stroman shot and killed Waquar Hassan, an immigrant from Pakistan, at Hassan's grocery store in Dallas, Texas. On October 4, 2001, Stroman shot and killed Vasudev Patel, an immigrant from India and a naturalized U.S. citizen, while Patel was working at his Shell station convenience store. A store video camera recorded the killing, helping police to identify Stroman as the killer. Stroman later told a Dallas television station that he shot Hassan and Patel because, "We're at war. I did what I had to do. I did it to retaliate against those who retaliated against us."

Beyond these killings, there were more than a thousand other anti-Muslim or anti-Arab acts of hate which took the form of physical assaults, verbal harassment and intimidation, arson, attacks on mosques, vandalism, and other property damage.

Instead of "calming prejudice" the GB Bush administration institutionalized hate crimes:

First, in the weeks immediately following the September 11 attacks, the government began secretly arresting and detaining Arab, Muslim, and South Asian men. Within the first two months after the attacks, the government had detained at least 1,200 men.
...
Second, in November 2001, the Department of Justice began efforts to "interview" approximately 5,000 men between the ages of 18 and 33 from Middle Eastern or Muslim nations who had arrived in the United States within the previous two years on a temporary student, tourist, or business visa and were lawful residents of the United States. Four months later, the government announced it would seek to interview an additional 3,000 men from countries with an Al Qaeda presence.
...
Third, in September 2002, the government implemented a "Special Registration" program also known as NSEERS (National Security Entry-Exit Registration System), requiring immigrant men from 26 mostly Muslim countries to register their name, address, telephone number, place of birth, date of arrival in the United States, height, weight, hair and eye color, financial information and the addresses, birth dates and phone numbers of parents and any foreign friends with the government.

Besides all that a rather useless security theater was installed at U.S. airports which has costs many billions in lost time and productivity ever since. The Patriot Act was introduced which allowed for unlimited spying on private citizens. Wars were launched that were claimed to be justified by 9/11. These were "mass outbreaks of anti-Muslim sentiment and violence. Many were killed and maimed in them. People were tortured and vanished. All of this happened largely to applause of a majority of the U.S. people which were glued to 24 and dreamed of being "terrorist hunters".

Anyone with a functional memory knows that the U.S. reaction to 9/11 was anything but "pretty calm". It is ridiculous that Krugman is claiming that.

Posted by b at 15:46 UTC | Comments (73)

I find it a bit humorous b that you are critical of Krugman for his 911 dementia when for years many of us finance types have railed about how morally corrupt the logic and thinking of Paul Krugman is.

Paul Krugman is to economics what Bernie Sanders has become for the purported "left" side of the "right wing" uni-party....a sheep dog for the easily led.

Paul Krugman is an acolyte for the God of Mammon/global private finance elite.


Clueless Joe , Sep 11 2020 16:11 utc | 3

Paul is getting old. Looks like senile dementia isn't limited to Biden nowadays.

Red Ryder , Sep 11 2020 16:44 utc | 11

While spreading anger and hate toward Arab people, The Bush Administration rescued the many members of the Kingdom's family from all around the US and escorted their flights out of the US to safety in Saudi Arabia.

Distracting the public big time was Dick Cheney, VP, who insisted from the very next day that the plot to hit the Twin Towers was Saddam's plot.

So, the historical record and US response was skewed from the getgo. AQ and Bin Laden didn't concern the neocons. They wanted the US to go to Iraq again, and this time start a wide war that would spread to Syria and Lebanon and Iran.

It was easy times to spread fear and hate, and Cheney and the war mongers of CENTCOM were riding high. Americans were scared of all Arabs, all Sunnis, all Shiites, from anywhere. They were all the same in the public's mind. Enemies.

It was perfect and has led to 19 years of endless wars. Add ISIS and al Nusra and the Taliban and you have an endless soup of enemies.

Jackrabbit , Sep 11 2020 17:01 utc | 13

I'm coining a new term: "Empire apologist".

!!

michaelj72 , Sep 11 2020 19:59 utc | 35

krugman is a terrible shill for the neo-cons and liberal-interventionists of the 21st century

at my age, I shouldn't really be surprised any more by what american "intellectuals" and "nobel prize winners" say about anything..... but I am.

He's neo-liberal interventionist moron of the first rank, and saying what he did actually normalizes the war mania and war-mongering which has become so staple in mainstream thought and the "think tanks" and is now practically part of the american DNA and "culture".
shame on krugman

Hoarsewhisperer , Sep 11 2020 20:08 utc | 36

...
It appears the Deep State has attacked the USA's people twice in two decades--on 911 and with the decision to let as many die as possible by deliberately not doing anything to mitigate the impact of COVID-19 and allowing the real economy to atrophy so even more will die in the long run.
Posted by: karlof1 | Sep 11 2020 19:40 utc | 34

Talking about tilting at windmills - I'll never forget Robert Fisk angrily pointing out that the Yankees knew where to find Al CIA-duh because they extended the cave complex at Tora Bora to help Al CIA-duh, equipped with 10,000 US Stinger Missiles, kick the Russians out of Afghanistan in the 1980s!!!

(The Yankees had to wait for 10+ years to invade Afghanistan because it takes that long for Stingers to pass their Use By date)

Rob , Sep 11 2020 20:08 utc | 37

@michaelj72. "krugman is a terrible shill for the neo-cons and liberal-interventionists of the 21st century"

Actually, Paul Krugman was a strong and outspoken opponent of the Iraq War since early 2003 and possibly earlier. He was amongst the few mainstream liberal commentators to take that stand.

Jen , Sep 11 2020 21:02 utc | 44

If MoA readers and commenters were to read the entire series of Krugman's tweets, six in all, they will see mention of how the Bush govt began exploiting the events of 11 September 2001 almost immediately. Though the example Krugman actually uses would make most people cringe at what it suggests about the bubble he lives in and how far removed it is from most people's lives and experiences, and his reference to a "horrible war" does not mention either Afghanistan or Iraq.

It has to be said that Twitter is not designed very well for the kind of informal conversational commentary that people often use it for. But then you would think Krugman would use something other than Twitter to discuss and compare 9/11 with the impact of COVID-19.

The real issue I have with Krugman's Tweet is that he is revising history and bending over backwards to apologise for Dubya in a way to criticise Donald Trump's performance as President.

uncle tungsten , Sep 11 2020 22:13 utc | 50
b " Anyone with a functional memory knows that the U.S. reaction to 9/11 was anything but "pretty calm". It is ridiculous that Krugman is claiming that. "

Careful with that axe b, you are talking about Biden's chief economic adviser and likely appointee as Chair of the Fed. How does this look?
Volker
Greenspan
Bernanke
Yellen
Powell
Krugman

What could go wrong?

Prof K , Sep 11 2020 22:15 utc | 51
From 2019, Krugman de facto admits he was wrong his whole life. What a tool.

https://www.bloomberg.com/opinion/articles/2019-10-10/inequality-globalization-and-the-missteps-of-1990s-economics

David G , Sep 11 2020 22:34 utc | 54

uncle tungsten | Sep 11 2020 22:13 utc | 50:

Reading Krugman's columns in 2016, I had a strong to overwhelming sense that this was a person revving up for a spot in Hillary's White House or cabinet. For some reason it isn't hitting me as strongly this time around – he may not have as close connections in Biden's circle – but it certainly would not be a surprise to see him take a turn through the media/government revolving door if Trump loses (though, fwiw, I don't think it will be a job at the Fed).

Et Tu , Sep 11 2020 22:48 utc | 55

Yep. Pretty staggering how a few disgruntled ex-CIA contractors managed to, deliberately or not, help the US Gov't launch the biggest world war operation right under the noses of the brainwashed masses.

99% of Westerners still are clueless as to explaining the last 20 years in a broader geopolitical context.

Russ , Sep 11 2020 22:48 utc | 56

Posted by: Caliman | Sep 11 2020 22:15 utc | 52

#28: "The antiwar protests in the US were small and insignificant."

No they were not. Millions of people demonstrated against the planned war, in the US, in the UK, and around the world...

We mustn't forget how the vast majority of those who allegedly were anti-war suddenly went totally pro-war silent upon Obama coming in.

But that pales compared to the vile spectacle of all the self-alleged "anti-authoritarians", "anti-propagandists" "dissidents", who suddenly regard the government media as the literal voice of God, where their alleged God speaks of Covid.

Prof K , Sep 11 2020 22:55 utc | 57

His book, End this Depression Now, is pretty weak. He has no theory of why the crash occurred. He critiques the austerity agenda but doesn't understand that government spending CAN create tax liabilities for capital down the road and eat into profits, thus blocking expanded investments and growth. Moronic libertarians hate Krugman just because they are right wing assholes who think, like fairies, that a free market without the state will work fine and self correct. Marx debunked this fairy tale thoroughly in Capital Volume 1, showing that, even if we start with the mythical free market of libertarian morons, capitalism will still operate according to the general law by which concentration and centralization lead to class polarization. In any case, in volume 3 of Capital, Marx develops his laws of crisis, showing that the cycles of expansion and depression under capitalism follow the movements of the rate of profit, which itself is determined by the ratio of the value of sunk capital in production technologies to the rate of exploitation (profits/wages). If the former rises more than the latter, the rate of profit sinks, along with investment, output and employment. Financial crises then set in.

The empirical evidence in the data bears out Marx's theory, not Krugman's dumb notion of aggregate demand, or the stupid libertarian focus on interest rates.

vk , Sep 12 2020 0:16 utc | 64

We could discuss here all day about the sociological subject of the American people's true positioning in the aftermath of 9/11. It would be, sincerely, a waste of time.

The important thing to grasp over this episode - from the point of view of History - is this: it was a strategic victory for al-Qaeda . The USA took the bait (all scripted?) and went into a quagmire in Iraq and Afghanistan. In a few years, the surplus the USA had accumulated with the sacking and absorption of the Soviet space during Bill Clinton evaporated and became a huge deficit in the Empire's accounts. Not long after, the 2008 financial meltdown happened, burying Bushism in a spectacular way.

There's a debate about the size of the hole the invasion of Iraq and Afghanistan cost the American Empire. Some put it into the dozens of billions of USDs; others put it into the trillions of USDs range. We will never know. What we know is that the hole was big enough to both erase the American surplus and to not avoid the financial meltdown of 2008.

Either the expansion through the Middle East wasn't fast and provided riches enough to keep up with the Empire's voracious appetite or the invasion itself already represented a last, desperate attempt by the Empire to avoid its imminent collapse. We know, however, that POTUS Bush had a list of countries he wanted to invade beyond Iraq (the "Axis of Evil") which contained a secret country (Venezuela). He was conscious Iraq and Afghanistan wouldn't be enough. Whatever the case, he didn't have the time, and the financial meltdown happened in his last year in the White House.

uncle tungsten , Sep 12 2020 1:15 utc | 65

michaelj72 #38
karlof1 at #12

great stuff from M. Hudson, one of my favorite reads these days. Hudson has krugman's number. thanks again for those snippets and the links!

Steve Keen also has his number and Keen is pro capitalist

Krugman is a moron dressed as a weasel sounding like a squawking hen, with the vision of a hemorrhoid.

Antonym , Sep 12 2020 1:26 utc | 66

The main harsh reaction of G.W. Bush after 9/11 was the formation of DHS and laws to legalize mass national and international spying on anybody with electronic traffic. https://en.wikipedia.org/wiki/United_States_Department_of_Homeland_Security#History

They knew who the perps of 9/11 were: their "own" Saudi irregulars in the CIA's US main land training camps, who started practicing on the "wrong"- domestic American- targets. These guys were officially entered without any background checks.
The Bush and Bin Laden families go way back in money making. That is why George had to ponder so long in that Florida kindergarten after hearing about the attacks: he had a suspicion. The Saudi only fly out after 9/11 confirms that.

Kay Fabr , Sep 12 2020 2:30 utc | 69

Paul Krugman Is a pro. Completely owned by Deep State. His purpose is to deflect discussion and prevent questioning the official version of 9/11 , and get people chasing something completely irrelevant. Well done Paul, most have taken the bait.

[Sep 12, 2020] Some -Corporate Fear- Is Needed, Blain Urges -A Little Bit Of Good Old Creative Capitalist Destruction- -

Sep 12, 2020 | www.zerohedge.com


xxx 1 hour ago (Edited) remove link

DISAGREE ON EVERY SINGLE WORD, in particular with this:

rules/regulations/capital requirements have infected the global banking system and rendered it a harvesting operation for retail and a derivatives rule/regulation/capital requirment evasion device for the pursuit of profit

absolutely false.

Banking system is in the 4th part of a cycle that they have created !

The first part has been capital harvesting (1970-1980)

The second part has been deregulation and hunt for stellar return on investment

The third part is financialisation and plunder of real economy

The fourth part is the destruction of real economy through debt, deflation, extreme financial activity seeking for Yields.

The banks have been the fortresses of globalisation. Commercial banking has been absorbed by investment banking. In this deflationary environment Commercial Banking has practice NO ROI.

You want to see the Banks working again?

Reintroduce the Glass Steagall and separate again investment and commercial banking.

Repeal all what has been done between 1987 and 1999.

THAT will stop globalisation, that will stop the slow bleeding-to-death of westerne economies, that will save commercial banking and our capitalistic societies.

[Sep 12, 2020] Yes, It's a Stock Market Bubble. That Doesn't Mean Trouble for Investors Just Yet-

Sep 12, 2020 | finance.yahoo.com

Every stock market bubble begins with a story, and make no mistake -- this is a stock market bubble. A virus forced the country to shut down and accelerated the gains in a select few technology stocks that are uniquely capable of thriving with everyone stuck at home. A central bank took quick action to prevent financial markets from seizing up, pushing interest rates about as low as they could go.

[Sep 11, 2020] Are Junk Bonds Suggesting A Stock Market Top Is Near by kimblecharting

The stock market now is completely disconnected from the economy. Stein's Law, which he expressed in 1976 states: "If something cannot go on forever, it will stop."
Notable quotes:
"... Junk Bonds play a critical role in highlighted investor sentiment. When junk bonds (lower-rated debt) is performing well, then that means investors are taking more risks. When junk bonds struggle, that means investors are taking on less risk. ..."
"... At the same time, there is a divergence between the stock market (the S&P 500 made new all-time highs) and Junk Bonds (well below all-time highs and 5 percent off 2019 highs). ..."
Sep 10, 2020 | www.zerohedge.com

As investors, we have several tools and indicators at our disposal.

Whether it is technical indicators such as Fibonacci levels, moving averages, or price supports, or fundamental indicators such as corporate earnings or economic data, we have a lot of information to use when making decisions.

Today's chart incorporates both. Junk Bonds play a critical role in highlighted investor sentiment. When junk bonds (lower-rated debt) is performing well, then that means investors are taking more risks. When junk bonds struggle, that means investors are taking on less risk.

So today, we highlight the Junk Bonds ETF (JNK). Using technical analysis, we can see that JNK is trading near line (A), a price level that has served as support and resistance over the past several years. It is currently serving as price resistance.

At the same time, there is a divergence between the stock market (the S&P 500 made new all-time highs) and Junk Bonds (well below all-time highs and 5 percent off 2019 highs).

So this is an important resistance test for junk bonds. Will Junk Bonds (JNK) break down from here (bearish) or break out (bullish).

What happens here will send an important message to stocks (and investors)!

[Aug 31, 2020] Economics Quotes

Aug 31, 2020 | quotes.cat-v.org

Just as a poetic discussion of the weather is not meteorology, so an issuance of moral pronouncements or political creeds about the economy is not economics. Economics is a study of cause-and-effect relationships in an economy.

-- Thomas Sowell


The first lesson of economics is scarcity: There is never enough of anything to satisfy all those who want it. The first lesson of politics is to disregard the first lesson of economics.

-- Thomas Sowell


Economics is the painful elaboration of the obvious.


The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.

-- Friedrich von Hayek


I can't imagine economists admitting how little they actually know. If they admitted to themselves, it would hurt their ego. If they admitted to others, it would hurt their job prospects.

-- Joseph Mattes, Vienna (The Economist, letters December 04, 2010)


The use of mathematics has brought rigor to economics. Unfortunately, it has also brought mortis .

-- Attributed to Robert Heilbroner


A study of economics usually reveals that the best time to buy anything is last year.

-- Marty Allen


Economic statistics are like a bikini, what they reveal is important, what they conceal is vital

-- Attributed to Professor Sir Frank Holmes, Victoria University, Wellington, New Zealand, 1967.


Doing econometrics is like trying to learn the laws of electricity by playing the radio.

-- Guy Orcutt


Economists

-- David Wildasin


"Murphys law of economic policy": Economists have the least influence on policy where they know the most and are most agreed; they have the most influence on policy where they know the least and disagree most vehemently.

-- Alan S. Blinder


An economist is someone who, when he finds something that works in practice, tries to make it work in theory.


The purpose of studying economics is not to acquire a set of ready-made answers to economic questions, but to learn how to avoid being deceived by economists.

-- Joan Violet Robinson


An economist is an expert who will know tomorrow why the things he predicted yesterday didn't happen today.

-- Laurence J. Peter


Having a[n in] house economist became for many business people something like havinga resident astrologer for the royal court: I don't quite understand what this fellow is saying but there must be something to it.

-- Linden. (Jan. 11, 1993). Dreary Days in the Dismal Science. Forbes. Pp. 68-70.


Economics is the only field in which two people can get a Nobel Prize for saying exactly the opposite thing.


Economists do it with models.

-- Heard at the LSE


Bentley's second Law of Economics: The only thing more dangerous than an economist is an amateur economist!

Berta's Fundamental Law of Economic Rents.. "The only thing more dangerous than an amateur economist is a professional economist."


Definition: Policy Analyst is someone unethical enough to be a lawyer, impractical enough to be a theologian, and pedantic enough to be an economist.




Economists have forecasted 9 out of the last 5 recessions.


An econometrician and an astrologer are arguing about their subjects. The astrologer says, "Astrology is more scientific. My predictions come out right half the time. Yours can't even reach that proportion". The econometrician replies, "That's because of external shocks. Stars don't have those".


When an economist says the evidence is "mixed," he or she means that theory says one thing and data says the opposite.

-- Attributed to Richard Thaler, now at the Univ of Chicago


The last severe depression and banking crisis could not have been achieved by normal civil servants and politicians, it required economists involvement.


Taxes

State run lotteries: think of them as tax breaks for the intelligent.

-- Evan Leibovitch


Inflation

Inflation is the one form of taxation that can be imposed without legislation.

-- Milton Friedman


Having a little inflation is like being a little pregnant–inflation feeds on itself and quickly passes the "little" mark.

-- Dian Cohen


Trade and Trade Barriers

Tariffs, quotas and other import restrictions protect the business of the rich at the expense of high cost of living for the poor. Their intent is to deprive you of the right to choose, and to force you to buy the high-priced inferior products of politically favored companies.

-- Alan Burris, A Liberty Primer


Perhaps the removal of trade restrictions throughout the world would do more for the cause of universal peace than can any political union of peoples separated by trade barriers.

-- Frank Chodorov


When goods don't cross borders, soldiers will.

-- Fredric Bastiat, early French economist


The primary reason for a tariff is that it enables the exploitation of the domestic consumer by a process indistinguishable from sheer robbery.

-- Albert Jay Nock


Regulation

Regulation - which is based on force and fear - undermines the moral base of business dealings. It becomes cheaper to bribe a building inspector than to meet his standards of construction. A fly-by-night securities operator can quickly meet all the S.E.C. requirements, gain the inference of respectability, and proceed to fleece the public. In an unregulated economy, the operator would have had to spend a number of years in reputable dealings before he could earn a position of trust sufficient to induce a number of investors to place funds with him. Protection of the consumer by regulation is thus illusory.

-- Alan Greenspan


You fucking academic eggheads! You don't know shit. You can't deregulate this industry. You're going to wreck it. You don't know a goddamn thing!

-- Robert Crandall, boss of American Airlines, to an unnamed Senate lawyer in 1971


Government

The direct use of physical force is so poor a solution to the problem of limited resources that it is commonly employed only by small children and great nations.

-- David Friedman


Government Spending

See, when the Government spends money, it creates jobs; whereas when the money is left in the hands of Taxpayers, God only knows what they do with it. Bake it into pies, probably. Anything to avoid creating jobs.

-- Dave Barry


I don't think you can spend yourself rich.

-- George Humphrey


Capitalism and Free Markets

A major source of objection to a free economy is precisely that it gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself.

-- Milton Friedman


The most important single central fact about a free market is that no exchange takes place unless both parties benefit.

-- Milton Friedman


The only thing worse than being exploited by capitalism is not being exploited by capitalism.

-- Joan Violet Robinson


Manufacturing and commercial monopolies owe their origin not to a tendency imminent in a capitalist economy but to governmental interventionist policy directed against free trade and laissez faire.

-- Ludwig Mises, "Socialism"


If an exchange between two parties is voluntary, it will not take place unless both believe they will benefit from it. Most economic fallacies derive from the neglect of this simple insight, from the tendency to assume that there is a fixed pie, that one party can only gain at the expense of another.

-- Milton Friedman


States with central-planning regimes [ ] do tend to consume much less energy (and much less of everything else) [ ] than do Americans. There is a word for that: poverty.

-- The Politically Incorrect Guide to Socialism


Central Banks

Any system which gives so much power and so much discretion to a few men, [so] that mistakes – excusable or not – can have such far reaching effects, is a bad system. It is a bad system to believers in freedom just because it gives a few men such power without any effective check by the body politic – this is the key political argument against an independent central bank To paraphrase Clemenceau: money is much too serious a matter to be left to the Central Bankers.

-- Milton Friedman


A central banker walks into a pizzeria to order a pizza.

When the pizza is done, he goes up to the counter get it. There a clerk asks him: "Should I cut it into six pieces or eight pieces?"

The central banker replies: "I'm feeling rather hungry right now. You'd better cut it into eight pieces."


Intellectual Property

For one thing, there are many "inventions" that are not patentable. The "inventor" of the supermarket, for example, conferred great benefits on his fellowmen for which he could not charge them. Insofar as the same kind of ability is required for the one kind of invention as for the other, the existence of patents tends to divert activity to patentable inventions.

-- Milton Friedman


Slavery

From the experience of all ages and nations, I believe, that the work done by freemen comes cheaper in the end than the work performed by slaves.

The work done by slaves, though it appears to cost only their maintenance, is in the end the dearest of any. A person who can acquire no property can have no other interest but to eat as much and to labour as little as possible.

Whatever work he does, beyond what is sufficient to purchase his own maintenance, can be squeezed out of him by violence only, and not by any interest of his own.

-- Adam Smith


Prohibition

It is because it's prohibited. See, if you look at the drug war from a purely economic point of view, the role of the government is to protect the drug cartel. That's literally true.

-- Milton Friedman


In the Long Run
Minimum Wage and Unemployment

The real minimum wage is zero: unemployment.

-- Thomas Sowell


All of the progress that the US has made over the last couple of centuries has come from unemployment. It has come from figuring out how to produce more goods with fewer workers, thereby releasing labor to be more productive in other areas. It has never come about through permanent unemployment, but temporary unemployment, in the process of shifting people from one area to another.

-- Milton Friedman

Misc

Talk is cheap. Supply exceeds Demand.


It is difficult to get a man to understand something when his salary depends on his not understanding it.

-- Upton Sinclair


When you start paying people to be poor, you wind up with an awful lot of poor people.

-- Milton Friedman


of course the country could never listen to this guy .it just makes too much damn sense.

-- ryanx0 about Milton Friedman [http://www.youtube.com/watch?v=Se_TJzB9-z0]


Every individual necessarily labors to render the annual revenue of society as great as he can. He generally neither intends to promote the public interest, nor knows how much he is promoting it. He intends only his own gain, and he is, in this, as in many other cases, led by an invisible hand to promote an end which was not part of his intention.

-- Adam Smith, Wealth of Nations



Back during the Solidarity days, I heard that the following joke was being told in Poland:

A man goes into the Bank of Gdansk to make a deposit. Since he has never kept money in a bank before, he is a little nervous. 
"What happens if the Bank of Gdansk should fail?" he asks. 
"Well, in that case your money would be insured by the Bank of Warsaw." 
"But, what if the Bank of Warsaw fails?" 
"Well, there'd be no problem, because the Bank of Warsaw is insured by the National Bank of Poland." 
"And if the National Bank of Poland fails?" 
"Then your money would be insured by the Bank of Moscow." 
"And what if the Bank of Moscow fails?" 
"Then your money would be insured by the Great Bank of the Soviet Union." 
"And if that bank fails?" 
"Well, in that case, you'd lose all your money. But, wouldn't it be worth it?"

All models are wrong but some are useful.

-- George Box


I'd rather be vaguely right than precisely wrong.

-- J.M.Keynes; Found in Forbes magazine 01/25/1999 issue. In the Numbers Game column by Bernard Cohen


Far better an approximate answer to the right question, which is often vague, than an exact answer to the wrong question, which can always be made precise.

-- J. Tukey


There is an entirely leisure class located at both ends of the economic spectrum

[Aug 29, 2020] The fact that a delusional two faction of neoliberal "ruling class" are at war portend bad for Rupublic

Aug 29, 2020 | www.moonofalabama.org

Walter , Aug 28 2020 12:05 utc | 179

Well, I read all the way through.

In my US youth we trained with .30 cal Simi auto rifles at public school, and had also at public school, rifle teams that used .22 target rifles.

Wally was the only white guy on the teams (there were several schools)...

The racial stuff was all there, but so also was an intact industrial plant... a fella couldn't walk down the street without stumbling into a job.

Welder, fitter, fabricator, assembly line work, foundries and forges and shipyards and mines were running double shifts and the unions were strong...even rich people were afraid to cross a picketline...

and the income tax was about 75%...

In a long and adventurous life slumming 'round I have been threatened with guns dozens of time...Every Time a cop was holding the gun, with "one up the spout" (it's "policy") and finger on the trigger. Not once was there an arrest. Not once. Beatdachitoutta, well, several times, kidnapped too, but never actually arrested. Actually pretty much a boyscout. And white. Yes, the cops are azzhones, like Dylan said, the cops doaneed you and man they expect the same.

I think the "problem" with the views here @ MoA in regard the "civil war" lies in fundamental assumptions.

Simply try assuming that the US has ended, what you're seeing is denouement. Then forget about it...it's like chemistry, and "da fat's in da fire". Outcome is backed in. Like the corpse rotting back to it's constituent chemistry.

Igor Panarin's prediction, and also Deagle's prediction, may well be the proximate situation when the reaction bombe cools off.

The fact that a delusional "ruling class" is at war with itself as well as the common people stands as strong evidence...

[Aug 24, 2020] Why neoclassical economics is a yet another secular religious doctrine, and not a science

Highly recommended!
In a sense the USA is a theocratic society with neoliberal religion as the state religion. Not that different from the USSR whioch also was a theocratic society with some perversion of Marxism as the state religion.
Aug 24, 2020 | peakoilbarrel.com

Hickory Ignored says: 08/15/2020 AT 9:35 AM

I capitulate. Ron you are correct, we are post peak.
Post Peak

OK, now what?
It is so strange to be post-peak and not have high prices for crude,
and food.
I guess that will be coming.

note- biofuels should not be counted in liquids tally. It is a different animal, with the source being dependent on farming and soil, not drilling and geology. Just because ethanol is used for propulsion shouldn't matter- electrons and batteries aren't counted either, and rightly so. Those belong in a different category- transportation energy.

Schinzy Ignored says: 08/15/2020 AT 12:02 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

The most overrated law in economics is that of supply and demand. This law suffers from what Richard Feynman called "vagueness" (see
https://www.youtube.com/watch?v=EYPapE-3FRw ). The problem is that it is always satisfied and hence gives absolutely no information about prices.

The latest iteration of our article on the oil cycle can be found at
http://www.math.univ-toulouse.fr/~schindle/articles/2020_oil_cycle_notes.pdf

alimbiquated Ignored says: 08/16/2020 AT 9:52 AM

Another problem with market theory (beyond vagueness) is that it lacks a time axis.

The theory states that the relationship between price and supply moves along the demand curve, but doesn't say how fast, just that "in the long run" the system will reach equilibrium. Being in equilibrium means being somewhere on the demand curve.

https://www.economicsonline.co.uk/Competitive_markets/Demand_curves.html

So for example, if prices go up, the demand quantity is expected to go down. The question is when.

Where does this go wrong? In classical market theory, for example, unemployment is impossible, because if labor supply outstrips demand prices (wages) should fall until until equilibrium is attained. This has been observed to be false on many occasions, including right now.

As Feymann states in the video, "If it disagrees with experiment, it's WRONG! That's all there is to it." Classical economics isn't just too vague, it is wrong.

Keynes joked about this that in the long term we'll all be dead. He meant equilibrium will never be reached, so we are never on the demand curve. He argued that "sticky prices", meaning the unwillingness to accept pay cuts, kept labor markets permanently out of equilibrium.

It's worth pondering whether oil prices are "sticky" as well. Saying yes is saying the law of supply and demand doesn't apply (in the short term). This year we have seen that both OPEC's politicking and panicky traders can cause wild swings in price unrelated to supply and demand.

Where market theory is vague is the shape of the demand curve. For example, if oil supply can't meet demand in the near future, as some here have posited, how high will prices go? Some claim it will go over $200, as people get desperate for it. Some claim that higher prices would increase efforts to find and drill more, putting a lid on prices. Some claim the shortage would crash the world economy, depressing prices. Some claim that faced with oil shortages, the world would simply switch to EVs, or stop wasting the gunk on poorly designed transportation systems, so prices would stay more or less the same.

Who is right? Nobody knows. So we don't know the shape of the demand curve. The theory is hopelessly vague.

Schinzy Ignored says: 08/16/2020 AT 12:25 PM

Good points. For all these reasons it is not surprising that the journalist Robert Samuelson noted last year that frequently economists don't know what they're talking about: https://www.washingtonpost.com/opinions/economists-often-dont-know-what-theyre-talking-about/2019/05/12/f91517d4-7338-11e9-9eb4-0828f5389013_story.html?noredirect=on&utm_term=.dc651d463df7 .

Han Neumann Ignored says: 08/17/2020 AT 8:25 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

Schinzy,

The price of crude oil is only part of the Peakoil phenomenon. How much is left in the ground counts, however more important is at which velocity the remaining Gb can be extracted. I am not a geologist, but common sense says that when an oilfield is well depleted (50-70%) the most of the remaining barrels will be extracted at a much lower speed, even at very high oilprices. With secondary and tertiary EOR technology most conventional oilfields will not produce the same or close to the same amount of barrels/day as before for many more years. That's also my conclusion from what I have read more than a decade ago.
Of course with high oilprices new, relatively small, oil fields will come online and (more advanced) EOR will start in other fields, but no matter how you look at it: depletion never stops. With most oilfields in the world past-peak, only a tremendous amount of money (needed to develop EOR) can prevent world crude oilproduction from falling like a rock. And all those EOR technologies will deplete oilfields faster. Big gains in the beginning, more disappointments later.
Will there be significant amount of shale oil developed in the future in other countries than the U.S. ? If so, is that wise, regarding an already existing runaway climate change ?

[Aug 24, 2020] The link between political instability and inequality

Aug 24, 2020 | peakoilbarrel.com

Schinzy Ignored says: 08/16/2020 AT 9:21 AM

Modelling political instability is the subject of cliodynamcs, see https://en.wikipedia.org/wiki/Cliodynamics . The graph on that page seems to link political instability with inequality. My suspicion is that it is also linked to scarcity.

[Aug 24, 2020] Tesla market cap $300B v. Exxon at $190B.

Aug 24, 2020 | peakoilbarrel.com

Stephen Hren Ignored says: 08/16/2020 AT 1:03 PM

Tesla market cap – $300B v. Exxon at $190B.

Wall Street is very story driven. They wasted a decade throwing money at tight oil and lost billions. It's hard to see how this tight oil story gets resuscitated. The '10s saw free debt, low regulatory regime, no effective alternatives to oil, skilled work force, entrenched globalized oil markets, no pandemics, etc, and they STILL lost hundreds of billions. Wall Street wants to lose their money in new ways. At least they get some novelty out of it.

[Aug 24, 2020] OPEC July 2020 Production Charts " Peak Oil Barrel

Notable quotes:
"... $40s WTI and Brent are wholly unsustainable prices. I'd argue that $50s and $60s are also if growth is being sought outside of a few areas. ..."
"... SS, there is no doubt that the pandemic will hasten peak oil supply. Many shut-in wells will not re-open. Frac spreads are being sold for scrap. Rigs are being decommissioned. Plus we are still producing at 80 to 90% of former levels. That means depletion is still continuing. So when they do get around to producing flat out again, the oil will just not be there. ..."
"... close to 100,000 job losses in the oil industry, many folks in their 50s and 60s. Hard to see how they bring folks on for another boom with the loss of all that skilled labor. ..."
"... So, maybe $100 oil over a period of time could turn this tide, but sub-$50 WTI sure won't. ..."
"... Yes, the future is hard to predict. But absent some tremendous financial return potential, why would young people have any interest in making a career of US upstream E & P? ..."
Aug 24, 2020 | peakoilbarrel.com

Ron Patterson Ignored says: 08/15/2020 AT 8:15 AM

OPEC peaked in 2016, Russia peaked in 2019, and the USA very likely peaked in 2019 also. And the vast majority of all other nations have peaked also as evidenced by their continuing decline. That should be enough evidence for anyone.

shallow sand Ignored says: 08/15/2020 AT 8:33 AM

Ron.

$40s WTI and Brent are wholly unsustainable prices. I'd argue that $50s and $60s are also if growth is being sought outside of a few areas.

The longer prices stay low due to the pandemic, the more likely the world has passed peak supply.

I don't see any sign that this pandemic will be over anytime soon.

Ron Patterson Ignored says: 08/15/2020 AT 8:46 AM

SS, there is no doubt that the pandemic will hasten peak oil supply. Many shut-in wells will not re-open. Frac spreads are being sold for scrap. Rigs are being decommissioned. Plus we are still producing at 80 to 90% of former levels. That means depletion is still continuing. So when they do get around to producing flat out again, the oil will just not be there.

As to the longevity of the pandemic, one can only guess. But things will never be back to the free and easy ways of the past. International travel will never be back to what it once was. There will be fewer travel vacations even within nations. The possibility of the virus returning will forever be on everyone's mind.

Stephen Hren Ignored says: 08/15/2020 AT 12:47 PM

Also close to 100,000 job losses in the oil industry, many folks in their 50s and 60s. Hard to see how they bring folks on for another boom with the loss of all that skilled labor.

Han Neumann Ignored says: 08/16/2020 AT 8:08 PM

Ron,

Once that a, in most cases, curative combination of medicines is available and one or a few very effective vaccins are registered and rolled out, it remains to be seen how 'normal' life will get again.

I don't think the virus will be forever on everyone's mind. Already now many young people have started to party like before the pandemic, even in Europe (infections rising in almost all European countries, so a lot of 'Trumpites' and Bolsonarites' also in Europe).

When vaccines are widely available at least everyone who is planning to travel by plane will be going to get a vaccin.
A good chance that vacations and air travel is close to normal somewhere in 2022 or 2023.

Dennis Coyne Ignored says: 08/16/2020 AT 9:42 AM

Shallow sand,

The pandemic will eventually subside an the US and other nations that have responded poorly to the pandemic will eventually learn from nations that have responded relatively better, compare Europe and US.

If peak supply is reached, but demand resumes 1% annual growth, I expect we will soon see Brent at $65/bo+/-5 at minimum, by 2025 to 2030.

shallow sand Ignored says: 08/16/2020 AT 10:37 AM

Dennis. Brent $65 in 2025-30 is only helpful if one or both of the following happens:

1. Capital markets continue to the pattern of 2015-19 and fund drilling that provides marginal returns or losses, but has no hope of providing superior returns.

2. Some other new, economical supply source is discovered.

Low oil prices to 2025-2030 would seem to mean supply will be constrained unless one or both of the above occur.

Conventional oil pretty much peaked in 2005.

I look at $10K invested in a major oil company in 2010. I look at $10K invested in a shale company in 2010. I then compare that to the S&P 500 return since 2010, all other industry groups, specific companies, etc.

Investing in oil is like investing in tobacco. The only allure is yield. Upstream E & P will have to keep borrowing to pay the dividend even if oil returns to $50 Brent. Same with $60 Brent.

shallow sand Ignored says: 08/16/2020 AT 11:03 AM

Dennis. One thing that you are missing is just how poor the future of the upstream oil industry is.

When the shale boom started, EV's were a pipe dream.

When the shale boom started, there wasn't widespread sentiment against oil. Global warming/climate change was on the radar, but not like now.

BP is trying to remake itself in large part because they cannot find talented and skilled younger workers who want to work for a fossil fuel company.

We have been in this industry since the 1970s. We have some of the best leases in our field and have made more money in this industry than in our professions or in other investments. There is a third generation in our family ranging from late teens to mid twenties. None are interested at all in this family business/investment. Same for one of my best friends who makes his living at this. Same for another, whose engineer son started working with him out of college, but before oil crashed in 2014 left and took a job in a "Green Energy" field.

Mike is in the same boat.

I know all of the major players in our field. All companies are family owned. There are a total of four in all of those families working in oil and gas who are under the age of 50, and those four are at or nearing 40, and started working in their family oil companies at least over 15 years ago.

As I have posted before, our employees range from 47-61 years of age. The two we hired who were in their twenties have both long ago left, and no longer work in upstream E & P.

We have participated in some Zoom meetings with the National Stripper Well Association. Almost all on those meetings is old (50-80 years old).

We hope to sell out on the next recovery, if that ever comes. But we are concerned there will not be any buyers.

So, maybe $100 oil over a period of time could turn this tide, but sub-$50 WTI sure won't.

Yes, the future is hard to predict. But absent some tremendous financial return potential, why would young people have any interest in making a career of US upstream E & P?

Hickory Ignored says: 08/15/2020 AT 9:35 AM

I capitulate. Ron you are correct, we are post peak.
Post Peak

OK, now what?
It is so strange to be post-peak and not have high prices for crude,
and food.
I guess that will be coming.

note- biofuels should not be counted in liquids tally. It is a different animal, with the source being dependent on farming and soil, not drilling and geology. Just because ethanol is used for propulsion shouldn't matter- electrons and batteries aren't counted either, and rightly so. Those belong in a different category- transportation energy.

Schinzy Ignored says: 08/15/2020 AT 12:02 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

The most overrated law in economics is that of supply and demand. This law suffers from what Richard Feynman called "vagueness" (see
https://www.youtube.com/watch?v=EYPapE-3FRw ). The problem is that it is always satisfied and hence gives absolutely no information about prices.

The latest iteration of our article on the oil cycle can be found at
http://www.math.univ-toulouse.fr/~schindle/articles/2020_oil_cycle_notes.pdf

alimbiquated Ignored says: 08/16/2020 AT 9:52 AM

Another problem with market theory (beyond vagueness) is that it lacks a time axis.

The theory states that the relationship between price and supply moves along the demand curve, but doesn't say how fast, just that "in the long run" the system will reach equilibrium. Being in equilibrium means being somewhere on the demand curve.

https://www.economicsonline.co.uk/Competitive_markets/Demand_curves.html

So for example, if prices go up, the demand quantity is expected to go down. The question is when.

Where does this go wrong? In classical market theory, for example, unemployment is impossible, because if labor supply outstrips demand prices (wages) should fall until until equilibrium is attained. This has been observed to be false on many occasions, including right now.

As Feymann states in the video, "If it disagrees with experiment, it's WRONG! That's all there is to it." Classical economics isn't just too vague, it is wrong.

Keynes joked about this that in the long term we'll all be dead. He meant equilibrium will never be reached, so we are never on the demand curve. He argued that "sticky prices", meaning the unwillingness to accept pay cuts, kept labor markets permanently out of equilibrium.

It's worth pondering whether oil prices are "sticky" as well. Saying yes is saying the law of supply and demand doesn't apply (in the short term). This year we have seen that both OPEC's politicking and panicky traders can cause wild swings in price unrelated to supply and demand.

Where market theory is vague is the shape of the demand curve. For example, if oil supply can't meet demand in the near future, as some here have posited, how high will prices go? Some claim it will go over $200, as people get desperate for it. Some claim that higher prices would increase efforts to find and drill more, putting a lid on prices. Some claim the shortage would crash the world economy, depressing prices. Some claim that faced with oil shortages, the world would simply switch to EVs, or stop wasting the gunk on poorly designed transportation systems, so prices would stay more or less the same.

Who is right? Nobody knows. So we don't know the shape of the demand curve. The theory is hopelessly vague.

hole in head Ignored says: 08/16/2020 AT 1:48 PM

A comment posted on ^peakoil.com^ . Interesting .
"The price action of WTI shows it quite clearly that the non oil extracting part of the economy can't afford to pay a high enough price that would allow the extracting, processing and delivery of oil products to it.

It's that simple, most of the oil still in the ground will stay there unless somehow you find a way to pay $100++ per barrel. The last 12 years has shown that we can't!

The best yearly average weekly price of WTI was right around $100
Average weekly price of WTI for years 2008 thru 2013 was $88.
Average weekly price of WTI for years 2014 thru 2019 was $53.

The trend is what it is and it shows no signs of changing, the price of WTI is still hitting lower lows and lower high.

I have no idea what the future will bring but the next 3 years are going to be interesting and not in a good way.

Have fun everyone."

Dennis,repeating myself ,the price of oil is going to trend down . Supply and demand curves do not apply where the world^s economic system is now placed . Alimbiquated has done a very good job explaining that .

Ron Patterson Ignored says: 08/15/2020 AT 6:38 PM

Much of the fall in output of the other 9 is from Iran, Nigeria, Libya, and Venezuela, much of that decline is due to political problems

No doubt it was. But political upheaval is part of the story, and always will be. There will be political problems ongoing for decades. Dennis, if your model excludes political problems, then you are living in a dream world.

Anyway, in addition to the political problems that you point out in those four nations, which will most likely continue, we have the natural decline in the other five nations in the chart below.

Hightrekker Ignored says: 08/15/2020 AT 6:42 PM

Nov 2018 is getting further in the rear view mirror -- –

Dennis Coyne Ignored says: 08/16/2020 AT 9:03 AM

Hightrekker,

Yes and oil prices have been low from Nov 2018 until now, do you expect that to continue for the next 10 years? I do not, perhaps that's the difference. 2025 to 2030 there is likely to be a new peak for World C plus C centered 12 month average output probably 1 to 3 Mb per day higher than the Nov 2018 peak. This assumes oil prices reach $64/bo or higher in 2020$ by June 2030.

Hightrekker Ignored says: 08/16/2020 AT 9:51 AM

Yes, I do not think we will surpass Nov 2018.
But I'm a European Historian, viewing other factors.

Survivalist Ignored says: 08/18/2020 AT 1:54 AM

I seem to recall, not too long ago, various talking heads prattling on about how USA LTO is now the new "swing producer"/source of swing supply. I guess we'll now get to see how well it swings on and off, as swing producers are wont to do.
My WAG is that it doesn't swing back on so well, as the swing off phase seems to be damaging (not just a tap you see), and when demand recovers after COVID, circa 2023, we'll see a price run up. Perhaps it'll be a damaging price run up. 2023 will be in the middle of Biden's first term, presumably.

Westexasfanclub Ignored says: 08/16/2020 AT 3:57 AM

And: Nigeria and Venezuela could ramp up their production only very, very slowly. They could not stem the general trend. Lybia is too little to make any serious difference. The only real wildcard is Iran. And it's the less probable to be played.

[Aug 24, 2020] If the Dollar dies, so will the country because the dollar's status is the only thing preventing hyperinflation and a total lockup of everything that moves at least for a few months.

Aug 24, 2020 | www.unz.com

RoatanBill , says: Next New Comment August 23, 2020 at 10:17 am GMT

The economy will roll over soon, probably by early 2021. Whatever party has the presidency won't matter. As the Dollar dies, so will the country because the dollar's status is the only thing preventing hyperinflation and a total lockup of everything that moves at least for a few months.

The carnival barkers in both parties are just rearranging the deck chairs on the Titanic. If you haven't stocked up on food, water and ammo you better do so now.

Lawlessness in the major cities is just the opening act. Wait till people are hungry and thrown out on the streets due to the stupidity of the Covid lock down madness.

tempus , says: Next New Comment August 23, 2020 at 12:17 pm GMT

It is beginning to look like the country as a whole is going to experience what the South suffered during Reconstruction (1865-1877): https://tcallenco.blogspot.com/2012/03/southern-history-first-reconstruction.html

[Aug 24, 2020] Why neoclassical economics is a yet another secular religious doctrine, and not a science

Aug 24, 2020 | peakoilbarrel.com

Hickory says: 08/15/2020 AT 9:35 AM

I capitulate. Ron you are correct, we are post peak. Post Peak

OK, now what? It is so strange to be post-peak and not have high prices for crude, and food. I guess that will be coming.

NOTE:

Schinzy , says: 08/15/2020 AT 12:02 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

The most overrated law in economics is that of supply and demand. This law suffers from what Richard Feynman called "vagueness" (see https://www.youtube.com/watch?v=EYPapE-3FRw ). The problem is that it is always satisfied and hence gives absolutely no information about prices.

The latest iteration of our article on the oil cycle can be found at: http://www.math.univ-toulouse.fr/~schindle/articles/2020_oil_cycle_notes.pdf

alimbiquated , says: 08/16/2020 AT 9:52 AM

Another problem with market theory (beyond vagueness) is that it lacks a time axis. The theory states that the relationship between price and supply moves along the demand curve, but doesn't say how fast, just that "in the long run" the system will reach equilibrium. Being in equilibrium means being somewhere on the demand curve.

https://www.economicsonline.co.uk/Competitive_markets/Demand_curves.html

So for example, if prices go up, the demand quantity is expected to go down. The question is when.

Where does this go wrong? In classical market theory, for example, unemployment is impossible, because if labor supply outstrips demand prices (wages) should fall until until equilibrium is attained. This has been observed to be false on many occasions, including right now.

As Feymann states in the video, "If it disagrees with experiment, it's WRONG! That's all there is to it." Classical economics isn't just too vague, it is wrong.

Keynes joked about this that in the long term we'll all be dead. He meant equilibrium will never be reached, so we are never on the demand curve. He argued that "sticky prices", meaning the unwillingness to accept pay cuts, kept labor markets permanently out of equilibrium.

It's worth pondering whether oil prices are "sticky" as well. Saying yes is saying the law of supply and demand doesn't apply (in the short term). This year we have seen that both OPEC's politicking and panicky traders can cause wild swings in price unrelated to supply and demand.

Where market theory is vague is the shape of the demand curve. For example, if oil supply can't meet demand in the near future, as some here have posited, how high will prices go? Some claim it will go over $200, as people get desperate for it. Some claim that higher prices would increase efforts to find and drill more, putting a lid on prices. Some claim the shortage would crash the world economy, depressing prices. Some claim that faced with oil shortages, the world would simply switch to EVs, or stop wasting the gunk on poorly designed transportation systems, so prices would stay more or less the same.

Who is right? Nobody knows. So we don't know the shape of the demand curve. The theory is hopelessly vague.

Schinzy , says: 08/16/2020 AT 12:25 PM

Good points. For all these reasons it is not surprising that the journalist Robert Samuelson noted last year that frequently economists don't know what they're talking about: https://www.washingtonpost.com/opinions/economists-often-dont-know-what-theyre-talking-about/2019/05/12/f91517d4-7338-11e9-9eb4-0828f5389013_story.html?noredirect=on&utm_term=.dc651d463df7 .

Han Neumann , says: 08/17/2020 AT 8:25 PM

I have argued for several years that peak oil is a low price phenomenon, not a high priced phenomenon.

Schinzy,

The price of crude oil is only part of the Peakoil phenomenon.

How much is left in the ground counts, however more important is at which velocity the remaining Gb can be extracted. I am not a geologist, but common sense says that when an oilfield is well depleted (50-70%) the most of the remaining barrels will be extracted at a much lower speed, even at very high oilprices.

With secondary and tertiary EOR technology most conventional oilfields will not produce the same or close to the same amount of barrels/day as before for many more years. That's also my conclusion from what I have read more than a decade ago.

Of course with high oilprices new, relatively small, oil fields will come online and (more advanced) EOR will start in other fields, but no matter how you look at it: depletion never stops.

With most oilfields in the world past-peak, only a tremendous amount of money (needed to develop EOR) can prevent world crude oil production from falling like a rock. And all those EOR technologies will deplete oilfields faster.

Big gains in the beginning, more disappointments later.
Will there be significant amount of shale oil developed in the future in other countries than the U.S. ? If so, is that wise, regarding an already existing runaway climate change ?

[Aug 23, 2020] Unconstrained Economic-Elite Domination under neoliberalism

Aug 23, 2020 | www.unz.com

james charles , says: Next New Comment August 23, 2020 at 11:12 am GMT

Hands up those who think the election will only have a 'marginal' effect?

"Testing Theories of American Politics: Elites, Interest Groups, and Average Citizens

Martin Gilens and Benjamin I. Page

Each of four theoretical traditions in the study of American politics -- which can be characterized as theories of Majoritarian Electoral Democracy, Economic-Elite Domination, and two types of interest-group pluralism, Majoritarian Pluralism and Biased Pluralism -- offers different predictions about which sets of actors have how much influence over public policy: average citizens; economic elites; and organized interest groups, mass-based or business-oriented. A great deal of empirical research speaks to the policy influence of one or another set of actors, but until recently it has not been possible to test these contrasting theoretical predictions against each other within a single statistical model. We report on an effort to do so, using a unique data set that includes measures of the key variables for 1,779 policy issues.

Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence.

The results provide substantial support for theories of Economic-Elite Domination and for theories of Biased Pluralism, but not for theories of Majoritarian Electoral Democracy or Majoritarian Pluralism. "

https://scholar.princeton.edu/sites/default/files/mgilens/files/gilens_and_page_2014_-testing_theories_of_american_politics.doc.pdf

[Aug 23, 2020] A Love Letter To The Fed From The Adoring Stock Market -

Aug 23, 2020 | www.zerohedge.com

Authored by Michael Regan via Bloomberg (emphasis ours),

Dear Fed,

Hey there! It's me, the stock market. I know it's weird to write you like this, but I felt like I needed to drop a quick thank-you note for everything you've done for me this year. I mean, your big ol' balance sheet is almost $3 trillion larger since early March! You're backing up the truck and loading it with Treasuries and corporate bonds and bond ETFs, all to keep the competition to stocks from fixed-income yields as limited as Jim Cramer's understanding of me. It's been a dream come true, honestly. I mean, fess up: Have you been reading my diary?!

... ... ...

So please do me a solid and keep this thank-you note in mind when you host your virtual Jackson Hole summit. No cowboy stuff, OK? If I hear anybody mutter something about "irrational exuberance," I swear I'm gonna blow my top and hurt a few of these Robinhood types, you got that? The Lord giveth, and the Lord taketh away. It's what I do -- and I'm good at it! But right now, this is still a lot of fun for me...

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=890

...  and when I do end up burning folks, do you really want to be the one who gets thrown under the bus?

I mean, you know you're going to catch all the blame, right?

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C'mon, Fed. We both know you're smarter than that. What's another few trillion?

With sincere and deepest gratitude,

The Stock Market

[Aug 23, 2020] US Default Bomb Goes Off- 2020 Will Have A Record Number Of Large Corporate Bankruptcies -

Aug 23, 2020 | www.zerohedge.com

US Default Bomb Goes Off: 2020 Will Have A Record Number Of Large Corporate Bankruptcies by Tyler Durden Sun, 08/23/2020 - 21:30 Twitter Facebook Reddit Email Print

The disconnect between the all time highs in the stock market and the broader economy has never been greater (with even Janet Yellen , one of the main architects of this disconnect, agreeing), and one of the places where this chasm is most glaring, is in the staggering number of major corporations filing for bankruptcy in 2020. Indeed, this year large US corporate bankruptcy filings are running at a record pace and are set to surpass levels reached during the financial crisis in 2009 (when the S&P was far from an all time high).

According to FT calculations , as of August 17, a record 45 companies each with more than $1 billion in assets has filed for Chapter 11 this year; this compares with 38 for the same period of 2009 during the depths of the financial crisis and is more than double last year's figure of 18 over the comparable period .

In total, 157 companies with liabilities over $50 million have filed for Chapter 11 bankruptcy this year and as we warned several months ago, many more are coming.

"We are in the first innings of this bankruptcy cycle. It will spread far across industries as we get deeper into the crisis. It's going to be a bumpy ride," said Ben Schlafman, chief operating officer at New Generation Research.

The spike in bankruptcies comes despite trillions of dollars in government aid to mitigate the fallout of the coronavirus pandemic on businesses, highlighting the catastrophic and lasting impact Covid-19 is having on the US economy. Or perhaps those trillions in government aid are going to the wrong recipients, and as a result companies that stand to benefit from mass defaults are now sporting record market caps. In fact, the irony is that in its pursuit to crush monopolies such as Amazon and Google, the government has made them bigger and stronger than they have ever been.

Meanwhile, with the US economy driving right over the fiscal cliff as Congress failed to extend emergency covid benefits, sending spending by those receiving Unemployment Insurance sharply lower ...

... and millions of Americans about to lose their job (again), a new default wave is just waiting to be unleashed.

me title=

"Ending the $600 per week federal unemployment benefits will push tens of millions of Americans into, or uncomfortably close to, poverty. They won't have the money to buy billions of dollars worth of goods and services. As a result, the entire economy will suffer. Small businesses will continue to suffer the most because they're already precarious," said Robert Reich, Bill Clinton's labor secretary.

For now, the brunt of the default wave has been felt by oil and gas companies as low (and on one historic occasion, negative) crude prices crippled dozens of businesses. There have been 33 filings to date according to the Oil Patch Bankruptcy Monitor from Haynes and Boone, including Chesapeake, Whiting Petroleum and Diamond Offshore Drilling. There were only 14 last year.


While not quite as bad as the E&P sector, retail businesses with assets of more than $50MM have also been severely affected with 24 filing for bankruptcy, a three-fold jump from last year. They have been among the hardest hit by the government-mandated lockdowns, which prevented stores from opening and drove consumers to online retailers such as Amazon. Burdened by debts, some of which were built up under private equity ownership, several prominent retailers have been forced to file for Chapter 11.

Some of the most iconic names that have filed this year include Neiman Marcus, which struggled for years with a heavy debt burden from its 2005 leveraged buyout by TPG and Warburg Pincus, and which finally filed for bankruptcy in May with liabilities of $6.7bn. JCPenney, also saddled with billions in debt, filed for Chapter 11 bankruptcy in May. Brooks Brothers, the venerable suit retailer that once counted Abraham Lincoln and John F Kennedy among its clients, did the same in July.

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"The Covid-19 pandemic is reshaping consumer buying habits. Therefore, we will continue to see large retail, energy, and transportation businesses taking advantage of the tools provided by a formal bankruptcy to restructure to be more profitable and competitive in the long term," said Deirdre O'Connor, managing director of corporate restructuring at legal services group Epiq.

And while several businesses tried to reopen in late May and June (and some amusingly tried to unfile for bankruptcy just so they were eligible for bailout loans), a recent flare-up in coronavirus cases and deaths in several US states choked the recovery, forcing many business owners to close again.

"It pains me to say this, but bankruptcy is a growth industry in America," New Generation's Schlafman dismally concluded.

[Aug 23, 2020] This week in Trumponomics -- The two market bubbles get bigger

Aug 23, 2020 | finance.yahoo.com

The last recession, from 2007 to 2009, was brutal because of twin crashes in both the financial and housing markets. The S&P 500 plunged 56% from top to bottom, and home values fell 27% . The daunting loss of wealth took years to recover and left prolonged scars on the U.S. economy.

The Federal Reserve wasn't about to let that happen again as the coronav