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Corporatism

"One Nation, under Corporate Power, with liberty and justice for a select few"

News Corruption of Regulators Recommended Links Bookshelf National Security State Neoliberalism as a New Form of Corporatism Neofacism
Elite [Dominance] Theory And the Revolt of the Elite The Iron Law of Oligarchy Amorality and criminality of neoliberal elite Audacious Oligarchy and "Democracy for Winners" New American Caste System The Pareto Law The World as the Grand Chessboard of the American empire
Inverted Totalitarism Media-Military-Industrial Complex Total Surveillance National Socialism and Military Keysianism Totalitarian Decisionism & Human Rights: The Re-emergence of Nazi Law Nation under attack meme Tea Party and right wing rage
Corporatist Corruption Casino Capitalism America�s Financial Oligarchy Neocolonialism as Financial Imperialism "Starving the beast" bait and switch Authoritarians American Exceptionalism
Machiavellism Mayberry Machiavellians Neo-theocratic Movements Neo Trotskyism aka Neoconservatism Corporatism quotes Humor Etc

Introduction

Before XX century Continental Europe has had many right-wing movements, though none with the organization and numbers of corporatism variants. Corporatism is a distinctively different ideology for right wing forces. Until the twentieth century, continental right-wing parties usually simply rejected democratic principles and institutions and preferred monarchies (e.g. France, 1814-48) or authoritarian despotism (e.g. Bonapartism, 1799-1814 and 1851-70). 

In corporatist regimes, which are often one party states (although two parry system with "the first after the post" rule can work as well or even better) this limitation of political representation of folk outside narrow caste of elite is preserved, and any attempt to challenge the elite is skillfully and forcefully (sometimes even brutally) suppressed. Brainwashing of population with particular corporatist ideology is rampant (Mussolini Italy, Hitler Germany).   Interests of ordinary people are suppressed in favor of interests of corporations and are taken into account only if they channeled with corporatist structures, such as large corporations (which actually are dominant political players), (emasculated) trade unions, military,  and political party or parties. Outside of them there is no legitimate political representation.  Each "corporation" is represented by tiny strata of corporate elite, which like mosaic form this society elite.

All economic power and political power in most Western societies including the USA and GB belongs to the corporations, whatever this term means. Power of multinational corporation lead existing postwar democracy regimes to becoming an empty shells. Corporations became not only powerful lobbyists and owners of most senators and representatives via contributions to the election complain,  but major insider players in the political establishment. Look at Goldman Sachs as an example of merger of corporation and Washington establishment. Alumni of the corporation essentially dominates Treasury department.  This is something that no economic or political theory advocates in any way but this is the central reality of the USA today. As well as most other countries. Confrontation of interests of large multinational and states is presented as "state vs. market" although large multinationals are as far from the concept of free market as state. That ideological trick weakens the position of state. In other words neoliberalism transforms classic corporatism in "neo-corporatism".

Military industrial complex in this sense is just another cartel of manufactures and related government agencies and politicians. After the WWI Corporatism became the most popular right-wing economic doctrine in Europe.  And now hunder years later corporatism remain dominant political ideology and social system for the USA and most European states. Neoliberalism in this sense is just a late stage of corporatism that change nothing in dominance of large corporation both in economic sphere and, by extension, in political life. It is just financial oligarchy that comes into forefront instead of traditional manufacturing and connected to it military industrial complex. 

schwitters, 07 April 2013 8:51am

Despite the hysteria whipped up about the evils of the Welfare State it is there because it was underpinned by the democratic process. One person's vote is priceless in a democracy, the greatest medium of exchange that we have is through the ballot box, the ultimate leveller.

The corruption of politics and the placement of power in the hands of the profoundly undemocratic corporate world is leading to an inevitable conclusion and the rise of extreme right wing politics at the heart of society.

The corruption of politics is the single most danger to freedom of all. The Welfare State is there because we voted for it and the consensus was established over decades.

The challenge of resisting the attack on the Welfare State, for instance, is that this attack is a symptom of a much broader malaise in politics, as hinted at in this article. It's the democratic process that is under duress and it is that which needs addressing. Justice will prevail under proper circumstances but it is hard to see where the leadership is going to come from to set about correcting the democratic deficit.

The stakes are that high.

As a political ideology and practice Corporatism initially appeared on historical scene in the form of  Italian fascism and later various Continental fascist regimes (Germany, Spain, Portugal). Later Latin American   regimes of the first half of the twentieth century joins that movement.  In the 60's it got a second breath with the rise to power (via a coup d'�tat ) of military industrial complex (the moment of violent coup d'�tat, the assassination of JFK in November 1963, more then 50 years ago is widely considered to be a switch of power to "deep state" ).  Later it was transformed in casino capitalism, a neoliberal flavor of corporatism.

The key question here is how to cope with the new brave world in which democracy is dead and ordinary people

Formally corporatism can be defined as a system of interest representation in which the constituent units are organized into a limited number of compulsory, non competitive, hierarchically ordered and functionally differentiated categories (aka corporations), recognized or licensed (if not created) by the State. They can  be iether granted a deliberate representational monopoly within their respective sphere of interest (labour unions), of grab it due to availability of financial resources (banks and other financial institutions). In exchange they are required to observe certain restrictions and controls on their selection of leaders and articulation of demands (Schmitter, 1979). State under corporatism serves as powerful mediator of various corporate interests and enforcer of the "rules of the game" for corporation. Individual voters do not matter as they can only be represented by corporations. 

Classic corporatism was an extreme-right political movement, ideology, and the corresponding form of government of a dictatorial type. Defining characteristics of which were:

  1. the militaristic nationalism (in the broad sense),
  2. anti-communism,
  3. xenophobia
  4. chauvinism,
  5. a cult of the leader,
  6. contempt for electoral democracy and liberalism,
  7. a belief in the supremacy of the elites and the social hierarchy,
  8. statism. 

The most typical features of the historical corporatism was its strong appeal to a frustrated middle class, a class suffering from an economic crisis or feelings of political humiliation, and frightened by the pressure from lower social groups.  As such it was by-and-large a militant middle-class movement, much like Tea party today expresses "the rage of white middle class" which is losing its economic position in the USA.

Among typical features of such regimes researchers uncovered the following:

  1. Powerful and continuing promotion of nationalism. From the prominent displays of flags to the ubiquitous lapel pins, the fervor to show patriotic nationalism is carefully stroked up. Catchy slogans, pride in the military, and demands for unity were common themes in promoting such attitudes. Sometimes it is coupled with a suspicion of foreigners, or particular ethnic group, which often borders on xenophobia.
  2. Disdain for the importance of human rights. The regimes views human rights of opponents as of little value and a hindrance to realizing the objectives of the ruling elite. At the same time, they can promote human right as false flag operation at home and at foreign policy. Through clever use of propaganda, the population was brought to accept these human rights abuses of opponents by marginalizing, even demonizing, nations and groups that are being targeted. When abuse was egregious as was the case in Guantanamo Bay detention camp and Abu Ghraib, the tactic was to use secrecy, denial, and disinformation.
  3. Identification of enemies/scapegoats as a unifying cause. The most significant common thread among these regimes was the use of scapegoating as a means to divert the people's attention from other problems, to shift blame for failures, and to channel frustration in controlled directions. Active opponents of these regimes were inevitably labeled as subversive elements, or terrorists and dealt with accordingly. The methods of choice -- relentless propaganda and disinformation --were usually effective. In addition thos propaganda, fascist the regimes sometimes incite "spontaneous" acts ( aka "pogroms") against the target scapegoats, usually communists, socialists, liberals, Jews, ethnic and racial minorities, traditional national enemies, members of other religions, secularists, homosexuals, and "terrorists."
  4. The supremacy of the military/avid militarism. Ruling elites always identified closely with the military and the industrial infrastructure that supported it. A disproportionate share of national resources was allocated to the military, even when domestic needs were acute. The military was seen as an expression of nationalism, and was used whenever possible to assert national goals, intimidate other nations, and increase the power and prestige of the ruling elite.
  5. A controlled mass media. Under some of the regimes, the mass media were under strict direct control and could be relied upon never to stray from the party line. Other regimes exercised more subtle power to ensure media orthodoxy. Methods included the control of licensing and access to resources, economic pressure, appeals to patriotism, and implied threats. The leaders of the mass media were often politically compatible with the power elite. The result was usually success in keeping the general public unaware of the regimes excesses.
  6. Obsession with national security. Inevitably, a national security apparatus under direct control of the ruling elite is the most effective tool for crushing social protest, operating in secret and beyond any constraints. Its actions were justified under the rubric of protecting 'national security,' and questioning its activities was portrayed as unpatriotic or even treasonous.
  7. Religion and ruling elite tied together. Most of the regimes attached themselves to the predominant religion of the country and chose to portray themselves as defenders of religion. The fact that the ruling elite's behavior was incompatible with the precepts of the religion was generally swept under the rug. Propaganda is used to keep up the illusion that the ruling elites are defenders of the faith. A perception was manufactured that opposing the power elite was tantamount to an attack on religion.
  8. Power of corporations protected, while power of labor is suppressed. Labour unitions are marginalized.  Although the personal life of ordinary citizens is under strict control (police state or national security state), the ability of large corporations to operate in relative freedom is protected and even enhanced via so called deregulation. The ruling elite saw corporations in general and large corporations especially as a way to not only to increased the speed of economic development and military production, but also as an additional means of social control. Members of the economic elite are intermixed with the political elite ("revolving door policy") to ensure a continued mutuality of interests, especially in the repression of 'have-not' citizens. Since organized labor was seen as the one power center that could challenge the political hegemony of the ruling elite and its corporate allies, it was inevitably crushed or made powerless. In all these cases, corporatist structures of labor bargaining are primarily a decorative fa�ade for state repression of independent trade unionism. The poor form an underclass, viewed with suspicion or outright contempt ("the guilt of the poor"). Under some regimes, being poor was considered akin to a vice. Important investment decisions, although influenced by the state partly through corporatist structures, remain domain of private corporations.
  9. Suppression of labour which leads to the inherent instability due to loss of purchasing power and shrinking middle class. Corporatism presuppose the extreme asymmetry of the power of capital and labor. Which can lead to conflicts. One sign of such an instability is the tendency of members of trade unions to withdraw their co-operation in wage-restraint policies when members insist that their leaders represent their demands rather than act as junior partners in managing the modern capitalist economy. In turn, the elite have shown themselves less and less interested, for their part, in maintaining such partnerships, and sometimes resort to open suppression, just to teach an example. Organized labor's power to control wages and working conditions, which has traditionally been grounded in its ability to limit the supply of workers, has been decimated by the mobility of capital. In a global market, there will always be workers willing to accept a lower wage as opposed to no wage. So classic corporatist "partnership" between capital and labor postulate is abandoned along with the Keynesian welfare state through the last two decades of the 20th century.
  10. Suppression of "non-conformist" intellectuals. Intellectuals and the inherent freedom of ideas and expression associated with them were anathema to these regimes. Intellectual and academic freedom were considered subversive to national security Universities are tightly, but indirectly, controlled; politically unreliable faculty harassed and deprived of funding. Unorthodox ideas or expressions of dissent are silenced. To these regimes, art and literature should serve the national interest or they had no right to exist.
  11. Obsession with crime and punishment. Most of these regimes maintained Draconian systems of criminal justice with huge prison populations, directed at lower classes. The police were often glorified and had almost unchecked power, leading to rampant abuse. Difference between regular and political crimes sometimes is fuzzy due to trumped-up criminal charges which sometimes are used against political opponents of the regime. Fear, and hatred of criminals is promoted among the population as an excuse for more police power.
  12. Rampant cronyism and corruption. Those in business circles and close to the power elite often used their position to enrich themselves. This corruption worked both ways; the power elite would receive financial gifts and property from the economic elite, who in turn would gain the benefit of government favoritism. Members of the power elite were in a position to obtain vast wealth from other sources as well: for example, by stealing national resources (That's what Yeltsin's regime did in Russia). With the national security apparatus under control and the media muzzled, this corruption was largely unconstrained and not well understood by the general population. See Corporatist Corruption: Systemic Fraud under Clinton-Bush-Obama Regime
  13. Fraudulent elections. Elections in the form of plebiscites or public opinion polls were usually bogus. When actual elections with candidates were held, they would usually are perverted by the power elite to get the desired result. Common methods included maintaining control of the election machinery, intimidating and disenfranchising opposition voters, destroying or disallowing legal votes, and, as a last resort, turning to a judiciary beholden to the power elite.

Here is a table that illustrates the variety (The Economic System of Corporatism):

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

You can add to this list all US presidents since Ronald Reagan, as well as Russian presidents Gorbachov, Yeltsin and Putin.

The key idea of corporatism is that political actors are not individual people, but associations and first of all corporations (which are officially considered to be "persons" and have rights) as well as trade unions. And that politically an individual is represented not directly, but only via those organizations or parties created by those organizations. Conflict between capital and labor is resolved by bargaining with state intermediation only between "organizational players". The state acts as the supreme arbiter of labor disputes which decisions are binding to both parties but openly favor interests of the corporations.

After a setback caused by WWII, corporatism reemerged in 70th the modified form of neoliberalism in Great Britain, the USA and other countries. The USA model of neoliberalism has some idiosyncratic features due to the fact that the USA is the most powerful neoliberal state. It is often called Casino Capitalism due to its deification of "free markets" (and by extension stock markets) as the key instrument of achieving fast development and social harmony (which in reality is a smoke screen for achieving a free reign of transnational corporations). Like communism formally propels proletarians as the new dominant social class under socialism (while in reality the dominant class is nomenklatura), neoliberalism promotes entrepreneurs and "creative class" (which paradoxically include financial oligarchy, one of the worst performer in creativity among entrepreneurs, if we discount devising criminal schemes of enrichment). The extreme manifestation of this ideology is Ayn Rand and her Objectivism Cult. Again, in reality the key players in neoliberalism regime are transnational corporations, which, especially financial corporations, acquired enormous political power (see Quiet coup) and put themselves above the law, much like military in the occupied country.

In an economic sense, neoliberalism, communism (or bolshevism as implemented in the USSR and China) and fascism are closely related and can be considered to be just different flavors of  the same social system.  In all these systems, corporate power is primary, but level of state control is higher under fascism and is highest under bolshevism.  In both cases state is used as a means to eliminate the conflict between the owners of capital represented by management and labor represented by unions by suppression of labor demands.

Using the quote attributed to Benito Mussolini (Benito Mussolini) : "Fascism should more appropriately be called Corporatism because it is a merger of State and corporate power."

The Website PublicEye.org has offered a reward for anyone who can find the original source:

"If you have a source for the quote based on an actual original document that you copy and mail us, please let us know, and you will receive a free 3-year subscription to the Public Eye magazine"[1]

Despite unknown origin of the quote what it states is pretty accurate. For example, the 1983 copy of the American Heritage Dictionary's definition of fascism was very similar to the misattributed quote:

"fascism - A system of government that exercises a dictatorship of the extreme right, typically through the merging of state and business leadership, together with belligerent nationalism."

American Heritage Dictionary, 1983

Also, Franklin D. Roosevelt in an April 29, 1938 message to Congress warned that the growth of private power could lead to fascism:

"The first truth is that the liberty of a democracy is not safe if the people tolerate the growth of private power to a point where it becomes stronger than their democratic state itself. That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power."

National Security State as a modern form of Corporatism

Modern, post WWII corporatism is associated with the term National Security State and the term Military-Industrial Complex introduced by President Dwight D. Eisenhower in his farewell address to the Nation (Eisenhower initially wrote "military-industrial-congressional complex", the term which is of course more technically correct, but, of course, politically unacceptable):

In the councils of government, we must guard against the acquisition of unwarranted influence, whether sought or unsought, by the military-industrial complex. The potential for the disastrous rise of misplaced power exists and will persist.

... ... ...

The prospect of domination of the nation's scholars by Federal employment, project allocations, and the power of money is ever present and is gravely to be regarded.

This merger, which now includes financial corporation became what we call a neoliberal state, or as  Sheldon Volin called it "Inverted Totalitarism". The neoliberal transformation of the society initialed in GB by Margaret Thatcher and in the USA by President  Reagan has distinct features of corporatism including elitism and creation "above the law" strata (or more  correctly governing class) similar to the USSR "nomenklatura", the merger of state and large corporations via revolving doors mechanism, deregulation in the interests of large transnational corporation, and gutting workers benefits to increase  profitability .

Another similar terms related to neoliberal state are casino capitalism and "crony capitalism". The latter term is connected with the fact that corruption of regulators is the intrinsic property of such a social system. Because it is often not clear who owns whom. For example, whether Goldman Sacks indirectly owns NY Fed, or NY Fed indirectly owns Goldman Sacks.

The  term "crony capitalism" is connected with the fact that corruption of regulators is the intrinsic property of such a social system. Because it is often not clear who owns whom. For example, whether Goldman Sacks indirectly owns NY Fed, or NY Fed indirectly owns Goldman Sacks.

The second stage of this transformation was the transformation of the USA to the classic National Security State, which happned after 9/11 and is related to activities of  President  George W Bush and his close advisors (which included Rumsfeld and Cheney).  It's important to note that  while 9/11 was the trigger event, the foundation for the national security state was built shortly after World War II with the National Security Act signed by President Truman. And first demonstrated its power with the JFK assassination in 1963. 

It is public interest to understand the extent to which the National Security State has become a status quo in many countries. People need to understand what's at stake when such extraordinary surveillance capabilities are technically available and  are  affecting practically every aspect of our lives. Because  so much money are at stake this becomes a a self-fulfilling prophecy, which is impossible to stop, as it continues to justify itself by saying we have to have America secure and we have to keep people feeling safe. In this situation a pathological incentive develops to react of every failure as a justification for even more surveillance.

Corporatism vs Inverted Totalitarism

While the corporatist state tend to assume authoritarian forms which are -- like European fascist regimes --  highly bureaucratized and "statist", variant with pseudo-democratic cosmetics are also possible. One of such variants is so called Inverted Totalitarism. The latter replaces direct repression of opposing social forces with indirect, but no less effective measures based on ostracism.  Still there is difference between authoritarian and totalitarian regimes: Authoritarian regime deprives you the right to speak, while totalitarian regime goes one step further -- it deprives you the right to remain silent. Anyone who does not express support for the course adopted by the local elite, is subjected to harassment, if not legal prosecution and loss of of work.

Modern neoliberal variant of corporatism has complex links with international capital which differentiates it from classic fascists states with their national supremacy ideologies.  That does not exclude a trend of substituting "racial supremacy" with "cultural supremacy" which is very well demonstrated in  American Exceptionalism

Also repression in the regime of  Inverted Totalitarism is presented in "velvet gloves" and works mainly via the process of silencing and exclusion, much less via direct physical repression. The focus switched from physical elimination of political opposition to its isolation and fragmentation. Political exclusion of opposition is sold as a necessary prerequisite to "order" and "social peace".

One telling sign of corporatism is existence of too big to fail (TBTF) corporations. In a way �Too Big To Fail� corporations are an immanent future of neoliberalism.  As neoliberalism presuppose high level of inequality it transforms the stat in National Security State (which militarizes policy and introduces total surveillance to protects top one 1% from proles under the pretext of protecting proles from terrorists).

Corporatism and Catholicism

As a social doctrine corporatism is connected to Catholicism and is an expression of Roman Catholic social doctrine, and was inspired by two Catholic encyclicals:

As such it was prevalent in Catholic countries, but in no way it was limited to them.  The key idea is to create an alternative to socialism, which helps to eliminate social protest, while preserving private property and private corporations with their owners.  Corporatism is not a unified phenomenon and shows significant variety of implementations. We can talk about

Still the fundamental feature of  corporate ideology was/is the neo-Christian notion of moral transformation of the society. To quote Mihail Manoilesco

"The essential social function of the corporation is to create a new moral environment, favorable to the idea of collaboration between employers and workers."

In the last half of the 19th century people of the working class in Europe were beginning to show interest in the ideas of socialism and syndicalism. Some members of the intelligentsia, particularly the Catholic intelligentsia, decided to formulate an alternative to socialism which would emphasize social justice without the radical solution of the abolition of private property. The result was called Corporatism, the attempted merge of corporate power and the state power.

Corporatism has been particularly significant in the countries with strong Catholicism traditions such as Latin countries of Europe (Portugal, Spain, Italy and France). Germany also has significant catholic population which was the core of the NSDP. The connection between Catholicism and the Continental corporatism movements is most obvious in the various Christian Democrat parties (where for �Christian� we can read �Roman Catholic�). In USA corporatism initially got fertile ground in states with significant Catholic population like Wisconsin (senator McCartney represented Wisconsin in the US senate). However, its influence goes much wider.

This idea was maintained throughout their time in power, with state control used as a means to eliminate the conflict between the owners of capital represented by management and labor represented by unions. Mainly by suppressing demands of workers and decimating labor unions. Quoting Benito Mussolini (it is actually an attributed quote, difficult to find in his writings): "Fascism should more appropriately be called Corporatism because it is a merger of State and corporate power.

Five Historical Corporatist Regimes

Depending of which elements  are stressed and which are somewhat tempered or subdued, we can distinguish among at least five different forms of corporatism:

  1. Spanish model (which is most closely connected with Catholicism, stresses bargaining of labor and corporations). It has been particularly significant in the Latin countries of Europe (Portugal, Spain, Italy and France) and Latin America. The connection between Catholicism is the most prominent in this model and various Christian Democrat parties (where for �Christian� we can read �Roman Catholic�) are important political players.
  2. Fascism and neo-fashism (which is characterized by rampant militarism and xenophobia). Mussolini Regime in Italy and Nazi Germany are two classic variant of this type of corporatism.
  3. American New Deal model (in which repressive elements were subdued)
  4. Asian model (which emphasized economic development of the nation)
  5. Neoliberalism (which emphasize the role of transnational corporations and local, connected with them, financial oligarchy (Russian oligarchs like Khodorkovsky are good example here) as the only first class citizens and suppresses or eliminates the power of trade unions. This form, in various modifications dominates post Communist countries.
  6. The Reagan Neoliberal Model.  Under President Reagan,  the USA experienced transformation in  a unique variation of neoliberal model, which can be considered a class of its own.  The term "Quiet coup" which means the hijacking of the political power in the USA by financial oligarchy was introduced by Simon H. Johnson, a British-American economist, Professor at the MIT in his article in Atlantic magazine, published in May 2009 (The Quiet Coup - Simon Johnson - The Atlantic). From March 2007 through the end of August 2008, he was Chief Economist of the International Monetary Fund. The article opens with a revealing paragraph:

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

Neoliberal Corporatism as a State Ideology and Secular religion

As John Ralston Saul noted in his The Unconscious Civilization, one central aspect of the neoliberral corporatist doctrine is its hijacking of the term "individualism," defining it as self-absorption or selfishness. Paradoxically in the USA both Democratic Party and Republican Party positions are based upon that definition. The US "Democrats", which under President Clinton became the Party of Financial oligarchy, just a more moderate wing of Republican Party,   agree with Republicans that individualism presuppose  anti-social selfishness (the slogan "greed is good"). In reality as Saul aptly puts it:

"Rights are a protection from society. But only by fulfilling their obligations to society can the individual give meaning to that protection. . . Real individualism then is the obligation to act as a citizen."

Is essence, like communism before corporatism (both in its neoliberal and fascist forms) is a secular religion," which the key idea of salvation as the blind pursuit of self-interest. It is led by an ideology of "corporatism," which has deformed the American ideal of a life worth living into one devoid of a concept of the common public good

The corporate compartmentalization of, and distortion of public knowledge, and the accompanying enforced conformity has so confused the majority of US citizens (99%)  that they eat blatant corporate propaganda without questioning and it makes via effect on our consciousness act against their own economic interest.  In other words, this cult of "individual selfishness" as modeled by corporate self-interest has hi-jacked Western civilization as we have come to know it.

The most analyzed flavor of corporatism is its extreme form -- fascism. In 2002, Laurence W. Britt's  analyzed seven fascist regimes in order to find the common elements that mark them as fascist: Nazi Germany, Fascist Italy, Franco's Spain, Salazar's Portugal, Papadopoulos's Greece, Pinochet's Chile, and Suharto's Indonesia (Fascism Anyone?) He found 14 common characteristics (some of them are reprinted with some changes below based on later work by Umberto Eco (1995)) and concluded:

"Does any of this ring alarm bells? Of course not. After all, this is America, officially a democracy with the rule of law, a constitution, a free press, honest elections, and a well-informed public constantly being put on guard against evils. Historical comparisons like these are just exercises in verbal gymnastics. Maybe, maybe not."

In the 1980th in the USA corporatism was transformed into a very specific form of "free market capitalism" (aka Neoliberalism) with a set of pseudoscience theories ("greed is good") that create "chosen" people, which in a fuzzy way mirror of Hitler theories of superiority of Arian race in economic terms  (replace the Arian race with the financial and technocratic elite ;-). In reality like any corporatism it has nothing common with free market (it is socialism for rich, which is as far from free market as one can get). Large financial players were subsidized (and rescued) by state. It is the same merger of state power and corporations as classic corporatism  with more prominent role of financial oligarchy in the mix and globalization as key component.

Johnson (The Quiet Coup - Magazine - The Atlantic) called acquiring by financial oligarchy dominant influence on the state a "Quiet coup" (not very dissimilar to NSDP takeover of power in Germany).

Corruption of government and putting economic elite above the law  is an immanent feature of corporatist regimes and it became a prominent feature of the US capitalism (and a real problem) immediately after Reagan (Saving and Loan crisis was the first act of this drama) and became pervasive under Clinton & Bush administration during which all "socialist" elements of "New Deal" (government regulation of private sector) were completely dismantled.

See also Casino Capitalism which is another name often used for the form of neoliberalism established in the USA.  It reflects inordinate influence of stock and other financial markets on the society and rampant speculation that accompany this.

An important book on the theoretical aspects of corporatism is Corporatism in Perspective An Introductory Guide to Corporatist Theory (SAGE Studies in Neo-Corporatism) Peter J Williamson

The key idea of the book is that liberal democracy is not liberal and is not a democracy. It is just a smoke screen maintained for propaganda focus. Of course there can be democratic moments in the life of any society but they are more of exception to the rule, then the rule.

Reality is that individual never participate in a political process as himself, typically he/she participate as a member of some interest group. The author sites Alan Cawson:

 "Pluralism has proven to be deficient because of its underling assumption of a competitive political marketplace, its voluntarism and methodological individualism in its implicit theory of interests and especially in its portrayal of the a neutral state which is disengaged from interests at the same time as it preserves an institutional boundary between public and private sphere"

Organization are viewed as instruments for pursing the elite strategies of control, rather then being directly responsible to members' interests. Organizations are top led not bottom led by the members and should be viewed in bureaucratic terms rather then democratic ones. For example in trade unions members typically became just consumers of benefits provided by an organization. Organization permanent bureaucracy became permanently detached from it "rank-and-file" members. Influence of the members are demonstrated only indirectly in the area of difficulties of enforcing compliance by leadership of the decision made, decisions which otherwise would not be accepted by the members. Sanctions applied to dissidents is an important part of organizational dynamics.

Most of powerful interest groups are state licensed. Licensing can be viewed as a coercive intervention of the bureaucratic state subsidizing the organization existence in exchange for compliance and defining, distorting, encouraging, regulating and repressing the activities of such groups and interest associations.

Organizations have status (p 86) which ahs several aspects. Among them:

In corporatist theory in no way organization is a simple association of individuals. As soon as the organization formed, the natural internal processes start creating the organizational elite. Many corporate writes have been influenced by the ideas of Marxist analysis, but few adhere to anything approaching a view that all political interests are reducible to class interests as determined by relations to production,,. But most  concur with Marxists that there is deep structural asymmetry between capital and labor which is reflected in unequal distribution of political power. So while corporatism affords capital and labor the same status, the latter is inhibited in their freedom to pursue its respective interests. In other words trade unions are always junior partners to organizations of capital. At the same time corporatists stress that organizations do not operate exclusively on a class basis, even within the confines of production associations. In many instances sectional interests may be an important basis of actions. Certainly in corporatist ideology the dominant view is that "professional loyalties" should supersede "class loyalties".

Neoliberal Corporatism and color revolutions

Outside the USA corporatist regimes, especially in Latin America, often became direct clients of international corporation and first of all based in the USA. Military coup d'etat that often brings such regime to power is often supported or even directly financed by USA or its allies (1953 Iranian coup d'�tat and Pinochet coup d'�tat in Chile are two classic,  textbook examples here).  Recently coup d'�tat was replaced by more subtle form of overthrow of legitimate (or semi-legitimate) government (especially those that can be considered "resource nationalists" like government of Russia, Libya, Iraq, Iran, Ukraine) called Color revolutions.

Systemic Corruption as Fundamental Feature of Corporatist Regimes

Systemic fraud was the second nature of corporatist regimes from its humble beginning is the first half of the XX century in Mussolini Italy to reincarnation of corporatism by Reagan. Like Mussolini used to say: to friends everything, to enemies the law. Mussolini claimed that this way dynamic (or heroic) capitalism based on private initiative could be prevented from degenerating into stale crony capitalism.

This is a fundamental difference in which corporatism (especially in its most criminogenic,  Neoliberalism form)  can to be distinguished from state capitalism, despite the fact that policies has many similarities.   Many analysts assert that China is one of the main examples of state capitalism in the 21st century. Bremmer describes state capitalism the following way (We're All State Capitalists Now - By Niall Ferguson Foreign Policy):

In this system, governments use various kinds of state-owned companies to manage the exploitation of resources that they consider the state's crown jewels and to create and maintain large numbers of jobs. They use select privately owned companies to dominate certain economic sectors. They use so-called sovereign wealth funds to invest their extra cash in ways that maximize the state's profits.

In all three cases, the state is using markets to create wealth that can be directed as political officials see fit. And in all three cases, the ultimate motive is not economic (maximizing growth) but political (maximizing the state's power and the leadership's chances of survival).

This is a form of capitalism but one in which the state acts as the dominant economic player and uses markets primarily for political gain.

Mussolini also aptly characterized corporatism as "state socialism turned on its head": instead of state controlling the corporations,  corporations became primary actors which control the state.

Instead of state controlling the corporations,  corporations became primary actors which control the state.

See Corruption of Regulators


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[May 12, 2021] It is the corporations that work in the background that seem to be the real seat of power

May 12, 2021 | www.moonofalabama.org

Stonebird , May 12 2021 20:56 utc | 47

psychohistorian | May 12 2021 19:44 utc | 31

I'm not sure that it is global private finance that is the key. Although I used to.

Either we consider the Oligarchs (Bezos Zuckerberg) as the newest form of low life, or the Banking cartels and billionares are even lower.

BUT - There is a third class of Global financiers. That is "Corporations" (as a class). Corporations are immortal, and like a hydra, with many heads, have more arms than an "image of a covid-virus" ( Octopussii are simply too limited, although they are a good example of multi-brained resourceful animals ). They are also "persons" in front of the law, with all the protections and privilges that offers. On other occasions they are simply above the law (Twit-Facebook and free speech). The people running them are only occasionally reprimanded, but the "corporation" itself is never touched. *1*

They pay, sometimes, a bit of taxes, have different laws and have lobbies working in their favour. Can corrupt Politicians with the offer of directorships or whatever. They can even be "foundations" and pay no tax at all. They deal across many different National laws, obey what they will, and are extra terrritorial in scope. They can have a nominal "center", while decisions are made elsewhere. They are in fact a new type of alien supra-being .
Of course, the "leaders" of Corporations are rich, but they can be replaced by others at the wishes of "shareholders". Untouchable and unknown.

Very useful for storing wealth and speculating at the same time.

In spite of Musk and others taking all the limelight, it is the corporations that work in the background that seem to be the real seat of power.
---
*1* One of the last real actions taken against Corporate power was the breaking up of Rockefellers Standard Oil .

*****

*2* In the case of the "breakup" of either the US or the EU - would the corporations be touched (eliminated), or hailed as saving civilisation?

[Mar 06, 2021] pfizer not the USA, wants military bases

Mar 06, 2021 | www.moonofalabama.org

snake , Mar 4 2021 21:42 utc | 32

pfizer not the USA, wants military bases
very interesting.. extension of the office of the president to a private corporation

This does not comport with Article II(Section 2) of the USA constitution.. which says
"The President shall be the Commander in Chief of the Army and Navy of the usa, and of the Militia of the serveral states, when into the actual service of the USA,

but no where do I find a private corporation may exercise the power of the Office of the President ...? What did I mis?

[Mar 03, 2021] The Tycoon Plot by Israel Shamir

Mar 03, 2021 | www.unz.com

A classic villain of 1970s and 80s was the evil tycoon. James Bond took on some of them. Meet Hugo Drax of the Moonraker , or Karl Stromberg of The Spy Who Loved Me ; these guys were willing to destroy mankind to replace it with a better version. Stromberg planned to trigger a global nuclear war and survive it underwater. Drax intended to poison mankind with his deadly gas and repopulate the world with his new chosen ones. Another one was de Wynter, the super-villain of The Avengers, played by Sean Connery. He controlled the world weather, and could kill us all off by hurricanes and tsunamis.

Before the tycoons, when the Cold war raged, a villain was a KGB agent or a Chinese operative. As détente calmed relations between the blocks, the agents went out of fashion; later, the fantastic villains of Marvel came into a vogue. The evil tycoons were uncomfortably close to the real thing; and they moved from the cinematic world into our reality.

The world we live in is the world formed by evil tycoons. They are the modern Demiurges, the evil creators of the Gnostics, an early sect that confronted the Church. Like the Demiurges, they are practically omnipotent; stronger than the State. The government needs lot of permissions and authorisations to spend a penny. If a penny had been misspent, the dark word 'corruption' will sound. 'Corruption' is a silly concept; by applying it, the oligarchs eliminated state competition, for they can pay whatever they want to whomever they wish. The State must observe intricate arcane rules, while the tycoons have no such limits. As a result, they shape our minds and lives, making the State a poor legitimate king among powerful and wealthy barons.

The Corona crisis is a result of their activity. Now, a group of WHO scientists completed its four weeks inspection tour of Wuhan trying to find out how the virus found its way to humans; some of them think (as President Trump did) the virus escaped the Wuhan Lab. Matt Ridley of The Daily Telegraph concluded his piece analysing their findings: "A growing number of top experts [he provides the list] say that a lab leak remains a plausible scientific hypothesis to be investigated". It is rather unlikely, said the WHO , but other explanations (pangolins etc) also border on the improbable . The Chinese are understandably upset. Hua Chunying, the spokeswoman for the Foreign Affairs ministry (the Chinese counterpart for the State Department's Ned Price) rejected the idea saying, "The United States should open the biological lab at Fort Detrick, and invite WHO experts to conduct origin-tracing in the United States". The Guardian report said she promoted "a conspiracy theory that it came from a US army lab"; while Ms Hua accused the US of spreading "conspiracy theories and lies" tracing the source to Wuhan. Whatever we say is a fact-based result of diligent research; whatever you say is a conspiracy theory – both the US and China representatives subscribe to this mantra.

Our own Ron Unz made an excellent analysis of these accusations and counter-accusations in his April 2020 piece . He noted that the virus attack in Wuhan took place at the worst possible time and place for the Chinese; therefore, an incidental release (or intentional release by the Chinese) is extremely unlikely. Ron Unz suggested that it was an American biowarfare attack upon China. Didn't American people suffer from the disease? Yes, the US government is "grotesquely and manifestly incompetent " and they were likely to expect "a massive coronavirus outbreak in China would never spread back to America".

Perhaps, but a better explanation is that some evil tycoon(s) played the part of Karl Stromberg who intended to nuke both Moscow and New York causing war and world-wide devastation, as in the James Bond movie. It could be somebody like Bill Gates, who is a major investor in Wuhan Lab. A fact-checking site with its weasel language admitted that the Lab "has received funding from the Bill & Melinda Gates Foundation, but Bill Gates can hardly be called a "partner" in the laboratory." Sure, not a partner. Just an investor, and that is more important than a partner. And he is not the only one; other multi-billionaires also are involved in bioresearch, in vaccine manufacturing, in Big Pharma. "Glaxo, BlackRock, and Bill Gates are all partners, but not owners of Pfizer", says another fact-checker . "In 2015, Anthony Fauci did issue a USD 3.7 million grant to the Wuhan Institute of Virology, but not to "create the coronavirus" – the fact-checking site adds. Well, you could not possibly expect Fauci to word the grant in such a straightforward way, could you?

Perhaps it is too formidable a job even for an evil tycoon like Gates. A plot of several evil tycoons is more likely. Together, they could try to change the world and mankind to suit them.

The evil tycoons could poison China on their New Year holiday and take this uppity state down a ring or two. They could import the virus into the US to undermine and remove Trump whom they hated. (He was certain to win the elections but for Corona.) They could poison Europe to weaken it and make it more docile and obedient to their demands – and to buy their assets on the cheap. Corona and lockdown did not harm them for they are normally withdrawn from the bustle of the common man's life.

The billionaires control the media; that much we know, and the part media has played in the Corona crisis was enormous. The media coverage of the crisis has a huge hidden cost. Try to publish information you consider important on the front page of a newspaper. It will cost you a lot. Still, all newspapers belonging to the Billionaires' Media block beginning with the New York Times and ending with Haaretz gave at least a third of its front page to Corona news each day. The sheer cost of this advertising runs into billions. Will we ever know who paid for it?

Steven Soderbergh's (2011) film Contagion predicted many features of the Covid-19, notably the origin of the virus. In the film, the disease originates from bats in China and is spread through markets where contaminated pork meat is sold. How could Soderbergh (or his script writer Scott Z. Burns) possibly know eight years before the event that the contagion should originate in the Chinese bats? Who told him? Wouldn't you expect he knew something? Burns was instructed by WHO experts, the CNN site explains. Isn't it interesting that the same Bill Gates is a major donor of WHO? Is it entirely impossible that already in 2011 Gates' people began to leak some details of the future virus through their own WHO to Hollywood?

The tycoons could force a weak state to follow their instructions. Scientists do obey orders: otherwise, no grants, no positions. In April 2020, the German scientists were ordered , "to instill the fear of Corona". And they did it, as we learned this week, producing numbers of dead on demand.

It seems that tycoons gained most from the Corona Crisis. Their assets grew by trillions, while the assets of the middle classes decreased by the same amount. More importantly, all states suffered from the crisis; they took loans and credit, they were responsible for their citizens' health, while billionaires just had fun and enjoyed it. For this reason, I tend to dismiss the case against states, be it the US or China, while (some) billionaires appear the only possible villains.

These billionaires are able to influence people much better that the state. Consider Pierre Omidyar. Besides being the owner of eBay, he is the force behind hundreds of NGOs. His organisations form the 'progressive' agenda and train the foot soldiers of the Green Deal. Roslyn Fuller of Spiked-online checked the plethora of NGOs he employs.

She says his NGOs and charities are "engaged in 'social engineering' – that is, using their resources to artificially change the structure of society to how they think it should be. If successful this would amount to an extreme circumvention of democracy, utilising money not just to win elections, but to substitute paid or subsidised content for actual support, and thereby flip an entire political culture on to a different track by amplifying some voices and drowning out others."

He is just one of the Masters of Discourse, next to the infamous George Soros. Facebook, Google, Twitter and Amazon are even more powerful. The billionaires have immense clout and they decide what we can and can't say and write. Just last week Amazon banned my Cabbala of Power , a book that was sold by them for some ten years. The estimable The Unz Review is banned on Facebook and shadow-banned on Google. Twitter switched-off President Trump, showing who is the real boss of the United States. Probably almost all movements described as 'leftists' nowadays are engineered by the tycoons like Omidyar or Soros. True left had been left for dead on the battlefield of ideas.

The tycoons are directly involved in the Corona Crisis, because its results are good for them. And it means they have us where they want to have us, and they won't let us out. We are cancelled until we regain the government and cancel them.

SAGE, as British Corona management team rather presumptuously named itself (it included the ridiculous figure of Neil Ferguson, he of the millions of predicted deaths), already declared that lockdowns will be a part of British life for years to come, vaccine or no vaccine. The Guardian , the Voice of the Oligarchs, gently pooh-poohed them, for it is not good to declare what must happen right away. Let people have some hope, so they run to vaccinate themselves, and then only afterwards can we reveal that, sorry, it does not help, you still have to don a mask and observe social distance and, yes, suffer lockdowns. "It's much easier to follow the rules if we think of them as temporary."

The plotters' plans aren't secret; they were described by Klaus Schwab in his book The Great Reset . Schwab is not a great thinker, being merely a weak scientist with just a few publications, and not a good or even decent writer. He had to collaborate with a journalist Thierry Malleret to produce the book. He is just a voice for the tycoons. But the question is, will he/they get what they want?

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

Feb 20, 2021 | www.moonofalabama.org

vk , Feb 18 2021 18:40 utc | 142

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

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

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

[...]

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

[...]

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

[...]

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


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

Feb 19, 2021 | www.moonofalabama.org

Grieved , Feb 18 2021 0:45 utc | 52

@36 oldhippie

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

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

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

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

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

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

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


vk , Feb 18 2021 2:24 utc | 63

Texas Could Have Kept the Lights On

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

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

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

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

vetinLA , Feb 18 2021 2:27 utc | 64

Thom Hartmann podcast on the Texas SNAFU;

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

[Jan 22, 2021] The Coming New Order

Highly recommended!
Jan 22, 2021 | www.zerohedge.com

Authored by Jeff Thomas via InternationalMan.com,

For many years, a handful of people have postulated that those who control industry, finance and governments are essentially the same people – a cabal of sorts that have, over generations, solidified their relationships in order to gain greater wealth and power, whilst systematically making things ever more difficult for the free market to exist.

But why should this be? Surely, corporate leaders are more ardently capitalist than anyone else?

Well, on the surface, that might appear to make sense, but once a significant position of power has been achieved, those who have achieved it recognize that, since they've already reached the top, the primary concern changes. From then on, the primary concern becomes the assurance that no others are able to climb so high as they have.

At that point, they realise that their foremost effort needs to be a push toward corporatism – the merger of power between government and business. This is a natural marriage. The political world is a parasitic one. It relies on a continual flow of funding. The world of big business is a study in exclusivity – the ability to make it impossible for pretenders to the throne to arise. So, big business provides the cash; government provides protective legislation that ensures preference for those at the top.

In most cases, this second half of the equation does not mean a monopoly for just one corporation, but a monopoly for a cabal – an elite group of corporations.

This corporatist relationship has deep roots in the US, going back over one hundred years. To this day, those elite families who took control of oil, steel, banking, motor vehicles and other industries a century ago, soon created a takeover of higher learning (universities), health (Big Pharma) and "Defense" (the military-industrial complex).

Through legislation, the US was then transformed to ensure that all these interests would be catered to, creating generations of both control and profit.

https://lockerdome.com/lad/13084989113709670?pubid=ld-dfp-ad-13084989113709670-0&pubo=https%3A%2F%2Fwww.zerohedge.com&rid=www.zerohedge.com&width=830

Of course, "profit" should not be an evil word, but under crony capitalism, it becomes an abomination – a distortion of the free market and the death of laissez faire economics.

Certainly, this sort of collectivism is not what Karl Marx had in mind when he daydreamed about a workers' paradise in which business leaders retained all the risk and responsibility of creating and building businesses, whilst the workers had the final word as to how the revenue would be distributed to the workers themselves.

Mister Marx failed in being objective enough to understand that if the business creator took all the risk and responsibility but gave up the ability to decide what happened to the revenue, he'd never bother to open a business. Even a shoeshine boy would reject such a notion and elect to go on the dole, rather than work.

Mister Marx sought more to bring down those who were successful than to raise up those who were not, yet he unwittingly created a new idea – corporate collectivism – in which the very people he sought to debase used the appeal of collectivist rhetoric to diminish both the freedoms and wealth of the average worker.

On the surface, this might appear to be a hard sell – to get the hoi polloi into the net – but in fact, it's quite easy and has perennially been effective.

Hitler's New Order was such a construct – the promise to return Germany to greatness and the German people to prosperity through increasingly draconian laws, warfare and an economic revolving door between government and industry.

Of course, a major influx of capital was required – billions of dollars – and this was eagerly provided by US industry and banks. Heads of New York banks not only funded Nazi industry; families such as the Fords, Rockefellers, Morgans, etc., sat on the boards of German corporations.

The Nazi effort failed, as they underestimated the Russian will to fight to the death. (Eighty percent of all German Army deaths were due to the Russian campaign.)

But those in New York were able to regroup and be first in the queue for the restructuring of German industry after the war and, ultimately, profited handsomely.

But most significantly, the idea of corporatist collectivism did not die. Even before the war, the same group of families and corporations had drawn up the plan for Franklin Roosevelt's New Deal.

Mister Roosevelt was a dyed-in-the-wool Wall Street man and a director of New York banks. In the 1930s and early 1940s, he created, as president, a revolving door that favoured large corporations, whilst the average American was consciously kept at the subsistence level through government entitlements.

The scam worked. Shortsighted Americans not only were grateful; they deified him for it.

Likewise, John Kennedy's New Frontier sought to revitalize the concept, as did Lyndon Johnson's Great Society: Give the little people entitlements that keep them little. Tax smaller businesses and create a flow of tax dollars to the elite industries, who, in turn, provide monetary favours to the political class.

The Green New Deal is merely the latest corporate collectivist scheme on the list.

Corporate collectivism can be defined as a system in which the few who hold the legal monopolies of finance and industry gain an overriding control over all others, and in so doing, systematically extract wealth from them.

Today, this system has become so refined that, although the average American has a flat screen TV and an expensive smartphone, he cannot raise $400 to cover an emergency that occurs in his life. He is, for all practical purposes, continually bankrupt, but still functioning in a zombie-like existence of continual dependency.

This, on the surface, may not seem all that dangerous, but those who cannot buy their way out of a small emergency are easily controlled. Just create an emergency such as an uber-virus and that fact will be illuminated quickly.

In order to maximise compliance in a population, maximise their dependence.

As stated above, this effort has been in play for generations. But it is now reaching a crescendo. It's now up to speed in most of the former Free World and those who hold the strings are ready for a major step forward in corporate collectivism.

In the coming year, we shall see dramatic changes appearing at a dizzying rate. Capital controls , migration controls, internal movement controls, tax increases, confiscation of assets and the removal of "inalienable" rights will all be coming into effect – so quickly that before the populace can even grasp the latest restrictions, new ones will be heaped on.

As this unfolds, we shall witness the erosion of the nation-state. Controls will come from global authorities, such as the UN, the IMF and the WEF. Organisations that have no formal authority over nations will increasingly be calling the shots and people will wonder how this is possible. Elected officials will increasingly become mere bagmen, doing the bidding of an unelected ruling class.

The changes that take place will be not unlike a blanket that is thrown over humanity.

The question then will be whether to, a) give in to this force, b) to fight it and most likely fall victim to it, or c) seek a means to fall outside the perimeter of the blanket.

* * *

Unfortunately most people have no idea what really happens when a government goes out of control, let alone how to prepare The coming economic and political crisis is going to be much worse, much longer, and very different than what we've seen in the past. That's exactly why New York Times best-selling author Doug Casey and his team just released an urgent video. Click here to watch it now .

[Jul 26, 2020] Patriotic Dissent- How A Working-Class Soldier Turned Against -Forever Wars- -

Jul 26, 2020 | www.zerohedge.com

Patriotic Dissent: How A Working-Class Soldier Turned Against "Forever Wars"


by Tyler Durden Sat, 07/25/2020 - 00:05 Twitter Facebook Reddit Email Print

Authored by Steve Early and Suzanne Gordon via Counterpunch.org,

When it comes to debate about US military policy, the 2020 presidential election campaign is so far looking very similar to that of 2016. Joe Biden has pledged to ensure that "we have the strongest military in the world," promising to "make the investments necessary to equip our troops for the challenges of the next century, not the last one."

In the White House, President Trump is repeating the kind of anti-interventionist head feints that won him votes four years ago against a hawkish Hillary Clinton. In his recent graduation address at West Point, Trump re-cycled applause lines from 2016 about "ending an era of endless wars" as well as America's role as "policeman of the world."

In reality, since Trump took office, there's been no reduction in the US military presence abroad, which last year required a Pentagon budget of nearly $740 billion. As military historian and retired career officer Andrew Bacevich notes , "endless wars persist (and in some cases have even intensified ); the nation's various alliances and its empire of overseas bases remain intact; US troops are still present in something like 140 countries ; Pentagon and national security state spending continues to increase astronomically ."

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When the National Defense Authorization Act for the next fiscal year came before Congress this summer, Senator Bernie Sanders proposed a modest 10 percent reduction in military spending so $70 billion could be re-directed to domestic programs. Representative Barbara Lee introduced a House resolution calling for $350 billion worth of DOD cuts. Neither proposal has gained much traction, even among Democrats on Capitol Hill. Instead, the House Armed Services Committee just voted 56 to 0 to spend $740. 5 billion on the Pentagon in the coming year, prefiguring the outcome of upcoming votes by the full House and Senate.

An Appeal to Conscience

Even if Biden beats Trump in November, efforts to curb US military spending will face continuing bi-partisan resistance. In the never-ending work of building a stronger anti-war movement, Pentagon critics, with military credentials, are invaluable allies. Daniel Sjursen, a 37-year old veteran of combat in Iraq and Afghanistan is one such a critic. Inspired in part by the much-published Bacevich, Sjursen has just written a new book called Patriotic Dissent: America in the Age of Endless War (Heyday Books)

Patriotic Dissent is a short volume, just 141 pages, but it packs the same kind of punch as Howard Zinn's classic 1967 polemic, Vietnam: The Logic of Withdrawal . Like Zinn, who became a popular historian after his service in World War II, Sjursen skillfully debunks the conventional wisdom of the foreign policy establishment, and the military's own current generation of "yes men for another war power hungry president." His appeal to the conscience of fellow soldiers, veterans, and civilians is rooted in the unusual arc of an eighteen-year military career. His powerful voice, political insights, and painful personal reflections offer a timely reminder of how costly, wasteful, and disastrous our post 9/11 wars have been.

Sjursen has the distinction of being a graduate of West Point, an institution that produces few political dissenters. He grew up in a fire-fighter family on working class Staten Island. Even before enrolling at the Academy at age 17, he was no stranger to what he calls "deep-seated toxically masculine patriotism." As a newly commissioned officer in 2005, he was still a "burgeoning neo-conservative and George W. Bush admirer" and definitely not, he reports, any kind of "defeatist liberal, pacifist, or dissenter."

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Sjursen's initial experience in combat -- vividly described in his first book, Ghost Riders of Baghdad: Soldiers, Civilians, and the Myth of The Surge (University Press of New England) -- "occurred at the statistical height of sectarian strife" in Iraq.

"The horror, the futility, the farce of that war was the turning point in my life," Sjursen writes in Patriotic Dissent .

When he returned, at age 24, from his "brutal, ghastly deployment" as a platoon leader, he "knew that the war was built on lies, ill-advised, illegal, and immoral." This "unexpected, undesired realization generated profound doubts about the course and nature of the entire American enterprise in the Greater Middle East -- what was then unapologetically labeled the Global War on Terrorism (GWOT)."

A Professional Soldier

By the time Sjursen landed in Kandahar Province, Afghanistan, in early 2011, he had been promoted to captain but "no longer believed in anything we were doing."

He was, he confesses, "simply a professional soldier -- a mercenary, really -- on a mandatory mission I couldn't avoid. Three more of my soldiers died, thirty-plus were wounded, including a triple amputee, and another over-dosed on pain meds after our return."

Despite his disillusionment, Sjursen had long dreamed of returning to West Point to teach history. He applied for and won that highly competitive assignment, which meant the Army had to send him to grad school first. He ended up getting credentialed, while living out of uniform, in the "People's Republic of Lawrence, Kansas, a progressive oasis in an intolerant, militarist sea of Republican red." During his studies at the state university, Sjursen found an intellectual framework for his "own doubts about and opposition to US foreign policy." He completed his first book, Ghost Riders , which combines personal memoir with counter-insurgency critique. Amazingly enough, it was published in 2015, while he was still on active duty, but with "almost no blowback" from superior officers.

Before retiring as a major four years later, Sjursen pushed the envelope further, by writing more than 100 critical articles for TomDispatch and other civilian publications. He was no longer at West Point so that body of work triggered "a grueling, stressful, and scary four-month investigation"by the brass at Fort Leavenworth, during which the author was subjected to "a non-publication order." At risk were his career, military pension, and benefits. He ended up receiving only a verbal admonishment for violating a Pentagon rule against publishing words "contemptuous of the President of the United States." His "PTSD and co-occurring diagnoses" helped him qualify for a medical retirement last year.

Sjursen has now traded his "identity as a soldier -- the only identity I've known in my adult life -- for that of an anti-war, anti-imperialist, social justice crusader," albeit one who did not attend his first protest rally until he was thirty-two years old. With several left-leaning comrades, he started Fortress on A Hill, a lively podcast about military affairs and veterans' issues. He's a frequent, funny, and always well-informed guest on progressive radio and cable-TV shows, as well as a contributing editor at Antiwar.com , and a contributor to a host of mainstream liberal publications. This year, the Lannan Foundation made him a cultural freedom fellow.

In Patriotic Dissent , Sjursen not only recounts his own personal trajectory from military service to peace activism. He shows how that intellectual journey has been informed by reading and thinking about US history, the relationship between civil society and military culture, the meaning of patriotism, and the price of dissent.

One historical figure he admires is Marine Corps Major General Smedley Butler, the recipient of two Medals of Honor for service between 1898 and 1931. Following his retirement, Butler sided with the poor and working-class veterans who marched on Washington to demand World War I bonus payments. And he wrote a best-selling Depression-era memoir, which famously declared that "war is just a racket" and lamented his own past role as "a high-class muscle-man for Big Business, for Wall Street, and for the Bankers."

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Sjursen contrasts Butler's anti-interventionist whistle-blowing, nearly a century ago, with the silence of high-ranking veterans today after "nineteen years of ill-advised, remarkably unsuccessful American wars." Among friends and former West Point classmates, he knows many still serving who "obediently resign themselves to continued combat deployments" because they long ago "stopped asking questions about their own role in perpetuating and enabling a counter-productive, inertia-driven warfare state."

Sjursen looks instead to small left-leaning groups like Veterans for Peace and About Face: Veterans Against the War (formerly Iraq Veterans Against the War), and Bring Our Troops Home. US, a network of veterans influenced by the libertarian right. Each in, its own way, seeks to "reframe dissent, against empire and endless war, as the truest form of patriotism." But actually taming the military-industrial complex will require "big-tent, intersectional action from civilian and soldier alike," on a much larger scale. One obstacle to that, he believes, is the societal divide between the "vast majority of citizens who have chosen not to serve" in the military and the "one percent of their fellow citizens on active duty," who then become part of "an increasingly insular, disconnected, and sometimes sententious post-9/11 veteran community."

Not many on the left favor a return to conscription.

But Sjursen makes it clear there's been a downside to the U.S. replacing "citizen soldiering" with "a tiny professional warrior caste," created in response to draft-driven dissent against the Vietnam War, inside and outside the military. As he observes:

"Nothing so motivates a young adult to follow foreign policy, to weigh the advisability or morality of an ongoing war as the possibility of having to put 'skin in the game.' Without at least the potential requirement to serve in the military and in one of America's now countless wars, an entire generation -- or really two, since President Nixon ended the draft in 1973–has had the luxury of ignoring the ills of U.S. foreign policy, to distance themselves from its reality ."

At a time when the U.S. "desperately needs a massive, public, empowered anti-war and anti-imperial wave" sweeping over the country, we have instead a "civil-military" gap that, Sjursen believes, has "stifled antiwar and anti-imperial dissent and seemingly will continue to do so." That's why his own mission is to find more "socially conscious veterans of these endless, fruitless wars" who are willing to "step up and form a vanguard of sorts for revitalized patriotic dissent." Readers of Sjursen's book, whether new recruits to that vanguard or longtime peace activists, will find Patriotic Dissent to be an invaluable educational tool. It should be required reading in progressive study groups, high school and college history classes, and book clubs across the country . Let's hope that the author's willingness to take personal risks, re-think his view of the world, and then work to change it will inspire many others, in uniform and out.

me name=


Justus_Americans , 59 minutes ago

Do we need to be in 160 countries with our military and can we afford it?

Cat Daddy , 1 hour ago

I am all for bringing the troops home except for this one unnerving truth; nature abhors a vacuum, specifically, when we pull out, China moves in. A world dominated by the CCP will be a dangerous place to be. When we leave, we will need to make sure our bases are safely in the hands of our friends.

dogbert8 , 1 hour ago

War is effectively the way the U.S. has done business since the Spanish American War, our first imperial conquests. War is how we ensure big business has the materials and markets they demand in return for their support of political parties and candidates. War is the only area left with opportunities for growth and profit. Don't think for a minute that TPTB will ever let us stop waging war to get what we (they) want.

TheLastMan , 2 hours ago

If you are new to zh all you need to do is study PNAC and the related nature of all parties to understand the criminality of USA militarization and for whose benefit it serves

Anonymous IX , 2 hours ago

I have written many times on this platform the exact same sentiments.

I am most disheartened by the COVID + Antifa/BLM Riots because of the facts this author presents.

We are distracted with emotional and highly volatile MASSIVELY PROPAGANDIZED stories by MSM (I don't watch) while the real problem in the world is as the author describes above.

We are war-mongering nation who needs to bring our troops home and disband over half of our overseas installations and bases.

We have no right to levy economic sanctions to impoverish, sicken, and weaken the citizens of Iran, Cuba, Venezuela, or anywhere else.

Yet, we run around arguing about masks and who can go into a restaurant or toppling statutes and throwing mortar-type fireworks at federal officers. This is what we do instead of facing a real problem which is that we are war-mongering nation with no moral/ethical conscience. These scraggily bearded white Antifas need to WTFU and realize who their true enemy.

Oh, wait. They work for the true enemy! Get it?

Max21c , 1 hour ago

We have no right to levy economic sanctions to impoverish, sicken, and weaken the citizens of Iran, Cuba, Venezuela, or anywhere else.

I don't agree with the economic sanctions nonsense thing as they seem to be more of a crutch for people that are not any good at planning, strategy, analytical thinking, critical thinking, strategic thinking, and lack much in the way of talent or creativity or intellectual acumen or intellectual skills...I believe there's around just shy of 10k economic sanctions by Washington...

But the USA does have the right to receive or refuse to receive foreign Ambassadors and Consuls and to recognize or not recognize other nations governments thus it does have some degrees of the right to not trade or engage in commerce with other nations to a certain extent... per imports and exports... et cetera... though it's not necessarily an absolute right or power

IronForge , 2 hours ago

Sjursen may admire General Butler; but he doesn't seem to know that several of the General's Descendants Served in the US Military.

Sjursen isn't Butler. The General Prevented a Coup in his Time.

The USA are a Hegemony whose KleptOchlarchs overtook the Original Constitutional Republic.

PetroUSD, MIC, Corporate Expansion-Conquest, AgriGMO, and Pharma Interests Span the Globe.

Wars are Rackets; and Societies to Nation-States have waged them over Real Estate, Natural Resources, Trade Routes, Industrial Capacity, Slavery, Suppresive Spite, Religious/Ideological Zeal, Economic Preservation, and Profiteering Greed.

YET, Militaries are still formed by Nation-States to Survive and for Some - Thrive above such Competitive Existenstential Threats.

*****

The Hegemony are running up against New Shifts in Global Power, Systems, and Influences; and are about to Lose their Unilateral Advantages. The Hegemon themselves may suffer Societal Collapses Within.

Sjursen should read up on Chalmers Johnson. Instead of trying to Coordinate Ineffective Peace Demonstrations, the Entire Voting/Political Contribution/Candidacy Schemes should be Separated from the Oligarchy of Plutocrats and Corporate/Political KleptOchlarchs.

Without Bringing the Votes back to the Collective Hands of Citizenry Interests First and Foremost, the Republic are Forever Conquered; and the Ethical may have to resort to Emigration and/or Secession.

Ink Pusher , 2 hours ago

Nobody rides for free,there's always a cost and those who can't pay in bullion will often pay in bodily fluids of one form or another.

Profiteers that create warfare for profit are simply parasitical criminals and should not be considered a "special breed" when weighed upon the Scales of Justice.

gzorp , 2 hours ago

Read 'Starship Troopers' by Robert A Heinlein (1959) pay especial attention to the "History and Moral Philosophy" courses... that's where his predictions for the future course of 'America's' future appear.... rather accurately. Heinlein was a 1930's graduate of Annapolis (Navy for you dindus and nohabs).....

A DUDE , 2 hours ago

t's not just the war machine but the entire system, the corporatocracy, of which the MIC is a part. And there is no way to change the system from within the system because whatever is anti-establishment becomes absorbed and neutered and part of the system.

So why would anyone vote is my question? 11. Trump and Biden Are Far Right of Center and Running to Offenbach Nearly Every Day

sbin , 2 hours ago

Tulsi Gabbard ran on anti interventionism foreign policy.

Look how fast the DNC disappeared her.

Of course destroying Kamala Harris in a debate and going after the ancient evil Hitlery sealed her fate.

BarkingWolf , 2 hours ago

In reality, since Trump took office, there's been no reduction in the US military presence abroad, which last year required a Pentagon budget of nearly $740 billion. As military historian and retired career officer Andrew Bacevich notes , "endless wars persist (and in some cases have even intensified ); the nation's various alliances and its empire of overseas bases remain intact; US troops are still present in something like 140 countries ; Pentagon and national security state spending continues to increase astronomically ."

Now wait just a minute there mister, that sounds like criticism of the Donald John PBUH PBUH PBUH ... you can't do that ... the cult followers will call you a leftist and a commie if you point out stuff like that even if it is objectively true! That's strike one, punk.

An Appeal to Conscience

Even if Biden beats Trump in November, efforts to curb US military spending will face continuing bi-partisan resistance.

November doesn't have anything to do with anything really. The appeal to conscience is wasted. The appeal would be better spent on removing the political class that is on the AIPAC dole and have dual citizenship in a foreign country in the ME while pretending to serve America while they are members of Congress. That's only the tip of the spear ... and that is a nonstarter from the get go.

Sjursen skillfully debunks the conventional wisdom of the foreign policy establishment, and the military's own current generation of "yes men for another war power hungry president."


I don't think Trump is necessarily a war power hungry president. While it is true that we have not withdrawn from Syria and basically stole their oil as Trump has repeated promised he would do, it is also true that Trump has yet to deliver Israels war with Iran and in fact had called back an invasion of Iran ten minutes before a flotilla of US warships was about to set sail to ignite such an invasion leaving Tel Aviv not only aggrieved, but angry as well.

Sjursen has now traded his "identity as a soldier -- the only identity I've known in my adult life -- for that of an anti-war, anti-imperialist, social justice crusader," albeit one who did not attend his first protest rally until he was thirty-two years old. With several left-leaning comrades ...

Okay, this is where you are starting to lose me .... i't like listening to a concert and suddenly the music is hitting sour notes that are off key, off tempo, and don't seem to fit somehow.

Marine Corps Major General Smedley Butler, the recipient of two Medals of Honor for service between 1898 and 1931. Following his retirement, Butler sided with the poor and working-class veterans who marched on Washington to demand World War I bonus payments. And he wrote a best-selling Depression-era memoir, which famously declared that "war is just a racket" and lamented his own past role as "a high-class muscle-man for Big Business, for Wall Street, and for the Bankers."

"On July 28, 1932, at the command of Gen. Douglas MacArthur, they marched down Pennsylvania Avenue toward the Capitol to launch an attack on World War I veterans. " https://www.stripes.com/news/us/the-veterans-were-desperate-gen-macarthur-ordered-us-troops-to-attack-them-1.480665

Butler was correct, war especially nowadays, is a racket that makes rich people who never seem to get their hands dirty, even richer. As one grunt put it long ago, "it's a dirty job, but somebody has to do it."

That "somebody" is going to be the kids of the little people (the real high-class muscle-men ) who are hated by their political class overlords even as the political class are worshipped as gods.

Sjursen looks instead to small left-leaning groups like Veterans for Peace and About Face: Veterans Against the War (formerly Iraq Veterans Against the War), and Bring Our Troops Home. US, a network of veterans influenced by the libertarian right.

The problem here is that the so-called "left" brand has always been about war and the capitalism of death.

The Democrat party is really the group that started the American civil war for instance, they are the ones behind legacy of Eugenists like Margaret Sanger who was a card carrying Socialist who founded the child murder mill known today as Planned Parenthood that sadly still exists under Trump but has turned into the industrialized slaughter of children ...even after birth so that their organs can be "harvested" for profit.

Sjursen's affinity for "the left" as saintly purveyors of peace, goodness, love, and life strikes me as rather disingenuous. Then he seems to argue if I read the analysis correctly that conscription will somehow be the panacea for the insatiable appetite for war?

One false flag such as The Gulf of Tonkin or 911 or even Perl Harbor or the Sinking of the Lusitania or the assassination of an Arch Duke ... is all that is really needed to arouse the unbridled hoards to march off to battle with almost erotic enthusiasm -the political class KNOWS IT!

Amendment X , 2 hours ago

And don't forget President Wilson (D) who was re-elected on the platform "He kept us out of the war" only to drag U.S. into the hopeless European Monarchary driven WWI.

11b40 , 1 hour ago

Yo! Low class muscle man here, and I have to agree with bringing back the draft. It should never have been eliminated, and is the root of the golbalists abiity to keep us in Afghanistan, and other parts of the ME, for going on 20 years.

Skin in the game. It means literally everything. As noted we now have 2 generations of men who never had to give much thought at all to what's happening around the world, and how America is involved....and look at the results. It would be a much different situation today if all those 18 year olds had to face the draft board with an unforgiving lottery.

Yes, one false falg can whip up the country to a war time fever pitch, but unless there is a real, serious threat, the fever cannot be maintained. The 1969 draft lottery caught me when I stayed out the first semester of my senior year. Didn't want to go, but accepted my fate and did the best job I could to stay alive and keep those around me as safe as possible. In 1966, I was in favor of the war, and was about to go Green Beret on the buddy system. We were going to grease gooks with all the enthusiasm of John Wayne. My old man, an artillery 1st Sgt at the time in Germany, talked me out of it. More like get your *** on a plane back to the States and into college, befroe i kick it up around your shouders. A WW2 & Korea vet, he told me then it was the wrong war, in the wrong place, at the wrong time.

The point is, when kids are getting drafted, Mom's, Dad's, and everyone else concerned with the safety of their friends & relatives, start paying attention and asking hard questions of politicians. Using Afghanistan as an example, we would have been on the way out by the 2004 election cycle, or at max before the next one in 2008. That was 12 years ago, and we are still there.

I addition, the reason we went would have been more closely examined, and there may have been a real investigtion into 9/11. Plus, I am convinced that serving your country makes for a better all around citizen, and God knows, we need better citizens.

Cassandra.Hermes , 2 hours ago

Trump and Pompeo started new cold war with China, but have no way to back up their threats and win it!! When i was in Kosovo peace corps i heard so many stories from Albanian who were blamed to be Russian or American spy because of double cold war against Albania. Trump and Pompeo just gave excuse to Xi to blame anyone who protest as American spy. BBC were showing China's broadcast of the protests in Oregon to Hong Kong with subtitle "Do you really want American democracy?", LMFAO

Max21c , 2 hours ago

Joe Biden has pledged to ensure that "we have the strongest military in the world," promising to "make the investments necessary to equip our troops for the challenges of the next century, not the last one."

The United States shall continue to have a weak military until it starts to fix its foreign policy and diplomacy. You cannot have the strongest military in the world if you lack a good foreign policy and good diplomacy. Brains are a lot more important than battleships, battalions, bullets, barrels, or bombs. Get a frickin' clue you friggin' Washington morons.

Washington is weak because they are dumb. Blind, deaf, and dumb.

Heroic Couplet , 2 hours ago

Too little, too late. Great ad for a book that will be forgotten in a week. Read Bolton's book. The minute Trump tries to reduce troops, Bolton is right there, saying "No, we can't move troops to the perimeter. No, we can't move troops from barracks to tents at the perimeter." Who needs AI?

Erik Prince wrote 3.5 years ago that 4th gen warfare consists of cyberwarfare and bio-weapons. The US military is fooked. There's probably an interesting book to be researched: How do Republicans feel about contracting COVID-19 after listening to Trump fumble?

ChecksandBalances , 3 hours ago

Blame the voters. Run on a platform to reduce military and police spending. See how many of those lose. Probably all of them. You have to stop feeding the beast. This is a slogan Trump correctly said but as usual didn't actually mean. We should cut all military and police spending by 1/2 and then take the remaining money and build a smarter, more efficient military and police force.

Max21c , 3 hours ago

It's not just the "Deep State." It's Washingtonians overall. It's Deep Crazy. They're all Deep Crazy! They're nuts. And the rare exceptions that may know better and have enough common sense to know its wrong to sick the secret police on innocent American civilians aren't going to say anything or do anything to stop it. The few that know better in foreign policy aren't going to say anything or do anything against the new Cold Wars on the Eastern Front against China or on the Western Front against Russia since they're not willing to go up against the Regime. So the Regimists know they have carte blanche to persecute or terrorize or go after any that stand in their way. This is how tyrannies and police states operate. It's the nature of the beast. At a minimum they brow beat people into submission. People don't want to stick their neck out and risk going up against the Regime and risk losing to the Regime, its secret police, and the powers that be. They shy away from anything that would bring the Regime and its secret police and its radicals, extremists, fanatics, and zealots their way.

nonkjo , 4 hours ago

It's okay to be against "forever war" and still not have to be a progressive douchbag.

Sjursen is an unprincipled ******** artist. He leaves Iraq disillusioned as a lieutenant but sticks around long enough for them to pay for his grad school and give him some sweet "resume building" experiences that he can stand on to sell books? FYI, from commissioning time as a second lieutenant to promotion to captain is 3 years...that means Sjusen was so disillusioned that he decided to stick around for 12 more years which is about 9 years longer than he actually needed to as an Academy grad (he only had to serve 6 unless he elected to go to grad school).

The bottom line is Sjusen capitalizes on people not knowing how the military works. That is, that his own self-interest far outweighs his the principles he espouses. Typical leftist hypoctite.

Max21c , 4 hours ago

...the U.S. "desperately needs a massive, public, empowered anti-war and anti-imperial wave ..."

Perhaps the USA just needs a better foreign policy. Though we all know that's not going to happen with the flaky screwballs of Washington and the flaky screwballs in the Pentagon, CIA, State Department, foreign policy establishment, think tanks et cetera.

Minor technical point: the time for the "anti-imperial wave" was before Washingtonians destroyed much of the world and created their strategic blunders and disastrous foreign policy. You folks all went along with this nonsense and now you have your quagmires, forever wars, and numerous trouble spots that have popped up here and there along the way to boot.

Pottery barn rule: you broke it and you own it and it's yours...Ma'am please pay at the register on the way out...Sorry Ma'am there's no more free gluing...though the gluing specialist may be in on the third Thursday this month though it's usually the second Tuesday each month...

Contemporaneously, in the same vein the American public has been brainwashed into going along with the new Cold Wars on the Western Front against Moscow and the even newer Cold War on the Eastern Front against Beijing. It's like P.T. Barnum said "There's a sucker born every minute," and you fools in the American public just keep buying right in to the brainwashing. They're now successfully indoctrinating you into buying into their new Cold Wars with Russia and China. The Cold War on the Eastern Front versus Peking is more getting more fanciful attentions at the moment and the Cold War on the Western Front has temporarily been relegated to the back burner but they'll move the Western Front Cold War from simmer to boil over whenever it suits their needs. It's just a rendition of the Oceania has always been at war with East Asia and Eurasia is our friend are just gameplays right out of George Orwell's 1984.

Most of the quagmires can be fixed to a certain extent by applying some cement and engineering to the quicksand and many of the trouble spots can become more settled and less unstable if not stable in some instances. Even some of the more serious strategic problems like the South China Sea, North Korean nuclear weapons development, and potential Iranian nuclear weapons development can still be resolved through peaceful strategies and solutions.

In re sum, while I won't disparage a peace movement I do not believe it is either necessary nor proper simply because you will not solve anything through a peace movement. The sine qua non or quintessential element is simply to end one of these wars successfully through a peaceful diplomatic solution or solve one of these serious foreign policy problems through diplomacy which is something that hasn't been the norm since the downfall of the Berlin Wall, is no longer in favor, and which is the necessary element to prove that peace can be achieved through strategy and diplomacy and thereby change the course of the country's future.

In foreign affairs the foreign policy establishment has its pattern of behavior and it is that pattern of behavior that has to be changed. It's the mindset of the Washingtonians & elites that has to be changed. Just taking to the streets won't really change their ways or their beliefs for any significant part of the duration. They may pay lip service to peace & diplomacy but it won't win out in their minds in the long run. They are so warped in their views and beliefs that it'll have little or no effect over the long haul. As soon as the protests dissipate they'll be right back at it, back to their bad ways and bad behavior.

Son of Captain Nemo , 4 hours ago

For the past 19 years... And as Anti-War as you will ever get!...

https://action.ae911truth.org/p/salsa/web/common/public/signup?signup_page_KEY=11418&killorg=True&loggedOut=True

https://www.ae911truth.org/grandjury

P.S.

Remind 0range $hit $tain ( https://www.paulcraigroberts.org/2016/11/14/trump-im-reopening-911-investigation/ ) that if he makes this a campaign pledge and an issue for debate he maybe can avoid a war crimes tribunal given how much has already been spent on the war machine ( https://www.zerohedge.com/markets/944-trillion-reasons-why-fed-quietly-bailing-out-hedge-funds )!

Hatterasjohn , 4 hours ago

Was it George Carlin that said " if voting made a difference they wouldn't let us do it " ? The only way to stop these forever wars is for people to stop joining the military. Parents should teach their children that joining the military and trotting off to some country to fight a war for the elite is not being patriotic . I was in the military from 1964 -1968. When Lyndon Johnson became president he drug out the Vietnam war as long as he could. Oh ! Lady Byrd Johnson bought Decon Company [ rat poison ] when most people never heard of it. Johnson bought this rat poison , government paid for ,at an inflated price . Sent ship loads of it to Vietnam .Never mind all the Americans and so called enemy killed.. Jane Fonda , Hanoi Jane , was really a hero who helped save countless lives by helping to end the war. Tommy and **** Smothers , Smother Brothers , spoke out against the war . Our government had them black balled from TV. Our government is probably as corrupt as any other country.

No-Go zone , 5 hours ago

https://www.zerohedge.com/news/2018-03-19/top-us-general-says-american-troops-should-be-ready-die-israel

cowboyted , 7 hours ago

A piece of irony, one of our greatest generals was Dwight Eisenhower, the Allied Supreme Commander in WWII and two term president. He kept the peace for almost 10 years and warned Americans to beware of the "military-industrial complex." Most military men never want war, they just make sure they are ready if it comes. We have had the military industrial complex for way too long, it needs to be reduced and we need more generals to run for president, Gen. Flynn maybe? I'll also take Schwartzkoff.

cowboyted , 7 hours ago

The U.S. should only use our military if we are attacked, period. Otherwise, as Jefferson astutely stated, a standing army is a threat to democracy.

captain noob , 7 hours ago

Capitalism has no morals

Profit is the driving force of every single thing

cowboyted , 7 hours ago

The U.S. should only use our military if we are attacked, period. Otherwise, as Jefferson astutely stated, a standing army is a threat to democracy.

Chief Joesph , 7 hours ago

After what General Smedley Butler had to say and warned us about, here we are, 90 years later, doing the very same thing. Goes to show how utterly dumb, unprogressive, sheepish, and Medieval Americans really are. And you thought this is what makes America Great????

cowboyted , 8 hours ago

The U.S. Constitution provides for a "national defense." Yet, the last time we were attacked by a foreign nation was on Dec. 7, 1941 in which, the Congress declared war on Japan. Yet, in the past 100 years our country's leaders have convinced Americans that we can wage war if the issue concerns our "national INTEREST." This is wrong and needs to be deleted and replaced with our Constitution's language. Also, Congress is the ONLY Constitutional authority to declare war, not the executive branch. Too many countries, including the U.S., spend too much money preparing for war on levels of destruction that are unnecessary. We must attain a new paradigm with leading countries to achieve a mutual understanding that the people of the world are better off with jobs, food, families, peace, and a chance at a better life, filled with hope, faith, and flourishing communities. Things have to change.

transcendent_wannabe , 8 hours ago

I have to agree in sentiment with the author, but the reality of humans on earth almost demands constant war, it is the price we pay for the modern city lifestyle. There are various reasons.

1. Ever since WW1, the country has become citified, and the old peaceful country farm life was replaced with the rat race of industrial production. Without war, there is no need for the level of industrial production required to give full employment to the overpopulated cities. People will scream for war and jingoism when they have no city jobs. How do you deal with that? Sure, War is a Racket, but so far a necessary racket.

2. Every 20 years the military needs a real shooting war to battle test its upcoming soldiers and new equipment. Now the battles are against insurgencies... door-to-door in cities and ghettos, and new tactics need to be field tested. If the military goes more than 20 years without a real shooting war, they lose the real men, the sargeant majors, who just become fat pot bellied desk personel without the adrenaline of a real fight.

3. Humans inately like to fight. Even children, boys wrestle, girls taunt one another. There is no way discovered yet to keep people from turning violent in their attempts to steal what others have, or to gain dominance thru physical intimidation. Without war, gangs will form and fight over territorial boundaries. There is no escaping it.

4. Earth is where the battle field is, Battlefield Earth. There is no fighting allowed in heaven, so Earth is where souls come to fight. Nobody on earth likes it, but fighting and war is here to stay, and you should really use this life to find out how to transcend earth and get to a place where war is not needed or allowed, like heaven or Valhalla.

Tortuga , 8 hours ago

So. He thinks the crooked, grifting, regressive hate US murdering dim pustules aren't the warmongering, globalist, hate US, crooked, grifting, murdering republicrats. What a mo ron.

HenryJonesJr , 8 hours ago

Real conservatives were always against foreign intervention. It was the Left that embraced foreign wars (Wilson / Roosevelt / Truman / Johnson).

messystateofaffairs , 8 hours ago

From my perspective being a professional goon to serve the greater glory of international criminals, is, aside from having to avoid the mirror, way too much hard and dangerous work for the money. As a civilian of a society run by criminals on criminal imperialist principles, I have no literal PTSD type of skin in that filthy game, but like most citizens, knowing and unknowing, I do swim in that sewer everyday, doing my best to avoid bumping into the larger turds. My "patriotism" lies where the turds are fewest, anywhere in the world that might be.

bh2 , 8 hours ago

The threat to US interests is not in the ME (apart from Israel). It's in the Pacific.

NATO was never intended to be a defense arrangement perpetually funded by the US. Once stood up and post-war economies in Europe were restored, it was supposed to be a European defense shield with the US as ultimate backup. Not as a sugar-daddy for wealthy nations. Now that Russia is no longer situated to attack through the Fulda Gap, NATO is a grotesque expression of Parkinson's Law writ large.

China is a real threat to US interests. That's obvious simply by consulting a map. Military assets committed to engagement in theaters that no longer seriously matter is feckless and spendthrift. Particularly when Americans are put in harm's way with no prospect of either winning or leaving.

Worse yet is the accelerating prospect of being drawn into conflict in the South China Sea because fewer than decisive US and allied assets are deployed there.

While nations are now responding to that threat (including Japan, who are re-arming), China must realize a successful Taiwan invasion faces steadily diminishing prospects. They must act soon or give up the opportunity. Moreover, the CCP are loosing face with their own people because of multiple calamities wreaking havoc. The danger of a desperate CCP turning to a hot war to save face is an ever-rising threat. (If Three Gorges Dam fails, that could be the final straw.)

FDR deliberately suckered Japan into attacking the US (but apparently never guessed it would be on Pearl Harbor). It appears modern neo warmongers of all stripes would be delighted if China were tempted into yet another senseless war in the Pacific. And more lives lost on all sides.

While the size of US military and (ineptly named) "intelligence" budgets are vastly out of scale, the short-term cost in money is secondary to risk of long-term cost in blood. Surging the budget may make good sense when guns are all pointing in the wrong direction and political donors don't care as long as it pays well.

Defeating that outrageously wasteful spending is the first battle to be won. Disengaging from stupid, distracting, unwinnable conflicts is an imperative to achieve that goal.

The Judge , 8 hours ago

US. is the real threat to US interests.

DeptOfPsyOps-14527776 , 8 hours ago

An important part of this statue quo is propaganda and in particular neo-con propaganda.

Once it was clear that agitating against the Russian federation had failed, they started agitating against the PRC.

FDR administration wasn't that clever, they just had (((support))). They wanted Imperial Japan unable to strengthen itself against the United Kingdom as it was waging a war against the European Axis, did not realize that the Japanese fleet could reach as far as Hawaii and after Pearl Harbor, believed the West Coast could have been attacked as well.

Hovewer, they likely expected the Japanese to intercept their fleet on the way to the Phillipines after a war between Imperial Japan and the Commonwealth had started.

Salzburg1756 , 8 hours ago

"FDR deliberately suckered Japan into attacking the US (but apparently never guessed it would be on Pearl Harbor)." No, we knew the japs were going to attack Pearl Harbor. We had broken their code. That's why we sent our best battle ships away from Hawaii just before the attack. Most of the ships they sank were old and worthless; our good ships were out at sea.

TheLastMan , 4 hours ago

What constitutes "America's interests"?

the us military is the world community welcome wagon for global multi national Corp chamber of commerce

Do us citizens serve corporations or do corporations serve us citizens?

next ?, who owns / controls corporations?

Alice-the-dog , 8 hours ago

There is a reason why suicide is the leading cause of death among active duty military. They come to realize that what they are doing is perfect male bovine fecal matter. That they are guilty of participating in completely unwarranted death and destruction.

847328_3527 , 9 hours ago

Liberals and "progressives" are traditionally against wars. This new "woke" group of Demorats shows they are NOT liberals or progressives since they support the Establishment War Criminals like Obama and his side kick, demented Biden, and Bloodthirsty Clinton.

[Jul 19, 2020] We need to ban corporations from doing anything in the political arena

Jul 19, 2020 | www.moonofalabama.org

Richard Steven Hack , Jul 19 2020 1:17 utc | 78

Posted by: time2wakeupnow | Jul 18 2020 18:59 utc | 13 But there are also very real First Amendment interests implicated by laws which bar entities from spending money to express political viewpoints."

With regard to Greenwald's opinion, mine is relatively simple: ban corporations from doing *anything* in the political arena. Corporations are *not* people, regardless of the legal myth that they are. Officers of corporations have no standing other than their personal standing, and they should be barred from contributing to campaigns, or lobbying for legislation or anything else outside of conducting the business they are *licensed by the state* to do.

This does not apply to incorporated non-profit organizations which are organized to do precisely what corporations should be banned from doing: advocate and attempt to influence specific legislation or policies or candidates for office. For profit corporations should be banned from doing anything to influence non-profit organizations, by the way, otherwise corporations will do an end-run around the ban on political action by funding fake "non-profit" organizations.

With regard to the large social media, there should be a law passed which 1) prevents them from being sued regardless of anything their subscribers say on their platforms, and 2) prevents them from censoring anything their subscribers say on their platforms. This was true on the street and should be true on the Internet. Freedom of speech is a cornerstone of the Constitution and should be protected on the Internet.

That does not apply here in MOA because MOA is a small operation owned and operated by one person. He has the right to ban or censor anything he likes. But if he was the size of Facebook or Twitter, he would have serious social influence. In that case, it would be justified to both hold him blameless for the trolls and also prevent him from censoring trolls.

Dealing with offensive people on the large platforms (and even here) should be done by providing the users adequate personal controls in their interface which enable the users to remove content from their view that they don't like, while the content remains in view for anyone who approves of it or doesn't care. Some forums have been doing this for years, such as Slashdot.

These solutions are incredibly simple. The reason they are not implemented is because different factions see benefit in not implementing them.

Naturally, as an anarchist, the solutions I suggest are predicated on the idiocy of having states and corporations in the first place. Otherwise, all these "issues" wouldn't even exist. This is what you get when you have a religious belief in the state and society.

[Feb 24, 2020] Creating the Corporate Coup

Notable quotes:
"... Although corporations are legally a person (see history below), they are in fact an entity. The sole goal of that entity is profit. There is no corporate conscience. ..."
"... Perhaps it would be useful to look at the nature of our global expansion. The global expanse of US military bases is well-known, but its actual territorial empire is largely hidden. The true map of America is not taught in our schools. Abby Martin interviews history Professor Daniel Immerwahr about his new book, ' How To Hide An Empire ,' where he documents the story of our "Greater United States." This is worth the 40 minute watch...I learned several new things. One more long clip. However this one is fine to just listen to as you do things. This is a wonderful interview with Noam Chomsky. The man exudes wisdom. ..."
"... The oligarchy has been with us since perhaps the tribal origins of our species, but the corporation is a newer phenomenon. A faceless, soulless profit machine. Ironically it is the 14th amendment which is used to justify corporate person-hood. ..."
"... Corporations aren't specifically mentioned in the 14th Amendment, or anywhere else in the Constitution. But going back to the earliest years of the republic, when the Bank of the United States brought the first corporate rights case before the Supreme Court, U.S. corporations have sought many of the same rights guaranteed to individuals, including the rights to own property, enter into contracts, and to sue and be sued just like individuals. ..."
"... But it wasn't until the 1886 case Santa Clara County v. Southern Pacific Rail Road that the Court appeared to grant a corporation the same rights as an individual under the 14th Amendment ..."
"... The United States is home to five of the world's 10 largest defense contractors, and American companies account for 57 percent of total arms sales by the world's 100 largest defense contractors, based on SIPRI data. Maryland-based Lockheed Martin, the largest defense contractor in the world, is estimated to have had $44.9 billion in arms sales in 2017 through deals with governments all over the world. The company drew public scrutiny after a bomb it sold to Saudi Arabia was dropped on a school bus in Yemen, killing 40 boys and 11 adults. Lockheed's revenue from the U.S. government alone is well more than the total annual budgets of the IRS and the Environmental Protection Agency, combined. ..."
"... http://news.nidokidos.org/military-spending-20-companies-profiting-the-m... For a list of the 20 companies profiting most off war... https://themindunleashed.com/2019/03/20-companies-profiting-war.html ..."
"... Capitalism, militarism and imperialism are disastrously intertwined ..."
"... Corporations are Religions Yes they are. They have ethics, goals, and priests. They have a god who determines everything "The Invisible Hand". They believe themselves to be superior to the state. They have cult garb, or are we not going to pretend that there's corporate dress codes, right down to the things you can wear on special days of the week. They determine what you can eat, drink and read. If you say something wrong, they feel within their rights to punish you because they OWN the medium that you used to spread ideas. OF course they don't own your thoughts... those belong to the OTHER god. ..."
Dec 09, 2019 | caucus99percent.com

Chris Hedges often says "The corporate coup is complete". Sadly I think he is correct. So this week I thought it might be interesting to explore the techniques which are used here at home and abroad. The oligarchs' corporate control is global, but different strategies are employed in various scenarios. Just thinking about the recent regime changes promoted by the US in this hemisphere...

The US doesn't even lie about past coups. They recently released a report about the 1953 CIA led coup against Iran detailing the strategies. Here at home it is a compliant media and a new array of corporate laws designed to protect and further enrich that spell the corporate capture of our culture and society. So let's begin by looking at the nature of corporations...

The following 2.5 hour documentary from 2004 features commentary from Chris, Noam, Naomi, and many others you know. It has some great old footage. It is best watched on a television so you have a bigger screen. (This clip is on the encore+ youtube channel and does have commercials which you can skip after 5 seconds)
https://www.youtube.com/watch?v=zpQYsk-8dWg

Based on Joel Bakan's bestseller The Corporation: The Pathological Pursuit of Profit and Power , this 26-award-winning documentary explores a corporation's inner workings, curious history, controversial impacts and possible futures.

One hundred and fifty years ago, a corporation was a relatively insignificant entity. Today, it is a vivid, dramatic, and pervasive presence in all our lives. Like the Church, the Monarchy and the Communist Party in other times and places, a corporation is today's dominant institution.

Charting the rise of such an institution aimed at achieving specific economic goals, the documentary also recounts victories against this apparently invincible force.

Although corporations are legally a person (see history below), they are in fact an entity. The sole goal of that entity is profit. There is no corporate conscience. Some of the CEO's in the film discuss how all the people in the corporations are against pollution and so on, but by law stockholder profit must be the objective. Now these entities are global operations with no loyalty to their country of origin.

Perhaps it would be useful to look at the nature of our global expansion. The global expanse of US military bases is well-known, but its actual territorial empire is largely hidden. The true map of America is not taught in our schools. Abby Martin interviews history Professor Daniel Immerwahr about his new book, ' How To Hide An Empire ,' where he documents the story of our "Greater United States." This is worth the 40 minute watch...I learned several new things. One more long clip. However this one is fine to just listen to as you do things. This is a wonderful interview with Noam Chomsky. The man exudes wisdom.

https://www.youtube.com/watch?v=yuVqfKYbGvE (2 hour 5 min)

So much of this conversation touches on today's topic of our corporate capture. Amy interviewed Ed Snowden this week... (video or text)

This is a system, the first system in history, that bore witness to everything. Every border you crossed, every purchase you make, every call you dial, every cell phone tower you pass, friends you keep, article you write, site you visit and subject line you type was now in the hands of a system whose reach is unlimited but whose safeguards were not. And I felt, despite what the law said, that this was something that the public ought to know.

https://www.democracynow.org/2019/12/5/edward_snowden_amy_goodman_interv...

The oligarchy has been with us since perhaps the tribal origins of our species, but the corporation is a newer phenomenon. A faceless, soulless profit machine. Ironically it is the 14th amendment which is used to justify corporate person-hood.

Corporations aren't specifically mentioned in the 14th Amendment, or anywhere else in the Constitution. But going back to the earliest years of the republic, when the Bank of the United States brought the first corporate rights case before the Supreme Court, U.S. corporations have sought many of the same rights guaranteed to individuals, including the rights to own property, enter into contracts, and to sue and be sued just like individuals.

But it wasn't until the 1886 case Santa Clara County v. Southern Pacific Rail Road that the Court appeared to grant a corporation the same rights as an individual under the 14th Amendment

https://www.history.com/news/14th-amendment-corporate-personhood-made-co...

More recently in 2010 (Citizens United v. FEC): In the run up to the 2008 election, the Federal Elections Commission blocked the conservative nonprofit Citizens United from airing a film about Hillary Clinton based on a law barring companies from using their funds for "electioneering communications" within 30 days of a primary or 60 days of a general election. The organization sued, arguing that, because people's campaign donations are a protected form of speech (see Buckley v. Valeo) and corporations and people enjoy the same legal rights, the government can't limit a corporation's independent political donations. The Supreme Court agreed. The Citizens United ruling may be the most sweeping expansion of corporate personhood to date.
https://www.motherjones.com/politics/2014/07/how-supreme-court-turned-co...

Do they really believe this is how we think?

More than just using the courts, corporations are knee deep in creating favorable laws, not just by lobbying, but by actually writing legislation to feed the politicians that they own and control, especially at the state level.

Through ALEC, Global Corporations Are Scheming to Rewrite YOUR Rights and Boost THEIR Revenue. Through the corporate-funded American Legislative Exchange Council, global corporations and state politicians vote behind closed doors to try to rewrite state laws that govern your rights. These so-called "model bills" reach into almost every area of American life and often directly benefit huge corporations.

In ALEC's own words, corporations have "a VOICE and a VOTE" on specific changes to the law that are then proposed in your state. DO YOU? Numerous resources to help us expose ALEC are provided below. We have also created links to detailed discussions of key issues...

https://www.alecexposed.org/wiki/ALEC_Exposed

Here's an attempt by a local station to tell the story of a Georgia session of legislators and ALEC lobbyists. https://www.youtube.com/watch?v=K3yIbxydlHY (6 min)

There is very little effort to hide the blatant corruption. People seem to accept this behavior as business as usual, after all it is.

Part of the current ALEC legislative agenda involves stifling protests.

I think it started in Texas...

A bill making its way through the Texas legislature would make protesting pipelines a third-degree felony, the same as attempted murder.
H.B. 3557, which is under consideration in the state Senate after passing the state House earlier this month, ups penalties for interfering in energy infrastructure construction by making the protests a felony. Sentences would range from two to 10 years.

https://www.ecowatch.com/texas-bill-pipeline-protests-felony-2637605986....
It is now law. Other states are following suit...

Lawmakers in Wisconsin introduced a bill on September 5 designed to chill protests around oil and gas pipelines and other energy infrastructure in the state by imposing harsh criminal penalties for trespassing on or damaging the property of a broad range of "energy providers."

Senate Bill 386 echoes similar "critical infrastructure protection" model bills pushed out by the American Legislative Exchange Council (ALEC) and the Council of State Governments over the last two years to prevent future protests like the one against the Dakota Access Pipeline.

https://www.exposedbycmd.org/2019/09/16/wisconsin-legislators-seek-crimi...

These activities are taking place in most states...especially red ones like mine.

When TPTB use government to play chess with the countries of the world havoc ensues...

Abby and Mike were on Chris' show yesterday talking about Gaza and the US/Israeli effort at genocide. https://www.youtube.com/watch?v=gcsEYRt_jGY (28 min)

And Chris was on the evening RT news this week discussing how the US empire is striking back against leaders who help their own people rather than our global corporations.

https://www.youtube.com/watch?v=1P5G9S8flnY (6.5 min)

Lee Camp and Ben Norton also discussed how the US wants to own South America. https://www.youtube.com/watch?v=XLETst107M0 (1st 22 min)

This excellent article tells the story well...

Financially, the cost of these wars is immense: more than $6 trillion dollars. The cost of these wars is just one element of the $1.2 trillion the US government spends annually on wars and war making. Half of each dollar paid in federal income tax goes towards some form or consequence of war . While the results of such spending are not hard to foresee or understand: a cyclical and dependent relationship between the Pentagon, weapons industry and Congress, the creation of a whole new class of worker and wealth distribution is not so understood or noticed, but exists and is especially malignant.

This is a ghastly redistribution of wealth, perhaps unlike any known in modern human history, certainly not in American history. As taxpayers send trillions to Washington. DC, that money flows to the men and women that remotely oversee, manage and staff the wars that kill and destroy millions of lives overseas and at home. Hundreds of thousands of federal employees and civilian contractors servicing the wars take home six figure annual salaries allowing them second homes, luxury cars and plastic surgery, while veterans put guns in their mouths, refugees die in capsized boats and as many as four million nameless souls scream silently in death.

These AUMFs (Authorization for Use of Military Force) and the wars have provided tens of thousands of recruits to international terror groups; mass profits to the weapons industry and those that service it; promotions to generals and admirals, with corporate board seats upon retirement ; and a perpetual and endless supply of bloody shirts for politicians to wave via an unquestioning and obsequious corporate media to stoke compliant anger and malleable fear. What is hard to imagine, impossible even, is anyone else who has benefited from these wars.

https://www.counterpunch.org/2019/12/06/authorizations-for-madness-the-e...

The United States is home to five of the world's 10 largest defense contractors, and American companies account for 57 percent of total arms sales by the world's 100 largest defense contractors, based on SIPRI data. Maryland-based Lockheed Martin, the largest defense contractor in the world, is estimated to have had $44.9 billion in arms sales in 2017 through deals with governments all over the world. The company drew public scrutiny after a bomb it sold to Saudi Arabia was dropped on a school bus in Yemen, killing 40 boys and 11 adults. Lockheed's revenue from the U.S. government alone is well more than the total annual budgets of the IRS and the Environmental Protection Agency, combined.

http://news.nidokidos.org/military-spending-20-companies-profiting-the-m... For a list of the 20 companies profiting most off war... https://themindunleashed.com/2019/03/20-companies-profiting-war.html

The obvious industry which was not included nor considered is the fossil fuel industry. Here's another example of mutual corporate interests.

"Capitalism, militarism and imperialism are disastrously intertwined with the fossil fuel economy .A globalized economy predicated on growth at any social or environmental costs, carbon dependent international trade, the limitless extraction of natural resources, and a view of citizens as nothing more than consumers cannot be the basis for tackling climate change .Little wonder then that the elites have nothing to offer beyond continued militarisation and trust in techno-fixes."

-- Nick Buxton and Ben Hayes
https://www.counterpunch.org/2019/07/05/doubling-down-the-military-big-b...

The US military is one of the largest consumers and emitters of carbon-dioxide equivalent (CO2e) in history, according to an independent analysis of global fuel-buying practices of a "virtually unresearched" government agency.
If the US military were its own country, it would rank 47th between Peru and Portugal in terms of annual fuel purchases, totaling almost 270,000 barrels of oil bought every day in 2017. In particular, the Air Force is the largest emitter of greenhouse gas emissions and bought $4.9 billion of fuel in 2017 � nearly double that of the Navy ($2.8 billion).

https://www.iflscience.com/environment/us-military-ranks-higher-in-green...

The fossil fuel giants even try to control the climate talks...

Oil and gas groups were accused Saturday of seeking to influence climate talks in Madrid by paying millions in sponsorship and sending dozens of lobbyists to delay what scientists say is a necessary and rapid cut in fossil fuel use.

https://www.rawstory.com/2019/12/fossil-fuel-groups-destroying-climate-t...

The corporations are so entwined that it is difficult to tell where they begin and end. There's the unity of private prisons and the war machine. And it's a global scheme...this example from the UK.

One thing is clear: the prison industrial complex and the global war machine are intimately connected. This summer's prison strike that began in the United States and spread to other countries was the largest in history. It shows more than ever that prisoners are resisting this penal regime, often at great risk to themselves. The battle to end prison slavery continues.

https://corporatewatch.org/poppies-prison-labour-and-the-war-machine/

Then there was the corporate tax give away...

The 2017 tax bill cut taxes for most Americans, including the middle class, but it heavily benefits the wealthy and corporations . It slashed the corporate tax rate from 35 percent to 21 percent, and its treatment of "pass-through" entities -- companies organized as sole proprietorships, partnerships, LLCs, or S corporations -- will translate to an estimated $17 billion in tax savings for millionaires this year. American corporations are showering their shareholders with stock buybacks, thanks in part to their tax savings.

https://www.vox.com/policy-and-politics/2018/12/18/18146253/tax-cuts-and...

Even Robert Jackson Jr., commissioner at the Securities and Exchange Commission. Appointed to the SEC in 2017 by President Donald Trump. Confirmed in January 2018 sees the corporate cuts as absurd.

"We have been to the movie of tax cuts and buybacks before, in the Republican administration during the George W. Bush era. We enacted a quite substantial tax cut during that period. And studies after that showed very clearly that most corporations use the funds from that tax cut for buybacks. And here's the kicker. That particular tax cut actually required that companies deploy the capital for capital expenditures, wage increases and investments in their people. Yet studies showed that, in fact, the companies use them for buybacks. So we've been to this movie before. And what you're describing to me, that corporations turned around and took the Trump tax cut and didn't use it in investing in their people or in infrastructure, but instead for other purposes, shouldn't surprise anybody at all."

https://www.wbur.org/onpoint/2019/11/18/corporations-stock-buybacks-sec-...

So the corporations grow larger, wealthier, more powerful, buying evermore legislative influence along the way. They have crept into almost every aspect of our lives. Some doctors are beginning to see the influence of big pharma and other corporate interests are effecting the current practice of medicine.

Gary Fettke is a doctor from Tasmania who has been targeted for promoting a high fat low carb diet...threatened with losing his medical qualifications. He doesn't pull punches in this presentation discussing the corporate control of big ag/food and big pharma on medical practice and education. (27 min)

Comments

detroitmechworks on Sun, 12/08/2019 - 8:28am

Corporations are Religions Yes they are. They have ethics, goals, and priests. They have a god who determines everything "The Invisible Hand". They believe themselves to be superior to the state. They have cult garb, or are we not going to pretend that there's corporate dress codes, right down to the things you can wear on special days of the week. They determine what you can eat, drink and read. If you say something wrong, they feel within their rights to punish you because they OWN the medium that you used to spread ideas. OF course they don't own your thoughts... those belong to the OTHER god.

At least the crazy made up gods that I listen to don't usually fuck over other human beings for a goddamn percentage. ON the other hand, if a corporation can make a profit, it's REQUIRED to fuck you over. To do otherwise would be against it's morals. Which it does have, trust us... OH, and corporations get to make fun of your beliefs, but you CANNOT make fun of theirs. Because that would be heresy against logic and reason.

www.youtube.com/embed/uGDA0Hecw1k?modestbranding=0&html5=1&rel=0&autoplay=0&wmode=opaque&loop=0&controls=1&autohide=0&showinfo=0&theme=dark&color=red&enablejsapi=0

Lookout on Sun, 12/08/2019 - 8:37am
yes indeed, they are superior to the state...

@detroitmechworks

In the film Secret State they (fossil fuel) admit it. Here's the trailer...(1.5 min)
https://www.youtube.com/watch?v=uCYjbux_dCM

You can watch the series if anyone has an interest. Start here...there are about 6 episodes.
https://www.youtube.com/watch?v=3aeZT6IXCUg (42 min)

Good spy thriller.

Nice to see you around the site again. Thanks for visiting this piece.

QMS on Sun, 12/08/2019 - 8:39am
A recent front page item

In a local newspaper showed a couple coming out of a Wal-Mart with their carts piled high with big boxed foreign junk, then shown cramming their SUV full of said junk. The headline read "Crazy Busy". It pretty much summed up what is wrong with the American consumer culture. The next day's big headline spotlighted our senator's picture affixed to a LARGE headline boasting "$22 Billion Submarine Contract Awarded". A good example of of what is wrong with the american war economy.

Thank you for your compilation Lookout! If we can get beyond the headlines, working at grass root and local solutions, maybe even underground revolution, there may be hope for us. Barter for a better future.

Lookout on Sun, 12/08/2019 - 9:06am
Let's hope we trade up for something better

@QMS

My buddies always say about their mayor..."There's no way we will trade down after this election...but then we do." Perhaps it is true for more than just their town.

The line running in my head is..."What if they gave a war and nobody came". I want to expand it to..."What if they made cheap junk no one really wanted and nobody bought it". Or substitute junk food for cheap junk, or...

My point in today's conclusion is much as I try to walk away from corporate culture/control, I really can't totally escape...but at least I spend most of my time in the open, breathing clean air, surrounded by forest. We do what we can.

Onward through the fog...

Raggedy Ann on Sun, 12/08/2019 - 8:58am
Good Sunday morning, Lookout ~~

Consumerism in our society is a plague, a disease perpetrated upon us by our corporate lords. It has taken over everything about being an American.

I think the youth are catching on, as they are thrifting more, but they don't understand about food, and that's the rub. Our youth will be more unhealthy until they understand what corporations are doing to us through food addictions.

We're expecting rain today for most of the day and actually it's just started. The person who will drill our well came by yesterday and figured out some details. We are behind two other wells, so it will probably be the holiday week when it happens - we'll see. I can wait til January and hope we do.

Have a lovely Sunday, everyone!

Lookout on Sun, 12/08/2019 - 9:10am
best of luck with your well!

@Raggedy Ann

That's an exciting project. Keep us posted. I hope y'all have a great holiday break. Enjoy your time....the most valuable thing we have!

davidgmillsatty on Sun, 12/08/2019 - 9:09am
The main reason I am not enamored with Sander's economic

Ideas is that new deal of FDR's day had corporate opponents far different than those of today. Sanders does not seem to understand that the corporations of yesterday, and what worked against them, will not work against the corporations of today. In the early part of the 20th century, corporations were still primarily domestic and local often with charters from the state where they conducted their primary business, many times all of their business.

Regulation and unions were reasonable anti-dotes to the abuses of these local and domestic corporations. The state still had some semblance of control over them.

But today corporations are global. They have no allegiance to, or concern for the domestic economy or local people. They do not fear of any anti-dotes that worked for years against domestic or local corporations. Global corporations just leave and go elsewhere if they don't like the domestic or local situation if they have not managed to completely take over the government.

There is only one reason to incorporate in the first place. That is for the owner(s) of the business to avoid personal liability or responsibility. The majority of people never understand this idea. Corporate owners are the people who are the genuine personal responsibility avoiders. Not the poor. The only antidote to corporations these days is the total demise of the corporation and its similar business entities that dodge personal responsibility. And the state must refuse to allow any such entities to do business. It is the only way forward. Otherwise nation states will give way to corporate states. Corporate governance is the new feudalism from which the old feudalism morphed.

Sanders isn't going to advocate doing away with corporate entities or other similar business entities. Nor will any of the Democratic contenders. They all require corporations to rail against as the basis for their political policy.

Lookout on Sun, 12/08/2019 - 9:19am
corporate power is formative

@davidgmillsatty

...and I've always wondered just how Bernie would dismantle them. However like the impotence of the impeachment, is the impotence of the primary process.

When the DNC was sued after 2016, they were exonerated based on the ruling they were a private entity entitled to make rules as the wanted. The primary is so obviously rigged I can almost guarantee Bernie will not be allowed the nomination, so the question to how he would change corporate control is really moot.

Thanks for your thoughtful comment.

davidgmillsatty on Sun, 12/08/2019 - 10:56am
Sanders Winning the Nomination

@Lookout I probably could get on board with a Sanders campaign if he would run as an Independent. But it is really hard to get on board with him as a Democrat. If he loses the nomination, he will probably not run as an Independent once again. Once he bailed on an Independent run last time, I and many others bailed on him. I would support his Independent candidacy just to screw with the Electoral College. I thought last time an independent candidacy might have thrown the election to the House of Representatives. I could see a Democratically controlled House voting for him over Trump in a three way EC split if the Democratic candidate took low EC numbers.

But he is so afraid of being tarred with the Nader moniker.

What I said many times on websites last election is that an EC vote is very similar to a Parliamentary Election. And that would be an interesting change for sure. It would also be a means of having the popular vote winner restored if there is a big enough margin in the House. And what would be equally cool is that the Senate picks the VP. So you could have President and VP from different parties.

Lookout on Sun, 12/08/2019 - 10:32am
in some alternate universe...

@davidgmillsatty

if Bernie got the nomination, I would vote for him, especially in this imaginary world, if Tulsi was his running mate. Then there the question about your vote being counted? We'll just have to see what we see and make judgements based on outcomes, IMO.

#4.1 I probably could get on board with a Sanders campaign if he would run as an Independent. But it is really hard to get on board with him as a Democrat. If he loses the nomination, he will probably not run as an Independent once again. Once he bailed on an Independent run last time, I and many others bailed on him. I would support his Independent candidacy just to screw with the Electoral College. I thought last time an independent candidacy might have thrown the election to the House of Representatives. I could see a Democratically controlled House voting for him over Trump in a three way EC split if the Democratic candidate took low EC numbers.

But he is so afraid of being tarred with the Nader moniker.

What I said many times on websites last election is that an EC vote is very similar to a Parliamentary Election. And that would be an interesting change for sure. It would also be a means of having the popular vote winner restored if there is a big enough margin in the House. And what would be equally cool is that the Senate picks the VP. So you could have President and VP from different parties.

davidgmillsatty on Sun, 12/08/2019 - 11:01am
The more I think about this

@Lookout The only way the Democrats might beat Trump is to have Sanders run as an Independent and prevent Trump from reaching 270. That is a far better way to beat Trump than impeachment. Would the house vote for the Democrat or an Independent? I guess it would depend on how Sanders did in the popular vote and EC against his Democratic rival.

#4.1.1
if Bernie got the nomination, I would vote for him, especially in this imaginary world, if Tulsi was his running mate. Then there the question about your vote being counted? We'll just have to see what we see and make judgements based on outcomes, IMO.

TheOtherMaven on Sun, 12/08/2019 - 2:06pm
And who that rival was!

@davidgmillsatty @davidgmillsatty

If it was Hillary "Dewey Cheatem & Howe" Clinton, all bets are off.

#4.1.1.1 The only way the Democrats might beat Trump is to have Sanders run as an Independent and prevent Trump from reaching 270. That is a far better way to beat Trump than impeachment. Would the house vote for the Democrat or an Independent? I guess it would depend on how Sanders did in the popular vote and EC against his Democratic rival.

Lookout on Sun, 12/08/2019 - 2:48pm
The $hill was on Howard Stern this week...

@TheOtherMaven

//www.youtube.com/embed/LhxMvmX9WlA?modestbranding=0&html5=1&rel=0&autoplay=0&wmode=opaque&loop=0&controls=1&autohide=0&showinfo=0&theme=dark&color=red&enablejsapi=0

snoopydawg on Sun, 12/08/2019 - 3:18pm
Howard effin Stern indeed

@Lookout

Good lord.that she did that is unbelievable. Great point. Boycott Fox News, but go on Stern's show. It's going to be fun to watch how much lower she falls.

Lookout on Sun, 12/08/2019 - 3:30pm
The depth of her corruption is unfathomable

@snoopydawg

AE maybe be correct that they will pull her from behind the curtain and anoint her to run again. But I sure hope not!

snoopydawg on Sun, 12/08/2019 - 3:31pm
More lying about Bernie not supporting Hillary

@Lookout

MSNBC invited on two former Hillary Clinton aides to criticize Bernie Sanders for taking a "long time to get out of the race" and that he didn't do "enough" campaigning for her in 2016. pic.twitter.com/6Vsqo0DKZI

-- Ibrahim (@ibrahimpols) December 8, 2019

Come on Bernie call this crap out.

davidgmillsatty on Sun, 12/08/2019 - 6:08pm
The Way that would work in the House of Reps

@TheOtherMaven They have to choose from actual EC vote getters. So if she is not the candidate she could not win.

Having Sanders run as an Independent and Warren or Biden run as a Democrat would be a much better strategy to ensure a Trump loss in the House. Of course it might take some coordination as in asking the voters to vote for the candidate who has the best chance of beating Trump in certain states. But voters could probably figure that out.

Or a candidate could just withdraw from a state in which the other candidate had a better chance of beating Trump.

QMS on Sun, 12/08/2019 - 9:27am
Dig it

@irishking @irishking
What to do?Dance in the streets! //www.youtube.com/embed/9KhbM2mqhCQ

Lookout on Sun, 12/08/2019 - 9:27am
Do you think the bear went over the mountain...

@irishking

refers to RUSSIA!!! (Just joking) Thanks for the song. Here's one from 1929 back atcha! Thanks for the visit. //www.youtube.com/embed/pDOwDi2jlk0

jakkalbessie on Sun, 12/08/2019 - 10:15am
So much to think about

Lookout as usual you have done an excellent job of giving me a lot of articles to read and think about this next week.

Of course I need to be loading my car and shutting this place down as I head to the Texas hill country. Will look for an article about Kinder Morgan and small communities that are fighting the pipeline through their towns. The read was a little hopeful.

Watching the weather and it looks like sunshine and clear skies as I travel. Thanks for all your work in putting this together.

Lookout on Sun, 12/08/2019 - 10:27am
My buddy JU Lee wrote a song...

@jakkalbessie

I like to travel on the old roads.

There's not a youtube, but the chorus goes:

I like to travel on the old roads
I like the way it makes me feel
No destination just the old roads
Somehow it helps the heart to heal.

I hope your road trip is a good one. The less busy tracks are almost meditative....soaking in scenery as the world passes by.

Have fun and be careful.

Lookout as usual you have done an excellent job of giving me a lot of articles to read and think about this next week.

Of course I need to be loading my car and shutting this place down as I head to the Texas hill country. Will look for an article about Kinder Morgan and small communities that are fighting the pipeline through their towns. The read was a little hopeful.

Watching the weather and it looks like sunshine and clear skies as I travel. Thanks for all your work in putting this together.

ggersh on Sun, 12/08/2019 - 11:06am
Nice work Lookout

Here are a couple of links to how free markets help in the corporate takeover. Amazon a corp that has only made a profit by never paying taxes and accounting fraud. It became a trillion dollar corp through the use of monopoly money(stock) it's nothing but the perfect example of todays "unicorn" corp, i.e. worth what it is w/out ever making a penny

Lookout on Sun, 12/08/2019 - 11:26am
The free market created the private prison industry too

@ggersh

Not so free really is it? Amazon is certainly a monster...now hosting the CIA/MIC cloud as well as owning the WaPo.

Snode on Sun, 12/08/2019 - 11:45am
Corporations are not people

Corporations can live far beyond a persons lifespan. Corporations can commit homicide and escape execution and justice. Unfortunately, unions are just as likely to be on the corporations side to get jobs and wages, and bust heads if anything interferes with that.

If we protest we've seen the police ready to use deadly force at the drop of a hat, and get away with it. We get to vote on candidates that some political club chose for us, and have little incentive to work for the 99%. The gov. has amassed so much information on us we can't even fathom its depth. We have nowhere left, no unexplored lands out of reach of the government. We think we own things, but if you think you own a home, see how long it is before the gov. confiscates it if you don't pay your property taxes.

If I were younger, or a young person asked what to do, I would say.... learn some skill that would make you attractive for emigrating to another country, because the US looks like it's over. It's people are only here to be exploited. And if Bernie were to become president I hope he gets a food taster.

Lily O Lady on Sun, 12/08/2019 - 1:27pm
Corporations are worldwide entities now. No where to

@Snode

run to. No where to hide. As in the U.K., corporations are seeking to to dismantle the NHS and turn it into a for-profit system like ours. Even as the gilllet-jaune protesters risk life and limb, Macron seeks to install true neoliberalism in France. And the beat goes on.

snoopydawg on Sun, 12/08/2019 - 5:41pm
Yep you nailed it

@Snode

Corporations can live far beyond a persons lifespan. Corporations can commit homicide and escape execution and justice.

Look at what chevron did to people in Borapol. I'm sure I spelled this wrong but hopefully people will know what I'm talking about. They killed lots of people and poisoned their land for decades and the fight over it is still going on. How many decades more will chevron get to skirt justice? Banks continue to commit fraud and they only get little fines that don't do jack to keep them from doing it again. Even cities are screwing people. Owe a few dollars on your property taxes and they will take your home and sell it for pennies on the dollar. How in hell can it be legal to charge people over 600% interest? What happened to usury rules if that's the correct term.

Lookout on Sun, 12/08/2019 - 5:51pm
They've done it all over the world...

@snoopydawg

The International Court of Justice at The Hague ruled last week that a prior ruling by an Ecuadorean court that fined Chevron $9.5 billion in 2011 should be upheld, according to teleSUR, a Latin American news agency. Texaco, which is currently a part of Chevron, is responsible for what is considered one of the world's largest environmental disasters while it drilled for oil in the Ecuadorian rainforest from 1964 to 1990.
https://www.ecowatch.com/will-chevron-and-exxon-ever-be-held-responsible...

snoopydawg on Sun, 12/08/2019 - 7:13pm
It's just unbelievable that they can still dodge responsibilit

@Lookout

for decades of polluting and killing.

The legal battle has been tied up in the courts for years. Ecuador's highest court finally upheld the ruling in January 2014, but Chevron refused to pay.

This is another thing that corporations get away with. Contaminating land and then just walking away from it. How many superfund sites have we had to pay for instead of the ones who created the mess. Just declared bankruptcy and walked away. Corporations are people? Fine then they should be held as accountable as the people in the lower classes. Fat chance though right?

Lily O Lady on Sun, 12/08/2019 - 6:01pm
Union Carbide India was responsible for the Bopal disaster.
snoopydawg on Sun, 12/08/2019 - 7:16pm
Thanks for the save

@Lily O Lady

Weren't people killed by a gas cloud released from the plant? I read something recently that said the case is still going through the courts. How much money have they spent trying not to spend more?

snoopydawg on Sun, 12/08/2019 - 12:27pm
7 year old concerned about the Uighers

//www.youtube.com/embed/wGq0xVh6UJw?modestbranding=0&html5=1&rel=0&autoplay=0&wmode=opaque&loop=0&controls=1&autohide=0&showinfo=0&theme=dark&color=red&enablejsapi=0

Lookout on Sun, 12/08/2019 - 12:36pm
The comments are supportive of Tulsi

@snoopydawg

....and no I had not seen that clip. Tulsi impresses me in many ways and the manner in which she treats this child is an example.

Especially as compared to Joe ByeDone's adolescent behavior...

//www.youtube.com/embed/mKV0oAPENdg?modestbranding=0&html5=1&rel=0&autoplay=0&wmode=opaque&loop=0&controls=1&autohide=0&showinfo=0&theme=dark&color=red&enablejsapi=0

snoopydawg on Sun, 12/08/2019 - 1:09pm
Ugh

@Lookout @Lookout

Byedone just needs to pack it in and drop out already. Today he was defending the republican party after someone said something about them needing to go away. Joe said that we need another party so one does not get more power than the other. Yeah right, Joe. It's not like the Pubs are already weilding power they don't have and them dems cowering and supporting them.

Newsweek reporter quit after being censored on the OPCW story.

I have collected evidence of how they suppressed the story in addition to evidence from another case where info inconvenient to US govt was removed, though it was factually correct.

-- Tareq Haddad (@Tareq_Haddad) December 7, 2019

ANd great news for Max Bluementhal!!

BREAKING: The US government has DROPPED ITS BOGUS CASE against me and @NotConq .

I was hauled out of my house by a team of cops, jailed for two days, and maliciously defamed due to the lies of the US-backed Venezuelan opposition.

I plan to seek justice. https://t.co/Wm7Yl8cL2T

-- Max Blumenthal (@MaxBlumenthal) December 7, 2019

Thanks for the wound up, LO. Lots of great stuff here to go back and digest.

#9

....and no I had not seen that clip. Tulsi impresses me in many ways and the manner in which she treats this child is an example.

Especially as compared to Joe ByeDone's adolescent behavior...

data:image/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==

Lookout on Sun, 12/08/2019 - 1:22pm
Glad to see Max vindicated

@snoopydawg

...thanks for the news.

Caity had a nice piece on Consortiumnews on the newsweek story...
https://consortiumnews.com/2019/12/08/journalist-newsweek-suppressed-opc...

Lily O Lady on Sun, 12/08/2019 - 1:44pm
Bipartisanship is big now. It's how politicians hide their dirty dealings.

@snoopydawg

First frustrate us with gridlock. Then pass bills benefiting the corporate overlords. Then leading up to elections pass bills like the one against animal cruelty (who doesn't love kitties and puppies?), or propose a bill to consider regulating cosmetics. This second bipartisan effort is glaringly cynical since no one apparently knows what is in beauty products. Sanders must have politicians worried for them to attempt something which has managed to go unregulated for so long.

All this bipartisanship is not even up to the level of rearranging the deck chairs on the Titanic. It's more like wiping at them with a dirty rag while the ship of state continues to sink. While animal cruelty and cosmetic safety are important issues, they pale in comparison to the systemic ills America suffers. Our fearless leaders will continue to scratch the surface while corruption and business as usual continue to fester. These bipartisan laws may look good on a politician's resume, but they won't really help the 99%.

CB on Sun, 12/08/2019 - 5:35pm
Looks like the PTB are starting to crank up

@snoopydawg
the propaganda to give NATO a raison d'�tre for a pivot to China. This will be doomed to complete failure just as the Russian pivot has.

But Putin and Xi Jinping are both much too skilled and intelligent to defeat. American WWE trash talkers are completely outclassed by an 8th dan in judo paired with a Sun Tzu scholar.

Tomoe nage - use your opponent's weight and aggression against him.

"If your enemy is secure at all points, be prepared for him. If he is in superior strength, evade him. If your opponent is temperamental, seek to irritate him. Pretend to be weak, that he may grow arrogant. If he is taking his ease, give him no rest. If his forces are united, separate them. If sovereign and subject are in accord, put division between them. Attack him where he is unprepared, appear where you are not expected ."
― Sun Tzu, The Art of War

Thank you Barack and Hillary...

CB on Sun, 12/08/2019 - 9:39pm
Neither Russia nor China want the US or US$ to collapse too quickly. It would be devastating for the entire world if it happened suddenly.

@Lookout
What they want is a controlled collapse. If they can get the US to continue to overspend on war mongering rather than programs of social uplift the country will rot from the inside.

"A nation that continues year after year to spend more money on military defense than on programs of social uplift is approaching spiritual death." - Martin Luther King, Jr.

Meanwhile, back in the Motherland: //www.youtube.com/embed/acPgB_rhdfA

Lookout on Sun, 12/08/2019 - 3:25pm
corporate corruption is low fanging fruit

@Pluto's Republic

So much more to say really. Had to stop somewhere but as you know the corruption runs deep and is intermixed with the CIA/FBI/MIC corporate government under which we live.

On we go as best we can!

There is great dignity in the objective truth. Perhaps because it never flows through the contaminated minds of the unworthy.

smiley7 on Sun, 12/08/2019 - 7:43pm
Excellent Watch, Lookout,

Corporate charters were initially meant to be for the public good if i'm not mistaken in recall, it was a trade-off for their privilege to exist. Maybe a movement political leader could highlight this and move the pendulum back to accountability.

Had a conversation with good friend today, a 3M rep, and he was griping about his competitor's shady marketing product practices apparently lying to manufacturers about the grades and contents of their competing products.

smiley7 on Sun, 12/08/2019 - 7:53pm
A timely piece to go with your conversation of today:

https://www.theguardian.com/us-news/2019/dec/07/kochland-review-koch-bro...

Battle of Blair... on Mon, 12/09/2019 - 8:37am
I want that flag.

Where can I buy that flag? I will raise it and sing the corporate anthem

"God bless Generica.
Land that is owned.
By the wealthy, unhealthy
As that might be for those being pwnd.

From the Walmart to McDonalds to the corner Dominooooos.
God Bless Generica
My high rent home.

[Feb 07, 2020] Divide et Impera

Feb 07, 2020 | www.zerohedge.com

VodkaInKrakow , 1 hour ago link

Bezos held a party in DC recently at his place attended by top officials from the Trump Administration. Jared Kushner was there before. They hang out together.

How odd that Bezos is somehow portrayed as some anti-Trump owner of WaPo. Bezos serves his role in Beltway...

Divide et Impera.

Divide and Rule (the rabble).

[Feb 07, 2020] Sanders Called JPMorgan's CEO America's 'Biggest Corporate Socialist' Here's Why He Has a Point

Highly recommended!
Notable quotes:
"... It is purely extractive ..."
"... By Paul Adler, Professor of Management and Organization, Sociology and Environmental Studies, University of Southern California. Originally published at The Conversation ..."
Feb 07, 2020 | www.nakedcapitalism.com
Yves here. I wish Sanders would use even more pointed messaging, like "socialism for the rich". But for those who complain about Sanders not going after important targets, this slap back at Dimon, who criticized Sanders and socialism at Davos, shows that the Vermont Senator is landing punches, but choosing his fights carefully.

And banks are much bigger welfare queens than the public realizes. They get all sorts of subsidies, from underpriced deposit insurance to Federal guaranteed for most home mortgages to the Fed operating and backstopping the essential Fedwire system. These subsidies are so great that banks should not be considered to be private sector entities, yet we let them privatize their profits and socialize their train wrecks. As we wrote in 2010 :

More support comes from Andrew Haldane of the Bank of England, who in a March 2010 paper compared the banking industry to the auto industry, in that they both produced pollutants: for cars, exhaust fumes; for bank, systemic risk. While economists were claiming that the losses to the US government on various rescues would be $100 billion (ahem, must have left out Freddie and Fannie in that tally), it ignores the broader costs (unemployment, business failures, reduced government services, particularly at the state and municipal level). His calculation of the world wide costs:

.these losses are multiples of the static costs, lying anywhere between one and five times annual GDP. Put in money terms, that is an output loss equivalent to between $60 trillion and $200 trillion for the world economy and between £1.8 trillion and £7.4 trillion for the UK. As Nobel-prize winning physicist Richard Feynman observed, to call these numbers "astronomical" would be to do astronomy a disservice: there are only hundreds of billions of stars in the galaxy. "Economical" might be a better description.

It is clear that banks would not have deep enough pockets to foot this bill. Assuming that a crisis occurs every 20 years, the systemic levy needed to recoup these crisis costs would be in excess of $1.5 trillion per year. The total market capitalisation of the largest global banks is currently only around $1.2 trillion. Fully internalising the output costs of financial crises would risk putting banks on the same trajectory as the dinosaurs, with the levy playing the role of the meteorite.

Yves here. So a banking industry that creates global crises is negative value added from a societal standpoint. It is purely extractive . Even though we have described its activities as looting (as in paying themselves so much that they bankrupt the business), the wider consequences are vastly worse than in textbook looting.

Back to the current post. As to JP Morgan's socialism versus the old USSR's planned economy, one recent study which I cannot readily find due to the sorry state of Google offered an important correction to conventional wisdom.

Recall that Soviet Russia initially did perform extremely well, freaking out the capitalist world by industrializing in a generation. There was ample hand-wringing as to whether a less disciplined free enterprise system could compete with a command and control economy. Economists got a seat at the policy table out of the concern that capitalist economies needed expert guidance to assure that they could produce both guns and butter.

The study concluded that central planning had worked well in Soviet Russia initially, until the lower-level apparatchiks started gaming the system by feeding bad information so as to make their performance look better (for instance, setting way too forgiving production targets, or demanding more resources than they needed). The paper contended that the increasingly poor information about what was actually happening on the ground considerably undermined the central planning process. That is not to say there weren't also likely problems with motivation and overly rigid bureaucracies. But the evolution of modern corporations, of devaluing and ignoring worker input and treating them like machines that are scored against narrow metrics, looks as demotivating as the stereotypical Soviet factory.

Finally, this post conflates socialism, which includes New Deal-ish European style social democracy, with capitalist systems alongside strong social safety nets, which the public ownership and provision of goods and services. It should be noted that public ownership has regularly provided services like utilities very effectively.

By Paul Adler, Professor of Management and Organization, Sociology and Environmental Studies, University of Southern California. Originally published at The Conversation

Sen. Bernie Sanders called JPMorgan Chase CEO Jamie Dimon the " biggest corporate socialist in America today " in a recent ad.

He may have a point – beyond what he intended.

With his Dimon ad, Sanders is referring specifically to the bailouts JPMorgan and other banks took from the government during the 2008 financial crisis. But accepting government bailouts and corporate welfare is not the only way I believe American companies behave like closet socialists despite their professed love of free markets.

In reality, most big U.S. companies operate internally in ways Karl Marx would applaud as remarkably close to socialist-style central planning. Not only that, corporate America has arguably become a laboratory of innovation in socialist governance, as I show in my own research .

Closet Socialists

In public, CEOs like Dimon attack socialist planning while defending free markets.

But inside JPMorgan and most other big corporations, market competition is subordinated to planning. These big companies often contain dozens of business units and sometimes thousands. Instead of letting these units compete among themselves, CEOs typically direct a strategic planning process to ensure they cooperate to achieve the best outcomes for the corporation as a whole .

This is just how a socialist economy is intended to operate. The government would conduct economy-wide planning and set goals for each industry and enterprise, aiming to achieve the best outcome for society as a whole.

And just as companies rely internally on planned cooperation to meet goals and overcome challenges, the U.S. economy could use this harmony to overcome the existential crisis of our age – climate change. It's a challenge so massive and urgent that it will require every part of the economy to work together with government in order to address it.

Overcoming Socialism's Past Problems

But, of course, socialism doesn't have a good track record.

One of the reasons socialist planning failed in the old Soviet Union, for example, was that it was so top-down that it lacked the kind of popular legitimacy that democracy grants a government. As a result, bureaucrats overseeing the planning process could not get reliable information about the real opportunities and challenges experienced by enterprises or citizens.

Moreover, enterprises had little incentive to strive to meet their assigned objectives, especially when they had so little involvement in formulating them.

A second reason the USSR didn't survive was that its authoritarian system failed to motivate either workers or entrepreneurs. As a result, even though the government funded basic science generously, Soviet industry was a laggard in innovation .

Ironically, corporations – those singular products of capitalism – are showing how these and other problems of socialist planning can be surmounted.

Take the problem of democratic legitimacy. Some companies, such as General Electric , Kaiser Permanente and General Motors , have developed innovative ways to avoid the dysfunctions of autocratic planning by using techniques that enable lower-level personnel to participate actively in the strategy process.

Although profit pressures often force top managers to short-circuit the promised participation, when successfully integrated it not only provides top management with more reliable bottom-up input for strategic planning but also makes all employees more reliable partners in carrying it out.

So here we have centralization – not in the more familiar, autocratic model, but rather in a form I call "participative centralization." In a socialist system, this approach could be adopted, adapted and scaled up to support economy-wide planning, ensuring that it was both democratic and effective.

As for motivating innovation, America's big businesses face a challenge similar to that of socialism. They need employees to be collectivist, so they willingly comply with policies and procedures. But they need them to be simultaneously individualistic, to fuel divergent thinking and creativity.

One common solution in much of corporate America, as in the old Soviet Union, is to specialize those roles , with most people relegated to routine tasks while the privileged few work on innovation tasks. That approach, however, overlooks the creative capacities of the vast majority and leads to widespread employee disengagement and sub-par business performance.

Smarter businesses have found ways to overcome this dilemma by creating cultures and reward systems that support a synthesis of individualism and collectivism that I call "interdependent individualism." In my research, I have found this kind of motivation in settings as diverse as Kaiser Permanent physicians , assembly-line workers at Toyota's NUMMI plant and software developers at Computer Sciences Corp . These companies do this, in part, by rewarding both individual contributions to the organization's goals as well as collaboration in achieving them.

While socialists have often recoiled against the idea individual performance-based rewards, these more sophisticated policies could be scaled up to the entire economy to help meet socialism's innovation and motivation challenge.

Big Problems Require Big Government

The idea of such a socialist transformation in the U.S. may seem remote today.

But this can change, particularly as more Americans, especially young ones, embrace socialism . One reason they are doing so is because the current capitalist system has so manifestly failed to deal with climate change.

Looking inside these companies suggests a better way forward – and hope for society's ability to avert catastrophe.


Colonel Smithers , February 7, 2020 at 5:21 am

Thank you, Yves.

Just to add, as a former bank and buy side lobbyist, the industry is not always opposed to regulation. It's a barrier to entry.

This post is on the money. Banksters and their clients love corporate welfare and socialism for the rich, especially when so much of, for example, UK QE "leaked" into asset bubbles in emerging markets, commodities and real estate.

You are right to say that Sanders should use more pointed language. Like Nina Turner, he should call out oligarchs. That term is used for Russians and Ukrainians, but never for the likes of Zuckerberg, Musk, Dimon, Blankfein, Schmidt, Branson, Dyson, Arnault et al. The term regime should also be used. If it's good enough to delegitimise certain governments, it's good enough to describe the Trump and Johnson administrations. After all, William Hague in talks with the US government called the British government the Brown regime.

Feynman and Haldane are mentioned above. It emerged this week that Dominic Cummings, Johnson's main adviser, is an admirer of both, regarding them as free thinkers and technicians of substance, and championed Haldane's candidacy to be Bank of England governor. Johnson sided with Chancellor Sajid Javid.

Ignacio , February 7, 2020 at 6:21 am

Sanders should use more pointed language or may be not for the moment. May be after the Super Tuesday. He is being careful and that is good IMO. He doesn't want to give excuses for easy attacks. I would say, instead of "socialism for the rich", "socialism for the 1%" or the 0,1% even better. Sounds more neutral. A comment yesterday linked an article comparing Sanders with Gandhi and others and I think it was well pointed. The quiet and careful revolution!

skippy , February 7, 2020 at 6:30 am

Attack the economics and not the strawmen.

pretzelattack , February 7, 2020 at 7:02 am

what do you think of american democracy? i think it would be a good idea.

ObjectiveFunction , February 7, 2020 at 11:04 am

Sanders understands (as does Trump), that the 2020 battle is *not* for the 35-40% whose minds are basically made up at each end. Trying to win those over in any numbers (especially by shrieking invective at them) is a pathetic waste of time and effort.

The winning message must move the 20-30% of voters who either:

(a) voted Obama (hope, for something more than soothing patter) and then Trump (a giant stubby middle finger to the establishment).
(b) voted Obama in 2008 but have stayed at home since (what's the point? they're all lying scum)

Sanders simply doesn't bring socialism to America, because he doesn't have a New Deal (i.e. SocDem) party. That kind of movement will take time (and the upcoming global climatolo-economic crisis) to build up, under savage attack from the propertied unterests and continuously subverted by credentialed PMC weasels and Idpol misleadership grifters.

What Sanders the man *does* bring, today, is:

(1) unimpeachable integrity, steadfastness and sorely missed absence of smug BS and double talk;
(2) hardheaded enforcement of the existing laws of the land;
(3) delivery of universal Concrete Material Benefits© to the broad citizenry (not more 'GDP' gravy for the oligarchs) in finite time, freeing them to rejuvenate themselves, and over time, the Republic.

This last is vitally important, but must also be approached prudently lest the entire movement lose focus, overextend and fall prey to the next Trump .

IMHO, it must focus ruthlessly on delivering:

(a) single payer health care, to starve (if not incinerate) the bloated ticks gorging on the US health/elder 'care' . cesspool, I can't bring myself to call it a 'system'. This above all: without it, Americans simply can't compete in any world, walls and tariffs or not.

(b) *real* infrastructure, for the 80%. That's water and sewerage, cross-class public housing, and busways and light rail to coax Americans out of their cars and suburbs. It's not 5G, vanity EVs and high speed Acelas. And sorry Keynesians, shovel ready is a side benefit, not the primary purpose. There's a lot to do.

(c) an overhaul of American higher education (still rooted in 17th century divinity schools). Teaching (and medicine) must again become honored occupations in the country; administrators must give way to front line practitioners.

. Only then can Bernie move on to the more deeply embedded and multinational targets:

(a) big finance,
(b) extractive industries
(c) the MIC

These behemoths can really only be attacked during a time of crisis. Or they will simply crush their opponents like insects, or buy them off.

In the case of the MIC, Berniecrats will likely need to be content with strong reassertion of Federal oversight (more stick, less carrot), and disengagement from doing our 'allies' dirty work (Trump is already on that road, with one huge Ixception .)

Total dismantlement sounds very nice, but consider: whatever's left of US industrial power is concentrated in the MIC. America doesn't need to 'buy prosperity down at the armoury', but like FDR, Bernie and (Tulsi) will also need to have the keels laid down against whatever whirlwind we have reaped. Baring our breast and saying 'we deserve destruction for our sins' is a fatuous open invitation to fascism. FDR knew better.

[/rant]

Harry Shearer , February 7, 2020 at 11:28 am

Anybody citing Kaiser Permanente as a good example of anything has never known a person subjected to their distinctive form of "care".

David J. , February 7, 2020 at 7:32 am

Sanders was pretty direct last night at the CNN Town Hall. Flat out calls Trump a socialist. (youtube link to the question.)

Also, stick around for his answer to Cooper's followup question. Gloves are off.

LowellHighlander , February 7, 2020 at 7:43 am

Paul Adler's post here reminds me of John Kenneth Galbraith's New Industrial State, except Professor Adler was referring to the financial (i.e. parasitical) sector of the economy. Am I off the mark in thinking this?

Mel , February 7, 2020 at 11:13 am

You're right on. Galbraith showed that planning comes naturally from very large projects. Soviets went to planning because they couldn't bet the entire national economy on some gut feeling -- they needed to know what would happen. Ditto the gigantic industries in what JKG called the Planning Sector in the west. Projects spending millions or billions of dollars over many years couldn't be left to chance. Eliminating chance meant imposing control, which the gigantic industries could try to do, helped by their access to gigantic capital, and which the Soviets had done with State power.

IMHO the modern FIRE sector arose from the old Planning Sector. They eliminated the uncertainties that complicated their planning; they cut their ties with physical processes that brought those uncertainties; they dumped physical industries onto throwaway economies overseas (that could be abandoned if they failed); they finally became pure businesses that dealt only with nice, clean contracts. No muss, no fuss, no bother.

Dirk77 , February 7, 2020 at 12:41 pm

So planning is a tool of any organization, yet is required more the larger it becomes? While planning may make sense for a company with a single product such as automobiles, does it make sense for a conglomerate? I mean I think the purpose of a conglomerate is to contain many diverse product sectors to reduce risk of the conglomerate as a whole to any one sector. In that way each sector does its own planning, but the conglomerate as a whole does not, apart from choosing which companies to buy and sell, which can be considered a different type of planning? In that way are the goals of society planning are different from the goals of conglomerate planning or that of smaller single product sector companies? Yet in spite of these differences the techniques of planning are the same? Is that the main point of Alder's article? Can someone explain please.

DSB , February 7, 2020 at 8:44 am

Dimon – billionaire bank manager.

chuck roast , February 7, 2020 at 8:46 am

If you surf around a bit you can find links to Bernie's views and support of worker co-ops. There is nothing on his website. In light the burgeoning Socialist smear tsunami, it is probably not something he wants to emphasize right now. Imagine someone getting up at a CNN Town Hall and asking him about his attitude towards worker cooperatives. (corporate heads explode on golf-courses all over America)

Stadist , February 7, 2020 at 10:03 am

Modern theses about leadership, expertise and management underline agile learning and self leadership to everyone himself and within team and then within larger entities. While I'm somewhat pessimistic about these corporate trends they still look like they would work much better with worker co-ops than in traditional top down owned corporations. Basically they are asking higher dedication from workers, but this only works really well if the profits are shared with workers in somewhat equitable manner in my opinion.

Also it seems common nowadays that many coding/programming companies, especially the highly productive ones seem to act more akin to co-ops than monolithically led traditional companies. The programmers are often engaged more to the company by giving or selling them shares, and if this happens in large scale the company ownership structure can skew more towards worker owned 'co-op'-like entity than more hierarchical traditional company, where owners and workers are usually clearly separated.

The Rev Kev , February 7, 2020 at 9:57 am

Be nice if one could have posted the Forbes 400 but, listed next to each entry, is the amount of money that they receive from the Federal government both directly and indirectly.

inode_buddha , February 7, 2020 at 12:38 pm

You might want to have a look at Open Secrets

https://www.opensecrets.org/

They conveniently list which money went where, and how the respective legislator voted.

notabanktoadie , February 7, 2020 at 10:23 am

Yves here. So a banking industry that creates global crises is negative value added from a societal standpoint. It is purely extractive. [bold in the original]

Which leads to this obvious question: Why should banks be privileged, explicitly or implicitly, in any way then?

E.g. why should we have only a SINGLE payment system (besides grubby physical fiat, paper bills and coins) that recklessly combines what should be inherently risk-free deposits with the inherently at-risk deposits the banks themselves create? I.e. why should a government privileged usury cartel hold the entire economy hostage?

a different chris , February 7, 2020 at 12:14 pm

If you mean "why" in the moral sense, which I believe you do, there is no answer.

If you mean why in the technical sense, examine this sentence:

>why should a government privileged usury cartel

It's not "government privileged", it owns the government. Anything the government is allowed to do outside of making Jamie Dimon et al richer are considered the actual privileges by this group, and can, will and have been retracted at will.

notabanktoadie , February 7, 2020 at 1:46 pm

If the banks cognitively "own" the government, it's because almost everyone believes TINA to government privileges for them.

This is disgracefully true of the big names of MMT, who should be working on HOW to abolish those privileges, not ignore or, in the case of Warren Mosler at least, INCREASE* them.

*e.g. unlimited, unsecured loans from the Central Bank to banks at ZERO percent.

Dirk77 , February 7, 2020 at 11:03 am

That neither extreme, capitalism or socialism, works, and that what is best for human society is some middle ground between the two is a very important message. So I'm very glad for this post. I realize that a black and white way of perceiving the world is an easy one. Yet as Alder points out, humans are both individuals and social beings. If people in this world could get back to thinking more like Ancient Greece in its appreciation for the golden mean, we would have a much better chance of surviving. Dispensing with all these useless socialism vs capitalism discussions would be a great time saver. I realize most people believe in some middle ground, yet making it explicit would simplify things quite a bit. As for the rest of the article, I need to think about it more. The corporate socialism idea does tie in with the link yesterday about limited liability.

a different chris , February 7, 2020 at 12:19 pm

>That neither extreme, capitalism or socialism, works,

Exactly! Because: There. Is. No. Economic. Equilibrium. Never was, never will be, anywhere and everywhere. Heck for billions of years, before humans existed let alone learned to talk, the world changed. Things developed, other things went extinct (although not in the heart-wrenching way of the Anthropocene, I personally am happy never to have met a T. Rex in truth), the way the world works even without us is continual change.

So adjust as necessary. Our healthcare system sucks, bring full bore socialism on it. Our corporate overlords suck, bring full bore free markets (kill patents to start) on them.

monday1929 , February 7, 2020 at 2:51 pm

You might want to re-think the "kill patents" idea. Our Founders liked them. I just had a patent "killed" by an examiner who "killed" 42 of 43 patents he examined. It was for a device which could be saving Corona/Flu victims Right Now. I am going to try to Donate the idea to Society, but preventing people from profiting from valid Novel ideas is not the solution. I realize Corporations abuse the Patent System, like every other thing they touch. But I am a low level individual who is trying to "innovate" and reduce illness. My main motivation was not monetary but it is always a factor.
I believe you have the wrong target on this issue.
My first rejection on a related patent was just received 2.5 years after initial filing. It took this long because the Govt. takes money from USPTO (which runs a surplus) and sends it to the General Fund. USA innovation friendly? Not the way I see it.

NoBrick , February 7, 2020 at 11:20 am

"But for those who complain about Sanders not going after important targets "

Consider the wisdom of Susan Webber:
"Wisdom of the CEO is comprimised work. These CEOs "know" that too much candor,
either individually or institutionally, is not a pro-survival strategy."

Diogenes , February 7, 2020 at 11:53 am

I think the comparison of banks to welfare queens is quite unfair.

To welfare queens, that is.

Assuming they exist outside of the sweaty PR fantasies of those of a certain political stripe, presumably even a welfare queen is not living 100% off of the munificence of the state, whereas the implied value of the "Too Big To Fail" guaranty subsidy was determined to be very nearly in the same amount as the annual profits of the recipient banks. In other words, they're complete wards of the state. Doesn't get much more socialistic than that.

https://www.bloomberg.com/opinion/articles/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-

In other words: "Socialism for me, markets for thee."

Susan the other , February 7, 2020 at 12:17 pm

Thank you, Yves for this post. Alder has very logical and accessible ideas. "Interdependent Individualism" is a good way to begin. When he says "socialists recoil against individual performance-based rewards" I can't help but think the rewards should be gifted from the workers to the bosses. Because that would be very change-promoting. Top down has a tendency to stagnate motivation – even offensively – like tossing them a few crumbs to keep them quiet. imo. This also really does sound Japanese. I'm not sure I can relate to the way they cooperate; from them there is not so much as a polite argument; certainly no sarcastic barbs. Americans are the exact opposite – we cooperate competitively in a sense. But Climate Change will dictate our direction regardless of decorum. My own sense of our dilemma is that "free market" corporations make their profits by extracting from labor and the exploitation of the environment, and by externalizing costs to society. Big disconnect. Huge, in fact. This is why "capitalism" has failed to address climate change. Anybody else notice that China has forbidden short selling as we speak? Just like the Fed did in 2009 with QE, etc. That's probably because if the economy crashes (regardless of how illogical it has become) it will take way too long to put back together. And there's work to be done. I remember Randy Wray dryly responding to Jacobin's criticism (of MMT) that the ideological socialists would rather see a bloody Marxist uprising than a peaceful evolution. I do think Wray is right on ideological blinders on both sides. One quibble I have with this very wise post is that it assumes (I think) that we cannot change our ways fast enough to mobilize adequately to address climate change. I think we've been doing it pretty aggressively since 2009. Literally a world war to control oil and maintain financial supremacy; serious consideration of our options by the political class (turning to MMT, etc.); slamming the breaks on trade and manufacturing; subsidizing essential industries. I'm sure there are other things going on under the radar. So I wouldn't discount our ability to mobilize – just our inability to admit it. Clearly we want to do things selectively.

a different chris , February 7, 2020 at 12:25 pm

>the Vermont Senator is landing punches, but choosing his fights carefully.

Yes, as Objective Function laid out nicely (funny word for this mess, but whatever) above – this isn't gonna be easy. If you hope to beat Mike Tyson in his prime, you don't start by trading heavy blows. Defeat him with small but continuous cuts from multiple directions.

twonine , February 7, 2020 at 12:30 pm

Speaking of Davos and Dimon, shouldn't that be "Biggest Corporate Criminals" ?

" senior leaders of three of the largest and most elite U.S. banks were serial criminals whose frauds are (we pray) without equal." -- William K. Black

monday1929 , February 7, 2020 at 2:34 pm

Wallstreet on parade website does great job laying out JPM's crime spree. They (JPM) just came off parole(?) in January on some Felony charges. Someone (Eliz. Warren?) might start a movement to prohibit public pensions / State and local Govts. from conducting business with any banks convicted of felonies or entering plea agreements more than, let's say, ten per year.
A convicted felon can not get a job at a bank run by a 22 times loser- Jamie Dimon, a fellow felon who should have some empathy.
Wallstreet on parade is one of few sites who discuss Citi's crimes, and the fact that the Federal Reserve tried to cover up (and succeeded until about 2012) the secret 2.5 TRILLIION in revolving loans provided to a bankrupt Citibank around 2009. This in addition to the hundreds of billions we did know about.
I do tend to harp on this because the felon Robert Rubin cost me about 500K in expired Put options on shittybank because of his blatant, felonious (per FCIC) lies right before the implosion. His referral for prosecution by the Financial Crises Inquiry Commission mysteriously withered away

[Jan 01, 2020] The relationship between Jews and neoliberalism

Jan 01, 2020 | www.unz.com

Anonymous [211] Disclaimer , says: December 19, 2019 at 8:38 pm GMT

This is a timely article for me as I have been pondering the relationship between Jews and neoliberalism for some time now.

At university I studied under a brilliant Neo-Marxist professor who showed me some theory and arguments that went a long way towards explaining how to make sense of the global power structure.

(Just a quick not for those who recoil at the mere mention of Neo-Marxist: the academics that use a Marxist lens as a tool to criticize the powerful are not all the cuckold communist SJW types – some of these individuals are extremely intelligent and they make very powerful arguments backed by loads of data.)

One of the theories I was introduced to was the notion of the Transnational Capitalist Class in this article called Towards A Global Ruling Class? Globalization and the Transnational Capitalist Class:

http://media.library.ku.edu.tr/reserve/respring18/Intl313_ZOnis/3_Historical_Structuralism.pdf

The authors write the following:

Sklair's work goes the furthest in conceiving of the capitalist class as no longer tied to territoriality Inherent in the international concept is a system of nation-states that mediates relations between classes and groups, including the notion of national capitals and national bourgeoisi. Transnational, by contrast, denotes economic and related social, political, and cultural processes – including class formation that supersede nation-states

What distinguishes the TCC from national or local capitalists is that it is involved in globalized production and manages globalized circuits of accumulation that give it an objective class existence and identity spatially and politically in the global system above any local territories and polities.

Since reading your (Dr Joyce) work on the JQ I began to see the connection between age old complaints of Jews, and what Ford referred to as "The International Jew". In fact, replace the term "transnational capitalist class" from my passages quoted above (and many others) and what you have is perfect mirror image of the argument.

This question has come up often lately, synchronistically (or maybe not). I'm somewhat new to the JQ, having consumed many hours of work (including much of your own) after being sent down the rabbit hole by the ongoing Epstein case. I was pondering that perhaps, Jews take the blame for what the predatory capitalists are doing. Not even a week later you addressed this precise question in your piece about Slavoj Ziszek and now with "vulture capitalism" it is coming up yet again in Carlson's segment followed by the article right here. It also came up on the "other side" in the blog I follow of a professor of globalization in this article: https://zeroanthropology.net/2019/11/27/global-giants-american-empire-and-transnational-capital/

The link above is a review of the book Giants: The Global Power Elite . The review provides a summary of the book which once again could be a text about Jews if one were to replace the term "transnational capitalist class" with "Jews". Why I mention it, though, is the following:

"Chapter 2, "The Global Financial Giants: The Central Core of Global Capitalism," identifies the 17 global financial giants -- money management firms that control more than one trillion dollars in capital. As these firms invest in each other, and many smaller firms, the interlocked capital that they manage surpasses $41 trillion (which amounts to about 16% of the world's total wealth). The 17 global financial giants are led by 199 directors. This chapter details how these financial giants have pushed for global privatization of virtually everything, in order to stimulate growth to absorb excess capital. The financial giants are supported by a wide array of institutions: "governments, intelligence services, policymakers, universities, police forces, militaries, and corporate media all work in support of their vital interests" (p. 60).

Chapter 3, "Managers: The Global Power Elite of the Financial Giants," largely consists of the detailed profiles of the 199 financial managers just mentioned.

This caught my eye because I immediately wondered how many of those 199 directors are Jewish. It also pertains directly to this exact article because I am confident that the vulture capitalists you targeted here are profiled in the book, probably with many others.

Now, I am not in the business of writing about the JQ, so I wanted to suggest to anyone out there that is that if they were to obtain a copy of this book and determine how many of the 199 directors are jews. What this could accomplish is a marriage of the major two theories of the "anti-semites" (for lack of a better word) and the "Neo-Marxists". I would argue that perhaps both sides would learn they are coming at the same thing from two different angles. Most would ignore it, but maybe a few leftist thinkers would receive a much needed electric shock if they were to see the JQ framed in marxist terms. Perhaps some alliances could be forged across the cultural divide in this struggle. Personally I believe that both angles are perfectly valid, and that understanding one without the other will leaves far too much to be desired when studying the powerful.

[Dec 24, 2019] Christmas in Flyover Land - Kunstler

Notable quotes:
"... It's a Wonderful Life ..."
"... we have sent the factories to distant lands and eliminated your jobs, and all the meaning and purpose in your lives -- and cheap stuff from Asia is your consolation prize. Enjoy ..."
"... Homelessness in America runs way deeper than just the winos and drug addicts living on the big city sidewalks. ..."
Dec 24, 2019 | kunstler.com

All the people of America, including the flyovers, are responsible for the sad situation we're in: this failure to reestablish a common culture of values most people can subscribe to and use it to rebuild our towns into places worth caring about. Main Street, as it has come to be, is the physical manifestation of that failure. The businesses that used to occupy the storefronts are gone, except for second-hand stores. Nobody in 1952 would have believed this could happen. And yet, there it is: the desolation is stark and heartbreaking.

Even George Bailey's "nightmare" scene in It's a Wonderful Life depicts the supposedly evil Pottersville as a very lively place, only programmed for old-fashioned wickedness: gin mills and streetwalkers. Watch the movie and see for yourself.

Pottersville is way more appealing than 99 percent of America's small towns today, dead as they are.

The dynamics that led to this are not hard to understand. The concentration of retail commerce in a very few gigantic corporations was a swindle that the public fell for.

Enthralled like little children by the dazzle and gigantism of the big boxes, and the free parking, we allowed ourselves to be played.

The excuse was "bargain shopping," which actually meant we have sent the factories to distant lands and eliminated your jobs, and all the meaning and purpose in your lives -- and cheap stuff from Asia is your consolation prize. Enjoy

The "bones" of the village are still standing but the programming for the organism of a community is all gone: gainful employment, social roles in the life of the place, confidence in the future. For a century starting in 1850, there were at least five factories in town. They made textiles and later on, paper products and, in the end, toilet paper, ironically enough. Yes, really.

They also made a lot of the sod-busting steel ploughs that opened up the Midwest, and cotton shirts, and other stuff. The people worked hard for their money, but it was pretty good money by world standards for most of those years.

It allowed them to eat well, sleep in a warm house, and raise children, which is a good start for any society. The village was rich with economic and social niches, and yes, it was hierarchical, but people tended to find the niche appropriate to their abilities and aspirations -- and, believe it or not, it is better to have a place in society than to have no place at all, which is the sad situation for so many today.

Homelessness in America runs way deeper than just the winos and drug addicts living on the big city sidewalks.


BackRowHeckler December 22, 2019 at 10:50 pm #

It seems there's a major political party exactly working against a common American culture. They jeer at the thought of it. It seems to be the main platform, above all else.

Brh

Log in to Reply
Walter B December 23, 2019 at 3:23 pm #

It is a major party alright BRH, but it is no so much political as it is economic and socially stratified. They are opulent, self consumed and greedy as hell (literally). There can only be so many parasites sucking the lifeblood out of any herd of servant beasts, and they can only suck so long on their hosts before the poor beasts fall over and die. And that is the tipping point, where we lose enough life blood that we can no longer stand upright, but drop to the deck and are consumed. It is the classic Goose that laid the Golden Egg fairy tale being acted out in real life and coming to a neighborhood near you soon. Log in to Reply

sunburstsoldier December 22, 2019 at 11:22 pm #

Beautiful, thoughtful post Jim, yet to be honest it fills me with a sense of anxiety, and this is simply because the catastrophic events you forecast, although for the better in the long run (as they will compel a return to a world made by hand, or the recovery of human scale) will nonetheless bring much suffering to a lot of people ( including my own family). I would personally like to believe there is another way a more sustainable civilization could be attained than on the heels of societal collapse. I do believe the world is full of mystery, and that life itself is a series of unfolding miracles we lack the capacity to comprehend due to our limited perspective. Yet perhaps you are right and some type of collapse is inevitable before a new beginning can be made. If such be the case, as individuals we will be compelled to tap into inner potentials that will needed to meet the approaching apocalypse, potentials which currently lie dormant and undeveloped. Maybe in the process of doing so we will recover our wholeness as well.

[Dec 14, 2019] William Barr on big tech: Companies becoming successful, dominant is not wrong

Dec 14, 2019 | www.youtube.com

Matt S. , 5 hours ago

Break up Silicon Valley, they are trying to take over the world, they think they are above the gov't and the Constitution!

Joe OConnor , 7 hours ago

Big Corp and unions influence gov to much as well as foreign lobbyists Listen to the American people

[Dec 07, 2019] The death of free markets under neoliberalism. Monopolization unhinged

Dec 07, 2019 | economistsview.typepad.com

Fred C. Dobbs , December 04, 2019 at 06:12 AM

The death of free markets
https://www.bostonglobe.com/2019/11/29/opinion/death-free-markets/?event=event25 via @BostonGlobe

Shaul Amsterdamski - November 29, 2019

In 2012, when economist Thomas Philippon was looking into some data, something odd caught his attention.

His homeland, France, was undergoing another revolution, although a much different one: a revolution in the country's telecommunication market. A new mobile operator, Free, had entered the market and disrupted it almost overnight. The new operator slashed prices, offering plans that hadn't been seen before in France.

France's three legacy mobile operators were forced to react and drop their own prices. It didn't help. In only three months, Free's market share reached 4 percent. At the end of the following year, its market share tripled. Today, Free controls 15 to 16 percent of the market, making it France's third largest mobile operator. (If you add the six virtual operators to the mix -- meaning companies who lease broadband space -- you'll get a total of 10 different mobile operators in a country with a population one-fifth the size of the United States.)

"Digging deeper into that crystallized everything for me," says Philippon. "It was an oligopoly based on three legacy carriers that lobbied very hard to prevent anybody from getting a fourth (mobile) license. For 10 years they were successful. But then, in 2011, the regulator changed and gave a license [to] Free. It wasn't a technological change or a change in consumers' taste. It was purely a regulatory decision."

For French consumers, this one decision changed everything. Instead of paying $55 for a 1-gigabyte plan, the new prices for much better plans cost half that. And prices continued to drop. Today, a Free 60-gigabyte plan costs only $12.

But Philippon wasn't just interested in what the new competition in the French telecom industry said about French markets. Having lived in the United States since 1999, he compared the French telecom revolution to the American market. The numbers blew his mind. While in France the number of mobile operators was rising, in the US the number was getting smaller (and that number might even decline further, if the planned Sprint-T-Mobile merger goes through).

The result was a huge price gap between the two countries.

"France went from being much more expensive to much cheaper in two years," he says. "The change in price was drastic -- a relative price move of 50 percent. In such a big market with gigantic firms, that's a big change. And it was not driven by technology, it was driven by pro-competition regulation." He immediately adds, just to emphasize the irony: "It happened in France of all places, a country that historically had a political system that made sure there wasn't too much competition. This is not the place where we expected this kind of outcome."

The opposite was very surprising too: The level of competition in the United States, the role model of free-market democracy, was declining.

Philippon, an acclaimed professor of finance at the New York University Stern School of Business, kept pulling that thread. He gathered an overwhelming amount of data on various markets, took a few steps back to look at the big picture, and then identified a pattern. The result is "The Great Reversal," his recent book, in which he explores and explains when, why, and how, as his subtitle puts it, "America Gave Up on Free Markets."

The telecom story is just one of many examples Philippon provides throughout the book of non-competitive US markets, in which most or all of the power is concentrated in the hands of a few big companies. It's a situation that makes it almost impossible for new competitors to enter and lower prices for consumers. The airline market is another example, as is the pharmaceutical industry, the banking system, and the big tech companies such as Google and Facebook, who have no real competition in the markets they operate in.

The book's main argument has a refreshing mix of both right- and left-leaning economic thinking. It goes like this: During the last 20 years, while the European Union has become much more competitive, the United States has become a paradise for monopolies and oligopolies -- with a few players holding most of the market share. As US companies grew bigger, they became politically powerful. They then used their influence over politicians and regulators, and their vast resources, to skew regulation in their favor.

The fight over net neutrality, to name one example, demonstrates it well.

"Guess who lobbied for that? It's a simple guess -- the people who benefited from it, the ISP's [internet service providers]. And they are already charging outrageous prices, twice as high [as] any other developed country," Philippon says.

This growing concentration of power in the hands of a few has affected everything and everyone. It has inflated prices because consumers have fewer options. Wages are stagnant because less competition means firms don't have to fight over workers. Financial investment in new machinery and technology has plummeted because when companies have fewer competitors they lose the incentive to invest and improve. It has driven CEO compensation up, and workers' compensation down. It has caused a spike in inequality, which in turn has ignited social unrest.

If all of this is too much to wrap your head around, Philippon puts a price tag on it: $5,000 per year. That's the price the median American household pays every year for the lost competition. That's the cost of the United States becoming a Monopoly Land.

How did this happen? According to Philippon, it's a story with two threads. The European side of this story happened almost by mistake. The American side, on the contrary, was no coincidence.

When the European Union was formed in the early 1990s, there was a lot of suspicion between the member states, namely France and Germany. (Two World Wars tend to have that effect.) This mistrust birthed pan-European regulators who enjoyed an unprecedented amount of freedom, more powerful than any of the member countries' governments.

"We did that mostly because we didn't really trust each other very much," he says. Now, 20 years later, "it turns out that this system we created is just a lot more resilient towards lobbying and bad influences than we thought."

At the same time in the United States, the exact opposite was happening. Adopting a free-market approach, regulators and legislators chose not to intervene. They didn't block mergers and acquisitions, and let big companies get bigger.

This created a positive feedback loop: As companies grew stronger, the regulators got weaker, and more dependent on the companies they are supposed to regulate. Tens of millions of dollars were channeled into lobbying. The Supreme Court's Citizens United decision gave corporate money even more political influence.

At some point, big companies started using regulation itself to prevent new competitors from entering the market.

The result wasn't free markets, but "the opposite -- market capture," says Philippon, referring to a situation in which the regulator is so weak it depends completely on the companies it regulates to design regulation.

Philippon is not the only one who's making these claims. A group of economists from the University of Chicago Booth School of Business holds a similar view. They are called Neo-Brandeisian, after the late Justice Louis Brandeis, who, a century ago, fought to broaden antitrust laws. They believe the big tech companies, for example, managed to rig the system, and fly under current antitrust regulation. They think it is time to break them apart.

But not everyone agrees with Philippon's narrative or his conclusions. Economists like Edward Conard, author of "The Upside of Inequality," thinks Philippon's claim that big companies are evidence of less competition is upside down. According to his criticism, it's exactly the opposite: These companies became big and powerful because they innovate and give a lot of value to consumers. He also argues that the conclusion that Europe is more competitive and innovative than the United States is preposterous, given that the biggest tech companies are American, not European.

Philippon addresses this counterclaim in his book. The United States is one giant market of English speakers. Theoretically, if you have a good idea for a new product and you can finance it, you have more than 300 million potential users on day one. In the EU, on the other hand, there are 28 countries, with residents who speak 24 different languages. It's not as simple.

Philippon, who by the age of 40 was named one of the top 25 promising economists by the International Monetary Fund, also differentiates himself from the Chicago school of thought in one important way: He's not dogmatic, he's pragmatic. Instead of a one-size-fits-all solution to the problem, he suggests a more nuanced approach. This is exactly what makes his case both unique and somewhat tricky to grasp. His approach is neither right nor left.

"The idea that free markets and government intervention are opposites, that's bogus. So half of me agrees with the Chicago School and half disagrees," he says.

"But if you think that you can get to a free market without any scrutiny by the government, that's crazy. That's simply untrue empirically. We need to make entry easier to increase competition, that's the objective," he says. "And the way to do so sometimes means more government intervention."

OK, but how do you do that? According to Philippon, each case is different.

"In some cases it will be by more intervention. Like maybe force Facebook to break from WhatsApp. And sometimes it will be by less intervention. Kill a bunch of regulations and requirements for small companies," he says.

The first idea, at least, has caught a lot of public attention during the last year, and has been a talking point of the presidential campaigns of Senators Bernie Sanders and Elizabeth Warren. Facebook's CEO Mark Zuckerberg was recorded saying that if Warren wins, it will "suck for us." Warren's plan for the big tech companies, for example, includes "reversing mergers," which means uncoupling WhatsApp and Instagram from Facebook. Her plan would also forbid Amazon being both a marketplace and a vendor at the same time.

But can any of these interventions actually happen? And if so, what would they mean for American consumers? Those are more complicated questions.

If big tech companies were broken up, Philippon estimates that the average American consumer won't be affected financially.

"Since people don't pay these companies directly, it won't change the bottom line for the middle class, it won't have a big impact on people's disposable income," he says.

What would have a tremendous impact on Americans' lives and income is to keep on going beyond the big tech companies. "We should go after the big ticket items -- telecom, transport, energy, and healthcare. That's where you want action, but there is much less bipartisan support for that," he says.

Something similar to the French telecom revolution is still far from happening in the United States, but the fact that the 2020 campaign is already pushing competition-promoting ideas back into the public discourse is a reason for cautious optimism, according to Philippon. Nevertheless, he warns, we should not let this mild optimism mislead us.

"Free markets are like a public good: It is in nobody's interest to protect them. Consumers are too dispersed and businesses love monopolies," he says. "So to take free markets for granted, that's just stupid."

(Shaul Amsterdamski is senior economics editor
for Kan, Israel's public broadcasting corporation.)

(Hmmm. Our largest monthly bill is for 'telecom',
from Comcast, for TV, phone & internet service.
There's no competitive offering in our town.)

RC (Ron) Weakley said in reply to Fred C. Dobbs... , December 04, 2019 at 10:16 AM
"...Our largest monthly bill is for 'telecom',
from Comcast, for TV, phone & internet service..."

[I got the same information from the service tech doing the annual clean and test on my propane fireplace insert yesterday, in reference to his parents though. They were on Verizon Fios for cable. He thought they should dump cable for a web-TV solution and just use cell phones. Their bill was over $400/month. Mine is a little over $200/month for the same service, which in both cases includes land line. In my zip code Verizon does not bundle Fios with mobile. The only difference that I know is that we have neither any premium channels nor DVR boxes and I assume that his parents must have both to run up a bill that high. When we pony up for Fios Gb, then at least for three years our bill will fall below $100/month, then return to a higher monthly yet if we do not take another new contract after that upgrade contract ends. Verizon only makes new contracts when new services are added or upgraded. Customers get next to no benefit for loyalty/retention. We have both Verizon and Comcast available in our area. I have had both in my present home at different times, but hate Comcast for failures on their part to provide tall vehicle clearance to pass down my driveway until forced to do so by the power company whose poles they must use and for a duplicate billing error where they billed me for two separate addresses and put me into collections for the one that I never resided at since I never saw that bill or knew of it prior to the first collections call.]

Fred C. Dobbs said in reply to RC (Ron) Weakley... , December 06, 2019 at 11:32 AM
(Bernie to the rescue!)

Bernie Sanders unveils plan to boost broadband
access, break up internet and cable titans
https://cnb.cx/34TzaQw
CNBC - Jacob Pramuk - Dec 6

Bernie Sanders unveiled a plan Friday to expand broadband internet access as part of a push to boost the economy and reduce corporate power over Americans.

In his sprawling "High-Speed Internet for All" proposal, the Vermont senator and Democratic presidential candidate calls to treat internet like a public utility. His campaign argues that the internet should not be a "price gouging profit machine" for companies such as Comcast, AT&T and Verizon.

Sanders' plan would create $150 billion in grants and aid for local and state governments to build publicly owned broadband networks as part of the Green New Deal infrastructure initiative. The total would mark a massive increase over current funding for broadband development initiatives. The proposal would also break up what the campaign calls "internet service provider and cable monopolies," stop service providers from offering content and end what it calls "anticompetitive mergers."

Sanders and his rivals for the 2020 Democratic presidential nomination have pushed to boost high-speed internet access for rural and low-income Americans, saying it has become a necessity to succeed in school and business. The self-proclaimed democratic socialist has unveiled numerous plans to root out corporate influence as he runs near the top of a jammed primary field. ...

im1dc -> Fred C. Dobbs... , December 04, 2019 at 05:07 PM
Aa excellent article that brings no new ideas to the debate but updates the debate to today.

One thing economist Thomas Philippon did not mention is that voters must turn out the elected and get new ones who will vote to create more and vigorous competition instead of oligopoly.

That is in my Equality, frequently shared here:

Economics = Politics
and
Politics = Economics

[Nov 23, 2019] The UN Is Being Turned into a Public-Private Partnership Harris Gleckman Explains Stealth Takeover by World Economic Forum

Nov 23, 2019 | www.nakedcapitalism.com

"The UN Is Being Turned into a Public-Private Partnership": Harris Gleckman Explains Stealth Takeover by World Economic Forum Posted on November 21, 2019 by Yves Smith Yves here. It is exciting to see Lynn Fries, a Geneva-based film-maker that we know from her days at The Real News Network, featuring important stories independently. OpenDemocracy presented this segment , on the corporate infiltration of the UN, and hence international governance. Lynn speaks with Harris Gleckman, Senior Fellow at the Center for Governance and Sustainability, and the author of 'Multistakeholder Governance and Democracy : A Global Challenge '. For the past 30 years, he has been a leading expert on multinational corporations, global environmental management, financing for development, global governance institutions, and the economics of climate change. They discuss how the World Economic Forum, best known for its annual Davos gathering for the rich and connected, has entered into a troubling agreement with the UN

Produced by GPEnewsdocs.

https://www.youtube-nocookie.com/embed/93aEyOUI0vY

LYNN FRIES : This newsdoc explores the folly of expecting private enterprise to operate in the service of the public interest on a grand scale, globally, in key fields: Financing the United Nations 2030 Agenda and Sustainable Development Goals, Climate change, Health, Digital cooperation, Gender equality and the empowerment of women, Education and skills. Specifically, it explores the United Nation's Strategic Partnership Agreement with the World Economic Forum. The agreement was signed by the Office of the UN Secretary-General and Executives of WEF, the World Economic Forum better known as DAVOS, a leading proponent of public-private partnerships and a multistakeholder approach to global governance.

The United Nations as the world's intergovernmental multilateral system should always focus on protecting common goods and providing global public benefits. That's the position of signatories of an Open Letter sent to the UN Secretary-General by hundreds of civil society organizations from all regions of the world. The letter states: "This public-private partnership will permanently associate the UN with transnational corporations, some of whose essential activities have caused or worsened the social and environmental crises that the planet faces. This is a form of corporate capture". The letter calls on the Secretary-General to terminate the Agreement.

I met up with Harris Gleckman to get his take on all this. Harris Gleckman is the author of "Multistakeholder Governance and Democracy: A Global Challenge" and is currently working on a handbook on the governance of multistakeholderism. Harris Gleckman is a Senior Fellow at the Center for Governance and Sustainability, UMass Boston. We go now to our featured clips of that meeting.

LYNN FRIES : Civil society is calling the World Economic Forum-UN Agreement as a corporate takeover of the UN.

HARRIS GLECKMAN: The UN Charter starts with the words "We the Peoples". What the Secretary-General is doing through the Global Compact and now through the partnership with the World Economic Forum is tossing this out the window. He is saying: I'm going to align the organization with a particular structural relationship with multinationals, with multistakeholderism, and set aside attention to all the different peoples of the world in their particular interests of environment, health, water needs and really talk about how to govern the world with those who have a particular role in creating problems of wars from natural resources, of creating problems relating to climate, creating problems relating to food supply and technologies. That is undermining a core element of what the United Nations has been and should be for its next 75 years.

LYNN FRIES : It's striking that the Agreement was signed as the UN is celebrating 100 years of multilateralism, the centenary year 1919 to 2019. And next year 2020 will mark the 1945 signing of the UN Charter 75th anniversary.

HARRIS GLECKMAN : Lynn, if I could give you an overview of what I'm concerned about the aspect of this about multistakeholderism is that the Secretary-General is the leading public figure for the multilateral system, the intergovernmental system. The World Economic Forum is the major proponent or one of the major proponents that a multi-stakeholder governance system should replace or marginalize the multilateral system. So the Secretary-General is taking steps to just jump on the bandwagon of multistakeholderism without a public debate about the democratic character of multistakeholderism, about a public debate about whether this is effectively able to solve problems, without a public debate about how stakeholders are selected to become global governors or even a public debate about what role the UN should have with any of these multistakeholder groups.

LYNN FRIES : I noted that the letter that was sent to the UN Secretary-General was also copied to the President of the General Assembly, the President of the Security Council and the Chair of the G77 with a request that it be circulated to all Governments as an Official Document.

HARRIS GLECKMAN : The Secretary-General should have gone to the intergovernmental process to debate this issue and now civil society is saying to the intergovernmental process: If the Secretary-General isn't going to tell you about it, we want you to have that debate anyway.

LYNN FRIES : In addressing the UN Secretary-General the letter by Civil Society Organizations recognized that the Secretary-General faced serious challenges.

HARRIS GLECKMAN: Yes it is absolutely the case that the Secretary-General is caught in a very difficult bind. Governments are not able to collect and are not collecting their taxes from the bulk of international business activities because of movements around tax havens. Government's say: well we don't have the money, so we cannot underwrite an effort to have a credible global governance system and this is affecting the operation of the UN. So the Secretary-General is looking at a challenge. He has the financial challenge: under payment of current dues and underfunding of the whole organization and an aggressive effort by the Trump administration to deconstruct all the organizations of the international system in a period Lynn where as you observed it's the hundredth year of multilateralism and the 75th year of the United Nations. And here the Secretary-General has two major crises on his hands in terms of the integrity of the system.

LYNN FRIES: Briefly give us some context on what you see as the motivation of the World Economic Forum.

HARRIS GLECKMAN : The World Economic Forum's motivation for joining, for perhaps, even driving forward this idea of a strategic partnership came from their work following the financial crisis starting n 2008-09. Davos, the common name for the World Economic Forum, convened 700 people working for a year and a half on a project that they called Global Redesign Initiative. They created that project because they realized that the whole public view about globalization as "a good for the world" was crumbling as a result of the financial crisis. And so they wanted to propose a new method of governing the world. And two of the elements of their proposal – that's actually a 700 page research paper – were to have a new relationship with governments in the United Nations system and to advocate that the global problems of the world should be solved by multistakeholder groups. This new partnership with the Secretary-General is an implementation of what they laid out in their Global Redesign Initiative to have a special place in the United Nations system for corporations to influence the behavior of the international organizations. And also for those corporations to be able to say to other people: Look we're in partnership with the United Nations so treat us as if we were neutral friendly bodies.

Let me just share with you a couple of examples that may help convey how serious that is. The Sustainable Development Goals were negotiated by governments in open sessions and they determined what the goals should be in 17 areas. Multistakeholder groups have announced that they are going to implement Goal 8 or Goal 6. And in the process, they declare: Here is how we will work on health, here's how we will work on education, here's how we will work on the environment. And rewrite what is the outcome of the Sustainable Development Goals in their own organizational interest. In some ways, that's not surprising. You bring together a group of companies, selected governments, selected civil societies, selected academics and they will have their own internal dynamic of concern. But what they do is they assert that what they are doing- their rewritten version- actually they are telling the world: Well, we are actually doing the UN version. But that is not what their text is.

For example, in the energy field, in the energy goal there are five key adjectives that describe the target about global energy needs. The leading multistakeholder group, Sustainable Energy for All, their target has four of those adjectives and they drop the one which was AFFORDABILITY. This is how the process of multistakeholders taking over an area, redefining it but to the public announcing that they are implementing the intergovernmental goals is an unhealthy development in global governance.

LYNN FRIES : The Civil Society letter referred to the Agreement as a public-private partnership as did you in a recent OPED. Explain more about the public interest issue with public-private partnerships.

HARRIS GLECKMAN : Well let's take a particular effort of a public-private partnership in providing water in a city. Historically this is a public or a municipal function to make sure that there is adequate amounts of water. The quality of water is healthy and its safety. And that it's regularly and reliably available to the residents in the area. When a public-private partnership comes in, the corporate side may have an interest in some of these goals but add an additional one. That is they want a return on their investment, they want a profit from it. So some of the items of those various public functions – access, quality of material of water, reliability of water, access to all people then gets suddenly changed. So if there's a manufacturing facility in one part of town more water may be diverted in that direction. If water purification is a little hard about a particular element: We may get a little lazy about doing that in the interests of profits. If it's going to take a lot of work to dig up a street and replace pipes, they'll say: Well, we can wait another five years and use those pipes which may have lead in them. All because now you add the fact that this public-private partnership needs to make a return of profit on what should be, what historically has a public municipal function. So you create this unequal development in terms of meeting public needs against the now new requirement that if you want a water system, you have to produce a profit for some of the actors involved.

LYNN FRIES : Food security is a major issue for vast populations. Comment on the implications for food security.

HARRIS GLECKMAN : If we want to build, recover, create a food secure world, you need to work with those who are growing, producing foods directly. Not those who are processing, distributing, marketing, rebranding. We need to start at the very base and create a system of engagement with small farmers, with small fishing families, with those around the world who are the actual food producers. Who have been preserving knowledge and building knowledge for centuries, they received that knowledge from centuries. That's the direction that would change the way in which we could actually look at the issues of hunger and food security in the world in a quite different fashion. Going to those who have a profit-centered motive in global governance will sharply narrow what might be possible to do. That's what the partnership will tend to do as the Secretary General and WEF have private discussions about how do we address the issue of food security while not talking very loud about how we make a profit in that process.

LYNN FRIES : If the UN Secretary-General invited you for a 1:1 what would you say?

HARRIS GLECKMAN : I think that I would say to the Secretary-General that he needs to give a major re-examination of the way the United Nations works with all of the peoples of the world. In order to provide a stronger base for the United Nations, the doors have to be made wider so that the views of various popular bodies, social movements, communities around the world have far greater access to the United Nations. I'd also say to him. Mr. Secretary General, the UN needs an open and clear conflict of interest policy and a conflict of interest practice. For those multinationals who are causes of problems, who aggravate the global problems of inequality we need and you as Head of the United Nations need to separate the United Nations from that process. They should not be invited to attend meetings. They should not be allowed to make statements. In the climate area, those who are continuing to extract natural resources from the ground where they should stay we have taken too much of carbon out of the ground. If we're going to meet the Paris Accord, they should have no role entering the United Nations. I'd also say to the Secretary General that he needs to establish a much bigger office to support civil society. At the moment, the UN support for civil society organization institutional support is about two people. That is absolutely the wrong level of engagement with the wider elements of civil society. And the last thing I would probably say to the Secretary-General is that the UN is very proud of having developed a system of internal governance that protects the weaker countries, the smaller countries, that their views can be heard in the intergovernmental governance process. The Secretary-General should not engage with multi stakeholder groups who do not have a rulebook that allows for the protection of smaller members of the group, that does not have a way to appeal and challenge decisions that does not require public disclosure of their finances, all of those characteristics of multistakeholderism. The Secretary General should have and the UN should have no relationship with those who are not interested in protecting core concepts of democracy

LYNN FRIES : We have to leave it there. Special thanks to our guest contributor, Harris Gleckman, and thank you for watching and for your interest in this segment of GPEnewsdocs coming to you from Geneva, Switzerland.


Ignacio , November 21, 2019 at 6:46 am

The WEF and its various constituencies try to overtake control of development with their "public-private partnership" flag but how these, let's say, partnerships, actually work and interact with local communities and governments is an issue that need to attract more scrutiny and transparency. If one uses the migratory pressure as a measure, so far, development in Africa, South America and South Asia is not doing a good job on the part of local communities. There may be a few success cases, as it seems to be the case that deforestation in Brazil that while proceeding it's way, has somehow slowed down compared to the last decade of the XXth century. But when a success story is analysed what you find behind is simply strong government action as the Brazilian did starting in 2004 when they begun the monitoring of development in the Amazon basin and expanded in 2006 with a moratorium in soya culture and beef production. The WEF has a series of initiatives on what they call sustainable development that sound excellent in their web pages but in reality do not seem to work so well and the UN should be kept independent and legally above of the WEF initiatives to monitor development and accountability. This initiative will almost certainly result in foxes governing henhouses.

As I see it the WEF makes the hell of a good PR job without counterbalancing parties.

Olga , November 21, 2019 at 9:54 am

Truly scary stuff and why does it remind me of the way public transport was destroyed in the US: step 1 – starve it of revenue; step 2 – privatize it (while promising better service); step 3 – let it rot; and step 4 – close it down (responding to the public, gripping about how bad the service had become). The job accomplished!
One has to wonder what the Sec. General has been smoking lately and where are Russians and Chinese to push back?

DHG , November 21, 2019 at 10:26 am

The UN will never accomplish its mission, man is incapable of bringing about world peace. The UN is here for one reason and one reason only and that is to destroy the false religious system when the political rulers hand it their power to accomplish just that.

Susan the Other , November 21, 2019 at 11:19 am

If WEF is looking at doing infrastructure on a global scale that is based on good science, is sustainable and maintainable, the ultimate power over the "multi-stakeholder groups" submitting their bids to the UN should be the UN – this means a new UN mandate that must be ratified yearly by voters, and bureaucrats that must win elections. If this big idea is going to accomplish what needs to be done the "stakeholders" might want to take a close look at what happened to the dearly departed ideas of neoliberalism. Neoliberalism was destroyed from within by the need for ever more profit; by the" rat-race to the bottom" and by externalizing costs in the form of pollution – by the most obviously unsustainable practices, both social and environmental. If the goal is clear and comprehensive all these problems inherent in yesterday's capitalism will have to be addressed at the get-go. It is a difference of scale whether a city hires a contractor to do new waterlines, or the UN hires "multi stakeholder groups" to do some continent-wide 50 year project. That means the UN will need to become answerable to the people for the management of all these big ideas. Because conflict of interest will be so massive as to be unmanageable otherwise. And one definition will be imperative – Just what stake or stakes is/are held by "multi-stakeholder groups"? Because what is at stake is the planet itself. Not money.

Titus , November 21, 2019 at 1:14 pm

To quote Lambert, 'Everything is going according to plan'.

RBHoughton , November 21, 2019 at 9:04 pm

The UN problem has always been money. The 200 nation states are dilatory in paying their dues. This gives the few rich countries power – 'cooperate with us and we'll fund your activities.' Its not as bare-faced as I state it but you get the picture. To solve this problem we need the majority of countries to vote to make national dues a precedent claim on each government. Publish the result of the vote and monthly progress towards the aim. Name the countries cooperating.

Once the UN administration is confident of its income it can plan its activities better, make peoples' health and livelihoods a priority and achieve a much higher profile amongst humanity.

Nielsen , November 22, 2019 at 1:55 am

After heavy drought in Chile the rivers magically recovered the day when a delegation from the UN arrived to inspect the riots.

RÍO ACONCAGUA CON AGUA!!!! 20/10/2019
https://www.youtube.com/watch?v=yERs4OmqVK8

A settler tells how the Mapocho River magically recovers its flow, as has happened in recent days in different parts of Chile.
https://www.youtube.com/watch?v=J0bdwdpwcmI

Water is used to cultivate avocados
https://www.youtube.com/watch?v=JEPuk87jNzs

Stop buying avocados from Chile.

And mining

"Mining transnationals find it cheaper to buy water rights than to desalinate seawater and transport it for tens or hundreds of kilometers. Even more so if they have to use less polluting but more expensive desalination technologies.
This is an unequal and unjust war where the main victims are the poor population, small farmers and the sustainable development of our region of Atacama.
We continue to approve and facilitate the approval of mining projects and mega-projects without making it a condition not to consume water from the basin.
– The population of Copiapó, Caldera, Tierra Amarilla and Chañaral, particularly the lower income population, suffers the consequences of having to endure repeated supply cuts, low pressure and a terrible quality of drinking water.
The drinking water crisis in the mentioned cities is a direct consequence of the over exploitation of the Copiapó river basin by foreign mining companies, of the purchase-sale and speculation with water rights, as well as of the irrationality and indolence of the State in not establishing priorities in the use of the vital water"
https://www.youtube.com/watch?v=8lGEONBfvTM

Translated with http://www.DeepL.com/Translator

Sofia Monsalve , November 22, 2019 at 8:32 am

Although corporate meddling is not unheard of in the UN system, under the new terms of the UN-WEF partnership, the UN will be permanently associated with transnational corporations. In the long-term, this would allow corporate leaders to become 'whisper advisors' to the heads of UN system departments.
The UN system is already under a significant threat from the US Government and those who question a democratic multilateral world. Additionally, this ongoing corporatization will reduce public support for the UN system in the South and the North, leaving the system, as a whole, even more vulnerable.To prevent a complete downfall, the UN must adopt effective mechanisms that prevent conflicts of interest consistently. Moreover, it should strengthen peoples and communities which are the real human rights holders, while at the same time build a stronger, independent, and democratic international governance system.
There is a strong call to action going on by hundreds of organizations against this partnership agreement http://bit.ly/33bRQZP

Marybeth Gardam , November 22, 2019 at 1:46 pm

How can a civil society organization sign on to this letter?

[Nov 01, 2019] Corporatism does not know any party by Saagar Enjeti Saagar Enjeti

Notable quotes:
"... Monday, that same company which was saved by the United States government was thrown a birthday party in the halls of the United States Congress committee which dispersed those funds? It literally doesn't get more corrupt than that. These people are so shameless they bragged about this party. They allowed it to be reported in Politico because that's just business as usual in our capital city ..."
"... So many on the right lecture the millennial generation and the working class as lazy. They give no credence to why exactly these people are angry. They watched the middle class get decimated, money get sent to Wall Street while our student debt exploded and any surplus cash that happened to be laying around was spent trying to turn the Middle East into a democratic paradise. America voted twice for change-agent Barack Obama to try and clean up the system, but he mostly just lectured corporations with an upturned chin and wagging finger, while letting them continue shipping jobs to China and Mexico. ..."
"... Institutionalized corruption has yielded disastrous results. ..."
Nov 01, 2019 | thehill.com

The House Ways and Means Committee threw a bipartisan "birthday bash" for insurance company AIG, that was widely attended by staffers across the aisle. The chairman of the committee, Richard Neal , who is a Democrat, gave remarks at the party. It included snacks, and an open bar serving a "centennial smash" signature cocktail, all while an acapella group serenaded the group to the tune of Pharrell's "Happy."

This is Versailles 1790's level stuff. It is a repulsive illustration of the bipartisan corruption that has seeped into our system. Don't forget this is the company received 190 billion dollars in bailout funds while the rest of the American middle class plummeted to destruction. It's also the same company which paid out $165 million in bonuses to its executives after receiving bailout money and facing zero repercussions from the Obama administration.

Monday, that same company which was saved by the United States government was thrown a birthday party in the halls of the United States Congress committee which dispersed those funds? It literally doesn't get more corrupt than that. These people are so shameless they bragged about this party. They allowed it to be reported in Politico because that's just business as usual in our capital city

Corporatism does not know any party. It has wormed its way into the highest levels of the United States government. It has ruled us to our detriment now for almost 40 years now. The left has responded to this moment with democratic socialism. The right looking at this movement is learning all of the wrong reasons; they're flying socialism sucks banners all across America without responding to the underlying structure of the American system as extraordinarily flawed

So many on the right lecture the millennial generation and the working class as lazy. They give no credence to why exactly these people are angry. They watched the middle class get decimated, money get sent to Wall Street while our student debt exploded and any surplus cash that happened to be laying around was spent trying to turn the Middle East into a democratic paradise. America voted twice for change-agent Barack Obama to try and clean up the system, but he mostly just lectured corporations with an upturned chin and wagging finger, while letting them continue shipping jobs to China and Mexico.

Institutionalized corruption has yielded disastrous results. A new survey from the Victims of Communism Memorial Foundation finds that more than 70% of millennials say they are likely to vote socialist, and that 1 in 5 think that America would be better off if private property was abolished. This makes perfect sense to me, because this generation sees the AIG bailout and the party 10 years later and goes, well if that's capitalism, then this crap is not for me

I know some of the people watching this probably are actual socialists. I don't think most of you are though. You're just fed up and you've been told that if you're against our current system then you're a socialist. So you shrug and go, sure, I guess. It is incumbent upon the right to restore and equitable and fair playing field within our system if we, correctly in my view, believe that capitalism is intrinsic to the strength of the United States

The libertarian streak of the Republican Party will be the electoral and moral death of it. Libertarianism was founded upon the idea that the greatest threat to you and your life is institutionalized power in the form of the government. It's time they understood that the government isn't the only institution which can hold power in our society. It's time to reign in that power wherever it reigns.

[Aug 28, 2019] Deep at the core is the battle by Banksters and their allies to keep their institutions private versus the Classical and Populist goal of making them public utilities and how the World Wars helped the former to gain their goals.

Notable quotes:
"... As Hudson points out, WW1 was a coup for the USA's financial sector and allowed them to gain control of academia to erase Marx and his Classical Economist allies and replace them with their own toadies along with their newly formed product--Propaganda and the nascent Police State, which the institution of Prohibition greatly facilitated. ..."
Aug 28, 2019 | www.moonofalabama.org

karlof1 , Aug 26 2019 15:45 utc | 103

The latest by Crooke I found a curious read since he bases his article on his interpretation of Adam Tooze's books about the world wars, neither of which I've read. Curious because we know from Hudson that the counterrevolution by the Feudal Lords of banking and land holding against Classical Economists and their political allies began in earnest well before then in @1870 and that their Race for Africa was a big part of their efforts to regain their hold on their home governments.

Within the USA, a similar revolution was being waged although it began several decades later in response to the Populists.

As Hudson points out, WW1 was a coup for the USA's financial sector and allowed them to gain control of academia to erase Marx and his Classical Economist allies and replace them with their own toadies along with their newly formed product--Propaganda and the nascent Police State, which the institution of Prohibition greatly facilitated.

I wrote the above to provide barflies with a contrasting historical context much of which was recently reviewed via all the Marxian discussion and where the actual roots of Neoliberalism are seated.

Deep at the core is the battle by Banksters and their allies to keep their institutions private versus the Classical and Populist goal of making them public utilities and how the World Wars helped the former to gain their goals.

Tooze's narrative seems okay on the surface, and it clearly fooled Crooke, but it's incomplete. What did the European Powers run out first that generated WW1's stalemate? Money for arms as posited or human bodies to man those arms? In George Seldes's censored interview with Hindenburg a week after the Armistice, published in You Can't Print That! , the defeated Field Marshal admitted it was the entry of American Men--human numbers--that turned the tide and made it clear to him that the war couldn't be won. Sure, money helped get the doughboys over there, but before they arrived masses of money were sent in both directions that didn't change the balance other than to create the unpayable postwar debts the Americans demanded be paid.


bevin , Aug 26 2019 16:21 utc | 109

karlofi@103
Hindenburg realised that the manpower resources of the US were crucial, though they hardly came into play on the battle field. But it was US raw materials, combined with the British blockade, that were the crucxial factor.

With the US the Alliance was simply, even minus Russia, too big, too powerful. And then there was the military reality that the Allies were beginning to organise themselves on the battlefield: including tanks etc.

As for the "Feudal Lords of Banking..." Hudson is a great resource, but his theory sounds wrong to me.

... ... ..

karlof1 , Aug 26 2019 17:02 utc | 114

bevin @109--

When I first happened across Seldes's interview and knowing the "stabbed in the back" claim that Hitler used in his rise to power, I was very curious as to why it was censored--what possible reason could be claimed to withhold such an important set of revelations? Clearly as Seldes himself says, if it had been published at the time, the entire course of subsequent history would likely have taken a different direction. Are you familiar with Seldes? He was I.F. Stone's idol and model with a penchant for truth-telling regardless of the subject or people involved. The book I linked to is filled with similar stories that contradicted the current narrative being sold to the masses, and his subsequent works are similar. But as you might guess, few people have ever heard of him or his writings.

Given what Hudson reveals about the manipulation of the learning/teaching of political-economy, it would be very wise to suspect much of what was/is produced via the "social sciences," (history written by the victors) which is why my collegiate mentor stressed the learning methodology he devised to try and arrive at the best non-subjective conclusion as possible whatever the inquiry--to try and duplicate as closely as possible the scientific method for confirmation of theories. I've discovered quite a lot of metaphysics within the entire spectrum of social science disciplines that's made me question a vast catalog of assumptions. As Fischer and other historians have discovered, historical truth often lies literally in the margins--the annotations--made by decision makers or obscure signals reports filed away within deep archives or forensic chemical reports detailing what is or isn't present within the samples. The learning of the revealed truths can be painful, making the adage Ignorance is Bliss rather powerful and enticing. But that's not for me as I subscribe to the alternative adage, The Truth will set you Free.

Vato , Aug 26 2019 17:51 utc | 119

Grieved @66

I'm just reading Keen's 2nd Edition of his Debunking Economics: The Naked Emperor Dethroned? where he writes on page 29: "[...], conventional Marxsim is as replete with logical errors as is neoclassical economics, even though Marx himself provides a far better foundation for economic analysis than did Walras or Marshall."

To my knowledge, Keen refers to himself as a Post-keynesian economist (not to be confused with bastardized Keynesian or central banks' Neo-Keynesian economics), highly influenced by the work of Hyman Minsky who learned under Schumpeter.

karlof1 , Aug 26 2019 18:04 utc | 122
Vato @119--

Hudson considered Minsky a friend and called him a "giant" within the political-economic realm as a founder of MMT.

karlof1 , Aug 26 2019 19:34 utc | 129
And as Hudson endlessly intones, the term free markets mean free from regulation means free from entities who covet controlling markets.
chu teh , Aug 26 2019 20:38 utc | 135
@ Karlof1 Aug 26 2019 19:34 utc

Far more workable:

"Freedom" is meaningless until the "freedom from" target is specified.

Observably, this seems not generally known.

[Aug 21, 2019] Losing a job in your 50s is especially tough. Here are 3 steps to take when layoffs happen by Peter Dunn

Unemployment benefits currently are usually is just six month or so; this is the time when you can plan you "downsizing". You do not need to rush but at the same time do not expect that you will get job offers quickly, if at all. Usually it does not happen. many advertised positions are fakes, another substantial percentage is already reserved for H1B candidates and posting them is the necessary legal formality.
Often losing job logically requires selling your home and moving to a modest apartment, especially if no children are living with you. At 50 it is abut time... You need to do it later anyway, so why not now. But that's a very tough decision to make... Still, if the current housing market is close to the top (as it is in 2019), this is one of the best moves you can make. Getting from your house several hundred thousand dollars allows you to create kind of private pension to compensate for losses in income till you hit your Social Security check, which currently means 66.
$300K investment in A quality bonds that returns 3% per year is enough to provides you with $24K per year "private pension" from 50 to age of 66 when social security kicks in. That allows you to pay for the apartment and amenities. The food is extra but with this level of income you qualify for food assistance.
This way you can take lower paid job, of much lower paid job (which mean $15 per hour), of temp job and survive.
And if this are many form you house sell your 401k remains intact and can supplement your SS income later on. Simple Excel spreadsheet can provide you with a complete picture of what you can afford and what not. Actually the ability to walk of fresh air for 3 or more hours each day worth a lot of money ;-)
Notable quotes:
"... Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career ripe with upward mobility. As a frequent observer of this phenomenon, it's as scary and troublesome as unchecked credit card debt or an expensive chronic health condition. This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives. ..."
"... The first thing you should do is identify the exact day your job income stops arriving ..."
"... Next, and by next I mean five minutes later, explore your eligibility for unemployment benefits, and then file for them if you're able. ..."
"... Grab your bank statement, a marker, and a calculator. As much as you want to pretend its business as usual, you shouldn't. Identify expenses that don't make sense if you don't have a job. Circle them. Add them up. Resolve to eliminate them for the time being, and possibly permanently. While this won't necessarily lengthen your fuse, it could lessen the severity of a potential boom. ..."
Feb 15, 2019 | finance.yahoo.com

... ... ...

Losing a job in your 50s is a devastating moment, especially if the job is connected to a long career ripe with upward mobility. As a frequent observer of this phenomenon, it's as scary and troublesome as unchecked credit card debt or an expensive chronic health condition. This is one of the many reasons why I believe our 50s can be the most challenging decade of our lives.

Assuming you can clear the mental challenges, the financial and administrative obstacles can leave you feeling like a Rube Goldberg machine.

Income, health insurance, life insurance, disability insurance, bills, expenses, short-term savings and retirement savings are all immediately important in the face of a job loss. Never mind your Parent PLUS loans, financially-dependent aging parents, and boomerang children (adult kids who live at home), which might all be lurking as well.

When does your income stop?

From the shocking moment a person learns their job is no longer their job, the word "triage" must flash in bright lights like an obnoxiously large sign in Times Square. This is more challenging than you might think. Like a pickpocket bumping into you right before he grabs your wallet, the distraction is the problem that takes your focus away from the real problem.

This is hard to do because of the emotion that arrives with the dirty deed. The mind immediately begins to race to sources of money and relief. And unfortunately that relief is often found in the wrong place.

The first thing you should do is identify the exact day your job income stops arriving . That's how much time you have to defuse the bomb. Your fuse may come in the form of a severance package, or work you've performed but haven't been paid for yet.

When do benefits kick in?

Next, and by next I mean five minutes later, explore your eligibility for unemployment benefits, and then file for them if you're able. However, in some states severance pay affects your immediate eligibility for unemployment benefits. In other words, you can't file for unemployment until your severance payments go away.

Assuming you can't just retire at this moment, which you likely can't, you must secure fresh employment income quickly. But quickly is relative to the length of your fuse. I've witnessed way too many people miscalculate the length and importance of their fuse. If you're able to get back to work quickly, the initial job loss plus severance ends up enhancing your financial life. If you take too much time, by your choice or that of the cosmos, boom.

The next move is much more hands-on, and must also be performed the day you find yourself without a job.

What nonessentials do I cut?

Grab your bank statement, a marker, and a calculator. As much as you want to pretend its business as usual, you shouldn't. Identify expenses that don't make sense if you don't have a job. Circle them. Add them up. Resolve to eliminate them for the time being, and possibly permanently. While this won't necessarily lengthen your fuse, it could lessen the severity of a potential boom.

The idea of diving into your spending habits on the day you lose your job is no fun. But when else will you have such a powerful reason to do so? You won't. It's better than dipping into your assets to fund your current lifestyle. And that's where we'll pick it up the next time.

We've covered day one. In my next column we will tackle day two and beyond.

Peter Dunn is an author, speaker and radio host, and he has a free podcast: "Million Dollar Plan." Have a question for Pete the Planner? Email him at [email protected]. The views and opinions expressed in this column are the author's and do not necessarily reflect those of USA TODAY.

[Aug 19, 2019] Is Big Necessarily Bad The American Conservative

Aug 19, 2019 | www.theamericanconservative.com

Is Big Necessarily Bad? Antitrust cannot be used as a cudgel based on size. There are other ways of whacking at corporate excess. By Marshall Auerback � August 19, 2019

Teddy Roosevelt with trust-busting stick, circa 1904. (Image: Library of Congress/Wikimedia Commons) When it comes to relations between consenting adults, size may not matter (or so one hears). But it's a different story in regard to companies and the politically fraught area of antitrust law.

Today, a number of policymakers , economists , and legal scholars connect a host of problems -- excessive wealth inequality, wage stagnation, political dysfunction, market distortions -- directly to the corporate "curse of bigness ," which they argue is a product of lax antitrust enforcement. But they may be misdiagnosing the cause of these diseases and, in so doing, offering up the wrong cure.

Instead of moving toward a new antitrust paradigm, we might do better to consider a more robust utility system of regulation that is "function-centric," rather than size-centric. In other words, regulation that restricts the range of corporate activities (e.g., structural separation so as to prevent companies like Amazon and Google from owning both the platform as well as participating as a seller on that platform), or the prices such companies can charge (as regulators often do for utilities or railways). These considerations would be "size neutral": they would apply independently of corporate size per se. Regulation, rather than antitrust, also better addresses other issues like privacy protection (via a national model that could replicate California's Consumer Privacy Act of 2018 ), labor abuses (it shouldn't matter whether workers are employed by Apple or mom-and-pop sweatshops), and controlling "fake news" dissemination (by placing social media companies under the purview of the Federal Communications Commission).

"Break 'em up" has great historical resonance in the United States. Yet one of the nation's earliest trust-busters, President Theodore Roosevelt, argued that "the remedy for [corporate] abuse was not mindlessly breaking up big firms, but preventing specific abuses by means of a strong national regulation of interstate corporations." Likewise, in the early days of the New Deal, his cousin, Franklin Delano Roosevelt, initially embraced the antitrust philosophy of Supreme Court Justice Louis Brandeis (who, like many of today's modern trust-busters, prioritized power and business structure over consumer welfare). Ultimately though, frustrated that the incessant focus on corporate concentration was hindering World War II efforts to mobilize greater industrial production, FDR concluded that optimal outcomes were more likely to be achieved via "prudent government oversight and using antitrust laws to police abuses -- not to break up every big company simply because it's big."

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After World War II, historian Richard Hofstadter noted a gradual public acceptance of big business . In large part, this was due "to the emergence of countervailing bigness in government and labor" that ultimately led to the "big three tripartite" model among government, business, and unions exemplified in the Treaty of Detroit agreement between General Motors and the United Auto Workers (UAW).

From the 1950s through the 1970s, "Tripartism" was exceptionally successful at promoting economic growth and high wages (the wage growth was explicitly linked to rising productivity in the Treaty of Detroit). Big unions flourished alongside growing conglomerates that emerged as the new face of corporate consolidation (a prime example being International Telephone and Telegraph -- ITT). Equally significant, as the economist Thomas Piketty observed in his sweeping account of rising inequality, Capital in the Twenty-first Century , a new wave of corporate consolidation did not exacerbate prevailing inequalities. To the contrary, this period coincided with a diminution of wealth inequality , as relative wealth gains for the top tier stabilized for the first time in decades.

That all changed in the 1980s with the rise of Ronald Reagan's market fundamentalist agenda. His presidency was characterized by a sustained attack on unions , cuts in public services, and the ascendancy of the doctrine of "shareholder capitalism," used to legitimize the establishment of SEC Rule 10b-18 . That rule engendered an explosion in share buybacks (until it was introduced, companies buying back their own shares was considered a form of stock manipulation). Rather than focusing on job-creating investment, corporate cash flow was thus directed toward stock repurchases to fatten executive compensation.

The legacy of Reagan's market fundamentalism persists today. It is the most cogent explanation we have for growing wealth inequality, wage stagnation, and reduced emphasis on corporate R&D.

This period also coincided with the rise of the "Bork Doctrine," when, citing Robert Bork, the Supreme Court asserted that the main focus of antitrust law should be on economic efficiency and consumer welfare, as opposed to granting the government broad discretion to shape the economy. That shift in priorities is a major source of the neo-Brandeisians' criticism of Bork's antitrust philosophy. It reflects their Jeffersonian vision of a social-economic order organized along the lines of small-scale businesses, with atomistic competition between a large number of equally advantaged units, in theory producing greater innovation and economic dynamism.

But that's a highly idealized vision that doesn't comport with reality. Our modern economy isn't comprised of village blacksmiths, yeoman farmers, and cobblers. A crucial component of the economy today is big business, including many large multinational corporations that operate globally. And it is questionable whether their size automatically equates to market power (in the sense of having the ability to manipulate prices at will and exclude competitors), especially in the context of a global economy featuring a multiplicity of competing national champions. Seldom do we hear calls to break up Detroit's "Big Three," despite global revenues in the hundreds of billions. Why? Because there is a widespread recognition that these companies face significant challenges in a global market dominated by similarly large competitors.

Contrary to popular myth, big companies, not small businesses, can be engines of growth and innovation, as Robert Atkinson and Michael Lind explore in their book Big Is Beautiful: Debunking the Myth of Small Business :

On virtually every meaningful indicator, including wages, productivity, environmental protection, exporting, innovation, employment diversity and tax compliance, large firms as a group significantly outperform small firms.

That insight parallels the scholarship of Joseph Schumpeter, the intellectual godfather of the economics of innovation, who showed that R&D spending and productivity increase with scale. Latterly, Schumpeter's insights have been validated by a recent study from Professors Ann Marie Knott and Carl Vieregger, who conclude (emphasis added):

Not only do large firms (using the U.S. Small Business Association definition of greater than 500 employees) conduct 5.75 more R&D in aggregate than small firms, they have 13% higher productivity with that R&D. However this merely captures the private returns to their R&D. A further benefit of large firm R&D is that it generates the spillovers upon which small firm innovation free-rides .

Size-centric antitrust proposals also ignore the increasing prevalence of economic network theory, which suggests that social networks like Facebook or search engines such as Google lend themselves to becoming natural monopolies in order to function optimally. Here again, function-centric regulation -- i.e., separation between the control of content and distribution -- makes more sense to rectify market abuse. And this could be achieved via utility-style regulation, as no less a figure than right-wing populist Steve Bannon has suggested , rather than creating a bunch of new mini-Facebooks or Googles via court-mandated break-ups (especially if the owners of the newly broken-up companies retain full control of algorithms to determine what people see in their News Feeds, what privacy settings they can use, and even what messages get delivered to news consumers, as Mark Zuckerberg does today ).

It is also the case that many businesses characterized by minimal levels of corporate concentration -- construction, education, entertainment, accommodation, food, business services, transportation, warehousing -- generally experience sub-standard productivity levels, sluggish growth, and low real wages, according to an INET-funded study by Professors Lance Taylor and �zlem �mer. Working conditions are generally worse, and wages and employment benefits lower, as small business owners are often the first to protest increased regulation or "burdensome" mandates, such as health care provisions. The real point is not to beat up on small businesses, but simply to note that the abuses commonly ascribed to big business are just as, if not more, likely to manifest themselves in smaller industries less prone to corporate concentration.

What about the claim that corporate consolidation contributes to a corrosion of American democracy ? It is true that as companies get bigger, it maximizes their abilities to "pay to play," as Professor Thomas Ferguson asserts in his seminal work, Golden Rule . Ferguson says that powerful blocs of business elites, large and small, with durable (largely economic) interests, are a constant feature of American politics. All have an incentive to get bigger in order to maximize political leverage. That includes smaller businesses that scale up via trade associations to maximize the impact of their "political investment." But again, what is needed here is not an antitrust remedy, but a change in the "pay to play" rules so as to ensure that money and corporate scale have less of a polluting impact on the American polity.

So it may be time to reconsider the simplistic notion that "big is bad." Yes, we want a dynamic economy and a thriving democracy. But mindlessly breaking up big businesses may not be the best path to get us there.

Marshall Auerback is a market analyst and a research associate at the Levy Economics Institute at Bard College.

This article was supported by the Ewing Marion Kauffman Foundation.

[Aug 08, 2019] Global market power and its macroeconomic implications

Aug 08, 2019 | economistsview.typepad.com

anne , August 06, 2019 at 05:45 AM

https://voxeu.org/article/global-market-power-and-its-macroeconomic-implications

June 28, 2018

Global market power and its macroeconomic implications
By Federico Diez, Daniel Leigh and Suchanan Tambunlertchai

The rise in the market power of large firms is assumed to affect economic activity, but measuring either market power or its effects is challenging. Based on firm-level data for 74 countries, this column shows that market power has increased around the world, driven mostly by 'superstar' firms. Higher markups are initially associated with increasing investment and innovation, but the reverse is true when market power becomes too strong. The share of income paid to workers also declines with rising market power.

[Jul 23, 2019] US justice department targets big tech firms in antitrust review by Kari Paul and agencies

Jul 23, 2019 | www.theguardian.com

The US justice department is opening a broad antitrust review into major technology firms, as criticism over the companies' growing reach and power heats up.

The investigation will focus on growing complaints that the companies are unlawfully stifling competition.

"The Department's review will consider the widespread concerns that consumers, businesses and entrepreneurs have expressed about search, social media, and some retail services online," the Department of Justice said in a statement.

ss="rich-link"> A new antitrust frontier – the issue closing partisan divides in the name of policing big tech Read more

"Without the discipline of meaningful market-based competition, digital platforms may act in ways that are not responsive to consumer demands," added the assistant attorney general Makan Delrahim, of the antitrust division.

The review will investigate practices of online platforms including Facebook , Alphabet's Google, Amazon and Apple.

The investigation comes amid calls from lawmakers, including Democratic presidential candidates such as Elizabeth Warren, that the companies should face more scrutiny.

Lat week, Facebook, Google, and Amazon faced a grilling before the House subcommittee on antitrust, commercial and administrative law over their hold on markets including digital advertising, e-commerce and cloud computing.

Lawmakers questioned Amazon over the fees it levies against third-party sellers on the platform and whether this creates a monopoly of power. They also questioned Facebook executives over practices of targeting startups for acquisition and copying features of companies that decline to be acquired.

Lawmakers also grilled Facebook this month over its plans to launch a global cryptocurrency, called Libra. In the hearing, Senator Sherrod Brown of Ohio said Facebook showed "breathtaking arrogance" in attempting to launch a digital financial service after a number of major privacy scandals.

In July, the Federal Trade Commission approved a $5bn fine against Facebook for its handling of user data surrounding the Cambridge Analytica scandal in 2018.

"Facebook is dangerous," Brown said, likening the company to a toddler playing with matches. "It has burned the house down repeatedly and called every attempt a learning experience. Do you really think people should trust you with their bank accounts and their money?"

The Department of Justice investigation is already under way, the Wall Street Journal reported on Tuesday. The department hosted a private presentation from critics of big technology companies, who walked legislators through concerns and arguments for breaking up the firms.

Facebook, Alphabet , Amazon and Apple did not immediately respond to requests for comment.

[Jun 23, 2019] Only the greedy, selfish, well off, egotistical and share holders believe that Public Services should, could and would benefit from privatisation and deregulation.

Apr 11, 2019 | discussion.theguardian.com

JohnS58 , 11 Apr 2019 06:15

Only the greedy, selfish, well off, egotistical and share holders believe that Public Services should, could and would benefit from privatisation and deregulation.

Education and Health for example are (in theory) a universal right in the UK. As numbers in the population rise and demographics change so do costs ie delivery of the service becomes more expensive.As market force logic is introduced it also becomes less responsive - hence people not able to get the right drugs and treatment and challenging and challenged young people being denied an education that is vital for them in increasing numbers.

Meanwhile - as Public Services are devalued and denuded in this system the private sector becomes increasingly wealthy at the top while its workers become poorer and less powerful at the bottom.

With the introduction of Tory austerity which punishes the latter to the benefit of the former there is no surprise that this system does not work and has provided a platform for the unscrupulous greedy and corrupt to exploit Brexit and produce conditions which will take 'Neoliberalism' to where logic suggests it would always go - with the powerful rich protected minority exerting their power over an increasingly poor and powerless majority.

[Jun 23, 2019] The competitive tender approach ensures the cheapest bids get the contracts and the cheapest bids are those most likely to employ exploited labour and cheap materials as well as cutting corners

Apr 10, 2019 | discussion.theguardian.com

Monkeybiz -> dd34342 , 10 Apr 2019 20:27

The competitive tender approach ensures the cheapest bids get the contracts and the cheapest bids are those most likely to employ exploited labour and cheap materials as well as cutting corners. Result? a job of sorts gets done, but the quality is rubbish, with no investment or pride in the product. Look at Hong Kong where this is longstanding practice: new tunnel, half the extractor fans do not work correctly because they were poorly installed. I once spoke to the Chief Engineer of the Tsing Ma bridge, he was stressed out of his socks for the whole construction period trying to monitor all the subcontractors who had bid so low they had to cheat to make a profit with the result that they would try to cut corners and avoid doing things if they thought they could get away with it. Good job that engineer was diligent. Others may be less able or willing.
Monkeybiz -> dd34342 , 10 Apr 2019 20:20

BTW: I seldom find comparisons in UK-media to other countries when those countries are better.

I think that's because most of the UK media is propaganda for the established system, which they rely on for advertising revenue and access to information. If an outlet's journalists start seriously questioning the existing system, a few things happen: 1. the journo doesn't get promoted within the system; 2. their access to information is curtailed (they are not invited to briefings etc., and; 3. advertising revenue drops. As the business model of most mainstream media is to present consumer audiences to advertisers, this is not going to sit well with the owners, see 1 and 2 above leading to poor evaluations. Any journo with half a brain quickly learns this and fits in. Only so far and no further.

[Jun 23, 2019] I have to agree that whilst some things have flourished once privatised, certain services must remain in public ownership and control to enable governments to improve or reduce, depending on national taxation and expenditure

Apr 10, 2019 | discussion.theguardian.com

Richard Burston , 10 Apr 2019 17:11

As a Tory for most of my longish life, I have to agree that whilst some things have flourished once privatised, certain services must remain in public ownership and control to enable governments to improve or reduce, depending on national taxation and expenditure - if people want better services then they must be prepared to pay for them, and of course the long-term pensions of the workforce. Managers should be subject matter experts before running departments, not just accountants or management consultants, so they can improve delivery not just constantly re-structure or carp on about 'efficiency savings'.

Having worked in shipping, that industry has oscillated several times but rail is an interesting example - a disaster in the dying days of national ownership, the private world started well improving safety, reliability and capacity but has gone downhill in recent years, not helped by the track management system. Again, the airlines started well but now several have gone into administration and BA has 'down-qualitied' itself to become one of the worst.

Some parts of the NHS can be provided by private industry but limited to service provision and collective buying only - certainly NOT cancer screening.
Then, when you look at private providers who go bust and completely fail to provide any acceptable capability - jails, probation, social care etc. one wonders when, if ever, politicians will realise that it costs them, the civil service and commercial management an incredible amount of time, effort and cost just to fail!

[Jun 23, 2019] Outsourcing government work is the most inefficient way of getting it done for the benefit of taxpayers.

Apr 10, 2019 | discussion.theguardian.com

MichaelAnthony , 10 Apr 2019 17:31

Outsourcing government work is the most inefficient way of getting it done for the benefit of taxpayers. When the profits private companies make from it are added to what economies must invest to pay the taxes for it it's astonishing how popular it has become throughout the world, something only explicable if those authorising it are amongst the most stupid of financial administrators or the most corrupt.
Outsourcing for example £1m worth of work requires that amount to be paid in taxes, which needs about £5m to be earned in wages and profits to pay £1m in taxes, which in turn needs an investment of perhaps ten times that amount, when the £1m is borrowed by debt laden governments to be repaid by over-borrowed and overtaxed economies.
If the outsourced company is not profit-making it will borrow the capital to be able to deliver what's required and that in turn will raise the amount it will want for future work, which is what I think accounts for Carillion and the other outsource giants going to the wall.
The process is generally the fault of governments failing to adhere strictly to the necessity of only paying its workforce on average the same as the private sector pays its workers, which in democracies is not an unfair requirement demanded by equality legislation. Many would claim that such was why Margaret Thatcher decided on privatising so many public utilities especially after the miners' strike in Ted Heath's government and why it gained so much support and popularity when wages and benefits for similar skill levels seemed so much better and jobs more secure for many public sector workers involved than they were in the private sector. Now of course, the high costs of private necessary public services are making life unbearable for the majority of workers and welfare recipients while profits are going abroad to those who own them and the EU in getting the flak – courtesy of the media - for the resultant poverty and austerity, allowed the false £350m a week to win the referendum. The £4 billion a week worth of exports to the EU paid most of that and the way companies are relocating to hedge against Brexit means a lot of lost jobs will go with them – some earlier estimates but it at more than 100,000 - which doesn't seem to deter those determinedly wanting out of the EU one little bit.
This is a blessing for the low labour cost Member States, who being in the populous markets the multinationals need, can attract the UK industries looking to further cut costs and freight charges so those that go will never come back because higher costs in the Brexit UK will not be compensated for easily with uncompetitive price hikes for EU customers, unlike CAP payments that have been promised to farmers by the government proBrexit Minister.
The doom and gloom felt by many I think is well justified when sovereign debt and bank credit is considered relative to taxes. While sovereign debt is regarded as an asset and future taxes are acceptable for bank credit and both can be securitized by banking systems to borrow even more capital that will be acceptable to central banks as QE, it's not surprising that sovereigns don't need to worry about economies being unable to provide the taxes their governments unlawfully spend even when leaving it for future generations is also unlawful i.e. is a crime, since if they don't, their central banks and bond holders covered by them will. When the cost in trillions since 2016 already spent by government in preparing for Brexit is included one can't help but think that the financial economy has made a proverbial killing from UK incorporated and now owns most if not all of it. If most of the finance for Brexit came from its financiers and investors is it possible that after Brexit they'll pour trillions back into the economy to make it capable of not only surviving but also competing favourably with the EU, Japan, China, and the US?

[Jun 23, 2019] Hardly anything has flourished after privatisation.

Apr 10, 2019 | discussion.theguardian.com

makingalist -> Richard Burston , 10 Apr 2019 18:06

I have to disagree. Hardly anything has flourished after privatisation. The big failures, which get all the publicity, were generally basket case private businesses which had to be nationalised to save them from collapse.

Sometimes they are stuffed with public money and sold at a loss to the public, like the Tory nationalisation of Rolls Royce, or deprived of funds like British Rail to provide an excuse to liberate thousands of square miles of real estate

This latter is the scheme for the NHS with hospitals and other property provided at great public expense sold off to any shark who says he has the money, and once it's private load the enterprise with debt and walk away.

[Jun 23, 2019] So neoliberalism stumbles on almost as a reflex action. Ben Fine calls it a 'zombie' but I think the better analogy is cannibalism.

Unlike the privatisations of the 80s and 90s there's barely any pretence these days that new sell-offs are anything more than simply part of a quest to find new avenues for profit-making in an economy with tons of liquid capital but not enough places to profitability put it.
Apr 10, 2019 | discussion.theguardian.com

hartebeest , 10 Apr 2019 18:42

Back in the Thatcher/Reagan years there were at people around who genuinely believed in the superiority of the market, or at least, made the effort to set out an intellectual case for it.

Now we're in a different era. After 2008, hardly anyone really believes in neoliberal ideas anymore, not to the point that they'd openly make the case for them anyway. But while different visions have appeared to some extent on both left and right, most of those in positions of power and influence have so internalised Thatcher's 'there is no alternative' that it's beyond their political horizons to treat any alternatives which do emerge as serious propositions, let alone come up with their own.

So neoliberalism stumbles on almost as a reflex action. Ben Fine calls it a 'zombie' but I think the better analogy is cannibalism. Unlike the privatisations of the 80s and 90s there's barely any pretence these days that new sell-offs are anything more than simply part of a quest to find new avenues for profit-making in an economy with tons of liquid capital but not enough places to profitability put it. Because structurally speaking most of the economy is tapped out.

Privatising public services at this point is just a way to asset strip and/or funnel public revenue streams to a private sector which has been stuck in neoliberal short-term, low skill, low productivity, low wage, high debt mode for so long that it has lost the ability to grow. So now it is eating itself, or at least eating the structures which hold it up and allow it to survive.

[Jun 23, 2019] The central premise used by Governments for privatising public servcies seems to have been that publicly run services are inefficient compared to private companies

Apr 10, 2019 | discussion.theguardian.com

lollipops42 , 10 Apr 2019 18:49

The central premise used by Governments for privatising public servcies seems to have been that publicly run services are inefficient compared to private companies; that the need to turn a profit means wasteful systems and behaviours are minimised. Therefore, money can be saved by outsourcing as private companies can provide the same or better service more cheaply.

I think this is very disrespectful to all those who work in public service, many of whom are dedicated to their jobs to provide care or a good service to members of the public. The idea that making money is the only motivating force that can make someone do their job well seems flawed. Further, if efficiency gains alone are not enough to make a profit, then the only recourse for companies is to provide a poorer service or be more exploitative of their employees, which is regularly played out.

This central premise is not widely challenged by politicians. It seems accepted as fact. I wonder if there have been any studies to either support or challenge this idea.

[Jun 11, 2019] One of the older male anchors on financial TV today noted, in a very condescending tone, that for some reason Elizabeth Warren has an attitude when it comes to corporations

Notable quotes:
"... "When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise -- to deny the political character of the modern corporation -- is not merely to avoid the reality. It is to disguise the reality. The victims of that disguise are those we instruct in error." ..."
Jun 11, 2019 | jessescrossroadscafe.blogspot.com

Lies Owe a Debt to the Truth

"There was time when average Americans could be counted upon to know correctly whether the country was going up or down, because in those days when America prospered, the American people prospered as well. These days things are different.

Let's look at it in a statistical sense. If you look at it from the middle of the 1930's (the Depression) up until the year 1980, the lower 90 percent of the population of this country, what you might call the American people, that group took home 70 percent of the growth in the country's income. If you look at the same numbers from 1997 up until now, from the height of the great Dot Com bubble up to the present, you will find that this same group, the American people, pocketed none of this country's income growth at all.

Our share of these great good times was zero, folks. The upper ten percent of the population, by which we mean our country's financiers and managers and professionals, consumed the entire thing. To be a young person in America these days is to understand instinctively the downward slope that so many of us are on."

Thomas Frank, Kansas City Missouri, 6 April 2017

"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise -- to deny the political character of the modern corporation -- is not merely to avoid the reality. It is to disguise the reality. The victims of that disguise are those we instruct in error."

John Kenneth Galbraith

One of the older male anchors on financial TV today noted, in a very condescending tone, that for some reason Elizabeth Warren 'has an attitude' when it comes to corporations.

I hope she and some of her like minded fellows get their opportunity to extend the hand of equal justice to these smug serial felons, pampered polecats, and corporatist clowns. It has been a long time coming.

[May 11, 2019] Has Privatization Benefitted the Public? by Jomo Kwame Sundaram

Highly recommended!
Looks like pendulum start swinging against privatization...
Notable quotes:
"... As corporate profits are the private sector's yardstick of success, privatized monopolies are likely to abuse their market power to maximize rents for themselves. Thus, privatization tends to burden the public, e.g., if charges are raised. ..."
"... In most cases, privatization has not closed the governments' fiscal deficits, and may even worsen budgetary problems. Privatization may worsen the fiscal situation due to loss of revenue from privatized SOEs, or tax evasion by the new privatized entity. ..."
"... In most cases, profitable SOEs were privatized as prospective private owners are driven to maximize profits. Fiscal deficits have often been exacerbated as new private owners use creative accounting to avoid tax, secure tax credits and subsidies, and maximize retained earnings. ..."
"... As a rule of thumb, I'd say that any privatisations that require the introduction of convoluted pseudo-market structures or vast new regulatory bureaucracies or which derive most of their ongoing income from the public sector are likely to be contrary to the long-term public interest. In the UK, unfortunately, all these ships sailed a long time ago ..."
"... Chicago is the proving grounds for thirty or so years of the Democrats' surrender to neoliberalism and austerity politics. Let us not forget, brethren and sistren, that Rahm is the Spawn of Bill + Hill as well as dear friend and advisor of Obama. So there is the work of Daley to undo and the work of the Clintonians to undo. It will take more than one term for Lightfoot. ..."
"... Privatization, at any cost, is no longer a choice. We have abused the pension system and now the public must pay for private companies to provide the most basic services. ..."
"... I keep thinking that perhaps an Act could or should be introduced here in UK (same for the States, i suppose), which should ensure that all politicians that enable any type of privatisation of public resources or PFI arrangement (yes that old chesnut), should be made personally responsible for the results therof. ..."
"... And any losses to the public accidentally or "accidentally" occasioned by such commandeering over public resources, to be treated like deliberate misappropriation by the said public officials. With the financial and custodial penalties as may be appropriate. ..."
"... lots of private services that are suspiciously similar to public utilities in terms of natural monopoly, such as cable TV, internet and even railroads. Maybe these should be nationalized and treated more like public services. It can work when they're adequately funded and oversight accountability has teeth; major airports are a good example. ..."
"... Plus the state giveaways includes tens of millions of dollars each year in corporate tax credits in the name of job creation. A report by the nonprofit " Good Jobs First " revealed that over 300 Illinois companies are keeping the state taxes paid by their employees. EDGE- the Economic Development in a Growing Economy is a corporate freebie tax credit, which is partly from the state personal income taxes paid by workers. That's right, the biggest welfare queens are the corporations collecting and keep their employees state income tax payments. ..."
"... Can it get worse? According to the Chicago Trib , "The Chicago Mercantile Exchange (CME), for example, with billions of untaxed contracts worth well over a quadrillion dollars, and whose profit margin in recent years is higher than any of the top 100 companies in the nation, had the hubris to demand an $85 million per year tax break. They got it." The money is there to secure the pensions and budget but has been diverted to the corporate welfare queens for honoring us mere serfs with their presence in the humble fiefdom of Illinois. ..."
"... Michael Hudson, to his immense credit, explains the pernicious effects of privatization of common goods repeatedly throughout his work, and demonstrates that it has been with us at least as long as the ancient practice of land alienation and rural usury. ..."
Apr 07, 2019 | www.nakedcapitalism.com

Posted on April 7, 2019 by Jerri-Lynn Scofield Jerri-Lynn here. Another succinct post by Jomo Kwame Sundaram that makes clear the "benefits" of privatization are not evenly distributed, and in fact, typically, "many are even worse off" when the government chooses to transfer ownership of the family silver.

Note that SOE is the acronym for state owned enterprise.

For those interested in the topic, see also another short post by the same author from last September, debunking other arguments to promote the privatization fairy, Revisiting Privatization's Claims .

By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development. Originally published at Inter Press Service

In most cases of privatization, some outcomes benefit some, which serves to legitimize the change. Nevertheless, overall net welfare improvements are the exception, not the rule.

Never is everyone better off. Rather, some are better off, while others are not, and typically, many are even worse off. The partial gains are typically high, or even negated by overall costs, which may be diffuse, and less directly felt by losers.

Privatized Monopoly Powers

Since many SOEs are public monopolies, privatization has typically transformed them into private monopolies. In turn, abuse of such market monopoly power enables more rents and corporate profits.

As corporate profits are the private sector's yardstick of success, privatized monopolies are likely to abuse their market power to maximize rents for themselves. Thus, privatization tends to burden the public, e.g., if charges are raised.

In most cases, privatization has not closed the governments' fiscal deficits, and may even worsen budgetary problems. Privatization may worsen the fiscal situation due to loss of revenue from privatized SOEs, or tax evasion by the new privatized entity.

Options for cross-subsidization, e.g., to broaden coverage are reduced as the government is usually left with unprofitable activities while the potentially profitable is acquired by the private sector. Thus, governments are often forced to cut essential public services.

In most cases, profitable SOEs were privatized as prospective private owners are driven to maximize profits. Fiscal deficits have often been exacerbated as new private owners use creative accounting to avoid tax, secure tax credits and subsidies, and maximize retained earnings.

Meanwhile, governments lose vital revenue sources due to privatization if SOEs are profitable, and are often obliged to subsidize privatized monopolies to ensure the poor and underserved still have access to the privatized utilities or services.

Privatization Burdens Many

Privatization burdens the public when charges or fees are not reduced, or when the services provided are significantly reduced. Thus, privatization often burdens the public in different ways, depending on how market power is exercised or abused.

Often, instead of trying to provide a public good to all, many are excluded because it is not considered commercially viable or economic to serve them. Consequently, privatization may worsen overall enterprise performance. 'Value for money' may go down despite ostensible improvements used to justify higher user charges.

SOEs are widely presumed to be more likely to be inefficient. The most profitable and potentially profitable are typically the first and most likely to be privatized. This leaves the rest of the public sector even less profitable, and thus considered more inefficient, in turn justifying further privatizations.

Efficiency Elusive

It is often argued that privatization is needed as the government is inherently inefficient and does not know how to run enterprises well. Incredibly, the government is expected to subsidize privatized SOEs, which are presumed to be more efficient, in order to fulfil its obligations to the citizenry.

Such obligations may not involve direct payments or transfers, but rather, lucrative concessions to the privatized SOE. Thus, they may well make far more from these additional concessions than the actual cost of fulfilling government obligations.

Thus, privatization of profitable enterprises or segments not only perpetuates exclusion of the deserving, but also worsens overall public sector performance now encumbered with remaining unprofitable obligations.

One consequence is poorer public sector performance, contributing to what appears to be a self-fulfilling prophecy. To make matters worse, the public sector is then stuck with financing the unprofitable, thus seemingly supporting to the privatization prophecy.

Benefits Accrue to Relatively Few

Privatization typically enriches the politically connected few who secure lucrative rents by sacrificing the national or public interest for private profit, even when privatization may not seem to benefit them.

Privatization in many developing and transition economies has primarily enriched these few as the public interest is sacrificed to such powerful private business interests. This has, in turn, exacerbated corruption, patronage and other related problems.

For example, following Russian voucher privatization and other Western recommended reforms, for which there was a limited domestic constituency then, within three years (1992-1994), the Russian economy had collapsed by half, and adult male life expectancy fell by six years. It was the greatest such recorded catastrophe in the last six millennia of recorded human history.

Soon, a couple of dozen young Russian oligarchs had taken over the commanding heights of the Russian economy; many then monetized their gains and invested abroad, migrating to follow their new wealth. Much of this was celebrated by the Western media as economic progress.


diptherio , April 7, 2019 at 9:11 am

SOE must stand for "state owned enterprise."

caloba , April 7, 2019 at 10:45 am

As a rule of thumb, I'd say that any privatisations that require the introduction of convoluted pseudo-market structures or vast new regulatory bureaucracies or which derive most of their ongoing income from the public sector are likely to be contrary to the long-term public interest. In the UK, unfortunately, all these ships sailed a long time ago

DJG , April 7, 2019 at 11:15 am

After the recent Chicago municipal elections, I wrote up some notes on the reasons for the discontent. This article by Sundaram explains exactly how these schemes work. Further, you can apply his criteria of subsidies for the rich, skimming, and disinheriting the middle class and poor to all of the following instances in Chicago.

If I may–some for instances of how Sundaram's observations turn up in U.S. cities:

Chicago is the proving grounds for thirty or so years of the Democrats' surrender to neoliberalism and austerity politics. Let us not forget, brethren and sistren, that Rahm is the Spawn of Bill + Hill as well as dear friend and advisor of Obama. So there is the work of Daley to undo and the work of the Clintonians to undo. It will take more than one term for Lightfoot.

Consider:
–Parking meters and enforcement have been privatized, starving the city of funds and, more importantly, of its police power.
–Taxes have been privatized in TIFs, where money goes and is never heard from again.
–There have been attempts to privatize the park system in the form of the Lucas museum and the current Obama Theme Park imbroglio, involving some fifty acres of park land.
–The school system has been looted and privatized. The Democrats are big fans of charter schools (right, "Beto"), seeing them as ways to skim money off the middle class and the poor.
–Fare collection on public transit has been privatized using a system so deliberately rudimentary and so deliberately corrupt that it cannot tell you at point of service how much you have paid as fare.
–Boeing was enticed to Chicago with tax breaks. Yes, that Boeing, the one that now deliberately puts bad software in your airplane.
–Property tax assessment has been an opaque system and source of skimming for lawyers.
–Zoning: Eddie Burke, pond scum, is just the top layer of pollution.
–And as we have made our descent, all of these economic dogmata have been enforced by petty harassment of the citizenry (endless tickets) and an ever-brutal police force.

And yet: The current Republican Party also supports all of these policies, so let's not pretend that a bunch of Mitch McConnell lookalikes are headed to Chicago to reform it.

California is no better , April 7, 2019 at 5:16 pm

Providing professional services i.e. architecture, engineering, etc. for a public entity, local or federal, does not yield unreasonable profits. Typically, the public agencies have their own staff to monitor and cost control a project. The professional services provided to private developers yields far more profit- oftentimes twice the profits associated with public agency work. Most professional services companies will transition their work to the public agencies during a recession.

At any rate, especially in Illinois, privatizing the work to avoid pension liabilities is no longer a choice. Michael Madigan pension promises will require the public to maintain a public service budget with no staff to fill potholes. Essentially, these are the no work jobs made popular by the Soprano crew twenty years ago.

Discussion of the downside of the privatization of public services is merely an oscillation from discussing the weather, the Bears or any other kitchen table discussion – nothing more than pleasant small talk to pass the time.

Privatization, at any cost, is no longer a choice. We have abused the pension system and now the public must pay for private companies to provide the most basic services.

stan6565 , April 7, 2019 at 6:36 pm

The question is, what can one do to help arrest this wholesale theft of public resources and their expropriation into the hands of well connected. " Public", as in, it is the working public over the last 100 or 200 years that created (or paid for), the electricity grid, or public schools, or entire armed or police forces

I keep thinking that perhaps an Act could or should be introduced here in UK (same for the States, i suppose), which should ensure that all politicians that enable any type of privatisation of public resources or PFI arrangement (yes that old chesnut), should be made personally responsible for the results therof.

And any losses to the public accidentally or "accidentally" occasioned by such commandeering over public resources, to be treated like deliberate misappropriation by the said public officials. With the financial and custodial penalties as may be appropriate.

Anybody out there with similar thoughts or should i really try harder and give up on drugs?

Tyronius Maximus , April 8, 2019 at 4:13 pm

I vociferously disagree with the assertion that the wrecking of pension funding in the past is the reason we are forced to leave privatization schemes in place today.

In a similar vein, the are lots of private services that are suspiciously similar to public utilities in terms of natural monopoly, such as cable TV, internet and even railroads. Maybe these should be nationalized and treated more like public services. It can work when they're adequately funded and oversight accountability has teeth; major airports are a good example.

rps , April 8, 2019 at 12:08 pm

Let's not forget the privatization of the Chicago Skyway , not once but twice.

Plus the state giveaways includes tens of millions of dollars each year in corporate tax credits in the name of job creation. A report by the nonprofit " Good Jobs First " revealed that over 300 Illinois companies are keeping the state taxes paid by their employees. EDGE- the Economic Development in a Growing Economy is a corporate freebie tax credit, which is partly from the state personal income taxes paid by workers. That's right, the biggest welfare queens are the corporations collecting and keep their employees state income tax payments.

Can it get worse? According to the Chicago Trib , "The Chicago Mercantile Exchange (CME), for example, with billions of untaxed contracts worth well over a quadrillion dollars, and whose profit margin in recent years is higher than any of the top 100 companies in the nation, had the hubris to demand an $85 million per year tax break. They got it." The money is there to secure the pensions and budget but has been diverted to the corporate welfare queens for honoring us mere serfs with their presence in the humble fiefdom of Illinois.

Paging Mike Madigan- The Institute on Taxation and Economic Policy lists Illinois as one of the "Terrible Ten" most tax-regressive states, imposing a much higher rate on poor residents for sales and excise taxes, property taxes and income taxes. Al Capone would be proud of him.

eg , April 7, 2019 at 12:04 pm

Michael Hudson, to his immense credit, explains the pernicious effects of privatization of common goods repeatedly throughout his work, and demonstrates that it has been with us at least as long as the ancient practice of land alienation and rural usury.

Natural monopolies ought to be nationalised, full stop.

Grizziz , April 7, 2019 at 12:39 pm

I support public ownership of natural monopolies, however it would be helpful if these pieces contained data, case studies or footnoted entries providing some empirical evidence of the author's thesis.

Thuto , April 7, 2019 at 1:00 pm

This article comes at a time when the clarion call for privatizing Eskom, SA's electricity utility, is hitting deafening levels. To the private sector, efficiency = maximizing profits by making the "bloated" enterprise lean (aka cutting the workforce) and quite literally mean (aka cutting services to "unprofitable" segments of the market, iow, the poor and vulnerable). When profits soar because the holy grail of efficiency is achieved, the mainstream business press brings out the champagne and toasts this "success" as proof that the previously "moribund" (they always exaggerate the state of things) monopolistic monolith has been given a new lease on life by privatizing it and the template is set for rescuing other "ailing" SOEs.

The drawbacks are never laid out as cleary as they are in this article and the plight of those worst affected, whether laid-off workers or those whose services have been cut, never makes it into the headlines.

PhilB , April 7, 2019 at 2:53 pm

And then there is prison privatization where the burden of operation and maintaining the institution should clearly be on the public so as to be constant reminder of the burden, among others reasons. The motivations by private prison operators to reduce services and costs out of site of the pesky prying eyes of the public are manifold.

RepubAnon , April 7, 2019 at 7:54 pm

Privatization is a great way to avoid having user fees wasted by providing services, and instead put to better use funding the re-election campaigns of politicians supporting privatization. Plus, it provides much-needed consulting fees for former politicians as well as job-creating 7-figure salaries for the CEOs,

(/snark, if you couldn't tell)

On a side note, the Dilbert comic strip is written about private industry ,

Iapetus , April 7, 2019 at 3:39 pm

There was a rudimentary plan put forward last June that recommended some pretty substantial privatizations of U.S. government assets and services which include:

-Privatizing the US Post Office ( through an Initial Public Offering or outright sale to a private entity ).
-Sell off U.S. government owned electricity transmission lines ( U.S. government owns 14% of this nations power transmission lines through TVA, Southwestern Power Administration, Western Area Power Administration, and Bonneville Power Administration ).
-Spin-off the Federal Aviation Administrations air traffic control operations into a private nonprofit entity.
-Spin-off the Department of Transportations operations of the Saint Lawrence Seaways Locks and Channels into a private non-profit entity.
-End the federal conservatorship of Fannie Mae and Freddie Mac, then regulate a new system of private guarantors for their MBS securities.

Not sure if these are still being considered.

Tom Stone , April 7, 2019 at 3:54 pm

There's no way I could ask that question with a straight face.

Jack Parsons , April 7, 2019 at 6:35 pm

At heart, the problem with privatization is that marketing to a government-employed purchaser or "purchase influencer" is ridiculously cheap, due to their poor accountability strictures.

This is abetted by the Katamari Damacy process (self-accretionary tendency) of money and power.

https://youtu.be/-U_Tccwyh70?t=139

The Rev Kev , April 7, 2019 at 7:50 pm

In Oz the electricity grids were privatized as they would be cheaper that way – or so people were told. Instead, the cost of electricity has risen sharply over the years to the point that it is effecting elections on both the State and Federal level as the price hikes are so controversial. A problem is that those companies have to pay back the loans used to buy the public electricity grids and as well, the senior management award themselves sky-high wages because they are totally worth it. These are factors that were never present when it was publicly owned. And just to put the boot in, those very same companies have been 'gold-plating' the electricity grid for their gain-

https://www.abc.net.au/news/2017-07-18/australian-gold-plated-power-grid/8721566

Meanwhile, whatever money the governments made selling their electricity companies has been long spent on white elephants or buying themselves re-elections by giving out goodies to voters.

Procopius , April 7, 2019 at 8:54 pm

buying themselves re-elections by giving out goodies to voters.

I don't reside in the states, so I don't see much of the detail of daily life. What are these "goodies" of which you speak? In what I am able to read on the internet, people aren't being given goodies any more. At least the old-time politicians handed out jobs, and turkeys at Christmas. The current crop do hand out jobs to their kids and immediate family, but not so much to anyone else.

John Rose , April 8, 2019 at 10:05 am

The county "poorhouse" in Lebanon County, PA over the years evolved into a bare-bones but very well run nursing home with caring, long-term staff. The Republican county commissioners, however, year after year, avoided raising taxes by underfunding the retirement plan for the employees. Then, "suddenly" there was a crisis because the underfunding had become legally untenable.
The solution was to sell the operation to a for-profit operator to fund the pansion plan shortfall at the minimal level required legally. In the next contract, the new owner cut health care and other benefits. The wages had always been minimal and he was free of the old pension plan requirements.
The employees went on strike for many months, the owner brought in replacements from companies that specialize in that service, until the employees had to cave in.
I had been counting on that facility when my sister was diagnosed with Alzheimers. I have family that is able to step in so she is provided for. Many others in the county are not so fortunate. Here are some staff comments: https://www.indeed.com/cmp/Cedar-Haven-Healthcare-Center/reviews?fcountry=ALL

Stratos , April 8, 2019 at 12:36 pm

" instead of trying to provide a public good to all, many [ordinary working people] are excluded because it is not considered commercially viable or economic to serve them."

There are also social and class dimensions to the exclusion. Private Internet Service Providers (ISPs) in the USA have made the "not commercially viable or economic to serve them" argument for decades when pressed about their refusal to wire the entire country. Their "business model" leaves millions without reliable broadband service in a variety of settings, from rural areas and small towns to inner cities and low income suburbs. In many cases, citizens in those areas have no access to broadband at all.

When small towns and counties in the US have taken the initiative to wire their localities, the ISPs have bribed state legislatures to pass laws prohibiting public broadband throughout the rest of the state. Talk about subversion of democracy! Insult to injury: the ISPs who wailed about "unfair competition" to state legislators then refuse to wire areas throughout the rest of the state.

Meanwhile, less affluent countries like Korea and Romania have lightning fast fiber optic broadband universally available at affordable prices.
https://motherboard.vice.com/en_us/article/jp5aa3/why-romanias-internet-is-so-much-faster-than-americas

Lack of universal and affordable broadband has two major effects:

➤ Local governments are shut out of economic opportunities because they lack connectivity. They are unable to shepherd business startups and existing businesses that need broadband to thrive. People move away. Businesses relocate or downsize. Local economies are left with erroding tax bases and boarded up downtowns.

➤ Children and young people in "broadband deserts" cannot tap into the many sources of learning that exist on the web. In particular, they don't have the opportunity to learn anything about frontend or backend web development applications such as, html, php, Ruby on Rails, Photoshop or Indesign.

That is one reason the US tech industry lacks workers from different backgrounds. Most tech workers grew up in areas the ISPs considered "commercially viable". In addition, many tech workers are self taught to some degree, even those with computer science degrees. It is difficult to be self taught if you lack access to the most basic resources and tools.

[Apr 08, 2019] Insofar as the Fed's "independence" has meant close ties to the financial industry, it has not been good news for most people in this country.

Apr 08, 2019 | economistsview.typepad.com

anne , April 06, 2019 at 12:56 PM

http://cepr.net/blogs/beat-the-press/the-independent-fed-isn-t-quite-what-it-is-cracked-up-to-be

April 6, 2019

The "Independent" Federal Reserve Isn't Quite What It Is Cracked Up to Be
By Dean Baker

Neil Irwin had a New York Times article * warning readers of the potential harm if the Federal Reserve loses its independence. The basis for the warning is that Donald Trump seems prepared to nominate Steven Moore and Herman Cain to the Fed, two individuals with no obvious qualifications for the job, other than their loyalty to Donald Trump. While Irwin is right to warn about filling the Fed with people with no understanding of economics, it is wrong to imagine that we have in general been well-served by the Fed in recent decades or that it is necessarily independent in the way we would want.

The examples Irwin gives are telling. Irwin comments:

"The United States' role as the global reserve currency -- which results in persistently low interest rates and little fear of capital flight -- is built in significant part on the credibility the Fed has accumulated over decades.

"During the global financial crisis and its aftermath, for example, the Fed could feel comfortable pursuing efforts to stimulate the United States economy without a loss of faith in the dollar and Treasury bonds by global investors. The dollar actually rose against other currencies even as the economy was in free fall in late 2008, and the Fed deployed trillions of dollars in unconventional programs to try to stop the crisis."

First, the dollar is a global reserve currency, it is not the only global reserve currency. Central banks also use euros, British pounds, Japanese yen, and even Swiss francs as reserve currencies. This point is important because we do not seriously risk the dollar not be accepted as a reserve currency. It is possible to imagine scenarios where its predominance fades, as other currencies become more widely used. This would not be in any way catastrophic for the United States.

On the issue of the dollar rising in the wake of the financial collapse in 2008, this was actually bad news for the U.S. economy. After the plunge in demand from residential construction and consumption following the collapse of the housing bubble, net exports was one of the few sources of demand that could potentially boost the U.S. economy. The rise in the dollar severely limited growth in this component.

The other example given is when Nixon pressured then Fed Chair Arthur Burns to keep interest rates low to help his re-election in 1972. This was supposed to have worsened the subsequent inflation and then severe recessions in the 1970s and early 1980s. The economic damage of that era was mostly due to a huge jump in world oil prices at a time when the U.S. economy was heavily dependent on oil.

While Nixon's interference with the Fed may have had some negative effect, it is worth noting that the economies of other wealthy countries did not perform notably better than the U.S. through this decade. It would be wrong to imply that the problems of the 1970s were to any important extent due to Burns keeping interest rates lower than he might have otherwise at the start of the decade.

It is also worth noting that the Fed has been very close to the financial sector. The twelve regional bank presidents who sit on the open market committee that sets monetary policy are largely appointed by the banks in the region. (When she was Fed chair, Janet Yellen attempted to make the appointment process more open.) This has led to a Fed that is far more concerned about keeping down inflation (a concern of bankers) than the full employment portion of its mandate.

Arguably, Fed policy has led unemployment to be higher than necessary over much of the last four decades. This has prevented millions of workers from having jobs and lowered wages for tens of millions more. The people who were hurt most are those who are disadvantaged in the labor market, such as African Americans, Hispanics, and people with less education.

Insofar as the Fed's "independence" has meant close ties to the financial industry, it has not been good news for most people in this country.

* https://www.nytimes.com/2019/04/06/upshot/fed-moore-cain-risk-partisanship.html

[Apr 08, 2019] Has Privatization Benefitted the Public naked capitalism

Notable quotes:
"... Privatization typically enriches the politically connected few who secure lucrative rents by sacrificing the national or public interest for private profit, even when privatization may not seem to benefit them. ..."
"... For example, following Russian voucher privatization and other Western recommended reforms, for which there was a limited domestic constituency then, within three years (1992-1994), the Russian economy had collapsed by half, and adult male life expectancy fell by six years. It was the greatest such recorded catastrophe in the last six millennia of recorded human history. ..."
"... Soon, a couple of dozen young Russian oligarchs had taken over the commanding heights of the Russian economy; many then monetized their gains and invested abroad, migrating to follow their new wealth. Much of this was celebrated by the Western media as economic progress. ..."
Apr 08, 2019 | www.nakedcapitalism.com

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<img src="http://b.scorecardresearch.com/p?c1=2&c2=16807273&cv=2.0&cj=1" /> Has Privatization Benefitted the Public? Posted on April 7, 2019 by Jerri-Lynn Scofield Jerri-Lynn here. Another succinct post by Jomo Kwame Sundaram that makes clear the "benefits" of privatization are not evenly distributed, and in fact, typically, "many are even worse off" when the government chooses to transfer ownership of the family silver.

Note that SOE is the acronym for state owned enterprise.

For those interested in the topic, see also another short post by the same author from last September, debunking other arguments to promote the privatization fairy, Revisiting Privatization's Claims .

By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development. Originally published at Inter Press Service

In most cases of privatization, some outcomes benefit some, which serves to legitimize the change. Nevertheless, overall net welfare improvements are the exception, not the rule.

Never is everyone better off. Rather, some are better off, while others are not, and typically, many are even worse off. The partial gains are typically high, or even negated by overall costs, which may be diffuse, and less directly felt by losers.

Privatized Monopoly Powers

Since many SOEs are public monopolies, privatization has typically transformed them into private monopolies. In turn, abuse of such market monopoly power enables more rents and corporate profits.

As corporate profits are the private sector's yardstick of success, privatized monopolies are likely to abuse their market power to maximize rents for themselves. Thus, privatization tends to burden the public, e.g., if charges are raised.

In most cases, privatization has not closed the governments' fiscal deficits, and may even worsen budgetary problems. Privatization may worsen the fiscal situation due to loss of revenue from privatized SOEs, or tax evasion by the new privatized entity.

Options for cross-subsidization, e.g., to broaden coverage are reduced as the government is usually left with unprofitable activities while the potentially profitable is acquired by the private sector. Thus, governments are often forced to cut essential public services.

In most cases, profitable SOEs were privatized as prospective private owners are driven to maximize profits. Fiscal deficits have often been exacerbated as new private owners use creative accounting to avoid tax, secure tax credits and subsidies, and maximize retained earnings.

Meanwhile, governments lose vital revenue sources due to privatization if SOEs are profitable, and are often obliged to subsidize privatized monopolies to ensure the poor and underserved still have access to the privatized utilities or services.

Privatization Burdens Many

Privatization burdens the public when charges or fees are not reduced, or when the services provided are significantly reduced. Thus, privatization often burdens the public in different ways, depending on how market power is exercised or abused.

Often, instead of trying to provide a public good to all, many are excluded because it is not considered commercially viable or economic to serve them. Consequently, privatization may worsen overall enterprise performance. 'Value for money' may go down despite ostensible improvements used to justify higher user charges.

SOEs are widely presumed to be more likely to be inefficient. The most profitable and potentially profitable are typically the first and most likely to be privatized. This leaves the rest of the public sector even less profitable, and thus considered more inefficient, in turn justifying further privatizations.

Efficiency Elusive

It is often argued that privatization is needed as the government is inherently inefficient and does not know how to run enterprises well. Incredibly, the government is expected to subsidize privatized SOEs, which are presumed to be more efficient, in order to fulfil its obligations to the citizenry.

Such obligations may not involve direct payments or transfers, but rather, lucrative concessions to the privatized SOE. Thus, they may well make far more from these additional concessions than the actual cost of fulfilling government obligations.

Thus, privatization of profitable enterprises or segments not only perpetuates exclusion of the deserving, but also worsens overall public sector performance now encumbered with remaining unprofitable obligations.

One consequence is poorer public sector performance, contributing to what appears to be a self-fulfilling prophecy. To make matters worse, the public sector is then stuck with financing the unprofitable, thus seemingly supporting to the privatization prophecy.

Benefits Accrue to Relatively Few

Privatization typically enriches the politically connected few who secure lucrative rents by sacrificing the national or public interest for private profit, even when privatization may not seem to benefit them.

Privatization in many developing and transition economies has primarily enriched these few as the public interest is sacrificed to such powerful private business interests. This has, in turn, exacerbated corruption, patronage and other related problems.

For example, following Russian voucher privatization and other Western recommended reforms, for which there was a limited domestic constituency then, within three years (1992-1994), the Russian economy had collapsed by half, and adult male life expectancy fell by six years. It was the greatest such recorded catastrophe in the last six millennia of recorded human history.

Soon, a couple of dozen young Russian oligarchs had taken over the commanding heights of the Russian economy; many then monetized their gains and invested abroad, migrating to follow their new wealth. Much of this was celebrated by the Western media as economic progress.

diptherio , April 7, 2019 at 9:11 am

SOE must stand for "state owned enterprise."

Jerri-Lynn Scofield Post author , April 7, 2019 at 9:30 am

Yes it does. I've now added a sentence to my introduction to make that clear. I noticed the omission when I was uploading the post, but wasn't sure whether readers would be confused.

Thanks for your comment.

caloba , April 7, 2019 at 10:45 am

As a rule of thumb, I'd say that any privatisations that require the introduction of convoluted pseudo-market structures or vast new regulatory bureaucracies or which derive most of their ongoing income from the public sector are likely to be contrary to the long-term public interest. In the UK, unfortunately, all these ships sailed a long time ago

DJG , April 7, 2019 at 11:15 am

After the recent Chicago municipal elections, I wrote up some notes on the reasons for the discontent. This article by Sundaram explains exactly how these schemes work. Further, you can apply his criteria of subsidies for the rich, skimming, and disinheriting the middle class and poor to all of the following instances in Chicago.

If I may–some for instances of how Sundaram's observations turn up in U.S. cities:

Chicago is the proving grounds for thirty or so years of the Democrats' surrender to neoliberalism and austerity politics. Let us not forget, brethren and sistren, that Rahm is the Spawn of Bill + Hill as well as dear friend and advisor of Obama. So there is the work of Daley to undo and the work of the Clintonians to undo. It will take more than one term for Lightfoot.

Consider:
–Parking meters and enforcement have been privatized, starving the city of funds and, more importantly, of its police power.
–Taxes have been privatized in TIFs, where money goes and is never heard from again.
–There have been attempts to privatize the park system in the form of the Lucas museum and the current Obama Theme Park imbroglio, involving some fifty acres of park land.
–The school system has been looted and privatized. The Democrats are big fans of charter schools (right, "Beto"), seeing them as ways to skim money off the middle class and the poor.
–Fare collection on public transit has been privatized using a system so deliberately rudimentary and so deliberately corrupt that it cannot tell you at point of service how much you have paid as fare.
–Boeing was enticed to Chicago with tax breaks. Yes, that Boeing, the one that now deliberately puts bad software in your airplane.
–Property tax assessment has been an opaque system and source of skimming for lawyers.
–Zoning: Eddie Burke, pond scum, is just the top layer of pollution.
–And as we have made our descent, all of these economic dogmata have been enforced by petty harassment of the citizenry (endless tickets) and an ever-brutal police force.

And yet: The current Republican Party also supports all of these policies, so let's not pretend that a bunch of Mitch McConnell lookalikes are headed to Chicago to reform it.

California is no better , April 7, 2019 at 5:16 pm

Providing professional services i.e. architecture, engineering, etc. for a public entity, local or federal, does not yield unreasonable profits. Typically, the public agencies have their own staff to monitor and cost control a project. The professional services provided to private developers yields far more profit- oftentimes twice the profits associated with public agency work. Most professional services companies will transition their work to the public agencies during a recession.

At any rate, especially in Illinois, privatizing the work to avoid pension liabilities is no longer a choice. Michael Madigan pension promises will require the public to maintain a public service budget with no staff to fill potholes. Essentially, these are the no work jobs made popular by the Soprano crew twenty years ago.

Discussion of the downside of the privatization of public services is merely an oscillation from discussing the weather, the Bears or any other kitchen table discussion – nothing more than pleasant small talk to pass the time.

Privatization, at any cost, is no longer a choice. We have abused the pension system and now the public must pay for private companies to provide the most basic services.

stan6565 , April 7, 2019 at 6:36 pm

The question is, what can one do to help arrest this wholesale theft of public resources and their expropriation into the hands of well connected. " Public", as in, it is the working public over the last 100 or 200 years that created (or paid for), the electricity grid, or public schools, or entire armed or police forces

I keep thinking that perhaps an Act could or should be introduced here in UK (same for the States, i suppose), which should ensure that all politicians that enable any type of privatisation of public resources or PFI arrangement (yes that old chesnut), should be made personally responsible for the results therof.

And any losses to the public accidentally or "accidentally" occasioned by such commandeering over public resources, to be treated like deliberate misappropriation by the said public officials.

With the financial and custodial penalties as may be appropriate.

Anybody out there with similar thoughts or should i really try harder and give up on drugs?

eg , April 7, 2019 at 12:04 pm

Michael Hudson, to his immense credit, explains the pernicious effects of privatization of common goods repeatedly throughout his work, and demonstrates that it has been with us at least as long as the ancient practice of land alienation and rural usury.

Natural monopolies ought to be nationalised, full stop.

Grizziz , April 7, 2019 at 12:39 pm

I support public ownership of natural monopolies, however it would be helpful if these pieces contained data, case studies or footnoted entries providing some empirical evidence of the author's thesis.

Thuto , April 7, 2019 at 1:00 pm

This article comes at a time when the clarion call for privatizing Eskom, SA's electricity utility, is hitting deafening levels. To the private sector, efficiency = maximizing profits by making the "bloated" enterprise lean (aka cutting the workforce) and quite literally mean (aka cutting services to "unprofitable" segments of the market, iow, the poor and vulnerable). When profits soar because the holy grail of efficiency is achieved, the mainstream business press brings out the champagne and toasts this "success" as proof that the previously "moribund" (they always exaggerate the state of things) monopolistic monolith has been given a new lease on life by privatizing it and the template is set for rescuing other "ailing" SOEs.

The drawbacks are never laid out as cleary as they are in this article and the plight of those worst affected, whether laid-off workers or those whose services have been cut, never makes it into the headlines.

PhilB , April 7, 2019 at 2:53 pm

And then there is prison privatization where the burden of operation and maintaining the institution should clearly be on the public so as to be constant reminder of the burden, among others reasons. The motivations by private prison operators to reduce services and costs out of site of the pesky prying eyes of the public are manifold.

RepubAnon , April 7, 2019 at 7:54 pm

Privatization is a great way to avoid having user fees wasted by providing services, and instead put to better use funding the re-election campaigns of politicians supporting privatization. Plus, it provides much-needed consulting fees for former politicians as well as job-creating 7-figure salaries for the CEOs,

(/snark, if you couldn't tell)

On a side note, the Dilbert comic strip is written about private industry ,

Iapetus , April 7, 2019 at 3:39 pm

There was a rudimentary plan put forward last June that recommended some pretty substantial privatizations of U.S. government assets and services which include:

-Privatizing the US Post Office ( through an Initial Public Offering or outright sale to a private entity ).
-Sell off U.S. government owned electricity transmission lines ( U.S. government owns 14% of this nations power transmission lines through TVA, Southwestern Power Administration, Western Area Power Administration, and Bonneville Power Administration ).
-Spin-off the Federal Aviation Administrations air traffic control operations into a private nonprofit entity.
-Spin-off the Department of Transportations operations of the Saint Lawrence Seaways Locks and Channels into a private non-profit entity.
-End the federal conservatorship of Fannie Mae and Freddie Mac, then regulate a new system of private guarantors for their MBS securities.

Not sure if these are still being considered.

Tom Stone , April 7, 2019 at 3:54 pm

There's no way I could ask that question with a straight face.

Jack Parsons , April 7, 2019 at 6:35 pm

At heart, the problem with privatization is that marketing to a government-employed purchaser or "purchase influencer" is ridiculously cheap, due to their poor accountability strictures.

This is abetted by the Katamari Damacy process (self-accretionary tendency) of money and power.

https://youtu.be/-U_Tccwyh70?t=139

The Rev Kev , April 7, 2019 at 7:50 pm

In Oz the electricity grids were privatized as they would be cheaper that way – or so people were told. Instead, the cost of electricity has risen sharply over the years to the point that it is effecting elections on both the State and Federal level as the price hikes are so controversial. A problem is that those companies have to pay back the loans used to buy the public electricity grids and as well, the senior management award themselves sky-high wages because they are totally worth it. These are factors that were never present when it was publicly owned. And just to put the boot in, those very same companies have been 'gold-plating' the electricity grid for their gain-

https://www.abc.net.au/news/2017-07-18/australian-gold-plated-power-grid/8721566

Meanwhile, whatever money the governments made selling their electricity companies has been long spent on white elephants or buying themselves re-elections by giving out goodies to voters.

Procopius , April 7, 2019 at 8:54 pm

buying themselves re-elections by giving out goodies to voters.

I don't reside in the states, so I don't see much of the detail of daily life. What are these "goodies" of which you speak? In what I am able to read on the internet, people aren't being given goodies any more. At least the old-time politicians handed out jobs, and turkeys at Christmas. The current crop do hand out jobs to their kids and immediate family, but not so much to anyone else.

[Apr 05, 2019] Pelosi Accused of Deploying 'Most Dishonest Argument' Against Medicare for All by Jake Johnson

Pelosi: Sock Puppet For the Insurance Industry
Apr 05, 2019 | www.commondreams.org
described as "probably the most dishonest argument in the entire Medicare for All debate."

"People who love their employer-based insurance do not get to hold on to it in our current system. Instead, they lose that insurance constantly, all the time. It is a complete nightmare."
-- Matt Bruenig, People's Policy Project

In an interview with the Washington Post , the Democratic leader said she is "agnostic" on Medicare for All and claimed, "A lot of people love having their employer-based insurance and the Affordable Care Act gave them better benefits."

Matt Bruenig, founder of the left-wing think tank People's Policy Project, argued in a blog post that Pelosi's statement "implies that, under our current health insurance system, people who like their employer-based insurance can hold on to it."

"This then is contrasted with a Medicare for All transition where people will lose their employer-based insurance as part of being shifted over to an excellent government plan," Bruenig wrote. "But the truth is that people who love their employer-based insurance do not get to hold on to it in our current system. Instead, they lose that insurance constantly, all the time, over and over again. It is a complete nightmare."

To illustrate his point, Bruenig highlighted a University of Michigan study showing that among Michiganders "who had employer-sponsored insurance in 2014, only 72 percent were continuously enrolled in that insurance for the next 12 months.

"This means that 28 percent of people on an employer plan were not on that same plan one year later," Bruenig noted.

me title=

"Critics of Medicare for All are right to point out that losing your insurance sucks," Bruenig concluded. "But the only way to stop that from happening to people is to create a seamless system where people do not constantly churn on and off of insurance. Medicare for All offers that. Our current system offers the exact opposite. If you like losing your insurance all the time, then our current healthcare system is the right one for you."

All On Medicare -- a pro-Medicare for All Twitter account -- slammed Pelosi's remarks, accusing the Democratic leader of parroting insurance industry talking points:

The Speaker's alternative to the Medicare for All legislation co-sponsored by over 100 members of her caucus is a bill to strengthen the Affordable Care Act (ACA), which she introduced last week .

"We all share the value of healthcare for all Americans -- quality, affordable healthcare for all Americans," Pelosi told the Post . "What is the path to that? I think it's the Affordable Care Act, and if that leads to Medicare for All, that may be the path."

The nation's largest nurses union was among those who expressed disagreement with the Speaker's incrementalist approach.

In a statement last week, National Nurses United president Zenei Cortez, RN, said Pelosi's plan would "only put a Band-Aid on a broken healthcare system."

"National Nurses United, along with our allies, will continue to build the grassroots movement for genuine healthcare justice and push to pass Medicare for All," Cortez concluded.

This work is licensed under a Creative Commons Attribution-Share Alike 3.0 License

[Apr 04, 2019] How much of the present-day US economy is even real i.e., results in the production of actual goods that people might want, as opposed to dodgy financial/insurance transactions which may add a lot of dollar value to GDP, but don't create anything real that enhances the quality of life for the masses?

Apr 04, 2019 | www.unz.com

Digital Samizdat , says: April 4, 2019 at 5:33 pm GMT

@Andrei Martyanov All true. And one more point: compared with China, how much of the present-day US economy is even real – i.e., results in the production of actual goods that people might want, as opposed to dodgy financial/insurance transactions which may add a lot of dollar value to GDP, but don't create anything real that enhances the quality of life for the masses?

Economist used to have a joke: every time you break your leg, you increase GDP. First, you gotta pay the hospital (transaction), then you gotta pay your doctor (another transaction), then you gotta pay for your case (yet another transaction). All those transactions make it look like 'wealth' is being created, because they are–numerically, at least–increasing per capita GDP. But still: wouldn't you and the country actually be better off if you hadn't broken your leg in the first place?

[Apr 04, 2019] Finance Capitalism came out of London and hopped to America, especially post WW2.

Apr 04, 2019 | www.unz.com

MEFOBILLS , says: April 4, 2019 at 3:57 pm GMT

China, emerged as an "honest broker" among countries in the Middle East, and used the free market system to improve relations with its trading partners and grow its economy. The IC appears to find fault with Russia because it is using the system the US created to better advantage than the US.

Industrial Capitalism is the system China and Russia are running on. America briefly had this system from 1868 to 1912; it was called the American System of Economy (Henry Clay/Peshine Smith).

This type of economy uses state credit (from Treasury not banks) and injects it into industry. Industry then grows, and people's welfare is increased through improved productivity.

Finance Capitalism came out of London and hopped to America, especially post WW2. At the same time Atlantacism and Rim theory hopped. America still runs under this BIZWOG (Britain Israel World Government) matrix. This matrix depends on finance capitalism.

Finance Capitalism is the placing of EXISTING ASSETS onto a private bank ledger, to then hypothecate said assets into new bank credit. For example, a ships bill of lading may be used to create new bank credit, or existing homes are put on double entry ledger to make housing bubbles.

The closer analogs to China and Russian economy are American System of Economy, not the current American BIZWOG finance capital. The historical analogs would also be Canada 1938-1974, when Canada had a sovereign economy. Canada post 1974 was converted to finance capitalism and now are debt laden and suffering like the rest of the west.

Kaiser's Germany used industrial capitalism then Japan's Manchurian Railroad Engineers copied it for Japan. Mussolini in Italy copied parts of it, and NSDAP in Germany resurrected Frederick List and the Kaiser's methods.

Finance Capital out of wall street funded the Bolsheviks in what amounted to a looting operation of Russia. It is any wonder that finance capitalism found succor with communism since they are both pyramid schemes?

Rim Theory, Atlantacism, Finance Capitalism, and Brzezinsky's chessboard are part of the same thing, an excuse matrix for gobbling up the world into one double entry private bank ledger, to then benefit a special (((usury))) finance class of plutocrats.

The "markets" that China and Russia operate on are those of industrial capitalism, using state credit. China has four large state banks, and they often cancel debt instruments (housed in the state bank) to then effectively put debt free money into their economy. Russia injects gold into their Central Bank Reserves, to then emit Rubles. Both China and Russia inject into industry, their farm sectors, and other sectors to get a desired output to help their people, not put them into debt servitude.

The BIZWOG matrix will collapse, it is anti-logos and hence against the natural order. It is on the wrong side of history.

[Mar 23, 2019] Note on palace-coup attempts of Rod Rosenstein and Andrew McCabe

Mar 23, 2019 | news.yahoo.com

W e are still trying to fathom the apparent but transient palace-coup attempts of Rod Rosenstein and Andrew McCabe. No one has gotten to the bottom of the serial lying by McCabe and James Comey, much less their systematic and illegal leaking to pet reporters.

We do not know all the ways in which James Clapper and John Brennan seeded the dossier and its related gossip among the press and liberal politicians -- only that both were prior admitted fabricators who respectively while under oath misled congressional representatives on a host of issues.

The central role of Hillary Clinton in funding the anti-Trump, Russian-"collusion," Fusion/GPS/Christopher Steele dossier is still not fully disclosed. Did the deluded FISA court know it was being used by Obama-administration DOJ and FBI officials, who withheld from it evidence to ensure permission to spy on American citizens? Could any justice knowingly be so naïve?

Do we remember at all that Devin Nunes came to national prominence when he uncovered information that members of the Obama administration's national-security team, along with others, had systematically unmasked surveilled Americans, whose names then were leaked illegally to the press?

One day historians will have the full story of how Robert Mueller stocked his legal team inordinately with partisans. He certainly did not promptly disclose the chronology of, or the interconnected reasons for, the firings of Lisa Page and Peter Strozk. And his team has largely used process-crime allegations to leverage mostly minor figures to divulge some sort of incriminating evidence about the president -- none of it pertaining to the original mandated rationale of collusion.

These are the central issues and key players of this entire sordid attempt to remove a sitting president.

But we should remember there were dozens of other minor players who did their own parts in acting unethically, and in some cases illegally, to destroy a presidency. We have mostly forgotten them. But they reflect what can happen when Washington becomes unhinged, the media go berserk, and a reign of terror ensues in which any means necessary is redefined as what James Comey recently monetized as a "Higher Loyalty" to destroy an elected president.

Here are just a few of the foot soldiers we have forgotten.

Anonymous

On September 5, 2018 (a date seemingly picked roughly to coincide with the publication of Bob Woodward's sensational tell-all book about the inside of the Trump White House), the New York Times printed a credo from a supposed anonymous Republican official deep within the Trump administration. In a supposed fit of ethical conviction, he (or she) warned the nation of the dangers it faced under his boss, President Trump, and admitted to a systematic effort to subvert his presidency:

The dilemma -- which he does not fully grasp -- is that many of the senior officials in his own administration are working diligently from within to frustrate parts of his agenda and his worst inclinations. I would know. I am one of them.

Anonymous elaborated:

Given the instability many witnessed, there were early whispers within the cabinet of invoking the 25th Amendment, which would start a complex process for removing the president. But no one wanted to precipitate a constitutional crisis. So we will do what we can to steer the administration in the right direction until -- one way or another -- it's over.

We do not know whether Anonymous was describing the coup attempt as described by Andrew McCabe that apparently entailed Rod Rosenstein at the Justice Department informally polling cabinet officials, or marked a wider effort among Never Trump Republicans and deep-state functionaries to ensure that Trump failed -- whether marked by earlier efforts to leak confidential calls with foreign officials or to serve up unsubstantiated rumors to muckrakers or simply slow-walk or ignore presidential directives.

In any case, Anonymous's efforts largely explain why almost daily we hear yet another mostly unsubstantiated account that a paranoid, deranged, and dangerous Trump is holed up in his bedroom with his Big Macs as he plans unconstitutional measures to wreck the United States -- and then, by accident, achieves near-record-low peacetime unemployment, near-record-low minority unemployment, annualized 3 percent GDP growth, record natural-gas and oil production, record deregulation, comprehensive tax reform and reduction, and foreign-policy breakthroughs from the destruction of ISIS to cancellation of the flawed Iran deal.

James Baker

In the course of congressional testimony, it was learned that the FBI general counsel, James Baker, for a time had been under investigation for leaking classified information to the press. Among the leaks were rumored scraps from the Steele dossier passed to Mother Jones reporter David Corn (who has denied any such connection) that may have fueled his sensational pre-election accusation of Trump–Russian collusion.

Nonetheless, about a week before the 2016 election, Corn of Mother Jones was writing lurid exposés, such as the following, to spread gossip likely inspired from the Christopher Steele dossier (italics inserted):

Does this mean the FBI is investigating whether Russian intelligence has attempted to develop a secret relationship with Trump or cultivate him as an asset? Was the former intelligence officer and his material deemed credible or not?

An FBI spokeswoman says, "Normally, we don't talk about whether we are investigating anything." But a senior US government official not involved in this case but familiar with the former spy tells Mother Jones that he has been a credible source with a proven record of providing reliable, sensitive, and important information to the US government. In June, the former Western intelligence officer -- who spent almost two decades on Russian intelligence matters and who now works with a US firm that gathers information on Russia for corporate clients -- was assigned the task of researching Trump's dealings in Russia and elsewhere, according to the former spy and his associates in this American firm.

What does "assigned" mean, and by whom? That Fusion/GPS (which, in fact, is a generic opposition-research firm with no particular expertise in Russia) hired with disguised Clinton campaign funds a has-been foreign-national spy to buy dirt from Russian sources to subvert a presidential campaign?

Those leaks of Christopher Steele's dirt also did their small part in planting doubt in voters' minds right that electing Trump was tantamount to implanting a Russian asset in the White House. Baker has been the alleged center of a number of reported leaks, even though the FBI's general counsel should have been the last person to disclose any government communication to the press during a heated presidential campaign. And there is still no accurate information concerning what role, if any, Baker played in Andrew McCabe's efforts to discuss removing the president following the Comey firing.

Evelyn Farkas

On March 1, 2017, just weeks after Trump took office, the New York Times revealed that. in a last-minute order, outgoing president Obama had vastly expanded the number of government officials with access to top-secret intelligence data. The Obama administration apparently sought to ensure a narrative spread that Trump may have colluded with the Russians. The day following the disclosure, a former Pentagon official, Evelyn Farkas (who might have been a source for the strange disclosure of a day earlier), explained Obama's desperate eleventh-hour effort in an MSNBC interview:

I was urging my former colleagues, and, and frankly speaking the people on the Hill . . . it was more actually aimed at telling the Hill people, get as much information as you can, get as much intelligence as you can before President Obama leaves the administration.

Because I had a fear that somehow that information would disappear with the senior people who left so it would be hidden away in the bureaucracy, um, that the [stutters] Trump folks -- if they found out how we knew what we knew about their [the] Trump staff, dealing with Russians -- that they would try to compromise those sources and methods, meaning we no longer have access to that intelligence.

So I became very worried because not enough was coming out into the open and I knew that there was more. We have very good intelligence on Russia, so then I had talked to some of my former colleagues and I knew that they were also trying to help get information to the Hill.

Despite media efforts to spin Farkas's disclosure, she was essentially contextualizing how outgoing Obama officials were worried that the incoming administration would discover their own past efforts ("sources and methods") to monitor and surveil Trump-campaign officials, and would seek an accounting. Her worry was not just that the dossier-inspired dirt would not spread after Trump took office, but that the Obama administration's methods used to thwart Trump might be disclosed (e.g., " if they found out how we knew what we knew about their [the] Trump staff, dealing with Russians -- that they would try to compromise those sources and methods, meaning we no longer have access to that intelligence" ).

So Farkas et al. desperately sought to change the law so that their rumors and narratives would be so deeply seeded within the administrative state that the collusion narrative would inevitably lead to Congress and the press, and thereby overshadow any shock at the improper or illegal methods the Obama-administration officials had authorized to monitor the Trump campaign.

And Farkas was correct. Even today, urination in a Russian hotel room has overshadowed perjury traps, warping the FISA courts, illegal leaking, inserting a spy into the Trump campaign, and Russian collusion with Clinton hireling and foreign agent Christopher Steele.

Samantha Power
We now forget that for some reason, in her last year in office, but especially during and after the 2016 election, Power, the outgoing U.S. ambassador to the United Nations, reportedly asked to unmask the names of over 260 Americans picked up in government surveillance. She offered no real explanations of such requests.

Even stranger than a U.N. ambassador suddenly playing the role of a counterintelligence officer, Power continued her requests literally until the moments before Trump took office in January 2017. And, strangest of all, after Power testified before the House Oversight and Government Reform Committee, Representative Trey Gowdy reported that "her testimony is 'they [the unmasking requests] may be under my name, but I did not make those requests.'"

Who, in the world, then, did make those requests and why and, if true, did she know she was so being used?

And were some of those unmasking requests leaked, thus helping to fuel media rumors in late 2016 and early 2017 that Trump officials were veritable traitors in league with Russia? And why were John Brennan, James Clapper, Susan Rice, and Sally Yates reportedly in the last days (or, in some cases, the last hours) requesting that the names of Americans swept up in surveillance of others be unmasked? What was the point of it all?

In sum, did a U.N. ambassador let her name be used by aides or associates to spread rumors throughout the administrative state, and thereby brand them with classified government authenticity, and then all but ensure they were leaked to the press?

We the public most certainly wondered why the moment Trump was elected, the very name Carter Page became synonymous with collusion, and soon Michael Flynn went from a respected high-ranking military official to a near traitor, as both were announced as emblematic of their erstwhile complicit boss.

Ali Watkins and James Wolf

Watkins was the young reporter for Buzzfeed (which initially leaked the largely fake Steele dossier and erroneously reported that Michael Cohen would implicate Trump in suborning perjury) who conducted an affair with James Wolf, a staffer, 30 years her senior, on the Senate Intelligence Committee.

Wolf, remember, systematically and illegally began leaking information to her that found its way into sensationalized stories about collusion. But as Margot Cleveland of the Federalist pointed out, Watkins was also identified by Buzzfeed "in court filings as one of the individuals who 'conducted newsgathering in connection with the Dossier before Buzzfeed published the Article' on the dossier. This fact raises the question of whether Watkins received information from Wolfe concerning the dossier and, if so, what he leaked."

In other words, the dossier was probably planted among U.S. senators and deliberately leaked through a senior Senate aide, who made sure that the unverified dirt was published by the press to damage Donald Trump.

And it did all that and more.

The list of these bit players could be easily expanded. These satellites were not coordinated in some tight-knit vast conspiracy, but rather took their cue from their superiors and the media to freelance with assumed impunity, as their part in either preventing or ending a Trump presidency. And no doubt the Left would argue that the sheer number of federal bureaucrats and political appointees, in a variety of cabinets and agencies, throughout the legislative and the executive branches, all proves that Trump is culpable of something.

Perhaps. But the most likely explanation is that a progressive administrative state, a liberal media, and an increasingly radicalized liberal order were terrified by the thought of an outsider Trump presidency. Therefore, they did what they could, often both unethically and illegally, to stop his election, and then to subvert his presidency.

In their arrogance, they assumed that their noble professions of higher loyalties and duties gave them exemption to do what they deemed necessary and patriotic. And others like them will continue to do so, thereby setting the precedent that unelected federal officials can break the law or violate any ethical protocols they please -- if they disagree with the ideology of the commander in chief. We ridicule Trump for going ballistic at each one of these periodically leaked and planted new stories that raised some new charge about his stupidity, insanity, incompetence, etc. But no one has before witnessed any president subjected to such a comprehensive effort of the media, the deep state, political opponents, and his own party establishment to destroy him.

Subversion is the new political opposition. The nation -- and the Left especially -- will come to regret the legacy of the foot soldiers of the Resistance in the decades to come.

[Mar 21, 2019] Pentagon to probe if Shanahan used office to help Boeing

Mar 21, 2019 | finance.yahoo.com

The Pentagon's inspector general has formally opened an investigation into a watchdog group's allegations that acting Defense Secretary Patrick Shanahan has used his office to promote his former employer, Boeing Co.

Citizens for Responsibility and Ethics in Washington filed an ethics complaint with the Pentagon's inspector general a week ago, alleging that Shanahan has appeared to make statements promoting Boeing and disparaging competitors, such as Lockheed Martin.

Shanahan, who was traveling with President Donald Trump to Ohio on Wednesday, spent more than 30 years at Boeing, leading programs for commercial planes and missile defense systems. He has been serving as acting Pentagon chief since the beginning of the year, after James Mattis stepped down.

The probe comes as Boeing struggles to deal with a public firestorm over two deadly crashes of the Boeing 737 Max 8 jetliner within the last five months. And it focuses attention on whether Trump will nominate Shanahan as his formal pick for defense chief, rather than letting him languish as an acting leader of a major federal agency.

Dwrena Allen, spokeswoman for the inspector general, said Shanahan has been informed of the investigation. And, in a statement, Pentagon spokesman Tom Crosson said Shanahan welcomes the review.

"Acting Secretary Shanahan has at all times remained committed to upholding his ethics agreement filed with the DoD," said Crosson. "This agreement ensures any matters pertaining to Boeing are handled by appropriate officials within the Pentagon to eliminate any perceived or actual conflict of interest issue(s) with Boeing."

During a Senate hearing last week, Shanahan was asked by U.S. Sen. Richard Blumenthal, D-Conn., about the 737 Max issue. Shanahan said he had not spoken to anyone in the administration about it and had not been briefed on it. Asked whether he favored an investigation into the matter, Shanahan said it was for regulators to investigate.

On Wednesday, Blumenthal said that scrutiny of Shanahan's Boeing ties is necessary. "In fact, it's overdue. Boeing is a behemoth 800-pound gorilla -- raising possible questions of undue influence at DOD, FAA and elsewhere," said Blumenthal.

Shanahan signed an ethics agreement in June 2017, when he was being nominated for the job of deputy defense secretary, a job he held during Mattis' tenure. It outlined the steps he would take to avoid "any actual or apparent conflict of interest," and said he would not participate in any matter involving Boeing.

The CREW ethics complaint, based to a large part on published reports, including one by Politico in January, said Shanahan has made comments praising Boeing in meetings about government contracts, raising concerns about "whether Shanahan, intentionally or not, is putting his finger on the scale when it comes to Pentagon priorities."

One example raised by the complaint is the Pentagon's decision to request funding for Boeing 15EX fighter jets in the 2020 proposed budget. The Pentagon is requesting about $1 billion to buy eight of the aircraft.

Shanahan, 56, joined Boeing in 1986, rose through its ranks and is credited with rescuing a troubled Dreamliner 787 program. He also led the company's missile defense and military helicopter programs.

Trump has seemed attracted to Shanahan partially for his work on one of the president's pet projects -- creating a Space Force. He also has publicly lauded Shanahan's former employer, Boeing, builder of many of the military's most prominent aircraft, including the Apache and Chinook helicopters, the C-17 cargo plane and the B-52 bomber, as well as the iconic presidential aircraft, Air Force One.

This is only the third time in history that the Pentagon has been led by an acting chief, and Shanahan has served in that capacity for longer than any of the others.

Presidents typically take pains to ensure the Pentagon is being run by a Senate-confirmed official, given the grave responsibilities that include sending young Americans into battle, ensuring the military is ready for extreme emergencies like nuclear war and managing overseas alliances that are central to U.S. security.


3 hours ago Why did Trump appoint a former Boeing executive and industry lobbyist to the the Secretary of Defense to replace General Mattis? What in Shananhan's background makes him qualified to lead our nation's military forces? 3 hours ago WITHOUT A DOUBT HE DID., ALSO INVESTIGATE NIKKI HALEY'S APPOINTED ON BOEING'S BOARD TO REPLACE SHANAHAN. FOLLOW THE HOEING KICKBACKS(MONEY), TO DONALD TRUMP'S FAMILY. 3 hours ago Shanahan probably helped Boeing on the promise of a later payback just like Ms. Nikki Haley did while Gov of SC where Boeing built a new plant on her watch. She helped big time to keep the Unions out of the new Boeing plant and now Boeing is going to put her on their board of directors. Nothing like a bit of an obvious payoff. 2 hours ago Reminds me of the Bush Jr days in the White House. During the Gulf War (#2) Vice President #$%$ Cheney awarded oil company Halliburton (Cheney was CEO before accepting the VP job) to deliver meals for the troops. The contract was ?No Bid.? Why was an oil company delivering food to troops with a no bid contract? After Cheney?s Job was over being VP he went back to being CEO at Halliburton and moved Halliburton?s headquarters to Dubai. What an American! 2 hours ago Now we understand why Boeing & the FAA hesitated to ground those planes for few days despite many countries who did grounded those plane which is a precedent for a country to ground & NOT wait for the manufacturer. ONLY after Canada grounded those planes Boeing & the FAA & that's because Canada IS a the #1 flight partner of the US ! 4 hours ago Years ago there was a Boeing procurement scandal and Trump does love the swamp he claims to hate.

[Mar 20, 2019] The Opportunity Cost of America s Disastrous Foreign Policy by Vlad Sobell

Foreign policy is no longer controlled by the President of the USA. It is controlled by the Deep state. This article is from 2015 but can easily be written about Trump administration
Notable quotes:
"... Indeed, as Putin himself had proposed in his visionary October 2011 article, the Eurasian Union could have become one of the pillars of a huge harmonized economic area stretching from Lisbon to Vladivostok and based on the EU's single-market rules (acquis communautaire). ..."
"... First and foremost, because the self-proclaimed "exceptional" power (actually, a mere "outlying island" in the Atlantic, according to the founder of geopolitics, Halford Mackinder) and its dysfunctional "deep-state" officialdom did not want it to be. How could they have permitted such a thing? How could they have allowed other countries to get on with improving the lives of their citizens without being obliged to seek Washington's approval every step of the way? ..."
"... In order to make sure that they were not side-lined, the US elites had to intervene. The Western propaganda machine started churning out all sorts of nonsense that Putin is a new Hitler who is bent on restoring the Soviet empire and who is bullying Europe, while continuing to bang on about his "increasingly autocratic rule". ..."
"... Deadly attacks by chauvinistic proxies were launched on the Russophone people in South Ossetia, Georgia in 2008 and more recently in Ukraine. ..."
"... Stuck in an Orwellian nightmare, Europe has to demonstrate its unfailing loyalty to Big Brother and go along with the view that Russia, an intrinsic and valuable part of the European mainstream both historically and culturally, represents universal evil and that the Earth will not be safe until the Federation has been dismembered and Putinism wiped out once and for all. ..."
"... Having self-destructed in two world wars, it has become an easy and even willing prey to an arrogant, ignorant and power-drunk predator that has never experienced the hardships and horrors that Europe has. ..."
"... Even more terrifying, intellectually third-rate Washington viceroys such as Victoria Nuland and the freelancing armchair warrior Senator McCain are allowed to play God with our continent. ..."
"... Indeed, the damage extends beyond the economy. By aligning with the forces of chaos � such as chauvinistic extremists in Ukraine � Washington and its Euro-vassals are corrupting the moral (and intellectual) core of the West. ..."
"... 'My Ph.D. dissertation chairman, who became a high Pentagon official assigned to wind down the Vietnam war, in answer to my question about how Washington gets Europeans to always do what Washington wants replied: "Money, we give them money." "Foreign aid?" I asked. "No, we give the European political leaders bagfuls of money. They are for sale. We bought them. They report to us." Perhaps this explains Tony Blair's $50 million fortune one year out of office'. ..."
"... "We, the [CENSORED] people, control America and the Americans know it." -- Benjamin Netanyahu, Prime Minister of [CENSORED] ..."
Mar 18, 2015 | Russia Insider

Washington is betraying the best interests of the American people through its current foreign policy... European democracy is threatened by US, not Russian, foreign policy

The avalanche of commentary since the Ukrainian crisis erupted a year ago has overshadowed any reflections on the immense forgone benefits (technically speaking, the "opportunity cost") of what might have been if Washington had been working for peace and stability instead of war and chaos.

Imagine the following: After the unraveling of the Communist bloc, Europe, in partnership with the US, had forged a new security system in which Russia was treated as a valued and equal partner � one whose interests were respected. Russia, decimated by a century of wars and Communist imperialism, would doubtless have eagerly reciprocated in kind. Most countries of the former Soviet Union would have then proceeded to build a new Eurasian structure of which Russia would have served as the natural umbrella, given its long-standing interaction with the region's diverse nations and cultures.

Indeed, as Putin himself had proposed in his visionary October 2011 article, the Eurasian Union could have become one of the pillars of a huge harmonized economic area stretching from Lisbon to Vladivostok and based on the EU's single-market rules (acquis communautaire).

The rising Far Eastern economic powerhouse, with the world's most populous country, China, at its centre, would have linked up with the world's largest economy (the EU). An enormous Eurasian production and financial bloc would have been created � one that drew primarily on secure supplies of Russian energy and other natural resources. Untold investment opportunities would have opened up in Siberia and Russia's Far East as well as in Central Asia. Hundreds of millions of people in Eurasia and elsewhere would have been lifted out of poverty. And, not least, the EU would have been refashioned as an integral part of the dynamic trans-Eurasian economy (rather than as a German-centred empire, as appears to be the case today), thereby making a major contribution to overcoming the ongoing global economic depression.

All of this was not to be, however. Why not? First and foremost, because the self-proclaimed "exceptional" power (actually, a mere "outlying island" in the Atlantic, according to the founder of geopolitics, Halford Mackinder) and its dysfunctional "deep-state" officialdom did not want it to be. How could they have permitted such a thing? How could they have allowed other countries to get on with improving the lives of their citizens without being obliged to seek Washington's approval every step of the way?

European democracy is threatened by US, not Russian, foreign policy

In order to make sure that they were not side-lined, the US elites had to intervene. The Western propaganda machine started churning out all sorts of nonsense that Putin is a new Hitler who is bent on restoring the Soviet empire and who is bullying Europe, while continuing to bang on about his "increasingly autocratic rule".

Deadly attacks by chauvinistic proxies were launched on the Russophone people in South Ossetia, Georgia in 2008 and more recently in Ukraine.

And in what is eerily reminiscent of Stalinist "bloc discipline", the EU/NATO nomenclature was ordered to implement the absurd strategy of severing the Russian economy from the EU. For their part, the cowering Eurocrats willingly obliged by imposing sanctions on Russia that, perversely, have had a negative impact on their own economies (but, let it be stressed, not that of the US). No questions raised and no public debate on the wisdom of such a strategy permitted.

Stuck in an Orwellian nightmare, Europe has to demonstrate its unfailing loyalty to Big Brother and go along with the view that Russia, an intrinsic and valuable part of the European mainstream both historically and culturally, represents universal evil and that the Earth will not be safe until the Federation has been dismembered and Putinism wiped out once and for all.

This abuse and humiliation of Europe is unparalleled. The continent that gave the world the wonders of the Antiquity, modern democracy, the industrial revolution and what is arguably the greatest tradition of philosophy, fine arts and classical music is being bullied by its oversized offspring. Having self-destructed in two world wars, it has become an easy and even willing prey to an arrogant, ignorant and power-drunk predator that has never experienced the hardships and horrors that Europe has. War and extermination camps are etched into the European DNA. America "knows" about them only from afar � and, not least, from the Hollywood entertainment industry.

Even more terrifying, intellectually third-rate Washington viceroys such as Victoria Nuland and the freelancing armchair warrior Senator McCain are allowed to play God with our continent. The so-called European "leaders" are colluding with them in plunging Europe into the abyss and thereby risking nuclear confrontation.

America, too, is a loser

But this is not just a tragedy for Europe and Eurasia. We are also witnessing the wilful misrule of America and, by default, of the entire West. Indeed, Washington is betraying the best interests of the American people through its current foreign policy. The "democracy-promoters" running Washington's foreign-policy apparatus apparently do not understand that America has nothing to lose and a lot to gain from the Eurasian economic project: the rising tide of global economic welfare would lift everyone's boats, including its own. Why should it matter to Washington if the rising tide comes from other quarters beyond its control?

Indeed, the damage extends beyond the economy. By aligning with the forces of chaos � such as chauvinistic extremists in Ukraine � Washington and its Euro-vassals are corrupting the moral (and intellectual) core of the West. If it continues to support such forces against Russia, united Europe will lose not only its backbone but its very soul. The moral consequences of this loss will be enormous and could lead to the precipitous erosion of Western democracy.

The 'autocrats' want to work with the West, not against it

US and EU leaders believe that the Russian and Chinese "autocrats" are out to destroy the West because the latter hate freedom (as George W. Bush might have put it). And hence, they argue, the autocrats must be stopped in their tracks. The simple truth is that Western leaders are too blinkered to understand that far from desiring to destroy the West, Russia and China want it to prosper so that they can work with it to everyone's benefit. Having enjoyed a privileged position over several centuries and having attained unprecedented prosperity in recent decades, the West simply cannot understand that the rest of humanity has no interest in fomenting the "clash of civilizations" but rather craves peace and stability so that it can finally improve its economic lot.

Perhaps, however, all is not yet lost. It is still possible that reason � and economic forces � will prevail and force the West to correct the errors of its ways. What we need, perhaps, more than ever is the ability to step out of the box, question our fundamental assumptions (not least about Russia and China) and find the courage to change policies that have proved disastrous. After all, critical thought, dispassionate analysis and the ability to be open to new ideas is what made the West so successful in the past. If we are to thrive once again in the future, we must resurrect these most valuable and unsurpassed assets.

Vlad Sobell teaches political economy in Prague and Berlin Europeans Look On as US Sows Discord on the Continent Wed, Nov 2

Tom Welsh

What I cannot understand is the naive belief that elected politicians would act in the interests of those whom they represent. Under what other circumstances do we see human beings act with disinterested altruism? So why would a bunch of people who have been ruthlessly selected for selfishness, arrogance, and callousness - a bunch of carefully chosen psychopaths, if you will - behave in that way?

'My Ph.D. dissertation chairman, who became a high Pentagon official assigned to wind down the Vietnam war, in answer to my question about how Washington gets Europeans to always do what Washington wants replied: "Money, we give them money." "Foreign aid?" I asked. "No, we give the European political leaders bagfuls of money. They are for sale. We bought them. They report to us." Perhaps this explains Tony Blair's $50 million fortune one year out of office'.

- Paul Craig Roberts

jabirujoe

"Washington is betraying the best interests of the American people through its current foreign policy".

Not only it's foreign policy but it's domestic policy as well. Let's call it for what it really is. The Wall Street/Corporate policy which is the driving force behind behind everything the US does

Toddrich

"We, the [CENSORED] people, control America and the Americans know it." -- Benjamin Netanyahu, Prime Minister of [CENSORED]

"When we're done with the U.S. it will shrivel up and blow away." -- Benjamin Netanyahu, Prime Minister of [CENSORED]

The welfare or future of the American people are not part of the equation.

[Mar 20, 2019] What will happen if no energy source can cover the decline rate

Notable quotes:
"... "If that was to happen and no energy source can cover the decline rate, wouldn't the world be pretty fucked economically thereafter? Hence one can assume or take a wild ass guess that the decline after peak would resemble something like Venezuela. So not a smooth short % decline rate." ..."
"... Realistically the global economy is already in a tight spot. It started back in 2000 when Oil prices started climbing from about $10/bbl in 1998 to about $30/bbl in 2000. Then the World Major Central banks dropped interest which ended triggering the Housing Boom\Bust and carried Oil prices to $147/bbl. Since then Interest rates have remained extremely low while World Debt has soared (expected to top $250T in 2019). ..."
"... Probably the biggest concern for me is the risking risks for another World war: The US has been targeting all of the major Oil exporters. The two remaining independent targets are Venezuela & Iran. I suspect Venzuela will be the next US take over since it will be a push over compared to Iran. ..."
Mar 16, 2019 | peakoilbarrel.com

Ignored says: 03/16/2019 at 12:42 am

Iron Mike Asked:

"If that was to happen and no energy source can cover the decline rate, wouldn't the world be pretty fucked economically thereafter? Hence one can assume or take a wild ass guess that the decline after peak would resemble something like Venezuela. So not a smooth short % decline rate."

Energy is the economy, The economy cannot function without energy. Thus its logical that a decline in energy supply will reduce the economy. The only way for this not to apply is if there are efficiency gains that offset the decline. But at this point the majority of cost effective efficiency gains are already in place. At this point gains become increasing expensive with much smaller gains (law of diminishing returns). Major infrastructure changes like modernizing rail lines take many decades to implement and also require lots of capital. Real capital needed will be difficult to obtain do to population demographics (ie boomers dependent on massive unfunded entitlement & pensions).

Realistically the global economy is already in a tight spot. It started back in 2000 when Oil prices started climbing from about $10/bbl in 1998 to about $30/bbl in 2000. Then the World Major Central banks dropped interest which ended triggering the Housing Boom\Bust and carried Oil prices to $147/bbl. Since then Interest rates have remained extremely low while World Debt has soared (expected to top $250T in 2019).

My guess is that global economy will wipe saw in the future as demographics, resource depletion (including Oil) and Debt all merge into another crisis. Gov't will act with more cheap and easy credit (since there is no alterative TINA) as well as QE\Asset buying to avoid a global depression. This creating a wipesaw effect that has already been happening since 2000 with Boom Bust cycles. This current cycle has lasted longer because the Major central banks kept interest rates low, When The Fed started QT and raising rate it ended up triggering a major stock market correction In Dec 2018. I believe at this point the Fed will no longer seek any further credit tightening that will trip the economy back into recession. However its likely they the global economy will fall into another recession as consumers & business even without further credit tighting by CB (Central Banks) Because they've been loading up on cheap debt, which will eventually run into issues servicing their debt. For instance there are about 7M auto loans in delinquency in March of 2019. Stock valuations are largely driven by stock buybacks, which is funded by debt. I presume companies are close to debt limit which is likely going to prevent them from purchase more stock back.

Probably the biggest concern for me is the risking risks for another World war: The US has been targeting all of the major Oil exporters. The two remaining independent targets are Venezuela & Iran. I suspect Venzuela will be the next US take over since it will be a push over compared to Iran. I think once all of remaining independent Oil Exports are seized that is when the major powers start fighting each other. However is possible that some of the proxy nations (Pakastan\India),(Israel\Iran), etc trigger direct war between the US, China, and Russia at any time.

Notice that the US is now withdrawing from all its major arms treaties, and the US\China\Russia are now locked into a Arms race. Nuclear powers are now rebuilding their nuclear capacity (more Nukes) and modernizing their deployment systems (Hypersonic, Very large MIRV ICBMS, Undersea drones, Subs, Bombers, etc.

My guess is that nations like the US & China will duke it out before collapsing into the next Venezuela. If my assessment is correct, The current state of Venezuela will look like the garden of Eden compared to the aftermath of a full scale nuclear war.

Currently the Doomsday clock (2019) is tied with 1953 at 2 minutes:

https://thebulletin.org/doomsday-clock/past-announcements/

1953 was the height of the cold war. I presume soon the Doomsday clock will be reduced to less than 2 Minutes later this year, due to recent events in the past few weeks.

https://thebulletin.org/doomsday-clock/current-time/

"the world's nuclear nations proceeded with programs of "nuclear modernization" that are all but indistinguishable from a worldwide arms race, and the military doctrines of Russia and the United States have increasingly eroded the long-held taboo against the use of nuclear weapons."

" The current international security situation -- what we call the "new abnormal" -- has extended over two years now. It's a state as worrisome as the most dangerous times of the Cold War, a state that features an unpredictable and shifting landscape of simmering disputes that multiply the chances for major military conflict to erupt."

[Mar 19, 2019] Elizabeth Warren had a good speech at UC-Berkeley. She focused on the middle class family balance sheet and risk shifting

Mar 19, 2019 | www.nakedcapitalism.com

rc, March 18, 2019 at 4:01 pm

Elizabeth Warren had a good speech at UC-Berkeley. She focused on the middle class family balance sheet and risk shifting. Regulatory policies and a credit based monetary system have resulted in massive real price increases in inelastic areas of demand such as healthcare, education and housing eroding purchasing power.

Further, trade policies have put U.S. manufacturing at a massive disadvantage to the likes of China, which has subsidized state-owned enterprises, has essentially slave labor costs and low to no environmental regulations. Unrestrained immigration policies have resulted in a massive supply wave of semi- and unskilled labor suppressing wages.

Recommended initial steps to reform:

1. Change the monetary system-deleverage economy with the Chicago Plan (100% reserve banking) and fund massive infrastructure lowering total factor costs and increasing productivity. This would eliminate

2. Adopt a healthcare system that drives HC to 10% to 12% of GDP. France's maybe? Medicare model needs serious reform but is great at low admin costs.

3. Raise tariffs across the board or enact labor and environmental tariffs on the likes of China and other Asian export model countries.

4. Take savings from healthcare costs and interest and invest in human capital�educational attainment and apprenticeships programs.

5. Enforce border security restricting future immigration dramatically and let economy absorb labor supply over time.

Video of UC-B lecture: https://www.youtube.com/watch?v=akVL7QY0S8A&feature=youtu.be

Jerry B, March 18, 2019 at 5:26 pm

As I have said in other comments, I like Liz Warren a lot within the limits of what she is good at doing (i.e. not President) such as Secretary of the Treasury etc. And I think she likes the media spotlight and to hear herself talk a little to much, but all quibbling aside, can we clone her??? The above comment and video just reinforce "Stick to what you are really good at Liz!".

I am not a Liz Warren fan boi to the extent Lambert is of AOC, but it seems that most of the time when I hear Warren, Sanders, or AOC say something my first reaction is "Yes, what she/he said!".

[Mar 19, 2019] Monopoly: too big to ignore

Mar 19, 2019 | crookedtimber.org

by John Quiggin on March 9, 2019

That's the headline given to my latest piece in Inside Story

Here's the opening para

Two hundred years after the birth of Karl Marx and fifty years after the last Western upsurge of revolutionary ferment in 1968, the term "monopoly capitalism" might seem like a relic of outmoded enthusiasms. But economists are increasingly coming to the view that monopolies, and associated market failures, have never been a bigger problem.

and the conclusion

The problems of monopoly and inequality may seem so large as to defy any response. But we faced similar problems when capitalism first emerged, and Western countries came up with the responses that created the broad-based prosperity of the mid twentieth century. The internet, in particular, has the potential to enhance freedom and equality rather than facilitate corporate exploitation. The missing ingredient, so far, has been the political will.

Share this:

hix 03.09.19 at 10:14 am ( 1 )

Good read, just one minor complaint, why not just use a random stock screener to get current market cap data instead of 2016 ones:
https://finance.yahoo.com/screener/unsaved/ca63a480-28d8-4809-bd40-fab28b414da2
Glen Tomkins 03.09.19 at 5:25 pm ( 2 )
"Monopoly" is such an ugly term. We prefer to call it "market power" these days, because of course it's a good thing if the job creators and their enterprises have more power to do all the good things they do for us. It's clearly class warfare, if not racism, to use the term of abuse, "monopoly", when you mean "market power".
Dipper 03.09.19 at 8:51 pm ( 3 )
Of all the examples to choose, airlines would seem to be a bad one. They come and go with rapidity, and airlines are now being used as an example of how to reform banks.

Running the modern air industry needs lots of infrastructure and lots of regulations, so would seem to be an obvious place to have monopoly airlines. The critical thing that has happened has been the splitting of the infrastructure from the market-facing entities. So the booking systems, airport handling, and other services are all done by firms who don't directly face the paying customer. Pretty much anyone can set up an airline, and they can become quite big

Banking regulation is going in the direction of the airline industry. The idea being to split up the major systems and financial risk repositories from the market-facing companies. Hence, again, anyone can set up a bank.

One significant issue behind the growth in monopolies is regulation. The debate in the UK over the EU has included much discussion of regulation, much of it from a Remain/pro EU angle being that more regulation is a costless good. But there is an obvious and well-known cost, that regulation acts as a barrier to new entrants, and hence destroys innovation and creates conditions for monopolies, cartels, and oligopolies. It is surely no coincidence that the EU, an organisation that cannot look at any object without trying to regulate it, is sliding into recession and has effectively zero productivity increase this century. If you regulate what you have now, you just make the status quo your future. In the end, you just end up like the CBI, reduced to demanding more and more cheap labour to fuel your dinosaur members' wishes for more profit.

So. Split the resource-heavy stuff from the market-facing stuff, and try to avoid regulating your economy into a coma.

Collin Street 03.09.19 at 9:11 pm ( 4 )
Sure, monopoly's a problem.

But.

A significant fraction of the population can't keep track of their actual cost structures and will, cheerful and unknowing, sell at a loss. Unless you can exclude them from the market -- unless you have some mechanism for excluding people from the market -- the clearing price will be below the cost price: no market that does not have exclusion mechanisms can possibly be profitable.

That is to say: a profitable sector of industry requires exclusion mechanisms and all profit relies on rent .

The question we have to ask is, then: how do we distribute rent opportunities? We used to be able to use transport costs to create rent "naturally", but we can't do that any more: at least with monopoly some things still get made and some people still make money.

[honestly? I think uniform tariff barriers coupled with socialism [or socialism-approximating structures like dirigisme among firms with effectively-universally-held shares] are the only real solution.]

bad Jim 03.10.19 at 7:24 am ( 5 )
Um. "Monopoly" triggers thoughts of a scotty dog and a flat iron. Regarding the minimum wage, I'm encouraged to see oligopsony mentioned, not just because I love rare words; it's only recently than in such discussions the more common word "monopsony" was used. But how else to explain how Walmart greeters and burger flippers, despite their disparate productivity and different employers, are paid the same meager wage?

It says something about our common discourse, by which I mean American politics, that people preach as though market power was as unimaginable as ethical conduct, the first of which is tacitly assumed and the second generally acknowledged as nonexistent.

John Quiggin 03.10.19 at 7:36 am ( 6 )
@Dipper I'm sure you'll sympathize when I observe that Australia is different from other places (a point you've often made about Britain), at least with respect to airlines.

We've only had one successful entry on a substantial scale in the history of commercial aviation (when Virgin Blue displaced Ansett in 2001). Against that, there has been a long string of failed attempts to break up the duopoly (now consisting of two full-service airlines each with a low-cost subsidiary).

So, in an Australian publication, airlines are on obvious example.

mpowell 03.11.19 at 3:52 pm ( 7 )
You argue that what has been missing is political will, but at the same time you acknowledge that new versions of the old solutions for these problems must be found. I would focus more on the latter than the former. Yes, the EU is creating stronger privacy protection now, but one of the main impacts will be to strengthen existing large players. Do we really want to move to a regulated monopoly model so quickly? These new markets have been evolving rapidly over the past 15 years and models of the internet economy that made sense even 10 years ago are now out-dated. I think we still need to figure out what people need out of these new provided services and how to get there. It seems a lot harder than simply breaking up the producers and distributers of basic commodities.
hix 03.11.19 at 6:01 pm ( 8 )
And here i was thinking Dipper would try to make his weak case with the strongest arguments- Ryanair or Easyjet*. Virgin Atlantic, really? While airlines in Europe are probably not the most obvious easy to comprehend example for monopoly or oligopoly one could pick, those terms are still quite accurate as a description of the current situation in most submarkets.

*The crux with those two is that there are and were a gazillion other discount carriers, but non of those are sucesfull, Ryanair in particular in contrast produces an insane return on equity.

Ronan 03.12.19 at 12:38 pm ( 9 )
Have you read 'Game of Mates' about cronyism among the elite in Australia ? Kind of interesting and eye opening(at least for an outsider like me) Might be of interest if you havent.

https://www.smh.com.au/opinion/game-of-mates-how-billionaires-get-rich-at-our-expense-20170526-gwe0dp.html

Daniel 03.12.19 at 8:58 pm ( 10 )
Speaking of monopoly, I read one (or more) of your contributors say, "buy my book on Amazon." Amazon is the most dangerous monopolist, stay away.

[Mar 18, 2019] Boeing (BA) Secures $250M Deal to Support LRSO Cruise Missile

Mar 18, 2019 | finance.yahoo.com

Zacks Equity Research , Zacks March 18, 2019

The Boeing Company BA recently won a $250 million contract to offer weapon system integration for the Long Range Stand-Off (LRSO) Cruise Missile. Work related to the deal is scheduled to be completed by Dec 31, 2024.

The contract was awarded by the Air Force Nuclear Weapons Center, Eglin Air Force Base, Florida. Per the terms of the deal, this aerospace giant will provide aircraft and missile carriage equipment development and modification, engineering, testing, software development, training, facilities and support necessary to fully integrate the LRSO Cruise Missile on the B-52H bomber platform.

Attributes of LRSO

The LRSO is a nuclear-armed air-launched cruise missile, under development. It is set to replace the current AGM-86 air launched cruise missile (ALCM). LRSO, might be up to about 50% longer than Joint Air-to-Surface Standoff Missile-Extended Range (JASSM-ER) and still be suitable for internal carriage by the B-2 and B-52.

Our View

AGM-86 ALCM has been serving the U.S. Air Force quite efficiently. However, with increasingly sophisticated air defense systems developed by America's nemeses, especially Russia, demand for a new stealth nuclear-armed cruise missile capable of either destroying these defenses or penetrating them has been increasing consistently. In this scenario, the LRSO comes as the most credible stealthy and low-yield option available to the United States (according to Strategic Studies Quarterly Report).

Boeing's B-52, which has been the U.S. Air Force's one of the most preferred bombers, is completely dependent on long-range cruise missiles and cannot continue in the nuclear mission beyond 2030 without LRSO. As B-52 is expected to play a primary role in the U.S. nuclear mission for at least next decade and ALCM is already well beyond its originally planned end of life, we may expect more contracts similar to the latest one to usher in from the Pentagon in the coming days. This, in turn, should prove conducive to Boeing.

Price Performance

In a year's time, shares of Boeing have gained about 16.5% against the industry's 2.2% decline.

[Mar 18, 2019] A Recession Is Coming, And Maybe a Bear Market, Too by Gary Shilling

My be so, but it looks like Trump is adamant to keep stocks high flying. Such a S&500 promoter in chief...
Mar 18, 2019 | finance.yahoo.com

I first suggested the U.S. economy was headed toward a recession more than a year ago, and now others are forecasting the same. I give a business downturn starting this year a two-thirds probability.

The recessionary indicators are numerous. Tighter monetary policy by the Federal Reserve that the central bank now worries it may have overdone. The near-inversion in the Treasury yield curve. The swoon in stocks at the end of last year. Weaker housing activity. Soft consumer spending. The tiny 20,000 increase in February payrolls, compared to the 223,000 monthly average gain last year. Then there are the effects of the deteriorating European economies and decelerating growth in China as well as President Donald Trump's ongoing trade war with that country.

There is, of course, a small chance of a soft landing such as in the mid-1990s. At that time, the Fed ended its interest-rate hiking cycle and cut the federal funds rate with no ensuing recession. By my count, the other 12 times the central bank restricted credit in the post-World War II era, a recession resulted.

It's also possible that the current economic softening is temporary, but a revival would bring more Fed restraint. Policy makers want higher rates in order to have significant room to cut in the next recession, and the current 2.25 percent to 2.50 percent range doesn't give them much leeway. The Fed also dislikes investors' zeal for riskier assets, from hedge funds to private equity and leveraged loans, to say nothing of that rankest of rank speculations, Bitcoin. With a resumption in economic growth, a tight credit-induced recession would be postponed until 2020.

"Recession" conjures up specters of 2007-2009, the most severe business downturn since the 1930s in which the S&P 500 Index plunged 57 percent from its peak to its trough. The Fed raised its target rate from 1 percent in June 2004 to 5.25 percent in June 2006, but the main event was the financial crisis spawned by the collapse in the vastly-inflated subprime mortgage market.

Similarly, the central bank increased its policy rate from 4.75 percent in June 1999 to 6.5 percent in May 2000. Still, the mild 2001 recession that followed was principally driven by the collapse in the late 1990s dot-com bubble that pushed the tech-laden Nasdaq Composite Index down by a whopping 78 percent.

The 1973-1975 recession, the second deepest since the 1930s, resulted from the collapse in the early 1970s inflation hedge buying of excess inventories. That deflated the S&P 500 by 48.2 percent. The federal funds rate hike from 9 percent in February 1974 to 13 percent in July of that year was a minor contributor.

The remaining eight post-World War II recessions were not the result of major financial or economic excesses, but just the normal late economic cycle business and investor overconfidence. The average drop in the S&P 500 was 21.2 percent.

At present, I don't see any major economic or financial bubbles that are just begging to be pricked. The only possibilities are excess debt among U.S. nonfinancial corporations and the heavy borrowing in dollars by emerging-market economies in the face of a rising greenback. Housing never fully recovered from the subprime mortgage debacle. The financial sector is still deleveraging in the wake of the financial crisis. Consumer debt remains substantial but well off its 2008 peak in relation to household income.

Consequently, the recession I foresee will probably be accompanied by about an average drop in stock prices. The S&P 500 fell 19.6 percent from Oct. 3 to Dec. 24, but the recovery since has almost eliminated that loss. A normal recession-related decline of 21.2 percent � meeting the definition of a bear market � from that Oct. 3 top would take it to 2,305, down about 18 percent from Friday's close, but not much below the Christmas Eve low of 2,351.

A. Gary Shilling is president of A. Gary Shilling & Co., a New Jersey consultancy, a Registered Investment Advisor and author of "The Age of Deleveraging: Investment Strategies for a Decade of Slow Growth and Deflation." Some portfolios he manages invest in currencies and commodities.


The_Mick, 9 hours ago

"I first suggested the U.S. economy was headed toward a recession more than a year ago, and now others are forecasting the same."
And yet you were WRONG a year ago! You don't get excused for last year just because you're still predicting it!

Of course a recession is coming - maybe this year but maybe not for 10 years. Recessions happen from time to time but they are not predictable because economics has too many variables we can't quantify.

And do you think you're impressing anyone by adding "maybe a bear market too"???

What do you mean "maybe"? If there's a recession then, of course, our slightly overpriced market will experience a bear market! DUH! Terry7 hours ago I expected a deeper understanding from My Shilling. This article seems very week. If he had submitted it as an an economic paper I don't think he would get high marks. Many historical economic facts glossed over or omitted. Terrible job of describing the causes of the early 1970s world recession . As for a recession without a bear market.....? Don't make me laugh.... And buy the way we are already in a bear market !

This decade is a lot like the 1990s in that it has been a nice long run. But no business cycle goes on for every. It's just does not work like that because it is cycle in nature. After a ten year run in stocks it is less risky for serious money to be out of them that in them. That is why the bond market is so solid right not. Because it's not work risking all your cash for maybe a couple more percent when you have already make 300% or more..

The western economies are just running off free or very cheap money being constantly pumped into investment assets by the central banks. There are no real guts to them. USA, EU and Japan have been running the printing presses with abandonment. At the same time China and India are becoming the industrial power houses because they had over one billion people who will work for next to nothing.

Because every investment asset is pumped up of "free" money in the form of very low interest rate loans from the FED etc. Things are very fragile. And someone has give Powel this "reality check". So the FED does a 180 on policy and now looks like a Wall St poodle. And they speculators have gone back to pumping FANG stocks

But they all know this market is very pumped up and fragile. And they all keep their stop loss triggers very tight. That is why it falls so dramatically when it takes a hit. Like OMG the FED funds rate going from 2.75% to 3.00% !! So tread very carefully . The cracks are all around

Salo, 7 hours ago

I am only surprised when I read that another recession is not coming.

Almost 10 years since the "end" of the Great Recession, and all it took was $22 Trillion of borrowed money, a $4 Trillion in the red Fed balance sheet and interest rates just barely north of 2%. Oh, and one big beautiful corporate tax cut. Who knew expansionary economies were so uncomplicated?

Ricardo, 6 hours ago

I remember reading Gary Shilling's articles a few years after the Crash of 2009 when he attempted to prove without a doubt that market returns would be sub-par for decades to come. He was wrong and you would have missed out on the longest and biggest bull market in history. Be wary of what Gary has to tell you.

[Mar 18, 2019] Boeing Drops as Role in Vetting Its Own Jets Comes Under Fire

Mar 18, 2019 | finance.yahoo.com

Boeing Co. tumbled early Monday on heightened scrutiny by regulators and prosecutors over whether the approval process for the company's 737 Max jetliner was flawed.

A person familiar with the matter on Sunday said that the U.S. Transportation Department's Inspector General was examining the plane's design certification before the second of two deadly crashes of the almost brand-new aircraft.

Separately, the Wall Street Journal reported that a grand jury in Washington, D.C., on March 11 issued a subpoena to at least one person involved in the development process of the Max. And a Seattle Times investigation found that U.S. regulators delegated much of the plane's safety assessment to Boeing and that the company in turn delivered an analysis with crucial flaws.

Boeing dropped 2.8 percent to $368.53 before the start of regular trading Monday in New York, well below any closing price since the deadly crash of Ethiopian Airlines Flight 302 on March 10. Ethiopia's transport minister said Sunday that flight-data recorders showed "clear similarities" between the crashes of that plane and Lion Air Flight 610 last October.

U.S. Federal Aviation Administration employees warned as early as seven years ago that Boeing had too much sway over safety approvals of new aircraft, prompting an investigation by Transportation Department auditors who confirmed the agency hadn't done enough to "hold Boeing accountable."

The 2012 investigation also found that discord over Boeing's treatment had created a "negative work environment" among FAA employees who approve new and modified aircraft designs, with many of them saying they'd faced retaliation for speaking up. Their concerns pre-dated the 737 Max development.

In recent years, the FAA has shifted more authority over the approval of new aircraft to the manufacturer itself, even allowing Boeing to choose many of the personnel who oversee tests and vouch for safety. Just in the past few months, Congress expanded the outsourcing arrangement even further.

"It raises for me the question of whether the agency is properly funded, properly staffed and whether there has been enough independent oversight," said Jim Hall, who was chairman of the National Transportation Safety Board from 1994 to 2001 and is now an aviation-safety consultant.

Outsourcing Safety

At least a portion of the flight-control software suspected in the 737 Max crashes was certified by one or more Boeing employees who worked in the outsourcing arrangement, according to one person familiar with the work who wasn't authorized to speak about the matter.

The Wall Street Journal first reported the inspector general's latest inquiry. The watchdog is trying to assess whether the FAA used appropriate design standards and engineering analysis in approving the 737 Max's anti-stall system, the newspaper said.

Both Boeing and the Transportation Department declined to comment about that inquiry.

In a statement on Sunday, the agency said its "aircraft certification processes are well established and have consistently produced safe aircraft designs," adding that the "737 Max certification program followed the FAA's standard certification process."

The Ethiopian Airlines plane crashed minutes after it took off from Addis Ababa, killing all 157 people on board. The accident prompted most of the world to ground Boeing's 737 Max 8 aircraft on safety concerns, coming on the heels of the October crash of a Max 8 operated by Indonesia's Lion Air that killed 189 people. Much of the attention focused on a flight-control system that can automatically push a plane into a catastrophic nose dive if it malfunctions and pilots don't react properly.

In one of the most detailed descriptions yet of the relationship between Boeing and the FAA during the 737 Max's certification, the Seattle Times quoted unnamed engineers who said the planemaker had understated the power of the flight-control software in a System Safety Analysis submitted to the FAA. The newspaper said the analysis also failed to account for how the system could reset itself each time a pilot responded -- in essence, gradually ratcheting the horizontal stabilizer into a dive position.

Software Fix

Boeing told the newspaper in a statement that the FAA had reviewed the company's data and concluded the aircraft "met all certification and regulatory requirements." The company, which is based in Chicago but designs and builds commercial jets in the Seattle area, said there are "some significant mischaracterizations" in the engineers' comments.

[Mar 17, 2019] OPEC Threatens To Kill US Shale

Mar 17, 2019 | finance.yahoo.com

The Organization of Petroleum Exporting Countries will once again become a nemesis for U.S. shale if the U.S. Congress passes a bill dubbed NOPEC, or No Oil Producing and Exporting Cartels Act, Bloomberg reported this week , citing sources present at a meeting between a senior OPEC official and U.S. bankers.

The oil minister of the UAE, Suhail al-Mazrouei, reportedly told lenders at the meeting that if the bill was made into law that made OPEC members liable to U.S. anti-cartel legislation, the group, which is to all intents and purposes indeed a cartel, would break up and every member would boost production to its maximum.

This would be a repeat of what happened in 2013 and 2014, and ultimately led to another oil price crash like the one that saw Brent crude and WTI sink below US$30 a barrel. As a result, a lot of U.S. shale-focused, debt-dependent producers would go under.

Bankers who provide the debt financing that shale producers need are the natural target for opponents of the NOPEC bill. Banks got burned during the 2014 crisis and are still recovering and regaining their trust in the industry. Purse strings are being loosened as WTI climbs closer to US$60 a barrel, but lenders are certainly aware that this is to a large extent the result of OPEC action: the cartel is cutting production again and the effect on prices is becoming increasingly visible.

Related: Pakistan Aims To Become A Natural Gas Hotspot

Indeed, if OPEC starts pumping again at maximum capacity, even without Iran and Venezuela, and with continued outages in Libya, it would pressure prices significantly, especially if Russia joins in. After all, its state oil companies have been itching to start pumping more.

The NOPEC legislation has little chance of becoming a law. It is not the first attempt by U.S. legislators to make OPEC liable for its cartel behavior, and none of the others made it to a law. However, Al-Mazrouei's not too subtle threat highlights the weakest point of U.S. shale: the industry's dependence on borrowed money.

The issue was analyzed in depth by energy expert Philip Verleger in an Oilprice story earlier this month and what the problem boils down to is too much debt. Shale, as Total's chief executive put it in a 2018 interview with Bloomberg, is very capital-intensive. The returns can be appealing if you're drilling and fracking in a sweet spot in the shale patch. They can also be improved by making everything more efficient but ultimately you'd need quite a lot of cash to continue drilling and fracking, despite all the praise about the decline in production costs across shale plays.

The fact that a lot of this cash could come only from banks has been highlighted before: the shale oil and gas industry faced a crisis of investor confidence after the 2014 crash because the only way it knew how to do business was to pump ever-increasing amounts of oil and gas. Shareholder returns were not top of the agenda. This had to change after the crash and most of the smaller players -- those that survived -- have yet to fully recover. Free cash remains a luxury.

Related: The EIA Cuts U.S. Oil Output Projections

The industry is aware of this vulnerability. The American Petroleum Institute has vocally opposed NOPEC, almost as vocally as OPEC itself, and BP's Bob Dudley said this week at CERAWeek in Houston that NOPEC "could have severe unintended consequences if it unleashed litigation around the world."

"Severe unintended consequences" is not a phrase bankers like to hear. Chances are they will join in the opposition to the legislation to keep shale's wheels turning. The industry, meanwhile, might want to consider ways to reduce its reliance on borrowed money, perhaps by capping production at some point before it becomes forced to do it.

By Irina Slav for Oilprice.com

[Mar 17, 2019] Market Concentration Is Threatening the US Economy by Joseph E. Stiglitz

Notable quotes:
"... Making matters worse, America's low tax-to-GDP ratio � just 27.1% even before the Trump tax cut � means a dearth of money for investment in the infrastructure, education, health care, and basic research needed to ensure future growth. These are the supply-side measures that actually do "trickle down" to everyone. ..."
"... The policies for combating economically damaging power imbalances are straightforward. Over the past half-century, Chicago School economists , acting on the assumption that markets are generally competitive, narrowed the focus of competition policy solely to economic efficiency, rather than broader concerns about power and inequality. The irony is that this assumption became dominant in policymaking circles just when economists were beginning to reveal its flaws. The development of game theory and new models of imperfect and asymmetric information laid bare the profound limitations of the competition model. ..."
"... The law needs to catch up. Anti-competitive practices should be illegal, period. And beyond that, there are a host of other changes needed to modernize US antitrust legislation. Americans' need the same resolve in fighting for competition that their corporations have shown in fighting against it. ..."
Mar 17, 2019 | www.project-syndicate.org

Rising inequality and slow growth are widely recognized as key factors behind the spread of public discontent in advanced economies, particularly in the United States. But these problems are themselves symptoms of an underlying malady that the US political system may be unable to address.

The world's advanced economies are suffering from a number of deep-seated problems. In the United States, in particular, inequality is at its highest since 1928 , and GDP growth remains woefully tepid compared to the decades after World War II.

After promising annual growth of "4, 5, and even 6%," US President Donald Trump and his congressional Republican enablers have delivered only unprecedented deficits. According to the Congressional Budget Office's latest projections , the federal budget deficit will reach $900 billion this year, and will surpass the $1 trillion mark every year after 2021. And yet, the sugar high induced by the latest deficit increase is already fading, with the International Monetary Fund forecasting US growth of 2.5% in 2019 and 1.8% in 2020, down from 2.9% in 2018.

Many factors are contributing to the US economy's low-growth/high-inequality problem. Trump and the Republicans' poorly designed tax "reform" has exacerbated existing deficiencies in the tax code, funneling even more income to the highest earners. At the same time, globalization continues to be poorly managed, and financial markets continue to be geared toward extracting profits (rent-seeking, in economists' parlance), rather than providing useful services.

But an even deeper and more fundamental problem is the growing concentration of market power , which allows dominant firms to exploit their customers and squeeze their employees, whose own bargaining power and legal protections are being weakened . CEOs and senior executives are increasingly extracting higher pay for themselves at the expense of workers and investment.

For example, US corporate executives made sure that the vast majority of the benefits from the tax cut went into dividends and stock buybacks, which exceeded a record-breaking $1.1 trillion in 2018 . Buybacks raised share prices and boosted the earnings-per-share ratio, on which many executives' compensation is based. Meanwhile, at 13.7% of GDP , annual investment remained weak, while many corporate pensions went underfunded.

Evidence of rising market power can be found almost anywhere one looks. Large markups are contributing to high corporate profits . In sector after sector, from little things like cat food to big things like telecoms, cable providers, airlines, and technology platforms, a few firms now dominate 75-90% of the market, if not more; and the problem is even more pronounced at the level of local markets.

As corporate behemoths' market power has increased, so, too, has their ability to influence America's money-driven politics. And as the system has become more rigged in business's favor, it has become much harder for ordinary citizens to seek redress for mistreatment or abuse. A perfect example of this is the spread of arbitration clauses in labor contracts and user agreements, which allow corporations to settle disputes with employees and customers through a sympathetic mediator, rather than in court.

Multiple forces are driving the increase in market power. One is the growth of sectors with large network effects, where a single firm � like Google or Facebook � can easily dominate. Another is the prevailing attitude among business leaders, who have come to assume that market power is the only way to ensure durable profits. As the venture capitalist Peter Thiel famously put it , "competition is for losers."

Some US business leaders have shown real ingenuity in creating market barriers to prevent any kind of meaningful competition, aided by lax enforcement of existing competition laws and the failure to update those laws for the twenty-first-century economy. As a result, the share of new firms in the US is declining.

None of this bodes well for the US economy. Rising inequality implies falling aggregate demand, because those at the top of the wealth distribution tend to consume a smaller share of their income than those of more modest means.

Moreover, on the supply side, market power weakens incentives to invest and innovate. Firms know that if they produce more, they will have to lower their prices. This is why investment remains weak, despite corporate America's record profits and trillions of dollars of cash reserves. And besides, why bother producing anything of value when you can use your political power to extract more rents through market exploitation? Political investments in getting lower taxes yield far higher returns than real investments in plant and equipment. 1

Making matters worse, America's low tax-to-GDP ratio � just 27.1% even before the Trump tax cut � means a dearth of money for investment in the infrastructure, education, health care, and basic research needed to ensure future growth. These are the supply-side measures that actually do "trickle down" to everyone.

The policies for combating economically damaging power imbalances are straightforward. Over the past half-century, Chicago School economists , acting on the assumption that markets are generally competitive, narrowed the focus of competition policy solely to economic efficiency, rather than broader concerns about power and inequality. The irony is that this assumption became dominant in policymaking circles just when economists were beginning to reveal its flaws. The development of game theory and new models of imperfect and asymmetric information laid bare the profound limitations of the competition model.

The law needs to catch up. Anti-competitive practices should be illegal, period. And beyond that, there are a host of other changes needed to modernize US antitrust legislation. Americans' need the same resolve in fighting for competition that their corporations have shown in fighting against it.

The challenge, as always, is political. But with US corporations having amassed so much power, there is reason to doubt that the American political system is up to the task of reform. Add to that the globalization of corporate power and the orgy of deregulation and crony capitalism under Trump, and it is clear that Europe will have to take the lead.

[Mar 12, 2019] "One nation, under God and all of his defense contractors "

Notable quotes:
"... I thought we lived in a corporate state and since the Supreme Court has ruled corporations have rights – the voting morons already have loyalty to their corporate masters – "one nation, under God and all of his defense contractors " ..."
Mar 12, 2019 | www.unz.com

never-anonymous , says: March 12, 2019 at 5:23 pm GMT

I thought we lived in a corporate state and since the Supreme Court has ruled corporations have rights – the voting morons already have loyalty to their corporate masters – "one nation, under God and all of his defense contractors "

Anti-Semitism theater – a carefully staged social movement organized by Government owned media to divide the peons and make them hate each other. Real hate-group profit lies in charging for vast quantities of militarism but making just enough to kill women and children overseas.

Back home the flag waving patriots insist they need a giant military with weapons for anyone who can pay to protect them and their families. Dual loyalty to the Jewish lobby and the defense lobby.

[Mar 10, 2019] Bond-Market Inflation Skeptics See Little to Fear in Coming Data by Emily Barrett

Mar 10, 2019 | finance.yahoo.com

"At this point in the cycle, a pickup in inflation will generally lead to corporate margin compression, which is potentially more supportive of maintaining a long duration stance," Bartolini, lead portfolio manager for U.S. core bond strategies, said after the jobs figures. He sees annual CPI remaining around this report's consensus of 1.6 percent -- the slowest since 2016 -- for a while.

Benchmark 10-year yields enter the week at 2.63 percent, close to the lowest level in two months. In the interest-rate options market, traders have been ramping up positions that target lower yields in five- and 10-year notes.

DougDoug,

The Fed is pretty much DONE with rate hikes, as paying the INTEREST on, 22 Trillion in Debt will get,.. UGLIER and UGLIER ! Especially with, all the new,.. Tax and SPEND Demo'Rat Liberals, coming into, Congress ! "We the People", will be,.. TOAST !!

I'm HOLDING, my "Floating Rate" senior secured, Bond CEF's and my Utility and Tech, CEF's, too ! Drawing NICE Dividends,.. Monthly !

The World is NOT ending for, the USA,.. THANKS,.. to Trump !

[Mar 10, 2019] U.S. SEC to review stock trading rules in big potential shakeup by John McCrank

Mar 10, 2019 | finance.yahoo.com

NEW YORK (Reuters) - The U.S. Securities and Exchange Commission is launching a review of the main set of rules governing stock trading, opening the door to the biggest potential changes in a decade-and-a-half, the head of the agency said on Friday.

The possible changes are aimed at making it easier to trade illiquid stocks, making more trading information available to investors, and improving the speed and quality of public data feeds needed for trading.

The SEC in 2005 adopted a broad framework called Regulation National Market System that was largely aimed at ensuring retail investors get the best price possible and preventing trades from being executed at prices that are inferior to bids and offers displayed on other trading venues.

Since then, faster, more sophisticated technology has put a bigger focus on rapid-fire, high-speed trading. There has also been an influx of new electronic stock exchanges, fragmenting liquidity and increasing costs for brokers around exchange connectivity and market data needed to fuel algorithmic trading.

"It is clear that the market challenges we faced in the early 2000s are not the same as the issues that we confront over a decade later," Jay Clayton, chairman of the SEC, said at an event in New York.

To get a better grasp of current market issues, the SEC held a series of roundtable discussions with industry experts last year that led to potential rule-making recommendations around thinly-traded securities, combating retail fraud, and market data and market access, Clayton said.

Some areas the SEC is looking at include:

The 2019 review follows an active 2018 for the SEC.

The regulator adopted rules to increase transparency around broker-dealer stock order routing and private off-exchange trading venues. It also ordered a pilot program to test banning lucrative rebate payments that exchanges make to brokers for liquidity-adding stock orders.

(Reporting by John McCrank; Editing by Tom Brown)

https://s.yimg.com/rq/darla/3-6-3/html/r-sf.html

Sign in to post a message. 17 viewing1 person reacting

judi 1 hour ago What about Naked Shorting? It is out of control and no one including the SEC is doing anything to stop it??

Tara 41 minutes ago The rules implemented in 2005 did nothing to help retail traders with accounts under 25K.
When are you going to address the real issue of stock price manipulation? Also, bring back the uptick rule. And while you are at it, we need rules to punish dishonest analysts who publish opinions of price that are so far off the charts, they never reflect actual earnings often announced days later.

Rob 38 minutes ago They are going to make it more in favor of big boys aka the banks

[Mar 10, 2019] Oil Market About To Enter Supply Deficit

Mar 10, 2019 | finance.yahoo.com

� The OPEC+ cuts have likely already tipped the oil market into a supply deficit, according to Barclays.
� OECD inventories fell dramatically over the past two years, and came back to the five-year average in 2018, where they have mostly remained.
� The OPEC+ cuts quickly headed off a renewed surplus, and will likely drain inventories over the course of this year. Inventories are set to fall below the five-year average.
� Still, Barclays says the market return to balance or even a small surplus in the second half of 2019.

2. China's oil demand not collapsing

<img src="https://s.yimg.com/it/api/res/1.2/.fxgVesli1gE.apMTKU4BQ--~A/YXBwaWQ9eW5ld3M7c209MTt3PTQ1MTtoPTMxNg--/http://media.zenfs.com/en-US/homerun/oilprice.com/43a64118adc9d08dff397f7e71a52626" itemprop="url"/>

� Some of the more catastrophic oil forecasts for 2019 centered on a sharp slowdown in Chinese demand.
� China's car sales actually contracted year-on-year over the last few months, and car sales could continue to fall this year.
� But China's demand, while slowing relative to years past, is still expected to grow by 0.5 mb/d in 2019, according to Barclays, the same rate of expansion as 2018.
� Next year, however, China's demand growth could slow a bit more, dipping below 0.4 mb/d, continuing a gradual deceleration in demand growth.

[Mar 05, 2019] Democratic senator to introduce tax on trading [Video]

Mar 05, 2019 | finance.yahoo.com

CNBC Videos

Senator Brian Schatz (D-Hawaii) is expected to introduce a new tax bill today. The senator says his bill would tax the sale of stocks, bonds and derivatives at a 0.1 rate. It would apply to any transaction in the United States. The senator says his proposal would clamp down on speculation and some high frequency trading that artificially creates more market volatility.

[Mar 04, 2019] Corporatism masquerading as Liberty

Jan 18, 2014 | creditwritedowns.com

I have been meaning to write something on faux Libertarians of the corporatist ilk for a while. However, since I switched to forecasting mode instead of advocacy , I have tried to leave the political element out of my posts as much as possible. I'll leave the politics to those who enjoy it; I don't. But, I think this is an important topic so I am going to give it a go here.

If you do a search for the word 'liberty' on the Internet, invariably you find the Wikipedia entry for that word. I think the definition used there is a good one. Here's what Wikipedia says about Liberty :

Liberty is the concept of ideological and political philosophy that identifies the condition to which an individual has the right to behave according to one's own personal responsibility and free will. The conception of liberty is influenced by ideals concerning the social contract as well as arguments that are concerned with the state of nature.

Individualist and classical liberal conceptions of liberty relate to the freedom of the individual from outside compulsion or coercion and this is defined as negative liberty.

What you will notice is there is nothing in this definition regarding corporations. It is all about individual liberty and the freedoms of individuals . Individuals are born with innate, natural and inalienable rights to liberty that are self-evident. This philosophical view of humankind gained currency during the enlightenment and is now universally accepted. It also underpins the very concept of democracy and is the origin of the founding of the United States of America.

For example, the U.S. Declaration of Independence begins [highlighting added]:

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them withpowers of the earth, the separate and equal sta

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness . -- That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, -- That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness.

As always, I have to note that the writer of the Declaration was a slaveholder in a country in which government killed the indigenous population. So, there is certainly a gap between the high-mindedness of this wonderful document and actual events on the ground. Don't let that detract from the aspirational quality of the words.This is exactly what individual liberty is all about.

On the other hand, a corporation is a societal construct codified into legal existence to further the mutual interests of individuals. A corporation is "an artificial being, invisible, intangible, and existing only in contemplation of the law," according to Chief Justice Marshall in the Dartmouth College Case of 1819. Trustees of Dartmouth College v. Woodward , won by Daniel Webster when the state of New Hampshire attempted to turn the college into The University of New Hampshire, was an early American test of eminent domain-type property seizure.

A corporation has no inalienable or natural rights. Nevertheless, it is the fact that corporations represent a group of individuals that allows the 'corporatist' to claim that these fictional legal entities should enjoy the same natural and legal liberties and rights with which individuals are born.

Let me be bold here: The 'Corporatist' is a kleptocrat masquerading as a believer in liberty. He uses terminology based in liberty to construct an ideology solely as a means of furthering the gains of a specific strata of society allied with the corporatist and at the expense of other strata, by coercion if necessary .

Remember my post on kleptocracy from 2008? If not, here are the four methods Jared Diamond says ruling elites use to maintain power:

  1. Disarm the populace, and arm the elite.
  2. Make the masses happy by redistributing much of the tribute received, in popular ways.
  3. Use the monopoly of force to promote happiness, by maintaining public order and curbing violence. This is potentially a big and underappreciated advantage of centralized societies over noncentralized ones.
  4. The remaining way for kleptocrats to gain public support is to construct an ideology or religion justifying kleptocracy.

I broadened the argument on this in my year in review in 2009. Please read The year in review at Credit Writedowns – Kleptocracy to get a fuller perspective. Here's the statement from that post I want to concentrate on:

The last (and perhaps most important) issue [of the four ways elites maintain power], in my view, has to do with the unabiding faith in free markets that many now have. It is with religious zeal that these so-called Libertarians defend the primacy of markets over all else when in reality common sense would tell you that those with the greatest influence and money will always be at an advantage without some check on that influence and power.

This is the corporatism, the faux Libertarianism, to which I refer. The logic goes like this:

  1. Individuals have inalienable rights to freedom. This is a fundamental right that all individuals have and efforts by government to undermine these rights must be resisted at all costs.
  2. Corporations are groups of individuals which have banded together for mutual benefit. In so doing, they can express their individual natural rights more effectively than they could as individuals.
  3. As such, corporations must retain the same rights as individuals legally in order to allow those individuals the corporation represents to express there natural rights. Therefore, the same resistance to denying the rights of individuals must also be transferred to the corporations which represent them .

This logic will take you much further in furthering the aims of corporations, the point being that corporations, businesses, should enjoy the same rights that individuals have.

That is not to say that businesses should not have rights. They should; and we should grant them as much liberty as is reasonable and warranted. But let's be clear, corporations are not individuals; they are collections of individuals. Often, individuals hide behind this collective using the corporate veil to shield themselves from sanction for behaviour that abuses individual liberties. In a very real sense, the rights and liberties of businesses and individuals often come into conflict. A real libertarian would always favour the individual in that conflict . A corporatist would favour the corporation. That's the difference.

Let me give you an example. Say I was walking down the street in Louisville, Kentucky and saw a cute little shop that sold Kettle Korn. For those of you who don't know kettle korn, it is salted and sweetened popcorn that was brought to the U.S. by German immigrant farmers in Pennsylvania, Maryland and into the Midwest over two hundred years ago. In Germany, popcorn is sweet not salty like it is in the U.S. So, I see this store and I am thinking, "They have Kettle Korn in Kentucky? Wow, who knew. I love this stuff. Let me go get some." Here's the problem: the owner of the store has a business policy that no black people are allowed inside. Mind you, this isn't a government policy because government discrimination based on race or ethnicity is illegal in the United States. But, this business owner doesn't want Blacks in his store. So when I enter, he tells me to leave because I am violating his store's liberty to choose its own policies.

I would say the individual liberty trumps the business liberty in this case, especially since the owner is violating his own government's business policy as well as societal norms. A corporatist would say that the business owner wins since it is his business. Again, that's the difference.

There are lots of other examples of corporatism at work in the U.S. legal system regarding property rights in particular. My November 2009 post " New York to use eminent domain to build a basketball stadium " showed the New York State Court of Appeals ruling that the Atlantic Yards basketball project can go forward as planned, dislocating the residents in the Brooklyn, NY area where the stadium is to be built. The decision means that government can evict you from your own home, seize your property, and give you what it believes is a fair price without your consent to build a sports arena, ostensibly for the public good but certainly for state and private profit.

This and other cases like it are occurring because of the decision in Kelo v. City of New London, Conn . If a state or local government deems a private project – funded by private monies and profiting private enterprises – to be in the public interest, it can seize your property to allow this project to occur. In the New London case, residents were evicted to make way for a luxury hotel and up-scale condos, from which private developers would profit handsomely. Kelo was an outrageous example of cronyism completely at odds with the ethos of the Dartmouth College Case of 1819. Because of Kelo , government can now abuse its power to enrich specific private interests. That's corporatism at work.

Corporatism has nothing to do with liberty. It is all about power and coercion. It's about favouring the big guy over the little guy, the more well-connected over the less well-connected, the insider over the outsider. And in society that means favouring large, incumbent businesses over smaller businesses, new entrants or individuals. How does deregulation and free market ideology fit into this ?

"Obviously, if some always have more power and wealth than others, there is never a situation in which the economic playing field is level. Moreover, it is axiomatic that those with the means and access will always have greater influence over government than those without. So, in a very real sense, the socioeconomic elite of any advanced, stratified society will always have disproportionate control of the economic and political system.

"Now, I happen to be a Libertarian-minded individual, so I have nothing against the free markets or the concept of limited government and deregulation. Freer markets and more limited government are my preferred ideal. However, I am a realist. I understand that markets are never truly free and government fulfils a necessary function .

"So, when you hear someone talking about getting government out of the way and allowing the free markets to work, you should be thinking about the influence and control this would naturally engender.

"Think crony capitalism

"In fact, I would argue that the deregulation and free market capitalism that these individuals refer to is really crony capitalism in disguise. I will explain.

"When I think of deregulation, I think of two related but distinct concepts. The one is the actual de-regulation, which is the permission of economic actors to compete in markets previously unavailable to them by order of legislation or de facto government intervention and coercion. The other is regulatory oversight, which is the maintenance of specific rules of engagement under threat of penalty on economic actors by government. De-regulation and regulatory oversight are related concepts but they are not the same."

This favouring of large corporate interests is what Bill Black has been calling Deregulation, Desupervision and De Facto Decriminalization . Dylan Ratigan calls it corporate communism . Ron Paul calls it corporatism . I am calling it kleptocracy. Whatever label you put on this 'thing', it is not about liberty at all. It is about entrenching the interests of a select few at the expense of the rest– and that has nothing to do with liberty.

[Feb 27, 2019] Angry Bear " Mars Descending U.S. Security Alliances and the International Status of the Dollar

Feb 27, 2019 | angrybearblog.com

Mars Descending? U.S. Security Alliances and the International Status of the Dollar

Dan Crawford | February 26, 2019 6:11 am

US/Global Economics by Joseph Joyce

Mars Descending? U.S. Security Alliances and the International Status of the Dollar

A decade after the global financial crisis, the dollar continues to maintain its status as the chief international currency. Possible alternatives such as the euro or renminbi lack the broad financial markets that the U.S. possesses, and in the case of China the financial openness that allows foreign investors to enter and exit at will. Any change in the dollar's predominance, therefore, will likely occur in response to geopolitical factors.

Linda S. Goldberg and Robert Lerman of the Federal Reserve Bank of New York provide an update on the dollar's various roles. The dollar remains the dominant reserve currency, with a 63% share of global foreign exchange reserves, and serves as the anchor currency for about 65% of those countries with fixed exchange rates. The dollar is also widely utilized for private international transactions. It is used for the invoicing of 40% of the imports of countries other than the U.S., and about half of all cross-border bank claims are denominated in dollars.

This wide use of the dollar gives the U.S. government the ability to fund an increasing debt burden at relatively low interest rates. Moreover, as pointed out by the New York Times , the Trump administration can enforce its sanctions on countries such as Iran and Venezuela because global banks cannot function without access to dollars. While European leaders resent this dependence, they have yet to evolve a financial system that could serve as a viable alternative.

The dollar's continued predominance may also reflect other factors. Barry Eichengreen of UC-Berkeley and Arnaud J. Mehl and Livia Chitu of the European Central Bank have examined the effect of geopolitical factors -- the "Mars hypothesis" -- versus pecuniary factors -- the "Mercury hypothesis" -- in determining the currency composition of the international reserves of 19 countries during the period of 1890-1913. Official reserves during this time could be held in the form of British sterling, French francs, German marks, U.S. dollars and Dutch guilders.

The authors find evidence that both sets of factors played roles. For example, a military alliance between a reserve issuing country and one that held reserves would boost the share of the currency of the reserve issuer by almost 30% if there was a military alliance between these nations. They conjecture that the reserve issuer may have used security guarantees to obtain financing from the security-dependent nation, or to serve the role of financial center when the allied country needed to borrow internationally.

Eichengreen, Mehl and Chitu then use their parameter estimates to measure by how much the dollar share of the international reserves of nations that currently have security arrangements with the U.S. would fall if such arrangements no longer existed. South Korea, for example, currently holds 84% of its foreign reserves in dollars; this share would fall to 54% in the absence of its security alliance with the U.S. Similarly, the dollar component of German foreign exchange reserves would decline from 98% to 68%.

In previous eras, such calculations might be seen as interesting only for providing counterfactuals. But the Trump administration seems intent on cutting back on America's foreign military commitments. The U.S. and Korea, for example, have not negotiated a renewal of the Special Measures Agreement to finance the placement of U.S. troops in Korea. German Chancellor Angela Merkel has defended her country's role in NATO in the face of criticism from President Trump that Germany must spend more on defense expenditures. The possibility of a pan-European army to serve as an alternative security guarantee is no longer seen as totally far-fetched.

The dollar may be safe from replacement on economic grounds. But the imminent shrinkage of the British financial sector due to the United Kingdom's withdrawal from the European Union shows that political decisions follow their own logic, sometimes without regard for the economic consequences. If the dollar lose some of its dominance, it may be because of self-inflicted wounds.

[Feb 17, 2019] The Subtle Signal That the Bull Market Could Soon End

Feb 17, 2019 | finance.yahoo.com

A great predictor

What is this amazingly accurate indicator of a coming recession? The unemployment rate trend. I first came across this idea on the Philosophical Economics blog , whose author has adopted the pseudonym Jesse Livermore, in honor of the 20th-century investor.

This Livermore conducted a rigorous analysis in search of the perfect recession indicator. He evaluated several potential signals, including real retail sales growth, industrial production growth, real S&P 500 earnings-per-share growth, employment growth, real personal income growth, and housing starts growth. While some of these indicators were promising, none of them compared to the predictive ability of the unemployment rate trend.

Note that it's the unemployment rate trend that's the great predictor of a recession and not the unemployment rate itself. The unemployment rate is a lagging indicator of a recession. In other words, the rate goes up significantly only after a recession is in effect.

But before the unemployment rate moves significantly higher, the unemployment rate trend must change from downward to upward. And that's what Livermore found was a great leading indicator, or predictor, of an economic recession. This change in trend is determined by simply seeing when the latest unemployment rate is higher than the 12-month simple moving average of previous monthly unemployment rates.

So how well does this predictor work? Over the last 70 years, a change in the unemployment rate trend predicted every recession that occurred. In two cases, the recession came immediately after the change in the unemployment rate trend. In other cases, the trend changed several months in advance of the start of a recession.

The U.S. hasn't experienced an economic recession since the Great Recession of 2008 and 2009. Unemployment rates remain low. However, the U.S. unemployment rate for January, which was reported in early February, moved higher than the 12-month simple moving average of previous monthly unemployment rates.

The subtle signal that has proven to be accurate at predicting the onset of a recession has flashed. And if a recession is indeed on the way, the bull market will soon end.

One drawback

Is there a catch? Yep. While the unemployment rate trend has been uncannily accurate at indicating recessions, it also sometimes provides a false signal. In other words, the trend changes but a recession doesn't occur.

This scenario happened as recently as September 2016. The unemployment rate rose above the 12-month simple moving average for previous unemployment rates for one month. A recession didn't ensue, though, and the bull market kept on trucking.

[Feb 17, 2019] Gundlach Last year's market selloff was just a 'taste of things to come' by Julia La Roche

Feb 17, 2019 | finance.yahoo.com

Late last year, the S&P 500 ( ^GSPC ) tumbled 20% from its Oct. 3 intraday high to its Dec. 24 intraday. And despite the market's sharp 17% rally from those lows, Bond king Jeffrey Gundlach says we're in a bear market and that we could see new lows.

"A bear market has nothing to do with this 20% arbitrary thing," Gundlach, the CEO of $121 billion DoubleLine Capital, told Yahoo Finance in an exclusive interview. "It has to do with something crazy happening first, and then the crazy thing gives it up. And yet more traditional things continue to march on. But one by one they give it up." December's dip buyers will sell at lower levels

The market has since been saved by the Fed's pivot to be "patient" on monetary policy and the subsequent rally in the bond market, all of which has kept interest rates low. For now.

"If the long end of rates starts to rise, as I expect, and if we break through 3.50% on the 30-year, I think it's over," Gundlach added. "Because the competition from the bond market, particularly against a climate of limiting one of the engines of stock price appreciation, which is buybacks , is thought to be potentially in jeopardy."

Gundlach believes that investors who bought during December's dip will likely end up selling at a lower point.

See also

[Feb 15, 2019] CAPE Fear The Bulls Are Wrong. Shiller's Measure Is the Real Deal

Notable quotes:
"... The CAPE aims to correct for those distortions. It smooths the denominator by using not current profits, but a ten-year average, of S&P 500 earnings-per-share, adjusted for inflation. Today, the CAPE for the 500 reads 29.7. It's only been that high in two previous periods: Before the crash of 1929, and during the tech bubble from 1998 to 2001, suggesting that when stocks are this expensive, a downturn may be at hand. ..."
"... is 36.1% higher ..."
"... Here's the problem that the CAPE highlights. Earnings in the past two decades have been far outpacing GDP; in the current decade, they've beaten growth in national income by 1.2 points (3.2% versus 2%). That's a reversal of long-term trends. ..."
"... Right now, earnings constitute an unusually higher share of national income. That's because record-low interest rates have restrained cost of borrowing for the past several years, and companies have managed to produce more cars, steel and semiconductors while shedding workers and holding raises to a minimum. ..."
"... t's often overlooked that although profits grow in line with GDP, which by the way, is now expanding a lot more slowly than two decades ago, earnings per share ..."
"... The reason is dilution. Companies are constantly issuing new shares, for everything from expensive acquisitions to stock option redemptions to secondary offerings. New enterprises are also challenging incumbents, raising the number of shares that divide up an industry's profits faster than those profits are increasing. Since total earnings grow with GDP, and the share count grows faster than profits, it's mathematically impossible for EPS growth to consistently rise in double digits, although it does over brief periods––followed by intervals of zero or minuscule increases. ..."
"... The huge gap between the official PE of 19 and the CAPE at 30 signals that unsustainably high profits are artificially depressing the former. and that profits are bound to stagnate at best, and more likely decline. ..."
"... In an investing world dominated by hype, the CAPE is a rare truth-teller ..."
Feb 15, 2019 | finance.yahoo.com

For the past half-decade, a controversial yardstick called the CAPE has been flashing red, warning that stock prices are extremely rich, and vulnerable to a sharp correction. And over the same period, the Wall Street bulls and a number of academics led by Jeremy Siegel of the Wharton School, have been claiming that CAPE is a kind of fun house mirror that makes reasonable valuations appear grotesquely stretched.

CAPE, an acronym "Cyclically-adjusted price-to-earnings ratio," was developed by economist Robert Shiller of Yale to correct for a flaw in judging where stock prices stand on the continuum from dirt cheap to highly expensive based on the current P/E ratio. The problem: Reported earnings careen from lofty peaks to deep troughs, so that when they're in a funk, multiples jump so high that shares appear overpriced when they're really reasonable, and when profits explode, they can skew the P/E by creating the false signal that they're a great buy.

The CAPE aims to correct for those distortions. It smooths the denominator by using not current profits, but a ten-year average, of S&P 500 earnings-per-share, adjusted for inflation. Today, the CAPE for the 500 reads 29.7. It's only been that high in two previous periods: Before the crash of 1929, and during the tech bubble from 1998 to 2001, suggesting that when stocks are this expensive, a downturn may be at hand.

The CAPE's critics argue that its adjusted PE is highly inflated, because the past decade includes a portion of the financial crisis that decimated earnings. That period was so unusual, their thinking goes, that it makes the ten-year average denominator much too low, producing what looks like a dangerous number when valuations are actually reasonable by historical norms. They point to the traditional P/E based on 12-month trailing, GAAP profits. By that yardstick today's multiple is 19.7, a touch above the 20-year average of 19, though exceeding the century-long norm of around 16.

I've run some numbers, and my analysis indicates that the CAPE doesn't suffer from those alleged shortcoming, and presents a much truer picture than today's seemingly reassuring P/E. Here's why. Contrary to its opponents' assertions, the CAPE's earnings number is not artificially depressed. I calculated ten year average of real profits for six decade-long periods starting in February of 1959 and ending today, (the last one running from 2/2009 to 2/2019). On average, the adjusted earnings number rose 22% from one period to the next. The biggest leap came from 1999 to 2009, when the 10-year average of real earnings advanced 42%.

So did profits since then languish to the point where the current CAPE figure is unrealistically big? Not at all. The Shiller profit number of $91 per share is 36.1% higher than the reading for the 1999 to 2009 period, when it had surged a record 40%-plus over the preceding decade. If anything, today's denominator looks high, meaning the CAPE of almost 30 is at least reasonable, and if anything overstates what today's investors will reap from each dollar they've invested in stocks.

Indeed, in the latest ten-year span, adjusted profits have waxed at a 3.2% annual pace, slightly below the 3.6% from 1999 to 2009, but far above the average of 1.6% from 1959 to 1999.

Here's the problem that the CAPE highlights. Earnings in the past two decades have been far outpacing GDP; in the current decade, they've beaten growth in national income by 1.2 points (3.2% versus 2%). That's a reversal of long-term trends. Over our entire 60 year period, GDP rose at 3.3% annually, and profits trailed by 1.3 points, advancing at just 2%. So the rationale that P/Es are modest is based on the assumption that today's earnings aren't unusually high at all, and should continue growing from here, on a trajectory that outstrips national income.

It won't happen. It's true that total corporate profits follow GDP over the long term, though they fluctuate above and below that benchmark along the way. Right now, earnings constitute an unusually higher share of national income. That's because record-low interest rates have restrained cost of borrowing for the past several years, and companies have managed to produce more cars, steel and semiconductors while shedding workers and holding raises to a minimum.

Now, rates are rising and so it pay and employment, forces that will crimp profits. I t's often overlooked that although profits grow in line with GDP, which by the way, is now expanding a lot more slowly than two decades ago, earnings per share grow a lot slower, as I've shown, lagging by 1.3 points over the past six decades.

An influential study from 2003 by Rob Arnott, founder of Research Affiliates, and co-author William J. Bernstein, found that EPS typically trails overall profit and economic growth by even more, an estimated 2 points a year.

The reason is dilution. Companies are constantly issuing new shares, for everything from expensive acquisitions to stock option redemptions to secondary offerings. New enterprises are also challenging incumbents, raising the number of shares that divide up an industry's profits faster than those profits are increasing. Since total earnings grow with GDP, and the share count grows faster than profits, it's mathematically impossible for EPS growth to consistently rise in double digits, although it does over brief periods––followed by intervals of zero or minuscule increases.

The huge gap between the official PE of 19 and the CAPE at 30 signals that unsustainably high profits are artificially depressing the former. and that profits are bound to stagnate at best, and more likely decline. The retreat appears to have already started. The Wall Street "consensus" Wall Street earnings forecast compiled by FactSet calls for an EPS decline of 1.7% for the first quarter of 2017, and zero inflation-adjusted gains for the first nine months of the year.

In an investing world dominated by hype, the CAPE is a rare truth-teller .

[Feb 15, 2019] Oil Rises as Aramco Said to Cut Output at Biggest Offshore Field

KSA and Russia together can drive oil price to anywhere they wish... Wall street sharks can do nothing with those giants if they cut oil output.
Notable quotes:
"... Russia plans to accelerate the output cuts it agreed to with OPEC+. ..."
Feb 15, 2019 | finance.yahoo.com

Oil climbed as Saudi Arabia was said to curtail some output from its Safaniyah offshore oil field, the largest in the world.

Futures in New York rose as much as 2.2 percent Friday, pushing toward its biggest weekly gain in a month. Saudi Arabia was said to trim supply from Safaniyah to repair a damaged power cable, while Russia plans to accelerate the output cuts it agreed to with OPEC+.

... ... ...

Saudi Arabian Oil Co.'s Safaniyah field has the capacity to pump 1.2 million to 1.5 million barrels of crude a day, and is a major component of the Arab Heavy grade. The cable was damaged in an accident about two weeks ago and repairs are expected to be completed by early March, people with knowledge of the matter said.

[Feb 14, 2019] Pension vs. 401(k) Comparing Retirement Plans

Feb 14, 2019 | finance.yahoo.com

2 hours ago The biggest difference is that employers on average contribute 1/3 to your 401K that they contributed on your behalf for your pension.

[Feb 13, 2019] Condensate can't replace heavy oil

IEA is one-half EU marketing agency with the explisit goal to keep oil price low, and one half a research organization. In different reports one role can be prevalent.
The U.S. Energy Information Administration (EIA) estimates that margins for U.S. Gulf Coast refiners have declined to the lowest levels since late 2014, based on recent price trends in certain grades of crude oil and petroleum products. https://www.eia.gov/petroleum/weekly/
Comment on Yahoo are absolutly idiotic. I have dount only a couple more or less reasonable comment in the first 48. This level of incompetence and brainwashing is simply amazing.
Feb 13, 2019 | news.yahoo.com

The "call" on OPEC crude is now forecast at 30.7 million bpd in 2019, down from the IEA's last estimate of 31.6 million bpd in January.

U.S. sanctions on Iran and Venezuela have choked off supply of the heavier, more sour crude that tends to yield larger volumes of higher-value distillates, as opposed to gasoline. The move has created disruption for some refiners, but has not led to a dramatic increase in the oil price in 2019.

"In terms of crude oil quantity, markets may be able to adjust after initial logistical dislocations (from Venezuela sanctions)", the Paris-based IEA said.

"Stocks in most markets are currently ample and ... there is more spare production capacity available."

Venezuela's production has almost halved in two years to 1.17 million bpd, as an economic crisis decimated its energy industry and U.S. sanctions have now crippled its exports.

Brent crude futures have risen 20 percent in 2019 to around $63 a barrel, but most of that increase took place in early January. The price has largely plateaued since then, in spite of the subsequent imposition of U.S. sanctions.

"Oil prices have not increased alarmingly because the market is still working off the surpluses built up in the second half of 2018," the IEA said.

"In quantity terms, in 2019, the U.S. alone will grow its crude oil production by more than Venezuela's current output. In quality terms, it is more complicated. Quality matters."

dlider909, 7 hours ago Story will change in 30 days.

Robert, 7 hours ago ... ... ...

What this report fails to do is to pay the appropriate homage to American oilfield roughnecks...

ralf

7 hours ago Nonsense. I see military action against Venezuela soon, just because of our thirst for oil.
Talk about shale is like talk about Moon conquests, not supported by hard facts.

[Feb 13, 2019] Oil gains 2 percent as Saudi Arabia readies more supply cuts

Feb 13, 2019 | finance.yahoo.com

Saudi Arabia planning to drop March crude output by more than a half a million barrels per day below its initial pledge.

... ... ...

OPEC said on Tuesday it had reduced oil production almost 800,000 bpd in January to 30.81 million bpd under its voluntary global supply pact.

Saudi Arabia Energy Minister Khalid al-Falih told the Financial Times that the kingdom would reduce cut production to about 9.8 million bpd in March to bolster oil prices.

[Feb 12, 2019] Bill Gates suggests Ocasio-Cortez's tax plan a 'misfocus' by Brittany De Lea

Feb 12, 2019 | finance.yahoo.com

Microsoft co-founder Bill Gates does not think the way to increase U.S. tax revenue is through policies like raising the tax rate on the wealthy to 70 percent – as has been floated by some Democratic lawmakers like New York Rep. Alexandria Ocasio-Cortez.

During a podcast interview with The Verge , Gates responded to a question about whether raising the top rate to 70 percent in order to fund social programs – like infrastructure initiatives – appeals to him by saying government can be more effective in running social programs, but that's not the best way to raise revenue.

"You finally have some politicians who are so extreme that I'd say, 'No, that's even beyond,'" Gates said. "You do start to create tax dodging and disincentives, and an incentive to have the income show up in other countries and things."

Gates added that the country's richest people often don't pay the highest rate because their wealth doesn't always show up as income, it can be in the value of their stock, for example.

"So it's a misfocus," he added. "If you focus on that, you're missing the picture."

The billionaire businessman, however, does believe there are ways to make the current tax code more progressive. Some of those ways include more progressive policies regarding the estate tax, the tax on capital, or reforming FICA and Social Security taxes. Independent Vermont Sen. Bernie Sanders recently released a proposal to expand the estate tax to a rate of 77 percent for those passing on assets in excess of $1 billion.

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Bill Gates also called modern monetary theory (MMT) – which asserts that because the government controls its own currency, there is no need to worry about balancing the budget – "some crazy talk." Ocasio-Cortez recently indicated she was open to supporting MMT.

Gates is one of the richest people in the world. He has said, despite the fact that he has paid more in taxes than most, he should be paying more .

[Feb 12, 2019] Oil gains 2 percent

Feb 12, 2019 | finance.yahoo.com

Rising oil prices help Venezuela more than it helps the rest of OPEC because Venezuela needs the money more.

[Feb 12, 2019] Sanctions, OPEC cuts push Asia's heavy crude oil prices above Brent

Feb 12, 2019 | finance.yahoo.com

Middle East oil benchmarks Dubai and DME Oman have nudged above prices for Brent crude, an unusual move as U.S. sanctions on Venezuela and Iran along with output cuts by OPEC tighten supply of medium to heavy oil, traders and analysts said.

Heavier grades, mainly produced in the Middle East, Canada and Latin America, typically have a high sulphur content and are usually cheaper than Brent, the benchmark for lighter oil in the Atlantic Basin.

[Feb 07, 2019] Saudi Arabia cuts oil output by about 400,000 bpd in January sources

Feb 07, 2019 | finance.yahoo.com

DUBAI/LONDON (Reuters) - Saudi Arabia, the world's top oil exporter, cut its crude output in January by about 400,000 barrels per day (bpd), two OPEC sources said, as the kingdom follows through on its pledge to reduce production to prevent a supply glut.

Riyadh told OPEC that the kingdom pumped 10.24 million bpd in January, the sources said. That's down from 10.643 million bpd in December, representing a cut that was 70,000 bpd deeper than targeted under the OPEC-led pact to balance the market and support prices.

The Organisation of the Petroleum Exporting Countries, Russia and other non-OPEC producers - an alliance known as OPEC+ - agreed in December to reduce supply by 1.2 million bpd from Jan. 1.

The agreement stipulated that Saudi Arabia should cut output to 10.311 million bpd, but energy minister Khalid al-Falih has said it will exceed the required reduction to demonstrate its commitment.

[Feb 07, 2019] OPEC's Oil Exports to U.S. Fall to Five-Year Low in January

Feb 07, 2019 | finance.yahoo.com

Crude shipments to the U.S. from OPEC and its partners fell to 1.41 million barrels a day in January, the lowest in five years, according to data from cargo-tracking and intelligence company Kpler. Shrinking Iraqi imports and deep output cuts by Saudi Arabia fueled the decline

[Feb 04, 2019] Cuomo Blames Trump Tax Plan for Reduced New York Tax Collections

Feb 04, 2019 | finance.yahoo.com

New York collected $2.3 billion less income-tax revenue than predicted for December and January, a development that Governor Andrew Cuomo blamed on wealthy residents leaving for second homes in Florida and other states that received more favorable treatment in the tax law enacted by President Donald Trump and the Republican Congress.

The shortfall will require a new look at the $175 billion budget Cuomo submitted to the legislature last month, he said. If the trend continues, the governor said it would affect spending on high-expense items such as health, education, infrastructure and a planned middle-class tax cut.

"There is no doubt that the budget we put forward is not supported by the revenue," the Democratic governor said during a news conference in Albany. "If even a small number of high-income taxpayers leave, it has a great effect on this tax base. You are relying on a very small number of people for the vast amount of your tax dollars."

While acknowledging that stock market volatility is among several factors that may have suppressed income-tax revenue in the past two months, the governor placed most of the blame on Trump and the Republican-dominated Congress of 2017, which enacted a tax plan limiting federal deductions on real estate and other local taxes.

Related: New York's Income-Tax Revenue Falls 'Abruptly' Under Forecast

"It was politically diabolical and also highly effective," Cuomo said. "And if your goal is to help Republican states and hurt Democratic states this is the way to do it."

[Feb 04, 2019] Citi expects Brent crude to continue rising into the mid-$60 range and hit $70 before year end

Feb 04, 2019 | finance.yahoo.com

The bank expects oil supply to tighten in the first quarter as top exporter Saudi Arabia cuts production , but Citi's Ed Morse also forecasts a soft spot for demand in the opening months of 2019. Further complicating matters are a series of geopolitical and market dramas that will play out through the beginning of May.

This follows a three-month period that saw oil prices spike to nearly four-year highs as the market braced for U.S. sanctions on Iran. Prices then tumbled more then 40 percent to 18-month lows, blowing up long-held trading strategies and forcing drillers to rethink their 2019 budgets.

"The volatility every year is a good $20 to $25 a barrel between low and high," Morse said. "December was kind of the nightmare for the world where the swings were $50 at a low, $86 at a high and $68 for the average of Brent."

... ... ...

Citi expects Brent crude to continue rising into the mid-$60 range and hit $70 before year end. That will be enough to keep in play another wild card: surging U.S. oil production.

[Feb 04, 2019] Absolute control over people and resources is the ultimate goal of financial oligarchy

Financial industry has inherent trend toward parasitism and gangsterism and as such should be as tightly regulated as gambling. Probably even more. But under neoliberalism where financial oligarchy a the ruling class this is a pipe dream. I do not see any significant countervailing force other the far right nationalism. Far right nationalism has power to brake bankers spine, but usually they allied with them (fascism)
Feb 04, 2019 | www.zerohedge.com
Authored by Tom Chatham via Project Chesapeake blog,

Those that have been following events for several years know they are under attack by an enemy that has no face and means to do them great harm. Nothing less than their sovereignty and freedom is at stake.

Absolute control over people and resources is the ultimate goal.

Davidduke2000 , 9 minutes ago link

On his deathbed, Andrew Jackson said " I beat the bank".

Davidduke2000 , 9 minutes ago link

On his deathbed, Andrew Jackson said " I beat the bank".

freedommusic , 2 hours ago link

...the bankers want to show up after the population has lost everything in a collapse, to be their savior and gain control of everyone by offering resources in exchange for compliance.

In the end these bankers are just people . They yield NO power other than a cheap magi c trick called money. They are simply losers pulling levers behind the curtain . They are terrified of real people. They are terrified of being exposed. They are worthless conjurers of useless paper. Their power is a cheap spell. They always have known that once people are aware of the trick, they are done. They are afraid of elevated souls. They are afraid of the awakened. They are terrified of the big red pill that is coming for the masses. Game over.

SickDollar , 2 hours ago link

Uncle Shmuel (the Neocon's version of Uncle Sam)

new term BITCHEZ

Uncle Sam is dead

[Feb 02, 2019] The US has a secret weapon in the trade war

Technological superiority is a weapon and the USA know how to use it.
Notable quotes:
"... Made in China 2025 is the Chinese government's 10-year plan to update the country's 10 high-tech manufacturing industries, which include information technology, robotics, aerospace, rail transport, and new-energy vehicles, among others. ..."
"... Without U.S. semis, China will not be able to process the technology necessary to push forward the Made in China 2025 program. "American chips in many ways form the backbone of China's tech economy," Shah said. ..."
"... The Trump Administration's tariffs on Chinese goods were intended to severely disrupt the Chinese tech-advancement initiative. But Shah says that making U.S. chips more expensive for China could have consequences for the U.S. as well. ..."
"... "Over 50% of Chinese semiconductor consumption is supplied by U.S. firms In 2017, China consumed $138bn in integrated circuits (ICs), of which it only produced $18.5bn domestically, implying China imported $120bn of semis in 2017, up from $98bn in 2016 and $73bn in 2012." ..."
"... If the two leaders are unable to come to some sort of trade resolution at the meeting, U.S. tariffs on over $200 billion worth of Chinese goods will increase from 10% to 25% on January 1, 2019. ..."
"... While US has the upper hand on semis, a trade embargo on semis will (1) slows down China's move towards achieving Made in China 2025, (2) at the same time give China the impetus to rush ahead will all resources available to achieve the originally omitted goal of being self-sufficient in tech skills and technology, and (3) seriously hurt companies like Intel, AMD, Micron, and Qualcom as a huge percentage of their businesses are with China, and with that portion of their business gone, all these companies will end up in a loss and without the needed financial resources to invest into new technology in the near future. ..."
Nov 30, 2018 | www.yahoo.com

https://platform.twitter.com/widgets/follow_button.html?screen_name=heidi_chung&show_screen_name=false&show_count=false

Heidi Chung Reporter , Yahoo Finance November 28, 2018

As trade tensions run hot between the U.S. and China, President Trump might have one key advantage in the trade war, according to Nomura.

Analyst Romit Shah explained that China's dependence on U.S.-made advanced microchips could give Trump the upper hand.

"We believe that as China-U.S. tensions escalate, U.S. semiconductors give Washington a strong hand because the core components of Made in China 2025 (AI, smart factories, 5G, bigdata and full self-driving electric vehicles) can't happen without advanced microchips from the U.S.," Shah said in a note to clients.

BEIJING, CHINA � NOVEMBER 9, 2017: US President Donald Trump (L) and China's President Xi Jinping shake hands at a press conference following their meeting at the Great Hall of the People in Beijing. Artyom Ivanov/TASS (Photo by Artyom Ivanov\TASS via Getty Images)

Made in China 2025 is the Chinese government's 10-year plan to update the country's 10 high-tech manufacturing industries, which include information technology, robotics, aerospace, rail transport, and new-energy vehicles, among others.

One of Made in China 2025's main goals is to become semiconductor self sufficient. China hopes that at least 40% of the semiconductors used in China will be made locally by 2020, and at least 70% by 2025. "Made in China 2025 made abundantly clear China's commitment to semiconductor self-sufficiency. Made in China 2025 will upgrade multiple facets of the Chinese economy," Shah said.

According to Nomura's estimates, China is currently about 3 to 5 years behind the U.S. in dynamic random-access memory (DRAM) chip production. However, Shah explained that if the trade war persists, the consequences could set Chinese chip production behind by 5 to 15 years.

Without U.S. semis, China will not be able to process the technology necessary to push forward the Made in China 2025 program. "American chips in many ways form the backbone of China's tech economy," Shah said.

Consequences for U.S.

The Trump Administration's tariffs on Chinese goods were intended to severely disrupt the Chinese tech-advancement initiative. But Shah says that making U.S. chips more expensive for China could have consequences for the U.S. as well.

One concern centers around intellectual property theft. The Department of Justice (DOJ) has been working hard to punish China for allegedly attempting to commit espionage. For example, the DOJ believes China was attempting to spy on the U.S. through Huawei and asked U.S. allies to drop the Chinese tech equipment maker.

However, while many U.S. chipmakers, such as Advanced Micro Devices ( AMD ), Qualcomm ( QCOM ) and Micron ( MU ), expressed gratitude that the DOJ was intervening to prevent intellectual property theft, the companies are also concerned that it could spark retaliation from their Chinese business partners and result in loss of access to the Chinese market. "Joint ventures, IP sharing agreements and manufacturing partnerships are the price of admission into China, and thus far, companies are playing ball," Shah explained.

Shah essentially calls the Chinese tariffs a double-edged sword. While tariffs will hurt the Chinese if they can't have access to freely source U.S. chips, it could also hurt U.S. chipmakers if they lose their business in China. According to Shah's research, "Over 50% of Chinese semiconductor consumption is supplied by U.S. firms In 2017, China consumed $138bn in integrated circuits (ICs), of which it only produced $18.5bn domestically, implying China imported $120bn of semis in 2017, up from $98bn in 2016 and $73bn in 2012."

Trump and China's President Xi Jinping are scheduled to meet at the G20 summit in Buenos Aires, Argentina, on Thursday for a two-day meeting. If the two leaders are unable to come to some sort of trade resolution at the meeting, U.S. tariffs on over $200 billion worth of Chinese goods will increase from 10% to 25% on January 1, 2019.

"China could source equipment from Europe and Japan; however, we believe there are certain mission-critical tools that can only be purchased from the U.S. We believe that U.S.-China trade is the biggest theme for U.S. semis and equipment stocks in 2019. Made in China 2025 can't happen without U.S. semis, and U.S. semis can't grow without China. We hope this backdrop drives resolution," Shah said.

Heidi Chung is a reporter at Yahoo Finance. Follow her on Twitter: @heidi_chung .

R

[Feb 02, 2019] As goes January, so goes the year Old Wall Street indicator puts odds of 2019 gain at more than 80% by Patti Domm

This is a classic, textbook example of financial astrology... You probably should read it in full to appreciate the depth of junk science here. But this is financial casino my friends, and they try to entice you with naked girls and drinks...
Feb 01, 2019 | finance.yahoo.com

Stocks had their best January gains in more than 30 years, and that should mean 2019 will be a pretty good year for the market.

That's what the widely watched January barometer tells you - as goes January, so goes the year. According to Stock Trader's Almanac, going back to 1950, that metric of January's performance predicting the year has worked 87 percent of the time with only nine major errors, through 2017. In the years January was positive, going back to 1945, the market ended higher 83 percent of the time, according to CFRA.

But the indicator also signaled a positive year last year, and the market suffered an unusual late-year sell-off, wiping out all of the gains. The S&P 500 ended 2018 down 6.6 percent, despite rising 5.6 percent in January. But the S&P also defied history with a terrible December decline of 9.6 percent , the biggest loss for the final month of the year since 1931.

This January, the S&P 500 was up 7.9 percent. The best January performance since 1987, when it rose 13.2 percent. It was its best overall month since October 2015.

Some market pros worry the sharp snapback in stocks since the late December low means January could be stealing the gains from the rest of the year. Some also believe there could be another test at lower levels in the not too distant future. Yet, Wall Street forecasters have a median target of 2,950 for the S&P 500 at year end, a big leap from the current 2,704.

"I'm still struck between the contrast of a year ago and now," said James Paulsen, chief investment strategist at Leuthhold Group. "We came in last year with nothing but optimism. At this point last year, we had synchronized global growth, confidence had spiked to record post-war highs, and everyone knew we had this steroid-induced earnings boost coming. The thought was how could stocks lose, and of course they did."

The market has sprung back from December's low, with the S&P gaining 15 percent since Dec. 26.

"This year, we came in with nothing but bad news - the economy was slowing down. ... The rest of the world is slowing. We have trade wars. We have the shutdown, and analysts are revising earnings lower," Paulsen added. "We're worried about a recession and a bear market. It's strikingly different, and yet it's kind of like how can stocks win, but they are and I think they will."

Strategists also point to the differences in the way the market traded in each January. This January has been full of volatile swings, with ultimately larger gains than losses. Last year, the market was at the end of a long smooth glide path higher.

Last year didn't work

Stocks did well through most of January 2018, but by the end of the month, a correction started. "On January 30, in 2018, it was the first 1 percent decline in 112 days. That was basically the start of the fall off the cliff. In terms of percent gains, this January is similar to last, but in terms of where we've come from, it's very different. That was one of the calmest advances in history," said Frank Cappelleri, executive director at Instinet.

Cappelleri said it's important to put this year's market move in context, when considering the January barometer. "You have one of the biggest snapbacks after a very bad December, so the odds were in the market's favor to do better than that. I think maybe you have to look where we are now. You're up 15, 20 percent from the low depending on where you look. Are we going to go up that much more for the rest of the year?" he said.

Paulsen sees the gains continuing, after a possible pause. "I think it's going to continue to be a fairly good year, and I think we probably go up and get close to the highs or 3,000 on the S&P, and I'm not expecting hardly anything on the economy, and earnings are going to be weak, if not flat or maybe down," Paulsen said.

He said the slowing economy and a potential U.S.-China trade deal could push the dollar down and that would be a positive for stocks. At the same time, the Fed has paused in interest rate hikes and may even stop its balance sheet unwind.

Jeff Hirsch, editor-in-chief of the Stock Trader's Almanac, said there's another set of statistics that are in the market's favor for a positive 2019, though they also failed last year. He said for the years when the S&P 500 was positive in the first five days of the year, plus gained during the Santa rally period, and was up for the month of January, the S&P 500 had a positive year 27 out of 30 times. It also had an average gain of 17.1 percent in those years, since 1950.

Nick 29 minutes ago

Job growth is solid. Unemployment remains near all time lows even while labor force participation increases. Wage growth outpaced inflation last year. The economy is humming right along...its just the liberal media wants to bombard us with articles claiming the Trump recession is imminent.

I'm surprised they actually published an article sayings its going to be a good year.

[Feb 02, 2019] Wall Street s 2019 S P 500 forecasts

Parade of eminent astrologists ;-) Those financial prostitutes of casino capitlism, aka financial analysts most often are wrong year after year, but still have a solid coverage by the neoliberal media due to the shire wieght of the companies they represent. This bets are not connected with some kind of possible financial loss so they just talking up this firms portfolio, which of course is heavily tilted in favor of stocks. God even Vanguard retirement 2015 fund has 40% in stock, while formula 100-age would give you less then 35%. If this is bullish bias I do not know what is. Of course, they play with "other people money" and commissions are everything...
Notable quotes:
"... Their guesses about a great market in 2018 was kind of a miss. But they only had like 340 days so far. They still have 25 days left to turn in around. ..."
"... These guys are seldom right. I've been tracking these predictions more closely since 2014, usually 12-15 of the large financial institutions. Last year's average consensus was the SP at 2874. We closed Tuesday (Dec 4) at 2700. ..."
"... The average of the figures cited in the article is 3068. I think that is wishful thinking considering the slow downs in many sectors, slowing GDP and a flattening yield curve. ..."
"... With regard to upside potential, these all sound wildly optimistic to me. Ten years of printing money out of thin air and exploding deficits does not a future robust economy make, IMO. ..."
"... They cannot say 2500 cause people will not invest (and no commissions); they have to say equal or higher than today. To me it is screaming between the lines the index will hit 2500. ..."
"... So all of them predict the S&P will be higher then it is today even though many are saying we are already in a Bear Market...these people only make money if the market goes up so don't trust them! ..."
Feb 02, 2019 | finance.yahoo.com

[Feb 02, 2019] Former AOL exec Jean Case faults tech giants for trying to 'own the world'

Notable quotes:
"... Big tech companies have bullied competitors and outrun ethical standards in an effort to "own the world," Jean Case, the CEO of the Case Foundation and a former senior executive at AOL, told Yahoo Finance this week. "Many of those big companies are crowding out new innovations of young upstarts. That's not healthy," she said, in response to a question about Google and Facebook. ..."
Feb 02, 2019 | finance.yahoo.com

Big tech companies have bullied competitors and outrun ethical standards in an effort to "own the world," Jean Case, the CEO of the Case Foundation and a former senior executive at AOL, told Yahoo Finance this week. "Many of those big companies are crowding out new innovations of young upstarts. That's not healthy," she said, in response to a question about Google and Facebook.

"On the technology side, look, things have changed so fast," Case said. "I think we just haven't kept pace with some of the ethics policies and frameworks that we need to put around this stuff...used by millions of millions before thought is given to implications."

Case made the comments in a conversation that aired on Yahoo Finance on Thursday at 5 p.m. EST in an episode of " Influencers with Andy Serwer ," a weekly interview series with leaders in business, politics, and entertainment. In addition to her comments on big tech, Case explained why a woman can be elected president, what National Geographic has done to thrive amid media industry tumult, and how it felt at AOL in the heady early days of the internet.

... ... ...

[Jan 29, 2019] Bloodbath In Oil Gas Stocks Could Continue by Nick Cunningham

Notable quotes:
"... In the meantime, the strategy for oil and gas executives to appease investors is to focus on "quick cash, quarterly payouts and fast talk," Sanzillo says. "Either way the stocks lack a long-term value rationale." ..."
"... Meanwhile, the Wall Street Journal reports that the U.S. shale industry has been over-hyping the production potential from their wells. The WSJ compared well-productivity estimates from shale companies to those from third parties. After looking at the production data at thousands of wells and how much oil and gas those wells were on track to produce over the course of their lifespans, the WSJ found that company forecasts seemed to be misleading. ..."
"... Schlumberger, for instance, has reported that secondary shale wells near older wells in West Texas have been 30 percent less productive than the initial wells, the WSJ found. Also, many shale companies used data from their best wells and extrapolated forward, projecting enormous growth numbers that have not panned out. ..."
Jan 04, 2019 | finance.yahoo.com

Of course, that is largely just a reflection of the sharp decline in oil prices. But the share prices of most oil and gas companies are also largely based on oil price movements. So, the steep slide in oil prices in the final two months of 2018 led to disaster for investors in energy stocks.

"The stock market went to hell in December. And when it got there, it found that the energy sector had already moved in, signed a lease and decorated the place," Tom Sanzillo, Director of Finance at the Institute for Energy Economics and Financial Analysis (IEEFA), wrote in a commentary .

The energy sector was at or near the bottom of the S&P 500 for the second year in a row, Sanzillo pointed out. And that was true even within segments of the oil and gas industry. For instance, companies specializing in hydraulic fracturing fell by 30 percent, while oil and gas supply companies lost 40 percent. "The fracking boom has produced a lot of oil and gas, but not much profit," Sanzillo argued.

Looking forward, there are even larger hurdles, especially in the medium- to long-term. Oil demand growth is flat in developed countries and slowing beginning to slow in China and elsewhere. The EV revolution is just getting started.

The last great hope for the oil industry is to pile into petrochemicals , as oil demand for transportation is headed for a peak. But profits in that sector could also prove elusive. "The industry's rush to invest in petrochemicals to maintain demand for oil and gas is likely to continue, but the profit potential in this sector is more limited than oil and gas exploration, and is likely to keep the energy sector at or near the bottom of the S&P 500," Sanzillo concluded.

In the meantime, the strategy for oil and gas executives to appease investors is to focus on "quick cash, quarterly payouts and fast talk," Sanzillo says. "Either way the stocks lack a long-term value rationale."

Meanwhile, the Wall Street Journal reports that the U.S. shale industry has been over-hyping the production potential from their wells. The WSJ compared well-productivity estimates from shale companies to those from third parties. After looking at the production data at thousands of wells and how much oil and gas those wells were on track to produce over the course of their lifespans, the WSJ found that company forecasts seemed to be misleading.

Related: 2019 Could Make Or Break OPEC

"Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota," reporters for the WSJ wrote . "Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm."

Schlumberger, for instance, has reported that secondary shale wells near older wells in West Texas have been 30 percent less productive than the initial wells, the WSJ found. Also, many shale companies used data from their best wells and extrapolated forward, projecting enormous growth numbers that have not panned out.

The upshot is that shale companies will have to step up spending in order to hit the promised production targets. However, so many of them have struggled to turn a profit, and the recent downturn in oil prices has put even more pressure on them to rein in costs.

That raises questions about the production potential not just from individual shale companies, but also from the U.S. as a whole.

By Nick Cunningham of Oilprice.com

[Jan 29, 2019] Why Trump's $1.5 Trillion Tax Cut Hasn't Sparked Hiring or Investment

Notable quotes:
"... The Trump administration's $1.5 trillion in tax cuts appears to have not made any major impact on businesses' capital investment or hiring plans, according to a new survey. ..."
"... "A large majority of respondents, 84%, indicate that one year after its passage, the corporate tax reform has not caused their firms to change hiring or investment plans," NABE President Kevin Swift said in a release. "Fewer firms increased capital spending compared to the October survey responses, but the cutback appeared to be concentrated more in structures than in information and communication technology investments." ..."
"... The lower tax rates did have an impact in the goods-producing sector, NABE found, with 50% of respondents reporting increased investments at their companies, and 20% saying they redirected hiring and investments to the US from abroad. ..."
Jan 29, 2019 | finance.yahoo.com

The Trump administration's $1.5 trillion in tax cuts appears to have not made any major impact on businesses' capital investment or hiring plans, according to a new survey.

A quarterly poll from the National Association for Business Economics published Monday found that some companies reported accelerating investments because of lower corporate taxes, but a whopping 84% of respondents said they had not changed their plans. That's up slightly from 81% in the previous survey published in October, Reuters reports.

The White House had said the massive stimulus package, which cut the corporate tax rate to 21% from 35%, would boost business spending and job growth. The tax cuts that came into effect in January 2018 were the biggest overhaul of the U.S. tax code in more than 30 years.

"A large majority of respondents, 84%, indicate that one year after its passage, the corporate tax reform has not caused their firms to change hiring or investment plans," NABE President Kevin Swift said in a release. "Fewer firms increased capital spending compared to the October survey responses, but the cutback appeared to be concentrated more in structures than in information and communication technology investments."

The lower tax rates did have an impact in the goods-producing sector, NABE found, with 50% of respondents reporting increased investments at their companies, and 20% saying they redirected hiring and investments to the US from abroad.

An analysis of how S&P 500 firms were reacting to the tax cut by researchers at the University of Michigan found that 4% of the sample said in Q1 of 2018 they would pay some of their tax savings back to workers, and 22% mentioned in earnings conference calls they would increase investment because of the tax cuts.

Though for small businesses, a new survey from the National Federation of Independent Business released earlier this month found 61% of owners reported making capital investments, unchanged from last month but 5 points higher than in August. In December, 35% of small-business owners reported increasing employee compensation and 24% reported planned increases in the next few months.

[Jan 24, 2019] Your retirement questions answered Social Security, buying service credits and Medicare

Jan 24, 2019 | finance.yahoo.com

Q: I am 62. Last year, I got a Social Security calculation showing that when I am 66-plus-years-old, I will receive $400-plus in Social Security benefits per month. Because of my health, I started to work only three days a week. Will this reduce the amount of my benefits? If l decide to quit my job, but not apply for my Social Security benefits until I'm 66-plus, will it reduce my monthly Social Security benefits?

A: Social Security calculates your monthly benefit by taking your highest 35 years of earnings and your age, says Rick Fingerman, a managing partner with Financial Planning Solutions. "So, if you stop working before your full retirement age or FRA, as you suggest, you could see a lower benefit if you do not have 35 years of higher earnings already."

The same answer applies if you quit your job altogether at 62 and wait until 66 to collect, he says.

One option, says Fingerman, could be if you were going to wait until your FRA and you have a spouse that is already collecting on their own benefit. "You might receive a higher monthly benefit on their record as you would get 50% of what they are receiving, which could be more than the $400 a month under your own benefit," he says.

[Jan 24, 2019] Claiming Social Security Early vs. Delaying Pros and Cons

Jan 24, 2019 | finance.yahoo.com

Of course, nobody can predict exactly how long they'll live -- the average man and woman turning 65 today can expect to live until age 84 and 86, respectively, according to the Social Security Administration. However, if you're facing health issues and don't expect to live that long, it may be wiser to claim as early as possible rather than waiting until you have only a few years left to enjoy your benefits.

... ... ...

Your full retirement age (FRA) is the age at which you'll receive 100% of the benefits to which you're entitled. So if your FRA is 67, and you wait until then to claim, you'd receive $1,300 per month. If you claim at 62, your benefits will be cut by 30% -- leaving you with just $910 per month.

... ... ...

If you wait until your FRA to claim, you'll receive 100% of your entitled benefits. But if you wait beyond that age, you'll receive a bonus on top of your full amount to make up for all the months you weren't receiving benefits at all. If your FRA is, say, 67 and you wait to claim benefits until 70, you'll receive a 24% bonus over your full amount. So if you would have received $1,300 per month by claiming at 67, you'd receive $1,612 by waiting until 70. (Keep in mind, too, that this bonus maxes out at age 70, so there's no additional benefit to waiting to claim until after that age.)

This can be a lifesaver for those who are seriously behind on saving for retirement . If you're going to rely on Social Security to make ends meet, it's in your best interest to maximize those benefits.

The amount you receive in benefits will be locked in once you claim. If you delay and receive that boost, you'll continue receiving that boost for the rest of your life. Likewise, if you claim early and your benefits are reduced, you'll receive those smaller checks for life. So delaying can play out in your favor if you spend several decades in retirement -- the longer you live, the more you will receive over your lifetime.

While delaying claiming benefits by a few years will result in bigger checks, you may not actually receive more over a lifetime than you would if you had claimed earlier. Although you're receiving more each month, that's just to make up for the years you weren't receiving any benefits at all. If you don't reach your "break even age" -- or the age at which you've received more over a lifetime by waiting to claim than you would have received by claiming early -- it may not be worth it to wait.

For example, say your FRA is 67. If you claim early at 62, you'd receive $910 per month (or $10,920 per year), and if you delay until 70, you'd receive $1,612 per month ($19,344 per year). Here's how much you'd have received in total benefits at different ages:

Age at Death Total Lifetime Benefits When Claiming at 62 Total Lifetime Benefits When Claiming at 70
70 $87,360 N/A
75 $141,960 $96,720
80 $196,560 $193,440
85 $251,160 $290,160

Source: Author's calculations

So in this scenario, you'll have to live past age 80 in order to "break even" and earn more in lifetime benefits by delaying rather than claiming early. That can be a good thing if you expect to live a long time, but if you don't expect to live past 80, it may be more advantageous to claim earlier rather than later.

[Jan 24, 2019] Robert Shiller interviewed by Andy Serwer at Davos 2019

[Video] He views housing prices as a leading indicator, but he is not ready to forecast slowdown yet. Yes Home Sales Sank 6.4% in December . No, a recession isn't about to hit. The International Monetary Fund still thinks the global economy will grow a respectable 3.5% this year . By with the recent downgrade risks are higher and probably highest since 2010.
As for 2019 he said we are always at risk entering the recession. He thinks that as in June there will be the longest recession, that might be time for a recession including in housing market. Inverted curve is a sign of such comes are coming.
Housing market is closing down and that can lead to recession, but he is not giving it probability higher that 50 for this year. He also mentions that real interest rate of short end there are not much above inflation.
Jan 24, 2019 | finance.yahoo.com

Yale Economics Professor and Nobel Laureate Robert Shiller spoke with Yahoo Finance at Davos, telling Editor-in-Chief Andy Serwer: "People are starting to think housing is expensive, and that could lead to a turnaround and a drop in home prices. But I'm not ready to forecast that yet."

[Jan 24, 2019] Rubenstein predicts near-term resolutions on U.S.-China trade 'dispute' govt. shutdown

[Video]
Interesting discussion... He said tariff might not work as expected. He does not think recession in probable in 2018 but later it might became inveitable
14% are functionally illiterate. Those people are at he bottom and will stay at the bottom.
Jan 23, 2019 | finance.yahoo.com

David Rubenstein, Co-Founder and Co-Executive Chairman of The Carlyle Group, sits down for a one on one with Yahoo Finance editor-in-chief Andy Serwer at the World Economic Forum's annual meeting in Davos, Switzerland. They discuss U.S.-China relations, Alexandria Ocasio-Cortez, income inequality, the government shutdown, and more.

[Jan 24, 2019] Davos 2019 the thing that scares hedge fund titan Ray Dalio the most

Jan 24, 2019 | finance.yahoo.com

Speaking at a panel discussion on the first day of the World Economic Forum (WEF) , Dalio said: "The US, Europe, China – all of those will experience a greater level of slowing, probably a greater level of disappointment.

"I think there's a reasonable chance that by end of that, monetary policy and fiscal policy will have to become easier relative to what is now discounted in the markets.

He added: " What scares me the most longer-term is that we have limitations to monetary policy, which is our most valuable tool, at the same time as we have greater political and social antagonism.

"So the next downturn worries me the most. There are a lot of parallels with the late 1930s.

READ MORE: Ray Dalio's three-step formula for anyone to start investing

"In 1929-1932 we had a debt crisis, and interest rates hit zero. Then there was a lot of printing of money and purchases of financial assets which drives financial assets higher.

"It creates also a polarity, a populism and an antagonism. We also had at that time the phenomenon of a rising power, like China, dealing with conflict with an existing power.

"These types of political issues are now very connected to economic issues in policy."

Asked at the summit in Switzerland about increasing debt levels and signs of a global slowdown, Dalio said the world economy was in the later stages of a short-term debt cycle.

READ MORE: What is Davos? The 2019 World Economic Forum explained

He said there had been an "inappropriate, mistaken desire to tighten monetary policy at a level that was faster than what the capital markets could handle."

The renowned 69-year-old investor, who authored a free book called ' Principles for Navigating Big Debt Crises', also offered his take on corporate debt levels.

He said: "W hen we cut corporate taxes and made interest rates low enough that it was attractive enough to buy financial assets, particularly by companies having mergers and acquisitions, that caused a lot of growth in corporate debt. And that growth in corporate debt was used to finance the purchases. That is going to be less."

He suggested a slowdown could increase the link between politics and economic policy, and predicted increased debate over a 70% income tax rate next year.

[Jan 23, 2019] Another sign of collapse of neoliberal ideology: discussion of 70% tax rate on income over 10 million is no longer viewed as anathema

Jan 23, 2019 | finance.yahoo.com

Billionaire Michael Dell, chief executive officer of the eponymous technology giant, rejected a suggestion by U.S. Representative Alexandria Ocasio-Cortez of a 70-percent marginal tax rate on the wealthiest Americans.

"No, I'm not supportive of that," Dell said at a Davos panel on making digital globalization inclusive. "And I don't think it will help the growth of the U.S. economy. Name a country where that's worked."

She may not be in Davos, but the New York representative's influence is being felt on the slopes of the Swiss Alps. Three weeks after Ocasio-Cortez floated the idea in an interview on "60 Minutes" to raise the top marginal tax rate on Americans' income of more than $10 million to 70 percent, it was a hot topic at the gathering of the global financial and political elite.

... ... ...

"My wife and I set up a foundation about 20 years ago and we would've contributed quite a bit more than a 70 percent tax rate on my annual income," Dell said. "I feel much more comfortable with our ability as a private foundation to allocate those funds than I do giving them to the government."

Erik Brynjolfsson, a professor at the Massachusetts Institute of Technology who was on the panel with Dell, said such a rate worked in the U.S. after World War II. But other executives were opposed, including Salesforce.com Inc. Co-Chief Executive Officer Keith Block.

... ... ...

Billionaire investor Ray Dalio suggested that the idea may have legs in the run-up to the U.S. presidential election. Discussing the outlook for a slowing world economy Tuesday, Dalio said that next year will see "the beginning of thinking about politics and how that might affect economic policy beyond. Something like the talk of the 70 percent income tax, for example, will play a bigger role." He didn't mention Ocasio-Cortez by name.

Currently in the U.S., the top marginal tax rate is 37 percent, which takes effect on income of more than $510,300 for individuals and $612,350 for married couples, according to the Tax Foundation.

The fortunes of a dozen attendees at the World Economic Forum in 2009 have soared by a combined $175 billion, a Bloomberg analysis found. The same cannot be said for people on the other end of the social spectrum: A report from Oxfam on Monday revealed that the poorest half of the world saw their wealth fall by 11 percent last year.

[Jan 22, 2019] The elite at Davos may have just destroyed the 2019 stock market rally

Jan 22, 2019 | finance.yahoo.com

Meanwhile, the International Monetary Fund slashed its global growth outlook for 2019 and 2020 the day before the WEF kicked off. Its growth forecasts for China in 2019 and 2020 -- 6.2% -- is lower than most top minds on Wall Street have modeled.

Credit Suisse came out today with a doozy of a 90-page "study" looking at global debt levels. A shout out like this in the report does nothing to engender confidence in risk assets: "Defaults are likely to rise in segments of the corporate debt markets once economic growth weakens more markedly or if monetary policy tightens further; in such a situation, an unwinding of positions could generate significant market stress due to illiquidity."

Credit Suisse Chairman Urs Rohner suggests on the first page of the report that a full-scale global debt blowup is unlikely. But the overall scope of the report is bearish to stocks, trust this writer who read the study in its entirety.

[Jan 22, 2019] Benito Mussolini defined fascism as "Barely able to slip a cigarette paper between business and government."

Jan 22, 2019 | discussion.theguardian.com

William Anthony -> BoneyOCoonassa , 15 Jan 2019 09:40

We've known since WW2, that fighting fascism is difficult. Benito Mussolini defined fascism as "Barely able to slip a cigarette paper between business and government." And when business runs government, we have even exceeded fascism. The new battle against fascism is not going to be easy.

[Jan 22, 2019] The International Monetary Fund serves up depressing new outlook on the world for investors to ponder

Notable quotes:
"... Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter ..."
Jan 22, 2019 | finance.yahoo.com

The International Monetary Fund just uncorked a sobering outlook on the global economy and asset markets for the elite billionaires huddled up in Davos, Switzerland for the World Economic Forum to ponder.

In its latest World Economic Update report, the IMF said Monday the global economy is projected to grow at a meager 3.5% this year and only accelerate to 3.6% in 2020. The outlooks for 2019 and 2020 are 0.2 percentage point and 0.1 percentage point below the IMF's projections issued in October.

Hat tips to the ongoing U.S. trade war with China, tightening financial conditions globally and more volatile risk asset markets.

The finer points: The IMF pretty much had nothing good to say on the outlooks for developed and emerging markets. Although that is nothing unusual for the IMF -- who often takes a cautious stance on its outlooks for economies and financial markets -- it may give many investors a wake up call amid a somewhat hot start to the stock market in 2019.

Of note, U.S. growth is seen slowing to 2.5% in 2019 and dipping to 1.9% in 2020 at the hands of the unwinding of fiscal stimulus (see Trump tax cuts), higher interest rates and the U.S. trade war with China. The IMF tossed the U.S. a bone by noting the pace of expansion is above the country's estimated potential growth in both years.

As for Europe, the IMF is now more bearish on growth compared to its October outlook. Growth for emerging and developing Europe in 2019 is forecast to cool to 0.7% (from 3.8% in 2018) and then bounce to 2.4% in 2020. Previously, the IMF was looking for growth of 2% and 2.8% in 2019 and 2020, respectively. Lackluster growth in Italy, France and Germany as well as policy tightening in Turkey are the main culprits for the IMF's European growth downgrade.

Growth in emerging and developing Asia is expected to drop from 6.5% in 2018 to 6.3% in 2019 and reach 6.4% in 2020, said the IMF. The IMF expects growth in China to be 6.2% both in 2019 and 2020 versus 6.6% in 2018.

Interestingly, the IMF incorporates the impact of continued tariffs by the U.S. on China and vice versa in its baseline forecast. In other words, the organization does not expect there to be a trade truce between the countries on their self-imposed March 1 deadline.

For the investors out there: For those bulls that have returned to beaten up stocks in January, the IMF does its best to squash the hopium infiltrating your brains. "A range of catalyzing events in key systemic economies could spark a broader deterioration in investor sentiment and a sudden, sharp repricing of assets amid elevated debt burdens. Global growth would likely fall short of the baseline projection if any such events were to materialize and trigger a generalized risk-off episode," cautioned the IMF.

China's growth slowdown is also a risk that the IMF suggests investors don't fully appreciate.

"As seen in 2015�16, concerns about the health of China's economy can trigger abrupt, wide reaching sell-offs in financial and commodity markets that place its trading partners, commodity exporters, and other emerging markets under pressure," the IMF pointed out.

The bottom line: The IMF isn't exactly super plugged into global asset markets in the same vein as forecasters at Goldman Sachs and Morgan Stanley. But their latest assessment of the global economy and risk markets offers up a good counterbalance to the enthusiasm that has begun to creep back into financial markets after the October 2017 through December 2018 rout.

Happy trading, folks.

Brian Sozzi is an editor-at-large at Yahoo Finance. Follow him on Twitter

[Jan 19, 2019] Stock Rebound Will Collapse as Recession Risk Rises Morgan Stanley

Jan 19, 2019 | finance.yahoo.com

The stock market has staged a rebound in January, but Morgan Stanley sees a number of bearish indicators. Indeed, they estimate that odds of the U.S. economy slipping into a recession are now the highest since the financial crisis of 2008, and they project that the S&P 500 Index (SPX) ultimately will settle back to a value of 2,400 in 2019, revisiting the recent lows seen in December and more than 18% below the record high set in September 2018. "We expect upcoming negative data will prove 2600-2650 [on the S&P 500] to be a good sale before a proper retest of the December lows," Morgan Stanley says in the latest Weekly Warm-Up report from their U.S. equity strategy team headed by Michael Wilson.

[Jan 17, 2019] The financial struggles of unplanned retirement

People who are kicked out of their IT jobs around 55 now has difficulties to find even full-time McJobs... Only part time jobs are available. With the current round of layoff and job freezes, neoliberalism in the USA is entering terminal phase, I think.
Jan 17, 2019 | finance.yahoo.com

A survey by Transamerica Center for Retirement Studies found on average Americans are retiring at age 63, with more than half indicating they retired sooner than they had planned. Among them, most retired for health or employment-related reasons.

... ... ...

On April 3, 2018, Linda LaBarbera received the phone call that changed her life forever. "We are outsourcing your work to India and your services are no longer needed, effective today," the voice on the other end of the phone line said.

... ... ...

"It's not like we are starving or don't have a home or anything like that," she says. "But we did have other plans for before we retired and setting ourselves up a little better while we both still had jobs."

... ... ...

Linda hasn't needed to dip into her 401(k) yet. She plans to start collecting Social Security when she turns 70, which will give her the maximum benefit. To earn money and keep busy, Linda has taken short-term contract editing jobs. She says she will only withdraw money from her savings if something catastrophic happens. Her husband's salary is their main source of income.

"I am used to going out and spending money on other people," she says. "We are very generous with our family and friends who are not as well off as we are. So we take care of a lot of people. We can't do that anymore. I can't go out and be frivolous anymore. I do have to look at what we spend - what I spend."

Vogelbacher says cutting costs is essential when living in retirement, especially for those on a fixed income. He suggests moving to a tax-friendly location if possible. Kiplinger ranks Alaska, Wyoming, South Dakota, Mississippi, and Florida as the top five tax-friendly states for retirees. If their health allows, Vogelbacher recommends getting a part-time job. For those who own a home, he says paying off the mortgage is a smart financial move.

... ... ...

Monica is one of the 44 percent of unmarried persons who rely on Social Security for 90 percent or more of their income. At the beginning of 2019, Monica and more than 62 million Americans received a 2.8 percent cost of living adjustment from Social Security. The increase is the largest since 2012.

With the Social Security hike, Monica's monthly check climbed $33. Unfortunately, the new year also brought her a slight increase in what she pays for Medicare; along with a $500 property tax bill and the usual laundry list of monthly expenses.

"If you don't have much, the (Social Security) raise doesn't represent anything," she says with a dry laugh. "But it's good to get it."

[Jan 17, 2019] Jamie Dimon Next US recession won't look like 07

Notable quotes:
"... On Tuesday, Dimon and JPMorgan CFO Marianne Lake said they think the current outlook for growth is positive considering the consumer is still strong and healthy. ..."
Jan 17, 2019 | finance.yahoo.com

During an interview with FOX Business earlier this month, Dimon told FOX Business' Maria Bartiromo that while it didn't look like a recession was imminent, there will eventually be a meaningful slowdown.

"There will be a recession one day. So when people say, 'Is there going to be a recession?' Yeah, I don't know when it's going to be, but there will be one and something will trigger it and it will be a little bit different than the last one," he said.

On Tuesday, Dimon and JPMorgan CFO Marianne Lake said they think the current outlook for growth is positive considering the consumer is still strong and healthy.

For the fourth quarter, the largest U.S. bank by assets reported lower-than-expected profit despite gains from higher interest rates and a bump within its loan sector. Losses were driven by market volatility, global growth worries and an ongoing trade war between the U.S. and China.


Ryan S 8 hours ago

Yes the pending recession will cause many debt bubbles to burst and not just isolated primarily to banking and housing sector.

Think of what happens to the college/university system when student can no longer get loans for subsidized rates. A house or vehicle can serve as an asset to be used as collateral to control rate ceilings. However, there is no collateral in Billy and Genie's BA History degree. Good luck to all these ivory tower universities when your funding dries up and nobody can afford your way overpriced programs. Anubis 9 hours ago I have read Americans hold over 50 trillion in debt yet over half the population has only $1,000 in savings.

Bob 9 hours ago

Why is the US increasing deficit spending doing a good economy???? Reply
s 8 hours ago
Why does no one ask....why does higher education cost so much compared to other costs? The rate of increases in higher education is never challenged by anyone. It is automatically assumed good. People are so blind and accepting.
Bart 7 hours ago
"At some point in the future we will have a recession and it will be a little bit different from the last recession." He is paid $28,500,000.00 a year and sounds like my car mechanic.
buddhist 8 hours ago
Same like it was in 2007. Everything in the world was fine until Lehmann declared bankruptcy and hell started to break. May be this time around it's Deutsche bank's turn.
Sam 5 hours ago
Signs of the economy slowing are everywhere. Company earnings are down and layoffs are increasingly more common. Min wage jobs might be plentiful right now, but that will change in less than a year. Better hold on and you better keep your job. Next recession will eliminate a lot of jobs. Those over 40 - forget it.
Chinas Love 8 hours ago
The next recession will occur when the US government hit over $25 Trillion in debt thus surpassing out total GDP thus making the US bankrupt or Trump enacts the remaining $600 billion of the $820 Billion in tariffs on China and the rest of the world because China trade deficit has grown under his watch to historic levels each each!

[Jan 17, 2019] Managerialism is synonym for corporatism

Jan 17, 2019 | discussion.theguardian.com

JulesBywaterLees -> Zagradotryad , 29 Nov 2018 08:29

Managerialism is a state of European/Western politics, power has moved to large corporations. In 2008 the finance industry held countries to ransom...
Zagradotryad , 29 Nov 2018 08:03

power that has become too distant from the people.

That's the problem.

It's not technology, or Russians, or Trump or any other of the things you throw up to convince yourself the problem is external.

Managerialism has merely delivered gross inequality. The tools don't matter.

[Jan 17, 2019] The Coke or Pepsi and parties is a perfect corporatist arrangement, which guarantee filtering out any opposition to the oligarchy in 99 percent of elections

Only a severe political crisi can shake this "controlled duopoly" of the US coporatism.
Jan 16, 2019 | theguardian.com

William Williamson, 15 Jan 2019 10:38

Well put. All the USA has is Coke or Pepsi. With a lot of masquerading in between. A couple people who aren't on THE payroll, or wanting to be.
MyGenericUsername , 15 Jan 2019 07:38
Half of Americans don't bother voting for president. Why is the American media full only of people who insist that the country is divided in half between Democrat and Republican supporters? Where are the people of influence who think it's a problem and reflects poorly on the country that half of eligible voters don't see a reason to participate, and that it's worth changing things in order to get more people to change their minds about that?

Both parties are content with being unpopular, but with political mechanisms ensuring they stay in power anyway. The Democrats aren't concerned with being popular. They're content with being a token opposition party that every once in a while gets a few token years with power they don't put to any good anyway. It pays more, I guess.

CanSoc , 15 Jan 2019 07:34
It still looks like if Americans want to live in a progressive country, they'll have to move to one. But as it is clear that the neoliberalism of establishment Democrats has little or nothing to offer the poor and working class, or to non-wealthy millennials, the times they are a-changing.

[Jan 16, 2019] Corporatism is the control of government by big business. This is what we have in the USA today. The main difference between corporatism and fascism is the level of repressions against opposition. Corporatism now tales forma of inverted totalitarism and use ostracism instead of phycal repressions

Jan 16, 2019 | profile.theguardian.com

ChesBay -> KMdude 15 Jan 2019 10:07

That is why we need a Constitutional amendment to get the money OUT of politics. Make bribery illegal. THEN, we will not need Wall Street, which doesn't serve MOST of the population of this country, and is mostly responsible for the wealth gap and lack of opportunities for most of the population.
ChesBay , 15 Jan 2019 10:05
I'm not fooled. These are not progressives, they are corporatists, beholden to their donors. They have no courage, no interest in serving their constituencies, but are only interested in the power and money. What our country , and the world, needs is radical change from the profit-first point of view. I won't support either one of them.
William Anthony , 15 Jan 2019 09:28
It comes as no surprise that Wall Street runs the US Government.

Benito Mussolini defined fascism as "Barely able to slip a cigarette paper between business and government."

The US is a de-facto fascism.

[Jan 13, 2019] This is Main Street versus Wall Street. This is honest books versus dirty books by Greg Hunter

Notable quotes:
"... I watched Greg Hunter's show on this. Very disturbing because of it's currency. This backdoor off-the-books financing of whatever they want is as she says, the introduction of free fascism in the US. ..."
"... Deep State is REAL: https://www.youtube.com/watch?v=LLTzpDFGWjI ..."
Jan 13, 2019 | www.zerohedge.com

Via Greg Hunter's USAWatchdog.com,

originally from: Secret Money For Private Armies Austin Fitts Exposes America's Open Running Bailout

Investment advisor and former Assistant Secretary of Housing Catherine Austin Fitts says it looks like a "global recession is coming."

Is that going to cause the debt reset we've been hearing about for years? Fitts says, " Make no mistake about it, there is no reason for the federal government to default or monkey with any debt because they can literally print the currency..."

" The question is how do they make sure whatever they are printing really holds any kind of store of value. I think the reason you are seeing them reengineer the federal bureaucracy and financial transactions infrastructure is because they want much greater and tighter control to do whatever they do, and that includes to continue to debase the currency. They could do this (reset) entirely by debasing the currency...

What we are watching . . . is essentially a coup. We had a financial coup, and now we are watching a legal coup to consolidate that financial coup. I would keep my eye on the fundamental governance structure of the U.S. The important thing is not what they do. The important thing is who controls no matter what they do. Now, we have created a mechanism for them to control entirely in secret and create policies entirely in secret, including around the back of a U.S. President... It's pirating by the 'just do it' method. I said to someone the other day, what is it about secret money for secret private armies that you don 't understand? "

$21 trillion in "missing money" at the DOD and HUD that was discovered by Dr. Mark Skidmore and Catherine Austin Fitts in 2017 has now become a national security issue.

The federal government is not talking or answering questions, even though the DOD recently failed its first ever audit. Fitts says, "This is basically an open running bailout..."

"Under this structure, you can transfer assets out of the federal government into private ownership, and nobody will know and nobody can stop it. There is no oversight whatsoever. You can't even know who is doing it. I'm telling you they just took the United States government, they just changed the governance model by accounting policy to a fascist government. If you are an investor, you don't know who owns those assets, and there is no evidence that you do...

If the law says you have to produce audited financial statements and you refuse to do so for 20 years, and then when somebody calls you on it, you proceed to change the accounting laws that say you can now run secret books for all the agencies and over 100 related entities ."

In closing, Fitts says, "We cannot sit around and passively depend on a guy we elected President..."

"The President cannot fix this. We need to fix this...

This is Main Street versus Wall Street. This is honest books versus dirty books. If you want the United States in 10 years to resemble anything what it looked like 20 years ago, you are going to have to do it, and there is no one else who can do it. You have to first get the intelligence to know what is happening."

Join Greg Hunter as he goes One-on-One with Catherine Austin Fitts, Publisher of "The Solari Report."

https://www.youtube.com/embed/Mi6S4zrFjPg

To Donate to USAWatchdog.com


Withdrawn Sanction , 15 minutes ago link

"If the law says you have to produce audited financial statements and you refuse to do so for 20 years, and then when somebody calls you on it, you proceed to change the accounting laws that say you can now run secret books for all the agencies and over 100 related entities ."

She's referring to FASB standards, but those dont sound like a Constitutional Amendment to me.

Article i, Section 9, paragraph 7: "No Money shall be drawn from the Treasury, but in Consequence of Appropriations made by Law; and a regular Statement and Account of the Receipts and Expenditures of all public Money shall be published from time to time."

Perhaps when $20+ trillion are involved, the Constitution be damned, I suppose. Or perhaps the govt boys will claim the $20T didn't come from an appropriation but instead from their own "industrious" activities...you know, like drug and gun running, and human trafficking perhaps?

DjangoCat , 21 minutes ago link

I watched Greg Hunter's show on this. Very disturbing because of it's currency. This backdoor off-the-books financing of whatever they want is as she says, the introduction of free fascism in the US.

Is the Donald on this case? Sure hope so.

JBlount123 , 22 minutes ago link

Deep State is REAL: https://www.youtube.com/watch?v=LLTzpDFGWjI

Duc888 , 24 minutes ago link

One of the smartest women out there. Huge fan here. She almost got snuffed for blowing the whistle at HUD (two sets of books and all). It's only recently that she's come out and said that there's no such thing as the "money being lost". It's digital and 100% traceable.

Arrowflinger , 15 minutes ago link

Fitts is correct and her approach is sound. Money flows are traceable. The problem is more complicated, though. As Enron proved and the Parmalat scandal cemented, the CRONY CUT is fatal. The Auditors gave up fiduciary duties for FIDOCIARIES riches. They rolled over and played dead.

Duc888 , 12 minutes ago link

They've already tried to off her. They broke her financially and she bounced back. She made a lot of enemies but luckily she has some good friends in high places too. Watch a few Vids about what they did to her after she blew the whistle at HUD. She's lucky to be above ground.

Her extensive studies and reports that follow crack cocaine being dumped into various areas the subsequent drug related violence and BS "WOD" response and then what happened to the real estate, as in, WHO WINDS UP BUYING block after block after block of blighted buildings is absolutely fascinating . She should have gotten more recognition for those exhaustive studies.

There's a VERY LARGE HAND at work there...for profit.

[Jan 13, 2019] More Americans fleeing high-tax states

Jan 13, 2019 | finance.yahoo.com

Last year, these were the ten highest income tax states, according to TurboTax (*These rates do not include local taxes.):

[Jan 13, 2019] Goldman Sachs Says Markets Indicate a 50% Chance of a Recession

Notable quotes:
"... However, despite the signs, Goldman Sachs assumes the indicators are wrong and that "recession risk remains fairly low, in the neighborhood of 15% over the next year." The bank has predicted that the S&P 500 will finish 2019 at 3,000, up from the current value just below 2,600. ..."
Jan 13, 2019 | finance.yahoo.com

Confidence in continued economic growth has been waning. A huge majority of chief financial officers around the world say a recession will happen by the end of 2020. Most voters think one will hit by the end of this year.

Now the Goldman Sachs economic research team says that the market shows a roughly 50% chance of a recession over the next year, according to Axios.

Goldman Sachs looked at two different measures: the yield curve slope and credit spreads. The former refers to a graph of government bond interest rates versus the years attaining maturity requires. In a growing economy, interest rates are higher the longer the investment because investors have confidence in the future. A frequent sign of a recession is the inversion of the slope, when investors are uncertain about the future, so are less willing to bet on it.

Credit spreads compare the interest paid by government bonds, which are considered the safest. Corporate bonds, which are riskier, of the same maturity have to offer higher interest rates. As a recession approaches, credit spreads tend to expand, as investors are more worried about companies defaulting on their debt.

However, despite the signs, Goldman Sachs assumes the indicators are wrong and that "recession risk remains fairly low, in the neighborhood of 15% over the next year." The bank has predicted that the S&P 500 will finish 2019 at 3,000, up from the current value just below 2,600.

[Jan 13, 2019] UAE energy minister says average oil price in 2018 was $70 a barrel

Jan 13, 2019 | finance.yahoo.com

ABU DHABI (Reuters) - United Arab Emirates Energy Minister Suhail al-Mazrouei said on Saturday the average oil price in 2018 was $70 a barrel.

The Organization of the Petroleum Exporting Countries and other leading global oil producers led by Russia agreed in December to cut their combined oil output by 1.2 million barrels per day to balance the oil market starting from January.

"Today we look at an average year of around $70 for Brent," Mazrouei told an industry news conference in Abu Dhabi, adding that this level would help encourage global oil investments. An energy ministry spokesman said the minister was referring to the average oil price in 2018.

[Jan 13, 2019] Canada's Crude Oil Production Cuts Are Unsustainable by Haley Zaremba

I especially like the phase "This directive was particularly surprising in the context of Canada's free market economy" That's really deep understanding of the situation ;-) . It is so difficult to understand that Canada as a large oil producer, needs higher oil prices and it does not make sense from the point of market economy to pollute the environment and at the same time lose money in the process ?
Notable quotes:
"... Alberta's oil production has been cut 8.7 percent according to the mandate set by the province's government under Rachel Notley with the objective of cutting out around 325,000 barrels per day from the Canadian market. ..."
"... So far, the government-imposed productive caps have been extremely successful. In October Canadian oil prices were so depressed that the Canadian benchmark oil Western Canadian Select (WCS) was trading at a whopping $50 per barrel less than United States benchmark oil West Texas Intermediate (WTI). now, in the wake of production cuts, the price gap between WCS and WTI has diminished by a dramatic margin to a difference of just under $13 per barrel. ..."
"... The current production caps in Canada are only intended to last through the middle of this year, at which point Canadian oil companies will be permitted to decrease their cutbacks to just 95,000 barrels per day fewer than the numbers from November 2018's production rates. ..."
Jan 13, 2019 | finance.yahoo.com

In an attempt to combat a ballooning oil glut and dramatically plummeting prices, the premier of Alberta Rachel Notley introduced an unprecedented measure at the beginning of December when she is mandating that oil companies in her province cut production. This directive was particularly surprising in the context of Canada's free market economy, where oil production is rarely so directly regulated.

Canada's recent oil glut woes are not due to a lack of demand, but rather a severe lack of pipeline infrastructure. There is plenty of demand, and more than enough supply, but no way to get the oil flowing where it needs to go. Canada's pipelines are running at maximum capacity, storage facilities are filled to bursting, and the pipeline bottleneck has only continued to worsen . Now, in an effort to alleviate the struggling industry, Alberta's oil production has been cut 8.7 percent according to the mandate set by the province's government under Rachel Notley with the objective of cutting out around 325,000 barrels per day from the Canadian market.

Even before the government stepped in, some private oil companies had already self-imposed production caps in order to combat the ever-expanding glut and bottomed-out oil prices. Cenovus Energy, Canadian Natural Resource, Devon Energy, Athabasca Oil, and others announced curtailments that totaled around 140,000 barrels a day and Cenovus Energy, one of Canada's major producers, even went so far as to plead with the government to impose production caps late last year.

So far, the government-imposed productive caps have been extremely successful. In October Canadian oil prices were so depressed that the Canadian benchmark oil Western Canadian Select (WCS) was trading at a whopping $50 per barrel less than United States benchmark oil West Texas Intermediate (WTI). now, in the wake of production cuts, the price gap between WCS and WTI has diminished by a dramatic margin to a difference of just under $13 per barrel.

Related: The Natural Gas Crash Isn't Over

While on the surface this would seem to be a roundly glowing review of the production caps in Alberta, production cuts are not a long-term solution for Canada's oil glut woes. The current production caps in Canada are only intended to last through the middle of this year, at which point Canadian oil companies will be permitted to decrease their cutbacks to just 95,000 barrels per day fewer than the numbers from November 2018's production rates. The cuts are a just a treatment, not a cure, for oversupply in Alberta. The problem needs to be addressed at its source--the pipelines.

Unfortunately, the pipeline shortage in Alberta has no quick and easy fix. While there are multiple major pipeline projects underway, the two largest, the Keystone XL pipeline and the Trans Mountain pipeline, are stalled indefinitely thanks to legal woes and seemingly endless litigation. The Enbridge Line 3 pipeline, intended to replace one of the region's already existing pipelines, is currently under construction and projected to be up and running by the end of the year, but will not go a long way toward fixing the bottleneck.

Even if the Albertan government re-evaluates the present mid-2019 expiration date for the current stricter production cuts, extending the production caps could have enduring negative consequences in the region's oil industry. Keeping a long-term cap on production in Alberta would potentially discourage investment in future production as well as in the infrastructure the local industry so sorely needs. According to some reporting , the cuts will not be able to control the gap between Canadian and U.S. oil for much longer anyway, just another downside to drawing out what should be a short-term solution. The government will need to weigh the possible outcomes very carefully as the expiration date approaches, when the and the pipeline shortage is still a long way from being solved and the price of oil remains dangerously variable.

By Haley Zaremba for Oilprice.com

[Jan 12, 2019] Gundlach Warns U.S. Economy Is Floating on 'an Ocean of Debt'

Jan 12, 2019 | finance.yahoo.com

(Bloomberg) -- Jeffrey Gundlach said yet again that the U.S. economy is gorging on debt.

Echoing many of the themes from his annual "Just Markets" webcast on Tuesday, Gundlach took part in a round-table of 10 of Wall Street's smartest investors for Barron's. He highlighted the dangers especially posed by the U.S. corporate bond market.

Prolific sales of junk bonds and significant growth in investment grade corporate debt, coupled with the Federal Reserve weaning the market off quantitative easing, have resulted in what the DoubleLine Capital LP boss called "an ocean of debt."

The investment manager countered President Donald Trump's claim that he's presiding over the strongest economy ever. The growth is debt-based, he said.

Gundlach's forecast for real GDP expansion this year is just 0.5 percent. Citing numbers spinning out of the USDebtClock.org website, he pointed out that the U.S.'s unfunded liabilities are $122 trillion -- or six times GDP.

"I'm not looking for a terrible economy, but an artificially strong one, due to stimulus spending," Gundlach told the panel. "We have floated incremental debt when we should be doing the opposite if the economy is so strong."

Stock Bear

Gundlach is coming off another year in which his Total Return Bond Fund outperformed its fixed-income peers. It returned 1.8 percent in 2018, the best performance among the 10 largest actively managed U.S. bond funds, according to data compiled by Bloomberg.

Gundlach expects further declines in the U.S. stock market, which recently have steadied after reeling for most of December since the Great Depression. Equities will be weak early in the year and strengthen later in 2019, effectively a reversal of what happened last year, he said.

"So now we are in a bear market, which isn't defined by me as stocks being down 20 percent. A bear market is determined by the way stocks are acting," he said.

Rupal Bhansali, chief investment officer of International & Global Equities at Ariel Investments, picked up on Gundlach's debt theme in the Barron's cover story. Citing General Electric's woes, she urged investors to focus more on balance-sheet risk rather than whether a company could beat or miss earnings. Companies with net cash are worth looking at, she said.

To contact the reporters on this story: James Ludden in New York at [email protected];Hailey Waller in New York at [email protected]

To contact the editors responsible for this story: Matthew G. Miller at [email protected], Ros Krasny

For more articles like this, please visit us at bloomberg.com

[Jan 12, 2019] These US companies employ the most H-1B visa holders

Jan 12, 2019 | finance.yahoo.com

One of the most sought-after visa programs in the U.S., the H-1B, could see some significant changes in 2019, according to President Trump , including a potential path to citizenship for recipients of the non-immigrant visa.

The H-1B visa program allows U.S. employers to hire graduate-level workers in specialty occupations, like IT, finance, accounting, architecture, engineering, science and medicine. Any job that requires workers to have at least a bachelor's degree falls under the H-1B for specialty occupations.

Each year, the U.S. Citizenship and Immigration Services (USCIS) allots about 85,000 of the H-1B visas -- 65,000 for applicants with a bachelor's degree or equivalent, and 20,000 for those with a master's degree or higher.

As of April 2017, when Trump signed an executive order -- "Buy American and Hire American" -- it's become more difficult for U.S. companies to hire people via H-1B. It directs the Department of Homeland Security to only grant the visas to the "most-skilled or highest-paid beneficiaries."

Here's a look at the American companies (and industries) that benefited the most from the program in 2017.

Cognizant: The IT services business had a whopping 3,194 H-1B initial petitions approved in 2017, the most of any U.S. company by almost 600.

Amazon: In 2017, the e-commerce behemoth hired 2,515 employees via the H-1B visa program, according to data compiled by the National Foundation for American Policy . That was about a 78 percent increase from 2016, or 1,099 more employees.

Microsoft: Microsoft hired 1,479 workers through H-1B in 2017, the second most of U.S. companies -- an increase in 334 employees from the year prior, or close to 29 percent.

IBM: In 2017, IBM employed about 1,231 workers through the H-1B visa program.

Intel: The California-based company employed 1,230 workers through H-1B in 2017, 200 more workers -- or a 19 percent increase -- compared to 2016.

Google: The search engine giant had 1,213 H-1B initial petitions approved for fiscal year 2017, a 31 percent increase of about 289 from 2016.

[Jan 11, 2019] How Shocking Was Shock Therapy

Highly recommended!
Notable quotes:
"... You should have come here in the 90's to see a shock of the Doctrine to face social trauma of "PGR"(Huge National Farms) workers (it's the electorate of PiS (Law and Justice)), Miners near Wałbrzych, workers of textile industry near łï¿½dź bereft of everything from day to day (literally). Even the contemporary visit might ensure you quite a thrill if you knew where to look. Most of the firms that would easily survive if given some protectionism were hostily taken over by a foreigner capital and shut down with their production instantly replaced by imported goods. ..."
"... I do remember his speeches well. Form the spectrum offered by the Chicago boys he chosen the hardest option. It was Michnik and Kuroń who opted for less "Chicago" direction. But they were in minority. The prevailing Zeitgeist of the period caused words "social", "common" to be treated as a curse and socially stigmatizing. ..."
"... For a better understanding what went wrong you may take example of railroad privatization and compare it to the Czech way. ..."
"... the global elite perspective is that a quick way to rid the globe of the problems we face is to kill off enough people so that the problem dissipates -- war, fraud, nationalism/racism used to point the finger at the other (making it easier for people to harm one another or look the other way (Arendt). ..."
"... Efficiency requires a variety of gains, returns, profits and fairness. Otherwise it is simply theft. And when all is accounted for there might not be any profit to be had in the real world. Only in the minds of the neoliberals. Efficiency is something that should be accounted for carefully so that no vital systems are harmed. ..."
Jan 11, 2019 | www.nakedcapitalism.com

likbez , January 11, 2019 at 1:33 am

The level of the naivety of Barkley Rosser is astounding.

Poland was a political project, the showcase for the neoliberal project in Eastern Europe and the USSR. EU was pressed to provide large subsidies, and that marionette complied. The commenter ilpalazzo (above) is right that there has been " a tremendous development in real estate and infrastructure mostly funded by the EU that has been a serious engine of growth." Like in Baltics and Ukraine, German, French, Swedish and other Western buyers were most interested in opening market for their products and getting rid of local and xUSSR competitors (and this supported and promoted Russophobia). With very few exceptions. University education system also was partially destroyed, but still fared better than most manufacturing industries.

I remember talking to one of the Polish professors of economics when I was in Poland around 1992. He said that no matter how things will develop, the Polish economy will never be allowed to fail as the USA is interested in propelling it at all costs. Still, they lost quite a bit of manufacturing: for example all shipbuilding, which is ironic as Lech Wałęsa and Solidarity emerged in this industry.

Eventually, Poland emerged as the major US agent of influence within the EU (along with GB) with the adamant anti-Russian stance. Which taking into account the real state of Polish manufacturing deprived of the major market is very questionable. Later by joining sanctions, they lost Russian agricultural market (including all apple market in which they have a prominent position).

But they have a large gas pipeline on their territory, so I suspect that like Ukraine they make a lot of money via transit fees simply due to geographic. So they parochially live off rent -- that why they bark so much at North Stream 2.

Polish elite is a real horror show, almost beyond redemption, and not only in economics. I do not remember, but I think it was Churchill who said " Poland is a greedy hyena of Europe." This is as true now as it was before WWII.

Jura , January 11, 2019 at 4:54 am

Gosh! I used to actively fight the commies here in the 80's. But then with Balcerowicz I almost regretted it. as to your words:

"Balcerowicz himself at one point advocated something pretty much like what came to pass, a gradual privatization and maintaining most of the sociaal safety net while advocating shock monetary policies to bring inflation under control." � They derail.

You should have come here in the 90's to see a shock of the Doctrine to face social trauma of "PGR"(Huge National Farms) workers (it's the electorate of PiS (Law and Justice)), Miners near Wałbrzych, workers of textile industry near łï¿½dź bereft of everything from day to day (literally). Even the contemporary visit might ensure you quite a thrill if you knew where to look. Most of the firms that would easily survive if given some protectionism were hostily taken over by a foreigner capital and shut down with their production instantly replaced by imported goods.

I do remember his speeches well. Form the spectrum offered by the Chicago boys he chosen the hardest option. It was Michnik and Kuroń who opted for less "Chicago" direction. But they were in minority. The prevailing Zeitgeist of the period caused words "social", "common" to be treated as a curse and socially stigmatizing.

For a better understanding what went wrong you may take example of railroad privatization and compare it to the Czech way.

Don't believe the official statistics, we have a huge part of our working poors here. Their voice will never be heard as they live in a subsistence economy and the've got neither time nor power to shout struggling to survive..

John Mc , January 11, 2019 at 11:28 am

One wonders why there is a need to revisit Klein's thesis to debunk parts of it in this moment?

And the point is so small in this article about Poland, that one wonders why a James Madison prof of econ does not have more time to look at significant problems everywhere instead of parse the progressive beast?

In my lifetime, I have not witnessed a time where more of the political machinery has drifted to the right -- caught in the headlights of what Chris Hedges calls the illusion of democracy in the decay of capitalism.

Its important to not forget Gina Haspel's contribution here and torture -- how torture (economic, physical, and social shock) is implicated, vaulting her to the head of our top Spy agency --

It reminds me of a recent article from Arundhati Roy's, that the global elite perspective is that a quick way to rid the globe of the problems we face is to kill off enough people so that the problem dissipates -- war, fraud, nationalism/racism used to point the finger at the other (making it easier for people to harm one another or look the other way (Arendt).

Susan the Other , January 11, 2019 at 1:21 pm

China is wisely looking at the efficiency of state owned enterprises with a reluctance to privatize them. It will become very clear now that everyone is sobering up from the collapse of the USSR that neoliberal capitalist efficiency (profits) can only be made by socializing costs and externalizing everything that reduces their bottom line with answers like "That ain't mine."

If even the doofuses at Davos are looking at various forms of "capital" (social, political, civil, environmental, etc.) they have begun to mitigate their global catastrophe.

Efficiency requires a variety of gains, returns, profits and fairness. Otherwise it is simply theft. And when all is accounted for there might not be any profit to be had in the real world. Only in the minds of the neoliberals. Efficiency is something that should be accounted for carefully so that no vital systems are harmed.

bruce wilder , January 11, 2019 at 2:17 pm

Barkley insists on a left-right split for his analysis of political parties and their attachment to vague policy tendencies and that insistence makes a mess of the central issue: why the rise of right-wing populism in a "successful" economy?

Naomi Klein's book is about how and why centrist neoliberals got control of policy. The rise of right-wing populism is often supposed (see Mark Blyth) to be about the dissatisfaction bred by the long-term shortcomings of or blowback from neoliberal policy.

Barkley Rosser treats neoliberal policy as implicitly successful and, therefore, the reaction from the populist right appears mysterious, something to investigate. His thesis regarding neoliberal success in Poland is predicated on policy being less severe, less "shocky".

In his left-right division of Polish politics, the centrist neoliberals -- in the 21st century, Civic Platform -- seem to disappear into the background even though I think they are still the second largest Party in Parliament, though some seem to think they will sink in elections this year.

Electoral participation is another factor that receives little attention in this analysis. Politics is shaped in part by the people who do NOT show up. And, in Poland that has sometimes been a lot of people, indeed.

Finally, there's the matter of the neoliberal straitjacket -- the flip-side of the shock in the one-two punch of "there's no alternative". What the policy options for a Party representing the interests of the angry and dissatisfied? If you make policy impossible for a party of the left, of course that breeds parties of the right. duh.

Likbez,

Bruce,

Blowback from the neoliberal policy is coming. I would consider the current situation in the USA as the starting point of this "slow-motion collapse of the neoliberal garbage truck against the wall." Neoliberalism like Bolshevism in 1945 has no future, only the past. That does not mean that will not limp forward in zombie (and pretty bloodthirsty ) stage for another 50 years. But it is doomed, notwithstanding recently staged revenge in countries like Ukraine, Argentina, and Brazil.

Excessive financialization is the Achilles' heel of neoliberalism. It inevitably distorts everything, blows the asset bubble, which then pops. With each pop, the level of political support of neoliberalism shrinks. Hillary defeat would have been impossible without 2008 events.

At least half of Americans now hate soft neoliberals of Democratic Party (Clinton wing of Bought by Wall Street technocrats), as well as hard neoliberal of Republican Party, which created the " crisis of confidence" toward governing neoliberal elite in countries like the USA, GB, and France. And that probably why the intelligence agencies became the prominent political players and staged the color revolution against Trump (aka Russiagate ) in the USA.

The situation with the support of neoliberalism now is very different than in 1994 when Bill Clinton came to power. Of course, as Otto von Bismarck once quipped "God has a special providence for fools, drunkards, and the United States of America." and another turn of the technological spiral might well save the USA. But the danger of never-ending secular stagnation is substantial and growing. This fact was admitted even by such dyed-in-the-wool neoliberals as Summers.

This illusion that advances in statistics gave neoliberal access to such fine-grained and timely economic data, that now it is possible to regulated economy indirectly, by strictly monetary means is pure religious hubris. Milton Friedman would now be laughed out the room if he tried to repeat his monetarist junk science now. Actually he himself discarded his monetarist illusions before he died.

We probably need to the return of strong direct investments in the economy by the state and nationalization of some assets, if we want to survive and compete with China. Australian politicians are already openly discussing this, we still lagging because of "walking dead" neoliberals in Congress like Pelosi, Schumer, and company.

But we have another huge problem, which Australia and other countries (other than GB) do not have: neoliberalism in the USA is a state religion which completely displaced Christianity (and is hostile to Christianity), so it might be that the lemming will go off the cliff. I hope not.

The only thing that still keeps neoliberalism from being thrown out to the garbage bin of history is that it is unclear what would the alternative. And that means that like in 1920th far-right nationalism and fascism have a fighting chance against decadent neoliberal oligarchy.

Previously financial oligarchy was in many minds associated with Jewish bankers. Now people are more educated and probably can hang from the lampposts Anglo-Saxon and bankers of other nationalities as well ;-)

I think that in some countries neoliberal oligarchs might soon feel very uncomfortable, much like Soros in Hungary.

As far as I understood the level of animosity and suppressed anger toward financial oligarchy and their stooges including some professors in economics departments of the major universities might soon be approaching the level which existed in the Weimar Republic. And as Lenin noted, " the ideas could become a material force." This true about anger as well.

[Jan 08, 2019] The smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the more money it siphons off from the productive sectors

Highly recommended!
There is probably an optimum size of financial sector after which it easily go out of control and start grabbing political power. So it is important to prohibit banksters to participate in political activity of any kind or in lobbing. Lobbing by financial sector should be criminalized. They also should be prohibited from hired any for government employee for 10 years after he/she left this/her position in government (revolving door style of corruption).
The other interesting point is that taxes can server as powerful inhibitor of destructive behaviour of financial sector. So the fight for the level of taxation of particular social groups is the most important political fight in modern society.
Also some actions of banksters sho</blockquote>uld be criminalized with high duration of jail term, just to create negative incentives for certain types of behavior. For example selling insurance without adequate capital to cover loses. Also important is to criminalize changing more then a minimum fees (say, 0.25% a year) in 401K accounts as well as provided insufficiently diversified 401k portfolios.
Jan 08, 2019 | neweconomicperspectives.org
Ben | March 18, 2014 at 5:32 pm

This was a fascinating piece, very readable for those of us with minimal financial education. However, since this is such a good explainer for the layman, I think it would be very beneficial to explain how big a difference 1% in fees makes for an investor over a lifetime. I know personally when I used to compare funds the difference between 1 and 2% in fees seemed negligible. But then I saw that fantastic PBS Frontline on this topic and saw how much that 1% could cost me over a lifetime! I now have everything that I personally manage in index funds!

Doc | March 19, 2014 at 5:26 am

You can't really argue with what has been said, and all (of us) involved in the sector know it is massive rip off.

While a free market advocate, I think a first step would be to introduce meaningful fee caps on all state promoted or mandated saving arrangements (eg ISAS, and Pensions), on the grounds that the market is skewed by the government intervention that creates the glut of forced buyers, and so to correct that imbalance the market (i.e. consumers) need protection through fee caps. I'd say no more than 20 – 25bps should be permitted for all ISAS and pension savings (DC or DB). Individual wealthy investors (investments of more than say £5m?) can pay what they like.

Paul | March 28, 2014 at 4:18 pm

Ben,

>>The job of the finance sector is simply to manage existing resources. It creates nothing.

This is a dubious assertion, but you clearly believe it. How then, can you in good conscience, charge 1.25% (plus indirect costs for the funds you hold in client portfolios) to manage people's money when you yourself admit you are adding no value?
(source: http://strubelim.com/wp/our-funds/ar-fund/ )

golfer1john | March 30, 2014 at 11:23 pm

Semantics.

There are 6000 publicly traded companies. Some of them will have rising stock prices, some falling. If a money manager can steer you to the rising ones, he is doing something of value. It doesn't mean he created anything physical that didn't exist before. He's doing a service for you that would otherwise have taken you some time and effort to do, and that's what you pay for.

Briana | March 31, 2014 at 10:22 am

Yes, it's a different definition of value. The growth of financial services has been outpacing the growth of other sectors to a monstrous scale, and that makes this distinction important. It signals a kind of corruption that can only mean high inflation and decoupling money from economic output.

golfer1john | April 1, 2014 at 12:05 am

I don't follow. How is financial services different from any other kind of services, in the impact on inflation? Why not also actors, barbers, or any other service profession?

The growth of the financial sector might be explained by the fact that it is the industry most able to exploit computers, and the first to do so on a large scale.

The corruption is, I think, a separate issue that is present whenever other people's money is involved. Financial services and government are simply more involved that way than most other industries, and have been all along, dating to long before the recent growth. Corruption is not impossible in any industry, just more attractive when the numbers are larger.

Jim Shannon | April 1, 2014 at 9:20 am

Corruption is never a separate in ANY corporate activity. The TAX CODE treats the wealth of the .01% radically different than Income from Labor, because all Taxes on Capital Gains are deferred until taken and are not TAXED as ordinary income. The TAX CODE is responsible for the corruption of our government because it has put real POWER, the Power of Wealth in the hands of the .01%, to buy whatever it wants, while labor and the poor spend everything they earn or are given , every single year to survive in a economic culture designed for the benefit of the .01%, something no one will write about!

Change the TAX CODE and the Corruption of Society will end!

Briana | April 1, 2014 at 7:23 pm

Barbers and actors being paid for their labor do not have the same impact on inflation as a bank giving out loans and consumer credit at interest. It's not equivalent at all.

Corruption in financial industries is what this article is discussing. If it's a separate issue, I'm confused as to the point of talking about this at all!

golfer1john | April 2, 2014 at 1:50 pm

No, I wasn't, though I have heard that. My theory of markets, and human group behavior in general, is a statistical approach. There are averages, distributions, and temporary equilibriums, but the interesting parts are the outliers. I guess that is more of a quantum flavor than Newtonian. Over time, economies behave cyclically. Much of nature and human group behavior is cyclical.

Paul | April 11, 2014 at 11:48 am

"This argument hinges on everyone that purchases these services knowing their true value."

In a literal sense, you are correct, it is an imperfect measure of value. However, I think it is far and away the most reliable one we have as value is extremely subjective. I don't think it is right or prudent for third, non cost bearing parties to preempt decisions made by consenting adults, rather, I would accord them the dignity of free choice. There are many things that consumers purchase that I do not understand, why anyone would pay a premium for a fast car seems like a waste of money to me, for example. Why anyone would pay money to golf, not to mention the huge cost in terms of time it takes to get through 18 holes, seems like a waste of money to me. These are things that make no sense to me because I do not see the value there. But, I recognize that people have various tastes and preferences, and I respect that and presume that individuals know themselves and their own tastes and preferences better than I (or someone else) does. Therefore, when someone values something that I do not understand, I tend to believe it is a result of a difference in preference, rather than they are too dumb to figure out what they like, or that they are "tricked" into buying something and hence need protection delivered by those who fancy themselves as enlightened enough to see the real truth. Nothing about this is unique to the financial industry, by the way.

"Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is worthwhile."

Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources.

[Jan 08, 2019] Rewriting Economic Thought - Michael Hudson

Highly recommended!
Notable quotes:
"... The following is a transcript of CounterPunch Radio – Episode 19 (originally aired September 21, 2015). Eric Draitser interviews Michael Hudson. ..."
"... The Troika and IMF doctrine of austerity and privatization ..."
Oct 05, 2015 | michael-hudson.com

The following is a transcript of CounterPunch Radio – Episode 19 (originally aired September 21, 2015). Eric Draitser interviews Michael Hudson.

Eric Draitser: Today I have the privilege of introducing Michael Hudson to the program. Doctor Hudson is the author of the new book Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy , available in print on Amazon and an e-version on CounterPunch. Michael Hudson, welcome to CounterPunch Radio.

Michael Hudson: It's good to be here.

ED: Thanks so much for coming on. As I mentioned already, the title of your book – Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy – is an apt metaphor. So parasitic finance capital is really what you're writing about. You explain that it essentially survives by feeding off what we might call the real economy. Could you draw out that analogy a little bit? What does that mean? How does finance behave like a parasite toward the rest of the economy?

MH: Economists for the last 50 years have used the term "host economy" for a country that lets in foreign investment. This term appears in most mainstream textbooks. A host implies a parasite. The term parasitism has been applied to finance by Martin Luther and others, but usually in the sense that you just talked about: simply taking something from the host.

But that's not how biological parasites work in nature. Biological parasitism is more complex, and precisely for that reason it's a better and more sophisticated metaphor for economics. The key is how a parasite takes over a host. It has enzymes that numb the host's nervous system and brain. So if it stings or gets its claws into it, there's a soporific anesthetic to block the host from realizing that it's being taken over. Then the parasite sends enzymes into the brain. A parasite cannot take anything from the host unless it takes over the brain.

The brain in modern economies is the government, the educational system, and the way that governments and societies make their economic policy models of how to behave. In nature, the parasite makes the host think that the free rider, the parasite, is its baby, part of its body, to convince the host actually to protect the parasite over itself.

That's how the financial sector has taken over the economy. Its lobbyists and academic advocates have persuaded governments and voters that they need to protect banks, and even need to bail them out when they become overly predatory and face collapse. Governments and politicians are persuaded to save banks instead of saving the economy, as if the economy can't function without banks being left in private hands to do whatever they want, free of serious regulation and even from prosecution when they commit fraud. This means saving creditors – the One Percent – not the indebted 99 Percent.

It was not always this way. A century ago, two centuries ago, three centuries ago and all the way back to the Bronze Age, almost every society has realized that the great destabilizing force is finance – that is, debt. Debt grows exponentially, enabling creditors ultimately to foreclose on the assets of debtors. Creditors end up reducing societies to debt bondage, as when the Roman Empire ended in serfdom.

About a hundred years ago in America, John Bates Clark and other pro-financial ideologues argued that finance is not external to the economy. It's not extraneous, it's part of the economy, just like landlords are part of the economy. This means that if the financial sector takes more revenue out of the economy as interest, fees or monopoly charges, it's because finance is an inherent and vital part of the economy, adding to GDP, not merely siphoning it off from producers to pay Wall Street and the One Percent. So our economic policy protects finance as if it helps us grow, not siphons off our growth.

A year or two ago, Lloyd Blankfein of Goldman Sachs said that the reason Goldman Sachs' managers are paid more than anybody else is because they're so productive. The question is, productive of what? The National Income and Product Accounts (NIPA) say that everybody is productive in proportion to the amount of money they make/take. It doesn't matter whether it's extractive income or productive income. It doesn't matter whether it's by manufacturing products or simply taking money from people, or simply by the fraud that Goldman Sachs, Citigroup, Bank of America and others paid tens of millions of dollars in fines for committing. Any way of earning income is considered to be as productive as any other way. This is a parasite-friendly mentality, because it denies that there's any such thing as unearned income. It denies that there's a free lunch. Milton Friedman got famous for promoting the idea that there's no such thing as a free lunch, when Wall Street knows quite well that this is what the economy is all about. It's all about how to get a free lunch, with risks picked up by the government. No wonder they back economists who deny that there's any such thing!

ED: To get to the root of the issue, what's interesting to me about this analogy that we're talking about is that we hear the term neoliberalism all the time. It is an ideology I that's used to promote the environment within which this parasitic sort of finance capital can operate. So could you talk a bit about the relationship between finance capital and neoliberalism as its ideology.

MH: Today's vocabulary is what Orwell would call DoubleThink. If you're going to call something anti-liberal and against what Adam Smith and John Stuart Mill and other classical economists described as free markets, you pretend to be neoliberal. The focus of Smith, Mill, Quesnay and the whole of 19th-century classical economics was to draw a distinction between productive and unproductive labor – that is, between people who earn wages and profits, and rentiers who, as Mill said, "get rich in their sleep." That is how he described landowners receiving groundrent. It also describes the financial sector receiving interest and "capital" gains.

The first thing the neoliberal Chicago School did when they took over Chile was to close down every economics department in the country except the one they controlled at the Catholic University. They started an assassination program of left wing professors, labor leaders and politicians, and imposed neoliberalism by gunpoint. Their idea is you cannot have anti-labor, deregulated "free markets" stripping away social protections and benefits unless you have totalitarian control. You have to censor any idea that there's ever been an alternative, by rewriting economic history to deny the progressive tax and regulatory reforms that Smith, Mill, and other classical economists urged to free industrial capitalism from the surviving feudal privileges of landlords and predatory finance.

This rewriting of the history of economic thought involves inverting the common vocabulary that people use. So, the idea of the parasitism is to replace the meaning of everyday words and vocabulary with their opposite. It's DoubleThink.

Democratic vs. oligarchic government and their respective economic doctrines
ED: I don't want to go too far off on a tangent, but you mentioned the example of Chile's 1973 coup and the assassination of Allende to impose the Pinochet dictatorship. That was a Kissinger/Nixon operation as we know, but what's interesting about that is Chile was transformed into a sort of experimental laboratory to impose the Chicago school economic model of what we now would call neoliberalism. Later in our conversation I want to talk a bit about some recent laboratories we have seen in Eastern Europe, and now in Southern Europe as well. The important point about neoliberalism is the relationship between totalitarian government and this form of economics.

MH: That's right. Neoliberals say they're against government, but what they're really against is democratic government. The kind of governments they support are pre-referendum Greece or post-coup Ukraine. As Germany's Wolfgang Schäuble said, "democracy doesn't count." Neoliberals want the kind of government that will create gains for the banks, not necessarily for se the economy at large. Such governments basically are oligarchic. Once high finance takes over governments as a means of exploiting the 99 Percent, it's all for active government policy – for itself.

Aristotle talked about this more than 2,000 years ago. He said that democracy is the stage immediately proceeding oligarchy. All economies go through three stages repeating a cycle: from democracy into oligarchy, and then the oligarchs make themselves hereditary. Today, Jeb Bush wants to abolish the estate tax to help the emerging power elite make itself into a hereditary aristocracy. Then, some of the aristocratic families will fight among themselves, and take the public into their camp and promote democracy, so you have the cycle going all over again. That's the kind of cycle we're having now, just as in ancient Athens. It's a transition from democracy to oligarchy on its way to becoming an aristocracy of the power elite.

ED: I want to return to the book in a second but I have to interject that one particular economist hasn't been mentioned yet: Karl Marx. It's an inversion of Marx as well, because Marx's labor theory of value was that that value ultimately is derived from labor. Parasitic finance capital is the opposite of that. It may increase prices without value.

MH: Correct, but I should point out that there's often a misinterpretation of the context in which the labor theory of value was formulated and refined. The reason why Marx and the other classical economists – William Petty, Smith, Mill and the others – talked about the labor theory of value was to isolate that part of price that wasn't value. Their purpose was to define economic rent as something that was not value. It was extraneous to production, and was a free lunch – the element of price that is charged to consumers and others that has no basis in labor, no basis in real cost, but is purely a monopoly price or return to privilege. This was mainly a survival of the feudal epoch, above all of the landed aristocracy who were the heirs of the military conquers, and also the financial sector of banking families and their heirs.

The aim of the labor theory of value was to divide the economy between excessive price gouging and labor. The objective of the classical economists was to bring prices in line with value to prevent a free ride, to prevent monopolies, to prevent an absentee landlord class so as to free society from the legacy of feudalism and the military conquests that carved up Europe's land a thousand years ago and that still underlies our property relations.

The concept and theory of economic rent
ED: That's a great point, and it leads me into the next issue that I want to touch on. You've mentioned the term already a number of times: the concept of economic rent. We all know rent in terms of what we have to pay every month to the landlord, but we might not think about what it means conceptually. It's one of the fabrics with which you've woven this book together. One of the running themes, rent extraction, and its role in the development of what we've now termed this parasitic relationship. So, explain for laymen what this means – rent extraction – and how this concept evolved.

MH: To put the concept of economic rent in perspective, I should point out when I went to get my PhD over a half a century ago, every university offering a graduate economics degree taught the history of economic thought. That has now been erased from the curriculum. People get mathematics instead, so they're unexposed to the concept of economic rent as unearned income. It's a concept that has been turned on its head by "free market" ideologues who use "rent seeking" mainly to characterize government bureaucrats taxing the private sector to enhance their authority – not free lunchers seeking to untax their unearned income. Or, neoclassical economists define rent as "imperfect competition" (as if their myth of "perfect competition" really existed) stemming from "insufficient knowledge of the market," patents and so forth.

Most rent theory was developed in England, and also in France. English practice is more complex than America. The military conquers imposed a pure groundrent fee on the land, as distinct from the building and improvements. So if you buy a house from a seller in England, somebody else may own the land underneath it. You have to pay a separate rent for the land. The landlord doesn't do anything at all to collect land rent, that's why they call them rentiers or coupon clippers. In New York City, for example, Columbia University long owned the land underneath Rockefeller Center. Finally they sold it to the Japanese, who lost their shirt. This practice is a carry-over from the Norman Conquest and its absentee landlord class.

The word "rent" originally was French, for a government bond (rente). Owners received a regular income every quarter or every year. A lot of bonds used to have coupons, and you would clip off the coupon and collect your interest. It's passively earned income, that is, income not actually earned by your own labor or enterprise. It's just a claim that society has to pay, whether you're a government bond holder or whether you own land.

This concept of income without labor – but simply from privileges that had been made hereditary – was extended to the ideas of monopolies like the East India Company and other trade monopolies. They could produce or buy goods for, let's say, a dollar a unit, and sell them for whatever the market will bear – say, $4.00. The markup is "empty pricing." It's pure price gouging by a natural monopoly, like today's drug companies.

To prevent such price gouging and to keep economies competitive with low costs of living and doing business, European kept the most important natural monopolies in the public domain: the post office, the BBC and other state broadcasting companies, roads and basic transportation, as well as early national airlines. European governments prevented monopoly rent by providing basic infrastructure services at cost, or even at subsidized prices or freely in the case of roads. The guiding idea is for public infrastructure – which you should think of as a factor of production along with labor and capital – was to lower the cost of living and doing business.

But since Margaret Thatcher led Britain down the road to debt peonage and rent serfdom by privatizing this infrastructure, she and her emulators other countries turned them into tollbooth economies. The resulting economic rent takes the form of a rise in prices to cover interest, stock options, soaring executive salaries and underwriting fees. The economy ends up being turned into a collection of tollbooths instead of factories. So, you can think of rent as the "right" or special legal privilege to erect a tollbooth and say, "You can't get television over your cable channel unless you pay us, and what we charge you is anything we can get from you."

This price doesn't have any relation to what it costs to produce what they sell. Such extortionate pricing is now sponsored by U.S. diplomacy, the World Bank, and what's called the Washington Consensus forcing governments to privatize the public domain and create such rent-extracting opportunities.

In Mexico, when they told it to be more "efficient" and privatize its telephone monopoly, the government sold it to Carlos Slim, who became one of the richest people in the world by making Mexico's phones among the highest priced in the world. The government provided an opportunity for price gouging. Similar high-priced privatized phone systems plague the neoliberalized post-Soviet economies. Classical economists viewed this as a kind of theft. The French novelist Balzac wrote about this more clearly than most economists when he said that every family fortune originates in a great theft. He added that this not only was undiscovered, but has come taken for granted so naturally that it just doesn't matter.

If you look at the Forbes 100 or 500 lists of each nation's richest people, most made their fortunes through insider dealing to obtain land, mineral rights or monopolies. If you look at American history, early real estate fortunes were made by insiders bribing the British Colonial governors. The railroad barrens bribed Congressmen and other public officials to let them privatize the railroads and rip off the country. Frank Norris's The Octopus is a great novel about this, and many Hollywood movies describe the kind of real estate and banking rip-offs that made America what it is. The nation's power elite basically begun as robber barons, as they did in England, France and other countries.

The difference, of course, is that in past centuries this was viewed as corrupt and a crime. Today, neoliberal economists recommend it as the way to raise "productivity" and make countries wealthier, as if it were not the road to neofeudal serfdom.

The Austrian School vs. government regulation and pro-labor policies
ED: I don't want to go too far off on a tangent because we have a lot to cover specific to your book. But I heard an interesting story when I was doing a bit of my own research throughout the years about the evolution of economic thought, and specifically the origins of the so-called Austrian School of Economics – people like von Mises and von Hayek. In the early 20th century they were essentially, as far as I could tell, creating an ideological framework in which they could make theoretical arguments to justify exorbitant rent and make it seem almost like a product of natural law – something akin to a phenomenon of nature.

MH: The key to the Austrian School is their hatred of labor and socialism. It saw the danger of democratic government spreading to the Habsburg Empire, and it said, "The one thing we have to stop is democracy. Their idea of a free market was one free of democracy and of democratic government regulating and taxing wealthy rentiers. It was a short step to fighting in the streets, using murder as a "persuader" for the particular kind of "free markets" they wanted – a privatized Thatcherite deregulated kind. To the rentiers they said: "It's either our freedom or that of labor."

Kari Polanyi-Levitt has recently written about how her father, Karl Polanyi, was confronted with these right-wing Viennese. His doctrine was designed to rescue economics from this school, which makes up a fake history of how economics and civilization originated.

One of the first Austrian's was Carl Menger in the 1870s. His "individualistic" theory about the origins of money – without any role played by temples, palaces or other public institutions – still governs Austrian economics. Just as Margaret Thatcher said, "There's no such thing as society," the Austrians developed a picture of the economy without any positive role for government. It was as if money were created by producers and merchants bartering their output. This is a travesty of history. All ancient money was issued by temples or public mints so as to guarantee standards of purity and weight. You can read Biblical and Babylonian denunciation of merchants using false weights and measures so see why money had to be public. The major trading areas were agora spaces in front of temples, which kept the official weights and measures. And much exchange was between the community's families and the public institutions.

Most important, money was brought into being not for trade (which was conducted mainly on credit), but for paying debts. And most debts were owed to the temples and palaces for pubic services or tribute. But to the Austrians, the idea was that anything the government does to protect labor, consumers and society from rentiers and grabbers is deadweight overhead.

Above all, they opposed governments creating their own money, e.g. as the United States did with its greenbacks in the Civil War. They wanted to privatize money creation in the hands of commercial banks, so that they could receive interest on their privilege of credit creation and also to determine the allocation of resources.

Today's neoliberals follow this Austrian tradition of viewing government as a burden, instead of producing infrastructure free of rent extraction. As we just said in the previous discussion, the greatest fortunes of our time have come from privatizing the public domain. Obviously the government isn't just deadweight. But it is becoming prey to the financial interests and the smashers and grabbers they have chosen to back.

ED: You're right, I agree 100%. You encounter this ideology even in the political sociological realm like Joseph Schumpeter, or through the quasi-economic realm like von Hayek in The Road to Serfdom.

MH: Its policy conclusion actually advocates neo-serfdom. Real serfdom was when families had to pay all their income to the landlords as rent. Centuries of classical economists backed democratic political reform of parliaments to roll back the landlords' power (and that of bankers). But Hayek claimed that this rollback was the road to serfdom, not away from it. He said democratic regulation and taxation of rentiers is serfdom. In reality, of course, it's the antidote.

ED: It's the inversion you were talking about earlier. We're going to go into a break here in a minute but before we do I want to touch on one other point that is important in the book, again the book, Killing the Host: How Financial Parasites and Debt Bondage Destroyed the Global Economy, available from CounterPunch – very important that people pick up this book.

MH: And from Amazon! You can get a hard copy for those who don't want to read on computers.

Finance as the new mode of warfare
ED: Yes, and on amazon as well, thank you. This issue that I want to touch on before we go to the break is debt. On this program a couple of months ago I had the journalist John Pilger. He and I touched on debt specifically as a weapon, and how it is used as a weapon. You can see this in the form of debt enslavement, if you want to call it that, in postcolonial Africa. You see the same thing in Latin America where, Michael, I know you have a lot of experience in Latin America in the last couple of decades. So let's talk a little bit, if we could, before we go to the break, about debt as a weapon, because I think this is an important concept for understanding what's happening now in Greece, and is really the framework through which we have to understand what we would call 21st-century austerity.

MH: If you treat debt as a weapon, the basic idea is that finance is the new mode of warfare. That's one of my chapters in the book. In the past, in order to take over a country's land and its public domain, its basic infrastructure and its mineral resources, you had to have a military invasion. But that's very expensive. And politically, almost no modern democracy can afford a military invasion anymore.

So the objectives of the financial sector – of Wall Street, the City of London or Frankfurt in Germany – is to obtain the land. You can look at what's happening in Greece. What its creditors, the IMF and European Central Bank (ECB) want are the Greek islands, and they want the gas rights in the Aegean Sea. They want whatever buildings and property there is, including the museums.

Matters are not so much different in the private sector. If you can get a company or individual into debt, you can strip away the assets they have when they can't pay. A Hayek-style government would block society from protecting itself against such asset stripping. Defending "property rights" of creditors, such "free market" ideology deprives the rest of the economy – businesses, individuals and public agencies. It treats debt writedowns as the road to serfdom, not the road away from debt dependency.

In antiquity, private individuals obtained labor services by making loans to families in need, and obliging their servant girls, children or even wives to work off the loan in the form of labor service. My Harvard-based archaeological group has published a series of five books that I co-edited, most recently Labor in the Ancient World . Creditors (often palace infrastructure managers or collectors) would get people into bondage. When new Bronze Age rulers started their first full year on the throne, it was customary to declare an amnesty to free bond servants and return them to their families, and annul personal debts as well as to return whatever lands were forfeited. So in the Bronze Age, debt serfdom and debt bondage was only temporary. The biblical Jubilee law was a literal translation of Babylonian practice that went back two thousand years.

In America, in colonial times, sharpies (especially from Britain) would lend farmers money that they knew the farmer couldn't pay, then they would foreclose just before the crops came in. Right now you have corporate raiders, who are raiding whole companies by forcing them into debt, and then smashing and grabbing. You now have the IMF, European Central Bank and Washington Consensus taking over whole countries like Ukraine. The tactic is to purposely lend them the money that clearly cannot be repaid, and say, "Oh you cannot pay? Well, we're not going to take a loss. We have a solution." The solution is to sell off public enterprises, land and natural resources. In Greece's case, 50 billion euros of its property, everything that it has in the public sector. The country is to be sold off to foreigners (including domestic oligarchs working out of their offshore accounts). Debt leverage is thus the way to achieve what it took armies to win in times past.

ED: Exactly. One last point on that as well. I want to get your comment on and we see this in post-colonial Africa, especially when the French and the British had to nominally give up control of their colonies. You saw debt become an important tool to maintain hegemony within their spheres of influence. Of course, asset stripping and seizing control, smashing and grabbing was part of that. But also it is the debt servicing payments, it is the cycle of debt repayment and taking new loans on top of original loans to service the original loans – this process this cycle is also really an example of this debt servitude or debt bondage.

MH: That's correct, and mainstream economics denies any of this. It began with Ricardo, who's brothers were major bankers at the time, and he himself was the major bank lobbyist in England. Right after Greece won its independence from Turkey, the Ricardo brothers made a rack-renting loan to Greece at far below par (that is, below the face value that Greece committed itself to pay). Greece tried to pay over the next century, but the terms of the loan ended up stripping and keeping it on the edge of bankruptcy well into the 20th century.

But Ricardo testified before Parliament that there could be no debt-servicing problem. Any country, he said, could repay the debts automatically, because there is an automatic stabilization mechanism that enables every country to be able to pay. This is the theory that underlines Milton Friedman and the Chicago School of monetarism: the misleading idea that debt cannot be a problem.

That's what's taught now in international trade and financial textbooks. It's false pleading. It draws a fictitious "What If" picture of the world. When criticized, the authors of these textbooks, like Paul Samuelson, say that it doesn't matter whether economic theory is realistic or not. The judgment of whether an economic theory is scientific is simply whether it is internally consistent. So you have these fictitious economists given Nobel Prizes for promoting an inside out, upside down version of how the global economy actually works.

ED: One other thing that they no longer teach is what used to be called political economy. The influence of the Chicago School, neoliberalism and monetarism has removed classical political economy from academia, from the Canon if you will. Instead, as you said, it's all about mathematics and formulas that treat economics like a natural science, when in fact it really should be more of a historically grounded social science.

MH: The formulas that they teach don't have government in them,. If you have a theory that everything is just an exchange, a trade, and that there isn't any government, then you have a theory that has nothing to do with the real world. And if you assume that the environment remains constant instead of using economics to guide public and national policy, you're using economics for the opposite of what the classical economists did. Adam Smith, Mill, Marx, Veblen – they all developed their economic theory to reform the world. The classical economists were reformers. They wanted to free society from the legacy of feudalism – to get rid of land rent, to take money creation and credit creation into the public domain. Whatever their views, whether they were right wingers or left wingers, whether they were Christian socialists, Ricardian socialists or Marxian socialists, all the capitalist theorists of the 19th century called themselves socialists, because they saw capitalism as evolving into socialism.

But what you now have, since World War I, is a reaction against this, stripping away of the idea that governments have a productive role to play. If government is not the director and planner of the economy, then who is? It's the financial sector. It's Wall Street. So the essence of neoliberalism that you were mentioning before, is indeed a doctrine of central planning. It states that the central planning should be done by Wall Street, by the financial sector.

The problem is, what is the objective of central planning by Wall Street? It's not to raise living standards, and it's not to increase employment. It is to smash and grab. That is the society we're in now.

A number of chapters of my book (I think five), describe how the Obama administration has implemented this smash and grab, doing the exact opposite of what he promised voters. Obama has implemented the Rubin-omics [Robert Rubin] doctrine of Wall Street to force America into what looks like a chronic debt depression.

ED: Exactly right. I couldn't agree more. Let's take a short break and we'll continue the discussion. Again, I'm chatting with Michael Hudson about his new book, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy.

The case of Latvia: Is it a success story, or a neoliberal disaster?
ED: I want to go back to some of the important issues that we introduced or alluded to in the first part of our discussion. As I was mentioning to you off-air, a couple years ago I twice interviewed your colleague Jeffrey Sommers, with whom you've worked and co-published a number of papers. We talked a lot about many of the same issues that you and I are touching on. Specifically Sommers – and I know you as well – did a lot of work in Latvia, a country in the former Soviet space in Eastern Europe on the Baltic Sea. Your book has a whole chapter on it, as well as references throughout the book.

So let's talk about how Latvia serves as a template for understanding the austerity model. It is touted by technocrats of the financial elite as a major success story – how austerity can work. I find it absurd on so many different levels. So tell us what happened in Latvia, what the real costs were, and why neoliberals claim it as a success story.

MH: Latvia is the disaster story of the last two decades. That's why I took it as an object lesson. You're right, it was Jeff Sommers who first brought me over to Latvia. I then became Director of Economic Research and Professor of Economics at the Riga Graduate School of Law.

When Latvia was given its independence when the Soviet Union broke up in 1991, a number of former Latvians had studied at George Washington University, and they brought neoliberalism over there – the most extreme grabitization and de-industrialization of any country I know. Latvians, Russians and other post-Soviet countries were under the impression that U.S. advisors would help them become modernized like the U.S. economy – with high living and consumption standards. But what they got was advice to emulate American experience. It got something just the opposite – how to enable foreign investors and bankers to carve it up, dismantle its industry and become a bizarre neoliberal experiment.

You may remember the Republican presidential candidate Steve Forbes, who in 2008 proposed a flat tax to replace progressive taxation. The idea never could have won in the United States, but Latvia was another story. The Americans set the flat tax at an amazingly low 12 percent of income – and no significant property tax on real estate or capital gains. It was a financial and real estate dream, and created a classic housing and financial bubble.

Jeff and I visited the head of the tax authority, who told us that she was appointed because she had done her PhD dissertation on Latvia's last land value assessment – which was in 1917. They hadn't increased the assessments since then, because the Soviet economy didn't have private land ownership and didn't even have a concept of rent-of-location for planning purposes. (Neither did Russia.)

Latvia emerged from the Soviet Union without any debt, and also with a lot of real estate and a highly educated population. But its political insiders turned over most of the government enterprises to themselves. Latvia had been a computer center and also the money-laundering center of the Soviet leadership already in the late 1980s (largely as a byproduct of Russian oil exports through Ventspils), and Riga remains the money-laundering city for today's Russia.

Privatizing housing and other property led to soaring real estate prices. But this bubble wasn't financed by domestic banks. The Soviet Union didn't have private banks, because the government had simply created the credit to fund the economy as needed. The main banks in a position to lend to Latvia were Swedish and other Scandinavian banks. They pounce on the lending opportunities to opened up by an entire nation whose real estate had almost no tax on it. The result was the biggest real estate bubble in the world, along with Russia's. Latvians found that in order to buy housing of their own, they had to go deeply into debt. Assets were only given to insiders, not to the people.

A few years ago there was a reform movement in Latvia to stop the economic bleeding. Jeff and I brought over American property appraisers and economists. We visited the leading bank, regulatory agencies. Latvia was going broke because its population had to pay so much for real estate. And it was under foreign-exchange pressure because debt service on its mortgage loans was being paid to the Swedish and foreign banks. The bank regulator told us that her problem was that her agency's clients are the banks, not the population. So the regulators thought of themselves as working for the banks, even though they were foreign-owned. She acknowledged that the banks were lending much more money than property actually was worth. But her regulatory agency had a solution: It was to have not only the buyer be obligated to pay the mortgage, but also the parents, uncles or aunts. Get the whole family involved, so that if the first signer couldn't pay the cosigners would be obligated.

That is how Latvia stabilized its banking system. But it did so by destabilizing the economy. The result is that Latvia has lost 20 percent of its population over the past decade or so. For much the same reasons that Greece has lost 20 percent of its population, with Ireland in a similar condition. The Latvians have a joke "Will the last person who leaves in 2020 please turn off the lights at the airport."

The population is shrinking because the economy is being run by looters, domestic and foreign. I was shown an island in the middle of the Daugava river that runs to the middle of Latvia, and was sold for half a million dollars. Our appraisers said that it's worth half a billion dollars, potentially. There are no plans to raise the property tax to recapture these gains for the country – so that it can lower its heaviest labor taxes in the world, nearly half each paycheck for income tax and "social security" spending so that finance and real estate won't be taxed.

A few years ago, I was at the only meeting of INET (George Soros's group) that I was invited to, and in the morning one of the lead talks was on how Latvia was a model that all countries could follow to balance the budget. Latvia has balanced the budget by cutting back public spending, reducing employment and lowering wage levels while indebting its population and forcing to immigrate. The neoliberal strategy is to balance by selling off whatever remains in the public domain. Soros funded a foundation there (like similar ones he started in other post-Soviet countries) to get a part of the loot.

These giveaways at insider prices have created a kleptocracy obviously loyal to neoliberal economics. I go into the details in my chapter. It's hard to talk about it without losing my temper, so I'm trying to be reasonable but it's a country that was destroyed and smashed. That was the U.S. neoliberal model alternative to post-Stalinism. It wasn't a new American economy. It was a travesty.

Why then does the population continue to vote for these neoliberals? The answer is, the neoliberals say, the alternative is Stalinism. To Latvians, this means exile, deportations and memories of the old pro-Russian policy. The Russian-speaking parties are the main people backers of a social democracy party. But neoliberals have merged with Latvian nationalists. They are not only making the election over resentment against the Russian-speaking population, but the fact that many are Jewish.

I find it amazing to see someone who is Jewish, like George Soros, allying with anti-Semitic and even neo-Nazi movements in Latvia, Estonia, and most recently, of course, Ukraine. It's an irony that you could not have anticipated deductively. If you had written this plot in a futuristic novel twenty years ago, no one would have believed that politics could turn more on national and linguistic identity politics than economic self-interest. The issue is whether you are Latvian or are Russian-Jewish, not whether you want to untax yourself and make? Voting is along ethnic lines, not whether Latvians really want to be forced to emigrate to find work instead of making Latvia what it could have been: an successful economy free of debt. Everybody could have gotten their homes free instead of giving real estate only to the kleptocrats.

The government could have taxed the land's rental value rather than letting real estate valuation be pledged to pay banks – and foreign banks at that. It could have been a low-cost economy with high living standards, but neoliberals turned in into a smash and grab exercise. They now call it an idea for other nations to follow. Hence, the U.S.-Soros strategy re Ukraine.

ED: That's an excellent point. It's a more extreme case for a number of reasons in Ukraine – the same tendency. They talk about, "Putin and his gaggle of Jews." That's the idea, that Putin and the Jews will come in and steal everything – while neoliberals plan to appropriate Ukraine's land and other resources themselves. In this intersection between economics and politics, Latvia, Lithuania, Estonia – the Baltic States of the former Soviet Union – are really the front lines of NATO expansion. They were some of the first and most pivotal countries brought into the NATO orbit. It is the threat of "Russian aggression" via the enclave at Kaliningrad, or just Russia in general. That is the threat they use to justify the NATO umbrella, and simultaneously to justify continuing these economic policies. So in many ways Russia serves as this convenient villain on a political, military and economic level.

MH: It's amazing how the popular press doesn't report what's going on. Primakov, who died a few months ago, said during the last crisis a few years ago that Russia has no need to invade Latvia, because it owns the oil export terminals and other key points. Russia has learned to play the Western game of taking countries over financially and acquiring ownership. Russia doesn't need to invade to control Latvia any more than America needs to invade to control Saudi Arabia or the Near East. If it controls exports or access to markets, what motive would it have to invade? As things stand, Russia uses Latvia it as a money laundering center.

The same logic applies to Ukraine today. The idea is that Russia is expansionary in a world where no one can afford to be militarily expansionary. After Russia's disaster in Afghanistan, no country in the world that's subject to democratic checks, whether it's America after the Vietnam War or Russia or Europe, no democratic country can invade another country. All they can do is drop bombs. This can't capture a country. For that you need major troop commitments.

In the trips that I've taken to Russia and China, they're in a purely defensive mode. They're wondering why America is forcing all this. Why is it destroying the Near East, creating a refugee problem and then telling Europe to clean up the mess it's created? The question is why Europe is willing to keep doing this. Why is Europe part of NATO fighting in the Near East? When America tells Europe, "Let's you and Russia fight over Ukraine," that puts Europe in the first line of fire. Why would it have an interest in taking this risk, instead of trying to build a mutual economic relationship with Russia as seemed to be developing in the 19th century?

ED: That's the ultimate strategy that the United States has used – driving a wedge between Russia and Europe. This is the argument that Putin and the Russians have made for a long time. You can see tangible examples of that sort of a relationship even right now if you look at the Nord Stream pipeline connecting Russian energy to German industrial output – that is a tangible example of the economic relationship, that is only just beginning between Russia and Europe. That's really what I think the United States wanted to put the brakes on, in order to be able to maintain hegemony. The number one way it does that is through NATO.

MH: It's not only put the brakes on, it has created a new iron curtain. Two years ago, Greece was supposed to privatize 5 billion euros of its public domain. Half of this, 2.5 billion, was to be the sale of its gas pipeline. But the largest bidder was Gazprom, and America said, "No, you can't accept the highest bidder if its Russian." Same thing in Ukraine. It has just been smashed economically, and the U.S. says, "No Ukrainian or Russian can buy into the Ukrainian assets to be sold off. Only George Soros and his fellow Americans can buy into this." This shows that the neoliberalism of free markets, of "let's everybody pay the highest price," is only patter talk. If the winner in the rigged market is not the United States, it sends in ISIS or Al Qaeda and the assassination teams, or backs the neo-Nazis as in Ukraine.

So, we're in a New Cold War. Its first victims, apart from Southern Europe, will be the rest of Europe. You can imagine how this is just beginning to tear European politics apart, with Germany's Die Linke and similar parties making a resurgence.

The Troika and IMF doctrine of austerity and privatization
ED: I want to return us back to the book and some other key issues that you bring up that I think are most important. One that we hear in the news all the time, and you write extensively about it in the book, is the Troika. That's the IMF, the European Central Bank (ECB) and the European Commission. It could be characterized as the political arm of finance capital in Europe, one that imposes and manages austerity in the interest of the ruling class of finance capital, as I guess we could call them. These are technocrats, not academically trained economists primarily (maybe with a few exceptions), but I want you to talk a bit about how the Troika functions and why it's so important in what we could call this crisis stage of neoliberal finance capitalism.

MH: Basically, the Troika is run by Frankfurt bankers as foreclosure and collection agents. If you read recently what former Greek finance minister Yanis Varoufakis has written, and his advisor James Galbraith, they said that when Syriza was elected in January, they tried to reason with the IMF. But it said that it could only do what the European Central Bank said, and that it would approve whatever they decided to do. The European Central Bank said that its role wasn't to negotiate democracy. Its negotiators were not economists. They were lawyers. "All we can say is, here's what you have to pay, here's how to do it. We're not here to talk about whether this is going to bankrupt Greece. We're just interested in in how you're going to pay the banks what they're owe. Your electric companies and other industry will have to go to German companies, the other infrastructure to other investors – but not from Russia."

It's much like England and France divided up the Near East after World War I. There's a kind of a gentlemen's agreement as to how the creditor economies will divide up Greece, carving it up much like neighboring Yugoslavia to the north.

In 2001 the IMF made a big loan to Argentina (I have a chapter on Argentina too), and it went bad after a year. So the IMF passed a rule, called the No More Argentinas rule, stating that the Fund was not going to participate in a loan where the government obviously can not pay.

A decade later came the Greek crisis of 2011. The staff found that Greece could not possibly pay a loan large enough to bail out the French, German and other creditors. So there has to be a debt write-down of the principal. The staff said that, and the IMF's board members agreed. But its Managing Director, Strauss-Kahn wanted to run for the presidency of France, and most of the Greek bonds were held by French banks. French President Sarkozy said "Well you can't win political office in France if you stiff the French banks." And German Chancellor Merkel said that Greece had to pay the German banks. Then, to top matters, President Obama came over to the G-20 meetings and they said that the American banks had made such big default insurance contracts and casino gambles betting that Greece would pay, that if it didn't, if the Europeans and IMF did not bail out Greece, then the American banks might go under. The implicit threat was that the U.S. would make sure that Europe's financial system would be torn to pieces.

ED: And Michael, I just want to clarify, I guess it's sort of a question: about what you're talking about here in terms of Geithner and Obama coming in: These would be credit default swaps and collateralized debt obligations?

MH: Yes. U.S. officials said that Wall Street had made so many gambles that if the French and German banks were not paid, they would turn to their Wall Street insurers. The Wall Street casino would go under, bringing Europe's banking system down with it. This prompted the European Central Bank to say that it didn't want the IMF to be a part of the Troika unless it agreed to take a subordinate role and to support the ECB bailout. It didn't matter whether Greece later could pay or not. In that case, creditors would smash and grab. This lead the some of the IMF European staff to resign, most notably Susan Schadler, and later to act as whistle blowers to write up what happened.

The same thing happened again earlier this year in Greece. Lagarde said that the IMF doesn't do debt reduction, but would give them a little longer to pay. Not a penny, not a euro will be written down, but the debt will be stretched out and perhaps the interest rate will be lowered – as long as Greece permits foreigners to grab its infrastructure, land and natural resources.

The staff once again leaked a report to the Financial Times (and maybe also the Wall Street Journal) that said that Greece couldn't pay, there's no way it can later sell off the IMF loan to private bondholders, so any bailout would be against the IMF's own rules. Lagarde was embarrassed, and tried to save face by saying that Germany has to agree to stretch out the payments on the debt – as if that somehow would enable it to pay, while its assets pass into foreign hands, which will remit their profits back home and subject Greece to even steeper deflation.

Then, a few weeks ago, you have the Ukraine crisis and the IMF is not allowed to make loans to countries that cannot pay. But now the whole purpose is to make loans to countries who can't pay, so that creditors can turn around and demand that they pay by selling off their public domain – and implicitly, force their population to emigrate.

ED: Also, technically they're not supposed to be making loans to countries that are at war, and they're ignoring that rule as well.

MH: That's the second violation of IMF rules. At least in the earlier Greek bailout, Strauss Kahn got around the "No More Argentinas" rule by having a new IMF policy that if a country is systemically important, the IMF can lend it the money even if it can't pay, even though it's not credit-worthy, if its default would cause a problem in the global financial system (meaning a loss by Wall Street or other bankers). But Ukraine is not systemically important. It's part of the Russian system, not the western system. Most of its trade is with Russia.

As you just pointed out, when Lagarde made the IMF's last Ukrainian loan, she said that she hoped its economy would stabilize instead of fighting more war in its eastern export region. The next day, President Poroshenko said that now that it had got the loan, it could go to war against the Donbass, the Russian speaking region. Some $1.5 billion of the IMF loan was given to banks run by Kolomoisky, one of the kleptocrats who fields his own army. His banks send the IMF's gift abroad to his own foreign banks, using his domestic Ukrainian money to pay his own army, allied with Ukrainian nationalists flying the old Nazi SS insignia fighting against the Russian speakers. So in effect, the IMF is serving as an am of the U.S. military and State Department, just as the World Bank has long been.

ED: I want to interject two points here for listeners who haven't followed it as closely. Number one is the private army that you're talking about – the Right Sector which is essentially a mercenary force of Nazis in the employ of Kolomoisky. They're also part of what's now called the Ukrainian National Guard. This paramilitary organization that is being paid directly by Kolomoisky. Number two – and this relates back to something that you were saying earlier, Michael – that IMF loan went to pay for a lot of the military equipment that Kiev has now used to obliterate the economic and industrial infrastructure of Donbass, which was Ukraine's industrial heartland. So from the western perspective it's killing two birds with one stone. If they can't strip the assets and capitalize on them, at least they can destroy them, because the number one customer was Russia.

MH: Russia had made much of its military hardware in Ukraine, including its liftoff engines for satellites. The West doesn't want that to continue. What it wants for its own investors is Ukraine's land, the gas rights in the Black Sea, electric and other public utilities, because these are the major tollbooths to extract economic rent from the economy. Basically, US/NATO strategists want to make sure, by destroying Ukraine's eastern export industry, that Ukraine will be chronically bankrupt and will have to settle its balance-of-payments deficit by selling off its private domain to American, German and other foreign buyers.

ED: Yes, that's Monsanto, and that's Hunter Biden on the Burisma board (the gas company). It's like you said earlier, you wouldn't even believe it if someone would have made it up. It's so transparent, what they're doing in Ukraine.

Financialization of pension plans and retirement savings
I want to switch gears a bit in the short time we have remaining, because I have two more things I want to talk about. Referring back to this parasitical relationship on the real economy, one aspect that's rarely mentioned is the way in which many regular working people get swindled. One example that comes to my mind is the mutual funds and other money managers that control what pension funds and lots of retirees invest in. Much of their savings are tied up in heavily leveraged junk bonds and in places like Greece, but also recently in Puerto Rico which is going through a very similar scenario right now. So in many ways, US taxpayers and pensioners are funding the looting and exploitation of these countries and they're then financially invested in continuing the destruction of these countries. It's almost like these pensioners are human shields for Wall Street.

MH: This actually is the main theme of my book – financialization. Mutual funds are not pension funds. They're different. But half a century ago a new term was coined: pension fund capitalism, sometimes called pension fund socialism. Then we got back to Orwellian doublethink when Pinochet came to power behind the natural alliance of the Chicago School with Kissinger at the State Department. They immediately organized what they called labor capitalism. n labor capitalism labor is the victim, not the beneficiary. The first thing they did was compulsory setting aside of wages in the form of ostensible pension funds controlled by the employers. The employers could do whatever they wanted with it. Ultimately they invested their corporate pension funds in their own stocks or turned them over to the banks, around which their grupo conglomerates were organized. They then simply drove the businesses with employee pension funds under, wiping out the pension fund liabilities – after moving the assets into their captive banks. Businesses were left as empty corporate shells.

Something similar happened in America a few years ago with the Chicago Tribune. Real estate developer Sam Zell borrowed money, bought the Tribune, using the Employee Stock Ownership Plan (ESOP) essentially to pay off the bondholders. He then drove/looted the Tribune into bankruptcy and wiped out the stockholders. Employees brought a fraudulent conveyance suit.

Already fifty years ago, critics noted that about half of the ESOPs are wiped out, because they're invested by the employers, often in their own stock. Managers give themselves stock options, which are given value by employee purchases. Something similar occurs with pension funds in general. Employee wages are paid into pension funds, which bid up the stock prices in general. On an economy-wide basis, employees are buying the stock that managers give themselves. That's pension fund capitalism.

The underlying problem with this kind of financialization of pensions and retirement savings is that modern American industry is being run basically for financial purposes, not for industrial purposes. The major industrial firms have been financialized. For many years General Motors made most of its profits from its financial arm, General Motors Acceptance Corporation. Likewise General Electric. When I was going to school 50 years ago, Macy's made most of its money not by selling products, but by getting customers to use its credit cards. In effect, it used its store to get people to use its credit cards.
Last year, 92% of the earnings of the Fortune 100 companies were used for stock buy-backs -- corporations buying back their stock to support its price – or for dividend payouts, also to increase the stock's price (and thus management bonuses and stock options). The purpose of running a company in today's financialized world is to increase the price of the stock, not to expand the business. And who do they sell the stock to? Essentially, pension funds.

There's a lot of money coming in. I don't know if you remember, but George W. Bush wanted to privatize Social Security. The idea was to spend all of its contributions – the 15+% that FICA withholds from workers paychecks every month – into the stock market. This would fuel a giant stock market boom. Money management companies, the big banks, would get an enormous flow of commissions, and speculators would get rich off the inflow. It would make billionaires into hundred-billionaires. All this would soar like the South Sea Bubble, until the American population began to age – or, more likely, begin to be unemployed. At that point the funds would begin to sell the stocks to pay retirees. This would withdraw money from the stock market. Prices would crash as speculators and insiders sold out, wiping out the savings that workers had put into the scheme.

The basic idea is that when Wall Street plays finance, the casino wins. When employees and pension funds play the financial game, they lose and the casino wins.

ED: Right, and just as an example for listeners – to make what Michael was just talking about it even more real – if we think back to 2009 and the collapse of General Motors, it was not General Motors automotive manufacturing that was collapsing. It was GMAC, their finance arm, which was leveraged on credit default swaps, collateralized debt obligations and similar financial derivatives – what they call exotic instruments. So when Obama comes in and claimed that he "saved General Motors," it wasn't really that. He came in for the Wall Street arm of General Motors.

Obama's demagogic role as Wall Street shill for the Rubinomics gang
MH: That's correct. He was the Wall Street candidate, promoted by Robert Rubin, who was Clinton's Treasury Secretary. Basically, American economic policies can run by a combination of Goldman Sachs and Citigroup, often interchangeably.

ED: This was demonstrated very clearly in the first days of Obama taking office. Who does he meet with to talk about the financial crisis? He invites the CEOs of Goldman Sachs and JP Morgan, Bank of America, Citi and all of the rest of them. They're the ones who come to the White House. It's been written about in books, in the New Yorker and elsewhere. Obama basically says, "Don't worry guys, I got this."

MH: Ron Suskind wrote this. He said that Obama said, "I'm the only guy standing between you and the pitchforks. Listen to me: I can basically fool them." (I give the actual quote in my book.) The interesting thing is that the signs of this meeting were all erased from the White House website, but Suskind has it in his book. Obama emerges as one of the great demagogues of the century. He may be even worse than Andrew Jackson.

ED: So much of it is based on obvious policies and his actions. The moment he came to power was a critical moment when action was needed. Not only did he not take the right action, he did exactly what Wall Street wanted. In many ways we can look back to 2008 when he was championing the TARP, the bailout, and all the rest of that. None of that would have been possible without Obama. That's something that Democrats like to avoid in their conversations.

MH: That's exactly the point. It was Orwellian rhetoric. He ran as the candidate of Hope and Change, but his real role was to smash hope and prevent change. By keeping the debts in place instead of writing them down as he had promised, he oversaw the wrecking of the American economy.

He had done something similar in Chicago, when he worked as a community organizer for the big real estate interests to tear up the poorer neighborhoods where the lower income Blacks lived. His role was to gentrify them and jack up property prices to move in higher-income Blacks. This made billions for the Pritzker family. So Penny Pritzker introduced him to Robert Rubin. Obama evidently promised to let Rubin appoint his cabinet, so they appointed the vicious anti-labor Rahm Emanuel, now Chicago's mayor, as his Chief of Staff to drive any Democrat to the left of Herbert Hoover out of the party. Obama essentially pushed the Democrats to the right, as the Republicans gave him plenty of room to move rightward and still be the "lesser evil."

So now you have people like Donald Trump saying that he's for what Dennis Kucinich was for: a single payer healthcare program. Obama fought against this, and backed the lobbyists of the pharmaceutical and health insurance sectors. His genius is being able to make most voters believe that he's on their side when he's actually defending the Wall Street special interests that were his major campaign contributors.

ED: That's true. You can see that in literally every arena in which Obama has taken action. From championing so-called Obamacare, which is really a boon for the insurance industry, to the charter schools to privatize public education and also become a major boon for Wall Street, for Pearson and all these major education corporations. In terms of real estate, in the gentrification, all the rest. Literally every perspective, every angle from which you look at Obama, he is a servant of finance capital of investors, not of the people. And that's what the Democratic Party has become, delivering its constituency to Wall Street.

A left-wing economic alternative
MH: So here's the problem: How do we get the left to realize this? How do we get it to talk about economics instead of ethnic identity and sexual identity and culture alone? How do we get the left to do what they were talking about a century ago – economic reform and how to take the side of labor, consumers and debtors? How do we tell the Blacks that it's more important to get a well paying job? That's the way to gain power. I think Deng said: "Black cat, white cat, it doesn't matter as long as it catches mice." How do we say "Black president, white president, it doesn't matter, as long as they give jobs for us and help our community economically?"

ED: I think that's important and I want to close with this issue: solutions. One of the things I appreciate in reading your book is that it is broken up into sections. The final section, I think, is really important. You titled it: "There Is An Alternative." That is of course a reference to Margaret Thatcher's TINA (There Is No Alternative). That ideology and mindset took over the left, or at least the nominally left-wing parties. So you're saying that there is an alternative. In that section you propose a number of important reforms. You argue that they would restore industrial prosperity. Now, I'm not asking you to name all of them, to run down the list, but maybe touch on a little bit of what you included, and why that's important for beginning to build this alternative.

MH: There are two main aims that classical economists had 200 years ago. One was to free society from debt. You didn't want people to have to spend their lives working off the debt, whether for a home, for living or to get an education. Second, you wanted to fund industry, not by debt but by equity. That is what the Saint-Simonians and France did. It's what German banking was famous for before World War I. There was a debate in the English speaking countries, especially in England saying that maybe England and the Allies might lose World War I because the banks are running everything, and finance should be subordinated to fund industry. It can be used to help the economy grow, not be parasitic.

But instead, our tax laws make debt service tax deductible. If a company pays $2 billion a year in dividends, a corporate raider can buy it on credit and, if there's a 50% stock rate, he can pay $4 billion to bondholders instead of $2 billion to stockholders. Over the past twenty years the American stock market has become a vehicle for corporate raiding, replacing equity with debt. That makes break-even costs much higher.

The other point I'm making concerns economic rent. The guiding idea of an economic and tax system should be to lower the cost of living and doing business. I show what the average American wage earner has to pay. Under the most recent federal housing authority laws, the government guarantees mortgage loans that absorb up to 43% of family income. Suppose you pay this 43% of income for your home mortgage, after the 15% of your wages set aside for Social Security under FICA.

Instead of funding Social Security out of the general budget and hence out of what is still progressive taxation, Congress has said that the rich shouldn't pay for Social Security; only blue-collar workers should pay. So if you make over $115,000, you don't have to pay anything. In addition to that 15% wage tax, about 20% ends up being paid for other taxes – sales taxes, income taxes, and various other taxes that fall on consumers. And perhaps another 10% goes for bank loans besides mortgages – credit card loans, student loans and other debts.

That leaves only about 25% of what American families earn to be spent on goods and services – unless they borrow to maintain their living standards. This means that if you would give wage earners all of their food, all their transportation, all their clothing for nothing, they still could not compete with foreign economies, because so much of the budget has to go for finance, insurance and real estate (FIRE). That's why our employment is not going to recover. That's why our living standards are not going to recover.

Even if wages do go up for some workers, they're going to have to pay it to the bank for education loans, mortgage loans (or rent), bank debt and credit card debt, and now also for our amazingly expensive and rent-extracting medical insurance and health care and medications. The result is that if they try to join the middle class by getting higher education and buying a home, they will spend the rest of their lives paying the banks. They don't end up keeping their higher wages. They pay them to the banks.

ED: You don't have to tell me. I'm living that reality. Interestingly, in that final section of your book you talk about alternatives, like a public banking option that many people have discussed. You talk about the Social Security cap that you were just mentioning, and focus on taxing economic rent. Some critics would suggest that these sorts of reforms are not going to be able to salvage the capitalist model that is so ensconced in the United States. So I want to give you a chance to sort of present that argument or maybe rebut it.

MH: I won't rebut that criticism, because it's right. Marx thought that it was the task of industrial capitalism to free economies from the economic legacies of feudalism. He saw that the bourgeois parties wanted to get rid of the "excrescences" of the industrial capitalist marketplace. They wanted to get rid of the parasites, the landowners and usurious creditors. Marx said that even if you get rid of the parasites, even if you socialize finance and land that he dealt with in volume II and III of Capital, you're still going to have the Volume I problem. You're still going to have the exploitation problem between employers and employees – the labor/capital problem.

My point is that most academic Marxists and the left in general have focused so much on the fight of workers and labor unions against employers that they tend to overlook that there's this huge FIRE sector – Finance, Insurance, and Real Estate – tsunami is swamping the economy. Finance is wrecking industry and government, along with labor. The reforms that Marx expected the bourgeois parties to enact against rentiers haven't occurred. Marx was overly optimistic about the role of industrial capitalism and industrialized banking to prepare the ground for socialism.

This means that until you complete the task of freeing of society from feudalism – corrosive banking and economic rent as unearned income – you can't solve the industrial problems that Marx dealt with in Volume I. And of course even when you do solve them, these problems of labor exploitation and markets will still exist.

ED: Yes, absolutely. Well we're out of time. I want to thank you for coming onto the program. Listeners, you heard it. There's so much information to digest here. The book is really brilliant, I think essential reading, required reading – Killing the Host: How Financial Parasites and Debt Bondage Destroy the Global Economy, available through CounterPunch, as well as on Amazon. Michael Hudson professor of economics at University of Missouri Kansas City, his work is all over the place. Find it regularly on CounterPunch, as well as on his website michael-hudson.com. Michael Hudson thanks so much for coming on CounterPunch Radio.

MH: It's great to be here. It's been a wonderful discussion.

ED: Thank you

[Jan 08, 2019] The Financial Sector Is the Greatest Parasite in Human History by Ben Strubel

Highly recommended!
The key point is that financial industry needs to be strictly regulated and suppressed, because after a cirtain point it stage coup d'�tat, banksters come to power and turn the industry into cancer for the society with it uncontrolled parasitic growth.
Notable quotes:
"... In economics, the financial sector is typically lumped in with the insurance sector and real estate (the financial portion of the real estate sector, not construction) sector. Together, the sectors are often abbreviated and called the FIRE sector. In this article I will talk mainly about the finance portion of the FIRE sector since it is by far the largest, most visible, and most corrupt. ..."
"... The job of the finance sector is simply to manage existing resources . It creates nothing. Therefore, the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the more money it siphons off from the productive sectors. ..."
"... Neither of these two friendly fellows actually does much, if anything, in the way of actual investing. Sure, they learn the lingo, dress sharply, and probably know more than the average Joe, but they don't call the shots. That happens at Big Bank HQ. ..."
"... Somewhere in the belly of the beast there is a gaggle of highly paid, largely worthless economists and market technicians. Using some combination of tea leaves, voodoo, crystal balls, and tarot cards, these guys come up with the selection of one-size-fits-most, happy-meal portfolios that clients will be invested in. Actually, scratch that. Portfolios aren't assembled using all kinds of mystical methods; they are assembled using cold hard cash. (It's the finance sector. Did you think they spoke a language other than green?) See, various mutual fund companies pay marketing fees and other dubiously legal payments to the advisory firms to get them to sell their funds. In 2010, mutual fund companies paid $3.5B in perfectly legal "pay to play" schemes to get their funds featured in various investment lineups. ..."
"... One significant source of profit for the financial sector has been exploiting public, taxpayer-owned infrastructure. It should be blatantly obvious that these deals are bad for citizens, as the fees charged to citizens for use of the asset must not only cover servicing costs and maintenance capital expenditures but must also generate profit for the firms buying the assets. ..."
"... As the financial sector funnels more and more resources into lobbying and bribes (let's face it, campaign contributions are nothing more than legal bribery), it has been able to strip an ever-greater amount of state-owned assets from the public. Public asset strip mining is one of the chief causes of the increasing profitability of the financial sector. ..."
March 13, 2014

Before I begin this article want to make the point that what I'm about to say doesn't apply to everyone in the industry. While the average mutual fund, broker, wealth manager, and hedge fund charges high fees and delivers poor results it doesn't apply to everyone. I know lots of good, honest hedge fund managers that charge reasonable fees. I know lots of wealth managers that act in their client's best interest and don't gouge them on fees. Unfortunately these are the exceptions rather than the rule.

Over the past year or so, the issue of rising income inequality in the United States (and even worldwide) has come front and center. Most of what I've read has focused on wages, union membership, unemployment, taxation, government subsidy, and executive pay issues.

There is one issue whose role I think is overlooked in the mainstream media: the role the financial sector plays in exacerbating income inequality. In fact, I believe the financial sector is one of the prime causes, and at its current point is perhaps the greatest parasite in human history. It is sucking wealth from the productive sectors of the economy at an unprecedented rate.

Before we go any further, I want to define the term "income inequality." When I use that term, I am referring to the fact that, on average, the incomes and standard of living of American workers is not keeping pace with productivity. I'm also using the term, in part, to explain why workers and executives in some parts of the economy are overpaid in relation to the benefits they provide. What I am not doing is making a blanket statement that money should be taken away from successful, hardworking people and given or "redistributed" to the lazy.

The Role of the Financial Sector

In economics, the financial sector is typically lumped in with the insurance sector and real estate (the financial portion of the real estate sector, not construction) sector. Together, the sectors are often abbreviated and called the FIRE sector. In this article I will talk mainly about the finance portion of the FIRE sector since it is by far the largest, most visible, and most corrupt.

The problem is that the financial, insurance, and real estate (FIRE) sectors do not actually produce any goods or services. If you go on Google Finance you'll see it divides the economy into ten sectors: energy, basic materials, industrials, cyclical consumer goods, non-cyclical consumer goods, financials, healthcare, technology, telecommunications, and utilities.

The nine nonfinancial sectors all produce goods or services. For example, the energy sector companies drill for our oil and refine it into gasoline (e.g., ExxonMobil); the basic materials sector mines our iron (BHP Billiton) and refines it into steel (Nucor); the industrial sector produces the mining equipment (Caterpillar) used by the previously mentioned sectors; the cyclical consumer goods sector produces our cars (Ford) or sells our everyday items (Wal-Mart); the non-cyclical consumer goods sector sells the things we need no matter what, such as groceries (Safeway); the healthcare sector provides the medicines that heal us (Johnson & Johnson); the technology sector gives us the computers and software we use (Apple); the telecommunications sector gives us the ability to communicate (Verizon); and the utility sector gives us the power to run our homes and businesses (Duke Energy).

The financial sector? Well, according to Harvard professor Greg Mankiw, chief academic apologist for the financial sector, this is what it's supposed to do:

Those who work in banking, venture capital, and other financial firms are in charge of allocating the economy's investment resources. They decide, in a decentralized and competitive way, which companies and industries will shrink and which will grow.

The job of the finance sector is simply to manage existing resources . It creates nothing. Therefore, the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the more money it siphons off from the productive sectors.

The graph below shows how the financial sector has grown since 1960. The figures are shown as a percentage of investment (using both gross and net investment).

Graphic source: Jacobin Magazine

Graphic source: Jacobin Magazine

As you can see, the financial sector has almost doubled or tripled in size since 1960. That means it is extracting double or triple the amount of money from the real economy!

Just how much?

I want to go through several areas of the economy to show you how the financial sector is extracting money and offering no benefit.

The Grift in Your Retirement Plan

I want to start with the industry I work in, wealth management. When I started my business, I was cognizant of how investors were ill served by the traditional model of wealth management and vowed to run my business differently. Unfortunately, a vast majority of the financial industry has built an unrivaled apparatus for extracting huge sums of money from retirees and mom-and-pop investors.

Say, you're sitting on your couch, watching TV and thinking about retirement. You just got part of your inheritance and think investing it for the future would be a sensible idea. Imagine you haven't the slightest idea how to get started. Then a commercial comes on with Tommy Lee Jones telling you how trustworthy Ameriprise is. Maybe you hear the reassuring voice of John Houseman pitching Smith Barney, or you might see the iconic bull charging across the desert for Merrill Lynch.

Say you decide to go down to your local brokerage and meet with a financial advisor. His (or her) pitch sounds good, so you decide to become a client.

The first problem is the guy you met. Remember how he told you he has his finger on the pulse of the market, he has access to the best investment research, he is always taking continuing education classes, and he is always monitoring your portfolio? He isn't. He could be a complete moron. He got hired (and survived and thrived) because he is a good salesman. Nothing less and nothing more. He takes his orders on what to sell from the top -- the gaggle of people with their fingers in your retirement pie, helping themselves to regular bites.

The first person behind the scenes telling our hapless salesman what to do is some sort of office, district, or regional manager. This is manager is just like the salesman but with more ambition. Almost all of these guys were promoted from sales, and their job is do an impersonation of Alec Baldwin from Glengarry Glen Ross, yelling at the underperformers ("Coffee is for closers!") to get out there and sell the turd of the month. ("XYZ Mutual Fund Company just paid our firm $200M," this manager says, "so get out there and sell their funds! And, Jones, if you don't gross $20,000 by the end of this month you're fired! Meeting adjourned.")

Neither of these two friendly fellows actually does much, if anything, in the way of actual investing. Sure, they learn the lingo, dress sharply, and probably know more than the average Joe, but they don't call the shots. That happens at Big Bank HQ.

Somewhere in the belly of the beast there is a gaggle of highly paid, largely worthless economists and market technicians. Using some combination of tea leaves, voodoo, crystal balls, and tarot cards, these guys come up with the selection of one-size-fits-most, happy-meal portfolios that clients will be invested in. Actually, scratch that. Portfolios aren't assembled using all kinds of mystical methods; they are assembled using cold hard cash. (It's the finance sector. Did you think they spoke a language other than green?) See, various mutual fund companies pay marketing fees and other dubiously legal payments to the advisory firms to get them to sell their funds. In 2010, mutual fund companies paid $3.5B in perfectly legal "pay to play" schemes to get their funds featured in various investment lineups.

You, the investor, are usually charged somewhere around 1% to 1.5% of assets annually for this "service." I've seen clients charged as much as 1.65% and I've come across firms advertising fees as high as 2% per year for clients with small account balances. For large portfolios (typically $1M or more) the fees start going down and I've seen rates as low as .5% or less. These fees are split up between your advisor, the district manager, and the firm itself. Keep in mind that these are fees before any investments have been made!

So who actually makes the investments in stocks and bonds? It's the portfolio managers at the mutual fund companies. According to the Investment Company Institute 2011 Fact Book (the ICI is a pro-mutual fund organization), the average mutual fund in 2010 charged 1.47% of assets annually. That's in addition to an average up-front sales charge of 1%.

Why so expensive? Well, the funds are towing a lot of dead weight. According to the ICI 2013 Fact Book, only 42% of mutual fund employees were employed in fund management positions or fund administrative positions. The rest, 58%, were employed in either investor servicing (34%) or sales and distribution (24%) job functions.

Like any good infomercial says, "But wait! There's more!" When you buy a stock or bond, you can't just go grab it off the shelf like you are shopping at Wal-Mart. You need to go through a brokerage. A 1999 study by Chalmers, Edelen, and Kadlec found that the average mutual fund incurs trading expenses of .78% per annum. A newer study in 2004 by Karceski, Livingston, and O'Neal found brokerage commissions cost funds around .38% per annum, or .58% if you account for the effect trading large blocks of stock has on the bid-ask spread.

But wait! There's more! Mutual funds and your average retail investor are relatively unsophisticated, so a new industry has popped up to take advantage of them. It's called "high frequency trading" or HFT for short. These are powerful computers programmed to take advantage of "dumb" traders in the market. These HFT firms place their computers physically next to the stock exchange computers in the datacenters and buy access to market quotes milliseconds before they are made public. They use these and other advantages to skim profits from other legitimate investors (that is, people buying stocks because they want to own part of the underlying company).

All told, it's not uncommon to see investors incurring annual expenses of 2%, all the way up to 4% per year.

Institutions and the Rich Have the Same Problem

The problem isn't just limited to Joe Six-pack Retiree. Large institutional investors, such as pension funds, and "sophisticated" rich investors get taken to the cleaners too.

Once upon a time someone came up with a great idea: Since an all-stock portfolio is volatile, why not "hedge" the portfolio and sell some stocks short? If you bet that good stocks will go up (buying stocks in the good companies or going long) and bad stocks will go down (selling the stock short) then you could limit volatility and maybe make some extra money. (You'd make money both when the good stocks went up and the bad stocks went down). It was and is a pretty good idea when done correctly. Unfortunately, the term "hedge fund," like the term "mutual fund," has lost its original meaning. The term hedge fund is now used to refer to any type of pooled investment vehicle that is limited to select clients (usually rich, sophisticated investors and institutions, although the rules vary worldwide).

The rule of thumb is that hedge funds charge a 2% per year management fee and keep 20% of all profits, the proverbial "2 and 20" compensation. According to a WSJ article , this old adage isn't too far off; the average hedge fund charges 1.6% per year and keeps 18% of profits.

In 2012, hedge funds removed $50.5B from their investors' pockets. In fact, according to an article in Jacobin Magazine, the top 25 hedge fund managers make more money than the CEOs of all S&P 500 companies combined. Combined!

Have they earned it? Well, the answer seems to be no. I pulled the last four years of return data for two hedge fund indices: the Barclays Hedge Fund Index and the Credit Suisse AllHedge Index. These two indices track thousands of hedge funds across the globe. I compared them with the returns of the Vanguard Total World Stock Index Fund and the Vanguard Total World Bond Market Index Fund as well as a 50/50 portfolio of the two Vanguard Funds. All returns shown are net of fees.

strbl2

The Vanguard stock fund trounced both hedge fund indices, and the Credit Suisse index managed only to beat the returns of bonds by .01%.

Right about now you will hear the howls of the "hedgies" complaining. I wasn't quite fair to the hedge funds. A lot, but not all, of them are hedged so returns in down markets will be better and four years isn't a terribly long time to look at.

The two graphs below show the returns for the Credit Suisse index since 2004 and the maximum drawdowns (losses) since 2004.

strbl3

strbl4

First, over 10 years the returns for hedge funds are atrocious, only about 25% in total. They do have a point that the draw downs are lower. The maximum losses experienced during the downturn only averaged about 25%. Fine, but the Vanguard Total Bond Market Index had barely any draw downs during the crisis and returned over 50% during a similar time period.

strbl5

Unfortunately, Vanguard does not have return data for any of its World Stock funds for a complete 2008 calendar year so I was unable to get exact data for my 50/50 portfolio. But I'd be willing to bet it beats the hedge fund indices on a risk adjusted basis.

When you hear about underfunded pension plans, part of the blame lies with pension investment committees and their investments in hedge funds. These funds, in aggregate, have not earned the fees they charge and have instead funneled the money of retirees into the hands of a wealthy few.

I'm not alone in reaching this conclusion. Pension funds are slowly starting to see the light and reducing their allocations to "alternative" investments, such as hedge funds, and reallocating the capital to indexed products or negotiating with the funds for lower fees.

It's not just the traditional investment arena where the financial sector has run wild. Its unending quest for siphoning money from the economy has spilled out into other areas.

Speculation in Commodities Costs Main Street Billions

Speculation by the financial sector in the commodities market is impacting the entire world. The passage of the Commodities Futures Modernization Act (CFMA) has allowed big banks to engage in almost limitless speculation in the commodities market. Wall Street has convinced everyone from individual investors to pension funds and endowments that they need to include commodities in their portfolios for deworsification, I mean, diversification purposes. Between investors plowing more than $350B into the commodities market and what appears to be outright manipulation of commodities prices, the financial sector has increased the costs of everything from wheat to heating oil and aluminum to gasoline.

An executive for MillerCoors testified that manipulation of the aluminum market cost manufacturers over $3B. The World Bank estimated that in 2010, 44 million people worldwide were pushed into poverty because of high food prices. The chief cause? More than 100 studies agree the cause is speculation in the commodities market. (Goldman Sachs made $440M in 2012 from food market speculation.) For Americans who love their cars (and SUVs), the biggest impact might be felt at the gas pump where experts estimate that financial speculation has added anywhere from $1 to $1.50 to gas prices.

For more information on speculation in the commodities, I recommend Matt Taibbi's excellent pieces, in-depth information at Better Markets , or some of my articles on commodities.

If you think it's bad enough that Wall Street is raising the price of your food, heating oil, gasoline, and Pepsi, then wait until you get a load of one of the Street's other ingenious ideas for helping themselves to more of your money.

Corruption of Public Infrastructure

One significant source of profit for the financial sector has been exploiting public, taxpayer-owned infrastructure. It should be blatantly obvious that these deals are bad for citizens, as the fees charged to citizens for use of the asset must not only cover servicing costs and maintenance capital expenditures but must also generate profit for the firms buying the assets.

The first and most obvious examples of this type of fraud (I choose to use the term "fraud" because I believe that is exactly what these deals are) are government entities selling public, taxpayer-owned infrastructure, such as road, bridges, parking facilities, and ports, to the private sector so that they can extract rent from the users. The deals are usually touted as saving taxpayers money and letting the "more efficient" private sector better manage the asset. This is false. Many studies show private ownership of public goods does not lead to any cost savings. A comprehensive econometric study done in 2010 of all available public vs. private studies by Germa Bel, Xavier Fageda, Mildred E. Warner at the University of Barcelona found no cost saving in privatizing public water or solid waste management services and infrastructure.

The case is no different when it comes to public roads. A 2007 paper by US PIRG found that privatizing roads never benefits citizens. Financial firms were typically able to buy the assets on the cheap and then raise toll rates while usually sneaking language into the agreements that prevented governments from building competing infrastructure. The paper presented evidence that the Indiana Toll Road lease will cost taxpayers at least $7.5B.

One of the most egregious examples of the financial sector extracting rent is the 2009 sale of Chicago's parking meters to a consortium led by Morgan Stanley. Shortly after the lease was finalized, rates at many parking meters increased (in some case by quadruple the amount). The Chicago Inspector General found that the city was underpaid by almost $1B for the lease. Meanwhile, in 2010 Morgan Stanley banked $58 million in profits from the parking meters. With no way out of the deal , the citizens of Chicago are now paying Morgan Stanley for the right to use assets they used to own!

The second way in which taxpayers are exploited by the financial sector is so-called public-private partnerships (also referred to as PPP or P 3 ). There is no set definition for what constitutes a PPP arrangement, and it is possible some might be beneficial in limited circumstances. I want to focus on one specific type of PPP that enriches the financial sector: when public projects are privately financed. There is absolutely no reason for any government project to ever require paying "rent" to the financial sector in the form of financing.

The United States federal government is the monopoly supplier of US dollars. It can add them to the economy at will through deficit spending or remove them via taxation. There is no earthly reason for a public entity to be forced to depend on the private sector to provide any type of financing. The only constraint on whether or not money should be spent is whether the economy is at full capacity (full employment and full industrial capacity utilization) where the additional deficit spending may cause inflation.

State and local governments are unable to issue currency and therefore must depend on revenue raised via taxation, distributions from the federal government, or money raised through bond issuance. Even then, studies have shown that PPPs are more expensive compared to the state or local entity securing financing through the municipal bond market.

As the financial sector funnels more and more resources into lobbying and bribes (let's face it, campaign contributions are nothing more than legal bribery), it has been able to strip an ever-greater amount of state-owned assets from the public. Public asset strip mining is one of the chief causes of the increasing profitability of the financial sector.

So far we've dealt with examples that are pretty easy to see. Everyone who owns a car knows that gas prices have been rising too fast and food is more expensive. The citizens of Chicago know they are getting shafted on the parking meter deal since parking rates have quadrupled. But there are hidden areas of the economy where the financial sector is ripping off the public too.

Interest Rate Manipulation

Do you know what LIBOR is? And what it's used for? A lot of financial types read my newsletters, so I'm sure some of you do. But the average man or woman on the street likely does not.

LIBOR stands for London Interbank Offered Rate and is the average interest rate banks in London estimate that they would be charged if they borrowed from other banks. This rate is used worldwide by mortgage lenders, credit card agencies, banks, and other financial institutions to set interest rates. By some estimates, more than $350T in financial products, derivatives, and contracts are tied to LIBOR.

In 2012, it was discovered that, since 1991, banks were falsely inflating or deflating the interest rates they reported. (Remember banks essentially make up their own interest rates and report them with the results being essentially averaged and reported as LIBOR.) The banks did this in order to profit from trades or to make themselves look more creditworthy than they were.

The Macquarie Group estimated that the manipulation of LIBOR cost investors $176B. (Keep in mind this is an estimate coming from a financial firm, so it would be prudent to assume it's on the low end.)

Andrew Lo, a finance professor at MIT, said the fraud "dwarfs by orders of magnitude any financial scam in the history of the markets."

Food Stamps (SNAP) and Welfare (TANF)
I highly doubt any of my clients or readers are beneficiaries of the SNAP or "food stamps" program and are probably not very familiar with it. While it is nominally a government program it has been corrupted by the big banks. Benefits are provided electronically via debit cards (EBT cards). JP Morgan has made over $500M from 2004 to 2012 providing EBT benefits to 18 states. The banks then are free to reap fees from users for such things as cash withdraws for TANF benefits, out of network ATM fees, lost card replacement fees, and even customer service calls.

I believe you can judge how profitable a service is to a company how much it spends on lobbying. In the case of JPMorgan, its bribes, I mean campaign contributions to Agriculture Committee (SNAP is part of the Department of Agriculture) members increased sharply after it entered the EBT market in 2004.

strbl6

(Graphic source: GAI via data from CRP) Summary

A bloated and out-of-control financial sector does not add any value to society. Society benefits when the financial sector is kept as small as possible.

The financial sector is a parasite that depends on its host organism, the productive sector of the economy, to fuel its profits. The larger the financial sector grows, the more wealth it extracts from the productive sectors of the economy. With all due respect to Matt Taibbi, Goldman Sachs isn't a vampire squid; the entire financial sector is the vampire squid with its tentacles reaching into the pockets of citizens everywhere and sucking out money.


Brian | March 13, 2014 at 9:44 am

Quite a damning critique, and if I may step away from the main point I have to ask: why is it that some guys involved with finance, Strubel as well as Auerback, Mosler and Ritholtz, talk like this while so many in the field do not? Does everyone involved "know" all this but most simply choose to put on blinders?

Jim Shannon | March 13, 2014 at 9:57 am

Great Article about the .01% "Taker Class". This can all end by the 99% demanding a change to the TAX CODE! Yet another clear indication of the manipulation of the "Giver Class" by government!

Jonathan | March 13, 2014 at 11:00 am

Its truly frightening to see how the public has been blindsided/mislead about the root causes of rapid income inequality. As a social worker I am somwhat familiar with the SNAP benefit program Depressing to think JP Morgan Chase skimmed at least 500m over an eight year period for SNAP and welfare benefits. I suppose this is the new age enclosure movement where Wall Street is picking up public assets for pennies on the dollar and charging enormous rents..

The questions is.. what happens when it is used up?? A scorched wasteland of dysfunctional infrastruture/gated communites housing a tiny elite protected from beggars, street criminals, and gang bandits??

Zane Zodrow | March 13, 2014 at 2:07 pm

Excellent article. Easy for a layperson to understand and covers a good portion of the pervasive, ongoing, worldwide financial system theft. I worked for a stock brokerage firm years ago while studying for the series 7. Once I figured out they were all just well-dressed telemarketers, I quit and found a more productive job. Remember 'dogs of the Dow' ?

Dale Pierce | March 13, 2014 at 2:11 pm

A very well-written and eye-opening post � thanks, Ben. I think the formulation of this central point may be a little skewed, though: " the smaller the financial sector is the more real wealth there is for the rest of society to enjoy. The bigger the financial sector becomes the more money it siphons off from the productive sectors."

I think this formulation may be somewhat muddling the real-vs.-financial dichotomy that MMT revolves around. Sort of by definition, the financial sector is 100 percent nominal � even when it posits ownership of real assets, it is really just money-valuing them, applying the unit-of-account property of money. The ownership is an abstraction. The owner of a share of stock or a gold ETF has no concrete interaction with the company or commodity in question. So, contrasting the total size of the financial sector to the totality of real wealth available � for those members of society who do *not* receive income from the financial sector � leaves me scratching my head. I'm not clear what is being measured. I know that profits flowing to the financial sector have exploded from around two percent of total corporate profits in the 1950s to around forty percent now. This means it is over-charging for its so-called services, but I think the real-economy effects are non-linear, and more complex than this.

Regarding the financial sector's growing tendency to siphon off money from the productive sectors � yes, they do this. But it is up to the state, with its currency-issuing and taxing powers, to regulate how far this process goes and what happens next. In a recent post, J.D. Alt took note of the ephemeral nature of the financial sector's nominal money-wealth. It is "fictitious capital". Electronic poker chips. Just zeros and ones, really. As long as the plutocrats simply hoard them � use them to keep score � the state can just replace them by increasing spending. I also tend to think that the consumption spending of the .01 percent is rather inelastic. They already have everything they want. Keynes' attitude was to let them live it up, up to a point, and then tax the excess back when they die.

For me, the most important part of your post is the section on commodity speculation and infrastructure privatization. This truly is a huge deal, a clear interaction with the real economy and a terrible crime, actually. Again, though, it is up to the state to permit these outrages or ban them � we used to ban them but we stopped. So. One more big thank-you to the Big Dog, I guess. To think � before Clinton, America actually based aid to poor children on their ages and their poverty rather than the supposed moral imperfections of their parents. We even had no-fee food stamps.

Obviously, the other reason we can't just let the one percent play their casino games is that they eventually blow up the real economy, as a totality, through financial crises and destabilization. And, due to all the fabulist monetary propaganda out there, there is now a big reservoir of public opinion and political will *in favor* of financial collapse. The libertarians and other Paul-Partiers think it would do us all good. And bring back the gold standard. And "End the Fed", and all the rest of that good 19th Century stuff. I'm not a ready-for-Hillary kind of guy in general, but is it possible to imagine a scarier idea than President Rand?

Thanks again, Ben � great post.

golfer1john | March 13, 2014 at 4:44 pm

While most of your specific criticisms are quite valid, I think your brush is a bit too broad. "The problem is that the financial, insurance, and real estate (FIRE) sectors do not actually produce any goods or services. "

This is obviously false. I have many times used services provided by banks, credit unions, insurance companies, and real estate brokers and agents. It would be practically impossible to find the right house to buy, to sell it for a fair price, to get the loan necessary to buy it, or to protect myself and my family from a catastrophic loss without their services.

It is undoubtedly true that most of the volatility of the FIRE sector since 1990 is due to speculation and parasitical activities, but there is undoubtedly also some growth of useful services that has facilitated growth of the other sectors, not detracted from it. Thus it is not always true that "the smaller the financial sector is the more real wealth there is for the rest of society to enjoy".

Bottom line, you have a good point. Excessively broad statements might be more dramatic, but if they are not true they don't help your cause.

golfer1john | March 18, 2014 at 10:04 am

I have gotten real value from real estate brokers. Did you ever try to sell a house without one? Qualify the serious buyers and deal with the lookie-loos? And the government paperwork!! I've always gotten my money's worth.

No, the fire doesn't care if you have insurance, but the insurance company will advise you on how to prevent fires and minimize the damage. Paying an insurance company has protected me from paying the unaffordable high cost of the insured risks. The service provided by insurance is not incident prevention, it is management of financial risk, and it does that very well. My claims have been handled quickly and fairly. I had one unusual case where I thought the insurance company should have paid me more than their original offer (the nation-wide blue book value of the car didn't reflect the unique situation in my State), and after discussion they agreed with me and paid. I've been with them for over 40 years and I'm very happy with their services.

If you want your bank to create wealth for you, you're looking in the wrong place. Banks are good for storing and protecting your money, and many will do that for you without fees, and even pay you interest. They'll let you use their computers to pay your creditors, also without charge. They'll even give you short-term interest-free loans, and pay you cash rebates, if you use their credit cards. I like my banks' services, too. And, of course, if you want to borrow money they will lend it to you and if your payment is late they don't break your legs. They will make a profit, though. That's why they do it. You don't have to participate if you don't want to.

Not every bank is Goldman Sachs, and not every insurance company is AIG. Those are good examples of companies that often serve no useful purpose, but there are many others who do provide useful services at a reasonable cost.

zak | March 17, 2014 at 8:25 pm

Although I can be sympathetic of the no-value creation thesis in the financial industry, comparing the performance of hedge funds with the recent performance of bonds is a no big no-no, because it assumes a negative correlation between equities and bonds. If one look at the world markets in the last 100 years, that has been the exception rather than the rule.

And you forgot to mention the important roles of capital markets in deploying capital and financing companies through IPOs, bond offers, etc.

FSK | March 17, 2014 at 10:05 pm

You missed another big point, negative real interest rates. The Fed Funds Rate is currently 0%-0.25%, while real inflation is much higher. (The CPI is not an accurate measure of inflation.) Big banks can profit by borrowing at 0% and buying stuff (bonds, stocks, commodities, real estate, politicians, whatever).

On LIBOR, here's another interesting bit. Cities and states lost a TON of money on interest rate swaps with banks. What was sold as a "hedge" wound up blowing up and costing a fortune.

http://www.realfreemarket.org/blog/2012/07/10/banksters-rob-cities-via-interest-rate-swaps-and-libor-rate-manipulation/

Ben | March 18, 2014 at 5:32 pm

This was a fascinating piece, very readable for those of us with minimal financial education. However, since this is such a good explainer for the layman, I think it would be very beneficial to explain how big a difference 1% in fees makes for an investor over a lifetime. I know personally when I used to compare funds the difference between 1 and 2% in fees seemed negligible. But then I saw that fantastic PBS Frontline on this topic and saw how much that 1% could cost me over a lifetime! I now have everything that I personally manage in index funds!

Doc | March 19, 2014 at 5:26 am

You can't really argue with what has been said, and all (of us) involved in the sector know it is massive rip off.

While a free market advocate, I think a first step would be to introduce meaningful fee caps on all state promoted or mandated saving arrangements (eg ISAS, and Pensions), on the grounds that the market is skewed by the government intervention that creates the glut of forced buyers, and so to correct that imbalance the market (i.e. consumers) need protection through fee caps. I'd say no more than 20 � 25bps should be permitted for all ISAS and pension savings (DC or DB). Individual wealthy investors (investments of more than say �5m?) can pay what they like.

Paul | March 28, 2014 at 4:18 pm

Ben,

>>The job of the finance sector is simply to manage existing resources. It creates nothing.

This is a dubious assertion, but you clearly believe it. How then, can you in good conscience, charge 1.25% (plus indirect costs for the funds you hold in client portfolios) to manage people's money when you yourself admit you are adding no value?

(source: http://strubelim.com/wp/our-funds/ar-fund/ )

Briana | March 30, 2014 at 8:32 pm

Hi Paul,

I know this was for Ben, but there's a pretty simple answer to that question: They don't charge 1.25% because they create value, they're charging a fee to access the profit created by companies they invest in. Say I told you that I knew a guy named Jimmy who was going to make three bucks for every buck he gets, and I asked if you'd lend me a dollar to give to Jimmy with the promise that he'd give me 1.50 cents of it. I'd want to keep 25 cents but you can have 1.25, and so you agree. I didn't create the 2 extra dollars of value -- Jimmy did -- but I feel justified in asking for a cut because I gave you the tip about Jimmy's value creation ability.

At least, that is my understanding of Ben's statement.

golfer1john | March 30, 2014 at 11:23 pm

Semantics.

There are 6000 publicly traded companies. Some of them will have rising stock prices, some falling. If a money manager can steer you to the rising ones, he is doing something of value. It doesn't mean he created anything physical that didn't exist before. He's doing a service for you that would otherwise have taken you some time and effort to do, and that's what you pay for.

Briana | March 31, 2014 at 10:22 am

Yes, it's a different definition of value. The growth of financial services has been outpacing the growth of other sectors to a monstrous scale, and that makes this distinction important. It signals a kind of corruption that can only mean high inflation and decoupling money from economic output.

golfer1john | April 1, 2014 at 12:05 am

I don't follow. How is financial services different from any other kind of services, in the impact on inflation? Why not also actors, barbers, or any other service profession? The growth of the financial sector might be explained by the fact that it is the industry most able to exploit computers, and the first to do so on a large scale.

The corruption is, I think, a separate issue that is present whenever other people's money is involved. Financial services and government are simply more involved that way than most other industries, and have been all along, dating to long before the recent growth. Corruption is not impossible in any industry, just more attractive when the numbers are larger.

Jim Shannon | April 1, 2014 at 9:20 am

Corruption is never a separate in ANY corporate activity. The TAX CODE treats the wealth of the .01% radically different than Income from Labor, because all Taxes on Capital Gains are deferred until taken and are not TAXED as ordinary income. The TAX CODE is responsible for the corruption of our government because it has put real POWER, the Power of Wealth in the hands of the .01%, to buy whatever it wants, while labor and the poor spend everything they earn or are given , every single year to survive in a economic culture designed for the benefit of the .01%, something no one will write about!

Change the TAX CODE and the Corruption of Society will end!

Briana | April 1, 2014 at 7:23 pm

Barbers and actors being paid for their labor do not have the same impact on inflation as a bank giving out loans and consumer credit at interest. It's not equivalent at all.

Corruption in financial industries is what this article is discussing. If it's a separate issue, I'm confused as to the point of talking about this at all!

Paul | April 1, 2014 at 9:41 am

Briana,

I don't think your explanation is correct. Why wouldn't I go directly to Jimmy in that case and cut out the middle man since he is offering no value add? The fact is, the middle man, Ben, in this case, believes that he can identify superior companies to invest his clients money in and earn a greater return. This is Ben's value add and why he charges 1.25%.

Golfer John is correct and that point, essentially, blows a hole in Ben's thesis here that the financial sector adds no value because they only manage "existing resources". Steering capital to the good ideas that improve consumer wealth and generate a return is a value add and the fact that millions of transactions like this happen voluntarily between consenting adults further supports this.

Physics tells us that matter cannot be created or destroyed, so the same resources that are on this earth today are the same ones that were here 10,000 years ago. So, in that sense, Apple is simply managing "existing resources" when they build the iphone, Toyota simply managing "existing resources" when they build a car, and UPS and US Mail are merely moving "existing resources" from one location to another when they make deliveries, must be no value add there right?

Asserting that the financial sector only manages existing resources, and then citing that as proof of no value add is simply a non sequiter.

golfer1john | April 2, 2014 at 1:50 pm

No, I wasn't, though I have heard that. My theory of markets, and human group behavior in general, is a statistical approach. There are averages, distributions, and temporary equilibriums, but the interesting parts are the outliers. I guess that is more of a quantum flavor than Newtonian. Over time, economies behave cyclically. Much of nature and human group behavior is cyclical.

Briana | April 1, 2014 at 6:21 pm

Paul -- That's true, and a good analogy, except you're getting a bit reductive with the term "existing resources". I agree that "no value" is a bit extreme, which is why I became more interested in the -type- of value.

Paul | April 3, 2014 at 11:44 am

John � My physics is flawed to the extent that the law of conservation of matter is flawed, this I admit. I am much more economist than physicist though so better that I get my physics wrong and econ right! I see a lot of similarities between the two, as well as crucial differences, but I don't want to get too off topic.

Briana � "No Value is a bit extreme"

I agree, and as the absurdly hyperbolic title* of this article states, the author takes it to an even greater extreme � namely that the financial sector is actually a systematic destroyer of value (parasite) that is created by all of the other industries. The crux of his assertion rests on that they only "manage existing resources" and also calling Greg Mankiw an apologist, neither strikes me as an intellectually rigorous argument.

And interestingly, on his own firm's website, the author apparently contradicts the thesis of this article when advertising his financial services and the fees he charges for his own value add. I can think of several explanations for this, none of which are particularly flattering, others can draw their own conclusions.

*a worse parasite than all of the murderous dictatorial regimes in human history that have institutionalized the slaughter and torture of millions? Really? I note this because it is so obviously false that it makes the rest of the content seem unserious and shallow even if valid points exist. Acidic comments tend to preach to the already converted, but perhaps that is the goal here.

Briana | April 4, 2014 at 7:02 pm

Yeah, ok. I should know better, Paul. My brain tried to rationalize the argument by making it less extreme. The goal probably was to mobilize the choir to go Occupy Wall Street for a few more months, haha.

Those valid points shouldn't be ignored because of the poorly handled hyperbole, though. The financial sector does have a great capacity to act as a parasite by overvaluing their services and squandering wealth generated by other industries instead of reinvesting it in worthwhile, valuable enterprises; or using that wealth to essentially 'gamble' or invent money that is not attached to any real value (i.e. shorting or credit default swaps). As the fruits of these behaviors are becoming obvious, it gets harder to justify policies that allow them to happen.

Paul | April 9, 2014 at 10:51 am

In many ways that is my point. You found those "valid points" obviously correct before reading the article, so it rang true despite the extreme hyperbole. I did not find those points self-evidently true so this poorly constructed argument relying on clearly false assumptions struck me as uncompelling.

For example, how does one "overvalue their services"? If one charges too much, no one is forced to buy. I may find Ben's management fee of 1.25% to be overvaluing himself, but I have the option of not paying and instead going to less expensive alternatives.

Why wouldn't the financial industry invest in "worthwhile valuable enterprises" if they provide a worthwhile return? After all, aren't they driven by an insatiable desire for profit? Who determines what enterprises are worthwhile?

I do not see anything inherently wrong with short selling. Indeed, the ability to short a stock is simply expressing a view about its value, and leads to greater and more accurate price discovery. What is wrong with shorting a stock if one believes it is overpriced relative to its instrinsic value? Is it not preferable that prices reflect underlying economic fundamentals rather than being disconnected from such? Shorting puts downward pressure on prices, and helps prevent overvaluation.

Credit Default Swaps are nothing more than insurance against a bond default. There is nothing inherently wrong with insurance.

I'm not suggesting that you, here in the comments, need to write a paper elaborating on those, just that this article did a poor job of pursuading, though again, I am coming to the realization that I am likely not the intended audience.

This discussion in the comments has actually been more fruitful than the article itself.

(Sorry for the late response, I've been away for a few days.)

Briana | April 9, 2014 at 10:43 pm

Hi Paul,

"For example, how does one "overvalue their services"?"

This argument hinges on everyone that purchases these services knowing their true value. It's very simplistic to say that if someone purchases it, that is the real value. It gets complicated when you take into account the psychological pressures of purchasing behavior, such as "middle-price" preferences, "money you don't see is money you don't miss" and other tricks that are employed to get people to pay higher prices.

"Why wouldn't the financial industry invest in "worthwhile valuable enterprises" if they provide a worthwhile return? After all, aren't they driven by an insatiable desire for profit? Who determines what enterprises are worthwhile?"

Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is worthwhile.

"I do not see anything inherently wrong with short selling."

Shorting is basically a bucket shop in disguise.

"Credit Default Swaps are nothing more than insurance against a bond default. There is nothing inherently wrong with insurance."

There is when it's considered "money creation" http://www.usdebtclock.org/

"This discussion in the comments has actually been more fruitful than the article itself."

Agreed. And I could write a paper elaborating on this!

Paul | April 11, 2014 at 11:48 am

"This argument hinges on everyone that purchases these services knowing their true value."

In a literal sense, you are correct, it is an imperfect measure of value. However, I think it is far and away the most reliable one we have as value is extremely subjective. I don't think it is right or prudent for third, non cost bearing parties to preempt decisions made by consenting adults, rather, I would accord them the dignity of free choice. There are many things that consumers purchase that I do not understand, why anyone would pay a premium for a fast car seems like a waste of money to me, for example. Why anyone would pay money to golf, not to mention the huge cost in terms of time it takes to get through 18 holes, seems like a waste of money to me. These are things that make no sense to me because I do not see the value there. But, I recognize that people have various tastes and preferences, and I respect that and presume that individuals know themselves and their own tastes and preferences better than I (or someone else) does. Therefore, when someone values something that I do not understand, I tend to believe it is a result of a difference in preference, rather than they are too dumb to figure out what they like, or that they are "tricked" into buying something and hence need protection delivered by those who fancy themselves as enlightened enough to see the real truth. Nothing about this is unique to the financial industry, by the way.

"Countless services and products we rely on were funded by taxes to make them profitable. They are "worthwhile" but apparently not "profitable" enough to invest in. Making money and creating value aren't the same thing. Ideally, everyone decides what is worthwhile."

Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources.

Briana | April 11, 2014 at 7:50 pm

Paul �

I agree with you on purchasing decisions. People should be free to determine value. I'm not saying people are always dumb, but I do think they are manipulated. If you want to believe they are not, that is up to you, but apparently you've never seen advertising. The financial industry advertises itself heavily, especially in consumer credit markets and insurance. But if we're going to gauge something as nebulous as "true value", it requires a level of conscientiousness from everyone, and accepting whatever people purchase as reflecting it's actual value is a quick way to guarantee abuse, especially when you have something like consumer credit. If people are free to determine value, they should also be held to the consequences of their choices, which is currently not the case in the financial industry and increasingly in the general population.

"Apparently not enough people decided these services and products were worthwhile, so politicians decided they were worthwhile and used the force and power of government to get them done. Substituting preferences of politicians, spending other people's money for those of millions of individuals spending their own money does not seem like an efficient way to allocate resources."

You mean like electricity, phone services, railroads, airlines, fortified wheat, water treatment, the internet, satellites, healthcare.. the list could go on and on. It is less efficient (a word that really needs to be defined clearly, but I'll assume I know what you mean!), and it happens because otherwise it wouldn't be possible, and yet it becomes widely adopted and lauded none-the-less; progress, they say. Like I said, worthwhile and profitable are not 1-to-1 correlation, just as willingness to purchase doesn't necessarily indicate true value.

I thought you might have some interesting opinion on the CDS as money creation I'm still trying to figure that one out!

[Jan 08, 2019] No, wealth isn t created at the top. It is merely devoured there by Rutger Bregman

Highly recommended!
Financialization is a new type of racket...
Notable quotes:
"... Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they're sucking the rest of us dry @rcbregman ..."
"... 'A big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body' ..."
"... This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet � on reflection � cannot be denied. The truth that we are living in an inverse welfare state. These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have "made it". By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world. ..."
"... To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our "human capital" in economic terms) to create something new, whether that's a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth. ..."
"... But there is also a second way to make money. That's the rentier way : by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others' expense, using his power to claim economic benefit. ..."
"... For those who know their history, the term "rentier" conjures associations with heirs to estates, such as the 19th century's large class of useless rentiers, well-described by the French economist Thomas Piketty . These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend the rentier's right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking. From Wall Street to Silicon Valley , from big pharma to the lobby machines in Washington and Westminster, zoom in and you'll see rentiers everywhere. ..."
"... It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I'll start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the International Monetary Fund and the Bank for International Settlements � not exactly leftist thinktanks � have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they gobble it up whole. ..."
"... In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It's not creating anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however, is always the same: offer loans like it's going out of style, which in turn inflates the price of things like houses and shares, then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you), and if the shit hits the fan, let Uncle Sam mop it up. ..."
"... Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields a similar revenue model. Take tax evasion . Untold hardworking, academically degreed professionals make a good living at the expense of the populations of other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers. One of the richest people in the world, Carlos Slim , earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The same goes for the Russian oligarchs who rose after the Berlin Wall fell , who bought up valuable state-owned assets for song to live off the rent. ..."
"... Even paragons of modern progress like Apple, Amazon, Google , Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose. ..."
"... Even more important, many of these companies function as "natural monopolies", operating in a positive feedback loop of increasing growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult to compete with, because as they grow bigger, they only get stronger. ..."
"... Most of Mark Zuckerberg's income is just rent collected off the millions of picture and video posts that we give away daily for free. And sure, we have fun doing it. But we also have no alternative � after all, everybody is on Facebook these days. Zuckerberg has a website that advertisers are clamouring to get onto, and that doesn't come cheap. Don't be fooled by endearing pilots with free internet in Zambia. Stripped down to essentials, it's an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an astounding 64% of all online ad revenue in the US. ..."
"... Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he had the biggest army in Europe. It's no different for the modern rentier. He's got the law, politicians and journalists squarely in his court. That's why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised within an inch of her life if she checks the wrong box. ..."
"... The biggest tragedy of all, however, is that the rentier economy is gobbling up society's best and brightest. Where once upon a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks, law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it's insane. We are forking over billions in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts. ..."
"... One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire. Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child's growth, so the rentier drains a country of its vitality. ..."
Mar 30, 2017 | www.theguardian.com

Rutger Bregman

Bankers, pharmaceutical giants, Google, Facebook ... a new breed of rentiers are at the very top of the pyramid and they're sucking the rest of us dry @rcbregman

Comments 890

'A big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body'.

This piece is about one of the biggest taboos of our times. About a truth that is seldom acknowledged, and yet � on reflection � cannot be denied. The truth that we are living in an inverse welfare state. These days, politicians from the left to the right assume that most wealth is created at the top. By the visionaries, by the job creators, and by the people who have "made it". By the go-getters oozing talent and entrepreneurialism that are helping to advance the whole world.

Now, we may disagree about the extent to which success deserves to be rewarded � the philosophy of the left is that the strongest shoulders should bear the heaviest burden, while the right fears high taxes will blunt enterprise � but across the spectrum virtually all agree that wealth is created primarily at the top.

So entrenched is this assumption that it's even embedded in our language. When economists talk about "productivity", what they really mean is the size of your paycheck. And when we use terms like " welfare state ", "redistribution" and "solidarity", we're implicitly subscribing to the view that there are two strata: the makers and the takers, the producers and the couch potatoes, the hardworking citizens � and everybody else.

In reality, it is precisely the other way around. In reality, it is the waste collectors, the nurses, and the cleaners whose shoulders are supporting the apex of the pyramid. They are the true mechanism of social solidarity. Meanwhile, a growing share of those we hail as "successful" and "innovative" are earning their wealth at the expense of others. The people getting the biggest handouts are not down around the bottom, but at the very top. Yet their perilous dependence on others goes unseen. Almost no one talks about it. Even for politicians on the left, it's a non-issue.

To understand why, we need to recognise that there are two ways of making money. The first is what most of us do: work. That means tapping into our knowledge and know-how (our "human capital" in economic terms) to create something new, whether that's a takeout app, a wedding cake, a stylish updo, or a perfectly poured pint. To work is to create. Ergo, to work is to create new wealth.

But there is also a second way to make money. That's the rentier way : by leveraging control over something that already exists, such as land, knowledge, or money, to increase your wealth. You produce nothing, yet profit nonetheless. By definition, the rentier makes his living at others' expense, using his power to claim economic benefit.

'From Wall Street to Silicon Valley, zoom in and you'll see rentiers everywhere.'

For those who know their history, the term "rentier" conjures associations with heirs to estates, such as the 19th century's large class of useless rentiers, well-described by the French economist Thomas Piketty . These days, that class is making a comeback. (Ironically, however, conservative politicians adamantly defend the rentier's right to lounge around, deeming inheritance tax to be the height of unfairness.) But there are also other ways of rent-seeking. From Wall Street to Silicon Valley , from big pharma to the lobby machines in Washington and Westminster, zoom in and you'll see rentiers everywhere.

There is no longer a sharp dividing line between working and rentiering. In fact, the modern-day rentier often works damn hard. Countless people in the financial sector, for example, apply great ingenuity and effort to amass "rent" on their wealth. Even the big innovations of our age � businesses like Facebook and Uber � are interested mainly in expanding the rentier economy. The problem with most rich people therefore is not that they are coach potatoes. Many a CEO toils 80 hours a week to multiply his allowance. It's hardly surprising, then, that they feel wholly entitled to their wealth.

It may take quite a mental leap to see our economy as a system that shows solidarity with the rich rather than the poor. So I'll start with the clearest illustration of modern freeloaders at the top: bankers. Studies conducted by the International Monetary Fund and the Bank for International Settlements � not exactly leftist thinktanks � have revealed that much of the financial sector has become downright parasitic. How instead of creating wealth, they gobble it up whole.

Don't get me wrong. Banks can help to gauge risks and get money where it is needed, both of which are vital to a well-functioning economy. But consider this: economists tell us that the optimum level of total private-sector debt is 100% of GDP. Based on this equation, if the financial sector only grows, it won't equal more wealth, but less. So here's the bad news. In the United Kingdom, private-sector debt is now at 157.5% . In the United States, the figure is 188.8% .

In other words, a big part of the modern banking sector is essentially a giant tapeworm gorging on a sick body. It's not creating anything new, merely sucking others dry. Bankers have found a hundred and one ways to accomplish this. The basic mechanism, however, is always the same: offer loans like it's going out of style, which in turn inflates the price of things like houses and shares, then earn a tidy percentage off those overblown prices (in the form of interest, commissions, brokerage fees, or what have you), and if the shit hits the fan, let Uncle Sam mop it up.

The financial innovation concocted by all the math whizzes working in modern banking (instead of at universities or companies that contribute to real prosperity) basically boils down to maximizing the total amount of debt. And debt, of course, is a means of earning rent. So for those who believe that pay ought to be proportionate to the value of work, the conclusion we have to draw is that many bankers should be earning a negative salary; a fine, if you will, for destroying more wealth than they create.

Bankers are the most obvious class of closet freeloaders, but they are certainly not alone. Many a lawyer and an accountant wields a similar revenue model. Take tax evasion . Untold hardworking, academically degreed professionals make a good living at the expense of the populations of other countries. Or take the tide of privatisations over the past three decades, which have been all but a carte blanche for rentiers. One of the richest people in the world, Carlos Slim , earned his millions by obtaining a monopoly of the Mexican telecom market and then hiking prices sky high. The same goes for the Russian oligarchs who rose after the Berlin Wall fell , who bought up valuable state-owned assets for song to live off the rent.

But here comes the rub. Most rentiers are not as easily identified as the greedy banker or manager. Many are disguised. On the face of it, they look like industrious folks, because for part of the time they really are doing something worthwhile. Precisely that makes us overlook their massive rent-seeking.

Take the pharmaceutical industry. Companies like GlaxoSmithKline and Pfizer regularly unveil new drugs, yet most real medical breakthroughs are made quietly at government-subsidised labs. Private companies mostly manufacture medications that resemble what we've already got. They get it patented and, with a hefty dose of marketing, a legion of lawyers, and a strong lobby, can live off the profits for years. In other words, the vast revenues of the pharmaceutical industry are the result of a tiny pinch of innovation and fistfuls of rent.

Even paragons of modern progress like Apple, Amazon, Google , Facebook, Uber and Airbnb are woven from the fabric of rentierism. Firstly, because they owe their existence to government discoveries and inventions (every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice recognition, was invented by researchers on the government payroll). And second, because they tie themselves into knots to avoid paying taxes, retaining countless bankers, lawyers, and lobbyists for this very purpose.

Even more important, many of these companies function as "natural monopolies", operating in a positive feedback loop of increasing growth and value as more and more people contribute free content to their platforms. Companies like this are incredibly difficult to compete with, because as they grow bigger, they only get stronger.

Aptly characterising this "platform capitalism" in an article, Tom Goodwin writes : "Uber, the world's largest taxi company, owns no vehicles. Facebook, the world's most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world's largest accommodation provider, owns no real estate."

Facebook Twitter Pinterest 'Every sliver of fundamental technology in the iPhone, from the internet to batteries and from touchscreens to voice recognition, was invented by researchers on the government payroll.' Photograph: Regis Duvignau/Reuters

So what do these companies own? A platform. A platform that lots and lots of people want to use. Why? First and foremost, because they're cool and they're fun � and in that respect, they do offer something of value. However, the main reason why we're all happy to hand over free content to Facebook is because all of our friends are on Facebook too, because their friends are on Facebook because their friends are on Facebook.

Most of Mark Zuckerberg's income is just rent collected off the millions of picture and video posts that we give away daily for free. And sure, we have fun doing it. But we also have no alternative � after all, everybody is on Facebook these days. Zuckerberg has a website that advertisers are clamouring to get onto, and that doesn't come cheap. Don't be fooled by endearing pilots with free internet in Zambia. Stripped down to essentials, it's an ordinary ad agency. In fact, in 2015 Google and Facebook pocketed an astounding 64% of all online ad revenue in the US.

But don't Google and Facebook make anything useful at all? Sure they do. The irony, however, is that their best innovations only make the rentier economy even bigger. They employ scores of programmers to create new algorithms so that we'll all click on more and more ads. Uber has usurped the whole taxi sector just as Airbnb has upended the hotel industry and Amazon has overrun the book trade. The bigger such platforms grow the more powerful they become, enabling the lords of these digital feudalities to demand more and more rent.

Think back a minute to the definition of a rentier: someone who uses their control over something that already exists in order to increase their own wealth. The feudal lord of medieval times did that by building a tollgate along a road and making everybody who passed by pay. Today's tech giants are doing basically the same thing, but transposed to the digital highway. Using technology funded by taxpayers, they build tollgates between you and other people's free content and all the while pay almost no tax on their earnings.

This is the so-called innovation that has Silicon Valley gurus in raptures: ever bigger platforms that claim ever bigger handouts. So why do we accept this? Why does most of the population work itself to the bone to support these rentiers?

I think there are two answers. Firstly, the modern rentier knows to keep a low profile. There was a time when everybody knew who was freeloading. The king, the church, and the aristocrats controlled almost all the land and made peasants pay dearly to farm it. But in the modern economy, making rentierism work is a great deal more complicated. How many people can explain a credit default swap , or a collateralised debt obligation ? Or the revenue model behind those cute Google Doodles? And don't the folks on Wall Street and in Silicon Valley work themselves to the bone, too? Well then, they must be doing something useful, right?

Maybe not. The typical workday of Goldman Sachs' CEO may be worlds away from that of King Louis XIV, but their revenue models both essentially revolve around obtaining the biggest possible handouts. "The world's most powerful investment bank," wrote the journalist Matt Taibbi about Goldman Sachs , "is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money."

But far from squids and vampires, the average rich freeloader manages to masquerade quite successfully as a decent hard worker. He goes to great lengths to present himself as a "job creator" and an "investor" who "earns" his income by virtue of his high "productivity". Most economists, journalists, and politicians from left to right are quite happy to swallow this story. Time and again language is twisted around to cloak funneling and exploitation as creation and generation.

However, it would be wrong to think that all this is part of some ingenious conspiracy. Many modern rentiers have convinced even themselves that they are bona fide value creators. When current Goldman Sachs CEO Lloyd Blankfein was asked about the purpose of his job, his straight-faced answer was that he is " doing God's work ". The Sun King would have approved.

The second thing that keeps rentiers safe is even more insidious. We're all wannabe rentiers. They have made millions of people complicit in their revenue model. Consider this: What are our financial sector's two biggest cash cows? Answer: the housing market and pensions. Both are markets in which many of us are deeply invested.

Recent decades have seen more and more people contract debts to buy a home, and naturally it's in their interest if house prices continue to scale new heights (read: burst bubble upon bubble). The same goes for pensions. Over the past few decades we've all scrimped and saved up a mountainous pension piggy bank. Now pension funds are under immense pressure to ally with the biggest exploiters in order to ensure they pay out enough to please their investors.

The fact of the matter is that feudalism has been democratised. To a lesser or greater extent, we are all depending on handouts. En masse, we have been made complicit in this exploitation by the rentier elite, resulting in a political covenant between the rich rent-seekers and the homeowners and retirees.

Don't get me wrong, most homeowners and retirees are not benefiting from this situation. On the contrary, the banks are bleeding them far beyond the extent to which they themselves profit from their houses and pensions. Still, it's hard to point fingers at a kleptomaniac when you have sticky fingers too.

So why is this happening? The answer can be summed up in three little words: Because it can.

Rentierism is, in essence, a question of power. That the Sun King Louis XIV was able to exploit millions was purely because he had the biggest army in Europe. It's no different for the modern rentier. He's got the law, politicians and journalists squarely in his court. That's why bankers get fined peanuts for preposterous fraud, while a mother on government assistance gets penalised within an inch of her life if she checks the wrong box.

The biggest tragedy of all, however, is that the rentier economy is gobbling up society's best and brightest. Where once upon a time Ivy League graduates chose careers in science, public service or education, these days they are more likely to opt for banks, law firms, or trumped up ad agencies like Google and Facebook. When you think about it, it's insane. We are forking over billions in taxes to help our brightest minds on and up the corporate ladder so they can learn how to score ever more outrageous handouts.

One thing is certain: countries where rentiers gain the upper hand gradually fall into decline. Just look at the Roman Empire. Or Venice in the 15th century. Look at the Dutch Republic in the 18th century. Like a parasite stunts a child's growth, so the rentier drains a country of its vitality.

What innovation remains in a rentier economy is mostly just concerned with further bolstering that very same economy. This may explain why the big dreams of the 1970s, like flying cars, curing cancer, and colonising Mars, have yet to be realised, while bankers and ad-makers have at their fingertips technologies a thousand times more powerful.

Yet it doesn't have to be this way. Tollgates can be torn down, financial products can be banned, tax havens dismantled, lobbies tamed, and patents rejected. Higher taxes on the ultra-rich can make rentierism less attractive, precisely because society's biggest freeloaders are at the very top of the pyramid. And we can more fairly distribute our earnings on land, oil, and innovation through a system of, say, employee shares, or a universal basic income .

But such a revolution will require a wholly different narrative about the origins of our wealth. It will require ditching the old-fashioned faith in "solidarity" with a miserable underclass that deserves to be borne aloft on the market-level salaried shoulders of society's strongest. All we need to do is to give real hard-working people what they deserve.

And, yes, by that I mean the waste collectors, the nurses, the cleaners � theirs are the shoulders that carry us all.

� Pre-order Utopia for Realists and How Can We Get There by Rutger Bregman

� Translated from the original Dutch by Elizabeth Manton

See also:

[Jan 07, 2019] The Fed IS the Ugly Truth

Notable quotes:
"... "The entire US economy today is about the quick buck." ..."
"... " When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history giving us a grand total of over $15 trillion." ..."
The Automatic Earth
... ... ...

Central banks are founded for one reason only: to save [private] banks from bankruptcy, invariably at the cost of society at large. They'll bring down markets and societies just to make sure banks don't go under. They'll also, and even, do that when these banks have taken insane risks. It's a battle societies can't possibly win as long as central banks can raise unlimited amounts of 'money' and shove it into private banks. Ergo: societies can't survive the existence of a central bank that serves the interests of its private banks.

Henrich:

Stock-Market Investors, It's Time To Hear The Ugly Truth

For years critics of U.S. central-bank policy have been dismissed as Negative Nellies, but the ugly truth is staring us in the face: Stock-market advances remain a game of artificial liquidity and central-bank jawboning, not organic growth. And now the jig is up. As I've been saying for a long time: There is zero evidence that markets can make or sustain new highs without some sort of intervention on the side of central banks. None. Zero. Zilch. And don't think this is hyperbole on my part. I will, of course, present evidence.

In March 2009 markets bottomed on the expansion of QE1 (quantitative easing, part one), which was introduced following the initial announcement in November 2008. Every major correction since then has been met with major central-bank interventions: QE2, Twist, QE3 and so on. When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history. The sum: More than $5 trillion between 2016 and 2017, giving us a grand total of over $15 trillion, courtesy of the U.S. Federal Reserve, the European Central Bank and the Bank of Japan:

When did global central-bank balance sheets peak? Early 2018. When did global markets peak? January 2018. And don't think the Fed was not still active in the jawboning business despite QE3 ending. After all, their official language remained "accommodative" and their interest-rate increase schedule was the slowest in history, cautious and tinkering so as not to upset the markets.

With tax cuts coming into the U.S. economy in early 2018, along with record buybacks, the markets at first ignored the beginning of QT (quantitative tightening), but then it all changed. And guess what changed? Two things. In September 2018, for the first time in 10 years, the U.S. central bank's Federal Open Market Committee (FOMC) removed one little word from its policy stance: "accommodative." And the Fed increased its QT program. When did U.S. markets peak? September 2018.

[..] don't mistake this rally for anything but for what it really is: Central banks again coming to the rescue of stressed markets. Their action and words matter in heavily oversold markets. But the reality remains, artificial liquidity is coming out of these markets. [..] What's the larger message here? Free-market price discovery would require a full accounting of market bubbles and the realities of structural problems, which remain unresolved. Central banks exist to prevent the consequences of excess to come to fruition and give license to politicians to avoid addressing structural problems.

is it $15 trillion, or is it 20, or 30? How much did China add to the total? And for what? How much of it has been invested in productivity? I bet you it's not even 10%. The rest has just been wasted on a facade of a functioning economy. Those facades tend to get terribly expensive.

Western economies would have shrunk into negative GDP growth if not for the $15-20 trillion their central banks injected over the past decade. And that is seen, or rather presented, as something so terrible you got to do anything to prevent it from happening. As if it's completely natural, and desirable, for an economy to grow forever.

It isn't and it won't happen, but keeping the illusion alive serves to allow the rich to put their riches in a safe place, to increase inequality and to prepare those who need it least to save most to ride out the storm they themselves are creating and deepening. And everyone else can go stuff themselves.

And sure, perhaps a central bank could have some function that benefits society. It's just that none of them ever do, do they? Central banks benefit private banks, and since the latter have for some braindead reason been gifted with the power to issue our money, while we could have just as well done that ourselves, the circle is round and we ain't in it.

No, the Fed doesn't hide the ugly truth. The Fed is that ugly truth. And if we don't get rid of it, it will get a lot uglier still before the entire edifice falls to pieces. This is not complicated stuff, that's just what you're made to believe. Nobody needs the Fed who doesn't want to pervert markets and society, it is that simple.

zerosum #44732

The word your looking for "abyss" definition -- a catastrophic situation seen as likely to occur to the people with wealth that is built upon "leverage."

https://www.investopedia.com/terms/l/leverage.asp

Leverage results from using borrowed capital as a funding source when investing to expand the firm's asset base and generate returns on risk capital. Leverage is an investment strategy of using borrowed money -- specifically, the use of various financial instruments or borrowed capital -- to increase the potential return of an investment. Leverage can also refer to the amount of debt a firm uses to finance assets. When one refers to a company, property or investment as "highly leveraged," it means that item has more debt than equity.

... ... ...

Doc Robinson January 7, 2019 at 4:06 am #44737

"The entire US economy today is about the quick buck."

Even the stock market these days seems to be about the quick buck. In the US, the average holding period for stocks has dropped from 8 years (1960), to 5 years (1970), to 2 years (1990), to 4 months (in the past few years).

https://www.politifact.com/virginia/statements/2016/jul/06/mark-warner/mark-warner-says-average-holding-time-stocks-has-f/

The policies of the Fed (as well as the Board of Directors of the companies) are evidently geared towards the short-term benefits of the owners who will be leaving in a few months. The long-term health of the companies, the economy, and the overall society (mostly non-owners) is evidently not so important to the Fed and the CEOs.

" When market tumbled in 2015 and 2016, global central banks embarked on the largest combined intervention effort in history giving us a grand total of over $15 trillion."

Those $15 trillion in assets being held by the central banks propped the global stock market capitalization up to around $75 trillion. Short term thinking that gives short-term benefits. Take away the props and of course that sucker is going to fall.

What were they thinking, the overweight patient with all of those systemic problems is going to be able to walk just fine when the crutches are taken away?

[Jan 07, 2019] Junk Economics and the Parasites of Global Finance by MICHAEL HUDSON

Notable quotes:
"... At least in nature, "smart" parasites may perform helpful functions, such as helping their host find food. But as the host weakens, the parasite lays eggs, which hatch and devour the host, killing it. That is what predatory finance is doing to today's economies. It's stripping assets, not permitting growth or even letting the economy replenish itself. ..."
"... MH: The financial sector is a rentier sector – external to the "real" economy of production and consumption, and therefore a form of overhead. As overhead, it should be a subtracted from GDP. ..."
"... In the name of saving "the market," the Fed and ECB therefore overruled the market. Today, over 80 percent of U.S. home mortgages are guaranteed by the Federal Housing Authority. Banks won't make loans without the government picking up the risk of non-payment. So bankers just pretend to be free market. That's for their victims. ..."
"... The "flight to security" is a move out of the stock and bond markets into government debt. Stocks and bonds may go down in price, some companies may go bankrupt, but national governments can always print the money to pay their bondholders. Investors are mainly concerned about keeping whatthey have – security of principal. They are willing to be paid less income in exchange for preserving what they have taken. ..."
"... But the way Wall Street administrators at the Treasury and Fed plan the crisis is for small savers to lose out to the large institutional investors. So the bottom line that I see is a slow crash. ..."
"... U.S. diplomats radically changed IMF lending rules as part of their economic sanctions imposed on Russia as result of the coup d'état by the Right Sector, Svoboda and their neo-Nazi allies in Kiev. The ease with which the U.S. changed these rules to support the military coup shows how the IMF is simply a tool of President Obama's New Cold War policy. ..."
"... The main financial innovation by Apple has been to set up a branch office in Ireland and pretend that the money it makes in the Untied States and elsewhere is made in Ireland – which has only a 15 percent income-tax rate ..."
"... It would seem to be an anomaly to borrow from banks and pay dividends. But that is the "cannibalism" stage of modern finance capitalism, U.S.-style. For the stock market as a whole, some 92 percent of earnings recently were used to pay dividends or for stock buybacks. ..."
Mar 23, 2016 | www.counterpunch.org

Justin Ritchie: In your book, Killing the Host: How Financial Parasites and Debt Bondage Destroy the Local Economy , you draw this metaphor of parasites and global finance? Could you explain what you mean by this?

Michael Hudson: The financial sector today is decoupled from industrialization. Its main interface with industry is to provide credit to corporate raiders. Their objective isasset stripping, They use earnings to repay financial backers (usually junk-bond holders), not to increase production. The effect is to suck income from the company and from the economy to pay financial elites.

These elites play the role today that landlords played under feudalism. They levy interest and financial fees that are like a tax, to support what the classical economists called "unproductive activity." That is what I mean by "parasitic."

If loans are not used to finance production and increase the economic surplus, then interest has to be paid out of other income. It is what economists call a zero-sum activity. Such interest is a "transfer payment," because it that does not play a directly productive function. Credit may be a precondition for production to take place, but it is not a factor of production as such.

The situation is most notorious in the international sphere, especially in loans to governments that already are running trade and balance-of-payments deficits. Power tends to pass into the hands of lenders, so they lose control – and become less democratic.

To return to my use of the word parasite, any exploitation or "free lunch" implies a host. In this respect finance is a form of war, domestically as well as internationally.

At least in nature, "smart" parasites may perform helpful functions, such as helping their host find food. But as the host weakens, the parasite lays eggs, which hatch and devour the host, killing it. That is what predatory finance is doing to today's economies. It's stripping assets, not permitting growth or even letting the economy replenish itself.

The most important aspect of parasitism that I emphasize is the need of parasites to control the host's brain. In nature, a parasite first dulls the host's awareness that it is being attacked. Then, the free luncher produces enzymes that control the host's brain and make it think that it should protect the parasite – that the outsider is part of its own body, even like a baby to be specially protected.

The financial sector does something similar by pretending to be part of the industrial production-and-consumption economy. The National Income and Product Accounts treat the interest, profits and other revenue that Wall Street extracts – along with that of the rentier sectors it backs (real estate landlordship, natural resource extraction and monopolies) – as if these activities add to Gross Domestic Product. The reality is that they are a subtrahend, a transfer payment from the "real" economy to the Finance, Insurance and Real Estate Sector. I therefore focus on this FIRE sector as the main form of economic overhead that financialized economies have to carry.

What this means in the most general economic terms is that finance and property ownership claims are not "factors of production." They are external to the production process. But they extract income from the "real" economy.

They also extract property ownership. In the sphere of public infrastructure – roads, bridges and so forth – finance is moving into the foreclosure phase. Creditors are trying to privatize what remains in the public domains of debtor economies. Buyers of these assets – usually on credit – build interest and high monopoly rents into the prices they charge.

JR: What is your vision for the next few decades of the global economy?

MH: The financial overhead has grown so large that paying interest, amortization and fees shrinks the economy. So we are in for years of debt deflation. That means that people have to pay so much debt service for mortgages, credit cards, student loans, bank loans and other obligations that they have less to spend on goods and services. So markets shrink. New investment and employment fall off, and the economy is falls into a downward spiral.

My book therefore devotes a chapter to describing how debt deflation works. The result is a slow crash. The economy just gets poorer and poorer. More debtors default, and their property is transferred to creditors. This happens not only with homeowners who fall into arrears, but also corporations and even governments. Ireland and Greece are examples of the kind of future in store for us.

Financialized economies tend to polarize between creditors and debtors. This is the dynamic that Thomas Piketty leaves out of his book, but his statistics show that all growth in income and nearly all growth in wealth or net worth has accrued to the One Percent, almost nothing for the 99 Percent.

Basically, you can think of the economy as the One Percent getting the 99 Percent increasingly into debt, and siphoning off as interest payments and other financial charges whatever labor or business earns. The more a family earns, for instance, the more it can borrow to buy a nicer home in a better neighborhood – on mortgage. The rising price of housing ends up being paid to the bank – and over the course of a 30-year mortgage, the banker receives more in interest than the seller gets.

Economic polarization is also occurring between creditor and debtor nations. This issplitting the eurozone between Germany, France and the Netherlands in the creditor camp, against Greece, Spain, Portugal, Ireland and Italy (the PIIGS) falling deeper into debt, unemployment and austerity – followed by emigration and capital flight.

This domestic and international polarization will continue until there is a political fight to resist the creditors. Debtors will seek to cancel their debts. Creditors will try to collect, and the more they succeed, the more they will impoverish the economy.

Background

JR: Let's talk about your history, why did you become an economist?

MH: I started out wanting to be a musician – a composer and conductor. I wasn't very good at either, but I was a very good interpreter, thanks to working with Oswald Jonas in Chicago studying the musical theories of Heinrich Schenker. I got my sense of aesthetics from music theory, and also the idea of modulation from one key to another. It is dissonance that drives music forward, to resolve in a higher key or overtone.

When I was introduced to economics by the father of a schoolmate, I found it as aesthetic as music, in the sense of a self-transforming dynamic through history by challenge and response or resolution. I went to work for banks on Wall Street, and was fortunate enough to learn about how central mortgage lending and real estate were for the economy. Then, I became Chase Manhattan's balance-of-payments economist in 1964, and got entranced with tracing how the surplus was buried in the statistics – who got it, and what they used it for. Mainly the banks got it, and used it to make new loans.

I viewed the economy as modulating from one phase to the next. A good interpretation would explain history. But the way the economy worked was nothing like what I was taught in school getting my PhD in economics at New York University. So I must say, I enjoyed contrasting reality with what I now call Junk Economics.

In mainstream textbooks there is no exploitation. Even fraudulent banks, landlords and monopolists are reported as "earning" whatever they take – as if they are contributing to GDP. So I found the economics discipline ripe for a revolution.

JR: What is the difference between how economics is taught vs. what you learned in your job?

MH: For starters, when I studied economics in the 1960s there was still an emphasis on the history of economic thought, and also on economic history. That's gone now.

One can easily see why. Adam Smith, John Stuart Mill and other classical economists sought to free their societies from the legacy of feudalism: landlordism and predatory finance, as well as from the monopolies that bondholders had demanded that governments create as a means of paying their war debts.

Back in the 1960s, just like today, university courses did not give any training in actual statistics. My work on Wall Street involved National Income and Product Accounts and the balance-of-payments statisticspublished by the Commerce Department every three months, as well as IMF andFederal Reserve statistics. Academic courses didn't even make reference to accounting – so there was no conceptualization of "money," for instance, in terms of the liabilities side of the balance sheet.

New York University's money and banking course was a travesty. It was about helicopters dropping money down – to be spent on goods and services, increasing prices. There was no understanding that the Federal Reserve's helicopter only flies over Wall Street, or that banks create money on its own computers. It was not even recognized that banks lend to customers mainly to buy real estate, or speculate in stocks and bonds, or raid companies.

Economics is taught like English literature. Teachers explain the principle of "suspension of disbelief." Readers of novels are supposed to accept the author's characters and setting. In economics, students are told to accept just-pretend parallel universe assumptions, and then treat economic theory as a purely logical exercise, without any reference to the world.

The switch from fiction to reality occurs by taking the policy conclusions of these unrealistic assumptions as if they do apply to the real world: austerity, trickle-down economics shifting taxes off the wealthy, and treating government spending as "deadweight" even when it is on infrastructure.

The most fictitious assumption is that Wall Street and the FIRE sector add to output, rather than extracting revenue from the rest of the economy.

JR: What did you learn in your work on the US oil industry?

MH: For starters, I learned how the oil industry became tax-exempt. Not only by the notorious depletion allowance, but by offshoring profits in "flags of convenience" countries, in Liberia and Panama. These are not real countries. They do not have their own currency, but use U.S. dollars. And they don't have an income tax.

The international oil companies sold crude oil at low prices from the Near East or Venezuela to Panamanian or Liberian companies – telling the producing countries that oil was not that profitable. These shipping affiliates owned tankers, and charged very high prices to refineries and distributors in Europe or the Americas. The prices were so high that these refineries and other "downstream" operations marketing gas to consumers did not show a profit either. So they didn't have to pay European or U.S. taxes. Panama and Liberia had no income tax. So the global revenue of the oil companies was tax-free.

I also learned the difference between a branch and an affiliate. Oil wells and oil fields are treated as "branches," meaning that their statistics are consolidated with the head office in the United States. This enabled the companies to take a depletion allowance for emptying out oil fields abroad as well as in the United States.

My statistics showed that the average dollar invested by the U.S. oil industry was returned to the United States via balance-of-payments flows in just 18 months. (This was not a profit rate, but a balance-of-payments flow.) That finding helped the oil industry get exempted from President Lyndon Johnson's "voluntary" balance-of-payments controls imposed in 1965 when the Vietnam War accounted for the entire U.S. payments deficit. Gold was flowering out to France, Germany and other countries running payments surpluses.

The balance-of-payments accounting format I designed for this study led me to go to work for an accounting firm, Arthur Andersen, to look at the overall U.S. balance of payments. I found that the entire deficit was military spending abroad, not foreign aid or trade.

Junk Economics

JR: Why do you think there is a disconnect between academic economic theory and the way that international trade and finance really works?

MH: The aim of academic trade theory is to tell students, "Look at the model, not at how nations actually develop." So of all the branches of economic theory, trade theory is the most wrongheaded.

For lead nations, the objective of free trade theory is to persuade other countries not to protect their own markets. That means not developing in the way that Britain did under its mercantilist policies thatmade it the first home of the Industrial Revolution. It means not protecting domestic industry, as the United States and Germany did in order to catch up with British industry in the 19 th century and overtake it in theearly 20 th century.

Trade theorists start with a conclusion: either free trade or (in times past) protectionism. Free trade theory as expounded by Paul Samuelson and others starts by telling students to assume a parallel universe – one that doesn't really exist. The conclusion they start with is that free trade makes everyone's income distribution between capital and labor similar. And because the world has a common price for raw materials and dollar credit, as well as for machinery, the similar proportions turn out to mean equality. All the subsequent assumptions are designed to lead to this unrealistic conclusion.

But if you start with the real world instead of academic assumptions, you see that the world economy is polarizing. Academic trade theory can't explain this. In fact, it denies that today's reality can be happening at all!

A major reason why the world is polarizing is because of financial dynamics between creditor and debtor economies. But trade theory starts by assuming a world of barter. Finally, when the transition from trade theory to international finance is made, the assumption is that countries running trade deficits can "stabilize" by imposing austerity, by lowering wages, wiping out pension funds and joining the class war against labor.

All these assumptions were repudiated already in the 18 th century, when Britain sought to build up its empire by pursuing mercantilist policies. The protectionist American School of Economics in the 19 th century put forth the Economy of High Wages doctrine to counter free-trade theory. None of this historical background appears in today's mainstream textbooks. (I provide a historical survey in Trade, Development and Foreign Debt , new ed., 2002. That book summarizes my course in international trade and finance that I taught at the New School from 1969 to 1972.)

In the 1920s, free-trade theory was used to insist that Germany could pay reparations far beyond its ability to earn foreign exchange. Keynes, Harold Moulton and other economists controverted that theory. In fact, already in 1844, John Stuart Mill described how paying foreign debts lowered the exchange rate. When that happens, what is lowered is basically wages. So what passes for today's mainstream trade theory is basically an argument for reducing wages and fighting a class war against labor.

You can see this quite clearly in the eurozone, above all in the austerity imposed on Greece. The austerity programs that the IMF imposed on Third World debtors from the 1960s onward. It looks like a dress rehearsal to provide a cover story for the same kind of "equilibrium economics" we may see in the United States.

JR: Can the US pay its debts permanently? Does the amount of federal debt, $18 or $19 trillion even matter? Should we pay down the national debt?

MH: It is mainly anti-labor austerity advocates who urge balancing the budget, and even to run surpluses to pay down the national debt. The effect must be austerity.

A false parallel is drawn with private saving. Of course individuals should get out of debt by saving what they can. But governments are different. Governments create money and spend it into the economy by running budget deficits. The paper currency in your pocket is technically a government debt. It appears on the liabilities side of the public balance sheet.

When President Clinton ran a budget surplus in the late 1990s, that sucked revenue out of the U.S. economy. When governments do not run deficits, the economy is obliged to rely on banks – which charge interest for providing credit. Governments can create money on their own computers just as well. They can do this without having to pay bondholders or banks.

That is the essence of Modern Monetary Theory (MMT). It is elaborated mainly at the University of Missouri at Kansas City (UMKC), especially by Randy Wray – who has just published a number of books on money – and Stephanie Kelton, whom Bernie Sanders appointed as head of the Senate Democratic Budget Committee.

If the government were to pay off its debts permanently, there would be no money – except for what banks create. That has never been the case in history, going all the way back to ancient Mesopotamia. All money is a government debt, accepted in payment of taxes

This government money creation does not mean that governments can pay foreign debts. The danger comes when debts are owed in a foreign currency. Governments are unable to tax foreigners. Paying foreign debts puts downward pressure on exchange rates. This leads to crises, which often end by relinquishing political control to the IMF and foreign banks. They demand "conditionalities" in the form of anti-labor legislation and privatization.

In cases where national economies cannot pay foreign debts out of current balance-of-payments revenue, debts should be written down, not paid off. If they are not written down, you have the kind of austerity that is tearing Greece apart today.

JR: You say that mainstream economic theory and academic study is pro-creditor? Why is this the case?

MH: Thorstein Veblen pointed out that vested interests are the main endowers and backers of the higher learning in America. Hardly by surprise, they promote a bankers'-eye view of the world. Imperialists promote a similar self-serving worldview.

Economic theory, like history, is written by the winners. In today's world that means the financial sector. They depict banks as playing a productive role, as if loans are made to help borrowers earn the money to pay interest and still keep something for themselves. The pretense is that banks finance industrial capital formation, not asset stripping.

What else would you expect banks to promote? The classical distinction between productive and unproductive (that is, extractive) loans is not taught. The result has been to turn mainstream economics as a public-relations advertisement for the status quo, which meanwhile becomes more and more inequitable and polarizes the economy.

JR: What can be learned by studying the history of economic thought? What did Adam Smith and the people in his era and those which followed him understand that would be useful to us now?

MH: If you read Adam Smith and subsequent classical economists, you see that their main concern was to distinguish between productive and unproductive economic activity. They wanted to isolate unproductive rentier income, and unproductive spending and credit.

To do this, they developed the labor theory of value to distinguish value from price – with "economic rent" being the excess of price over socially necessary costs of production. They wanted tofree industrial capitalism from the legacy of feudalism: tax-like groundrent paid to a hereditary landed aristocracy. They also opposed the monopolies that bondholders had insisted that governments create to sell off to pay the public debt. That was why the East India Company and the South Sea Company were created with their special privileges.

Smith and his followers are applauded as the founding fathers of "free market" economics. But they defined free markets in a diametrically opposite way from today's self-proclaimed neoliberals. Smith and other classical economists urged markets free from economic rent.

These classical reformers realized that progressive taxation to stop favoring rentiers required a government strong enough to take on society's most powerful and entrenched vested interests. The 19 th -century drive for Parliamentary reform in Britain aimed at enabling the House of Commons to override the House of Lords and tax the landlords. (This rule finally passed in 1910 after a constitutional crisis.) Now there has been a fight by creditors to nullify democratic politics, most notoriously in Greece.

Today's neoliberals define free markets as those free for rent-seekers and predatory bankers from government regulation and taxes.

No wonder the history of economic thought has been stripped away from the curriculum. Reading the great classical economists would show how the Enlightenment's reform program has been inverted. The world is now racing down a road to the Counter-Enlightenment, a neo- rentier economy that is bringing economic growth to a halt.

JR: Why does economic thought minimize the role of debt? I.e. I read Paul Krugman and he says the total amount of debtisn't a problem, for example you can't find the internet bust in GDP or the 1987 crash?

MH: When economists speak of money, they neglect that all money and credit is debt. That is the essence of bookkeeping and accounting. There are always two sides to the balance sheet. And one party's money or savings is another party's debt.

Mainstream economic models describe a world that operates on barter, not on credit. The basic characteristic of credit and debt is that it bears interest. Any rate of interest can be thought of as a doubling time. Already in Babylonia c. 1900 BC, scribes were taught to c alculate compound interest, and how long it took a sum to double (5 years) quadruple (10 years) or multiply 64 times (30 years). Martin Luther called usury Cacus, the monster that absorbs everything. And in Volume III of Capital and also his Theories of Surplus Value , Marx collected the classical writings about how debts mount up at interest by purely mathematical laws, without regard for the economy's ability to pay.

The problem with debt is not only interest. Shylock's loan against a pound of flesh was a zero-interest loan. When crops fail, farmers cannot even pay the principal. They then may lose their land, which is their livelihood. Forfeiture is a key part of the credit/debt dynamic. But the motto of mainstream neoliberal economics is, "If the eye offends thee, pluck it out." Discussing the unpayability of debt is offensive to creditors.

Anyone who sets out to calculate the ability pay quickly recognizes that the overall volume of debts cannot be paid. Keynes that made point in the 1920s regarding Germany's inability to pay reparations.

Needless to say, banks and bondholders do not want to promote any arguments explaining the limits to how much can be paid without pushing economies into depression. That is what my Killing the Host is about. It is the direction in which the eurozone is now going, and the United States also issuffering debt deflation.

Turning to the second part of your question, Krugman and others say that debt doesn't matter because "we owe it to ourselves." But the "we" who owe it are the 99 Percent; the people who are "ourselves" are the One Percent. So the 99 Percent Owe the One Percent. And they owe more and more,thanks to the "magic of compound interest."

Krugman has a blind spot when it comes to understanding money. In his famous debate with Steve Keen, he denied that banks create money or credit. He insists that commercial banks only lend out deposits. But Keen and the Modern Monetary Theory (MMT) school show that loans create deposits , not the other way around. When a banker writes a loan on his computer keyboard, he creates a deposit as the counterpart.

Endogenous money is easily created electronically. That privilege enables banks to charge interest. Governments could just as easily create money on their own computers. Neoliberal privatizers want to block governments from doing this, so that economies will have to rely on commercial banks for the money and credit they need to grow.

The mathematics of compound interest means that economies can only pay their debts by creating a financial bubble – more and more credit to bid up asset prices for real estate, stocks and bonds, enabling banks to make larger loans. Today's economies are obliged to develop into Ponzi schemes to keep going – until they collapses\ in a crash.

JR: The models of the macroeconomy to forecast the future and to develop policy at institutions like the IMF, often consider finance and banking as just another sector of industry, like construction or manufacturing. How do these institutions consider their model of the financial sector?

MH: The IMF acts as the collection agent for global bondholders. Its projections begin by assuming that all debts can be paid, if economies will cut wages and wiping out pension funds so as to pay banks and bondholders.

As long as creditors remain in control, they are quite willing to sacrifice the 99 Percent to pay the One Percent. When IMF "stabilization" programs end up destabilizing their hapless victims, mainstream media blame the collapse on the debtor country for not shedding enough blood to impose even more austerity.

Economists often define their discipline as "the allocation of scarce resources among competing ends." But when resources or money really become scarce, economists call it a crisis and say that it's a question for politicians, not their own department. Economic models are only marginal – meaning, small changes, not structural.

The only trend that does grow inexorably is that of debt. The more it grows, the more it slows the "real" economy of production and consumption. So something must give: either the economy, or creditor claims. And that does indeed change the structure of the economy. It is a political as well as an economic change.

Regarding the second part of your question – how creditor institutions model the financial sector – when they look at prices they only consider wages and consumer prices, not asset prices. Yet most bank credit is tied to asset prices, because loans are made to buy homes or commercial real estate, stocks or bonds, not bread and butter.

Not looking at what is obviously important requires a great effort of tunnel vision. But as Upton Sinclair noted, there are some jobs – like being a central banker, or a New York Times editorial writer – that require the applicant not to understand the topic they are assigned to study. Hence, you have Paul Krugman on money and banking, the IMF on economic stabilization, and Rubinomics politicians on bailing out the banks instead of saving the economy.

If I can add a technical answer: The IMF does not recognize that the "budget problem" – squeezing domestic currency out of the economy by taxing wages and industry – is quite different from the "transfer problem" of converting this money into foreign exchange. That distinction was the essence of the German reparations debate in the 1920s. It is a focus of my history of theories of Trade, Development and Foreign Debt .

Drawing this distinction shows why austerity programs do not help countries pay their foreign debt, but tears them apart and induces emigration and capital flight.

JR: Does the financial sector add to GDP?

MH: The financial sector is a rentier sector – external to the "real" economy of production and consumption, and therefore a form of overhead. As overhead, it should be a subtracted from GDP.

JR: In the way that oil industry funded junk science on global warming denial, Wall Street funds and endows junk economics and equilibrium thinking?

Falling on your face is a state of equilibrium. So is death – and each moment of dying. Equilibrium is simply a cross section in time. Water levels 20 or 30 feet higher would be another form of equilibrium. But to the oil industry, "equilibrium" means their earnings continuing to grow at the present rate, year after year. This involves selling more and more oil, even if this raises sea levels and floods continents. That is simply ignored as not relevant to earnings. By the time that flooding occurs, today's executives will have taken their bonuses and capital gains and retired.

That kind of short-termism is the essence of junk economics. It is tunnel-visioned.

What also makes economics junky is assuming that any "disturbance" sets in motion countervailing forces that return the economy to its "original" state – as if this were stable, not moving down the road to debt peonage and similar economic polarization.

The reality is what systems analysts call positive feedback: When an economy gets out of balance, especially as a result of financial predators, the feedback and self-reinforcing tendencies push it further and further out of balance.

My trade theory book traced the history of economists who recognize this. Once a class or economy falls into debt, the debt overhead tends to grow steadily until it stifles market demand and subjects the economy to debt deflation. Income is sucked upward to the creditors, who then foreclose on the assets of debtors. This shrinks tax revenue, forcing public budgets into deficit. And when governments are indebted, they becomemore subject to pressure to privatization of public enterprise. Assets are turned over to monopolists, who further shrink the economy by predatory rent seeking.

An economy going bankrupt such as Greece and having to sell off its land, gas rights, ports and public utilities is "in equilibrium" at any given moment that its working-age population is emigrating, people are losing their pensions and suffering.

When economists treat depressions merely as self-curing "business downturns," they are really saying that no government action is required from "outside" "the market" to rectify matters and put the economy back on track to prosperity. So equilibrium thinking isbasically anti-government libertarian theory.

But when banks are subjected to "equilibrium" by writing down debts in keeping with the ability of borrowers to pay, WallStreet's pet politicians and economic journalists call this a crisis and insist that the banks and bondholders must be saved or there will be a crisis. This is not a solution. It makes the problem worse and worse.

There is an alternative, of course. That is to understand the dynamics at work transforming economic and socialstructures. That's what classical economics was about.

The post-classical revolution was marginalist. That means that economists only look at small changes, not structural changes. That isanother way of saying that reforms are not necessary – because reforms change structures, not merely redistribute a little bit of income as a bandage.

What used to be "political economy" gave way to just plain "economics" by World War I. As it became increasingly abstract and mathematical, students who studied the subject because they wanted to make the world better were driven out, into other disciplines. That was my experience teaching at the New School already nearly half a century ago. The discipline has become much more tunnel-visioned since then.

Present state of financial world

JR: We see around the world something like 25% of all national debt is now has a yield priced in negative interest rates? What does this mean? Do you see this continuing?

MH: On the one hand, negative interest rates reflect a flight to security by investors. They worry that the debts can't be paid and that there are going to be defaults.

They also see that the United States and Europe are in a state of debt deflation, where people and businesses have to pay banks instead of spending their income on goods and services. So markets shrink, sales and profits fall, and the stock market turns down.

This decline was offset by the Federal Reserve and the European Central Bank trying to re-inflate the Bubble Economy by Quantitative Easing – providing reserves to the banks in exchange for their portfolio of mortgages and other loans. Otherwise, the banks would have had to sell these loans in "the market" at falling prices.

In the name of saving "the market," the Fed and ECB therefore overruled the market. Today, over 80 percent of U.S. home mortgages are guaranteed by the Federal Housing Authority. Banks won't make loans without the government picking up the risk of non-payment. So bankers just pretend to be free market. That's for their victims.

The "flight to security" is a move out of the stock and bond markets into government debt. Stocks and bonds may go down in price, some companies may go bankrupt, but national governments can always print the money to pay their bondholders. Investors are mainly concerned about keeping whatthey have – security of principal. They are willing to be paid less income in exchange for preserving what they have taken.

Here's the corner that the economy has backed itself into. The solution to most problems creates new problems – blowback or backlash, which often turn out to be even bigger problems. Negative interest rates mean that pension funds cannot invest in securities that yield enough for them to pay what they have promised their contributors. Insurance companies can't earn the money to pay their policyholders. So something has to give.

There will be breaks in the chain of payments. But the way Wall Street administrators at the Treasury and Fed plan the crisis is for small savers to lose out to the large institutional investors. So the bottom line that I see is a slow crash.

JR: Could there be a more symbiotic relationship with global financial institutions? For money to have value, doesn't it need a functioning economy, rather than an entirelyfinancialized one?

MH: Money is debt. It is a claim on some debtor. Government money is a claim by its holder on the government, settled by the government accepting it as payment for tax debts.

Being a claim on a debtor, money does not necessarily need a functioning economy. It can be part of a foreclosure process, transferring property to creditors. A financialized economy tends to strip the economy of money, by sucking up to the creditor One Percent on top. That is what happened in Rome, and the result was the Dark Age.

JR: In 2007/2008 we had a subprime crash and since 2014 we've had a commodities crash where oil prices are low, is this because of what's going on in emerging market economies? Are emerging market economies and China the next subprime?

MH: The current U.S. and Eurozone depression isn't because of China. It's because of domestic debt deflation. Commodity prices and consumer spending are falling, mainly because consumers have to pay most of their wages to the FIRE sector for rent or mortgage payments, student loans, bank and credit card debt, plus over 15 percent FICA wage withholding for Social Security and Medicare (actually, to enable the government to cut taxes on the higher income brackets), as well income and sales taxes. After all this is paid, consumers don't have that much left to spend on commodities. So of course commodity prices are crashing.

Oil is a special case. Saudi Arabia is trying to drive U.S. fracking rivals out of business, while also hurting Russia. This lowers gas prices for U.S. and Eurozone consumers, but not by enough to spur economic recovery.

JR: You've written that we're entering a financial cold war – the IMF and the US have been very strict on debt repayment for loans from debtor nations, but in Ukraine they've made an exception regarding Russia, could you discuss your recent writing on that?

MH: U.S. diplomats radically changed IMF lending rules as part of their economic sanctions imposed on Russia as result of the coup d'état by the Right Sector, Svoboda and their neo-Nazi allies in Kiev. The ease with which the U.S. changed these rules to support the military coup shows how the IMF is simply a tool of President Obama's New Cold War policy.

The aim was to enable the IMF to keep lending to the military junta even though Ukraine is in default of its $3 billion debt to Russia, even though it refuses to negotiate payment, and even though IMF money has been used to fund kleptocrats such as Kolomoisky to field his own army against Russian speakers in Donbas. Ukraine has no foreseeablemeans of paying off the IMF and other creditors, given its destruction of its export industry in the East. My articles on this are on my website, michael-hudson.com .

JR: Today's economy has some truly amazing technology from companies like Apple, but Apple is also example of financial engineering, you outline this in your book, what financial innovations havebeen associated with the story of Apple's stock?

MH: The main financial innovation by Apple has been to set up a branch office in Ireland and pretend that the money it makes in the Untied States and elsewhere is made in Ireland – which has only a 15 percent income-tax rate

The problem is that if Apple remits this income back to the United States, it will have to pay U.S. income tax. It wants to avoid this – unless Wall Street can convince politicians to declare a "tax holiday" would let tax avoiders bring all their foreign money back to the United States "tax free." That would be a tax amnesty only for the very wealthy, not for the 99 Percent.

JR: This tax angle explains why Apple, almost the wealthiest company in the world, has been urged by activist shareholders to borrow. Why should the richest company have to go into debt?

MH: The answer is that Apple can borrow from U.S. banks at a low interest rate to pay dividends on its stock, instead of paying these dividends by bringing its income back home and paying the taxes that are due.

It would seem to be an anomaly to borrow from banks and pay dividends. But that is the "cannibalism" stage of modern finance capitalism, U.S.-style. For the stock market as a whole, some 92 percent of earnings recently were used to pay dividends or for stock buybacks.

JR: What is the eventual outcome of all theses corporate buybacks to pump up share prices?

MH: The problem with a company using its revenue simply to buy its own shares to support their price (and hence, enable CEOs to increase their salaries and bonuses, and make more capital gains on their stock options) is that the price fillip is temporary. Last year saw the largest volume of U.S. stock buybacks on record. But since January 1, the market has fallen by about 20 percent. The debts that companies took on to buy stocks remain in place; and the earnings that companies used to buy these stocks are now gone.

Corporations did not use their income to invest in long-term expansion. The financial time frame always has been short-term. Projects with long-term paybacks are cut back, because CEOs and financial managers simply want to take their money and run. That is the financial mentality.

JR: What is the outcome of all theses corporate buybacks to pump up share prices?

MH: When the dust settles, companies financialized in this way are left as debt-leveraged shells. CEOs then go to their labor unions and threaten to declare bankruptcy if the unions don't scale back their pension demands. So there is a deliberate tactic to force companies into debt for short-term earnings and stock-price gains in the short term, and a more intensive class war against present and past employees and pensioners as a longer-term policy.

JR: Why do business schools endorse of financialization? Reversing short-termism?

MH: The financial sector is the major endower of business schools. They have become training grounds for Chief Financial Officers. AtHarvard, Prof. Jensen reasoned that managers should aim at serving stockholders, not the company as such. The result was an "incentive" system tying management bonuses to the stock price. So naturally, CFOs used corporate earnings for stock buybacks and dividend payouts that provided a short-term jump in the stock price.

The ideological foundation of today's business schools is that economic control should be shifted out of government hands into those of financial managers – that is, Wall Street. That is their idea of freeenterprise. Its inevitable tendency is to end in more centralized planning by Wall Street than in Washington.

The aim of this financial planning is quite different from that of governments. As I wrote in Killing the Host : "The euro and the ECB were designed in a way that blocks government money creation for any purpose other than to support the banks and bondholders. The financial sector takes over the role of economic planner, putting its technicians in charge of monetary and fiscal policy without democratic voice or referendums over debt and tax policies."

Financial planning always has been short-term. That is why planning should not be consigned to banks and bondholders. Their mentality is extractive, and that ends up hit-and-run. What passes for mainstream financial analysis is simply to add up how much is owed and demand payment, not help the economy grow. To financial managers, economic prosperity and unemployment is an "externality" – that is, not part of the equation that they are concerned with.

Future

JR: The story of Greece in recent years is relevant to our discussion because the political party Syriza took over with ideas that were traditionally representing the left? Does the body of traditional left ideas have the ability to solve some of the challenges regarding financial warfare?

MH: The left and former Social Democratic or Labour parties have dome to focus on political and cultural issues, not the economic policy that led to their original creation. What is lacking is a focus on rent theory and financial analysis. Part of the explanation probably is covert U.S. funding and sponsorship of Blair-type neoliberals.

The eurozone threatened Greece with domestic destabilization if it did not surrender to the Troika's demands. Syriza's leaders worried that the ensuing turmoil would bring a right-wing neo-Nazi group such as Golden Dawn into power, or a military dictatorship as a client oligarchy for U.S. and German neoliberals.

So the political choice today is much like the 1930s, when the global economy also broke down. The choice is between nationalism and populism on the right, or socialism reviving what used to be left-wing politics.

JR: Could there be a debt write down? Isn't someone's debts another person's savings, i.e. pension funds, 401k, retirement funds?

MH: The problem is indeed that one party's debt finds its counterpart in some other party's savings. Not paying debts therefore involves annulling some other party's financial claims on the debtor. What happens to the savings on the other side of the savings/debt balance sheet?

JR: The political question is, who will lose first?

MH: The answer is, the least politically protected. The end game is "Big fish eat little fish." Pension funds are in the front line of sacrifice, while government bondholders are the most secure. Greek pensionsalready have been written down, and the savings of U.S. pension funds, Social Security and other social programs are the first to be annulled.

The only way to achieve a fair debt cancellation is to write down the debts of the wealthiest, not the most needy. That is the opposite of how matters are being resolved today. That is why southern Europe is being radicalized over the debt issue.

JR: Will financialized economies implode? Leaving the non-financialized ones?

MH: The One Percent who hold most of the economy's savings are quite willing to plunge society into depression to collect on their savings claims. Their greed is why we are in an economic war much like Rome's Conflict of the Orders that shaped the Republic, and its century of civil war between creditors and debtors, 133-29 BC.

Argentina has been imploding, just as Third World debtors were obliged to do when they accepted IMF austerity programs and "conditionalities" for loans to keep their currencies from depreciating. To avoid being forced to adopt such self-defeating and anti-democratic policies, it looks like countries will have to move out of the U.S. and Eurozone orbit into that of the BRICS. That is why today's financial crisis is leading to a New Cold War. It is as much financial as it is military.

JR: How would you advise a politician to restore prosperity in the future?

MH: The problem is who to give advice to. Most politicians today – at least in the United States – are proxies for their campaign contributors. President Obama is basically a lobbyist for his Wall Street in the Democratic Party's Robert Rubin gang. That kind of demagogue wouldn't pay any attention to policies that I or other economists would make. Their job is not to make the economy better, but to defend their campaign contributors among the One Percent at the economy's expense.

But when I go to China or Russia, here's what I advise (without much success so far, I admit):

First, tax land rent and other economic rent. Make it the tax base. Otherwise, this rental value will end up being pledged to banks as interest on credit borrowed to buy rent-yielding assets.

Second, make banks into public utilities. Credit creation is like land or air: a monopoly created by society. As organs of public policy they would not play the derivatives casino, or make corporatetakeover loans to raiders, or falsify mortgage documents.

Third, do not privatize basic utilities. Public ownership enables basic services to be provided at cost, on a subsidized basis, or freely. That will make the economy more competitive. The cost of upgrading public infrastructure can be defrayed by basing the tax system on economic rent, not wages.

Does it have to be this way ?

The Eurozone die is cast. Countries must withdraw from the euro so that governments can create their own money once again, and resist creditor demands to carve up and privatize their public domain.

For the United States, I don't see a concerted alternative to neoliberalism squeezing more and more interest and rent out of the economy, making the present slump even deeper in debt.

How won't debts be paid?

There are two ways not to pay debts: either by annulling or repudiating them, or by foreclosure when creditors take or demand property in lieu of monetary payment.

The first way not to pay is to default or proclaim a Clean Slate. The most successful example in modern times is the German Economic Miracle – the Allied Monetary Reform of 1948. That cancelled Germany's internal debts except for wages owed by employers, and minimum working balances.

The United States Government has fought against creation of an international court to adjudicate the ability of national economies to pay debts. If such a court is not created, the global economy will fracture. That is occurring in what looks like a New Cold War pitting the United States and its NATO satellites against the BRICS (China, Russia, South Africa, Brazil and India) along with Iran and other debtors.

The US preferred policy is for countries to sell off whatever is in their public domain when they lack the money to pay their debts. This is the "foreclosure" stage.

Short of these two ways of not paying debts, economies are submitting to debt deflation. That strips income from producers and consumers, businesses and governments to pay creditors. As the debtor economy weakens, the debt arrears mount up – often at rising interest rates to reflect the risk of non-payment as creditors realize that there is no "business as usual' way in which the debts can be paid.

Debtor countries may postpone the inevitable by borrowing from the IMF or U.S. Treasury to buy out bondholders. This saves the latter from taking a loss – leaving the debtor country with debts that are even harder to annul, because they are to foreign governments and international institutions. That is why it is a very bad policy for countries to move from owing money to private bondholders to owing the IMF or European Central Bank, whose demands are unforgiving.

In the long term, debts won't be paid in the way that Rome's debts were not paid. The money economy itself was stripped, and the empire fell into a prolonged Dark Age. That is the fate that will befall the West if it continues to support the "rights" of creditors over the right of nations and economies to survive.

This is a transcript from an interview on the XE Podcast conducted by Justin Ritchie.

[Jan 04, 2019] Cramer sees an Apple bottom of $120 per share, 16% below Thursday's open

While Cramer is a clown, I see some analogy in his dance with dot-com bubble. So deflation of dot-com bubble 2 might be coming.
Jan 04, 2019 | finance.yahoo.com

[Jan 04, 2019] Shale still vulnerable if OPEC gets nasty

Jan 04, 2019 | finance.yahoo.com

America is now the largest producer of oil in the world. For the U.S., this is great news as the dream of energy independence grows and maybe one day we can tell OPEC to go take a hike.

However, while the shale oil revolution has helped change the energy landscape forever, we cannot take shale for granted. We can't just assume that the industry can withstand any price and that production can keep rising despite the market conditions. We can't assume that shale oil producers can match OPEC production cuts barrel for barrel.

We also can't assume OPEC, weakened by falling prices of late, won't strike back like they did in 2014. That's when OPEC declared a production war on U.S. shale producers. The then de facto head of the OPEC Cartel Ali al-Naimi spoke about market share rivalry with the United States and said that they wanted a battle with the U.S. There were no winners in that production war. Ali al-Naimi was sacked as he almost bankrupted Saudi Arabia. It took its toll on U.S. producers as well, as many were forced into bankruptcy despite making significant progress on efficiency and cost cutting.

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With 2019 underway, OPEC, along with Russia, agreed to remove 1.2 million barrels per day off the market for the first six months of the year. Early reports on OPEC compliance to the agreed upon production cuts is overwhelming at a time when there are new questions about how shale oil producers are faring after this recent oil price drop.

Private forecasters are showing that there are major cuts in Saudi exports and even signs that OPEC production is falling sharply. Bloomberg News confirmed that by reporting "observed crude exports from Saudi Arabia fell to 7.253 million barrels per day in December on lower flows to the U.S. and China." Furthermore, other private trackers believe that the drop may be the biggest in exports since Bloomberg began tracking shipments in early 2017. Oil saw another boost after Bloomberg reported that OPEC oil production had the biggest monthly drop in two years falling by 530,000 barrels a day to 32.6 million a day last month. It's the sharpest pullback since January 2017.

Rewind to 2017, there was talk that shale oil producers would make up the difference and the cut would not matter, but that was proven wrong. This time expect the same because it is likely that shale oil producers may have to cut back as the sharp price drop has put them in a bad position. The Wall Street Journal pointed out that, even now, some shale oil wells are not producing as much oil as expected. This coupled with a large declining production rate in shale swells means that they need capital to keep drilling to keep those record production numbers moving higher. "Two-thirds of projections made by the fracking companies between 2014 and 2017 in America's four hottest drilling regions appear to have been overly optimistic, according to the analysis of some 16,000 wells operated by 29 of the biggest producers in oil basins in Texas and North Dakota. Collectively, the companies that made projections are on track to pump nearly 10% less oil and gas than they forecast for those areas, according to the analysis of data from Rystad Energy AS, an energy consulting firm. That is the equivalent of almost one billion barrels of oil and gas over 30 years, worth more than $30 billion at current prices. Some companies are off track by more than 50% in certain regions" the Journal reported.

"While U.S. output rose to an all-time high of 11.5 million barrels a day, shaking up the geopolitical balance by putting U.S. production on par with Saudi Arabia and Russia. The Journal's findings suggest current production levels may be hard to sustain without greater spending, because operators will have to drill more wells to meet growth targets. Yet shale drillers, most of whom have yet to consistently make money, are under pressure to cut spending in the face of a 40% crude-oil price decline since October."

Of course, none of this matters if we see a prolonged slowdown in the global economy, Demand may indeed turn out to be the great equalizer. Yet if growth comes back, say if we get a China trade deal or if they ever reopen the U.S. government, we will most likely see a very tight market in the new year. The OPEC cuts will lead to a big drawdown in supply and shale oil producers will find it hard to match OPEC and demand growth barrel for barrel.

[Jan 04, 2019] This Is Not the Time to Be Initiating New Positions in Equities

Jan 04, 2019 | finance.yahoo.com

While Apple's profit warning was truly a shocker -- the first time in 16.5 years the company had issued such a guidance release, according to Bespoke Research -- the forces pressuring global equity markets today are more macro than micro. To put it simply: the yield curve looks horrible. The table at the bottom of this report contains the details, but with a near-inversion of the 12-month/10-year Treasury yield spread the market's demand for stocks is understandably pressured.

[Jan 03, 2019] Is Warren Buffett Sending a Signal About the Bond Market

Notable quotes:
"... The 30-year U.S. yield fell to 2.91 percent on Thursday, the lowest since January 2018 ..."
"... The other interpretation is that the company chose to refinance with long-term fixed-rate debt because it sees the big drop in 30-year yields as unsustainable ..."
Jan 03, 2019 | finance.yahoo.com

Berkshire, with the third-highest credit rating from both Moody's Investors Service and S&P Global Ratings, is expected to price the debt on Thursday with a spread of 150 to 155 basis points above benchmark Treasuries. The 30-year U.S. yield fell to 2.91 percent on Thursday, the lowest since January 2018.

The other interpretation is that the company chose to refinance with long-term fixed-rate debt because it sees the big drop in 30-year yields as unsustainable. After all, if a borrower expects interest rates to rise in the future, it would prefer to lock in a fixed rate now rather than face higher payments down the road.

[Jan 03, 2019] Oil drops on concerns of economic downturn, but OPEC cuts support by Henning Gloystein

Jan 03, 2019 | finance.yahoo.com

OPEC oil supply fell by 460,000 barrels per day (bpd) between November and December, to 32.68 million bpd, a Reuters survey found on Thursday, as top exporter Saudi Arabia made an early start to a supply-limiting accord, while Iran and Libya posted involuntary declines.

OPEC, Russia and other non-members - an alliance known as OPEC+ - agreed last December to reduce supply by 1.2 million bpd in 2019 versus October 2018 levels. OPEC's share of that cut is 800,000 bpd.

"If OPEC is faithful to its agreed output cut together with non-OPEC partners, it would take 3-4 months to mop up the excess inventories," energy consultancy FGE said.

[Jan 03, 2019] The Rise of the Trader

Jan 03, 2019 | www.amazon.com

No sooner did you pass the fake fireplace than you heard an ungodly roar, like the roar of a mob ... It was the sound of well-educated young white men baying for money on the bond market.

TOM WOLFE, The Bonfire of the Vanities. 1987

We are Wall Street. It's our job to make money. Whether it's a commodity, stock, bond, or some hypothetical piece of fake paper, it doesn't matter. We would trade baseball cards if it were profitable. ...

We get up at 5am & work till 10pm or later. We're used to not getting up to pee when we have a position. We don't take an hour or more for a lunch break. We don't demand a union. We don't retire at 50 with a pension. We eat what we kill, and when the only thing left to eat is on your dinner plates, we'll eat that....

We aren't dinosaurs. We are smarter and more vicious than that, and we are going to survive.

Reported by STACY-MARIE ISHMAEL, FT Alphaville, 30 April 2010

[Dec 31, 2018] Britain fell for a neoliberal con trick even the IMF says so by Aditya Chakrabortty

Looks like Guardian start turning away from neoliberalism.
Notable quotes:
"... What price is paid when a promise is broken? Because for much of my life, and probably yours, the political class has made this pledge: that the best way to run an economy is to hack back the public realm as far as possible and let the private sector run free. That way, services operate better, businesses get the resources they need, and our national finances are healthier. ..."
"... I don't wish to write about the everyday failings of neoliberalism – that piece would be filed before you could say "east coast mainline". Instead, I want to address the most stubborn belief of all: that running a small state is the soundest financial arrangement for governments and voters alike. Because 40 years on from the Thatcher revolution, more and more evidence is coming in to the contrary. ..."
"... The other big reason for the UK's financial precarity is its privatisation programme, described by the IMF as no less than a "fiscal illusion". British governments have flogged nearly everything in the cupboard, from airports to the Royal Mail – often at giveaway prices – to friends in the City. Such privatisations, judge the fund, "increase revenues and lower deficits but also reduce the government's asset holdings". ..."
"... IMF research shows is that the Westminster classes have been asset-stripping Britain for decades – and storing up financial trouble for future generations ..."
Oct 17, 2018 | www.theguardian.com

The fund reports that Britain's finances are weaker than all other nations except Portugal, and says privatisation is to blame

Columnists usually proffer answers, but today I want to ask a question, a big one. What price is paid when a promise is broken? Because for much of my life, and probably yours, the political class has made this pledge: that the best way to run an economy is to hack back the public realm as far as possible and let the private sector run free. That way, services operate better, businesses get the resources they need, and our national finances are healthier.

It's why your tax credits keep dropping , and your mum has to wait half a year to see a hospital consultant – because David Cameron slashed public spending, to stop it "crowding out" private money. It's why water bills are so high and train services can never be counted on – because both industries have been privatised.

We let finance rip and flogged our assets. Austerity was bound to follow Will Hutton

From the debacle of universal credit to the forced conversion of state schools into corporate-run academies, the ideology of the small state – defined by no less a body than the International Monetary Fund as neoliberalism – is all pervasive. It decides how much money you have left at the end of the week and what kind of future your children will enjoy, and it explains why your elderly relatives can't get a decent carer.

I don't wish to write about the everyday failings of neoliberalism – that piece would be filed before you could say "east coast mainline". Instead, I want to address the most stubborn belief of all: that running a small state is the soundest financial arrangement for governments and voters alike. Because 40 years on from the Thatcher revolution, more and more evidence is coming in to the contrary.

Let's start with the IMF itself. Last week it published a report that barely got a mention from the BBC or in Westminster, yet helps reframe the entire debate over austerity. The fund totted up both the public debt and the publicly owned assets of 31 countries, from the US to Australia, Finland to France, and found that the UK had among the weakest public finances of the lot. With less than £3 trillion of assets against £5tn in pensions and other liabilities, the UK is more than £2tn in the red . Of all the other countries examined by researchers, including the Gambia and Kenya, only Portugal's finances look worse over the long run. So much for fixing the roof.

'British governments have flogged nearly everything in the cupboard from airports to the Royal Mail – often at giveaway prices – to friends in the City.' Photograph: Amer Ghazzal/Rex/Shutterstock

Almost as startling are the IMF's reasons for why Britain is in such a state: one way or another they all come back to neoliberalism. Thatcher loosed finance from its shackles and used our North Sea oil money to pay for swingeing tax cuts. The result is an overfinancialised economy and a government that is £1tn worse off since the banking crash. Norway has similar North Sea wealth and a far smaller population, but also a sovereign wealth fund. Its net worth has soared over the past decade.

The other big reason for the UK's financial precarity is its privatisation programme, described by the IMF as no less than a "fiscal illusion". British governments have flogged nearly everything in the cupboard, from airports to the Royal Mail – often at giveaway prices – to friends in the City. Such privatisations, judge the fund, "increase revenues and lower deficits but also reduce the government's asset holdings".

Throughout the austerity decade, ministers and economists have pushed for spending cuts by pointing to the size of the government's annual overdraft, or budget deficit. Yet there are two sides to a balance sheet, as all accountants know and this IMF work recognises. The same goes for our public realm: if Labour's John McDonnell gets into No 11 and renationalises the railways, that would cost tens of billions – but it would also leave the country with assets worth tens of billions that provided a regular income.

Instead, what this IMF research shows is that the Westminster classes have been asset-stripping Britain for decades – and storing up financial trouble for future generations.

Just look at housing to see the true cost of privatisation Dawn Foster

Privatisation and austerity have not only weakened the country's financial position – they have also handed unearned wealth to a select few. Just look at a new report from the University of Greenwich finding that water companies could have funded all their day-to-day running and their long-term investments out of the bills paid by customers. Instead of which, managers have lumbered the firms with £51bn of debt to pay for shareholders' dividends. Those borrowed billions, and the millions in interest, will be paid by you and me in our water bills. We might as well stuff the cash directly into the pockets of shareholders.

Instead of competitively run utilities, record investment by the private sector and sounder public finances, we have natural monopolies handed over to the wealthy, banks that can dump their liabilities on the public when things get tough, and an outsourcing industry that feasts upon the carcass of the public sector. As if all this weren't enough, neoliberal voices complain that we need to cut taxes and red tape, and further starve our public services.

This is a genuine scandal, but it requires us to recognise what neoliberalism promised and what it has failed to deliver. Some of the loudest critics of the ideology have completely misidentified it. Academics will daub the term "neoliberal" on any passing phenomenon. Fitbits are apparently neoliberal, as is Ben & Jerry's ice-cream and Kanye West. Pundits will say that neoliberalism is about markets and choice – tell that to any commuter wedged on a Southern rail train. And centrist politicians claim that the great failing of neoliberalism is its carelessness about identity and place, which is akin to complaining that the boy on a moped who snatched your smartphone is going too fast.

Let us get it straight. Neoliberalism has ripped you off and robbed you blind. The evidence of that is mounting up – in your bills, in your services and in the finances of your country.

• Aditya Chakrabortty is a Guardian columnist and senior economics commentator

[Dec 29, 2018] U.S. retirees try to keep cool as stocks tumble by Tim McLaughlin

Overinvestment in stocks of retires is very common under neoliberalism.
There are several factors here: one is greed cultivated by neoliberal MSM, the second is insufficient retirement funds (gambling with retirement savings) and the last and not least is lack of mathematical skills an inability to use Excel for viewing their portfolio and making informed decisions.
Notable quotes:
"... At the end of 2016, 69 percent of investors in their 60s had at least 40 percent of their 401(k) portfolio invested in stocks, up from 65 percent in 2007, according to the Employee Benefit Research Institute in Washington. ..."
"... 19 percent had more than 80 percent of their 401(k) invested in stocks in 2016 ..."
"... "We had lousy forecasts in 2008. The housing market was in a tailspin," said 76-year-old John Bauer, who worked for McDonnell Douglas and Boeing Co for 36 years in St. Louis. "Today, employment is way up. The housing market is steady and corporations are flush." ..."
Dec 29, 2018 | finance.yahoo.com

BOSTON (Reuters) - Nancy Farrington, a retiree who turns 75 next month, admits to being in a constant state of anxiety over the biggest December stock market rout since Herbert Hoover was president.

"I have not looked at my numbers. I'm afraid to do it," said Farrington, who recently moved to Charleston, South Carolina, from Boston. "We've been conditioned to stand pat and not panic. I sure hope my advisers are doing the same."

Retirees are worrying about their nest eggs as this month's sell-off rounds out the worst year for stocks in a decade, and some fear they are headed for a day of reckoning like the 2008 market meltdown or dot-com crash of the early 2000s.

Retirees have less time to recover from bad investment moves than younger workers. If they or their advisers panic and sell during a brief downturn, they may lock in a more meager retirement. But their portfolio could be even more at risk if they hold on too long in a prolonged decline.

"I have no way of riding it out if that happens," said Farrington. "I can feel the anxiety in my stomach all the time."

While many industrialized countries still have generous safety nets for retirees, pensions for U.S. private-sector workers largely have been supplanted by 401(k) accounts and other private saving plans. That means millions of older Americans are effectively their own pension managers.

Workers in countries like Belgium, Canada, Germany, France and Italy receive, on average, about 65 percent of their income replaced by mandatory pensions. In the Netherlands the ratio of benefits to lifetime average earnings is abut 97 percent, according to a 2017 Organization for Economic Cooperation and Development report.

The OECD says the comparable U.S. replacement rate from Social Security benefits is about 50 percent.

U.S. retirees had watched their private accounts mushroom during a bull stock market that began in early 2009. Meanwhile, the Federal Reserve kept interest rates near zero for years, enticing retirees deeper into stocks than previous generations as investments like certificates of deposit, government bonds and money-market funds generated paltry income.

At the end of 2016, 69 percent of investors in their 60s had at least 40 percent of their 401(k) portfolio invested in stocks, up from 65 percent in 2007, according to the Employee Benefit Research Institute in Washington.

Still, fewer have gone all in on stocks in recent years. Just 19 percent had more than 80 percent of their 401(k) invested in stocks in 2016, down from 30 percent at year-end 2007, according to nonprofit research group EBRI.

"Nothing has gone wrong, but it seems the market is trying to figure out what could go wrong," said Brooke McMurray, a 69-year-old New York retiree who says she became a financial news junkie after the 2007-2009 financial crisis.

"Unlike before, I now know what I own and I constantly read up on my companies," she said.

The three major U.S. stock indexes have tumbled about 10 percent this month, weighed by investor worries including U.S.-China trade tensions, a cooling economy and rising interest rates, and are on track for their worst December since 1931.

The S&P 500 is headed for its worst annual performance since 2008, when Wall Street buckled during the subprime mortgage crisis. But some are not quite ready to draw comparisons.

"We had lousy forecasts in 2008. The housing market was in a tailspin," said 76-year-old John Bauer, who worked for McDonnell Douglas and Boeing Co for 36 years in St. Louis. "Today, employment is way up. The housing market is steady and corporations are flush."

Still, Bauer said he is uneasy about White House leadership. He and several other retirees referenced U.S. Treasury Secretary Steve Mnuchin's recent calls to top bankers, which did more to rattle than assure markets. U.S. stocks tumbled more than 2 percent the day before the Christmas holiday.

Nevertheless, Bauer is prepared to ride out any market turmoil without making dramatic moves to his retirement portfolio. "When it's up, I watch it. When it's down, I don't," he said. And there are some factors helping take the sting out of the market rout, said Larry Glazer, managing partner of Boston-based Mayflower Advisors LLC.

[Dec 27, 2018] Chart analyst sees a weeks-long relief rally in stocks that could offer selling opportunity

Dec 27, 2018 | finance.yahoo.com

Compare with "That's set to worsen in the new year, experts told CNBC on Monday, pointing to risks including the Federal Reserve likely raising interest rates further and mounting concerns about a global economic slowdown." The problem iether expecting rally or expecting further downturn is that stock prices are so detached from reality that everything is possible.

[Dec 25, 2018] 'The worst is yet to come' Experts say a global bear market is just getting started by Yen Nee Lee

The S&P crashed below its bear market level of 2352.7 - the lowest since April 2017 - ending the longest bull market in history. This is the worst December for the S&P 500 since The Great Depression
Dec 25, 2018 | finance.yahoo.com

[Dec 24, 2018] Wells Fargo bonuses were bad business on steroids

Dec 24, 2018 | www.yahoo.com

It was over two years ago that Wells Fargo's fake accounts scandal burst into the headlines, and since then, there has been an unrelenting torrent of bad news. In late October, the American Banker reported that two executives were placed on leave after they received notifications of pending sanctions from the Office of the Comptroller of the Currency. In November, Federal Reserve chairman Jerome Powell sent a letter to Senator Elizabeth Warren saying the Fed will not lift a cap on Wells's growth until the bank addresses deficiencies in oversight and risk management. "The underlying problem at the firm was a strategy that prioritized growth without ensuring that risks were managed, and as a result the firm harmed many of its customers," Powell wrote.

In early November, Jay Welker, who was the head of the private bank, which sits within the bank's wealth management business, retired . Under Welker, the private bank pushed wealth advisors to vigorously sell high-fee products . There may be more bad news about this aspect of the embattled bank. The Justice Department, the SEC, the Labor Department, and Wells Fargo's own board are conducting ongoing investigations into its wealth management business that have yet to be resolved.

There's still one aspect of how the wealth management business pushed for growth that former Wells Fargo employees say hasn't gotten the scrutiny it should. For four years, starting in 2012 and through the end of 2015, Wells incentivized some of its advisors in that business through something called the "Growth Award." Some former employees say these awards led to behavior that was not in the best interest of clients, including steering them towards higher-fee products. The Growth Award was much discussed internally, says a former investment strategist at Wells, although not everyone was privy to the details of how it worked.

Last summer, the Wall Street Journal reported the existence of the growth award, but not the details of how the money worked. Essentially, the growth award was a way of motivating advisors to grow their businesses. In and of itself, that isn't unusual. The industry has for years offered successful brokers incentives, often in the form of elaborate trips to exotic locales.The SEC is weighing new rules that may curtail the use of such rewards under the theory that they could make brokers "predominantly motivated" by "self enrichment." Firms have also long used rich packages to lure successful brokers to move their business.

But firms are cutting back on the use of such packages, according to industry insiders. When told about the details of the growth award, three financial advisors at other firms with whom Yahoo Finance spoke expressed shock at both the sheer size and the way it incentivized advisors for short-term growth, rather than long-term business building. (Another advisor thought that in the context of the packages that were used to incentivize brokers to switch, it wasn't so surprising.) Or as former Wells Fargo executive, who was in the retail brokerage industry for decades, says, "If a free golf outing is bad business, then the Growth Award is bad business on steroids."

In a statement to Yahoo Finance, spokesperson Shea Leordeanu said, "At Wells Fargo Wealth and Investment Management, we are committed to taking care of our clients' financial needs every day and take seriously our responsibility to help them preserve and invest their hard-earned savings. Our primary goal is to be a trusted advisor to our clients and to act in their best interests. And we have supervisory processes and controls in place so that, if a team member acts in a manner not in line with our values and our policies, we take appropriate action."

An enormous, compounding bonus for bringing revenue to Wells Fargo

The Growth Award wasn't available to the entire army of some 14,000 advisors, who make up the broad group of Wells Fargo Advisors. (Many others, most prominently those who came with the 2008 Wachovia merger, had different compensation plans with lock-ups that are just now expiring, leading to something of an exodus , according to press reports.) This Growth Award, on the other hand, was meant for the 3,000 or so advisors who were part of something known as Wealth Brokerage Services, or WBS. These advisors are located in the bank branches, or in hubs -- Wells Fargo buildings in cities -- that housed wealth management personnel among others like business bankers. (Wells Fargo subsequently announced a reorganization that is expected to combine what were separate groups of advisors.) To be eligible, you couldn't be a newbie -- you needed a two year minimum at the bank -- and you had to be doing more than $350,000 in annual revenue. The former executive and another advisor estimate that narrowed the group down to about 2,000 people.

The amounts people stood to make were extraordinary. Here's how the math worked. The goal was for an individual financial advisor to increase his or her revenue by at least 15% for each of the four years that the Growth Award was in place. The award multiplied each year the goal was achieved. So if you achieved 15% growth in the first year, you received a 15% bonus. If you achieved 15% growth again in the second year, you received a 30% bonus. If you achieved 15% growth in the third year, you received a 45% bonus. Finally, if you achieved 15% growth again in the 4th year, you received a whopping 60% bonus.

If you didn't achieve the goal, you were not penalized, but you didn't receive the bonus.

To get specific about just what these percentages could mean, say you generated $1 million in revenue in 2011, and you achieved precisely 15% growth each year for the next 4 years. In year one, your revenue would be $1,150,000, and your bonus, at 15% of that, would be $172,500. The new 2013 goal would be $1,322,500 (a 15% increase from the $1,150,000.). If you hit that goal, your Growth Award bonus for 2013 would be $396,393. And so on. If you hit the goals for 2014 and 2015, you stood to make a bonus of $684,393 and $1,049,403, respectively. That means you stood to make $2.3 million in total Growth Award bonuses. In other words, the financial incentives to hit the numbers were enormous.

Perhaps for the very reason the incentives were so enormous, more advisors hit the numbers than Wells had expected. (Of course, there was also a strong bull market during that period.) The Journal reported that Wells had allotted $250 million for the Growth Award bonuses. Instead, Wells had to pay $750 million between 2012 and 2015. "It's widely known inside Wells that they were so way over budget," says another former advisor. "I personally know brokers who were awarded bonuses of over $2 million, which is a stunning amount of money," says a former investment advisor.

Roughly two-thirds of the 2,000 or so eligible advisors earned an award.

"When you throw that kind of money out, it incentivizes."

Now consider the Growth Award from the perspective of a client, who might wander into a bank branch, maybe having gotten an unexpected inheritance. "You have to connect the dots," the former executive says. "This is where the sales pressure in the bank branches meets the wealth and investment management business."

The staff of the branch was incentivized to steer clients to a Wells financial advisor, because investment management referrals helped them meet their sales goals, and that advisor, in turn had incentives -- really big incentives -- to steer the clients toward products that generate upfront revenue. "If you don't have a high moral background, it'll put you in a position to do things for clients that aren't in their best interest," says a former advisor. "I'm always looking at what's best for the client but it's also what's best for my paycheck." "You are absolutely incentivizing advisors to sell the products with the highest upfront fees," says the former executive.

"Yeah, when you throw that kind of money out, it incentivizes," says another former advisor. "Jesus would probably be okay. But the disciples probably would have had some morals put to the test on that one."

Multiple sources say the Growth Award helps explain why annuity sales at Wells Fargo were so high, especially after the bank tried to tamp down on the amount the Award was going to cost them. In 2014, Wells Fargo decided to stop "fee fronting," which allowed advisors to count fees that would be paid in subsequent years toward their annual tally. So advisors began to search for products with high initial fees, one former advisor said.

Annuities come with high upfront revenues for the broker, making them an obvious choice for someone who is trying to hit a revenue target -- but maybe not the optimal choice for the client. "You think Wells Fargo's Bankers Are Bad? Take a Look at its Brokers," was the headline of an October 2016 piece in thestreet.com. The piece noted that Wells had argued to the Securities and Exchange Commission that it should not be subject to rules to put its investors first in cases where its advisors were making referrals for products including annuities, and that in 2015, Wells was number one in the country for annuity sales.

"It's pretty stunning that a firm that has just half the assets of its larger competitors sells more annuities," says a former advisor. "I think that just speaks to the emphasis on making sales numbers and a need to sell more of the highest payout products." Indeed, the Journal reported and several former advisors corroborate that internally, 2015 was dubbed "The Year of the Annuity."

It wasn't just annuities. One former advisor also noted that advisors trying to chase the growth award also favored mutual funds with high upfront fees. "You'd think if revenue was going up by 15% a year, your AUM would at least go up at least 12% or 13%," a former advisor said. "That was not the case. The award was only revenue based -- there was nothing in there for AUM, longevity, or anything like that. Strictly show us the money and we'll show you the money."

All the fees were disclosed to Wells Fargo's clients. But what clients didn't know was the incentive structure that was in place for their advisor. So yes, clients understood the fees -- but they were in the dark as to at least part of the reason one product might have been recommended over another. "Imagine that it's November," says the former executive. "You have to do $250,000 in revenue, or you going to leave a million dollars on the table. What are you doing to do?" He continues, "Every client of WBS has to go back and look at every trade, every single decision, from 2012 to 2015 and scrutinize whether it was impacted by the Growth Award." "I think if clients and the public knew that Wells Fargo Advisors had given such substantial and amazing well-timed retention bonuses to lock up their advisors, they would begin to wonder whether their advisors were giving the best advice to their clients," says another former investment strategist.

There could be another problem, too. "If you achieved the goal early, you would stop doing business so you didn't have the higher base to start from in the next year," says the former executive. "You'd sand bag -- and that might not be in the client's best interest either."

A golden handcuff at a very good time for Wells Fargo

The Growth Award may also help explain why Wells has been able to retain as many advisors as it has, despite the ongoing scandals. Six months before the end of the Growth Award program, midway through 2015, Wells Fargo asked those advisors who had qualified for the award how they would like to receive their pay. There were two options. The first option essentially allowed the advisor to unlock all the money at the end of February 2021. If the advisor left before that, the money was forfeited. A third of the advisors who earned awards chose this option.

The other option paid out a tenth of the bonus each year for 10 years. If the advisor so chose, they could get that money up front as a forgivable loan. Every year the advisor remained at Wells Fargo, he or she would simply pay the interest on their bonus, and a tenth of the principle would be forgiven. But if the advisor left, he or she had to pay back the unforgiven principle. (Or if the advisor hadn't taken the forgivable loan, the annual checks would stop.) Two-thirds of advisors opted for this route.

The Growth Award also had the potential to create another problem for advisors. The nice thing about building a fee-based business is that it's an annuity for the advisor. Every year, there's a fee. If, on the other hand, the advisors put clients' money into things that generate a one-time pop of revenue, the advisor doesn't get the same type of ongoing fees. So, the former executive says, some advisors are in a hole, where they owe taxes on the Growth Award, while their income has shrunk dramatically. "I know guys who got it who built or bought a huge house and are now stuck," he says.

The golden handcuff of the Growth Award has been good for the bank in the face of all of the scandals. One advisor told Yahoo Finance that the growth in the number of clients also shrank dramatically amid the unrelenting negative news.

"I went from around 30 referrals to two in six months after the scandal hit," this person said. What had been a solid stream of clients slowed to a trickle. But the only out for advisors would have been to have another firm hire them away and pay off their loan.

Perhaps the most interesting thing about the Growth Award is how deliberate it was. "It was not a computer glitch or an oversight," as the former executive says. "It was not perpetrated by a few rogue employees. The Growth Award was conceived by the Compensation Committee. The Compensation Committee is the most senior of senior management. The goal was to drive growth and drive growth it did." But perhaps at a price for clients -- making the Growth Award, in its way, the most telling evidence yet of the cultural issues within Wells Fargo.

Read more:

Exclusive: Wells Fargo pushed wealth advisors to use high-fee products, cross-sell

Exclusive: Wells Fargo automated high-net-worth wealth management as advisors faced sales pressure

[Dec 23, 2018] How Corporations Control Politics

Highly recommended!
Notable quotes:
"... Nearly 50% of the top executives and managers surveyed admit that they mobilize their workers politically. ..."
"... The most important factor in determining whether a firm engages in partisan mobilization of its workers-and thinks that that mobilization is effective-is the degree of control it has over its workers. ..."
"... But the problem isn't corruption. It's capitalism. Workers are dependent on employers for their well-being. That makes them vulnerable to their bosses' demands, about a great many matters, including politics. The ballot and the buck are fused. Not because of campaign donations but because of the unequal relationship between capital and labor. Not just in the corridors of Congress but also in the halls of the workplace. Unless you confront the latter, you'll never redress the former. Without economic democracy, there's no political democracy. ..."
"... I'd argue though that in terms of the overall discourse, "the bosses" have won without even resorting to anything so crude. ..."
"... people soak up attitudes about economics and trade policy from work. ..."
"... They aren't being threatened, it's simply a matter of culture � of lionising the "private sector" and bashing the "public sector" and those out of work. The identity comes out of water cooler moments and the lunch break. It takes a strong outside-work identity not to want the halo of "private sector wealth creator" and thus disdain a union, or a strike or a dole recipient ..."
"... But hey, it's not him getting black lung or dying in a mine collapse. It's his workers. The ones he's been fined repeated times for ignoring safety regulations to save a buck here and there. ..."
"... Much conservative rhetoric, especially in the US, is caught up in an anachronistic big-government/small-government debate. But real government is not where the nominal authority lies, but who has the real power! ..."
"... conservatives are leading a revolution, in which national governments are being usurped by the big government of the international corporate oligopoly. ..."
"... . . . the problem isn't corruption. It's capitalism. ..."
"... 15% report that employer messages affected their vote choice. ..."
"... Some workers are terribly underpaid, forcing them to work extra hours/job; some are subject to capricious scheduling, and irregular hours; others in prestige jobs intentionally overworked, makes for easier conditioning. All around the 40hr/week standard persists despite massive productivity gains. At least the French get August off to take a proper trip to the beach. ..."
June 7, 2015 | crookedtimber.org
In my Salon column today, I look at new research examining how corporations influence politics.
Money talks. But how?

From "Mr. Smith Goes to Washington" to Citizens United, the story goes like this: The wealthy corrupt and control democracy by purchasing politicians, scripting speech and writing laws. Corporations and rich people make donations to candidates, pay for campaign ads and create PACs. They, or their lobbyists, take members of Congress out to dinner, organize junkets for senators and tell the government what to do. They insinuate money where it doesn't belong. They don't build democracy; they buy it.

But that, says Alex Hertel-Fernandez, a PhD student in Harvard's government department, may not be the only or even the best way to think about the power of money. That power extends far beyond the dollars deposited in a politician's pocket. It reaches for the votes and voices of workers who the wealthy employ. Money talks loudest where money gets made: in the workplace.

Among Hertel-Fernandez's findings:
1. Nearly 50% of the top executives and managers surveyed admit that they mobilize their workers politically.

2. Firms believe that mobilizing their workers is more effective than donating money to a candidate, buying campaign ads, or investing in large corporate lobbies like the Chamber of Commerce.

3. The most important factor in determining whether a firm engages in partisan mobilization of its workers-and thinks that that mobilization is effective-is the degree of control it has over its workers. Firms that always engage in surveillance of their employees' online activities are 50 percent more likely to mobilize their workers than firms that never do.

4. Of the workers who say they have been mobilized by their employers, 20% say that they received threats if they didn't.

My conclusion:
When we think of corruption, we think of something getting debased, becoming impure, by the introduction of a foreign material. Money worms its way into the body politic, which rots from within. The antidote to corruption, then, is to keep unlike things apart. Take the big money out of politics or limit its role. That's what our campaign finance reformers tell us.

But the problem isn't corruption. It's capitalism. Workers are dependent on employers for their well-being. That makes them vulnerable to their bosses' demands, about a great many matters, including politics. The ballot and the buck are fused. Not because of campaign donations but because of the unequal relationship between capital and labor. Not just in the corridors of Congress but also in the halls of the workplace. Unless you confront the latter, you'll never redress the former. Without economic democracy, there's no political democracy.

Red more: Your boss wants to control your vote The real reason to fear corporate power Salon.com

Phil 06.07.15 at 3:43 pm

That's a disgusting state of affairs, and one which I hope is confined to the US. I've never seen anything remotely like that � never had a hint that my boss wanted to influence my vote � at any of the places I've worked, including the ones with no pension scheme and no union recognition.
.2

Metatone 06.07.15 at 3:44 pm

I think in terms of campaigning (letter writing) etc. these abuses have clear effects.

I'd argue though that in terms of the overall discourse, "the bosses" have won without even resorting to anything so crude.

At least here in the UK it's palpable that people soak up attitudes about economics and trade policy from work. And those policy preferences aren't designed around their prosperity

They aren't being threatened, it's simply a matter of culture � of lionising the "private sector" and bashing the "public sector" and those out of work. The identity comes out of water cooler moments and the lunch break. It takes a strong outside-work identity not to want the halo of "private sector wealth creator" and thus disdain a union, or a strike or a dole recipient

Josh Jasper 06.07.15 at 4:38 pm

cassander : Seems to me that coal miners and coal mine owners have a lot of interests in common.

You might want to mention that to someone who's worked for Massey energy at the Upper Big Branch Mine. Suggest to him that he really ought to be giving his wages to the PACs if Massey tells them to.

I suggest having your dentist on speed dial.

For that matter, it's evident that the lot of interests Murray and his labor force have in common exclude worker safety as well

http://www.huffingtonpost.com/elliott-negin/coal-baron-digs-a-deeper_b_4714139.html

But hey, it's not him getting black lung or dying in a mine collapse. It's his workers. The ones he's been fined repeated times for ignoring safety regulations to save a buck here and there.

Does mobilization to vote Republican affect coal workers? Yes. It makes it very likely that the industry will get away with ignoring safety regulations to save money, because destroying mining safety regulations for major donors is a Republican party practice.

Sasha Clarkson 06.07.15 at 6:45 pm

Much conservative rhetoric, especially in the US, is caught up in an anachronistic big-government/small-government debate. But real government is not where the nominal authority lies, but who has the real power!

Like it or not, conservatives are leading a revolution, in which national governments are being usurped by the big government of the international corporate oligopoly. This of course is barely accountable for its actions, nor subject to democratic oversight, and hence can ride roughshod over the broad mass of humanity. Of course, like the Star Wars Trade Federation, the oligopoly also subverts/coerces the loyalties of employees from the wider community to itself.

I suspect that the trend is that national governments will be important only in that they will provide the armies to enforce the will of the corporate elite. Eventually even this may become unimportant as other means are found to suppress us!

http://img4.wikia.nocookie.net/ /images/6/68/TF-DCS-ST.jpg

Bruce Wilder 06.07.15 at 7:08 pm

. . . the problem isn't corruption. It's capitalism.

So simple, then. So obvious.

More than a century of organizing work in hierarchy was all just a big mistake, but no worries, we'll just exchange it for "economic democracy" at the service desk at Best Buy.

Ronan(rf) 06.07.15 at 8:11 pm
Not to display a put on world weary cynicism , but I'm surprised people are surprised by this. It isn't "capitalism" , it's politics. People have always been pressured into how they vote, whether by domineering individuals in their family, notable families in their community , factions in their village, political machines in their towns and cities , so on and so forth. In workplaces of all sizes, from small shops to local factories, individuals have been coerced, whether implicitly (through peer pressure) or explicitly (threats of dismissal) into supporting political positions a dominant faction wants them to. (Is this not part of what trade unions do, or have done?)
It is a fallacy of WEIRD thinking to imagine away such pressures historically. Obviously this situation in the OP isn't ideal, but it is politics , as it has existed since time immemorial. (Or at least a date I can't place)
Alex Hertel-Fernandez 06.07.15 at 8:24 pm
Cassander: I've looked at workers' self-reports of whether employer messages changed their behaviors. About half of all workers who have been contacted by their bosses report a change in at least one of their political behaviors or attitudes, and 15% report that employer messages affected their vote choice. Is this a lot or a little? I think the answer depends on whether you think it is an appropriate role for managers to play in the political lives of their employees.

You're definitely right that the economic interests of workers and managers are often aligned on things like trade and regulation. But many times they are not - as in the cases of working conditions (e.g. minimum wage) or redistributive policies. And independent of the content of employers' political messages, we might be worried about the power that managers have over their workers. For instance, I find that about 28% of contacted workers reported that their employers' messages either made them uncomfortable or included threats of economic retaliation. I think whether you are troubled by these statistics or not depends on whether you are concerned about power differentials between employers and their employees.

Barry Freed: Many of these employer tactics used to be illegal, for the most part, before Citizens United. And some states have taken action to curb the most coercive practices (NJ and OR). But most states haven't.

hix 06.07.15 at 8:40 pm
Well, I associate such behaviour with defect democracy � which is how id think of most historical democracies. So for me it is shocking to see this kind of mechanism in a modern long established rich democracy (ok not that shocking, considering all the other fingerpointers towards that direction with regards to the US).
gianni 06.07.15 at 8:46 pm
Not to mention the ways in which American corporations especially have worked to diminish the employee's time for political activity. Some workers are terribly underpaid, forcing them to work extra hours/job; some are subject to capricious scheduling, and irregular hours; others in prestige jobs intentionally overworked, makes for easier conditioning. All around the 40hr/week standard persists despite massive productivity gains. At least the French get August off to take a proper trip to the beach.

Added to this our antiquated infrastructure and sprawling residential geography make the simple fact of getting to work a huge time investment. While in your car you are more likely to be fed the political opinions of well-funded media figures than to those of your peers. Don't forget that this is in the country that invented the internet � how many of those people could just be telecommuting anyway?

Ronan(rf) 06.07.15 at 8:55 pm
@13 � I don't know if I'd see the US as an institutionally mature democracy akin to what exists in Northern Europe, more as a hybrid of areas that are economically and politically developed, and others that are more comparable to weak states or emerging democracies (at best the European 'periphery', Spain, Greece, Italy, Ireland- perhaps in the 80s more than now) You can see this in the weak state capacity, corrupt militia like police forces and late agrarian style of politics.
Also, perhaps I'm wrong.
Bruce Wilder 06.07.15 at 9:44 pm
Rich Puchalsky @ 11:

I appreciate that when you're going against an established story, you have to emphasize that what's really going on is a whole different story.

That's what I'd take "the problem isn't corruption. It's capitalism." to be.

But really I'd assume that it's both.

[Dec 22, 2018] Crude refusal China shuns U.S. oil despite trade war truce

Dec 22, 2018 | finance.yahoo.com

Chinese refineries that used to purchase U.S. oil regularly said they had not resumed buying due to uncertainty over the outlook for trade relations between Washington and Beijing, as well as rising freight costs and poor profit-margins for refining in the region.

Costs for shipping U.S. crude to Asia on a supertanker are triple those for Middle eastern oil, data on Refinitiv Eikon showed.

A senior official with a state oil refinery said his plant had stopped buying U.S. oil from October and had not booked any cargoes for delivery in the first quarter.

"Because of the great policy uncertainty earlier on, plants have actually readjusted back to using alternatives to U.S. oil ... they just widened our supply options," he said.

He added that his plant had shifted to replacements such as North Sea Forties crude, Australian condensate and oil from Russia.

"Maybe teapots will take some cargoes, but the volume will be very limited," said a second Chinese oil executive, referring to independent refiners. The sources declined to be named because of company policy.

A sharp souring in Asian benchmark refining margins has also curbed overall demand for crude in recent months, sources said.

Despite the impasse on U.S. crude purchases, China's crude imports could top a record 45 million tonnes (10.6 million barrels per day) in December from all regions, said Refinitiv senior oil analyst Mark Tay.

Russia is set to remain the biggest supplier at 7 million tonnes in December, with Saudi Arabia second at 5.7-6.7 million tonnes, he said.

19 hours ago This is an economic/political tight rope for both countries. China is the largest auto market in the world with numerous manufacturers located inside its borders. Apple sales will disappoint inside China after Meng's arrest over Iran sanctions (Huawei is a world heavy weight in terms of sales), and this has already begun inside China due to national pride. Canada has already seen one trade agreement postponed over her detention. US firm on the main have already issued orders to not have key employees travel to their Chinese plants unless absolutely necessary for fear of retaliation. Brussels is actively working on a plan to bypass US Iranian sanctions, which are deeply unpopular in Europe.
The key to this solution might be in automotive. Oil is possibly on the endangered bargaining list. Russia is a key trading partner (for years) with China and, along with Saudi Arabia and Iran (or even without Iran) will be able to supply their needs. Our agricultural sector, particularly in soybeans, has been hit hard, forcing the US govt. into farm subsidies. Brazil just recorded a record harvest in soybeans. The US could counter with lifting Meng from arrest in return for an agricultural break, but those negotiations won't make the mainstream news. Personally, I think her arrest was a very ill-thought move on the part of law enforcement, as the benefits don't even begin to outweigh the massive retaliation to US firms operating inside their borders. It is almost akin to arresting Tim Cook of Apple or Apple's CFO. You don't kill a bug with a sledge hammer.

[Dec 19, 2018] Judge excoriates Trump ex-adviser Flynn, delays Russia probe sentencing by Jan Wolfe and Ginger Gibson

Flynn "treason" is not related to Russia probe and just confirm that Nueller in engaged in witch hunt. I believe half of Senate and House of Representative might go to jail if they were dug with the ferocity Mueller digs Flynn's past. So while Flynn behavior as Turkey lobbyist (BTW Turkey is a NATO country and not that different int his sense from the US -- and you can name a lot of UK lobbyists in high echelons of the US government, starting with McCabe and Strzok) is reprehensible, this is still a witch hunt
When American law enforcement and intelligence officials, who carry Top Secret clearances and authority to collect intelligence or pursue a criminal investigation, decide to employ lies and intimidation to silence or intimidates those who worked for Donald Trump's Presidency, we see shadow of Comrage Stalin Great Terror Trials over the USA.
Dec 19, 2018 | www.yahoo.com
Former U.S. national security adviser Michael Flynn passes by members of the media as he departs after his sentencing was delayed at U.S. District Court in Washington, U.S., December 18, 2018. REUTERS/Joshua Roberts

By Jan Wolfe and Ginger Gibson

WASHINGTON (Reuters) - A U.S. judge fiercely criticized President Donald Trump's former national security adviser Michael Flynn on Tuesday for lying to FBI agents in a probe into Russian interference in the 2016 election, and delayed sentencing him until Flynn has finished helping prosecutors.

U.S. District Judge Emmet Sullivan told Flynn, a retired U.S. Army lieutenant general and former director of the Defense Intelligence Agency, that he had arguably betrayed his country. Sullivan also noted that Flynn had operated as an undeclared lobbyist for Turkey even as he worked on Trump's campaign team and prepared to be his White House national security adviser.

Flynn pleaded guilty to lying to FBI agents about his December 2016 conversations with Sergei Kislyak, then Russia's ambassador in Washington, about U.S. sanctions imposed on Moscow by the administration of Trump's Democratic predecessor Barack Obama, after Trump's election victory but before he took office.

Special Counsel Robert Mueller, leading the investigation into possible collusion between Trump's campaign team and Russia ahead of the election, had asked the judge not to sentence Flynn to prison because he had already provided "substantial" cooperation over the course of many interviews.

But Sullivan sternly told Flynn his actions were abhorrent, noting that Flynn had also lied to senior White House officials, who in turn misled the public. The judge said he had read additional facts about Flynn's behavior that have not been made public.

At one point, Sullivan asked prosecutors if Flynn could have been charged with treason, although the judge later said he had not been suggesting such a charge was warranted.

"Arguably, you sold your country out," Sullivan told Flynn. "I'm not hiding my disgust, my disdain for this criminal offense."

Flynn, dressed in a suit and tie, showed little emotion throughout the hearing, and spoke calmly when he confirmed his guilty plea and answered questions from the judge.

Sullivan appeared ready to sentence Flynn to prison but then gave him the option of a delay in his sentencing so he could fully cooperate with any pending investigations and bolster his case for leniency. The judge told Flynn he could not promise that he would not eventually sentence him to serve prison time.

Flynn accepted that offer. Sullivan did not set a new date for sentencing but asked Mueller's team and Flynn's attorney to give him a status report by March 13.

Prosecutors said Flynn already had provided most of the cooperation he could, but it was possible he might be able to help investigators further. Flynn's attorney said his client is cooperating with federal prosecutors in a case against Bijan Rafiekian, his former business partner who has been charged with unregistered lobbying for Turkey.

Rafiekian pleaded not guilty on Tuesday to those charges in federal court in Alexandria, Virginia. His trial is scheduled for Feb. 11. Flynn is expected to testify.

Prosecutors have said Rafiekian and Flynn lobbied to have Washington extradite a Muslim cleric who lives in the United States and is accused by Turkey's government of backing a 2016 coup attempt. Flynn has not been charged in that case.

'LOCK HER UP!'

Flynn was a high-profile adviser to Trump's campaign team. At the Republican Party's national convention in 2016, Flynn led Trump's supporters in cries of "Lock her up!" directed against Democratic candidate Hillary Clinton.

A group of protesters, including some who chanted "Lock him up," gathered outside the courthouse on Tuesday, along with a large inflatable rat fashioned to look like Trump. Several Flynn supporters also were there, cheering as he entered and exited. One held a sign that read, "Michael Flynn is a hero."

Flynn became national security adviser when Trump took office in January 2017, but lasted only 24 days before being fired.

He told FBI investigators on Jan. 24, 2017, that he had not discussed the U.S. sanctions with Kislyak when in fact he had, according to his plea agreement. Trump has said he fired Flynn because he also lied to Vice President Mike Pence about the contacts with Kislyak.

Trump has said Flynn did not break the law and has voiced support for him, raising speculation the Republican president might pardon him.

"Good luck today in court to General Michael Flynn. Will be interesting to see what he has to say, despite tremendous pressure being put on him, about Russian Collusion in our great and, obviously, highly successful political campaign. There was no Collusion!" Trump wrote on Twitter on Tuesday morning.

After the hearing, White House spokeswoman Sarah Sanders told reporters the FBI had "ambushed" Flynn in the way agents questioned him, but said his "activities" at the center of the case "don't have anything to do with the president" and disputed that Flynn had committed treason.

"We wish General Flynn well," Sanders said.

In contrast, Trump has called his former long-time personal lawyer Michael Cohen, who has pleaded guilty to separate charges, a "rat."

Mueller's investigation into Russia's role in the 2016 election and whether Trump has unlawfully sought to obstruct the probe has cast a shadow over his presidency. Several former Trump aides have pleaded guilty in Mueller's probe, but Flynn was the first former Trump White House official to do so. Mueller also has charged a series of Russian individuals and entities.

Trump has called Mueller's investigation a "witch hunt" and has denied collusion with Moscow.

Russia has denied meddling in the election, contrary to the conclusion of U.S. intelligence agencies that have said Moscow used hacking and propaganda to try to sow discord in the United States and boost Trump's chances against Clinton.

Lying to the FBI carries a statutory maximum sentence of five years in prison. Flynn's plea agreement stated that he was eligible for a sentence of between zero and six months.

(Reporting by Jan Wolfe and Ginger Gibson; Additional reporting by Susan Heavey; Editing by Kieran Murray and Will Dunham)

[Dec 18, 2018] Looks like AP joined Integrity Intiative

Dec 18, 2018 | news.yahoo.com

Yahoo News - Latest News & Headlines

Matt o'Brien and Barbara Ortutay, AP Technology Writers , Associated Press December 17, 2018

<img alt="Key takeaways from new reports on Russian disinformation" src="https://s.yimg.com/ny/api/res/1.2/9VGA29inJ83dPeqC.cvqTg--~A/YXBwaWQ9aGlnaGxhbmRlcjtzbT0xO3c9ODAwO2lsPXBsYW5l/http://globalfinance.zenfs.com/images/US_AHTTP_AP_HEADLINES_BUSINESS/e66de17c8e1a4cecaf1da81f2bf87093_original.jpg" itemprop="url"/>
Some suspected Russian-backed fake social media accounts on Facebook.

Russians seeking to influence U.S. elections through social media had their eyes on Instagram and the black community.

These were among the findings in two reports released Monday by the Senate intelligence committee. Separate studies from University of Oxford researchers and the cybersecurity firm New Knowledge reveal insights into how Russian agents sought to influence Americans by saturating their favorite online services and apps with hidden propaganda.

Here are the highlights:

INSTAGRAM'S "MEME WARFARE"

Both reports show that misinformation on Facebook's Instagram may have had broader reach than the interference on Facebook itself.

The New Knowledge study says that since 2015, the Instagram posts generated 187 million engagements, such as comments or likes, compared with 77 million on Facebook.

And the barrage of image-centric Instagram "memes" has only grown since the 2016 election. Russian agents shifted their focus to Instagram after the public last year became aware of the widespread manipulation on Facebook and Twitter.

NOT JUST ADS

Revelations last year that Russian agents used rubles to pay for some of their propaganda ads drew attention to how gullible tech companies were in allowing their services to be manipulated.

But neither ads nor automated "bots" were as effective as unpaid posts hand-crafted by human agents pretending to be Americans. Such posts were more likely to be shared and commented on, and they rose in volume during key dates in U.S. politics such as during the presidential debates in 2016 or after the Obama administration's post-election announcement that it would investigate Russian hacking.

"These personalized messages exposed U.S. users to a wide range of disinformation and junk news linked to on external websites, including content designed to elicit outrage and cynicism," says the report by Oxford researchers, who worked with social media analysis firm Graphika.

DEMOGRAPHIC TARGETING

Both reports found that Russian agents tried to polarize Americans in part by targeting African-American communities extensively. They did so by campaigning for black voters to boycott elections or follow the wrong voting procedures in 2016, according to the Oxford report.

The New Knowledge report added that agents were "developing Black audiences and recruiting Black Americans as assets" beyond how they were targeting either left- or right-leaning voters.

The reports also support previous findings that the influence operations sought to polarize Americans by sowing political divisions on issues such as immigration and cultural and religious identities. The goal, according to the New Knowledge report, was to "create and reinforce tribalism within each targeted community."

Such efforts extended to Google-owned YouTube, despite Google's earlier assertion to Congress that Russian-made videos didn't target specific segments of the population.

PINTEREST TO POKEMON

The New Knowledge report says the Russian troll operation worked in many ways like a conventional corporate branding campaign, using a variety of different technology services to deliver the same messages to different groups of people.

Among the sites infiltrated with propaganda were popular image-heavy services like Pinterest and Tumblr, chatty forums like Reddit, and a wonky geopolitics blog promoted from Russian-run accounts on Facebook and YouTube.

Even the silly smartphone game "Pokemon Go" wasn't immune. A Tumblr post encouraged players to name their Pokemon character after a victim of police brutality.

WHAT NOW?

Both reports warn that some of these influence campaigns are ongoing.

The Oxford researchers note that 2016 and 2017 saw "significant efforts" to disrupt elections around the world not just by Russia, but by domestic political parties spreading disinformation.

They warn that online propaganda represents a threat to democracies and public life. They urge social media companies to share data with the public far more broadly than they have so far.

"Protecting our democracies now means setting the rules of fair play before voting day, not after," the Oxford report says.

[Dec 18, 2018] Warren Buffett suggests you read this 19th century poem when the market is tanking

Notable quotes:
"... If you can keep your head when all about you are losing theirs ... If you can wait and not be tired by waiting ... If you can think – and not make thoughts your aim ... If you can trust yourself when all men doubt you ... Yours is the Earth and everything that's in it. ..."
"... Like this story? ..."
Dec 18, 2018 | finance.yahoo.com

The stock market has had a volatile year, and it's not over yet: The Dow Jones Industrial Average lost more than 520 points on Monday and the S&P 500 fell 2.1 percent. Both are in correction and on pace for their worst December performance since the Great Depression in 1931.

But for the average person, shifts in the market , even ones as dramatic as the ones we've seen this year, shouldn't be cause for panic. During times of volatility, seasoned investor Warren Buffett says it's best to stay calm and stick to the basics, meaning, buy-and-hold for the long term.

So, during downturns, "heed these lines" from the classic 19th century Rudyard Kipling poem "If -- " which help illustrate this lesson, Buffett wrote in his 2017 Berkshire Hathaway shareholder letter :

If you can keep your head when all about you are losing theirs ...
If you can wait and not be tired by waiting ...
If you can think – and not make thoughts your aim ...
If you can trust yourself when all men doubt you ...
Yours is the Earth and everything that's in it.

Market downturns are inevitable, Buffett pointed out, using his own company as an example: "Berkshire, itself, provides some vivid examples of how price randomness in the short term can obscure long-term growth in value. For the last 53 years, the company has built value by reinvesting its earnings and letting compound interest work its magic. Year by year, we have moved forward. Yet Berkshire shares have suffered four truly major dips."

He went on to cite each of the steep share-price drops, including the most recent one from September 2008 to March 2009, when Berkshire shares plummeted 50.7 percent.

Major declines have happened before and are going to happen again, he says: "No one can tell you when these will happen. The light can at any time go from green to red without pausing at yellow."

Rather than watch the market closely and panic, keep a level head. Market downturns "offer extraordinary opportunities to those who are not handicapped by debt," he says, which brings up another important investing lesson: Never borrow money to buy stocks .

"There is simply no telling how far stocks can fall in a short period," writes Buffett. "Even if your borrowings are small and your positions aren't immediately threatened by the plunging market, your mind may well become rattled by scary headlines and breathless commentary. And an unsettled mind will not make good decisions."

Don't miss: Warren Buffett and Ray Dalio agree on what to do when the stock market tanks

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[Dec 18, 2018] Stock Sell-Off Defies Everything the Bulls Hoped Would Stop It

Dec 18, 2018 | finance.yahoo.com

View photos
Stock Sell-Off Defies Everything the Bulls Hoped Would Stop It

(Bloomberg) -- Valuations aren't stopping it. Jerome Powell's softer tone failed to soothe anyone. The moratorium on tariffs is a fading memory and now the sturdiest chart level of the year is in danger of giving way.

A stock rout that bulls thought was finished three different times since October is in a new and ominous phase, with the Dow Jones Industrial Average losing 1,004 points in two days. No Santa Claus rally. Instead, the S&P 500 Index is hurtling toward the second-worst December on record.

"The stock market doesn't care what looks good now. It's wondering if fundamentals will deteriorate in the future," said Peter Mallouk, co-chief investment officer of Creative Planning, which has around $36 billion under management. "You have a lot of people that are scared, and they're sitting on the sidelines to wait it out."

Waiting it out is starting to look like the only viable strategy. On Monday, the S&P 500 briefly pierced a level that had been a psychological foundation for 10 months, its intraday low from Feb. 9. Valuations shrink and shrink -- computer and software stocks trade at 15 times next year's earnings estimates, cheaper than utilities and soapmakers -- and the selling just gets worse.

With Monday's 54-point loss, the S&P has now fallen 2 percent or more six times this quarter. The Nasdaq Composite has done it 10 times. Both are the most since the third quarter of 2011.

Pinning a single cause on the carnage has become an exercise in absurdity, with analysts cycling through a rotating list of reasons that include trade, Donald Trump's legal travails, China data, sinking oil and cooling home prices. Anyone daring to suggest economic growth may slow in 2019 is pointed to charts showing factories, employment and profits are booming -- but those assurances are starting to fall on deaf ears.

While S&P 500 Index futures indicated a potential respite in Asian trading Tuesday, rising as much as 0.5 percent, traders remained cautious.

Investors "are too worried, but that's the big driver behind the declines we've seen recently, overall worries about U.S. growth and worries about global growth," said Kate Warne, investment strategist at Edward Jones. "Investors have gotten very nervous about the changes they're seeing ahead and they're uncertain about what they mean."

A troubling sign for Americans: equity pain, which all year has been worse overseas, is landing with more force in the U.S. The Russell 2000 Index of small caps, a proxy for domestically oriented companies, slid into a bear market Monday, falling 21 percent since Aug. 31.

On the other hand, since hitting a 19-month low in late October, the MSCI Emerging Markets Index has trended higher, even as the S&P 500 Index keeps making new lows. Stocks in the EM gauge have outperformed the S&P 500 for three consecutive weeks, the most since late January, data compiled by Bloomberg show.

To comfort themselves in the face of such depressing facts, beaten-up investors have looked at past corrections and noticed that this one is still playing out according a relatively benign plan. Under the pattern, major swoons that have interrupted the bull market that began in 2009 have taken around 100 days to tire out before dip-buyers swooped in to put things right.

At the same time, anyone betting the New Year will bring an end to the volatility should be aware that bull markets can die slow deaths. The 88-day sell-off has been going on roughly one-third as long as it has taken for the S&P 500 to fall into the 11 bear markets it's suffered going back to World War II.

How many more sellers than buyers were there on Monday? The volume of stocks trading lower on the New York Stock Exchange reached 1 billion shares, compared with 158 million that were bought. The difference in trading volume, at 883 million shares, is on track to become the biggest weekly gap since 2016, data compiled by Bloomberg show.

That the worst two-day sell-off since October landed on the same week Powell's Federal Reserve is expected to announce its ninth interest rate hike was grist for those who see central bank policy behind everything. As willingly as the Fed chairman has walked back his most hawkish pronouncements, nobody thinks monetary policy is likely to loosen even as growth in the economy and earnings slows from this year's pace.

"That's what the market is struggling with right now -- do they believe in a growth slowdown to trend or something more sinister than that?" said Phil Camporeale, managing director of multi-asset solutions for JPMorgan Asset Management. "I don't think people really want to take risk, but especially trying to catch a falling knife on equity prices."

(Adds details on S&P 500 futures trading in seventh paragraph.)

--With assistance from Elena Popina and Lu Wang.

To contact the reporters on this story: Vildana Hajric in New York at [email protected];Sarah Ponczek in New York at [email protected]

To contact the editors responsible for this story: Jeremy Herron at [email protected], Chris Nagi, Eric J. Weiner

For more articles like this, please visit us at bloomberg.com

�2018 Bloomberg L.P.

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[Dec 18, 2018] DoubleLine's Gundlach says U.S. equities are in long-term bear market

Notable quotes:
"... Jeffrey Gundlach, chief executive of DoubleLine Capital, on Monday said the S&P 500 stock index is headed to new lows and that U.S. equities are in a long-term bear market. ..."
"... "I think it is a bear market. I think we've had the first leg down and the second leg down is usually more painful than the first leg down," said Gundlach, who oversees more than $123 billion. ..."
"... "I think this lasts a long time. It has a lot to do with the fact that, I believe, that we're in a situation that is ... highly unusual - that we're increasing the budget deficit so spectacularly so late in the cycle while the Fed is hiking interest rates." ..."
"... The intraday low for the year in the S&P was on Feb. 9, when it bottomed at 2532.69. The low close for the year was on April 2 at 2581.88. On Monday, the S&P closed 2545.94. ..."
Dec 17, 2018 | finance.yahoo.com
<img alt="FILE PHOTO: Jeffrey Gundlach, CEO of DoubleLine Capital, speaks during the Sohn Investment Conference in New York" src="https://s.yimg.com/it/api/res/1.2/BXVsdhZsK0OiZdcOd8_ffw--~A/YXBwaWQ9eW5ld3M7c209MTt3PTQ1MDtoPTMwMDtpbD1wbGFuZQ--/http://media.zenfs.com/en_us/News/Reuters/2018-12-17T182416Z_1_LYNXMPEEBG1NJ_RTROPTP_2_FUNDS-DOUBLELINE-GUNDLACH.JPG.cf.jpg" itemprop="url"/>

NEW YORK (Reuters) - Jeffrey Gundlach, chief executive of DoubleLine Capital, on Monday said the S&P 500 stock index is headed to new lows and that U.S. equities are in a long-term bear market.

Gundlach, speaking on CNBC TV, said passive investing has reached "mania status" and will exacerbate market problems.

"I think it is a bear market. I think we've had the first leg down and the second leg down is usually more painful than the first leg down," said Gundlach, who oversees more than $123 billion.

"I think this lasts a long time. It has a lot to do with the fact that, I believe, that we're in a situation that is ... highly unusual - that we're increasing the budget deficit so spectacularly so late in the cycle while the Fed is hiking interest rates."

The S&P 500 briefly erased its losses in late-morning trade on Monday but resumed its steep decline and pierced through Gundlach's target after he made his "bear market" comments.

The intraday low for the year in the S&P was on Feb. 9, when it bottomed at 2532.69. The low close for the year was on April 2 at 2581.88. On Monday, the S&P closed 2545.94.

Investors are also bracing for the Federal Reserve's last rate decision of the year on Wednesday, when they are expected to raise U.S. interest rates for a fourth time for 2018.

Gundlach said the Fed should not raise rates this week but will. "The bond market is basically saying, 'You know, Fed, there's no way you should be raising interest rates'," he said.

The U.S. central bank's quantitative tightening campaign has made markets nervous because of the ultra-low levels that have remained in place for several years, Gundlach said.

"The problem is that the Fed shouldn't have kept them (rates) so low for so long. The problem is, we shouldn't have had negative interest rates like we still have in Europe. We shouldn't have had done quantitative easing, which is a circular financing scheme," he said.

Gundlach also said the China-U.S. trade war gets worse from here. "China doesn't like to be told what to do by President Trump," he said. For its part, "I think they (the United States) will probably ratchet up the tariffs."

The remarks by Gundlach, who in April recommended investors short Facebook Inc, extended losses in Facebook shares on Monday after he characterized the social media giant as a "diabolical data-collection monster that would ultimately fall victim to regulation." The stock closed 2.69 percent lower.

Gundlach took a shot at passive investment strategies such as index funds, declaring the investing strategy a "mania" that is causing widespread problems in global stock markets.

"I'm not at all a fan of passive investing. In fact, I think passive investing ... has reached mania status as we went into the peak of the global stock market," Gundlach said. "I think, in fact, that passive investing and robo advisers ... are going to exacerbate problems in the market because it's hurting behavior," he said.

[Dec 18, 2018] 14,889,930,106,680 Reasons to Fear Recession

The last recession was in 2008, so yes it is time for the new one.
Dec 18, 2018 | finance.yahoo.com

(Bloomberg Opinion) -- Traders and investors will be glad to see the back of 2018. It's been the worst rout since 1901, by Deutsche Bank AG's reckoning, with almost every asset class delivering losses. These charts illustrate the backdrop to what went wrong this year – and hint at what could go better in 2019.

$14,889,930,106,680

That's how much the total value of companies listed on the world's stock markets has declined since peaking at $87,289,962,917,450 on Jan 28. In other words, almost $15 trillion has been wiped off the global equity market this year.

The list of potential motivations for the sell-off is long and includes rising geopolitical risks, the prospect of trade wars erupting, the risk that a slowdown in global growth that could degenerate into a worldwide recession, and the evergreen what-goes-up-must-come-down. But might it just be possible that investors start to take the view stocks have fallen far and fast enough to offer value next year?

Talkin' About a Recession

It's clear that one of the fundamental worries spooking investors is that the period of coordinated global growth that propelled stock markets higher in recent years is coming to an end.

The R word is increasingly cropping up in news articles. But economists put the chances of a recession in the coming year at 15 percent in the U.S. and 18 percent in the euro zone, according to Bloomberg surveys. Even the Brexit-battered U.K. economy is only at a 20 percent risk, while for Japan the likelihood rises to 30 percent. Perhaps those concerns about a recession are overdone.

Curving to Inversion

Or perhaps not. One trend was omnipresent in 2018 – the relentless flattening of the yield curve in the U.S.

Yields at the short end of the Treasury market pushed higher with every quarterly increase in the Fed's benchmark interest rate. Longer-dated bonds danced to a different beat, particularly as the October equity shakeout drove a flight to quality.

An inverted yield curve – when yields on shorter-dated bonds are higher than their longer-dated counterparts – is often seen as an indicator of impending recession. It's finally happened: yields on five-years are below those for two-years. A key question for 2019 will be how the feedback loop develops between the Federal Reserve's policy intentions and the shape of the curve.

Quantitative Tightening

The Fed has been reducing its economic stimulus by not replacing the bonds it bought under its Quantitative Easing program as they mature.

But this "normalization" is already taking its toll as the sharp equity market sell off in October showed. The Fed has a tricky choice to make in 2019 about whether it can persist both with hiking rates and reducing quantitative easing. Is the world ready yet to stand on its own feet without ongoing central bank support?

No Alarms and No Surprises

Economic surprise indexes – which measure actual economic data compared to forecasts – are designed to be portents of the future. And for 2018 they largely did their job. U.S. strength is waning and Brexit is taking a toll on the U.K. In particular the third-quarter weakness in euro-zone growth, when both Germany and Italy turned negative, was well-flagged from as early as the first quarter.

For 2019 there is a more neutral outlook, but it is interesting that the U.S. economic data is much more evenly balanced in terms of expectations. Europe continues to be the worst performer – quite something considering the predicament the U.K. is in.

Europe Stumbles

Europe has seen growth falter this year, with Italy's political crisis and Germany's diesel vehicle emissions scandal taking their toll.

Italy's third-quarter growth was revised to -0.1 percent, beating only Germany. The prospects for 2019 are none-too-rosy, bar the notable exception of Spain, as momentum has evaporated. Europe remains in the sick bay of the developed world – just as the European Central Bank prepares to remove its monetary stimulus to the economy.

Relying on China

China came to the global economy's rescue in the wake of the financial crisis, but it is starting to pay the price for increasing its debt to create additional GDP growth. Total social financing as a percentage of gross domestic product – a broad measure of credit creation – is flat-lining. Adding extra debt to boost the economy is becoming a less effective measure. It is not just the threat of a trade war with America that has pushed Chinese equities down by 20 percent in 2018.

China faces the classic emerging-market middle-income trap where growth fueled by credit runs out of road. This debt bubble will not be easily fixed.

Finding Reverse Again

Japanese Prime Minister's famous three economic arrows are failing to hit their mark. Debt that stands in excess of 250 percent of GDP is hampering all efforts to resuscitate inflation and sustainable growth in the world's third-largest economy. Third-quarter GDP contracted 2.5 percent on an annualized basis, the worst performance for four years.

Tokyo might be hosting the Olympics in 2020, but there is little benefit flowing through so far. Japan, like the rest of the once dominant Asian export powerhouses, is just as beholden to the outcome of the trade war with Trump as China is.

Hunting for Neutral

Until very recently, many economists were anticipating at least four more rate increases from the Fed next year at a pace of one per quarter. While the futures market still suggests a Dec. 19 hike is a done deal, the outlook for monetary policy in 2019 has shifted significantly in recent weeks.

Goldman Sachs Group Inc. has trimmed its forecast for number of potential Fed rate increases in 2019; billionaire fund manager Paul Tudor Jones said earlier this month that he's not expecting any additional tightening from the U.S. central bank next year. A halt to the hikes might prove as pleasing to financial markets as to President Donald Trump.

Credit Squeeze

Companies with dollar bonds have seen their borrowing costs soar relative to those of the U.S. government as the Fed has driven its benchmark interest rate higher this year. Investors have seen a corresponding slump in the value of the corporate debt they own.

Any slowdown in the ascent of U.S. borrowing costs as the Fed pauses for breath should give succor to corporate bonds – provided it isn't accompanied by a rise in defaults.

Other People's Money

It's been a terrible year for the stocks of firms that manage other people's money for a living.

Fund managers tend to invest in each other's shares. And you'd expect them to have better-than-average insight into the business prospects of their peers. So watch for an inflection point in asset management stocks – it might be a sign of a turning point for the wider market.

Happy Birthday to the Euro

The common European currency celebrates its 20th birthday at the start of January. During the two decades of its existence, rumors of the euro's demise have been proven to be greatly exaggerated.

The European debt crisis at the beginning of this decade posed an existential threat to the euro's well-being. The currency survived. At several points in the past few years, Greece seemed on the verge of either quitting or being ousted from the project. Its membership survived. And Italy's election of a populist government earlier this year raised the prospect of a founding member threatening to leave if it wasn't allowed to break the bloc's budget rules. Still, the euro survives.

In fact, as the chart above shows, investors are close to the most relaxed they've been about the euro fracturing in more than five years based on the Sentix Euro Break-Up Index, a monthly gauge of investor concern about the threat. So let's end by wishing the euro many happy returns.

To contact the authors of this story: Mark Gilbert at [email protected] Ashworth at [email protected]

To contact the editor responsible for this story: Edward Evans at [email protected]

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Gilbert is a Bloomberg Opinion columnist covering asset management. He previously was the London bureau chief for Bloomberg News. He is also the author of "Complicit: How Greed and Collusion Made the Credit Crisis Unstoppable."

Marcus Ashworth is a Bloomberg Opinion columnist covering European markets. He spent three decades in the banking industry, most recently as chief markets strategist at Haitong Securities in London.

For more articles like this, please visit us at bloomberg.com/opinion

[Dec 18, 2018] FBI's Flynn Notes Show He Was Aware of Nature of First Interview

Notable quotes:
"... christophere steele admitted before a british court today that he was hired by the clintons/obama/DNC to make up the dossier as a weapon to use against trump as a backup plan in case he won the election.. this proves the DNC lied, paid for a fake dossier, and comey admitted he knew the fake dossier was false before using it to get a FISC warrant and to spy on trump, which was used as an excuse for the mueller investigation.. yahoo news and leftwing media arent covering the story.. educate yourselves ..."
Dec 18, 2018 | news.yahoo.com

[Dec 16, 2018] Trump Models His War on Bank Regulators on Bill Clinton and W's Disastrous Wars by Bill Black

Notable quotes:
"... By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Jointly published with New Economic Perspectives ..."
"... Wall Street Journal ..."
"... Wall Street Journal ..."
"... The idea that examiners should not criticize any bank misconduct, predation, or 'unsafe and unsound practice' that does not constitute a felony is obviously insane. ..."
"... The trade association complaint that examiners dare to criticize non-felonious bank conduct – and the WSJ ..."
"... I have more than a passing acquaintance with banking, banking regulation, and banking's rectitude (such an old fashioned word) in the importance for Main Street's survival, and for the country's as a whole survival as a trusted pivot point in world finance , or for the survival of the whole American project. I know this sounds like an over-the-top assertion on my part, however I believe it true. ..."
"... Obama et al confusing "banking" with sound banking is too ironic, imo. ..."
"... It was actually worse than this. The very deliberate strategy was to indoctrinate employees of federal regulatory agencies to see the companies they regulated not as "partners" but as "customers" to be served. This theme is repeated again and again in Bush era agency reports. Elizabeth Warren was viciously attacked early in the Obama Administration for calling for a new "watchdog" agency to protect consumers. The idea that a federal agency would dedicate itself to protecting citizens first was portrayed as dangerously radical by industry. ..."
"... Models on Clinton and Bush. What's not to like? Why isn't msm and dem elites showing him the love when he's following their long term policies? And we might assume these would be hills policies if she had been pushed over the line. A little thought realizes that in spite of the pearl clutching they far prefer him to Bernie. ..."
Dec 14, 2018 | www.nakedcapitalism.com
By Bill Black, the author of The Best Way to Rob a Bank is to Own One, an associate professor of economics and law at the University of Missouri-Kansas City, and co-founder of Bank Whistleblowers United. Jointly published with New Economic Perspectives

The Wall Street Journal published an article on December 12, 2018 that should warn us of coming disaster: "Banks Get Kinder, Gentler Treatment Under Trump." The last time a regulatory head lamented that regulators were not "kinder and gentler" promptly ushered in the Enron-era fraud epidemic. President Bush made Harvey Pitt his Securities and Exchange Commission (SEC) Chair in August 2001 and, in one of his early major addresses, he spoke on October 22, 2001 to a group of accounting leaders.

Pitt, as a private counsel, represented all the top tier audit firms, and they had successfully pushed Bush to appoint him to run the SEC. The second sentence of Pitt's speech bemoaned the fact that the SEC had not been "a kinder and gentler place for accountants." He concluded his first paragraph with the statement that the SEC and the auditors needed to work "in partnership." He soon reiterated that point: "We view the accounting profession as our partner" and amped it up by calling accountants the SEC's "critical partner."

Pitt expanded on that point: "I am committed to the principle that government is and must be a service industry." That, of course, would not be controversial if he meant a service agency (not "industry") for the public. Pitt, however, meant that the SEC should be a "service industry" for the auditors and corporations.

Pitt then turned to pronouncing the SEC to be the guilty party in the "partnership." He claimed that the SEC had terrorized accountants. He then stated that he had ordered the SEC to end this fictional terror campaign.

[A]ccountants became afraid to talk to the SEC, and the SEC appeared to be unwilling to listen to the profession. Those days are ended.

This prompted Pitt to ratchet even higher his "partnership" language.

I speak for the entire Commission when I say that we want to have a continuing dialogue, and partnership, with the accounting profession,

Recall that Pitt spoke on October 22, 2001. Here are the relevant excerpts from the NY Times' Enron timeline :

Oct. 16 – Enron announces $638 million in third-quarter losses and a $1.2 billion reduction in shareholder equity stemming from writeoffs related to failed broadband and water trading ventures as well as unwinding of so-called Raptors, or fragile entities backed by falling Enron stock created to hedge inflated asset values and keep hundreds of millions of dollars in debt off the energy company's books.

Oct. 19 – Securities and Exchange Commission launches inquiry into Enron finances.

Oct. 22 – Enron acknowledges SEC inquiry into a possible conflict of interest related to the company's dealings with Fastow's partnerships.

Oct. 23 – Lay professes confidence in Fastow to analysts.

Oct. 24 – Fastow ousted.

The key fact is that even as Enron was obviously spiraling toward imminent collapse (it filed for bankruptcy on December 2) – and the SEC knew it – Pitt offered no warning in his speech. The auditors and the corporate CEOs and CFOs were not the SEC's 'partners.' Thousands of CEOs and CFOs were filing false financial statements – with 'clean' opinions from the then 'Big 5' auditors. Pitt was blind to the 'accounting control fraud' epidemic that was raging at the time he spoke to the accountants. Thousands of his putative auditor 'partners' were getting rich by blessing fraudulent financial statements and harming the investors that the SEC is actually supposed to serve.

Tom Frank aptly characterized the Bush appointees that completed the destruction of effective financial regulation as "The Wrecking Crew." It is important, however, to understand that Bush largely adopted and intensified Clinton's war against effective regulation. Clinton and Bush led the unremitting bipartisan assault on regulation for 16 years. That produced the criminogenic environment that produced the three largest financial fraud epidemics in history that hyper-inflated the real estate bubble and drove the Great Financial Crisis (GFC). President Trump has renewed the Clinton/Bush war on regulation and he has appointed banking regulatory leaders that have consciously modeled their assault on regulation on Bush and Clinton's 'Wrecking Crews.'

Bill Clinton's euphemism for his war on effective regulation was "Reinventing Government." Clinton appointed VP Al Gore to lead the assault. (Clinton and Gore are "New Democrat" leaders – the Wall Street wing of the Democratic Party.) Gore decided he needed to choose an anti-regulator to conduct the day-to-day leadership. We know from Bob Stone's memoir the sole substantive advice he gave Gore in their first meeting that caused Gore to appoint him as that leader. "Do not 'waste one second going after waste, fraud, and abuse.'" Elite insider fraud is, historically, the leading cause of bank losses and failures, so Stone's advice was sure to lead to devastating financial crises. It is telling that it was the fact that Stone gave obviously idiotic advice to Gore that led him to select Stone as the field commander of Clinton and Gore's war on effective regulation.

Stone convinced the Clinton-Gore administration to embrace the defining element of crony capitalism as its signature mantra for its war on effective regulation. Stone and his troops ordered us to refer to the banks, not the American people, as our "customers." Peters' foreword to Stone's book admits the action, but is clueless about the impact.

Bob Stone's insistence on using the word "customer" was mocked by some -- but made an enormous difference over the course of time. In general, he changed the vocabulary of public service from 'procedure first' to 'service first.'"

That is a lie. We did not 'mock' the demand that we treat the banks rather than the American people as our "customer" – we openly protested the outrageous order that we embrace and encourage crony capitalism. Crony capitalism's core principle – which is unprincipled – is that the government should treat elite CEOs as their 'customers' or 'partners.' A number of us publicly expressed our rage at the corrupt order to treat CEOs as our customers. The corrupt order caused me to leave the government.

Our purpose as regulators is to serve the people of the United States – not bank CEOs. It was disgusting and dishonest for Peters to claim that our objection to crony capitalism represented our (fictional) disdain for serving the public. Many S&L regulators risked their careers by taking on elite S&L frauds and their powerful political fixers. Many of us paid a heavy personal price because we acted to protect the public from these elite frauds. Our efforts prevented the S&L debacle from causing a GFC – precisely because we recognized the critical need to spend most of our time preventing and prosecuting the elite frauds that Stone wanted us to ignore..

Trump's wrecking crew is devoted to recreating Clinton and Bush's disastrous crony capitalism war on regulation that produced the GFC. In a June 8, 2018 article , the Wall Street Journal mocked Trump's appointment of Joseph Otting as Comptroller of the Currency (OCC). The illustration that introduces the article bears the motto: "IN BANKS WE TRUST."

Otting, channeling his inner Pitt, declared his employees guilty of systematic misconduct and embraced crony capitalism through Pitt's favorite phrase – "partnership."

I think it is more of a partnership with the banks as opposed to a dictatorial perspective under the prior administration.

Otting, while he was in the industry, compared the OCC under President Obama to a fictional interstellar terrorist. Obama appointed federal banking regulators that were pale imitation of Ed Gray, Joe Selby, and Mike Patriarca – the leaders of the S&L reregulation. The idea that Obama's banking regulators were akin to 'terrorists' is farcical.

The WSJ's December 12, 2018 article reported that Otting had also used Bob Stone's favorite term to embrace crony capitalism.

Comptroller of the Currency Joseph Otting has also changed the tone from the top at his agency, calling banks his "customers."

There are many terrible role models Trump could copy as his model of how to destroy banking regulation and produce the next GFC, but Otting descended into unintentional self-parody when he channeled word-for-word the most incompetent and dishonest members of Clinton and Bush's wrecking crews.

The same article reported a trade association's statement that demonstrates the type of outrageous reaction that crony capitalism inevitably breeds within industry.

Banks are suffering from "examiner criticisms that do not deal with any violation of law," said Greg Baer, CEO of the Bank Policy Institute ."

The article presented no response to this statement so I will explain why it is absurd. First, "banks" do not "suffer" from "examiner criticism." Banks gain from examiner criticism. Effective regulators (and whistleblowers) are the only people who routinely 'speak truth to power.' Auditors, credit rating agencies, and attorneys routinely 'bless' the worst CEO abuses that harm banks while enriching the CEO. The bank CEO cannot fire the examiner, so the examiners' expert advice is the only truly "independent" advice the bank's board of directors receives. That makes the examiners' criticisms invaluable to the bank. CEOs hate our advice because we are the only 'control' (other than the episodic whistleblower) that is willing and competent to criticize the CEO.

The idea that examiners should not criticize any bank misconduct, predation, or 'unsafe and unsound practice' that does not constitute a felony is obviously insane. While "violations of law" (felonies) are obviously of importance to us in almost all cases, our greatest expertise is in identifying – and stopping – "unsafe and unsound practices" because such practices, like fraud, are leading causes of bank losses and failures.

Third, repeated "unsafe and unsound practices" are a leading indicator of likely elite insider bank fraud and other "violations of law."

The trade association complaint that examiners dare to criticize non-felonious bank conduct – and the WSJ reporters' failure to point out the absurdity of that complaint – demonstrate that the banking industry's goal remains the destruction of effective banking regulation. Trump's wrecking crew is using the Clinton and Bush playbook to restore fully crony capitalism. He has greatly accelerated the onset of the next GFC.


Chauncey Gardiner , December 14, 2018 at 2:01 pm

Thank you for this, Bill Black. IMO the long-term de-regulatory policies under successive administrations cited here, together with their neutering the rule of law by overturning the Glass-Steagall Act; de-funding and failing to enforce antitrust, fraud and securities laws; financial repression of the majority; hidden financial markets subsidies; and other policies are just part of an organized, long-term systemic effort to enable, organize and subsidize massive control and securities fraud; theft of and disinvestment in publicly owned resources and services; environmental damage; and transfers of social costs that enable the organizers to in turn gain a hugely disproportionate share of the nation's wealth and nearly absolute political control under their "Citizens United" political framework.

Not to diminish, but among other things the current president provides nearly daily entertainment, diversion and spectacle in our Brave New World that serves to obfuscate what has occurred and is happening.

RBHoughton , December 14, 2018 at 9:41 pm

I'm with you Chauncey. I believe the rot really got started with creative accounting in early 1970s. That's when accountants of every flavor lost themselves and were soon followed by the lawyers. Sauce for the goose.

Banks and Insurers and many industrial concerns have become too big. We could avoid all the regulatory problems by placing a maximum size on commercial endeavour.

chuck roast , December 14, 2018 at 4:28 pm

Sameo-sameo

A number of years ago I did both the primary capital program and environmental (NEPA) review for major capital projects in a Federal Region. Hundreds of millions of dollars were at stake. A local agency wanted us (the Feds) to approve pushing up many of their projects using a so-called Public Private Partnership (PPP). This required the local agency to borrow many millions from Wall Street while at the same time privatizing many of their here-to-fore public operations. And of course there was an added benefit of instituting a non-union shop.

To this end I was required to sit down with the local agency head (he actually wore white shoes), his staff and several representatives of Goldman-Sachs. After the meeting ended, I opined to the agency staff that Goldman-Sachs was "bullshit" and so were their projects.

Shortly thereafter I was removed to a less high-profile Region with projects that were not all that griftable, and there was no danger of me having to review a PPP.

Oh, and I denied, denied, denied saying "bullshit."

flora , December 14, 2018 at 10:08 pm

Thank you, NC, for featuring these posts by Bill Black.

I have more than a passing acquaintance with banking, banking regulation, and banking's rectitude (such an old fashioned word) in the importance for Main Street's survival, and for the country's as a whole survival as a trusted pivot point in world finance , or for the survival of the whole American project. I know this sounds like an over-the-top assertion on my part, however I believe it true.

Main Street also knows the importance of sound banking. Sound banking is not a 'poker chip' to be used for games. Sound banking is key to the American experiment in self-determination, as it has been called.

Politicians who 'don't get this" have lost touch with the entire American enterprise, imo. And, no, the neoliberal promise that nation-states no longer matter doesn't make this point moot.

flora , December 14, 2018 at 10:47 pm

adding: US founding father Alexander Hambleton did understand the importance of sound banking, and so Obama et al confusing "banking" with sound banking is too ironic, imo.

Tim , December 15, 2018 at 8:29 am

It was actually worse than this. The very deliberate strategy was to indoctrinate employees of federal regulatory agencies to see the companies they regulated not as "partners" but as "customers" to be served. This theme is repeated again and again in Bush era agency reports. Elizabeth Warren was viciously attacked early in the Obama Administration for calling for a new "watchdog" agency to protect consumers. The idea that a federal agency would dedicate itself to protecting citizens first was portrayed as dangerously radical by industry.

John k , December 15, 2018 at 12:14 pm

Models on Clinton and Bush. What's not to like? Why isn't msm and dem elites showing him the love when he's following their long term policies?
And we might assume these would be hills policies if she had been pushed over the line. A little thought realizes that in spite of the pearl clutching they far prefer him to Bernie.

[Dec 16, 2018] Top Democrat Schiff Adds Call for Probe of Trump, Deutsche Bank Links

CIA democrats are still determined to sink Tramp, and continues to beat the dead cat of "Russian collision". What is interesting is that Jacob Schiff financed Bolsheviks revolution in Russia.
Yahoo comments reflect the deep split in the opinions in the society, which is positioned mainly by party lines. Few commenters understadn that the problem is with neoliberalism, not Trump, or Hillary who represent just different factions of the same neoliberal elite.
Notable quotes:
"... Schiff said Deutsche Bank has paid hundreds of millions of dollars in fines to the state of New York for laundering Russian money, and that it was the one bank willing to do business with the Trump Organization. ..."
"... In an interview with the New Yorker that was posted on line on Dec. 14, Schiff said the Intelligence Committee is "going to be looking at the issue of possible money laundering by the Trump Organization, and Deutsche Bank is one obvious place to start." ..."
"... A Senate investigation, which Warren and Van Hollen want to see followed by a report and a hearing, could put further pressure on the lender. The written request from the senators, sent Dec. 13, cites Deutsche Bank's "numerous enforcement actions" and a recent raid by police officers and tax investigators in Germany. ..."
"... Schiff, a target of Trump's on Twitter, also referred to reported comments by the president's sons some years ago that they didn't need "to deal with U.S. banks because they got all of the cash they needed from Russia or disproportionate share of their assets coming from Russia." He said Sunday he expects to learn more about that claim through financial records. ..."
Dec 16, 2018 | finance.yahoo.com

(Bloomberg)

The incoming chairman of the House Intelligence Committee joined Democratic colleagues in questioning ties between Deutsche Bank AG and President Donald Trump's real estate business.

Representative Adam Schiff of California said on NBC's "Meet the Press" Sunday that any type of compromise needs to be investigated. That could add his panel's scrutiny to that of Representative Maxine Waters, who's in line to be chair of the House Financial Services Committee and has also focused on the bank's connections to Trump.

Schiff's comments came three days after Wall Street critic Elizabeth Warren of Massachusetts and fellow Senate Democrat Chris Van Hollen called for a Banking Committee investigation of Deutsche Bank's compliance with U.S. money-laundering regulations.

Schiff said Deutsche Bank has paid hundreds of millions of dollars in fines to the state of New York for laundering Russian money, and that it was the one bank willing to do business with the Trump Organization.

"Now, is that a coincidence?" Schiff said. "If this is a form of compromise, it needs to be exposed."

In an interview with the New Yorker that was posted on line on Dec. 14, Schiff said the Intelligence Committee is "going to be looking at the issue of possible money laundering by the Trump Organization, and Deutsche Bank is one obvious place to start."

More Pressure

A Senate investigation, which Warren and Van Hollen want to see followed by a report and a hearing, could put further pressure on the lender. The written request from the senators, sent Dec. 13, cites Deutsche Bank's "numerous enforcement actions" and a recent raid by police officers and tax investigators in Germany.

It also notes the lender's U.S. operations being implicated in cross-border money-laundering accusations such as in a recent case involving Danish lender Danske Bank A/S and the movement of $230 billion in illicit funds.

"The compliance history of this institution raises serious questions about the national security and criminal risks posed by its U.S. operations," the senators said in their letter. "Its correspondent banking operations in the U.S. serve as a gateway to the U.S. financial system for Deutsche Bank entities around the world."

Troy Gravitt, a Deutsche Bank spokesman, responded that the company "takes its legal obligations seriously and remains committed to cooperating with authorized investigations."

Van Hollen, a Maryland Democrat, had questioned the Federal Reserve earlier this year about how it would keep the White House from interfering with oversight of the lender, which had been a major lender to Trump's real estate business.

Schiff, a target of Trump's on Twitter, also referred to reported comments by the president's sons some years ago that they didn't need "to deal with U.S. banks because they got all of the cash they needed from Russia or disproportionate share of their assets coming from Russia." He said Sunday he expects to learn more about that claim through financial records.

To contact the reporter on this story: Jesse Hamilton in Washington at [email protected]

To contact the editors responsible for this story: Jesse Westbrook at [email protected], Mark Niquette, Ros Krasny

[Dec 14, 2018] The whole austerity crisis thing appears to have been engineered so that a few blinkered and unpatriotic, vulture mafia privateers can make a killing, selling off vital state assets, such as infrastructure and ports, to the Chinese. This is a very suspicious and widespread trend.

Notable quotes:
"... Bob Marley got it right.... the human race is becoming a rat race, and it's a disgrace. ..."
"... The biggest problem is the financialisation of the economy... what is the actual value of things? The market is so manipulated that real price discovery is not possible. ..."
"... We have an over-cooked service-sector economy unsustainably reliant on cheap debt, cheap energy, and cheap manufactured goods to fuel our 'high-end levels of consumption, and mobility or living standards, and an over-heated housing market that is unsustainably run according to the needs of investors and landlords rather than residents or tenants. ..."
"... What we need is a coordinated approach between our nations. Undercutting each other on corporate taxes, writing tax avoidance into law, and continuing to allow multinationals to influence our politicians and play our governments against each other is exactly the game we must end. ..."
"... Instead, it places the financially powerful beyond any state, in an international elite that makes its own rules, and holds governments to ransom. That's what the financial crisis was all about. The ransom was paid, and as a result, governments have been obliged to limit their activities yet further.... ..."
"... "Ransom". There is no better word to describe it. This (the ransom mentality) is exactly the reactionary, vindictive, doctrinaire psychology that must be extracted like a cancer from our institutional lives and the human species. A monolithic task. But identifying the cause is the first step to cure. ..."
"... these are the new medieval transnational barons ..."
Jun 09, 2013 | theguardian.com
MysticFish -> Crackerpot , 8 Jun 2013 14:43
@Crackerpot - The whole austerity crisis thing appears to have been engineered so that a few blinkered and unpatriotic, vulture mafia privateers can make a killing, selling off vital state assets, such as infrastructure and ports, to the Chinese. This is a very suspicious and widespread trend.
artheart , 8 Jun 2013 14:38

Bob Marley got it right.... the human race is becoming a rat race, and it's a disgrace.

I see it every day from the window of my flat, on a main road, in Bethnal Green. There's a 'mentally unstable' Rastafarian who stands by the overground station, and shouts things out to people like "You're living in babylon".

I do sometimes think he's not the mental one.

artheart -> HolyInsurgent , 8 Jun 2013 14:32
@HolyInsurgent

The biggest problem is the financialisation of the economy... what is the actual value of things? The market is so manipulated that real price discovery is not possible.

We have an over-cooked service-sector economy unsustainably reliant on cheap debt, cheap energy, and cheap manufactured goods to fuel our 'high-end levels of consumption, and mobility or living standards, and an over-heated housing market that is unsustainably run according to the needs of investors and landlords rather than residents or tenants.

The whole thing is going to blow apart. Our 'aspirations' are slowly killing us - they're destroying the social fabric.

MikeInCanada , 8 Jun 2013 14:28
What we need is a coordinated approach between our nations. Undercutting each other on corporate taxes, writing tax avoidance into law, and continuing to allow multinationals to influence our politicians and play our governments against each other is exactly the game we must end.
HolyInsurgent , 8 Jun 2013 14:08

Deborah Orr: Instead, it places the financially powerful beyond any state, in an international elite that makes its own rules, and holds governments to ransom. That's what the financial crisis was all about. The ransom was paid, and as a result, governments have been obliged to limit their activities yet further....

I never thought I would live long enough to see this level of honesty ATL. It should have been published long ago, but at least the discussion now begins.

"Ransom". There is no better word to describe it. This (the ransom mentality) is exactly the reactionary, vindictive, doctrinaire psychology that must be extracted like a cancer from our institutional lives and the human species. A monolithic task. But identifying the cause is the first step to cure.

peterpuffin -> PointOfYou , 8 Jun 2013 14:03
@PointOfYou - these are the new medieval transnational barons

[Dec 14, 2018] Here's the funny thing about those who cheer the broken neoliberal model. They promise we will get to those "sunny uplands" with exactly the same fervor as old Marxists.

Notable quotes:
"... Neoliberalism? This is not just a financial agenda. This a highly organized multi armed counterculture operation to force us, including Ms Orr [unless she has...connections] into what Terence McKenna [who was in on it] termed the `Archaic Revival'. That is - you and me [and Ms Orr] - our - return to the medieval dark ages, if we indeed survive that far. ..."
"... The conscious and intelligent manipulation of the organised habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are moulded, our tastes formed, our ideas suggested, largely by men we have never heard of. ..."
"... the UK government did intervene in the economy when it bailed out the banks to the tune of many billions of pounds underwritten by the taxpayer. The markets should always be regulated sufficiently (light touch is absolutely useless) to prevent the problems currently being experienced from ever happening again. ..."
"... Traditional liberalism had died decades before WWII and was replaced by finance capitalism. What happened after WW II was that capitalism had to make various concessions to avoid a socialist revolution: social and political freedoms indeed darted ahead. ..."
"... No chance mate, at least not all the time greasy spiv and shyster outfits like hedge funds are funding Puffin face and the Vermin Party. They are never going to bite the hand that feeds them ..."
"... And in case we get uppity and endeavour to challenge the economic paradigm and the rule of these neoliberal elites, there's the surveillance state panopticon to track our movements and keep us in check. ..."
"... There is not a shred of logical sense in neoliberalism. You're doing what the fundamentalists do... they talk about what neoliberalism is in theory whilst completely ignoring what it is in practice. In theory the banks should have been allowed to go bust, but the consequences where deemed too high (as they inevitable are). The result is socialism for the rich using the poor as the excuse, which is the reality of neoliberalism. ..."
"... She, knowingly, let neo-liberal economic philosophy come trumpeting through the door of No10 and it's been there ever since; it has guided our politicians for the past 30 odd years. Hence, it is Thatcher's fault. She did this and another bad thing: the woman who glorified household economics pissed away billions of pounds of North Sea Oil. ..."
"... Bailouts have been a constant feature of neoliberalism. In fact the role of the state is simply reduced to a merely commissioning agent to private parasitical corporations. History has shown the state playing this role since neoliberalism became embedded in policy since the 1970s - Long Term Capital Management, Savings and Loans, The Brady Plan, numerous PFI bailouts and those of the Western banking system during the 1982 South American, 1997 Asian and 2010 European debt crises. ..."
Jun 08, 2013 | discussion.theguardian.com

Jenny340 -> EllisWyatt, 8 Jun 2013 13:37

@EllisWyatt - Here's the funny thing about those who cheer the broken neoliberal model. They promise we will get to those "sunny uplands" with exactly the same fervor as old Marxists.
PointOfYou , 8 Jun 2013 13:37

Neoliberalism has spawned a financial elite who hold governments to ransom

Neoliberalism? This is not just a financial agenda. This a highly organized multi armed counterculture operation to force us, including Ms Orr [unless she has...connections] into what Terence McKenna [who was in on it] termed the `Archaic Revival'. That is - you and me [and Ms Orr] - our - return to the medieval dark ages, if we indeed survive that far.

The same names come up time and time again. One of them being, father of propaganda, Edward Bernays.

Bernays wrote what can be seen as a virtual Mission Statement for anyone wishing to bring about a "counterculture." In the opening paragraph of his book Propaganda he wrote:

"..The conscious and intelligent manipulation of the organised habits and opinions of the masses is an important element in democratic society. Those who manipulate this unseen mechanism of society constitute an invisible government which is the true ruling power of our country. We are governed, our minds are moulded, our tastes formed, our ideas suggested, largely by men we have never heard of.

This is a logical result of the way in which our democratic society is organised. Vast numbers of human beings must cooperate in this manner if they are to live together as a smoothly functioning society. In almost every act of our daily lives, whether in the sphere of politics or business, in our social conduct or our ethical thinking, we are dominated by the relatively small number of persons who understand the mental processes and social patterns of the masses.

It is they who pull the wires which control the public mind..."[28]

Bernays' family background made him well suited to "control the public mind." He was the double nephew of psychoanalysis pioneer Sigmund Freud. His mother was Freud's sister Anna, and his father was Ely Bernays, brother of Freud's wife Martha Bernays.

Snookerboy -> OneCommentator , 8 Jun 2013 13:17
@OneCommentator - the UK government did intervene in the economy when it bailed out the banks to the tune of many billions of pounds underwritten by the taxpayer. The markets should always be regulated sufficiently (light touch is absolutely useless) to prevent the problems currently being experienced from ever happening again.

Those at the bottom of society and those in the public sector are the ones paying the price for this intervention in the UK. If you truly believe in the 'free' market then all of these failing organisations (banks, etc) should have been allowed to fail. The problem is that the wealth created under the current system is virtually all going to those at the top of the income scale and this needs to change and is one of the main reasons that neo liberalism should be binned!

ATrueFinn -> OneCommentator , 8 Jun 2013 13:09
@ OneCommentator 08 June 2013 5:21pm

No, it was as recently as ww2 more or less

Traditional liberalism had died decades before WWII and was replaced by finance capitalism. What happened after WW II was that capitalism had to make various concessions to avoid a socialist revolution: social and political freedoms indeed darted ahead.

Do read a book about history!

clairesdad -> brighton2 , 8 Jun 2013 13:06
@brighton2 - No chance mate, at least not all the time greasy spiv and shyster outfits like hedge funds are funding Puffin face and the Vermin Party. They are never going to bite the hand that feeds them.
NotWithoutMyMonkey , 8 Jun 2013 13:01
And in case we get uppity and endeavour to challenge the economic paradigm and the rule of these neoliberal elites, there's the surveillance state panopticon to track our movements and keep us in check.
TedStewart , 8 Jun 2013 12:51
Neoliberalism has spawned a financial elite who hold governments to ransom

Are you saying neoliberalism is a great big useless pile of shit? Then you are absolutely right!

kingcreosote -> MickGJ , 8 Jun 2013 12:47
@ MickGJ 08 June 2013 1:08pm . Get cifFix for Firefox .

I know what you are saying it's just sooner or later as those at the bottom continue to be squeezed the wealthy will sow their own seeds of destruction. I think we are witnessing the end game which is reflected in the desperation of the coalition to flog everything regardless of the efficacy of such behavior, they feel time is running out and they would be right.

taxhaven , 8 Jun 2013 12:44
Call it what you will - "neoliberalism", "neoconservatism", "socialism" or whatever it is...

This debate is not even really solely about money: this is about liberty , about free choice, about being permitted to engage in voluntary exchange of goods and services with others, unmolested. About the users of services becoming the ones paying for those services.

Ultimately the real effect will be to remove power from governments and hand it back to where it belongs - the free market.

dmckm -> OneCommentator , 8 Jun 2013 12:43
@ OneCommentator 08 June 2013 5:04pm . Get cifFix for Firefox .

voluntary transactions among free agents. That's called a free market and it is by far the most efficient way to produce wealth humanity has ever known.

Could you explain how someone bound by a contract of employment, with the alternative, destitution, is a 'free agent'?

jazzdrum -> SpinningHugo , 8 Jun 2013 12:25
@SpinningHugo - Nothing comes out of nothing and i well remember black Monday in the City. That was the start of the spivs running the economy as if it were a casino. If you think its only on CiF that Thatcher gets the blame, think on this, Scotland, a whole nation blames her too.
TedSmithAndSon -> theguardianisrubbish , 8 Jun 2013 12:24
@theguardianisrubbish -

Unless you are completely confused by what neoliberalism is there is not a shred of logical sense in this.

There is not a shred of logical sense in neoliberalism. You're doing what the fundamentalists do... they talk about what neoliberalism is in theory whilst completely ignoring what it is in practice. In theory the banks should have been allowed to go bust, but the consequences where deemed too high (as they inevitable are). The result is socialism for the rich using the poor as the excuse, which is the reality of neoliberalism.

Savers in a neoliberal society are lambs to the slaughter. Thatcher "revitalised" banking, while everything else withered and died.

Neoliberalism is based on the thought of personal freedom, communism is definitely not. Neoliberalist policies have lifted millions of people out of poverty in Asia and South America.

Neoliberalism is based on the thought that you get as much freedom as you can pay for, otherwise you can just pay... like everyone else. In Asia and South America it has been the economic preference of dictators that pushes profit upwards and responsibility down, just like it does here.

I find it ironic that it now has 5 year plans that absolutely must not be deviated from, massive state intervention in markets (QE, housing policy, tax credits... insert where applicable), and advocates large scale central planning even as it denies reality, and makes the announcement from a tractor factory.

Neoliberalism is a blight... a cancer on humanity... a massive lie told by rich people and believed only by peasants happy to be thrown a turnip. In theory it's one thing, the reality is entirely different. Until we're rid of it, we're all it's slaves. It's an abhorrent cult that comes up with purest bilge like expansionary fiscal contraction to keep all the money in the hands of the rich.

outragedofacton -> MickGJ , 8 Jun 2013 12:02
@MickGJ - You are wrong about the first 2 of course. Banksters get others to do their shit.

But unfortunately the poor sods who went down on D Day were in their way fighting for Wall Street as much as anything else. It's just that they weren't told about it by the Allies massive propaganda machine. So partly right

5/10

LetsGetCynical , 8 Jun 2013 11:57

The response should be a wholesale reevaluation of the way in which wealth is created and distributed around the globe

Which would be what? State planning? Communism? Totally free market capitalism? Oh wait, we already have the best of a bad bunch, a mixed capitalist economy with democracy. That really is the crux of it, our system isn't perfect, never will be, but nobody has come up with a better solution.

outragedofacton -> artheart , 8 Jun 2013 11:55
@artheart - Thank goodness for RT.

Learn also about the West's nefarious activities in the Middle East.

ATrueFinn -> fr0mn0where , 8 Jun 2013 11:51
@ fr0mn0where 08 June 2013 4:29pm

Barclays bank "only" paid out £660m in dividends to the bearers of risk capital, while its bonus pot for a very select number of its staff was £1.5bn.

Fascinating! Now, one could infer that Barclays represent "beneficial capitalism", rewarding its hard-working employees, but maybe we won't.

This is not the traditional capitalist style

The Traditional capitalist is not an extinct species but under threat. For the time being the population is stagnant in some countries and even increasing in some others. However, due to the foraging capacity of Neoliberal creature , competing in the same economical niche, the size and life expectation of it are diminishing.

dmckm -> SpinningHugo , 8 Jun 2013 11:50
@ SpinningHugo 08 June 2013 10:59am . Get cifFix for Firefox .

She, knowingly, let neo-liberal economic philosophy come trumpeting through the door of No10 and it's been there ever since; it has guided our politicians for the past 30 odd years. Hence, it is Thatcher's fault. She did this and another bad thing: the woman who glorified household economics pissed away billions of pounds of North Sea Oil.

szwalby -> MickGJ , 8 Jun 2013 11:30
@MickGJ - No, you're right. Why let yesterdays experience feed into what you expect of the future? Lets go forwards goldfish like, every minute a brand new one, with no baggage!
And by the way, who saved the hide of the very much private sector banks and financial institutions? The hated STATE, us tax payers!
fr0mn0where -> ATrueFinn , 8 Jun 2013 11:29
@ATrueFinn -

I think I agree with everything that you say here? The people at the top these days aren't really of much use for anything, including capitalism. The only thing that they do excel at is lining their own pockets and securing their privileged position in society.

They have become quite up front about it. There was a bit of a fuss last year when Barclays bank "only" paid out £660m in dividends to the bearers of risk capital, while its bonus pot for a very select number of its staff was £1.5bn. Barclays released a statement before their AGM explaining:

"Barclays is fully committed to ensuring that a greater proportion of income and profits flow to shareholders notwithstanding that it operates within the constraints of a competitive market."

This is not the traditional capitalist style competition that they are talking about where companies competed as to who can return the biggest profit for their shareholders this now comes secondary to the real competition which is for which company can return the biggest bonuses for a small group of employees.

theonionmurders -> theguardianisrubbish , 8 Jun 2013 11:05
@theguardianisrubbish

Bailouts have been a constant feature of neoliberalism. In fact the role of the state is simply reduced to a merely commissioning agent to private parasitical corporations. History has shown the state playing this role since neoliberalism became embedded in policy since the 1970s - Long Term Capital Management, Savings and Loans, The Brady Plan, numerous PFI bailouts and those of the Western banking system during the 1982 South American, 1997 Asian and 2010 European debt crises.

No wonder you're so ignorant of the basics of economic policy if you won't flick through a book - fear of accepting that you're simply wrong is a sure sign of either pig ignorance or denial, and is as I said embarrassing so its not really much point in wasting anymore time engaging with you.

petercs , 8 Jun 2013 10:44

The neoliberal idea is that the cultivation itself should be conducted privately as well. They see "austerity" as a way of forcing that agenda.

..."neoliberal", concept behind the word, has nothing to do with liberal or liberty or freedom...it is a PR spin concept that names slavery with a a word that sounds like the opposite...if "they" called it neoslavery it just wouldn't sell in the market for political concepts.

..."austerity" is the financial sectors' solution to its survival after it sucked most the value out of the economy and broke it. To mend it was a case of preservation of the elite and the devil take the hindmost, that's most of us.

...and even Labour, the party of trade unionism, has adopted austerity to drive its policy.

...we need a Peoples' Party to stand for the revaluation of labour so we get paid for our effort rather than the distortion, the rich xxx poor divide, of neoslavery austerity.

Crackerpot , 8 Jun 2013 10:43
When the IMF 'admitted' that the first bail out of Greece was 'bungled' are they trying to imply that the subsequent bail outs have been a success....
artheart , 8 Jun 2013 10:34
People need to start watching The Keiser Report to hear the truth, if they can handle the truth. Link here: http://rt.com/shows/keiser-report/

I simply cannot recommend it enough.

MickGJ -> bluebirds , 8 Jun 2013 10:30

@bluebirds - deregulated capitalism has failed

Of course it has. And it will continue to "fail", while provide us with all sorts of goodies, for the foreseeable future. Capitalism's endless "failure" is of no more concern than human mortality. Ever tried, ever failed, try again, fail better.
epinoa -> CaptainGrey , 8 Jun 2013 10:25
@CaptainGrey -

Except it's not. It is still very much alive and growing.

In as much as a zombie is.

The "alternatives" have crashed and burned save Cuba and North Korea.

I'd say the current oligarchical form of capitalism has crashed quite spectacularly. I say this as a free market capitalist too.

[Dec 14, 2018] Noam Chomsky pointed this out aeons ago though-that the American model is to use tax money to benefit private interests through technological infrastructure

Notable quotes:
"... Now we see moneyed entities with vested interests, carpet bagging and flogging off the NHS and an unelected fossil fuel mandarin, at the heart of government decision making, appointing corporate yea-sayers, to the key government departments, with environmental responsibilities. Corporations capturing the state apparatus for their own ends, is 'corporatism.' ..."
"... "Neoliberalism in practice is every bit as bad as Communism in practice, with none of the benefits." ..."
"... The bailout is simply actual neoliberalism as opposed to the theory inside tiny right wing minds. The system depends on the wealthy not being allowed to suffer the consequences of their own greed, or it would represent revolution and still not work. ..."
"... Neoliberalism in practice is every bit as bad as Communism in practice, with none of the benefits. It always amusing to see neoliberal morons shout about the red menace when they're two sides of the same coin. ..."
"... Neoliberalism is nothing if not the opposite extreme of the communist planned economy. Like the communist planned economy, neoliberalism is doomed to failure. I think we've all been sold a lie. ..."
Jun 08, 2013 | discussion.theguardian.com

epinoa -> Fachan , 8 Jun 2013 10:19

@Fachan -

Just as democracy is the worst system of government except for all other, so capitalism is the worst economic model except for all other.

Shame we only have bastardized forms of them.
bridkid5 -> NotAgainAgain , 8 Jun 2013 10:18
@NotAgainAgain - this is very true, it reminds me of an engineering company I worked for in Nottingham (since gone under). The production manger was a corrupt thief. He gradually sub-contracted the production work out to other companies in the area, taking backhanders for his troubles.

Once all the production was farmed out, he somehow got himself promoted to director level, where he and a sycophant subbed all the design work out. So all the production and design was done out of house, standards dropped and the company closed, leaving him with a nice payoff, just prior to retirement.

Some would say he played a blinder, my interpretation is he ruined a perfectly viable company, making a very good product, and over the course of about 5 years put over 30 people out of work.

In a just world he would be spending his retirement in prison.

ATrueFinn -> MickGJ , 8 Jun 2013 10:13
@ MickGJ 08 June 2013 2:16pm

ext year's harvest (possibly of GM food which makes better use of scarce resources)

Indeed. Wheat will grow as flour and fly to our cupboards.

ATrueFinn -> fr0mn0where , 8 Jun 2013 10:10
@ fr0mn0where 08 June 2013 1:53pm

Income distribution and a happy workforce is actually very good for business as well as society!

Of course it is, but the capitalists do not know it. In many countries, including Finland, the "condition of the working classes", ie. working conditions, have been in rapid decline for the last 20 years.

Permanent salaried jobs have been replaced with temps from agencies, unpaid overtime is becoming the norm, burnouts are commonplace and so on.

If in your country things are different, no mass lay-outs and outsourcing to China, count yourself lucky!

crinklyoldgit , 8 Jun 2013 10:04
On form, Debs. Here is something I like.

But even though an illiterate market wouldn't be so great for them, they avoid their taxes, because they can, because they are more powerful than governments

Noam Chomsky pointed this out aeons ago though-that the American model is to use tax money to benefit private interests through technological infrastructure.

It was ever thus, if in slightly different forms. Still it is surprising that they have gone so quickly from their stated position at the start of the republic of a rejection of kings and emperors to their position now of corruption so ingrained it is impossible to make distinctions. Proxy emperors are emperors all the same, no matter the rhetoric that promotes them.

One senses that there is very little 'going back' possible. Besides, the great Neoliberal scam is predicated upon the qualities of the 'governments' we have and the capacity of those 'rhetoricians' with the capacity to say anything or play any role, to lick any arse, to get elected. Such apparent strength is weakness. In this world that now exists here, we have now entered the same world as the USSR in the eighties, where the announcement of bumper harvests of wheat, made everyone with a brain cell groan and think 'Oh fuck! no bread this winter-quick, run to the shops now, and buy up all the flour there'.

But there is now no way to declare that without being seen as beyond the pale-a bug eyed conspiracist.

Still, I am a believer in the connectedness of this world. The economic system and its mythologies are just weird and distorted canaries in the coalmine of the wider environment. It is indicating that there is a misalignment between the way we think and what is possible in this world. Austerity promoters and 'Keynsian' Ballsites are one and the same thing-both pretenders that the key to the problems is within their narrow gifts

Hubris is followed by nemesis. In a wider sense what we seen now is a complete failure of the capacity to educate and to learn,and moderate behaviour, and find some way of caring for our 'others', beyond the core of 'self'. nationalism is essentially an extension of 'self'. We now shall see the failure of a retraction of thought into nationalism and scapegoating.

I predict that the population of the world will decline over the next century-quite markedly.
The only solace is that at the end of the process, the pain will be forgotten. It always is.

MysticFish -> MickGJ , 8 Jun 2013 09:57
@MickGJ - Cameron said 'We will cut the deficit, not the NHS,' and promised to be the 'greenest government ever,' saying that you could 'go green,' if you voted 'blue.'

Now we see moneyed entities with vested interests, carpet bagging and flogging off the NHS and an unelected fossil fuel mandarin, at the heart of government decision making, appointing corporate yea-sayers, to the key government departments, with environmental responsibilities. Corporations capturing the state apparatus for their own ends, is 'corporatism.'

Spoutwell , 8 Jun 2013 09:53

Much of the healthy economic growth – as opposed to the smoke and mirrors of many aspects of financial services – that Britain enjoyed during the second half of the 20th century was due to women swelling the educated workforce.

There was very little 'healthy economic growth' in Britain in the second half of the 20th century. Britain was bankrupt after WW2 with its people dependent on Marshall Aid and food contributions from its former 'colonies'.

Whatever 'growth' occured after Marshall Aid arrived was scuppered by a class system where company managers were more concerned with walking on the workers than with keeping their businesses afloat while such discrimination provoked hard left trade union policies which left british industry uncompetitive and ultimately non-existent.

If that wasn't enough, Thatcherism arrived to re-inforce class discrimination, sell off national services and assets and replace social policy with neo-liberal consumerism. Whether the workforce was swollen by women or anyone else is immaterial.

The anti-democratic incestuous class conflict latent in British society continues to ensure that the UK will remain a mere vassal state of foot-soldiers and consumers for international neo-liberal capitalism.

MurchuantEacnamai -> DasInternaut , 8 Jun 2013 09:49
@DasInternaut - Completely agree. The performance has been poor to absymal. But this is a failure of democratic governance because the collective interests of citizens as consumers and service users are not being represented and enforced by the elected politicians since they have been suborned by the capitalists elites and their fellow-travellers.

The people, indeed, have been sold a lie, but, unfortunately, it is only UKIP which is making the political waves by revealing selected aspects of this lie. The three established parties have been 'bought' to varying extents. But more and more citizens are beginning to realise the extent to which they have been bought.

Itsrainingtin , 8 Jun 2013 09:44
There is an upside to all of this, maybe I wont get modded so much from now on for being so angry at the ideological criminals . Hopefully the middle classes will cotton on to the fact that all this is not a mad hatters tinfoil hobby, we need more of them to be grumpy.
szwalby -> MickGJ , 8 Jun 2013 09:43
@MickGJ - We've already seen it. Not great so far. GS4, Winterbourne view, southern cross, trains...............Welfare to work companies, delivering no better results than people left to their own devices. Energy companies.

We'll see if the new wave of free schools, academy schools, and all the service outsourced by the council perform any better.

Doubtful, as to make a profit, they have to employ poorer paid people, less well qualified, and once they've got a contract, they've got very little competition, as when the second round of bidding comes around, as the firms having got the first contract are the only one with relevant experience, they are assured of renewal, the money machine will keep going!

MurchuantEacnamai -> TedSmithAndSon , 8 Jun 2013 09:39
@TedSmithAndSon - There's a huge difference between meddling and ensuring effective governance. But I expect in your omniscence you know that.
theguardianisrubbish -> theonionmurders , 8 Jun 2013 09:38
@theonionmurders - I am not going to read a book.

Neoliberalism are policies that are influenced by neo classical economics. If you are suggesting that the neoliberal school of thought would advocate any kind of a bailout then you are mistaken. Where else have I "apparently" embarrassed myself?

theguardianisrubbish -> TedSmithAndSon , 8 Jun 2013 09:28
@TedSmithAndSon - This is just an inaccurate rant not a reply.

"The system depends on the wealthy not being allowed to suffer the consequences.."

Unless you are completely confused by what neolibralism is there is not a shred of logical sense in this.

"The debt industry are the lenders who take advantage of a financial system..."

Which is what savers are. They come in the form of individuals businesses and governments. This encompasses everyone.

"whilst paying the lowest possible rate. Wonga, for instance."

If you are a lender you do not pay anything, you receive.

"Thatchers revolution was to take our citizenship and give it a value, whilst making everyone else a consumer, all for a handful of magic beans in the shape of British Gas shares."

...not forgetting that she revitalised the economy and got everyone back to work again.

"Neoliberalism in practice is every bit as bad as Communism in practice, with none of the benefits."

Neoliberalism is based on the thought of personal freedom, communism is definitely not. Neoliberalist policies have lifted millions of people out of poverty in Asia and South America. Communism has no benefits for society open your eyes!

theonionmurders -> theguardianisrubbish , 8 Jun 2013 09:24

@theguardianisrubbish - Does this author not realise that a government bailout goes against the whole neoliberal school of thought?

No it isn't. You're confusing neoliberalism with neo classical economics. The level of knowledge on economic theory here is sometimes embarrassing.

http://www2.warwick.ac.uk/fac/soc/sociology/rsw/research_centres/theory/conf/rg/harvey_a_brief_history_of_neoliberalism.pdf

MickGJ -> ATrueFinn , 8 Jun 2013 09:16

@ATrueFinn - After they are finished, what do Singaporeans eat?

Next year's harvest (possibly of GM food which makes better use of scarce resources). I imagine the sun will eventually stop bombarding us with the energy that powers photosynthesis but I'm not losing any sleep over it.
richmanchester -> MurchuantEacnamai , 8 Jun 2013 09:13
@MurchuantEacnamai - I think the point is this, Amazon make money by selling books, they avoid paying taxes, yet expect an educated, literate population to be provided for them, on the grounds that illiterate people don't buy books, and expect roads to move the books around on.

So who will pay for this?

TedSmithAndSon -> theguardianisrubbish , 8 Jun 2013 09:12
@theguardianisrubbish - No! The bailout is simply actual neoliberalism as opposed to the theory inside tiny right wing minds. The system depends on the wealthy not being allowed to suffer the consequences of their own greed, or it would represent revolution and still not work.

The debt industry are the lenders who take advantage of a financial system designed to push profits upwards (neoliberalism in practice), whilst paying the lowest possible rate. Wonga, for instance.

Thatchers revolution was to take our citizenship and give it a value, whilst making everyone else a consumer, all for a handful of magic beans in the shape of British Gas shares.

Neoliberalism in practice is every bit as bad as Communism in practice, with none of the benefits. It always amusing to see neoliberal morons shout about the red menace when they're two sides of the same coin.

szwalby -> MickGJ , 8 Jun 2013 09:04
@MickGJ -

.and provides them at a massively inflated cost accompanied by unforgivable waste and inefficiency, appalling service and life-threatening incompetence.

as opposed to the private sector, who always does what it says it will do, at reasonable cost, for the benefit of their customers, and with due regards to ethics? Like the Banks, the financial sector, who will never sell you a product that isn't the best for you, regardless of their interest? the private companies like Southern Cross, GS4?

The private insurance who refuse to take you on the minute you've got some illness or disability? Get off it! The state isn't perfect, the services it provides are not perfect, but replacing them with private provision isn't the answer!

DasInternaut -> MurchuantEacnamai , 8 Jun 2013 08:59
@MurchuantEacnamai - How would you rate how well British government has done in ensuring markets are genuinely competitive. How well has British government done in ensuring our energy market is competitive, for example. Does the competitiveness we observe in the energy market give customers better or worse value than they had before deregulation? How do you rate the British government's performance in rail and public transport, with respect to competitiveness?

Personally, and notwithstanding the notable exception of telecoms, I rate the British (and US) government's performance in deregulating state entities, creating new markets and ensuring competition, as poor.

Neoliberalism is nothing if not the opposite extreme of the communist planned economy. Like the communist planned economy, neoliberalism is doomed to failure. I think we've all been sold a lie.

[Dec 14, 2018] Neoliberal ideology acted as a smokescreen that enabled the financially powerful to rewrite the rules and place themselves beyond the law

Notable quotes:
"... Neoliberalism has spawned a financial elite who hold governments to ransom ..."
"... Neoliberal ideology acted as a smokescreen that enabled the financially powerful to rewrite the rules and place themselves beyond the law. ..."
"... So it seems that your suggestion is for a return to western capitalism post-war style - would that be right? (b.t.w. if I bring up the whole Soviet Union thing, it is partly because quite a few commentators in this debate come across as if they wish for something much more leftist than that). ..."
"... What you have missed, is that the lions share of the proceeds of that growth are not going to ordinary people but to a tiny minority of super rich. It is not working for the majority. ..."
"... The taxpayers are left to pick up the tab, nations are divided against immigrants and scroungers and then unfettered evangelists like you can spout as pompously as you like about how much big business would like to remove the state from corporate affairs. ..."
"... Without the state there wouldn't be neo-Liberalism, it took state regulated capitalism to build what unfettered purists insist on tearing apart for short term greed. ..."
"... The trouble is Neo-Liberals do not want to remove the state at all, they want to BE the state and in the process rendering democracy pretty much meaningless. And they've succeeded. ..."
"... The biggest swindle ever pulled was turning the most glaring and crushing failure of unfettered corporatism into the biggest and most crushing power grab implemented in order to suppress the will of the people ..."
"... Nobody hates a market more than a monopoly and capitalism must inevitably end in monopoly as it has. For the profiteering monopolies investment especially via taxation is insane as it can only undermine their monopoly. ..."
"... The bankers have always known that the austerity caused by having to pay off un-payable loans, that increase every year, will eventually produce countries very similar to the "Weimar Days" in pre-Hitler Germany. ..."
"... They also know that drastic conditions such as these often lead to a collapse of democracy and a resurgence of Fascism. ..."
"... Neoliberalism could not exist without massive state support. So the term is meaningless. There is nothing "liberal" about having a huge state funded military industrial complex that acts a Trojan horse for global corporations, invading other countries for resources. ..."
"... Neoliberalism is a branch of economic ideology which espouses the value of the free-market, and removing all protective legislation, so that large companies are free to do what they want, where-ever they want, with no impediments from social or environmental considerations, or a nation's democratic preferences. ..."
"... Business-friendly to who exactly: the nation or hostile overseas speculators? ..."
"... The golden age of 1945 - 1975 or so witnessed huge rises in standards of living so your point linking neo-liberalism to rising standards of living is literally meaningless. There was an explosive growth in economic activity during the three or four post war decades ..."
"... The assumption shared by many round here that the young are some untapped resource of revolutionary energy is deeply mistaken ..."
Jun 10, 2013 | www.theguardian.com

WyldeWolfe , 10 Jun 2013 19:42

Neoliberalism has spawned a financial elite who hold governments to ransom

So it's been a success then.

disorderedworld , 10 Jun 2013 17:21
A wonderful article that names the central issue. Neoliberal ideology acted as a smokescreen that enabled the financially powerful to rewrite the rules and place themselves beyond the law. The resultant rise of financial capitalism, which now eclipses the productive manufacturing-based capitalism that was the engine of world growth since the industrial revolution, has propelled a dangerous self-serving elite to the centre of world power. It's not just inequality that matters, but the character of the global elite.
MatthewBall -> murielbelcher , 10 Jun 2013 16:23
@murielbelcher -

The neo-liberal order commenced only in the late 1970s - there was a very different order prior to this which was not "soviet socialism" as you term it.

So it seems that your suggestion is for a return to western capitalism post-war style - would that be right? (b.t.w. if I bring up the whole Soviet Union thing, it is partly because quite a few commentators in this debate come across as if they wish for something much more leftist than that).

Anyway, my worry with this idea is that I am just not convinced that life in "The West 1945-80" was better on the whole than in "The West 1980-present". It's true that unemployment is higher these days, but a lot of work in the post-war years was boring and physically exhausting; in factories and mines where conditions were degrading and bad for health; and where industrial relations were simply terrible. I think as well that the higher unemployment is a localized phenomenon that many developing countries are not experiencing (this is relevant because Deborah Orr proposes change for the whole world, not merely the West).

There were also frequent recessions and booms - in fact, more frequent (albeit shorter) than now. What seems to have changed in this respect is that, whereas we used to alternate regularly between 2-3 years of boom and 1-2 years of bust, we now have 15 years of continuous boom followed by a (maybe?) 10 year bust (this pattern began around 1980). If you asked me which of these two patterns I preferred, then I think I'd go for the pre-1980 pattern, but its not clear to me that the post-1980 pattern is so much worse as to underwrite a savage indictment of the whole system.

As for Casino banking: they should reform that. Britain's Coalition Government has done something in that respect, although its not very radical - I am hoping Labour can do more. There is certainly a lot to be said for banks going back to a pre-"Big Bang" sense of tradition and prudence.

Buts let's not also forget the plus sides in the ledger for post-1980 capitalism: hundreds of millions in the former third world lifted out of poverty; unprecedented technological innovation (e.g. the internet, which makes access to knowledge more equal even as income inequality grows); and the accomodation (at least in the West) of progressive social change, such as the empowerment of ethnic minorities, LGBT people and women.

Change, yes - but lets be careful not to throw the baby out with the bathwater.

MatthewBall -> Grich , 10 Jun 2013 15:40
@Grich -

What you have missed, is that the lions share of the proceeds of that growth are not going to ordinary people but to a tiny minority of super rich. It is not working for the majority. http://www.nakedcapitalism.com/2010/07/58-of-real-income-growth-since-1976-went-to-top-1-and-why-that-matters.html

OK, but both the claim and the link cited in support talk only about a problem in the US. This can't really answer my point, which was that the rest of the world should not be expected to support a change to the economic system of the whole world just because of problems that are mostly localised to North America and Europe. People in developing countries might like the fact that they are, at last, catching "the West" up, and might well not care much about widening inequality of incomes in Western societies.

If you are going to propose changes that you want the whole world to adopt, as Deborah Orr does, then you should be careful to avoid casually assuming that Africa, India, China, et al, feel the same way about the world's recent history as we do. It seems to me that not enough care has been demonstrated in this regard.

MarkHH -> MickGJ , 10 Jun 2013 13:34

@MickGJ - Left to their own devices the most extreme neo-liberals would remove the state almost completely from corporate life.

Except when the State has to step in to prop up an unsustainable ideology. Then it's all meek murmurings and pleas for forgiveness and a timid "we'll be better from now" concessions and the Government obliges the public with the farce that they actually intend to do anything at all but make the public pay for the financial sector's state subsidized profligacy.

Once the begging bowl is re-filled of course then the pretense of "business as usual" profligacy rises to the fore.

The taxpayers are left to pick up the tab, nations are divided against immigrants and scroungers and then unfettered evangelists like you can spout as pompously as you like about how much big business would like to remove the state from corporate affairs.

When you well know that is the last thing big business would like to do. More of the state owned pie is always the most urgent of priorities. Poorer services at inflated costs equates as 'efficiency' until the taxpayer is again left to step in and pick up the bill.

Without the state there wouldn't be neo-Liberalism, it took state regulated capitalism to build what unfettered purists insist on tearing apart for short term greed.

The trouble is Neo-Liberals do not want to remove the state at all, they want to BE the state and in the process rendering democracy pretty much meaningless. And they've succeeded.

The biggest swindle ever pulled was turning the most glaring and crushing failure of unfettered corporatism into the biggest and most crushing power grab implemented in order to suppress the will of the people.

Just as IMF loans come with 'obligations' the principle of democracy itself was sold as part of 'the solution'.

The unsustainable, sustained. By slavery to debt, removal of society's safety net and an economy barely maintained by industries that serve the rich, vultures that prey on the weak and rising living costs and the drudgery of a life compounded by a relentless bombardment of everything in life that is unattainable.

Toeparty , 10 Jun 2013 05:28
Nobody hates a market more than a monopoly and capitalism must inevitably end in monopoly as it has. For the profiteering monopolies investment especially via taxation is insane as it can only undermine their monopoly. With the economy now globalised not even a world war could sweep away the current ossified political economy and give capitalism a new lease on life. It's socialism or monopoly capitalist barbarism. Make your choice.
DracoTBastard , 10 Jun 2013 05:26

The IMF exists to lend money to governments,

Money that the governments don't actually need as they can print their own money and spend it to use their countries own resources and then raise taxes to offset the extra spending and thus maintaining monetary value. The reality is that a government should never, ever borrow money.
Malakia123 , 10 Jun 2013 03:35
The beginning period between the two world wars (1919-33) in Germany called the Weimar Republic shows us exactly what severe austerity imposed by the Treaty of Versailles caused. Because the German economy contracted severely due to reparations payments, steady inflation and severe unemployment ensued. Of course the FED having started the Great Depression in America had not helped matters much anywhere in the world. The bankers have always known that the austerity caused by having to pay off un-payable loans, that increase every year, will eventually produce countries very similar to the "Weimar Days" in pre-Hitler Germany.

They also know that drastic conditions such as these often lead to a collapse of democracy and a resurgence of Fascism.

What causes inflation is uncontrolled speculation of the kind we have seen fed by private banking at various crucial points in history, such as the Weimar Republic. When speculation is coupled with debt (owed to private banking cartels) such as we are seeing in America and Europe now, the result is disaster. On the other hand, when a government issues its own "good faith" commerce-related currency in carefully measured ways as we saw in Roman times or Colonial America, it causes supply and demand to increase together, leaving prices unaffected. Hence there is no inflation, no debt, no unemployment, and no need for income taxes.

In reality, the Weimar financial crisis began with the impossible reparations payments imposed at the Treaty of Versailles. It is very similar to the austerity being imposed on European Nations and America as we speak – regardless of the fact that the IMF is trying to pose as "the Good Cop" at the moment! The damage has been done to nations like Greece, and others are soon to follow. The uncontrollable greed of banks and corporations is leading to an implosion of severe magnitude! It's time to open their books and put a stop to these private banks right now!

brucefiiona -> MysticFish , 9 Jun 2013 20:36
@MysticFish - So the US who has a greater spend on the military than communist China is neoliberal?

Neoliberalism could not exist without massive state support. So the term is meaningless. There is nothing "liberal" about having a huge state funded military industrial complex that acts a Trojan horse for global corporations, invading other countries for resources.

The term neoliberal is not only meaningless but misleading as it implies a connection with true liberalism, of which it has no meaningful connection.

brucefiiona , 9 Jun 2013 20:28
Do away with deceptive terms like neoliberalism, capitalism, socialism, left wing and right wing and things become clearer.

At root a lot of the people who get involved in all of the above have very similar character traits - love of power, greed, deceitful, ruthlessness. Most start out with these character traits, and others gain them as a result of power.

Anyone high up in politics or business is unhinged. You have to be. The organizational structures in these things are so synthetic, the beliefs so artificial, rigid, dogmatic and inhuman that only a unhinged person could prosper in this climate.

Most reasonable people admit doubt, are willing to accept compromise, are willing to make the occasional sacrifice for the greater good. All these things are what make us human, however all these things are seen as weaknesses in the inverted world of business and politics.

Business and politics creates an environment where the must inhuman traits prosper.

fr0mn0where -> murielbelcher , 9 Jun 2013 14:42
@murielbelcher -

"no but the highly placed banking and financial class are along with their venal political mates"

For sure but are they capitalists? Although they may well own capital does their power derive from the ownership of capital? You may, or may not be interested in this lecture on the future of capitalism by John Kay.

MysticFish -> AssistantCook , 9 Jun 2013 14:28
@AssistantCook - Neoliberalism is a branch of economic ideology which espouses the value of the free-market, and removing all protective legislation, so that large companies are free to do what they want, where-ever they want, with no impediments from social or environmental considerations, or a nation's democratic preferences. Von Hayek was a major influence and Thatcher was a loyal disciple, as was the notorious dictator, Pinochet. It is economic theory, designed for vulture capitalists, and unpopular industries like fossil fuel or tobacco, and usually the 'freedom' is all one-sided.
MysticFish -> DavidPavett , 9 Jun 2013 14:12
@DavidPavett - If states are too big, then what about multinational banks and corporations? I wonder why Neoliberal ideology does not try to limit the size of these. They are cumbersome and destructive, predatory dinosaurs and yet our politicians seem mesmerised to the point of allowing them special favours, tax incentives and the ability to determine our nation's policies in matters such as energy and health. Why not 'Small is Beautiful,' when it comes to companies? It doesn't make sense to shrink the state but then let non-transparent and unaccountable, multinational companies become too powerful. One gets the feeling the country is being invaded by the interests of hostile nations, using all-too-convenient Neoliberal ideology and hidden behind a corporate mask.
Jesús Rodriguez , 9 Jun 2013 12:46
Is the IMF ever stop evading its responsibility and blaming others for the worldwide financial tragedy it has provoked? Is it ever stop hurting the working class?
theguardianisrubbish -> murielbelcher , 9 Jun 2013 07:28
@murielbelcher -

"Neo-liberalism is based on the thought of personal freedom for the rich and powerful elites is all."

No it is not that is what you want to believe. There is nothing in this statement other than an opinion based on nothing.

"Many people across the globe were lifted out of poverty between 1945-1980 so what does your statement about neo-liberalism prove"

Which countries during this period saw massive sustainable reductions in poverty without some free market model in place?

"It is you who should open your eyes and stop expecting people on here to accept your ideological beliefs and statements as facts."

I don't expect people to accept my beliefs I am just pointing out why I think their beliefs are wrong. This is a comment section the whole idea of it is to comment on different views and articles. How can you ever benefit or make an accurate decision or belief if you do not try to understand what the opposite belief is? I think nearly everything I have said has been somewhat backed up by logic or a fact, I have not said wishy washy statements like:

"Neo-liberalism is based on the thought of personal freedom for the rich and powerful elites is all."

Unless you can expand on this and give evidence or some form of an example why you think its true then it makes no sense. You are not the only commentor on this article to make a similar statement and the way people have attempted to justify it is due to bailouts but as I have said a bailout is not part of the neoliberal school of thought so if you have a problem with bailouts you don't have a problem with neoliberalism.

theguardianisrubbish -> murielbelcher , 9 Jun 2013 07:10
@murielbelcher - I don't want to go to far into Thatcherism because it is slightly off topic. The early 80s recession was a global recession and yes during the first few years unemployment soared. Why was that because the trade unions were running amok the UK was losing millions of days of work per month.

Inflation was getting out of control and the only way to solve it was a self induced recession. You cannot seriously believe that without the reforms that she implemented we would not have recovered as quick as we did nor can you argue that it was possible for her or anyone else to turn around such an inefficient industry. Don't forget the problems of the manufacturing industry go back way before Thatcher's time.

theguardianisrubbish -> someoneionceknew , 9 Jun 2013 06:34
@someoneionceknew -

"Here's your problem. You believe that banks lend savings. They don't. Loans create deposits create reserves."

I am not claiming to be an expert on this if you are then let me know and please do correct me. I agree banks do not lend deposits but they do lend savings. There is a difference putting money on deposit is different to say putting money into an ISA. I don't agree though that deposits create reserves I believe that they come from the central bank otherwise banks would be constrained by the amount of deposits in the system which is not true and something you have said is not true.

Nevertheless, the majority of liquidity in the bond markets (like most other markets) comes from institutional investors, i.e pension funds, unit trusts, insurance companies, etc. They get their money from savings by consumers as well as sometimes companies. Ok we don't always give our money to insurance companies when we save but via premiums is another way the ordinary consumer contributes to this so called "debt industry". I also said that foreign and local governments buy debt and companies invest directly into the debt market.

MysticFish -> MickGJ , 9 Jun 2013 06:17
@MickGJ - Business-friendly to who exactly: the nation or hostile overseas speculators?
theguardianisrubbish -> TedSmithAndSon , 9 Jun 2013 06:14
"In theory the banks should have been allowed to go bust, but the consequences where deemed too high (as they inevitable are). "

Iceland would disagree.

"The result is socialism for the rich using the poor as the excuse, which is the reality of neoliberalism."

Why have only the rich benefited from the bailout? You are not making any sense.

"The result is socialism for the rich using the poor as the excuse, which is the reality of neoliberalism."

Why? You cannot just say a statement like that and not expand, it makes no sense.

"Thatcher "revitalised" banking, while everything else withered and died."

...but also revitalised the economy and got everyone back to work.

"Neoliberalism is based on the thought that you get as much freedom as you can pay for, otherwise you can just pay... like everyone else."

Again you have to expand on this because it makes no sense.

"In Asia and South America it has been the economic preference of dictators that pushes profit upwards and responsibility down, just like it does here."

Don't think that is true in most cases nor would it make sense. Why would a dictator who wants as much power as possible operate a laissez-faire economy? You cannot have personal freedom without having economic freedom, it is a necessary not sufficient condition. Tell me a case where these is a large degree of political freedom but little to no economic freedom. Moreover look at the countries in Asia and South America that have adopted a neoliberal agenda and notice their how poverty as reduced significantly.

"I find it ironic that it now has 5 year plans that absolutely must not be deviated from, massive state intervention in markets (QE, housing policy, tax credits... insert where applicable), and advocates large scale central planning even as it denies reality, and makes the announcement from a tractor factory."

Who has 5 year plans?

"In theory it's one thing, the reality is entirely different."

If the reality is different to the theory then it is not neoliberalism that is being implemented therefore it makes no sense to dispute the theory. Look at where it has been implemented, the best case in the world at the moment is Hong Kong look at how well that country has performed.

"a massive lie told by rich people "

I can assure you I am not rich.

"Until we're rid of it, we're all it's slaves."

Neoliberalism is based on personal freedom. If you believe this about neoliberalism in your opinion give me one economic school of thought where this does not apply.

theguardianisrubbish -> theonionmurders , 9 Jun 2013 05:35
@theonionmurders -

"Bailouts have been a constant feature of neoliberalism."

What you are saying does not make sense. Whatever you say about that there was no where else to turn the government had to bailout out the banks a neolibralist would disagree.

"In fact the role of the state is simply reduced to a merely commissioning agent to private parasitical corporations. "

That's corporatism which so far you have described pretty well.

"History has shown the state playing this role since neoliberalism became embedded in policy since the 1970s - Long Term Capital Management, Savings and Loans, The Brady Plan, numerous PFI bailouts and those of the Western banking system during the 1982 South American, 1997 Asian and 2010 European debt crises."

What?! Bailouts have been occurring before the industrial revolution. Deregulation in the UK occurred mainly during the 80s not 70's. Furthermore financial deregulation occurred in the UK in 1986. In the USA the major piece of financial deregulation was the Gramm Leach Bliley Act which was passed in 1999. So you have just undercut your own point with the examples you gave above. You could argue Argentina and we could argue all day about the causes of that, but I would say that any government that pursues an expansionary monetary policy under a fixed ER is never going to end well.

"...policy if you won't flick through a book."

My point was that when people quote a source they tend to either quote the page that the point comes from. To be honest if this book is telling you that neoliberalism and neoclassical are significantly different (which you seemed to suggest in you earlier post) then I would suggest put the book down.

ATrueFinn -> fireman36 , 9 Jun 2013 04:17
@ fireman36 09 June 2013 1:32am

Don't like it? Change the rules.

Exactly! However:

"Google, Amazon and Apple... avoid their taxes, because they can, because they are more powerful than governments."

Yes to the first, no to the second. Corporations with revenues exceeding the GDP of a small nation have quite a lot of power: Exxon's revenue is between the GDP of Norway and Austria. In Finland Nokia generated 3 4 % of the GDP for a decade and the government bent backwards to accommodate its polite requests, including a specific law reducing the privacy of employees' emails.

Grich -> MatthewBall , 8 Jun 2013 22:29
@MatthewBall -

I am not sure if this is true. We have the same economic system (broadly speaking, capitalism) as nearly every country in the world, and the world economy is growing at a reasonable rate, at around 3-4% for 2013-14 (see http://www.imf.org/external/pubs/ft/weo/2013/01/pdf/c1.pdf for more details).

We percieve a problem in (most of) Europe and North America because our economies are growing more slowly than this, and in some cases not at all. The global growth figure comes out healthy because of strong growth in the emerging countries, like China, Brazil and India, who are narrowing the gap between their living standards and ours. So, the world as a whole isn't broken, even if our bit of it is going through a rough patch.

What you have missed, is that the lions share of the proceeds of that growth are not going to ordinary people but to a tiny minority of super rich. It is not working for the majority. http://www.nakedcapitalism.com/2010/07/58-of-real-income-growth-since-1976-went-to-top-1-and-why-that-matters.html

oriel46 -> Fachan , 8 Jun 2013 22:08
@Fachan - Except that it isn't capitalism that was being criticized here, but neoliberalism: a distinction that's often lost on neoliberals themselves, ironically.
TomorrowsWorld , 8 Jun 2013 19:58
I'm sure that Denis Healy and any number of African economists would confirm that the IMF is quite simply a refuge of absolutely last resort, when investor confidence in your economy is so shattered that the only way ahead is to open the shark gates and allow big money to plunder whatever value remains there, without the benefit of any noticeable return for your people. Greece is but one more victim of a syndrome that encompasses all the science and forensic analysis of ritual sacrifice.
murielbelcher -> OneCommentator , 8 Jun 2013 19:10
@OneCommentator - don't confuse economic deregulation which acted as handmaiden to global finance and multinationals as economic freedoms for population

China's govt was doing what china's govt had decided to do from 1978 BEFORE the election of Thatcher in 1979 or Reagan in 1980 (office from Jan 1981), so very little correlation there I think

The GATT rounds whether you agree with their aims or not were the products of the post war decades, again before Thatcher and Reagan came to power

The golden age of 1945 - 1975 or so witnessed huge rises in standards of living so your point linking neo-liberalism to rising standards of living is literally meaningless. There was an explosive growth in economic activity during the three or four post war decades

murielbelcher -> theguardianisrubbish , 8 Jun 2013 19:04
@theguardianisrubbish - you can't get away with this

She DID not get everyone back to work again. There were two recessions at either end of the 1980s. She TRIPLED unemployment during the first half of the 1980s and introduced the phenomenon of high structural unemployment and placing people on invalidity benefits to massage the headline unemployment count. Give us the figures to back up your assertion that she "got everyone back to work again." I suspect that you cannot and your statement stands for the utter nonsense that it is in any kind of reality.

A few months after she was forced out Tory Chancellor Norman Lamont in 1991 during yet another recession declared that "unemployment was a price worth paying"!!!

Neo-liberalism is based on the thought of personal freedom for the rich and powerful elites is all. Many people across the globe were lifted out of poverty between 1945-1980 so what does your statement about neo-liberalism prove

It is you who should open your eyes and stop expecting people on here to accept your ideological beliefs and statements as facts.

Because they are not: in no shape, way or form

fireman36 , 8 Jun 2013 19:03
Not very impressed to be honest. For starters:

"The IMF exists to lend money to governments, so it's comic that it wags its finger at governments that run up debt. And, of course, its loans famously come with strings attached: adopt a free-market economy, or strengthen the one you have, kissing goodbye to the Big State."

That's glib and inaccurate. A better read about the IMF from an insider: http://www.theatlantic.com/magazine/archive/2009/05/the-quiet-coup/307364/ Digest: the biggest problem the IMF have to deal with in bailouts is always the politics of cronyism; free-market oligarchs and government in cahoots.

"Many IMF programs "go off track" (a euphemism) precisely because the government can't stay tough on erstwhile cronies, and the consequences are massive inflation or other disasters. A program "goes back on track" once the government prevails or powerful oligarchs sort out among themselves who will govern -- and thus win or lose -- under the IMF-supported plan. The real fight in Thailand and Indonesia in 1997 was about which powerful families would lose their banks. In Thailand, it was handled relatively smoothly. In Indonesia, it led to the fall of President Suharto and economic chaos."

MickGJ -> JohnBroggio , 8 Jun 2013 18:42

@JohnBroggio - who caters for the idealist vote?

Generally whoever happens to be in opposition at the time. This made the LibDems the ideal (sorry) choice for a long time but then they broke a long-standing if unspoken promise that they would never actually be in government.

Last weekś Economist has some very interesting stuff from the British Social Attitudes survey which shows the increasing drift away from collectivist ideals towards liberalism over each succeeding generation.

The assumption shared by many round here that the young are some untapped resource of revolutionary energy is deeply mistaken

[Dec 14, 2018] Neoliberalism has spawned a financial elite who hold governments to ransom by Deborah Orr

Highly recommended!
Notable quotes:
"... The crash was a write-off, not a repair job. The response should be a wholesale reevaluation of the way in which wealth is created and distributed around the globe ..."
"... The IMF also admits that it "underestimated" the effect austerity would have on Greece. Obviously, the rest of the Troika takes no issue with that. Even those who substitute "kick up the arse to all the lazy scroungers" whenever they encounter the word "austerity", have cottoned on to the fact that the word can only be intoned with facial features locked into a suitably tragic mask. ..."
"... Yet, mealy-mouthed and hotly contested as this minor mea culpa is, it's still a sign that financial institutions may slowly be coming round to the idea that they are the problem. ..."
"... Markets cannot be free. Markets have to be nurtured. They have to be invested in. Markets have to be grown. Google, Amazon and Apple haven't taught anyone in this country to read. But even though an illiterate market wouldn't be so great for them, they avoid their taxes, because they can, because they are more powerful than governments. ..."
"... The neoliberalism that the IMF still preaches pays no account to any of this. It insists that the provision of work alone is enough of an invisible hand to sustain a market. Yet even Adam Smith, the economist who came up with that theory , did not agree that economic activity alone was enough to keep humans decent and civilised. ..."
"... Governments are left with the bill when neoliberals demand access to markets that they refuse to invest in making. Their refusal allows them to rail against the Big State while producing the conditions that make it necessary. ..."
Jun 08, 2013 | www.theguardian.com

The crash was a write-off, not a repair job. The response should be a wholesale reevaluation of the way in which wealth is created and distributed around the globe

Sat 8 Jun 2013 02.59 EDT First published on Sat 8 Jun 2013 02.59 EDT

The IMF's limited admission of guilt over the Greek bailout is a start, but they still can't see the global financial system's fundamental flaws, writes Deborah Orr. Photograph: Boris Roessler/DPA FILE T he International Monetary Fund has admitted that some of the decisions it made in the wake of the 2007-2008 financial crisis were wrong, and that the �130bn first bailout of Greece was "bungled". Well, yes. If it hadn't been a mistake, then it would have been the only bailout and everyone in Greece would have lived happily ever after.

Actually, the IMF hasn't quite admitted that it messed things up. It has said instead that it went along with its partners in "the Troika" � the European Commission and the European Central Bank � when it shouldn't have. The EC and the ECB, says the IMF, put the interests of the eurozone before the interests of Greece. The EC and the ECB, in turn, clutch their pearls and splutter with horror that they could be accused of something so petty as self-preservation.

The IMF also admits that it "underestimated" the effect austerity would have on Greece. Obviously, the rest of the Troika takes no issue with that. Even those who substitute "kick up the arse to all the lazy scroungers" whenever they encounter the word "austerity", have cottoned on to the fact that the word can only be intoned with facial features locked into a suitably tragic mask.

Yet, mealy-mouthed and hotly contested as this minor mea culpa is, it's still a sign that financial institutions may slowly be coming round to the idea that they are the problem. They know the crash was a debt-bubble that burst. What they don't seem to acknowledge is that the merry days of reckless lending are never going to return; even if they do, the same thing will happen again, but more quickly and more savagely. The thing is this: the crash was a write-off, not a repair job. The response from the start should have been a wholesale reevaluation of the way in which wealth is created and distributed around the globe, a "structural adjustment", as the philosopher John Gray has said all along.

The IMF exists to lend money to governments, so it's comic that it wags its finger at governments that run up debt. And, of course, its loans famously come with strings attached: adopt a free-market economy, or strengthen the one you have, kissing goodbye to the Big State. Yet, the irony is painful. Neoliberal ideology insists that states are too big and cumbersome, too centralised and faceless, to be efficient and responsive. I agree. The problem is that the ruthless sentimentalists of neoliberalism like to tell themselves � and anyone else who will listen � that removing the dead hand of state control frees the individual citizen to be entrepreneurial and productive. Instead, it places the financially powerful beyond any state, in an international elite that makes its own rules, and holds governments to ransom. That's what the financial crisis was all about. The ransom was paid, and as a result, governments have been obliged to limit their activities yet further � some setting about the task with greater relish than others. Now the task, supposedly, is to get the free market up and running again.

But the basic problem is this: it costs a lot of money to cultivate a market � a group of consumers � and the more sophisticated the market is, the more expensive it is to cultivate them. A developed market needs to be populated with educated, healthy, cultured, law-abiding and financially secure people � people who expect to be well paid themselves, having been brought up believing in material aspiration, as consumers need to be.

So why, exactly, given the huge amount of investment needed to create such a market, should access to it then be "free"? The neoliberal idea is that the cultivation itself should be conducted privately as well. They see "austerity" as a way of forcing that agenda. But how can the privatisation of societal welfare possibly happen when unemployment is already high, working people are turning to food banks to survive and the debt industry, far from being sorry that it brought the global economy to its knees, is snapping up bargains in the form of busted high-street businesses to establish shops with nothing to sell but high-interest debt? Why, you have to ask yourself, is this vast implausibility, this sheer unsustainability, not blindingly obvious to all?

Markets cannot be free. Markets have to be nurtured. They have to be invested in. Markets have to be grown. Google, Amazon and Apple haven't taught anyone in this country to read. But even though an illiterate market wouldn't be so great for them, they avoid their taxes, because they can, because they are more powerful than governments.

And further, those who invest in these companies, and insist that taxes should be low to encourage private profit and shareholder value, then lend governments the money they need to create these populations of sophisticated producers and consumers, berating them for their profligacy as they do so. It's all utterly, completely, crazy.

The other day a health minister, Anna Soubry , suggested that female GPs who worked part-time so that they could bring up families were putting the NHS under strain. The compartmentalised thinking is quite breathtaking. What on earth does she imagine? That it would be better for the economy if they all left school at 16? On the contrary, the more people who are earning good money while working part-time � thus having the leisure to consume � the better. No doubt these female GPs are sustaining both the pharmaceutical industry and the arts and media, both sectors that Britain does well in.

As for their prioritising of family life over career � that's just another of the myriad ways in which Conservative neoliberalism is entirely without logic. Its prophets and its disciples will happily � ecstatically � tell you that there's nothing more important than family, unless you're a family doctor spending some of your time caring for your own. You couldn't make these characters up. It is certainly true that women with children find it more easy to find part-time employment in the public sector. But that's a prima facie example of how unresponsive the private sector is to human and societal need, not � as it is so often presented � evidence that the public sector is congenitally disabled.

Much of the healthy economic growth � as opposed to the smoke and mirrors of many aspects of financial services � that Britain enjoyed during the second half of the 20th century was due to women swelling the educated workforce. Soubry and her ilk, above all else, forget that people have multiple roles, as consumers, as producers, as citizens and as family members. All of those things have to be nurtured and invested in to make a market.

The neoliberalism that the IMF still preaches pays no account to any of this. It insists that the provision of work alone is enough of an invisible hand to sustain a market. Yet even Adam Smith, the economist who came up with that theory , did not agree that economic activity alone was enough to keep humans decent and civilised.

Governments are left with the bill when neoliberals demand access to markets that they refuse to invest in making. Their refusal allows them to rail against the Big State while producing the conditions that make it necessary. And even as the results of their folly become ever more plain to see, they are grudging in their admittance of the slightest blame, bickering with their allies instead of waking up, smelling the coffee and realizing that far too much of it is sold through Starbucks.

[Dec 14, 2018] The era of neoliberalism has seen a massive increase in government, not a shrinkage. The biggest change is the role of governments - to protect markets rather than to protect the rights and dignities of its citizens

Notable quotes:
"... The era of neoliberalism has seen a massive increase in government, not a shrinkage. The biggest change is the role of governments - to protect markets rather than to protect the rights and dignities of its citizens. When viewed by outcome rather than ideological rhetoric, it becomes increasingly clear that neoliberalism has nothing to do with shrinking the state, freeing markets, or freeing the individual, and everything to do with a massive power grab by a global elite. ..."
"... What was the billions of pounds in bank bailout welfare and recession on costs all about? You tell me. All the result of the application of your extremist free market ideology? Let the banks run wild, they mess up and the taxpayer has to step in with bailout welfare and pay to clear up the recession debris ..."
"... Market participants and their venal political friends have during the past 30 years of extremist neo-liberal ideology rigged, abused, distorted and subverted their market and elite power to tilt the economic and social balance massively in their favour ..."
"... Neo liberalism = the favoured ideology of the very rich and powerful elite ..."
"... at last somebody is looking at globalisation and asking whose interests is it designed to serve? It certainly ain't for the people. ..."
"... the highly placed banking and financial class are along with their venal political mates ..."
"... We've had three decades of asset stripping in favor of the rich elites and look at the mess we're in now. ..."
"... I strongly believe that people are not being told the full story. Like the NSA surveillance revelation, the effects will not be pretty when the facts are known. No country needs the IMF. ..."
"... The mythology surrounding deficits and national debt is a religion that the world is in desperate need of debunking. Like religion, the mythology is used as a means of power and entrenchment of privilege for the Ruling Caste, not the plebs (lesser mortals). ..."
Dec 03, 2018 | www.theguardian.com
justamug , 8 Jun 2013 18:09
This article is a testament to our ignorance. Orr is no intellectual slouch, but somehow, like many in the mainstream, she still fails to address some fundamental assumptions and thus ends up with a muddled argument.

"What they don't seem to acknowledge is that the merry days of reckless lending are never going to return;"

Lending has not stopped - it's just moved out of one market into another. Banks are making profits, and banks profit are made by expanding credit.

Neoliberal ideology insists that states are too big and cumbersome, too centralised and faceless, to be efficient and responsive.

Yes and no. There is a difference between what is preached and what happens in practice. The era of neoliberalism has seen a massive increase in government, not a shrinkage. The biggest change is the role of governments - to protect markets rather than to protect the rights and dignities of its citizens. When viewed by outcome rather than ideological rhetoric, it becomes increasingly clear that neoliberalism has nothing to do with shrinking the state, freeing markets, or freeing the individual, and everything to do with a massive power grab by a global elite.
murielbelcher -> MurchuantEacnamai , 8 Jun 2013 18:06
@MurchuantEacnamai - well righty ideologues such as yourself and your venal political acolytes have utterly failed to support the case or institute measures that: "apply effective democratic governance to ensure market

What was the billions of pounds in bank bailout welfare and recession on costs all about? You tell me. All the result of the application of your extremist free market ideology? Let the banks run wild, they mess up and the taxpayer has to step in with bailout welfare and pay to clear up the recession debris

Market participants and their venal political friends have during the past 30 years of extremist neo-liberal ideology rigged, abused, distorted and subverted their market and elite power to tilt the economic and social balance massively in their favour

You the taxpayer are good enough to bail us out when we mess up but then we demand that your services are cut in return and that your employment is ever more precarious and wages depressed (at the lower end of the scale - never ever the higher of course!! That's the neo-liberal deal isn't it

Neo liberalism = the favoured ideology of the very rich and powerful elite and boy don't they know how to work its levers

freedomrespect , 8 Jun 2013 18:00
Very insightful commentary and at last somebody is looking at globalisation and asking whose interests is it designed to serve? It certainly ain't for the people. Amazing it's been approved on a UK liberal newspaper as well!
Boguille -> Fachan , 8 Jun 2013 17:57
@Fachan - There was nothing in the article about envy. It was an exposition of the failure of our present system which allows the rich to get ever richer. That would be fine if it weren't for the fact that the increasing disparity in wealth is bringing down the economy and making it less productive while leaving a large part of the population in, or on the verge of, poverty.
murielbelcher -> CaptainGrey , 8 Jun 2013 17:41
@CaptainGrey - but we're not talking about that form of capitalism are we?

Surely you must realise that there are very very different forms of capitalism. The capitalism that reigns now would not have permitted the creation of the NHS had it not been devised in the1940s when a very different type of capitalism reigned. Its political acolytes and its cheerleader press would have denounced the NHS as an extremist commie idea!!

murielbelcher -> fr0mn0where , 8 Jun 2013 17:39
@fr0mn0where - it was crumbling in the 1980s

The Chicago boys swarmed into eastern Europe after 1989 to introduce a form of gangster unbridled capitalism. The very Chicago boys led by Milton Friedman who used the dictator Pinochet's Chile as test bed for their ideology from September 1973 after the coup that overthrew Allende

murielbelcher -> fr0mn0where , 8 Jun 2013 17:35
@fr0mn0where - no but the highly placed banking and financial class are along with their venal political mates

We've had three decades of asset stripping in favor of the rich elites and look at the mess we're in now.

murielbelcher -> MatthewBall , 8 Jun 2013 17:33
@MatthewBall - social democracy

The neo-liberal order commenced only in the late 1970s - there was a very different order prior to this which was not "Soviet Socialism" as you term it.

As such this extremist rich man's ideological experiment has had a long innings and has failed as the events of 2008 laid bare for all to see - it has been tried out disastrously on live human beings for 34 years and has now been thoroughly discredited with the huge bank bailouts and financial crash and ensuing and enduring recession It was scarcely succeeding prior to this with high entrenched rates of unemployment, frequent recessions/booms and busts and unsustainable property bubbles and deregulated unstable speculative aka casino banking activity

Time for a change

RidiculousPseudonym , 8 Jun 2013 17:26
This is basically right, but a few comments.

1. Neoliberalism cannot be pinned on one party alone. It was accepted by the Thatcher government, but no Prime Minister since has seriously challenged it.

2. Neoliberalism is logically contrary to conservative values. Either there are certain moral imperatives so important that it is worth wasting money over them, or there are not. No wonder that Tories are torn in two, not to mention Labour politicians who also try to combine neoliberalism and moral principle.

3. Saying "even Adam Smith" is understandable but unfair. His work was rather enlightened in the context of mercantilism, and of course the Wealth of Nations was not his only book. Others will know his work better than me, but I think he dwells rather strongly on problems of persistent poverty.

4. The political and redistributive functions of nations are indeed damaged by neolib, but I don't think there is any realistic way of getting that power back without applying capital controls. If we apply capital controls, all hell breaks loose.

5. Ergo, we are stuck with a situation where neolib is killing democracy, distributive justice and conservative moral values, but there is nothing we can do about it without pulling the plug altogether and unleashing a sharp drop in wealth and 1930s nationalistic havoc. A bit of a tragedy, indeed.

HolyInsurgent , 8 Jun 2013 17:22

Deborah Orr: The IMF exists to lend money to governments, so it's comic that it wags its finger at governments that run up debt.

I strongly believe that people are not being told the full story. Like the NSA surveillance revelation, the effects will not be pretty when the facts are known. No country needs the IMF. Any national government with its own national currency sovereignty can pay its own debts within its own country with its own currency. International borrowing in foreign markets is the biggest myth since religion. But since neoliberalism and its inherent myths have been swallowed whole for so long, we are still at the stage where the child points and laughs at the nude emperor. The fallout from the revelation and remedy is to follow.

The problem with the Eurozone is not that the Euro is the "national" currency. Control of the Euro resides with the European Central Bank, not the Troika (European Commission, European Central Bank, IMF). The European Central Bank, as sole controller of the Euro (the "national" currency), can issue funds to constituent Eurozone states to the extent necessary. I challenge anyone to demonstrate how any central bank does not have power over its own currency!

The mythology surrounding deficits and national debt is a religion that the world is in desperate need of debunking. Like religion, the mythology is used as a means of power and entrenchment of privilege for the Ruling Caste, not the plebs (lesser mortals).

someoneionceknew -> colonelraeburn , 8 Jun 2013 17:18
@colonelraeburn - Excuse me? Private bank credit caused the housing price inflation.

Politicians were complicit in deregulating and appointing non-regulators but they didn't make the loans.

MickGJ -> DavidPavett , 8 Jun 2013 17:16

@DavidPavett - Does anyone have any idea what this is supposed to mean? There are certainly no leads on this in the link given to "the philosopher" John Gray

Gray wrote this in the Guardian in 2007:

Whether in Africa, Asia, Latin America or post-communist Europe, policies of wholesale privatisation and structural adjustment have led to declining economic activity and social dislocation on a massive scale

This doesn't seem to support Orrś assertion that he is calling for a structural adjustment, rather the opposite. I'ḿ not really familiar with Grayś work but he seems to be rather against the universal imposition of any system, new or old.
katiewm -> CaptainGrey , 8 Jun 2013 16:46
@CaptainGrey - Capitalism is not an undifferentiated mass. Late-stage neoliberal hypercapitalism as practiced in the US and increasingly in the UK is a very different beast than the traditional European capitalist social democracy or the Nordic model, which have been shown to work relatively well over time. In fact, neoliberal capitalism - the sort Orr is talking about here - is marked by increasing decline both in the state and in the economy, as inequality in wealth distribution creates a society of beggars and kings instead of spenders and savers. The gains achieved through carefully regulated capitalism won't stick around in the free-for-all conditions preferred by those whose ideology demands the sell-off of the state.
jazzdrum -> PeterWoking , 8 Jun 2013 16:16
@PeterWoking - For some parts of the world , yes they are more affluent now , but a huge part of the globe is still without food and water .

I think de regulation of the financial sector has caused a huge amount of damage to the world all round and to be honest, i expect more of the same as the Bankers are still in control.

[Dec 08, 2018] Owning the lawmakers doesn't make banksters not criminals, it just makes them criminals that are above the law

Dec 08, 2018 | www.alternet.org

Guest � 6 years ago

[Dec 08, 2018] White House, Trudeau seek to distance themselves from Huawei move

This is about destruction of neoliberalism. Transnational financial elite under neoliberalism is above the law. the USA blatantly breaches this convention now. And will pay the price.
This is Onion-style humor is no it : White House, Trudeau seek to distance themselves from Huawei move
Notable quotes:
"... The official, speaking on condition of anonymity, acknowledged that the arrest could complicate efforts to reach a broader U.S.-China trade deal but would not necessarily damage the process. ..."
"... Meng's detention also raised concerns about potential retaliation from Beijing in Canada, where Prime Minister Justin Trudeau sought to distance himself from the arrest. ..."
Dec 08, 2018 | finance.yahoo.com

Huawei Technologies Co Ltd's chief financial officer, Meng Wanzhou, the 46-year-old daughter of the company's founder, was detained in Canada on Dec. 1, the same day Trump and Chinese President Xi Jinping dined together at the G20 summit in Buenos Aires.

A White House official told Reuters Trump did not know about a U.S. request for her extradition from Canada before he met Xi and agreed to a 90-day truce in the brewing trade war.

Meng's arrest during a stopover in Vancouver, announced by the Canadian authorities on Wednesday, pummeled stock markets already nervous about tensions between the world's two largest economies on fears the move could derail the planned trade talks.

The arrest was made at Washington's request as part of a U.S. investigation of an alleged scheme to use the global banking system to evade U.S. sanctions against Iran, according to people familiar with the probe.

Another U.S. official told Reuters that while it was a Justice Department matter and not orchestrated in advance by the White House, the case could send a message that Washington is serious about what it sees as Beijing's violations of international trade norms.

The official, speaking on condition of anonymity, acknowledged that the arrest could complicate efforts to reach a broader U.S.-China trade deal but would not necessarily damage the process.

Meng's detention also raised concerns about potential retaliation from Beijing in Canada, where Prime Minister Justin Trudeau sought to distance himself from the arrest.

"The appropriate authorities took the decisions in this case without any political involvement or interference ... we were advised by them with a few days' notice that this was in the works," Trudeau told reporters in Montreal in televised remarks.

[Dec 06, 2018] Social Security benefits will go up in 2019. Find out now how big your check will be

Dec 06, 2018 | finance.yahoo.com

Social Security recipients will get a 2.8 percent increase in 2019, following a cost-of-living adjustment announced by the agency in October.

That marks the biggest hike since 2012, when the cost-of-living adjustment was 3.6 percent .

[Dec 06, 2018] Market Moves Suggest a Recession Is Unavoidable

Notable quotes:
"... In bull markets, everything works. In bear markets, the only thing that really works is short-term government and municipal bonds and cash. Ample opportunity is being given to cut exposure to risk, and it's clear that few people are taking advantage of it. They never do. ..."
Dec 06, 2018 | finance.yahoo.com
(Bloomberg Opinion) -- As a longtime market observer, what I find most interesting about the latest correction in equities has the feeling of inevitability that it will turn into something worse. It wasn't this way in late January, when everyone wanted to buy that dip. It certainly wasn't this way in 2007, when the magnitude of the recession was grossly underestimated.

Even the Federal Reserve is getting into the pessimism. Chairman Jerome Powell signaled last week that a pause in interest-rate hikes might be forthcoming. What's interesting about that is Powell surely knew that such a reference might be interpreted as bowing to pressure from President Donald Trump and yet he did it anyway. In essence, he risked the perception of the Fed's independence probably because he knows the economic data is worsening.

Just about everyone I talk to in the capital markets, including erstwhile bulls, acknowledges that things are slowing down. Yes, the Institute for Supply Management's monthly manufacturing index released earlier this week was strong, but jobless claims are ticking up and I am hearing anecdotal reports of a wide range of businesses slowing down. Even my own business is slowing. Anecdotes aside, oil has crashed, home builder stocks have been crushed, and the largest tech stocks in the world have taken a haircut. If we get a recession from this, it will be a very well-telegraphed recession. Everyone knows it is coming.

A recession is nothing to fear. We have lost sight of the fact that a recession has cleansing properties, helping to right the wrong of the billions of dollars allocated to bad businesses while getting people refocused on investing in profitable enterprises. Stock market bears are so disliked because it seems as though they actually desire a recession and for people to get hurt financially. In a way, they are rooting for a recession because they know that the down part of the cycle is necessary.

There are signs that capital has been incorrectly allocated. In just in the span of a year, there have been three separate bubbles: one in bitcoin, one in cannabis and one in the FAANG group of stocks: Facebook, Apple, Amazon.com, Netflix and Google-parent Alphabet. This is uncommon. I begged the Fed to take the punch bowl away, and it eventually did, and now yields of around 2.5 percent on risk-free money are enough to get people rethinking their allocation to risk.

Yet, I wonder if it is possible to have a recession when so many people expect one. The worst recessions are the ones that people don't see coming. In 2011, during the European debt crisis, most people were predicting financial markets Armageddon. It ended up being a smallish bear market, with the S&P 500 Index down about 21 percent on an intraday basis between July and October of that year. It actually sparked a huge bull market in the very asset class that people were worried about: European sovereign debt. We may one day have a reprise of that crisis, but if you succumbed to the panic at the time, it was a missed opportunity.

But just the other day, the front end of the U.S. Treasury yield curve inverted, with two- and three-year note yields rising above five-year note yields. Everyone knows that inverted yield curves are the most reliable recession indicators. Of course, the broader yield curve as measured by the difference between two- and 10-year yields or even the gap between the federal funds rate and 10-year yields has yet to invert, but as I said before, there is an air of inevitability about it. Flattening yield curves always precede economic weakness. They aren't much good at exactly timing the top of the stock market, but you can get in the ballpark.

I suppose all recessions are a surprise to some extent. If you are a retail investor getting your news from popular websites or TV channels, you might not be getting the whole picture. In the professional community, it is becoming harder to ignore the very obvious warning signs that a downturn is coming. In bull markets, everything works. In bear markets, the only thing that really works is short-term government and municipal bonds and cash. Ample opportunity is being given to cut exposure to risk, and it's clear that few people are taking advantage of it. They never do.

[Dec 03, 2018] Neoliberalism is just a sanitised-sounding expression, to cover-up the fact that what we are really seeing here is re-branded, far-right corporatist ideology

Notable quotes:
"... 'Neoliberalism' is just a sanitised-sounding expression, to cover-up the fact that what we are really seeing here is re-branded, far-right, corporatist ideology. ..."
"... There is a major dividing line. There are those who recognise the abuses of the system and lobby for changes and there are those who lobby for further exploitation. ..."
"... The West became over-indebted when it embraced globalisation which necessarily impoverishes the Middle and Working Classes of the developed nations. A chap called Jimmy Goldsmith warned of this and was widely condemned for it. There is another issue Guardianistas would rather not confront : you can a welfare state or you can have open borders. But you can't have both. ..."
"... Private enterprise is inefficient because at it's heart it rules out cooperation. Being happiest if it's a monopoly, there's nothing a business would like better than wipe out all competition. ..."
"... Right now, the neoliberals think that those in the Far East are the workers and those in the West are the consumers, until the Far East becomes the market and wages so low in the West that they become the workers, unless of course some kind souls decide to invest money in Education, Health and infrastructure in Africa on a huge scale, so we then have Africa as the workers and the far East as the market, and the West, apart from those who own large numbers of shares or business outright, presumably either starve to death or pull themselves up by their bootstraps, and start all over again, inventing and setting up completely new industries, providing the newly universally educated and healthy Chinese and Africans and South Americans haven't done it first. ..."
"... The economic model we have is bankrupt and in its death throes ..."
"... Except it's not. It is still very much alive and growing. ..."
"... deregulated capitalism has failed. That is the product of the last 20 years. The pure market is a fantasy just as communism is or any other ideology. In a pure capitalist economy all the banks of the western world would have bust and indeed the false value "earned" in the preceding 20 years would have been destroyed. ..."
"... "Multinationals need to recognise that paying tax is an investment. Without that tax, their markets will slowly evaporate." However, the gains for the transnational rich are immediate and enormous, while the failure of their markets is slow and, so far, almost entirely painless. ..."
"... Accountants now hold the whip hand in government and business. They know the price of everything but the value of nothing. They advocate selling off industries, outsourcing to low wage economies, zero hours contracts and deregulation (under the bogus campaign line of cutting red tape). ..."
"... Google, Amazon and Apple haven't taught anyone in this country to read. But even though an illiterate market wouldn't be so great for them, they avoid their taxes, because they can , because they are more powerful than governments. ..."
"... If you invent a set of rules that says a country that deficit spends above an arbitrary percentage of its GDP is horribly inefficient and far too high then it should not be a surprise that when that happens, it is described as such. ..."
"... But the basic problem is this: it costs a lot of money to cultivate a market � a group of consumers � and the more sophisticated the market is, the more expensive it is to cultivate them. A developed market needs to be populated with educated, healthy, cultured, law-abiding and financially secure people ..."
"... The economic model we have is bankrupt and in its death throes is gobbling up the last scintilla of surplus that can be extracted from the poor ( anyone not independently wealthy). ..."
Dec 03, 2018 | www.theguardian.com

MysticFish , 8 Jun 2013 04:29

'Neoliberalism' is just a sanitised-sounding expression, to cover-up the fact that what we are really seeing here is re-branded, far-right, corporatist ideology.

"Fascism should more properly be called corporatism because it is the merger of state and corporate power."
- Benito Mussolini

NotAgainAgain -> EllisWyatt , 8 Jun 2013 04:15
@EllisWyatt -

There is a major dividing line. There are those who recognise the abuses of the system and lobby for changes and there are those who lobby for further exploitation.

So on the one hand there are relatively rich philanthropists who are quietly supporting campaigns to redistribute wealth and our abstaining, and on the other you have people arguing for repealing employment legislation.Worst of the lot are people who pretend to care about the poor but then proceed to fill their own boots.

As consequence people like Warren Buffet should perhaps be among the good guys, whilst people like Tony Blair are the worst of lot.

Uncertainty -> RedHectorReborn , 8 Jun 2013 04:09
@RedHectorReborn - The rich have extracted all of the wealth from the wells and is now turning to fracking, regardless of the cost to us all.
thenardiers , 8 Jun 2013 04:08
All very true. The failures of markets are well documented in economics: the tendency towards monopoly, the failure to value social goods etc.

In addition, it is ironic that the arch advocates of the 'free market' came begging ( read lobbying) to their governments insisting upon public financial bailouts for themselves or their counter parties. It was the 'free markets' failure to correctly price 'risk' that was the route of the economic collapse.

As regards access to 'free markets' it seems patently obvious that if you extract the most money from that market (Amazon et al), you should contribute a fair share towards the infrastructure of that market: roads, educations, health care etc.

1nn1t -> EllisWyatt , 8 Jun 2013 04:06

@EllisWyatt - ... we have a real problem with corporations that have a default setting of minimize taxes through ever more complex structures. It can't be beyond the wit of HMRC to reduce the complexity of the tax legislation and make it harder to avoid? The prize is continued access to the UK market

We also have the problem that for half the households in the land the level of welfare and benfits rather than wages is the major determinant of their disposable income and general prosperity.

The welfare code is now comparable in size to the tax code. The tax-benefit affairs of the working poor in the UK are now becoming as complex as those of the companies that employ them.

The welfare rights industry, which is essentially tax-benefit-lawyering for claimants, is now as large and complex as the tax-lawyering industry for companies.

It really is insane that we set the minimum wage so low that it attracts income tax, and then attempt to collect tax from the employing company to fund a tax credit to top up the same low wages that the same company is paying.

marienkaefer , 8 Jun 2013 04:00
The neoliberalism that the IMF still preaches pays no account to any of this. It insists that the provision of work alone is enough of an invisible hand to sustain a market

Does it? where does it say that? An article which as usual blanket condemns "financial institutions" but actually means banks.

gyges1 , 8 Jun 2013 03:59
The West became over-indebted when it embraced globalisation which necessarily impoverishes the Middle and Working Classes of the developed nations. A chap called Jimmy Goldsmith warned of this and was widely condemned for it. There is another issue Guardianistas would rather not confront : you can a welfare state or you can have open borders. But you can't have both.
JamesValencia , 8 Jun 2013 03:59
Most interesting.

Though I'd say private enterprise is capable of building markets - but not of sustaining them. Take books: If few people know how to read, someone will start a fee paying school to teach those who can pay for it. Then books will take off. And that will generate money for some, who'll send their kids to school.

However it will always, inevitably, crash at some point: Business can build up, but will always do it in destructuve cycles - exactly like the brush fires that destroy and regenerate the savannas. As somebright spark once said: Capitalism contains the seeds of it's own destruction, or something along those lines.

And we don't want to live like that - so we have regulation, and the state.And the state fertilises, and safeguards, by cutting the grass, making mulch, and spreading the rich gooey muck all over the nice, green, verdant, state controlled pampa.

The cowboys, now, they prefer no cutting of grass, and letting their cattle chomp away undistrurbed. And now my analogy is starting to wear thin.

The bottom line: Private enterprise is inefficient because at it's heart it rules out cooperation. Being happiest if it's a monopoly, there's nothing a business would like better than wipe out all competition.

Hence, the necessity for state spending, and state regulation, which the private sector is blind to, because it can't look ahead.

Rochdalelass , 8 Jun 2013 03:57
Well said Deborah!

People are members of families, and are employers and workers, who are customers or clients, and part of their local communities and professions and trades and hobbyists/clubs who are large scale wholesale consumers who create the markets that provides employment and income to individuals who are workers. And, and, one big circle.

Right now, the neoliberals think that those in the Far East are the workers and those in the West are the consumers, until the Far East becomes the market and wages so low in the West that they become the workers, unless of course some kind souls decide to invest money in Education, Health and infrastructure in Africa on a huge scale, so we then have Africa as the workers and the far East as the market, and the West, apart from those who own large numbers of shares or business outright, presumably either starve to death or pull themselves up by their bootstraps, and start all over again, inventing and setting up completely new industries, providing the newly universally educated and healthy Chinese and Africans and South Americans haven't done it first.

OK. I was against it for a long time, but go ahead. There's no way of avoiding it. Eat the Rich. Apart from the fact that ultra thin is fashionable, and with all that dieting and exercising, they are the only people who actually get the time for lots of exercise these days, and they'll taste incredibly tough and stringy.

EllisWyatt -> CaptainGrey , 8 Jun 2013 03:56
@CaptainGrey - Ssshhh not on CiF, we all know that capitalism has failed its just that we can't point to a successful alternative model because such a thing has never existed, its just that this time its different and the model I advocate will lead us all to the sunny uplands of utopia.

Obviously there will be a little bit of coercion and oppression to get us to those sunny uplands, but you can't make an omlette etc. plus don't worry that stuff will only happen to "bad people"

CaptainGrey -> emkayoh , 8 Jun 2013 03:55
@emkayoh -

The economic model we have is bankrupt and in its death throes

Except it's not. It is still very much alive and growing. The "alternatives" have crashed and burned save Cuba and North Korea. Capitalism, especially the beneficial capitalism of the NHS, free education etc. has won and countless people have gained as a result.
bluebirds -> CaptainGrey , 8 Jun 2013 03:55
@CaptainGrey - deregulated capitalism has failed. That is the product of the last 20 years. The pure market is a fantasy just as communism is or any other ideology. In a pure capitalist economy all the banks of the western world would have bust and indeed the false value "earned" in the preceding 20 years would have been destroyed.
MylesMackie , 8 Jun 2013 03:55
In the 19th century based on experience the public services became part of the public sector to avoid corruption and corporate blackmail. The neoclassical revolution of the late 20th century has pushed us back to days when elites regarded the state as their property. Democracy was a threat which won out either through the British model or violent revolution. A small elite cannot endure if the majority feel exploited.

The Bilderberg Conference should look to the past and learn from the mistakes committed. Neoclassicism will eventually impoverish them

1nn1t -> UnevenSurface , 8 Jun 2013 03:53

@UnevenSurface - Multinationals need to recognise that paying tax is an investment. Without that tax, their markets will slowly evaporate.

"Multinationals need to recognise that paying tax is an investment. Without that tax, their markets will slowly evaporate." However, the gains for the transnational rich are immediate and enormous, while the failure of their markets is slow and, so far, almost entirely painless.
EllisWyatt -> UnevenSurface , 8 Jun 2013 03:52
@UnevenSurface - I think corporation tax is becoming obsolete given globalization and the increasing dominance of online / global distribution.

Amazon, Starbucks (and to a lesser extent Google) need to have people on the ground in their market, for customer service, distribution, warehouse staff, baristas etc. So they'll pay employer taxes etc.

The question is is that enough? I think we are missing a trick with the UK market due to outdated tax legislation that hasn't really changed in 30 years.

After the US the UK is arguably the most attractive market in the world. Large, homogenous, wealthy with a low propensity to save and a rapid rate of adoption of new technology / products. We need to think about how we can exploit this in relation to corporate taxes because even though I am far from left wing, we have a real problem with corporations that have a default setting of minimise taxes through ever more complex structures.

It can't be beyond the wit of HMRC to reduce the complexity of the tax legislation and make it harder to avoid? The prize is continued access to the UK market

bluebirds , 8 Jun 2013 03:42
Accountants now hold the whip hand in government and business. They know the price of everything but the value of nothing. They advocate selling off industries, outsourcing to low wage economies, zero hours contracts and deregulation (under the bogus campaign line of cutting red tape).

All of these policies will ultimately end up with capitalism destroying itself. Low wage stagnation will result in penniless consumers which results in no growth which results in cuttin wages to maintain shareholder returns which results in penniless consumers etc etc etc. All our institutions are gradually eroded and life for the average citizen will become more and more unpleasant.

Willsmodger , 8 Jun 2013 03:42
Profit share may be a way forward, it's not perfect, companies can effectively use it to freeze wages and benefit from unpaid overtime, that creates unemployment as four people working a couple of hours extra ever day are denying someone else a job, but used in the right way it could ensure people get a share in the wealth they help create.

At the sharp end it's tough, at the company I worked at, all the managers were summoned to a meeting in September and told they had until Christmas to increase turnover and profits, or they would be out of a job.

At the same company, one of my managers complained that a successful manager at another branch was a crook. The CEO replied 'Yes, but he's a crook that makes a million pounds in profit every year'. I wonder how Deborah's article would have gone down with him?

peterfieldman , 8 Jun 2013 03:42
Everything was easier when the U S and Europe ran the world's economies with Bank regulations, currency controls and only the establishment could avoid income, capital gains and IHT taxes and grow wealthy generation after generation. Today there are simply too many players in the global arena and the rules have been torn up. We are in a jungle where greed is rife and only the powerful and corrupt survive, shipping and burying their loot in offshore havens.

We need a new global order with a change of mentality and more morality among the world's politicians, banking and corporate leaders. Unless we end corruption and exploitation of natural resources in the poor nations and a fairer distribution of the economic wealth the world faces economic and social collapse

Febo , 8 Jun 2013 03:41

Google, Amazon and Apple haven't taught anyone in this country to read. But even though an illiterate market wouldn't be so great for them, they avoid their taxes, because they can , because they are more powerful than governments.

Is it beyond the wit of government to close these (perfectly legal) loopholes? Otherwise, what you are asking for is for these companies to make charitible donations to government - nothing wrong with that per se, but let's not hide behind the misleading term 'tax avoidance' - companies are obliged to minimise taxes within the law, face it.

Liquidity Jones -> NicholasB , 8 Jun 2013 03:35
@NicholasB -

It is perfectly clear that in much of the EU public expenditure has been horribly inefficient and far too high

If you invent a set of rules that says a country that deficit spends above an arbitrary percentage of its GDP is horribly inefficient and far too high then it should not be a surprise that when that happens, it is described as such.

Whether that has any basis in reality or, as I suspect, is only relevant within its own ridiculous framework, is surely the question.

NotAgainAgain -> Fachan , 8 Jun 2013 03:32
@Fachan -

Deborah Orr is established writer for the Guardian and Married to a Will Self whose is almost certainly a millionaire. She is one of the rich. The idea that envy is driving her politics is just utterly absurd, and suggests a total lack of reflection.

finnkn , 8 Jun 2013 03:31

But the basic problem is this: it costs a lot of money to cultivate a market � a group of consumers � and the more sophisticated the market is, the more expensive it is to cultivate them. A developed market needs to be populated with educated, healthy, cultured, law-abiding and financially secure people

Not really; Amazon is just as happy to sell us trashy films, multipacks of chocolate, obesity drugs and baseball bats to stove our neighbour's head in. There's certainly an argument to be made that companies should have a duty to invest in the infrastructure that enables their product to be transported, stored etc...but they shouldn't be expected to give a toss if their customers are unhealthy ignoramuses. A market's a market.

NotAgainAgain -> NicholasB , 8 Jun 2013 03:24
@NicholasB -

But some countries manage to do this much more efficiently and effectively than others.

In Europe it would appear to be the Social Democratic Nordic countries and Germany which has very strong employment rights. Korea's economic growth was based on government investment and a degree of protectionism. These are precisely the ideas that neoliberalism opposes.

Liquidity Jones , 8 Jun 2013 03:23
If they had adopted The Keynes Plan at the 1944 Bretton Woods conference then the IMF and the World Bank would never have been set up. We most likely would not have had the euro crisis and the problem of trade imbalances between counties would most likely have gone away.

Now that is what I call 'Keynesian'. Feel free to continue to make up your own definitions though.

kingcreosote , 8 Jun 2013 03:19
Socialism for the 1% with the rest scraping around for the crumbs in an ever more divided world run by The Bilderbergers who play the politicians like puppets.
RedHectorReborn -> emkayoh , 8 Jun 2013 03:18
@emkayoh - I am not sure its in its death throes, I think what we are seeing is capitalism attempting to transform itself again. The success of that transformation will depend on how willing people across the western world to put up with reduced welfare, poverty pay and almost no employment rights. If we say no and make things too hot for the ruling class we have a chance to take control of the future direction of our world, if not then what's the point.
NicholasB , 8 Jun 2013 03:16
This is a strange rant. Everyone agrees that free markets need to be nurtured by appropriate state institutions. But some countries manage to do this much more efficiently and effectively than others. It is perfectly clear that in much of the EU public expenditure has been horribly inefficient and far too high.

There is no contradiction between being in favour of free markets and believing that markets and societies should be nurtured appropriately. We think people should be free and all accept that they should be nurtured.

UnevenSurface , 8 Jun 2013 03:10

So why, exactly, given the huge amount of investment needed to create such a market, should access to it then be "free"?

Corporate taxation is best explained as the license that business pays to access the market -- which is in turn created through the schools, hospitals, roads, etc. that the tax pays for. Unfortunately the new Corporate Social Irresponsibility being acted out by multinationals today neatly avoids paying that license, and sooner or later will damage them. Multinationals need to recognize that paying tax is an investment. Without that tax, their markets will slowly evaporate.

emkayoh , 8 Jun 2013 03:09
The economic model we have is bankrupt and in its death throes is gobbling up the last scintilla of surplus that can be extracted from the poor ( anyone not independently wealthy).

[Dec 03, 2018] Neoliberalism is a modern curse. Everything about it is bad and until we're free of it, it will only ever keep trying to turn us into indentured labourers. It's acolytes are required to blind themselves to logic and reason to such a degree they resemble Scientologists or Jehovah's Witnesses more than people with any sort of coherent political ideology, because that's what neoliberalism actually is... a cult of the rich, for the rich, by the rich... and it's followers in the general population are nothing but moron familiars hoping one day to be made a fully fledged bastard.

Highly recommended!
Notable quotes:
"... What sticks in the neoliberalism craw is that the state provides these services instead of private businesses, and as such "rob" them of juicy profits! The state, the last easy cash cow! ..."
"... Who could look at the way markets function and conclude there's any freedom? Only a neoliberal cult member. They cannot be reasoned with. They cannot be dissuaded. They cannot be persuaded. Only the market knows best, and the fact that the market is a corrupt, self serving whore is completely ignored by the ideology of their Church. ..."
"... when Thatcher and Reagan deregulated the financial markets in the 80s, that's when the trouble began which in turn led to the immense crash in 2008. ..."
"... Neo-liberalism is just another symptom of liberal democracy which is government by oligarchs with a veneer of democracy ..."
"... The state has merged with the corporations so that what is good for the corporations is good for the state and visa versa. The larger and richer the state/corporations are, the more shyster lawyers they hire to disguise misdeeds and unethical behavior. ..."
"... If you support a big government, you are supporting big corporations as well. The government uses the taxpayer as an eternal fount of fresh money and calls it their own to spend as they please. Small businesses suffer unfairly because they cannot afford the shyster lawyers and accountants that protect the government and the corporations, but nobody cares about them. ..."
"... Deborah's point about the illogical demands of neoliberalism are indeed correct, which is somewhat ironic as neoliberalism puts objective rationality at the heart of its philosophy, but I digress... ..."
"... There would not be NHS, free education etc. without socialism; in fact they are socialism. It took the Soviet-style socialism ("statism") 70 years to collapse. The neoliberalistic capitalism has already started to collapse after 30 years. ..."
"... I'm always amused that neoliberal - indeed, capitalist - apologists cannot see the hypocrisy of their demands for market access. Communities create and sustain markets, fund and maintain infrastructure, produce and maintain new consumers. Yet the neolibs decry and destroy. Hypocrites or destructive numpties - never quite decided between Pickles and Gove ..."
"... 97% of all OUR money has been handed over to these scheming crooks. Stop bailing out the banks with QE. Take back what is ours -- state control over the creation of money. Then let the banks revert to their modest market-based function of financial intermediaries. ..."
"... The State can't be trusted to create our money? Well they could hardly do a worse job than the banks! Best solution would be to distribute state-created money as a Citizen's Income. ..."
"... To promote the indecent obsession for global growth Australia, burdened with debt of around 250 billion dollars, is to borrow and pay interest on a further 7 billion dollars to lend to the International Monetary Fund so as it can lend it to poorer nations to burden them with debt. ..."
Dec 03, 2018 | www.theguardian.com
szwalby , 8 Jun 2013 06:03
This private good, public bad is a stupid idea, and a totally artificial divide. After all, what are "public spends"? It is the money from private individuals, and companies, clubbing together to get services they can't individually afford.

What sticks in the neoliberalism craw is that the state provides these services instead of private businesses, and as such "rob" them of juicy profits! The state, the last easy cash cow!

TedSmithAndSon , 8 Jun 2013 06:01
Neoliberalism is a modern curse. Everything about it is bad and until we're free of it, it will only ever keep trying to turn us into indentured labourers. It's acolytes are required to blind themselves to logic and reason to such a degree they resemble Scientologists or Jehovah's Witnesses more than people with any sort of coherent political ideology, because that's what neoliberalism actually is... a cult of the rich, for the rich, by the rich... and it's followers in the general population are nothing but moron familiars hoping one day to be made a fully fledged bastard.

Who could look at the way markets function and conclude there's any freedom? Only a neoliberal cult member. They cannot be reasoned with. They cannot be dissuaded. They cannot be persuaded. Only the market knows best, and the fact that the market is a corrupt, self serving whore is completely ignored by the ideology of their Church.

It's subsumed the entire planet, and waiting for them to see sense is a hopeless cause. In the end it'll probably take violence to rid us of the Neoliberal parasite... the turn of the century plague.

fr0mn0where -> CaptainGrey , 8 Jun 2013 05:51
@CaptainGrey -

"Capitalism, especially the beneficial capitalism of the NHS, free education etc. has won and countless people have gained as a result."

I agree with you and it was this beneficial version of capitalism that brought down the Iron Curtain. Working people in the former Communist countries were comparing themselves with working people in the west and wanted a piece of that action. Cuba has hung on because people there compare themselves with their nearest capitalist neighbor Haiti and they don't want a piece of that action. North Korea well North Korea is North Korea.

Isn't it this beneficial capitalism that is being threatened now though? When the wall came down it was assumed that Eastern European countries would become more like us. Some have but who would have thought that British working people would now be told, by the likes of Kwasi Kwarteng and his Britannia Unchained chums, that we have to learn to accept working conditions that are more like those in the Eastern European countries that got left behind and that we are now told that our version of Capitalism is inferior to the version adopted by the Communist Party of China?

jazzdrum -> bullwinkle , 8 Jun 2013 05:51
@bullwinkle - No , when Thatcher and Reagan deregulated the financial markets in the 80s, that's when the trouble began which in turn led to the immense crash in 2008.
Eddiel899 , 8 Jun 2013 05:51
Neo-liberalism is just another symptom of liberal democracy which is government by oligarchs with a veneer of democracy.

This type of government began in America about 150 years ago with the Rockefellers, Carnegie, J.P. Morgan, Ford etc who took advantage of new inventions, cheap immigrant labour and financial deregulation in finance and social mores to amass wealth for themselves and chaos and austerity for workers.

All this looks familiar again today with new and old oligarchs hiding behind large corporations taking advantage of the invention of the €uro, mass immigration into western Europe and deregulation of the financial "markets" and social mores to amass wealth for a super-wealthy elite and chaos and austerity for workers.

So if we want to see where things went wrong we need only go back 150 years to what happened to America. There we can also see our future?

WilliamAshbless -> CaptainGrey , 8 Jun 2013 05:49
@CaptainGrey

The beneficial capitalism of the NHS, free education etc. has won

Free education and the NHS are state institutions. As Debbie said, Amazon never taught anyone to read. Beneficial capitalism is an oxymoron resulting from your lack of understanding.

cpp4ever -> CaptainGrey , 8 Jun 2013 05:41
@CaptainGrey -

especially the beneficial capitalism of the NHS, free education etc. has won and countless people have gained as a result.

At one and the same time being privatized and having their funding squeezed, a direct result of the neoliberal dogma capitalism of austerity. Free access is being eroded by the likes of ever larger student loans and prescription costs for a start.

ATrueFinn -> SpinningHugo , 8 Jun 2013 05:41
@ SpinningHugo 08 June 2013 10:02am .

Nah. They achieved this by copying the west.

I would not go that far. The Western Capitalist Party is only now getting to be as powerful as CCP and China started the "reforms" in the late 1970s.

succulentpork , 8 Jun 2013 05:36

they avoid their taxes, because they can, because they are more powerful than governments

Let's not get carried away here. Let's consider some of the things governments can do, subject only to a 5 yearly check and challenge:

  1. force people upon pain of imprisonment to pay taxes to them
  2. pay out that tax money to whomever they like
  3. spend money they don't have by borrowing against obligations imposed on future taxpayers without their agreement
  4. kill people in wars, often from the comfort of a computer screen thousands of miles away
  5. print money and give it to whomever they like,
  6. get rid of nation state currencies and replace them with a single, centrally controlled currency
  7. make laws and punish people who break them, including the ability to track them down in most places in the world if they try and run away.
  8. use laws to create monopolies and favour special interests

Let's now consider what power apple have...

- they can make iPhones and try to sell them for a profit by responding to the demands of the mass consumer market. That's it. In fact, they are forced to do this by their owners who only want them to do this, and nothing else. If they don't do this they will cease to exist.

generalelection , 8 Jun 2013 05:26
The state has merged with the corporations so that what is good for the corporations is good for the state and visa versa. The larger and richer the state/corporations are, the more shyster lawyers they hire to disguise misdeeds and unethical behavior.

If you support a big government, you are supporting big corporations as well. The government uses the taxpayer as an eternal fount of fresh money and calls it their own to spend as they please. Small businesses suffer unfairly because they cannot afford the shyster lawyers and accountants that protect the government and the corporations, but nobody cares about them. Remember, that Green Energy is big business, just like Big Pharma and Big Oil. Most government shills have personally invested in Green Energy not because they care about the environment, only because they know that it is a safe investment protected by government for government. The same goes for large corporations who befriend government and visa versa.

... ... ...

finnkn -> NeilThompson , 8 Jun 2013 05:20
@NeilThompson - It's all very well for Deborah to recommend that the well paid share work. Journalists, consultants and other assorted professionals can afford to do so. As a self-employed tradesman, I'd be homeless within a month.
finnkn -> SpinningHugo , 8 Jun 2013 05:17
@SpinningHugo - Interesting that those who are apparently concerned with prosperity for all and international solidarity are happy to ignore the rest of the world when it's going well, preferring to prophesy apocalypse when faced with government spending being slightly reduced at home.
sedan2 -> Fachan , 8 Jun 2013 05:11
@Fachan -

Dont see a lot of solutions in this article - as long as our sentiments revolve around envy of the rich, we wont get very far

Yeah, there actually wasn't anything in this article which even smelled of "envy of the rich". Read it again.

KingOfNothing -> 1nn1t , 8 Jun 2013 05:03
@1nn1t - That is a point which just isn't made enough. This is the first group of politicians for whom a global conflict seems like a distant event.

As a result we have people like Blair who see nothing wrong with invading countries at a whim, or conservatives and UKIP who fail to understand the whole point of the European Court of Human Rights.

They seem to act without thought of our true place in the world, without regard for the truly terrible capacity humanity has for self destruction.

REDLAN1 , 8 Jun 2013 05:03
Deborah's point about the illogical demands of neoliberalism are indeed correct, which is somewhat ironic as neoliberalism puts objective rationality at the heart of its philosophy, but I digress...

The main problem with replacing neoliberalism with a more rational, and fairer system, entails that people like Deborah accept that they will be less wealthy. And that my friends is the main problem. People like Deborah, while they are more than happy to point the fingers at others, are less than happy to accept that they are also part of the problem.

(Generalisation Caveat: I don't know in actuality if Deborah would be unhappy to be less wealthy in exchange for a fairer system, she doesn't say)

Herbolzheim , 8 Jun 2013 04:49
Good critique of conservative-neoliberalism, unless you subscribe to it and subordinate any morals or other values to it. She mentions an internal tension and I think that's because conservatism and neoliberal market ideology are different beasts.
NotAgainAgain -> CaptainGrey , 8 Jun 2013 04:47
@CaptainGrey -

There are different models of capitalism quite clearly the social democratic version in Scandinavia or the "Bismarkian" German version have worked a lot better than the UKs.

DavidPavett , 8 Jun 2013 04:45

Yet, mealy-mouthed and hotly contested as this minor mea culpa is, it's still a sign that financial institutions may slowly be coming round to the idea that they are the problem.

How is it a sign of that? We are offered no clues.

What they don't seem to acknowledge is that the merry days of reckless lending are never going to return;

Try reading a history of financial crashes to dislodge this idea.

... even if they do, the same thing will happen again, but more quickly and more savagely.

This may or may not be true but here it is mere assertion.

The IMF exists to lend money to governments, so it's comic that it wags its finger at governments that run up debt.

At this point I start to have real doubts as to whether Deborah Orr has actually read even the Executive Summary of the Report this article is ostensibly a response to.

All the comments that follow about the need for public infrastructure, education, regulated markets and so on are made as if they were a criticism of the IMF and yet the IMF says many of those same things itself. The IMF position may, of course, be contradictory - but then that is something that would need to be demonstrated. It seems that Deborah has not got beyond reading a couple of Guardian articles on the issues she discusses and therefore is in no position to do this.

Thus, for example in its review of world problems of Feb 2013 the IMF comments favorably that in Bangladesh in order to boost competitiveness

Efforts are being made to narrow the skills gap with other countries in the region, as the authorities look to take full advantage of Bangladesh's favorable demographics and help create conditions for more labor-intensive led growth. The government is also scaling up spending on education, science and technology, and information and communication technology.

Which seems to be the sort of thing Deborah Orr is calling for. She should spend a little time on the IMF website before criticising the institution. It is certainly one that merits much criticism - but it needs to be informed.

And the solution to the problems? For Deborah Orr the response

... from the start should have been a wholesale reevaluation of the way in which wealth is created and distributed around the globe, a "structural adjustment", as the philosopher John Gray has said all along.

Does anyone have any idea what this is supposed to mean? There are certainly no leads on this in the link given to "the philosopher" John Gray. And what a strange reference that is. John Gray, in his usual cynical mode, dismisses the idea of progress being achieved by the EU. But then I suppose that is consistent from a man who dismisses the idea of progress itself.

... Conservative neoliberalism is entirely without logic.

The first step in serious political analysis is to understand that the people one opposes are not crazy and are not devoid of logic. If that is not clearly understood then all that is left is the confrontation of assertion and contrary assertion. Of course Conservative neoliberalism has a logic. It is one I do not agree with but it is a logic all the same.

The neoliberalism that the IMF still preaches pays no account to any of this [the need for public investment and a recognition of the multiple roles that individuals have].

Wrong again.

It insists that the provision of work alone is enough of an invisible hand to sustain a market.

And again.

This stuff can't be made up as you go along on the basis of reading a couple of newspaper articles. You actually have to do some hard reading to get to grip with the issues. I can see no signs of that in this piece.

EllisWyatt -> NotAgainAgain , 8 Jun 2013 04:43
@NotAgainAgain - We are going off topic and that is in no small part down to my own fault, so apologies. Just to pick up the point, I guess my unease with the likes of Buffet, Cooper-Hohn or even the wealthy Guardian columnists is that they are criticizing the system from a position of power and wealth.

So its easy to advocate change if you feel that you are in the vanguard of defining that change i.e. the reforms you advocate may leave you worse off, but at a level you feel comfortable with (the prime example always being Polly's deeply relaxed attitude to swingeing income tax increases when her own lifestyle will be protected through wealth).

I guess I am a little skeptical because I either see it as managed decline, a smokescreen or at worst mean spiritedness of people prepared to accept a reasonable degree of personal pain if it means other people whom dislike suffer much greater pain.

Again off topic so sorry about that

NotAgainAgain -> mountman , 8 Jun 2013 04:43
@mountman -

The critical bit is this

"There is a clear legal basis in Germany for the workplace representation of employees in all but the very smallest companies. Under the Works Constitution Act, first passed in 1952 and subsequently amended, most recently in 2001, a works council can be set up in all private sector workplaces with at least five employees."

http://www.worker-participation.eu/National-Industrial-Relations/Countries/Germany/Workplace-Representation

The UK needs to wake up to the fact that managers are sometimes inept or corrupt and will destroy the companies they work for, unless their are adequate mechanisms to hold poor management to account.

ATrueFinn -> SpinningHugo , 8 Jun 2013 04:42
@ SpinningHugo 08 June 2013 9:26am

More people lifted out of poverty in China over the last 25 years than the entire population of South America.

Maybe we need the Chinese Communist Party to take over the world?

ATrueFinn -> CaptainGrey , 8 Jun 2013 04:40
@ CaptainGrey 08 June 2013 8:43am

Capitalism, especially the beneficial capitalism of the NHS, free education etc. has won

There would not be NHS, free education etc. without socialism; in fact they are socialism. It took the Soviet-style socialism ("statism") 70 years to collapse. The neoliberalistic capitalism has already started to collapse after 30 years.

irishaxeman , 8 Jun 2013 04:40
I'm always amused that neoliberal - indeed, capitalist - apologists cannot see the hypocrisy of their demands for market access. Communities create and sustain markets, fund and maintain infrastructure, produce and maintain new consumers. Yet the neolibs decry and destroy. Hypocrites or destructive numpties - never quite decided between Pickles and Gove, y'see.
EllisWyatt -> JamesValencia , 8 Jun 2013 04:38
@JamesValencia - Actually on reflection you are correct and I was wrong in my attack on the author above. Having re-read the article its a critique of institutions rather than people so my points were wide of the mark.

I still think that well heeled Guardian writers aren't really in a position to attack the wealthy and politically connected, but I'll save that for a thread when they explicitly do so, rather than the catch all genie of neoliberalism.

bullwinkle -> bluebirds , 8 Jun 2013 04:38
@bluebirds -

@CaptainGrey - deregulated capitalism has failed. That is the product of the last 20 years. The pure market is a fantasy just as communism is or any other ideology. In a pure capitalist economy all the banks of the western world would have bust and indeed the false value "earned" in the preceding 20 years would have been destroyed.

If the pure market is a fantasy, how can deregulated capitalism have failed? Does one not require the other? Surely it is regulated capitalism that has failed?

snodgrass , 8 Jun 2013 04:36
97% of all OUR money has been handed over to these scheming crooks. Stop bailing out the banks with QE. Take back what is ours -- state control over the creation of money. Then let the banks revert to their modest market-based function of financial intermediaries.

The State can't be trusted to create our money? Well they could hardly do a worse job than the banks! Best solution would be to distribute state-created money as a Citizen's Income.

EllisWyatt -> 1nn1t , 8 Jun 2013 04:35
@1nn1t - Some good points, there is a whole swathe of low earners that should not be in the tax system at all, simply letting them keep the money in their pocket would be a start.

Second the minimum wage (especially in the SE) is too low and should be increased. Obviously the devil is in the detail as to the precise rate, the other issue is non compliance as there will be any number of businesses that try and get around this, through employing people too ignorant or scared to know any better or for family businesses - do we have the stomach to enforce this?

Thirdly there is a widespread reluctance to separate people from the largesse of the state, even at absurd levels of income such as higher rate payers (witness child tax credits). On the right they see themselves as having paid in and so are "entitled" to have something back and on the left it ensures that everyone has a vested interest in a big state dipping it hands into your pockets one day and giving you something back the next.

Broken system

1nn1t -> Uncertainty , 8 Jun 2013 04:34

@Uncertainty - Which is why the people of the planet need to join hands.

The only group of people in he UK to see that need were the generation that faced WW2 together. It's no accident that, joining up at 18 in 1939, they had almost all retired by 1984.
BruceMullinger , 8 Jun 2013 04:31
To promote the indecent obsession for global growth Australia, burdened with debt of around 250 billion dollars, is to borrow and pay interest on a further 7 billion dollars to lend to the International Monetary Fund so as it can lend it to poorer nations to burden them with debt.

It is entrapment which impoverishes nations into the surrender of sovereignty, democracy and national pride. In no way should we contribute to such economic immorality and the entire economic system based on perpetual growth fuelled by consumerism and debt needs top be denounced and dismantled. The adverse social and environmental consequence of perpetual growth defies all sensible logic and in time, in a more responsible and enlightened era, growth will be condemned.

[Dec 03, 2018] The banks put their own short-term interests above their long-term interests of financial stability

Notable quotes:
"... Socialism for the 1% with the rest scraping around for the crumbs ..."
"... Don't you think a global recession and massive banking collapse should be classified as 'crash and burn'? ..."
"... It's one of the major contradictions of modern conservatism that the raw, winner-takes-all version of capitalism it champions actually undermines the sort of law abiding, settled communities it sees as the societal ideal. ..."
"... Rich people have benefited from this more than most: they need workers trained by a state-funded education system and kept healthy by a state-funded healthcare system; they depend on lending from banks rescued by the taxpayer; they rely on state-funded infrastructure and research, and – like all of us – on a society that does not collapse. Whether they like it or not, they would not have made their fortunes without the state spending billions of pounds ..."
"... You have to be careful when you take on the banksters. Abe Lincoln John Kennedy and Hitler all tried or (in Kennedy's case planned) on the issuance of money via the state circumventing the banks. All came to a sticky end. No wonder politicians run scared of them. ..."
"... Now, that's a novel interpretation! The working people in "Communist" countries had free healthcare and education, guaranteed employment and heavily subsidized housing. The reason we have healtcare and free education is that working people in Capitalist countries would otherwise have revolted to have Socialism. In the absence of competition, there is no benefit for the Capitalist to be "beneficial". ..."
"... The banks could plainly see that they were stoking a bubble, but chose not to pass on the increased risk of lending to consumers by raising their interest rates and coolling the market. Why? Because they were making a handsome short-term profit. The banks put their own short-term interests above their long-term interests of financial stability. When the house of cards came tumbling down - we bailed them out. It was idiotic banks who failed to properly control their risk of lending that caused the crash, not interventionist politicians. ..."
Jun 08, 2013 | www.theguardian.com
JFBridge , 8 Jun 2013 08:21
Virtually everyone knows what went wrong, with the exception only of uncontrollable ultra-right neoliberal buffs who try and put the blame on everyone else with various out and out lies and deceptions, and they are thankfully petering and dying out by the day, including deluded contributors to CiF, who seem to be positively and cruelly reveling in the suffering their beloved thesis has and is causing.

So, now that we know the symptoms, what about the cure? The coalition want to make the poor and vulnerable suffer even more than they have done over the last three decades or so while still refusing to clamp down and wholly regulate the bankers, corporates and free markets, who still hold too much power like the unions in the 70's,while Ed Miliband and 'One Nation Labour' merely suggest in mild, diffident terms about financial regulation and a more balanced economy, while still not wanting to upset those nice bankers too much.

It's time they were upset though, and made to pay for their errors and recklessness; while they still award themselves bonuses and take advantage of Gideon's recent tax cut, the poor and vulnerable who were never responsible for the long recession now have money taken off them and struggle to feed, pay bills and clothe themselves and their families, supported by the Daily Fail and co. who look on them as scrounging, lazy, criminal, violent, drunken, drug addicted and promiscuous sub-humans, who deserve their fate.

There's quite a few in the middle/professional classes (many bankers) if they didn't know, but they don't bother with such, do they?

MatthewBall -> emkayoh , 8 Jun 2013 08:20
@emkayoh -

The economic model we have is bankrupt and in its death throes

I am not sure if this is true. We have the same economic system (broadly speaking, capitalism) as nearly every country in the world, and the world economy is growing at a reasonable rate, at around 3-4% for 2013-14 (see http://www.imf.org/external/pubs/ft/weo/2013/01/pdf/c1.pdf for more details).

We perceive a problem in (most of) Europe and North America because our economies are growing more slowly than this, and in some cases not at all. The global growth figure comes out healthy because of strong growth in the emerging countries, like China, Brazil and India, who are narrowing the gap between their living standards and ours. So, the world as a whole isn't broken, even if our bit of it is going through a rough patch.

This is pertinant to a discussion of Deborah Orr's article, because in it she calls for global changes:

The response from the start should have been a wholesale reevaluation of the way in which wealth is created and distributed around the globe, a "structural adjustment", as the philosopher John Gray has said all along.

My point is: I don't think this argument will work, because I don't see why the emerging countries would want wholesale change to what, for them, is quite a successful recipe, just because it going down badly in Europe. Instead, European countries need to do whatever it takes to fix their banking systems; but also learn to live within their means, and show some more of the discipline and enterprise that made them wealthy in the first place.

jazzdrum -> Uncertainty , 8 Jun 2013 08:12
@Uncertainty - I`m not defending philanthropy, i am saying in answer to some personal attacks on Miss Orr below the line, that her status as either rich or poor is irrelevant, it is her politics that count .
Tony Benn and Polly Toynbee both receive much abuse in this manner on Cif.
00000010 -> colonelraeburn , 8 Jun 2013 08:10
@colonelraeburn - You really are under the quaint illusion you are in a democracy...
MickGJ -> kingcreosote , 8 Jun 2013 08:08

@kingcreosote - Socialism for the 1% with the rest scraping around for the crumbs

And yet the rest have more crumbs than under any other conceivable system. Look at the difference that even limited market liberalisation has made to poverty in China. No loaf, no crumbs. You can always throw the loaf out of the window if you don't like the inequality and then no-one can have anything.

That's fair, isn't it?

Uncertainty -> jazzdrum , 8 Jun 2013 07:57
@jazzdrum - I don't have much time for those rich who feel guilty about their greed and do 'charity' to salve their souls. Oh and get a Knighthood as a result.

The more honest giver is the person who gives of what little they have in their purse and go without as a result. Not a tax dodge re-branded as philanthropy.

Also, such giving from the rich often has strings and may be tailored to what they think are the 'deserving poor'. I don't like that either.

Uncertainty -> CaptainGrey , 8 Jun 2013 07:54
@CaptainGrey - That is not capitalism. You cannot point to the benefits of socialism and call it capitalism.

Don't you think a global recession and massive banking collapse should be classified as 'crash and burn'?

liberalcynic -> Herbolzheim , 8 Jun 2013 07:52
@Herbolzheim - It's one of the major contradictions of modern conservatism that the raw, winner-takes-all version of capitalism it champions actually undermines the sort of law abiding, settled communities it sees as the societal ideal.
Rainborough , 8 Jun 2013 07:51
"Why, you have to ask yourself, is this vast implausibility, this sheer unsustainability, not blindingly obvious to all?"

- asked the journalist employed by an organ of the capitalist press, with an implausible air of puzzlement.

liberalcynic -> szwalby , 8 Jun 2013 07:50
@szwalby -

The state, the last easy cash cow!

Damn, you've just revealed Richard Branson's secret business plan.
AndyPerry , 8 Jun 2013 07:39
More and more people are beginning to understand this as a fundamentally political problem ( ref. @XerXes1369). The 'left' prefers to concentrate on the role of a financial elite (which is supposed to be exerting some kind of malign supernatural force on the state), to divert attention from what mainstream 'left' poltics in this society has turned out to be.
szwalby -> colonelraeburn , 8 Jun 2013 07:26
@colonelraeburn -

When the state is taking over 60% of the income of even those on minimum wages we se how, from the very top to the very bottom, that the state is the problem.

It's become a monster that will destroy us all.

I would query where you get these figures from, but where it not for the state, do you really think that somebody on the minimum wage, keeping 100% of their wages, would be able to afford, out of these wages, health care, schooling for their children, infrastructure maintenance, their own police force and army, their own legal system? This from an article in the Independent:

Rich people have benefited from this more than most: they need workers trained by a state-funded education system and kept healthy by a state-funded healthcare system; they depend on lending from banks rescued by the taxpayer; they rely on state-funded infrastructure and research, and – like all of us – on a society that does not collapse. Whether they like it or not, they would not have made their fortunes without the state spending billions of pounds.

So the state, although not perfect benefit all of us, get over it!
outragedofacton , 8 Jun 2013 07:23
You have to be careful when you take on the banksters. Abe Lincoln John Kennedy and Hitler all tried or (in Kennedy's case planned) on the issuance of money via the state circumventing the banks. All came to a sticky end. No wonder politicians run scared of them.
CaptainGrey -> WilliamAshbless , 8 Jun 2013 07:04
@WilliamAshbless -

Free education and the NHS are state institutions. As Debbie said, Amazon never taught anyone to read. Beneficial capitalism is an oxymoron resulting from your lack of understanding.

Yes they are state institutions and the tax system should be changed to prevent Amazon et al from avoiding paying their fair share. But beneficial capitalism is not an oxymoron, it is alive and present in virtually every corner of the world. Rather than accuse me of not understanding, I think you would do well to take the beam out of your eye.
ATrueFinn -> fr0mn0where , 8 Jun 2013 07:02
@ fr0mn0where 08 June 2013 10:51am

I agree with you and it was this beneficial version of capitalism that brought down the Iron Curtain. Working people in the former Communist countries were comparing themselves with working people in the west and wanted a piece of that action.

Now, that's a novel interpretation! The working people in "Communist" countries had free healthcare and education, guaranteed employment and heavily subsidized housing. The reason we have healtcare and free education is that working people in Capitalist countries would otherwise have revolted to have Socialism. In the absence of competition, there is no benefit for the Capitalist to be "beneficial".

s0lar1 -> colonelraeburn , 8 Jun 2013 06:33
@colonelraeburn -

The banks couldn't stop property hyperinflation, at 20% a year for well over a decade.

The banks could plainly see that they were stoking a bubble, but chose not to pass on the increased risk of lending to consumers by raising their interest rates and coolling the market. Why? Because they were making a handsome short-term profit. The banks put their own short-term interests above their long-term interests of financial stability. When the house of cards came tumbling down - we bailed them out. It was idiotic banks who failed to properly control their risk of lending that caused the crash, not interventionist politicians.

[Dec 03, 2018] The classic form of neoliberal corruption: The rotating door betweens banks and intelligence agencies brass

This is the key feature of modern National Security State. Note where Mueller was after his retirement and before becoming the Special Procecutor.
Dec 03, 2018 | discussion.theguardian.com

MysticFish -> gbru2505 , 8 Jun 2013 16:23

@gbru2505 -

Last week there was a story where HSBC have taken on a senior ex-MI5 person to shore up their money laundering 'problems'. They're being fined over a billion dollars by the fed for taking blood money from murderers, drug dealers and corrupt politicians.

Not the Security Services' Director General by any chance?

-- In a filing to the Bermuda Stock Exchange ("BSX"), HSBC Holdings plc (Ticker: HSBC.BH), announced the appointment of Sir Jonathan Evans to the Board of Directors.

The filing stated:

Sir Jonathan Evans (55) has been appointed a Director of HSBC Holdings plc with effect from 6 August 2013. He will be an independent non-executive Director and a member of the Financial System Vulnerabilities Committee.

Sir Jonathan's career in the Security Service spanned 33 years, the last six of which as Director General. During his career Sir Jonathan's experience included counter-espionage, protection of classified information and the security of critical national infrastructure. His main focus was, however, counter-terrorism, both international and domestic including, increasingly, initiatives against cyber threats. As Director General he was a senior advisor to the UK government on national security policy and attended the National Security Council.

He was appointed Knight Commander of the Order of the Bath (KCB) in the 2013 New Year's Honours List and retired from the Service in April 2013.

http://www.bsx.com/NewsArticle.asp?articleID=1100794622

gbru2505 , 8 Jun 2013 16:13
I think there's some really good points in the article.

Last week there was a story where HSBC have taken on a senior ex-MI5 person to shore up their money laundering 'problems'. They're being fined over a billion dollars by the fed for taking blood money from murderers, drug dealers and corrupt politicians.

Their annual fee for this guy with 20 years experience to tackle a billion dollar fine and the disfunction in their organisation? A lousy 100 k. Fee to UK for training him? 0.

Ridiculous! It should have been 10 times that for him and a finders fee of perhaps 10 million to the state.

Realistically, the state has NO clue about it's real value, or the real value of the UK population. And the example above, I think, demonstrates banks' attitude to the global demand that they clean up their act. We neef to take this lot to the cleaners before the stench gets any worse.

[Oct 08, 2018] American Caesar Tucker Carlson's Conservative Revolution by Jake Bowyer

Notable quotes:
"... Ship of Fools is no apology for Trumpism. Indeed, Carlson calls Trump "vulgar and ignorant." But he rightly points out that Trump "didn't invade Iraq or bail out Wall Street. He didn't lower interest rates to zero, or open the borders, or sit silently by as the manufacturing sector collapsed and the middle class died." Basically, Donald J. Trump is not your average American politician. Thank God. ..."
"... Well, Ship of Fools excoriates finance capitalism and the class that has constantly reaped economic benefits out of the labor of American workers without contributing anything of substance to the American body politic. The Democrats used to be the party of populist rabble rousers like Huey Long and Al Smith. ..."
"... Explicit in this critique of America's Ruling Class is the fact that democracies are unstable and prone to self-destruction. In modern America, the elite do not attend to the population, cynical race-mongering is used to win votes at the cost of internal peace, and chicken hawks like Max Boot and William Kristol still receive adulation in the Main Stream Media despite their disastrous record of cheering on military misadventures that kill thousands of Americans. (To say nothing of their fanatical opposition to Trump -- despite the fact that he won the presidency when their catspaws McCain and Romney ignominiously failed). Ship of Fools correctly notes that this is what an empire looks like in its final days. ..."
"... Jake Bowyer [ Email him ] is the pseudonym of an American college student. ..."
Oct 08, 2018 | www.unz.com
Jake Bowyer October 3, 2018

Since the late fall of 2016, Democrats and other Leftist types have been decrying President Donald J. Trump as "not normal" and a "threat to democracy." Of course, this is hogwash of the most rank sort. The same people lambasting Trump for his supposed " authoritarianism " are the same people who have created the modern American oligarchy. Tucker Carlson , the popular Fox News who wrote the single most brilliant and prescient Main Stream Media article on the Trump phenomenon: Donald Trump Is Shocking, Vulgar and Right | And, my dear fellow Republicans, he's all your fault, by Tucker Carlson, Politico, January 28, 2016.

That was written before, let it be noted, Trump's double-digit triumph in the New Hampshire primary -- has continued to speak verboten things . Now he takes aim at America's oligarchic class in his just-released book Ship of Fools: How a Selfish Ruling Class Is Bringing America to the Brink of Revolution.

For Carlson, moral and social rot in the United States starts at the very top -- the place where Democrats and Republicans https://vdare.com/posts/they-want-to-lose-gop-congress-sounds-retreat-on-border-wall-funds-democratic-priorities to maintain unpopular elite rule. Carlson compares this American elite to blind drunk captains steering a sinking ship. Making matters worse: the fact that, in keeping with Carlson's nautical parallel, "Anyone who points out the consequences of what they're [the elite] doing gets keelhauled." Gavin McInnes (banned from Twitter ) and Alex Jones (banned from everything ) would agree.

Ship of Fools is no apology for Trumpism. Indeed, Carlson calls Trump "vulgar and ignorant." But he rightly points out that Trump "didn't invade Iraq or bail out Wall Street. He didn't lower interest rates to zero, or open the borders, or sit silently by as the manufacturing sector collapsed and the middle class died." Basically, Donald J. Trump is not your average American politician. Thank God.

For much of Ship of Fools , Carlson comes off sounding like someone with his heart in the center-left. Some cheeky Twitter users might even dub Carlson's latest book National Bolshevism.

Why? Well, Ship of Fools excoriates finance capitalism and the class that has constantly reaped economic benefits out of the labor of American workers without contributing anything of substance to the American body politic. The Democrats used to be the party of populist rabble rousers like Huey Long and Al Smith.

But Carlson points out that "the Democratic Party is now the party of the rich." Rather than attacking mega-wealthy people like Amazon's Jeff Bezos or Apple's Tim Cook , the modern American Left is completely in thrall to money and corporate power. This hurts every American not in the upper income bracket.

Republicans are no better. They remain wedded to the idea of being the party of business, and as such many Republican elected officials support Open Borders because that would provide their donors with an endless supply of cheap labor. This support comes at the cost of angering a majority of Republican voters.

In sum, both parties have given up on the native-born American workers. And, beginning in 2016, American workers began pushing back at the ballot box.

Ship of Fools is a bleak book. It is also much better than the usual fluff penned (or signed) by Fox News pundits. Carlson tells uncomfortable truths and engages with topics that until very recently were only considered fit for the fringe Right (like VDARE.com ).

Take for instance the displacement of white Americans, especially white working-class Americans. America is a nation of 200 million white people. Native-born whites pay more in taxes, provide the majority of America's soldiers, sailors, Marines, and airmen, and are the offspring of the people who built this country. For this hard work and loyalty, foreign-born editors at the New York Times tweet "#CancelWhitePeople." Hordes of Antifa types cheer on the displacement of native-born whites, while the political elite do nothing to combat rising drug overdose deaths and suicides in the Midwest, rural Northeast, and South. As Carlson warns, " White identity politics will be a response to a world in which identity politics is the only game there is."

And, as anti-white vitriol increases and whites are demoted from majority status, Carlson predicts that white interest groups will form and flex their muscles when they feel that their backs are up against the wall.

At several points in Ship of Fools , Carlson sincerely grieves for the lost Liberal-Left of his childhood. He misses the environmentalists who cared about littering, not about some abstract thing called climate change. He misses those Leftists who cried about injustice in the world rather than ranting and raving at the behest of the elite class. Without an honest Left, America could further descend into corporate anarcho-tyranny -- a place where businesses control free speech and only a small sliver of people enjoy the benefits of the modern and high-tech economy.

Ship of Fools ends with a warning: either practice democracy or be prepared for authoritarian rule.

"In order to survive, democracies must remain egalitarian," Carlson argues."When all the spoils seem to flow upward, the majority will revolt in protest."

Explicit in this critique of America's Ruling Class is the fact that democracies are unstable and prone to self-destruction. In modern America, the elite do not attend to the population, cynical race-mongering is used to win votes at the cost of internal peace, and chicken hawks like Max Boot and William Kristol still receive adulation in the Main Stream Media despite their disastrous record of cheering on military misadventures that kill thousands of Americans. (To say nothing of their fanatical opposition to Trump -- despite the fact that he won the presidency when their catspaws McCain and Romney ignominiously failed). Ship of Fools correctly notes that this is what an empire looks like in its final days.

In this sense the elites may be right to characterize President Trump as a populist. After all, Julius Caesar gave the common man order, security, and bread in the face of a cold and sterile system. By attempting to dismantle the elite consensus, Trump, Trumpism , and America First may just be the first entries in a new age of all-American Caesarism.

We should only be so lucky!

Jake Bowyer [ Email him ] is the pseudonym of an American college student.

KenG , says: October 7, 2018 at 6:36 am GMT

I enjoyed the book immensely even though I'm a socialist myself. Tucker's disdain for wars, technology companies, and the ruling class are a breath of fresh air. I also enjoy his show but I do wish he wouldn't talk over the guests he disagrees with.
AlreadyPublished , says: October 7, 2018 at 4:39 am GMT
There must be a reason why people like j g strijdom and curmudgeon, with their slimy unsubstantiated charges, despise Tucker Carlson. I suspect it is this:

[Sep 12, 2018] State AGs to Step Up Enforcement Against Tech Companies

Sep 12, 2018 | www.nakedcapitalism.com

Such separate priorities may also extend to areas in which the federal government regulates extensively, such as securities law (or at least did in the not-so-distant past), as I discussed in this post, Mary Jo White Leaves Behind a Weakened SEC for Trump to Weaken Further :

During the administration of President George W. Bush, state attorneys general used state authority to prosecute securities and financial transgressions. Notably, former New York state Attorney General Eliot Spitzer relied on authority provided by the state's 1910 Martin Act, which predates the federal securities law, to take legal action actions against insurance firms for brokerage practices, hedge funds for improper trading practices in mutual fund shares, and investment banks for conflicts of interest that distorted the investment research they provided, to name some of the most significant initiatives. Spitzer's successors as attorney general, current New York Governor Andrew Cuomo and current Attorney General Eric Schneiderman, have not had the impact that Spitzer had when he was lauded as the Sheriff of Wall Street.

Another New York regulator, Benjamin Lawsky, superintendent of New York's Department of Financial Services used the threat of denying a NY state banking charter to force tougher terms on settlements in which the Eric Holder/Loretta Lynch DoJ and other federal regulators had rolled over (see this post by Yves for a summary: Wall Street's Nemesis, Benjamin Lawsky, to Resign in June .).Other states, such as California, have their own expansive statutes– though now-US Senator Kamala Harris demonstrated when she served as California's AG that she more interested in virtue-signalling than taking scalps.

Crusading state AGs are not just Democrats. As I wrote in New EPA Lawsuit Policy Advances Trump's Deregulatory Agenda , Scott Pruitt– who recently stepped down as EPA administrator:

has been a longstanding bugbear of environmentalists. In his previous role as attorney general for the state of Oklahoma– a major producer of oil and natural gas– he either filed or joined lawsuits that sought to stymie the modest pro-regulatory environmental and climate change agenda the EPA previously espoused.

Like-minded Republicans AGs often joined him in these efforts.

So, What's On the Agenda for These AGs?

The most immediate threat to the tech industry might arise in the area of antitrust enforcement– which, shall we say, has not been a major priority for recent administrations, although the European Union has investigated and fined Google over competition concerns. Yet as recently as the Clinton administration, Microsoft was a target of an major antitrust action instigated by multiple state AGs in conjunction with the DoJ

Over to the WSJ again:

The [Sessions meeting ] announcement -- released amid last week's congressional hearings into the practices of Facebook and Twitter -- shed little light on who was raising the concerns or what remedies might be under consideration. But recent comments by several of the state attorneys general suggest they are actively exploring an antitrust investigation and hope to enlist Washington.

"I think the companies are too big, and they need to be broken up," Republican Louisiana Attorney General Jeff Landry said Thursday in a radio interview.

There is some evidence that party politics are driving this potential enforcement initiative:

Republicans' allegations that the tech companies suppress conservative voices has bubbled up for months in conservative media and was amplified by Mr. Trump late last month . Democrats have said that is the issue -- more than antitrust policy -- behind the coming Justice Department meeting, with Republicans hoping to stir their conservative base ahead of November elections

All the attorneys general who are expected to attend this month's meeting in Washington are Republicans, with Democratic officials saying they have yet to be invited.

Although it's too soon to say where these preliminary discussions between the DoJ and the the state AGs may lead, I want to draw attention to another development– the weakening of the hold of corporate Democrats on the direction of the party. David Sirota published an interesting piece in Monday's Guardian, Yes, let's wipe out Trump. But take neoliberal Democrats with him, too .

Sirota's piece wasn't especially concerned about Big Tech per se, and focused on a percolating progressive policy agenda. He mentions regulation, but only as it affects financial firms and pharmaceutical companies and where so far, corporate Democrats have successfully insulated their paymasters from any significant increase in legal liability.

But if progressives start to wield greater influence on the Democratic side– and Republican AGs follow through with a tougher approach to enforcement– the future might shape up to be a less comfortable operating environment for US internet companies. Or at least we might hope. /n

TS , September 12, 2018 at 8:31 am

I can understand antitrust and data-privacy violations but with regard to "stifling the free exchange of ideas" on their platforms, what legal statutes are being violated even if these companies were found to be supressing conservative speech?

Mark , September 12, 2018 at 1:46 pm

The OLG Munich recently decided that Facebook violated the right to free speech of a politician by deleting her post. Facebook gave their community rules as a reason for the deletion. The court ruled that Facebook could not rely on their rights a privat entity to do as they please in their own place (Hausrecht in German) but rather had to uphold the right to free spreech granted by the German constitution. This is a new interpretation of the law by a significant court and possibly transfers some of the burden ususally only placed on the state (uphold free speech) unto a privat company. The reason given is that Facebook is a controlling, monopolistic entity in the realm of social interaction and has therefore more responsibilties. The OLG Munich is the highest court in its court-district, Southern Bavaria, only below the federal court (BGH) and the ruling sets a binding precedent in its district and serves as an interesting opinion for the rest of Germany. Mind you precedent is of a lot less important in Germany than in the case-law US system and there are many differing rulings out there.

I suppose the arguments for supressing conservative speech or something like that might go a similar route in the US.

source: https://www.techdirt.com/articles/20180907/00455240595/german-court-tells-facebook-it-cant-delete-comments-even-though-german-law-says-it-must-delete-comments.shtml

PS: Please excuse the rambling source it is the only one in English I could find; also take my reasoning regarding the court ruling with a pinch of salt since I am not an attorney. At least the apparent confusion between forced deletion on one hand and forced non-deletion on the other hand mentioned in the source is easily explained. Free speech has its limits and violating those is in some cases a criminal offence, e.g. criminal insults, incitement to violance against people, etc.. A recent law in Germany requires sites like Facebook or Twitter to take obvious cases of such posts down, instead of waiting for the police or prosecution to act. This is worthy of a discussion in itself but it still leaves room between what Facebook arbitrarily deems acceptable based in its guidelines and what is acceptable under free speech in Germany, and here the court made their ruling.

[Sep 09, 2018] Revisiting Privatization s Claims

Notable quotes:
"... Fourth, privatization was supposed to reduce public sector monopolies, but there is often little evidence of significant erosion of the monopolies enjoyed by privatized SOEs. Arguably, technological change and innovation, e.g., in telecommunications, were far more significant in eroding privatized monopolies and reducing costs to consumers, than privatization per se. ..."
"... Also, natural monopolies (such as public utilities) are often deemed inefficient due to the monopolistic nature of the industry or market. The question which arises then is whether private monopoly is better, even with regulation intended to protect the public interest. ..."
Sep 06, 2018 | www.nakedcapitalism.com
Jerri-Lynn here. This short post usefully debunks arguments advanced to promote the privatization fairy. The author's reminds us that state ownership, when done properly, as in Singapore, can offer its own benefits and " is recognized there as the reason for public accountability, better governance and management."

By Jomo Kwame Sundaram, former UN Assistant Secretary General for Economic Development. Originally published at Inter Press Service

KUALA LUMPUR, Malaysia, Sep 4 2018 (IPS) � Several arguments have been advanced to justify privatization since the 1980s. Privatization has been advocated as an easy means to:

  1. Reduce the government's financial and administrative burden, particularly by undertaking and maintaining services and infrastructure;
  2. Promote competition, improve efficiency and increase productivity in providing public services;
  3. Stimulate private entrepreneurship and investment to accelerate economic growth;
  4. Help reduce the public sector's presence and size, with its monopolistic tendencies and bureaucratic support.

Moot case for privatization

First, privatization is supposed to reduce the government's financial and administrative burdens, particularly in providing services and infrastructure. Earlier public sector expansion was increasingly seen as the problem, rather than part of the solution. Thus, reducing the government's role and burden was expected to be popular.

Second, privatization was believed by some to be a means to promote competition, improve efficiency and increase productivity in service delivery. This belief was na�ve, confusing the question of ownership with that of promoting competition.

It was believed that privatization would somehow encourage competition, not recognizing that competition and property rights are distinct, and not contingent issues. Associated with this was the presumption that competition would automatically result in greater efficiency as well as improved productivity, not recognizing economies of scale and scope in many instances.

Third, privatization was expected to stimulate private entrepreneurship and investment. There is also a popular, but na�ve belief that privatization was going to stimulate private entrepreneurship when, in fact, the evidence is strong, in Malaysia and elsewhere, that privatization often crowds out the likelihood of small and medium-sized enterprises actually emerging to fill the imagined void, presumed to exist following privatization.

Admittedly, there is scope for new entrepreneurship with privatization as new ways and ideas offered by the private sector are considered � or reconsidered � as the new privatized entity seeks to maximize the profits/rents to be secured with privatization.

However, the private purchase of previously public property, in itself, does not augment real economic assets. Private funds are thus diverted, to take over SOEs, and consequently diminished, rather than augmented. Hence, private funds are less available for investing in the real economy, in building new economic capacities and capabilities.

Fourth, privatization was supposed to reduce public sector monopolies, but there is often little evidence of significant erosion of the monopolies enjoyed by privatized SOEs. Arguably, technological change and innovation, e.g., in telecommunications, were far more significant in eroding privatized monopolies and reducing costs to consumers, than privatization per se.

From the 1980s, if not before, various studies have portrayed the public sector as a cesspool of abuse, inefficiency, incompetence and corruption. Books and articles, often with clever titles such as 'vampire state', 'bureaucrats in business' and so on, provided the justification for privatization.

Undoubtedly, there were some real horror stories, which have been conveniently and frequently cited as supposedly representative of all SOEs. But other experiences can also be cited to show that SOEs can be run quite efficiently, even on commercial bases, confounding the dire predictions of the prophets of public sector doom.

Has privatization improved efficiency?

Although some SOEs have been better run and are deemed more efficient after privatization, the overall record has hardly been consistent. Thus, it is important to ascertain when and why there have been improvements, or otherwise. It is also important to remember that better-run privatized SOEs, in and of themselves, do not necessarily serve the national or public interest better.

Undoubtedly, most SOEs can be better run and become more efficient. But this is not always the case as some SOEs are indeed already well run. For instance, very few privatization advocates would insist that most SOEs in Singapore are poorly run.

As its SOEs are generally considered well-run, public ownership is not used there to explain poor governance, management or abuse; instead, public ownership is recognized there as the reason for public accountability, better governance and management.

Principal-agent managerial delegation dilemma

Hence, in different contexts, with appropriately strict supervision, SOEs can be and have indeed been better run. Privatization, in itself, does not solve managerial delegation problems, i.e., the principal-agent problem, as it is not a problem of public ownership per se.

With SOEs, the principal is the state or the government while the agents are the managers and supervisors, who may -- or may not -- pursue the objectives intended by the principal.

This is a problem faced by many organizations. It is also a problem for private enterprises or corporations, especially large ones, especially where the principal (shareholders) may not be able to exercise effective supervision or control over the agent.

Also, natural monopolies (such as public utilities) are often deemed inefficient due to the monopolistic nature of the industry or market. The question which arises then is whether private monopoly is better, even with regulation intended to protect the public interest.

The answer needs to be ascertained analytically on the basis of evidence, and cannot be presumed a priori. If an industry is a natural monopoly, what does privatization achieve? Often, it means a transfer to private hands, which can be problematic and possibly dangerous for the public interest.

[Aug 07, 2018] Trillion Dollar Companies the Apple Empire and Concentrated Markets by Binoy Kampmark

Notable quotes:
"... New York Times ..."
"... The Four: The Hidden DNA of Amazon, Apple, Facebook and Google ), ..."
"... Power and influence has shifted. Political leaders have little of these relatively speaking, certainly over the behavioural consistency and content of subjects and citizens. Someone like Mark Zuckerberg, distinctly outside a political process he can still control, does. "He can turn off or on your mood. He can take any product up or down. He can pretty much kill any company in the tech space." And that's just Facebook. ..."
Aug 07, 2018 | www.counterpunch.org

It seems a distant reality, or nightmare now: a company that was near defunct in 1996, now finding itself at the imperial pinnacle of the corporate ladder. Then, publications were mournful and reflective about the corporation that gave us the Apple Computer. An icon had fallen into disrepair. Then came the renovations, the Steve Jobs retooling and sexed-up products of convenience.

Apple's valuation last Thursday came in at $1 trillion and may well make it the first trillion dollar company on the planet. That its assets are worth more than a slew of countries is surely something to be questioned rather than cheered. This un-elected entity, with employees versed in evading, as far as possible, the burdens of public accountability, poses a troubling minder about how concentrated financial power rarely squares with democratic governance.

Chalking up such a mark is only impressive for those keeping an eye on the trillion dollar line. China's state-owned PetroChina is another muscular contender for getting there first , while the Saudi Arabian energy company Aramco, which produces a far from negligible 10 percent of the world's oil, could well scoot past Apple should it go public.

Cheering was exactly what was demanded by James Pethokoukis of the American Enterprise Institute, whose piece in The Week suggests that Apple reached that mark "the right way". The critics of such concentrated power, technology company or otherwise, were simply wrong. "For them, superbig is automatically superbad."

Praise for Apple, an abstract being, is warranted in the way that its ally, modern capitalism, should be. "The story of Apple is really the story of modern capitalism doing what it does best: turning imagination into reality." The author prefers to see Apple, and Amazon, as products of US genius in the capitalist context.

The New York Times is similarly impressed, linking individual gargantuan successes to the broader American effort in the economy. A small gaggle of US companies commanding "a larger share of total corporate profits" than at any time since the 1970s, is not necessarily something to snort at. The nine-year bull market has, essentially, been powered by the four technology giants. "Their successes are also propelling the broader economy, which is on track for its fastest growth rate in a decade."

To its credit, the paper does pay lip service to concerns that such "superstar firms" are doing their bit to stifle wage growth, shrink an already struggling, barely breathing middle class, while jolting income inequality.

This is where the trouble lies: a seemingly blind understanding of capitalism's inner quirks and unstable manifestations. The paradox behind the tech giant phenomenon does not lie in the wisdom that innovation comes from competition. The converse is claimed to be true: that concentration, oligopolistic power, and strings pulled by a few players is the way to keep innovation alive. This was Microsoft's vain argument during the 1990s, something that did not sit well with the antitrust denizens.

The fraternity of economists, rarely capable in agreeing on broader trends, has become abuzz with literature focused on one unsettling topic: the continuing, and accelerating concentration of US industry. Gustavo Grullon, Yelena Larkin and Roni Michaely noted in April last year that government policies encouraging competition in industry had been "drastically reversed in the US" with a 75 percent increase in the Herfindahl-Hirschman index (HHI) measuring market concentration. (Antitrust regulators beware.) The authors observe how, "Lax enforcement of antitrust regulations and increasingly technological barriers to entry appear to be important factors behind this trend."

Marketing professor from NYU, Scott Galloway, is one who has supped from the cup of the tech giants. He has written about their exploits ( The Four: The Hidden DNA of Amazon, Apple, Facebook and Google ), his addresses having become something of a viral phenomenon with analyses of the companies at the DLD Conference in Munich. Initially seduced by the bling and the product, he enjoyed the magic mushroom inducements the tech giants supplied, relished in their success and stock options, extolled their alteration of human behaviour. "This started as a love affair. I want to be clear. I love these companies."

This year, a change of heart took place. Galloway, after spending "the majority of the last two years" of his life "really trying to understand them and the relationship with the ecosystem" is convinced that these behemoths must be broken up. The big four, striving all powerful deities, sources of mass adoration, have become "our consumptive gods". "And as a result of their ability to tap into these very basic instincts, they've aggregated more market cap than the majority of nation's GDP".

Power and influence has shifted. Political leaders have little of these relatively speaking, certainly over the behavioural consistency and content of subjects and citizens. Someone like Mark Zuckerberg, distinctly outside a political process he can still control, does. "He can turn off or on your mood. He can take any product up or down. He can pretty much kill any company in the tech space." And that's just Facebook.

What Galloway points out with a forceful relevance is that liberties and freedoms are not the preserve of estranged markets and their bullish actors. Regulation and oversight are required. A return to competition would only be possible through some form of intervention and coaxing, perhaps even economic violence. The memory of the great financial crisis initially stimulated an appetite for regulation. In recent years, such urgings have been satiated. The tech giants, fully aware of this, continue to burgeon.

[Aug 04, 2018] The US empire was always conducting trade wars that even included deliberately created cartels

Notable quotes:
"... These laws allow a company that believes a foreign rival is selling a product below cost to request that the government impose special tariffs to protect it. Selling products below cost is called dumping, and the duties are called dumping duties. Often, however, the U.S. government determines costs on the basis of little evidence, and in ways which make little sense. To most economists, the dumping duties are simply naked protectionism. Why, they ask, would a rational firm sell goods below cost? ..."
"... Cartels work by restricting output, thereby raising prices. O'Neill's interest was no surprise to me; what did surprise me was the idea that the U.S. government would not only condone a cartel but actually play a pivotal role in setting one up. He also raised the specter of using the antidumping laws if the cartel was not created. These laws allow the United States to impose special duties on goods that arc sold at below a "fair market value," and particularly when they are sold below the cost of production. ..."
"... The reality is that the US empire was always conducting trade wars that included not only tariffs on specific products, but even deliberately created cartels. ..."
"... In the early 90s the Clinton administration uncritically adopted the neoliberal doctrine from Ronald Reagan and continued the big fraud against the majority of the Americans. ..."
"... On the one hand, the Clinton administration was selling the big fairy tale of neoliberalism to the American public: free market capitalism would bring prosperity for all through that trickle-down fiasco. And it was translated, as always, in further cuts in public spending - more tax-cuts for the super-rich. On the other hand, behind the scenes, the same administration was implementing the most aggressive protectionism in favor of some US corporations and against consumers. ..."
Aug 04, 2018 | failedevolution.blogspot.com

Donald Trump is using his trade wars to support the part of the US capital that has heavily lost from free trade globalization, which is more powerful than ever in our days. This is also part of the Trump agenda to persuade Americans for his "patriotic devotion" based on his "America First" slogan.

The reality is that the US empire was always conducting trade wars that included not only tariffs on specific products, but even deliberately created cartels.

In the early 90s the Clinton administration uncritically adopted the neoliberal doctrine from Ronald Reagan and continued the big fraud against the majority of the Americans.

On the one hand, the Clinton administration was selling the big fairy tale of neoliberalism to the American public: free market capitalism would bring prosperity for all through that trickle-down fiasco. And it was translated, as always, in further cuts in public spending - more tax-cuts for the super-rich. On the other hand, behind the scenes, the same administration was implementing the most aggressive protectionism in favor of some US corporations and against consumers.

In his book Globalization and its discontents , Joseph Stiglitz describes how the United States under Clinton administration set up a cartel in favor of the US aluminum industry:

The United States supports free trade, but all too often, when a poor country does manage to find a commodity it can export to the United States, domestic American protectionist interests are galvanized. This mix of labor and business interests uses the many trade laws - officially referred to as "fair trade laws," but known outside the United States as "unfair fair trade laws"- to construct barbed-wire barriers to imports.

These laws allow a company that believes a foreign rival is selling a product below cost to request that the government impose special tariffs to protect it. Selling products below cost is called dumping, and the duties are called dumping duties. Often, however, the U.S. government determines costs on the basis of little evidence, and in ways which make little sense. To most economists, the dumping duties are simply naked protectionism. Why, they ask, would a rational firm sell goods below cost?

During my term in government, perhaps the most grievous instance of U.S. special interests interfering in trade - and the reform process - occurred in early 1994, just after the price of aluminum plummeted. In response to the fall in price, U.S. aluminum producers accused Russia of dumping aluminum.

Any economic analysis of the situation showed clearly that Russia was not dumping. Russia was simply selling aluminum at the international price, which was lowered both because of a global slowdown in demand occasioned by slower global growth and because of the cutback in Russian aluminum use for military planes. Moreover, new soda can designs used substantially less aluminum than before, and this also led to a decline in the demand.

As I saw the price of aluminum plummet, I knew the industry would soon be appealing to the government for some form of relief, either new subsidies or new protection from foreign competition. But even I was surprised at the proposal made by the head of Alcoa, Paul O'Neill: a global aluminum cartel.

Cartels work by restricting output, thereby raising prices. O'Neill's interest was no surprise to me; what did surprise me was the idea that the U.S. government would not only condone a cartel but actually play a pivotal role in setting one up. He also raised the specter of using the antidumping laws if the cartel was not created. These laws allow the United States to impose special duties on goods that arc sold at below a "fair market value," and particularly when they are sold below the cost of production.

I worked hard to convince those in the National Economic Council that it would be a mistake to support O'Neill's idea, and I made great progress. But in a heated subcabinet meeting, a decision was made to support the creation of an international cartel.

While I had managed to convince almost everyone of the dangers of the cartel solution, two voices dominated. The State Department, with its close connections to the old-line state ministries, supported the establishment of a cartel. The State Department prized order above all else, and cartels do provide order. The old-line ministries, of course, were never convinced that this movement to prices and markets made sense in the first place, and the experience with aluminum simply served to confirm their views.

Rubin, at that time head of the National Economic Council, played a decisive role, siding with State. At least for a while, the cartel did work. Prices were raised. The protfits of Alcoa and other producers were enhanced. The American consumers - and consumers throughout the world - lost, and indeed, the basic principles of economics, which teach the value of competitive markets, show that the losses to consumers outweigh the gains to producers. Donald Trump is using his trade wars to support the part of the US capital that has heavily lost from free trade globalization, which is more powerful than ever in our days. This is also part of the Trump agenda to persuade Americans for his "patriotic devotion" based on his "America First" slogan.

The reality is that the US empire was always conducting trade wars that included not only tariffs on specific products, but even deliberately created cartels.

In the early 90s the Clinton administration uncritically adopted the neoliberal doctrine from Ronald Reagan and continued the big fraud against the majority of the Americans.

On the one hand, the Clinton administration was selling the big fairy tale of neoliberalism to the American public: free market capitalism would bring prosperity for all through that trickle-down fiasco. And it was translated, as always, in further cuts in public spending - more tax-cuts for the super-rich. On the other hand, behind the scenes, the same administration was implementing the most aggressive protectionism in favor of some US corporations and against consumers.

In his book Globalization and its discontents , Joseph Stiglitz describes how the United States under Clinton administration set up a cartel in favor of the US aluminum industry:

The United States supports free trade, but all too often, when a poor country does manage to find a commodity it can export to the United States, domestic American protectionist interests are galvanized. This mix of labor and business interests uses the many trade laws - officially referred to as "fair trade laws," but known outside the United States as "unfair fair trade laws"- to construct barbed-wire barriers to imports.

These laws allow a company that believes a foreign rival is selling a product below cost to request that the government impose special tariffs to protect it. Selling products below cost is called dumping, and the duties are called dumping duties. Often, however, the U.S. government determines costs on the basis of little evidence, and in ways which make little sense. To most economists, the dumping duties are simply naked protectionism. Why, they ask, would a rational firm sell goods below cost?

During my term in government, perhaps the most grievous instance of U.S. special interests interfering in trade - and the reform process - occurred in early 1994, just after the price of aluminum plummeted. In response to the fall in price, U.S. aluminum producers accused Russia of dumping aluminum.

Any economic analysis of the situation showed clearly that Russia was not dumping. Russia was simply selling aluminum at the international price, which was lowered both because of a global slowdown in demand occasioned by slower global growth and because of the cutback in Russian aluminum use for military planes. Moreover, new soda can designs used substantially less aluminum than before, and this also led to a decline in the demand.

As I saw the price of aluminum plummet, I knew the industry would soon be appealing to the government for some form of relief, either new subsidies or new protection from foreign competition. But even I was surprised at the proposal made by the head of Alcoa, Paul O'Neill: a global aluminum cartel.

Cartels work by restricting output, thereby raising prices. O'Neill's interest was no surprise to me; what did surprise me was the idea that the U.S. government would not only condone a cartel but actually play a pivotal role in setting one up. He also raised the specter of using the antidumping laws if the cartel was not created. These laws allow the United States to impose special duties on goods that arc sold at below a "fair market value," and particularly when they are sold below the cost of production.

I worked hard to convince those in the National Economic Council that it would be a mistake to support O'Neill's idea, and I made great progress. But in a heated subcabinet meeting, a decision was made to support the creation of an international cartel.

While I had managed to convince almost everyone of the dangers of the cartel solution, two voices dominated. The State Department, with its close connections to the old-line state ministries, supported the establishment of a cartel. The State Department prized order above all else, and cartels do provide order. The old-line ministries, of course, were never convinced that this movement to prices and markets made sense in the first place, and the experience with aluminum simply served to confirm their views.

Rubin, at that time head of the National Economic Council, played a decisive role, siding with State. At least for a while, the cartel did work. Prices were raised. The protfits of Alcoa and other producers were enhanced. The American consumers - and consumers throughout the world - lost, and indeed, the basic principles of economics, which teach the value of competitive markets, show that the losses to consumers outweigh the gains to producers.

http://digamo.free.fr/stig2002

It was the time where the Democrats had become Republicans and the US bipartisan dictatorship was established for good to serve the corporate America.

https://youtu.be/8d1ibtOVImg

[Jul 30, 2018] Google Bitten by 2nd Antitrust Fine in the EU, $5 Billion, Hugest Ever Anywhere. Third Waiting in the Wings by Lambert Strether

Notable quotes:
"... By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street. ..."
"... But don't cry for Google. These practices helped it earn it a net profit of $12.7 billion in 2017 and of $19.5 billion in 2016. The decision and a fine of enormous magnitude has been expected. And Google's shares are currently flat for the day. ..."
"... "The decision and a fine of enormous magnitude has been expected. And Google's shares are currently flat for the day." ..."
"... An unlocked phone direct from the mfg instead of the carrier will have fewer apps. Also you can disable many apps, just ignore the "may cause other apps to misbehave " message; it isn't true. Some of the apps you do need, and online forums will list which you need and which you don't. ..."
"... if you can quit FB cold turkey you can reduce your exposure to Google. For example I went back to using a paper calendar. ..."
"... LineageOS is a current Android version and not several years old like with earlier Moto G versions, it gets up to date security patches, has no spyware. You can even install only the Google Apps you want, and can delete or uninstall pretty much anything. Especially on older phones with limited storage this is a godsend. ..."
Jul 19, 2018 | www.nakedcapitalism.com

Lambert here: The EU doesn't mess around, does it?

By Wolf Richter, a San Francisco based executive, entrepreneur, start up specialist, and author, with extensive international work experience. Originally published at Wolf Street.

In the US, the internet giants – Google, Facebook, Amazon, et al. – can do pretty much as they please, interrupted only by occasional hearings in Congress, where Mark Zuckerberg, or whoever, has to grin-and-bear it for a few hours, knowing that this too shall pass. The EU takes antitrust actions against super-dominant giants a tad more seriously.

The EU's Competition Commission, after a three-year investigation, hit Google with a €4.3 billion antitrust fine – $5 billion – the highest fine ever by any antitrust agency anywhere.

No one dominates like Google. According to earlier EU findings cited by Bloomberg , Google's market share exceeds 90% for general Internet search, licensed mobile device operating systems, and app stores for Android software.

"Google has used Android as a vehicle to cement the dominance of its search engine," EU Competition Commissioner Margrethe Vestager told reporters. "These practices have denied rivals the chance to innovate and compete on the merits."

The fine is so large because of Google's "very serious illegal behavior" going back to 2011 and due to the huge revenues Google has earned with this behavior, she said.

In addition, Google was given 90 days to stop its "illegal practices" of forcing cellphone makers that use Google's Android operating system to install Google apps.

This fine comes on top of the €2.4-billion fine the EU hit Google with in 2017 after an investigation into Google's shopping-search service.

And the EU is not through yet. It's investigating Google's online advertising contracts and could issue an additional fine. Online advertising is Google's primary revenues source.

Bloomberg:

The EU said Google ensures that Google Search and Chrome are pre-installed on "practically all Android devices" sold in Europe. Users who find these apps on their phones are likely to stick with them and "do not download competing apps in numbers that can offset the significant commercial advantage derived on pre-installation."

Google's actions reduce the incentives for manufacturers to install and for users to seek out competing apps, it said.

The probe targeted contracts that require Android-phones makers to take Google's search and browser apps and other Google services when they want to license the Play app store, which officials say is a "must-have" for new phones.

The EU also found illegal Google's "significant financial incentives" to telecoms operators and manufacturers that exclusively install Google search on devices. Rivals couldn't compete with these payments, making it difficult for any other search engine to get their app pre-installed. The EU said Google stopped doing this in 2014.

Google's contracts also prevented handset makers selling phones using other versions of Android, the EU said. This hampered manufacturers from making devices using Amazon.com Inc.'s Fire OS Android version, it said.

Regulators rejected arguments that Apple Inc. competes with Android, saying Apple's phone software can't be licensed by handset makers and that Apple phones are often priced outside many Android users' purchasing power. Users face "switching costs" to move from Apple to Android and would continue to face Google Search as a default on Apple devices.

In a long statement on its blog , holier-than-thou Google praises itself from A through Z, in essence portraying itself as the greatest gift to mankind and that therefore, it should be allowed to do as it pleases. It includes this:

Today, because of Android, there are more than 24,000 devices, at every price point, from more than 1,300 different brands, including Dutch, Finnish, French, German, Hungarian, Italian, Latvian, Polish, Romanian, Spanish and Swedish phone makers.

And these devices are running on Android. In other words: Google is everywhere, and its ads and apps are on all these devices. Hence the Competition Commission's point: if you're this dominant, you've got to follow some rules.

At the end of its long statement, Google said: "We intend to appeal." Companies always appeal fines. Google is no exception. And the end product might be much less ambitious.

At the press conference, Vestager said it was up to Google to figure out how to comply with the Commission's order. "The obvious minimum" Google would need to do, she said, is that the "contractual restrictions disappear."

But don't cry for Google. These practices helped it earn it a net profit of $12.7 billion in 2017 and of $19.5 billion in 2016. The decision and a fine of enormous magnitude has been expected. And Google's shares are currently flat for the day.

"This emerging trend highlights just how much risk some investors are willing to take in the current environment." Read As Risks Balloon, Yield Chasers Blow Off the Fed


Raulb , July 19, 2018 at 7:32 am

It's interesting free market advocates are always going on about regulations, the need for free markets and market efficiency but don't seem to care so much about monopolies, outsize profits, the concentration of market power and its abuse that further impedes the operation of free markets and the billionaires that result.

Google's dominance in search and mobile is market failure. Facebook's dominance of social is market failure. Amazon's dominance is market failure, Apple being able to accumulate $800 billion it does not know what to do with is market failure.

Under conventional market theory all these entities would have stiff competition and not be able to accumulate outsize profits or monopoly power so the question is where is the competition and how come the the market is not working? And while the theories continue these firms concentrate even more power, control and windfall profits.

How come free market advocates always seem to be more concerned about attempts to impose minimum wages, health care or proper working conditions on amazon workers for instance than any of this? And we will not even talk about negative externalities like the emergence of a global spyware economy based on surveillance and creepily staking people 24/7. And using seemingly endless 'VC funds' to build these US centric monopolies.

oaf , July 19, 2018 at 8:17 am

We are being stalked; and a virtual individual, more or less fleshed-out, is created in the Cloud for each of us it is based on our behavior, every possible detail of which is incorporated into the dossier. How accurate these representations are can be affected by multiple variables Fake news? How about *Fake Browsing* or *Fake Shopping*. Feel free to experiment!!!

Carolinian , July 19, 2018 at 11:37 am

We are being stalked by allowing ourselves to be stalked. All Android apps carry a "permissions" warning telling how they are planning to stalk you. And of course smartphones themselves are spybots by design–a business model pioneered by Apple, not Google. One could argue that many of the worst current practices of Google are the result of trying to imitate competitors such as Apple and Facebook.

Android is based on open source Linux and there's probably no reason why smartphone manufacturers couldn't get their free operating systems elsewhere. Perhaps one big reason they don't is that they are in on the stalking.

blennylips , July 19, 2018 at 3:48 pm

Back in 2013, a google engineer, Beena Bhatia, took out this patent for google: http://patft.uspto.gov/netacgi/nph-Parser ..blah..blah..blah

I found in a marginalrevolution.com article back then. Turns out MR got it from here: http://www.dailymail.co.uk/sciencetech/article-2515635/Google-files-patent-robot-writes-Facebook-posts-emails-tweets–need-FULL-access-scan-accounts.html

The patent was filed by a Google software engineer on behalf of the firm It describes a system that analyses a user's online posts, emails and texts The system, or bot, would then generate automated replies for future posts These replies would be written in a way that mimics that person's usual language and tone

From the patient:

( 1 of 1 )
United States Patent 8,589,407
Bhatia November 19, 2013
Automated generation of suggestions for personalized reactions in a social network

Abstract

A system and method for automatic generating suggestions for personalized reactions or messages. A suggestion generation module includes a plurality of collector modules, a credentials module, a suggestion analyzer module, a user interface module and a decision tree. The plurality of collector modules are coupled to respective systems to collect information accessible by the user and important to the user from other systems such as e-mail systems, SMS/MMS systems, micro blogging systems, social networks or other systems. The information from these collector modules is provided to the suggestion analyzer module. The suggestion analyzer module cooperates with the user interface module and the decision tree to generate suggested reactions or messages for the user to send. The suggested reactions or messages are presented by the user interface module to the user. The user interface module also displays the original message, other information about the original message such as others' responses, and action buttons for sending, discarding or ignoring the suggested message.

If representations are not accurate, you need to volunteer more info till they get you right.

ST , July 19, 2018 at 8:38 am

"The decision and a fine of enormous magnitude has been expected. And Google's shares are currently flat for the day."

As big a fine as this is that last sentence shows that fines don't work. A monopolist will always pass on fines for it's illegal behaviour to its (captive) consumer/s. The only remedy is for criminal proceedings to be bought against it's senior officers with guaranteed jail time to persuade them to stop. That or breaking up the company.

pretzelattack , July 19, 2018 at 9:35 am

and antitrust law enforcement is a joke in the u.s. but hey, russia russia russia.

Big River Bandido , July 19, 2018 at 11:10 am

One serious project for the left, once it gains power, will be to reverse and destroy the entire line of legal argument that grants personhood to corporations.

Of particular harm are the court decisions on this point in the last 20 years or so, which have brought this concept to its logical extreme. (I'm thinking in particular of the recent gay-wedding-cake case, in which the Court [i.e., Justice Kennedy] implied that corporations have a right to hold, promote, and exercise political opinions, just as if they were a real person with the fiat. The so-called rationale of that decision is far worse in its long-term implications than the immediate outcome of the case.)

nervos belli , July 19, 2018 at 3:10 pm

Even a monopolist cannot simply Ma pass on the fines. Cause if they could have increased prices already since as you write, they are monopoly. Why haven't they done it? Monopolists are not dumb, they already extract the maximum price they think the market can bear.

LarryB , July 19, 2018 at 11:12 am

In the end, the only effect that this is going to have is to transfer money from Google to the EU. Cell phone manufacturers will install Chrome and Google Search whether Google requires it or not. There simply isn't anything else out there that works as well.

Arizona Slim , July 19, 2018 at 11:28 am

Yours Truly has an Android phone. With more than 150 apps, and guess what: I didn't install most of them. They simply came with the phone.

I can recall a recent incident when I needed to call 911 and my phone was off. I turned it on, and, guess what, those 150-plus apps just HAD to update. That process took 15 minutes.

Fortunately, I wasn't in a life-threatening situation. I was only trying to call to report gunfire nearby. In central Tucson, that happens fairly often.

Since the phone was in update mode for 15 minutes before I could even get to the opening screen with the "emergency call" link, I decided not to call 911. It was simply too late to make a timely report.

If I had my druthers, I'd rather have a phone with just a handful of apps. I don't need all of this Google crud. Especially if if poses a risk to health and safety.

albert , July 19, 2018 at 12:50 pm

Why do you put up with 150 apps?

Are you implying that you can't uninstall them?

. .. . .. -- .

ChiGal in Carolina , July 19, 2018 at 2:46 pm

An unlocked phone direct from the mfg instead of the carrier will have fewer apps. Also you can disable many apps, just ignore the "may cause other apps to misbehave " message; it isn't true. Some of the apps you do need, and online forums will list which you need and which you don't.

On my current Android form I have not signed into Chrome and use DDG instead of Google. Pretty much easy as pie Slim, attagirl -- if you can quit FB cold turkey you can reduce your exposure to Google. For example I went back to using a paper calendar.

oh , July 19, 2018 at 2:54 pm

Root your phone and delete all those apps including Google's. Don't use anything google -- gmail, youtube, chrome, google search, google voice, google groups and more of the EVIL company's concoctions created solely to spy on you and sell your data.

Needless to say the crooked cell phone carriers will farm your data and track you.

I'm so sick of these crooked companies, google, facebook, netflix, whatsapp, linkedin and others that snoop on you. Get tutamail or protonmail for your e-mail.

nervos belli , July 19, 2018 at 2:59 pm

Root your phone and delete all those apps including Google's.

This is the wrong way to approach this. The right way ist to install a 3rd party ROM like LineageOS and then not install any gapps.

Be prepared however that only very few programs will work. You will then lack Google play services and they are needed for many many programs. Not much more than what is in f-droid. There is of course no play store whatsoever then.

nervos belli , July 19, 2018 at 3:04 pm

What exact phone model is it?

Arizona Slim , July 19, 2018 at 6:07 pm

It's a Moto G from Motorola.

nervos belli , July 20, 2018 at 10:27 am

For whatever reason my reply didn't go through this morning.PS: this is now the third attempt even. Now replacing all URLs in hope it will go through

I wrote exact model for a reason: there are about two dozen different Moto G versions over 6 years of releases.

Pretty much all of them allow however LineageOS or other third party Android images. Those have no bloatware apps except what comes with the OS itself. If the LineageOS download section has no image for your specific phone, then visit xda-developers forum or needrom which both have even more.

LineageOS is a current Android version and not several years old like with earlier Moto G versions, it gets up to date security patches, has no spyware. You can even install only the Google Apps you want, and can delete or uninstall pretty much anything.
Especially on older phones with limited storage this is a godsend.

Synoia , July 19, 2018 at 11:40 am

I believe that under German law (and I'm not 100% positive of this), executives and directors can become personally liable for the actions of the businesses they manage.

A $5 Billion levied on directors and management, and not shareholders, would appear to be more effective.

Those responsible bear none of the penalty. And, if corporation be people, then is the corporation and its officers conspiring?

ChiGal in Carolina , July 19, 2018 at 2:53 pm

I hope Eric Schmidt pays all $5b out of his pocket and they use it to fund the studies of monopoly impacts he put the kibosh on. Some community service too wouldn't be a bad idea for such a bully.

nervos belli , July 19, 2018 at 3:02 pm

We have the same sort of corporate veil in Germany as all other modern western capitalist countries in form of "Kapitalgesellschaft". A public company is such a company, the other would be the GmbH aka Ltd.

A manager who does criminal things (see Diesel scandal VW/VAG an Audi manager was recently held in custody) can be held liable including fines or jail. But I don't know of any anti-trust actions which pierced the veil.

David Carl Grimes , July 19, 2018 at 12:48 pm

What ever happened to "Don't be evil"

[Jul 25, 2018] Trump and Corporatism

Notable quotes:
"... For many years some have seen the US as a form of corporatism* - as a country run in the interests of the corporations and those who lead them. There is considerable evidence that in many senses they are correct. However to see Trump as the epitome of this 'rule by corporations' I think misses something important. Trump is different from what went before in important respects. ..."
"... The government of Donald Trump is different. It is a selective plutocracy , and with one important exception that plutocracy is selected by Trump. In that way it can also be seen as a democratic dictatorship , where the complexity of government requires some delegation of power to other individuals. Like many dictatorships, some of those individuals are the dictator's family members. ..."
"... The photo above is taken from an extraordinary recent event (watch here ) where Trump walks down a line of senior executives, who in turn stand up and say what they are doing for the US and pledge to do more. Each statement is applauded with a positive statement by Trump, as his daughter trails behind. These are top companies: IBM, Microsoft, General Motors etc. It is all a show, of course, but of a kind the US has never seen before. It seems indicative that this is not just a continuation of past corporatism but something quite different. These are corporate executives doing the President's bidding for fear or favour. ..."
Jul 23, 2018 | mainlymacro.blogspot.com
For many years some have seen the US as a form of corporatism* - as a country run in the interests of the corporations and those who lead them. There is considerable evidence that in many senses they are correct. However to see Trump as the epitome of this 'rule by corporations' I think misses something important. Trump is different from what went before in important respects.

The way business influenced politicians in the past was straightforward. Campaigns cost a lot of money (unlike the UK there are no tight limits on how much can be spent), and business can provide that money, but of course corporate political donations are not pure altruism. The strings attached helped influence both Republican and Democratic politicians. It was influence that followed the money, and that meant to an extent it was representative of the corporate sector as a whole. The same point can be made about political lobbying.

The government of Donald Trump is different. It is a selective plutocracy , and with one important exception that plutocracy is selected by Trump. In that way it can also be seen as a democratic dictatorship , where the complexity of government requires some delegation of power to other individuals. Like many dictatorships, some of those individuals are the dictator's family members.

A dictatorship of this form would not be possible if Congress had strongly opposed it. That it has not is partly because the Republican party chooses not to oppose, but also because Trump wields a power over Congress that can override the influence of corporate money. That power comes from an alliance between Trump and the media that has a big influence on how Republican voters view the world: Fox News in particular but others as well. The irony is that under these conditions democracy in the form of primaries gives Trump and the media considerable power over Congress.

The distinction between traditional corporate power 'from below' and the current Trumpian plutocracy can be seen most clearly in Trump's trade policy. It would be a mistake to see past US trade policy as an uninterrupted promotion of liberalisation, but I think it is fair to say that trade restrictions have never been imposed in such a haphazard way, based on such an obviously false pretext (US surpluses good, deficits bad). Trump's policy is a threat to the international trading system that has in the past been lead by the US, and therefore it is a threat to most of corporate USA. Yet up till now Congress has done very little to stop Trump's ruinous policy.

The photo above is taken from an extraordinary recent event (watch here ) where Trump walks down a line of senior executives, who in turn stand up and say what they are doing for the US and pledge to do more. Each statement is applauded with a positive statement by Trump, as his daughter trails behind. These are top companies: IBM, Microsoft, General Motors etc. It is all a show, of course, but of a kind the US has never seen before. It seems indicative that this is not just a continuation of past corporatism but something quite different. These are corporate executives doing the President's bidding for fear or favour.

All this matters because it creates a tension that could at some stage drive events. So far the Republican party has been prepared to allow Trump to do what he wishes as long as didn't require their explicit approval (i.e their votes in Congress), but it has not as yet bent its collective agenda to his. (Arguments that it already has tend to look at past Republican rhetoric rather than actions.) This uneasy peace may no longer become tenable because of developments on trade, or Russia, or the mid-term election results. If enough Republicans think their future is safer by opposing Trump rather than indulging him, they still have the power to bring Trump to heel. But the longer the peace lasts, Trump's influence on the Republican party will only grow.
* Readers outside the US may be confused by my use of the term corporatism: it is one of those terms with many meanings. I'm using it in the fourth and final sense described here .

[Jul 16, 2018] Donald Trump s Trade Wars Could Lead to the Next Great Depression by Nomi Prins

Jun 22, 2018 | thenation.com

EDITOR'S NOTE: This article originally appeared at TomDispatch.com .

Leaders are routinely confronted with philosophical dilemmas. Here's a classic one for our Trumptopian times: If you make enemies out of your friends and friends out of your enemies, where does that leave you? What does winning (or losing) really look like? Is a world in which walls of every sort encircle America's borders a goal worth seeking? And what would be left in a future fragmented international economic system marked by tit-for-tat tariffs, travel restrictions, and hyper-nationalism? Ultimately, how will such a world affect regular people? Let's cut through all of this for the moment and ask one crucial question about our present cult-of-personality era in American politics: Other than accumulating more wealth and influence for himself, his children , and the Trump family empire , what's Donald J. Trump's end game as president? If his goal is to keep this country from being, as he likes to complain, " the world's piggy bank ," then his words, threats, and actions are concerning. However bombastic and disdainful of a history he appears to know little about, he is already making the world a less stable, less affordable, and more fear-driven place. In the end, it's even possible that, despite the upbeat economic news of the moment, he could almost single-handedly smash that piggy bank himself, as he has many of his own business ventures . Still, give him credit for one thing: Donald Trump has lent remarkable new meaning to the old phrase "the imperial presidency." The members of his administration, largely a set of aging white men, either conform to his erratic wishes or get fired. In other words, he's running domestic politics in much the same fashion as he oversaw the boardroom on his reality-TV show The Apprentice . Now, he's begun running the country's foreign policy in the same personalized, take-no-prisoners, you're-fired style. From the moment he hit the Oval Office, he's made it clear at home and abroad that it's his way or the highway. If only, of course, it really was that simple. What he will learn, if "learning process" and "President Trump" can even occupy the same sentence, is that "firing" Canada, the European Union (EU), or for that matter China has a cost. What the American working and the middle classes will see (sooner than anyone imagines) is that actions of his sort have unexpected global consequences. They could cost the United States and the rest of the world big-time. If he were indeed emperor and his subjects (that would be us) grasped where his policies might be leading, they would be preparing a revolt. In the end, they -- again, that's us -- will be the ones paying the price in this global chess match.

The Art of Trump's Deals

So far, President Trump has only taken America out of trade deals or threatened to do so if other countries don't behave in a way that satisfies him. On his third day in the White House, he honored his campaign promise to remove the United States from the Trans-Pacific Partnership, a decision that opened space for our allies and competitors, China in particular, to negotiate deals without us. Since that grand exit, there has, in fact, been a boom in side deals involving China and other Pacific Rim countries that has weakened, not strengthened, Washington's global bargaining position. Meanwhile, closer to home, the Trump administration has engaged in a barrage of NAFTA-baiting that is isolating us from our regional partners, Canada and Mexico.

Conversely, the art-of-the-deal aficionado has yet to sign a single new bilateral trade deal. Despite steadfast claims that he would serve up the best deals ever, we have been left with little so far but various tariffs and an onslaught against American trading partners. His one claim to bilateral-trade-deal fame was the renegotiation of a six-year-old deal with South Korea in March that doubled the number of cars each US manufacturer could export to South Korea (without having to pass as many safety standards).

As White House Press Secretary Sarah Sanders put it , when speaking of Kim Jong-un's North Korea, "The President is, I think, the ultimate negotiator and dealmaker when it comes to any type of conversation." She left out the obvious footnote, however: any type that doesn't involve international trade.

In the past four months, Trump has imposed tariffs, exempting certain countries, only to reimpose them at his whim. If trust were a coveted commodity, when it came to the present White House, it would now be trading at zero. His supporters undoubtedly see this approach as the fulfillment of his many campaign promises and part of his classic method of keeping both friends and enemies guessing until he's ready to go in for the kill. At the heart of this approach, however, lies a certain global madness, for he now is sparking a set of trade wars that could, in the end, cost millions of American jobs.

The Allies

On May 31st, Commerce Secretary Wilbur Ross confirmed that Canada, Mexico, and the EU would all be hit with 10 percent aluminum and 25 percent steel tariffs that had first made headlines in March. When it came to those two products, at least, the new tariffs bore no relation to the previous average 3 percent tariff on US-EU traded goods.

In that way, Trump's tariffs, initially supposed to be aimed at China (a country whose president he's praised to the skies and whose trade policies he's lashed out at endlessly), went global. And not surprisingly, America's closest allies weren't taking his maneuver lightly. As the verbal-abuse level rose and what looked like a possible race to the bottom of international etiquette intensified, they threatened to strike back.

In June, President Trump ordered that a promised 25 percent tariff on $50 billion worth of imported goods from China also be imposed. In response, the Chinese, like the Europeans, the Canadians, and the Mexicans, immediately promised a massive response in kind. Trump countered by threatening another $200 billion in tariffs against China. In the meantime, the White House is targeting its initial moves largely against products related to that country's " Made in China 2025 " initiative, the Chinese government's strategic plan aimed at making the country a major competitor in advanced industries and manufacturing.

Meanwhile, Mexico began adopting retaliatory tariffs on American imports. Although it has a far smaller economy than the United States, it's still the second-largest importer of US products, buying a whopping $277 billion of them last year. Only Canada buys more. In a mood of defiance stoked by the president's hostility to its people, Mexico executed its own trade gambit, imposing $3 billion in 15 percent�25 percent tariffs against US exports, including pork, apples, potatoes, bourbon, and cheese.

While those Mexican revenge tariffs still remain limited, covering just 1 percent of all exports from north of the border, they do target particular industries hard, especially ones that seem connected to President Trump's voting "base." Mexico, for instance, is by far the largest buyer of US pork exports, 25 percent of which were sold there last year. What its 20 percent tariff on pork means, then, is that many US producers will now find themselves unable to compete in the Mexican market. Other countries may follow suit. The result: a possible loss of up to 110,000 jobs in the pork industry.

Our second North American Free Trade Agreement (NAFTA) partner (for whose prime minister, Justin Trudeau, there is " a special place in hell ," according to a key Trumpian trade negotiator) plans to invoke tariffs of up to 25 percent on about $13 billion in US products beginning on July 1st. Items impacted range "from ballpoint pens and dishwasher detergent to toilet paper and playing cards sailboats, washing machines, dish washers, and lawn mowers." Across the Atlantic, the EU has similarly announced retaliatory tariffs of 25 percent on 200 US products, including such American-made classics as Harley-Davidson motorcycles, blue jeans, and bourbon.

Trump Disses the Former G7

As the explosive Group of Seven, or G7, summit in Quebec showed, the Trump administration is increasingly isolating itself from its allies in palpable ways and, in the process, significantly impairing the country's negotiating power. If you combine the economies of what might now be thought of as the G6 and add in the rest of the EU, its economic power is collectively larger than that of the United States. Under the circumstances, even a small diversion of trade thanks to Trump-induced tariff wars could have costly consequences.

President Trump did try one "all-in" poker move at that summit. With his game face on, he first suggested the possibility of wiping out all tariffs and trade restrictions between the United States and the rest of the G7, a bluff met with a healthy dose of skepticism. Before he left for his meeting with North Korean leader Kim Jong-un in Singapore, he even suggested that the G7 leaders "consider removing every single tariff or trade barrier on American goods." In return, he claimed he would do the same "for products from their countries." As it turned out, however, that wasn't actually a venture into economic diplomacy, just the carrot before the stick, and even it was tied to lingering threats of severe penalties.

The current incipient trade war was actually launched by the Trump administration in March in the name of American " national security ." What should have been highlighted, however, was the possible "national insecurity" in which it placed the country's (and the world's) future. After all, a similar isolationist stance in the 1920s and the subsequent market crash of 1929 sparked the global Great Depression, opening the way for the utter devastation of World War II.

European Union countries were incredulous when Trump insisted, as he had many times before, that the "U.S. is a victim of unfair trade practices," citing the country's trade deficits, especially with Germany and China. At the G7 summit, European leaders did their best to explain to him that his country isn't actually being treated unfairly. As French President Emmanuel Macron explained , "France runs trade deficits with Germany and the United Kingdom on manufactured goods, even though all three countries are part of the EU single market and have zero tariffs between them."

[Jun 24, 2018] Was the Marketplace of Ideas Politically Hijacked -

Notable quotes:
"... A Stigler Center panel examines the influence of Big Five tech firms over political discourse and the marketplace of ideas. ..."
"... "Our country has allowed the concentration of power in giant intermediaries -- Google, Facebook, and Amazon -- vastly more powerful than the original intermediary which we fought, which was the British East India Company." ..."
"... "We have reporters, editors, and publishers of our newspapers who live in fear every day. This is true of the people who publish our books and who write our books. They live in fear [that] Amazon is going to shut them down. Whose fault is that? It's the people in the antitrust community." ..."
"... "Google not only vanquished competition. What it did is it vanquished the antitrust enforcers who are supposed to protect the process of competition." ..."
"... "Basically, Section 230 was a libertarian's dream. They got what they wanted. I am a limited government conservative. What they wanted was a no-government world." ..."
Jun 24, 2018 | promarket.org

Was the Marketplace of Ideas "Politically Hijacked"? Posted on June 21, 2018 by Asher Schechter

A Stigler Center panel examines the influence of Big Five tech firms over political discourse and the marketplace of ideas.

https://www.youtube.com/embed/c0E15ka446M

At one point during Mark Zuckerberg's Senate hearing in April , the Facebook CEO had the following peculiar exchange with Senator Lindsay Graham (R-SC):

Graham: But you, as a company, welcome regulation?

Zuckerberg: I think, if it's the right regulation, then yes.

Graham: You think the Europeans had it right?

Zuckerberg: I think that they get things right.

Graham: . So would you work with us in terms of what regulations you think are necessary in your industry?

Zuckerberg: Absolutely.

Graham: Okay. Would you submit to us some proposed regulations?

Zuckerberg: Yes. And I'll have my team follow up with you so, that way, we can have this discussion across the different categories where I think that this discussion needs to happen.

Graham: Look forward to it.

This telling bit of dialogue was part of an overall pattern: the hearing was meant to hold Facebook (and Zuckerberg himself, as the company's founder, CEO, and de facto single ruler ) accountable for the mishandling of millions of people's private data. Yet one after another , the senators were asking an evasive Zuckerberg if he would be willing to endorse their bills and proposals to regulate Facebook. This mode of questioning repeated itself (to a somewhat lesser extent) during the House's tougher questioning of Zuckerberg the following day.

Needless to say, most company CEOs grilled by Congress following a major scandal that impacts millions of people and possibly the very nature of American democracy are not usually treated in this way -- as private regulators almost on equal footing with Congress.

Facebook, however, is not a typical company. As a recent Vox piece noted, with its vast reach of more than two billion users worldwide, Facebook is more akin to a government or a "powerful sovereign," with Zuckerberg -- due to his unusual level of control over it -- being the "key lawgiver." Zuckerberg acknowledged as much himself when he said, in a much-quoted moment of candor , that "in a lot of ways Facebook is more like a government than a traditional company." More than other technology companies, he added, Facebook is "really setting policies."

The notion that corporations can become so powerful that they are able to act as a "form of private government" (to quote Zephyr Teachout ) has long been part of the antitrust literature. Indeed, as the Open Market Institute's Barry Lynn and Matt Stoller recently noted during a panel at the Stigler Center's Digital Platforms and Concentration antitrust conference, it is deeply rooted in the rich tradition of antimonopoly in America.

That digital platforms are major political players has also been well documented . Once disdainful of politics, in the past two years Google, Facebook, and Amazon have dramatically ramped up their lobbying efforts, as the public and media backlash against their social, economic, and political power intensified. Google, which enjoyed unprecedented access to the Obama White House, is now the biggest lobbyist in Washington, with other tech platforms not far behind.

Market power begetting political power is not new in itself. As the participants of the Stigler panel noted, it is the immense power that concentrated digital intermediaries like Google and Facebook wield over digital markets, human interaction and the marketplace of ideas, particularly when it comes to the distribution of political information, that presents a unique challenge. As Lina Khan (also of Open Markets) recently noted , the current landscape of Internet media is one in which a handful of companies "are basically acting as private regulators, as private governments, over the dissemination and organization of information in a way that is totally unchecked by the public."

The latter part, at least, seems to be changing rapidly, as Americans (and millions more worldwide) grapple with ongoing revelations showing the profound impact that digital monopolies have on political opinions and outcomes, in the US and across the world. As Congressman John Sarbanes (D-MD) said during Zuckerberg's House hearing in April: "Facebook is becoming a self-regulated superstructure for political discourse."

Left to right: Scott Cleland, Ellen Goodman, Matt Stoller, Barry Lynn, Guy Rolnik

The exact nature of tech platforms' political power, its roots, and how to best deal with it -- all questions debated during the Stigler Center panel -- are complex and varied. But the key question seems rather simple. As Sarbanes put it during the same Congressional hearing: "Are we, the people, going to regulate our political dialogue, or are you, Mark Zuckerberg, going to end up regulating the political discourse? ״

A Private Regulator of Speech

Facebook, said Rutgers Law School professor Ellen Goodman, operates as a private speech regulator. As such, much like public governments, it "privileges some [forms of] speech over others." Unlike governments, however, which as regulators of speech purport to support public good, Facebook has adopted a "First Amendment-like radical libertarianism" through which it has so far refused to differentiate between "high- and low-quality information, truth or falsity, responsible and irresponsible press."

Facebook, famously, argues that it is not a media company, but a technology company. "It's not a player, it's not a [referee], it's just the engineer who made the field," said Goodman, the co-director of the Rutgers Institute for Information Policy & Law. The purpose of Facebook's "First Amendment rhetoric," she noted, is "to maximize data flow on its platform," but by doing so, "it implies, or even says explicitly, that it's standing in the shoes of the government."

Facebook and other platforms, said Goodman, have benefited from the process of deregulation and budget cuts to public media -- a process that has predated the Internet, and led to Washington essentially "giving up" on media policy. The government effectively "exempted these platforms from the kind of ordinary regulation that other information intermediaries were subjected to." With "platforms in the shoes of government, [and] government out of media policy," the concentration of platform power over information flows was allowed to continue undisturbed.

The problem, however, is that much like fellow FAANGs Amazon and Google, Facebook is not just an impartial governor, but a market participant interested in "monopolizing the time of its users," with a strong incentive to privilege its own products and business model that "eviscerates journalism."

"It also tunes its algorithm to favor certain kinds of speech and certain speakers," added Goodman. "There's almost no transparency, save for what it selectively, elliptically, and sometimes misleadingly posts on its blog."

"People Live in Fear"

In a seminal 1979 essay on what he termed the "political content" of antitrust, former FTC chairman Robert Pitofsky argued that "political values," such as "the fear that excessive concentration of economic power will foster anti-democratic political pressures," should be incorporated into antitrust enforcement. In recent years, this view has been echoed by a growing number of antitrust scholars , who argue that the way antitrust enforcement has been conducted in the US for the past 40 years -- solely through the prism of "consumer welfare" -- is ill equipped to deal with the new threats posed by digital platforms.

The Unites States, remarked Lynn during the panel, was born "out of rebellion against concentrated power, the British East India Company." The original purpose of antimonopoly in America, said Lynn, was the protection of personal liberty from concentrated economic and political power: "to give everybody the ability to manage their own property in the ways that they see fit, manage their own lives in the way that they see fit. To be truly independent of everybody else. To not be anybody else's puppet." Liberty and democracy, he added, "are functions of antimonopoly."

A state in which Facebook and Google wield enormous influence over the flow of information -- where, to quote a recent piece by Wired 's Nicholas Thompson and Fred Vogelstein, "every publisher knows that, at best, they are sharecroppers on Facebook's massive industrial farm" -- is antithetical to this ethos, said Lynn, and is firmly rooted in the "absolute, complete failure" of antitrust in the United States. "Our country has allowed the concentration of power in giant intermediaries -- Google, Facebook, and Amazon -- vastly more powerful than the original intermediary which we fought, which was the British East India Company." These digital intermediaries, he added, are "using their power in ways that are directly threatening our most fundamental liberties and our democracy."

"Our country has allowed the concentration of power in giant intermediaries -- Google, Facebook, and Amazon -- vastly more powerful than the original intermediary which we fought, which was the British East India Company."

The blame for the outsize influence that Facebook and other digital platforms have over the political discourse, said Lynn, rests squarely on the shoulders of the antitrust community: "For 200 years in this country, antimonopoly was designed to create freedom from masters. In 1981, when we got rid of our traditional antimonopoly and replaced it with consumer welfare, we created a system that has given freedom to master."

In today's concentrated media landscape, he contended, "people live in fear. We have reporters, editors, and publishers of our newspapers who live in fear every day. This is true of the people who publish our books and who write our books. They live in fear [that] Amazon is going to shut them down. Whose fault is that? It's the people in the antitrust community."

"We have reporters, editors, and publishers of our newspapers who live in fear every day. This is true of the people who publish our books and who write our books. They live in fear [that] Amazon is going to shut them down. Whose fault is that? It's the people in the antitrust community."

Lynn went on to quote from Thompson and Vogelstein's Wired piece: "The social network is roughly 200 times more valuable than the Times . And journalists know that the man who owns the farm has the leverage. If Facebook wanted to, it could quietly turn any number of dials that would harm a publisher -- by manipulating its traffic, its ad network, or its readers."

"This was hidden in the middle of the article," said Lynn. "[Thompson], as a journalist, felt obliged to put this out there He was crying out to the people in this community, in the antitrust community. He's saying 'protect me, the publisher, the editor of this magazine. Protect me, the reporter. Please make sure that I have the independence to do my work.'"

The "Code of Silence" Has Been Broken

Recent changes to Facebook's newsfeed have caused referral traffic from Facebook to media companies' websites to sharply decline , once again raising concerns about the significant impact that the company has on the media industry. The satirical news site The Onion , for instance, has launched a public war against Facebook, calling it "an unwanted interloper between The Onion and our audience." "We have 6,572,949 followers on Facebook who receive an ever-decreasing amount of the content we publish on the network," the site's editor-in-chief, Chad Nackers, told Business Insider .

The backlash by major news outlets and politicians across the political spectrum against the power of Facebook and other tech platforms as de facto regulators of speech on the Internet is a new phenomenon, said Guy Rolnik, a Clinical Associate Professor for Strategic Management at the University of Chicago Booth school of Business, during the panel. Until not too long ago, he said, Internet monopolies were the "darlings of the news media." Less than a year ago , he noted, Zuckerberg was even touted by several media outlets as a viable presidential candidate. "The idea that a person who has unprecedented private control over personal data and the public discourse at large would also be the president of the United States was totally in the realm and perimeter of what is legitimate," he said.

What has changed? "In many ways, what has changed is that many people associate Facebook today with the election of Donald Trump. This is why we see so much focus on those issues that were very salient and important for years," Rolnik maintained. Trump's election, and Facebook's role in the lead-up to it, broke the "code of silence."

Nevertheless, newsrooms today, he said, still do everything in their power "to make sure that everything is shareable on Facebook." In the words of Thompson and Vogelstein, they are still "sharecroppers on Facebook's massive industrial farm."

Google has "Politically Hijacked the US Antitrust Enforcement Process"

Scott Cleland, president of the consultancy firm Precursor LLC and former deputy US coordinator for international communications and information policy in the George HW Bush administration, has long warned that concentration among digital platforms will negatively impact the US economy and society at large.

In 2007, Cleland testified before the Senate on the then-proposed Google-DoubleClick merger, calling upon antitrust enforcers to block the merger and warning that lax antitrust enforcement (of the kind that ultimately led the Google-DoubleClick merger to be approved) would allow Google to become the "ultimate Internet gatekeeper" and the "online-advertising bottleneck provider picking content winners and losers" -- both of which came true. In 2011, he published the book Search & Destroy: Why You Can't Trust Google Inc . , in which he warned readers of Google's surveillance-based business model and its "unprecedented centralization of power over the world's information."

During the conference, Cleland presented a new white paper entitled " Rejecting the Google School of No-Antitrust: Fake Consumer Welfare Standard " in which he argues that Alphabet/Google has "politically hijacked the US antitrust enforcement process from 2013 to 2018."

US antitrust enforcers, he said, were initially "very tough" on Google during the first years of the George W. Bush administration. Between 2008 and 2012, both the Bush II and Obama administrations brought "strong and consistent antitrust scrutiny and enforcement to Google." Then, in 2013, the Federal Trade Commission decided to drop its case against the company, despite the conclusion of its staff that Google had used anticompetitive tactics. Following Obama's reelection, which Google at the time was credited with delivering, antitrust enforcement against Big Tech firms essentially ceased. "They shut down all those investigations and they did nothing for the last five years. DOJ went from very active -- four or five major antitrust actions -- to nothing. Crickets."

Back then, Google and Facebook were still "fiercely competing," he said. Google was going after Facebook's territory with Google Plus, and Facebook countered by going after Google search with Yahoo and Bing. But then, in 2014, something happened: the large tech firms "mysteriously stopped competing."

"Yahoo returned to working with Google. Apple dropped Bing for Siri and moved to Google search. Apple and Microsoft dropped their patent suits, and then Microsoft and Google made peace after scratching each other's eyes out. Google went from 70 percent share of search and search advertising in the PC market to 95 percent of that in both of those markets today," said Cleland.

What happened? Cleland points to the what he calls the "Google School of No-Antitrust," a narrative with which according to him Google had been trying to "influence public opinion, the media, elected and government officials, and US and state antitrust enforcers, to make the public believe Google (and other Internet platforms) have no antitrust risk or liability, because they offer free innovative products and services, and to make conservatives believe that the Google School of No-Antitrust and the Chicago School's consumer welfare standard and application are the same, when they are not."

Google, he asserted, "not only vanquished competition. What it did is it vanquished the antitrust enforcers who are supposed to protect the process of competition." It did so, he argued, by "politically hijacking the most important market, which is information."

"Google not only vanquished competition. What it did is it vanquished the antitrust enforcers who are supposed to protect the process of competition."

Cleland, who identifies as a free market conservative, argued that the current Internet is far from a free market. "Who thinks it's a good idea that all of the world's information goes through one bottleneck?" he asked, adding that "all the bad things that you're seeing right now are the result of policy."

One such policy is Section 230 of the Communications Decency Act of 1996, which provided Internet companies with legal immunity for the content their users generated or shared and is often credited with enabling the creation of the Internet as we know it today. Cleland sees Section 230 as "market structuring" and has compared it to the libertarian concept of creating artificial islands outside any governmental territory, known as " seasteading ."

"Section 230 says -- I'm paraphrasing, but that's what it says -- that US policy recognizes that the Internet is a free market that should be unfettered by federal and state regulations," said Cleland. "Basically, Section 230 was a libertarian's dream. They got what they wanted. I am a limited government conservative. What they wanted was a no-government world."

"Basically, Section 230 was a libertarian's dream. They got what they wanted. I am a limited government conservative. What they wanted was a no-government world."

Much of today's problems regarding the conduct of digital platforms, he said, results from this policy. "Twenty-two years ago, we as a nation immunized all interactive computer services from any civil liability. We said, 'It is OK. There is no accountability, no responsibility for you looking the other way, when your platform or things that are going on on your platform harm others.'"

Section 230, he maintained, "basically created 21 st -century robber barons. Those guys know they have the full weight of the government. If they go to court, they're going to win, and they have almost all the time."

Antitrust Is "One Part of the Answer"

When it comes to addressing these threats to free speech and democratic discourse, said Goodman, antitrust is only "one part of the answer." The other part, she asserted, is regulation.

"The First Amendment that we have, that we know and love today," she said, "was not born in 1789 in Philadelphia. It developed in the latter part of the 20th century against a particular set of industrial and social practices that mitigated some of the costs of free speech and spread the benefits."

Lawmakers and policymakers, she argued, should "retrieve and resuscitate the vocabulary of media policy," focusing on three core values: "freedom of mind and autonomy; non-market values of diversity and localism/community; and a concept of the public interest and fiduciary responsibility."

Whenever someone makes an argument for using antitrust or regulation as a way to structure markets of information, Stoller cautioned, there are those who will argue that this amounts to censorship. When asked how to avoid censorship when discussing the use government power over speech, Goodman was conflicted: "There is no way around that. There's a real tension here between absolute liberty of speech and controls on speech," she said. We cannot have this whole conference with us fantasizing about various regulatory possibilities that involve use restrictions -- limits on the flow of data, limits on the collection of data -- without acknowledging that under our First Amendment doctrine right now, probably none of that passes muster."

However, Goodman pointed to the Northwest Ordinance as a possible roadmap. "Nobody would say, or maybe they did, that [the Northwest Ordinance ] was an anti-private property rule. It was structuring the market so that more people could own property. That's what the history of media regulation in this country has been: structuring speech markets so that more people can speak."

Disclaimer: The ProMarket blog is dedicated to discussing how competition tends to be subverted by special interests. The posts represent the opinions of their writers, not necessarily those of the University of Chicago, the Booth School of Business, or its faculty. For more information, please visit ProMarket Blog Policy .

[Jun 06, 2018] Is fascism a logical next stage of the collapse of neoliberalism, like hapened in Waimar before?

Jun 06, 2018 | www.theguardian.com

quintal -> Alpo88 , 3 Jun 2018 15:56

Hi Alpo

Fascism is the word that most interests me when looking a the present trajectory in Australia

We're not there yet

And there's no one on the government benches who's a new Hitler or Stalin or Mussolini

But the next generation ..............

They make me uncomfortable. Some of the younger and as yet unheralded apparatchiks on the conservative fringe worry me. They're smart. Know the advertising and selling the message strategies. Have money and are well connected to the barons/oligarchs who pull the strings and they're ambitious.

Paradoxically a collapse of the Liberal Party will help them. In spite of it all we need a fiscally conservative, slightly socially conservative political movement in Australia but the drift to extremism is quite pronounced and profoundly worrying, especially in a time where climate change poses existential questions about our future.

This next election will not be a cakewalk. It'll be as bitterly fought as any in a generation and the consequences of a loss will be, for progressive forces, catastrophic.

cheers

Alpo88 , 3 Jun 2018 14:58
"Although people with low expectations are easier to con, fomenting cynicism about democracy comes at a long-term cost. Indeed, as the current crop of politicians is beginning to discover, people with low expectations feel they have nothing to lose."..... Yes, but that's part of the Devilish Plan: Why do you think that the Neoliberals and Conservatives spend so much time nurturing their relationship with both Police and the Army?.... They want to be sure that if their Neoliberal-Conservative project goes truly belly up, they will be the ones holding the guns.

Yes, it's sinister.... it's dangerous.... it's a time bomb, and we can only defuse it with the help of a majority of Australians waking up, standing up and Democratically vote against Fascism.

[Apr 26, 2018] Drones, Baby, Drones! The Rise of Americas High-Tech Assassins

Apr 03, 2015 | Alternet
...President Barack Obama, who had run a quasi-antiwar liberal campaign for the White House, had embraced the assassination program and had decreed, "the CIA gets what it wants." Intelligence budgets were maintaining the steep upward curve that had started in 2001, and while all agencies were benefiting, none had done as well as the CIA At just under $15 billion, the agency's budget had climbed by 56 percent just since 2004.

Decades earlier, Richard Helms, the CIA director for whom the event was named, would customarily refer to the defense contractors who pressured him to spend his budget on their wares as "those bastards." Such disdain for commerce in the world of spooks was now long gone, as demonstrated by the corporate sponsorship of the tables jammed into the Grand Ballroom that evening. The executives, many of whom had passed through the revolving door from government service, were there to rub shoulders with old friends and current partners. "It was totally garish," one attendee told me afterward. "It seemed like every arms manufacturer in the country had taken a table. Everyone was doing business, right and left."

In the decade since 9/11, the CIA had been regularly blighted by scandal-revelations of torture, renditions, secret "black site" prisons, bogus intelligence justifying the invasion of Iraq, ignored signs of the impending 9/11 attacks-but such unwholesome realities found no echo in this comradely gathering. Even George Tenet, the CIA director who had presided over all of the aforementioned scandals, was greeted with heartfelt affection by erstwhile colleagues as he, along with almost every other living former CIA director, stood to be introduced by Master of Ceremonies John McLaughlin, a former deputy director himself deeply complicit in the Iraq fiasco. Each, with the exception of Stansfield Turner (still bitterly resented for downsizing the agency post-Vietnam), received ringing applause, but none more than the night's honoree, former CIA director and then-current secretary of defense Robert M. Gates.

Although Gates had left the CIA eighteen years before, he was very much the father figure of the institution and a mentor to the intelligence chieftains, active and retired, who cheered him so fervently that night at the Ritz-Carlton. He had climbed through the ranks of the national security bureaucracy with a ruthless determination all too evident to those around him. Ray McGovern, his supervisor in his first agency post, as an analyst with the intelligence directorate's soviet foreign policy branch, recalls writing in an efficiency report that the young man's "evident and all-consuming ambition is a disruptive influence in the branch." There had come a brief check on his rise to power when his involvement in the Iran-Contra imbroglio cratered an initial attempt to win confirmation as CIA director, but success came a few years later, in 1991, despite vehement protests from former colleagues over his persistent willingness to sacrifice analytic objectivity to the political convenience of his masters.

Book cover of 'Kill Chain.'

Photo Credit:

Henry Holt

Click to enlarge.

Gates's successful 1991 confirmation as CIA chief owed much, so colleagues assessed, to diligent work behind the scenes on the part of the Senate Intelligence Committee's staff director, George Tenet. In 1993, Tenet moved on to be director for intelligence programs on the Clinton White House national security staff, in which capacity he came to know and esteem John Brennan, a midlevel and hitherto undistinguished CIA analyst assigned to brief White House staffers. Tenet liked Brennan so much that when he himself moved to the CIA as deputy director in 1995, he had the briefer appointed station chief in Riyadh, an important position normally reserved for someone with actual operational experience. In this sensitive post Brennan worked tirelessly to avoid irritating his Saudi hosts, showing reluctance, for example, to press them for Osama bin Laden's biographical details when asked to do so by the bin Laden unit back at headquarters.

Brennan returned to Washington in 1999 under Tenet's patronage, initially as his chief of staff and then as CIA executive director, and by 2003 he had transitioned to the burgeoning field of intelligence fusion bureaucracy. The notion that the way to avert miscommunication between intelligence bureaucracies was to create yet more layers of bureaucracy was popular in Washington in the aftermath of 9/11. One concrete expression of this trend was the Terrorist Threat Integration Center, known as T-TIC and then renamed the National Counter Terrorism Center a year later. Brennan was the first head of T-TIC, distinguishing himself in catering to the abiding paranoia of the times. On one occasion, notorious within the community, he circulated an urgent report that al-Qaeda was encrypting targeting information for terrorist attacks in the broadcasts of the al-Jazeera TV network, thereby generating an "orange" alert and the cancellation of dozens of international flights. The initiative was greeted with malicious amusement over at the CIA's own Counterterrorism Center, whose chief at the time, José Rodríguez, later opined that Brennan had been trying to build up his profile with higher authority. "Brennan was a major factor in keeping [the al-Jazeera/al-Qaeda story] alive. We thought it was ridiculous," he told a reporter. "My own view is he saw this, he took this, as a way to have relevance, to take something to the White House." Tellingly, an Obama White House spokesman later excused Brennan's behavior on the grounds that though he had circulated the report, he hadn't believed it himself.

Exiting government service in 2005, Brennan spent the next three years heading The Analysis Corporation, an obscure but profitable intelligence contractor engaged in preparing terrorist watch lists for the government, work for which he was paid $763,000 in 2008. Among the useful relationships he had cultivated over the years was well-connected Democrat Anthony Lake, a former national security adviser to Bill Clinton, who recommended him to presidential candidate Barack Obama. Meeting for the first time shortly after Obama's election victory, the pair bonded immediately, with Obama "finishing Brennan's sentences," by one account. Among their points of wholehearted agreement was the merit of a surgical approach to terrorist threats, the "need to target the metastasizing disease without destroying the surrounding tissue," as Brennan put it, for which drones and their Hellfire missiles seemed the ideal tools. Obama was initially balked in his desire to make Brennan CIA director because of the latter's all-too-close association with the agency's torture program, so instead the new president made him his assistant for counterterrorism and homeland security, with an office down the hall from the Oval Office. Two years into the administration, everyone in the Ritz-Carlton ballroom knew that the bulky Irishman was the most powerful man in U.S. intelligence as the custodian of the president's kill list, on which the chief executive and former constitutional law professor insisted on reserving the last word, making his final selections for execution at regularly scheduled Tuesday afternoon meetings. "You know, our president has his brutal side," a CIA source cognizant of Obama's involvement observed to me at the time.

Now, along with the other six hundred diners at the Helms dinner, Brennan listened attentively as Gates rose to accept the coveted award for "exemplary service to the nation and the Central Intelligence Agency." After paying due tribute to previous honorees as well as his pride in being part of the CIA "family," Gates spoke movingly of a recent and particularly tragic instance of CIA sacrifice, the seven men and women killed by a suicide bomber at an agency base, Forward Operating Base Chapman, in Khost, Afghanistan, in 2009. All present bowed their heads in silent tribute.

Gates then moved on to a more upbeat topic. When first he arrived at the Pentagon in 2007, he said, he had found deep-rooted resistance to "new technology" among "flyboys with silk scarves" still wedded to venerable traditions of fighter-plane combat. But all that, he informed his rapt audience, had changed. Factories were working "day and night, day and night," to turn out the vital weapons for the fight against terrorism. "So from now on," he concluded, his voice rising, "the watchword is: drones, baby, drones!"

The applause was long and loud.

Excerpted from Andrew Cockburn's new book, Kill Chain: The Rise of the High-Tech Assassins Henry Holt, 2015). Reprinted here with permission from the author.

[Dec 04, 2017] The neoliberal framework in antitrust is based on pecifically its pegging competition to consumer welfare, defined as short-term price effects and as such s unequipped to capture the architecture of market power in the modern economy

Notable quotes:
"... This Note argues that the current framework in antitrust-specifically its pegging competition to "consumer welfare," defined as short-term price effects-is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon's dominance if we measure competition primarily through price and output. ..."
"... This Note maps out facets of Amazon's dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon's structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon's power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties. ..."
Feb 12, 2017 | economistsview.typepad.com
anne : February 11, 2017 at 11:43 AM , 2017 at 11:43 AM
http://www.yalelawjournal.org/article/amazons-antitrust-paradox

January, 2017

Amazon's Antitrust Paradox
By Lina M. Khan

Abstract

Amazon is the titan of twenty-first century commerce. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space. Although Amazon has clocked staggering growth, it generates meager profits, choosing to price below-cost and expand widely instead. Through this strategy, the company has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it. Elements of the firm's structure and conduct pose anticompetitive concerns -- yet it has escaped antitrust scrutiny.

This Note argues that the current framework in antitrust-specifically its pegging competition to "consumer welfare," defined as short-term price effects-is unequipped to capture the architecture of market power in the modern economy. We cannot cognize the potential harms to competition posed by Amazon's dominance if we measure competition primarily through price and output.

Specifically, current doctrine underappreciates the risk of predatory pricing and how integration across distinct business lines may prove anticompetitive. These concerns are heightened in the context of online platforms for two reasons. First, the economics of platform markets create incentives for a company to pursue growth over profits, a strategy that investors have rewarded. Under these conditions, predatory pricing becomes highly rational-even as existing doctrine treats it as irrational and therefore implausible. Second, because online platforms serve as critical intermediaries, integrating across business lines positions these platforms to control the essential infrastructure on which their rivals depend. This dual role also enables a platform to exploit information collected on companies using its services to undermine them as competitors.

This Note maps out facets of Amazon's dominance. Doing so enables us to make sense of its business strategy, illuminates anticompetitive aspects of Amazon's structure and conduct, and underscores deficiencies in current doctrine. The Note closes by considering two potential regimes for addressing Amazon's power: restoring traditional antitrust and competition policy principles or applying common carrier obligations and duties.

[Oct 23, 2017] Neoliberalism as Creative Destruction David Harvey, 2007

This article is 10 year old but the analysis presented still remain by-and-large current.
You can read full article in Neoliberalism As Creative Destruction - David Harvey by Open Critique - issue
Notable quotes:
"... Neoliberalism is a theory of political economic practices proposing that human well-being can best be advanced by the maximization of entrepreneurial freedoms within an institutional framework characterized by private property rights, individual liberty, unencumbered markets, and free trade. ..."
"... Furthermore, if markets do not exist (in areas such as education, health care, social security, or environmental pollution), then they must be created, by state action if necessary. ..."
"... State interventions in markets (once created) must be kept to a bare minimum because the state cannot possibly possess enough information to second-guess market signals (prices) and because powerful interests will inevitably distort and bias state interventions (particularly in democracies) for their own benefit. ..."
"... State after state, from the new ones that emerged from the collapse of the Soviet Union to old-style social democracies and welfare states such as New Zealand and Sweden, have embraced, sometimes voluntarily and sometimes in response to coercive pressures, some version of neoliberal theory and adjusted at least some of their policies and practices accordingly. Post apartheid South Africa quickly adopted the neoliberal frame and even contemporary China appears to be headed in that direction. Furthermore, advocates of the neoliberal mindset now occupy positions of considerable influence in education (universities and many "think tanks"), in the media, in corporate board rooms and financial institutions, in key state institutions (treasury departments, central banks), and also in those international institutions such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) that regulate global finance and commerce. Neoliberalism has, in short, become hegemonic as a mode of discourse and has pervasive effects on ways of thought and political-economic practices to the point where it has become incorporated into the commonsense way we interpret, live in, and understand the world. ..."
"... Neoliberalization has in effect swept across the world like a vast tidal wave of institutional reform and discursive adjustment. While plenty of evidence shows its uneven geographical development, no place can claim total immunity (with the exception of a few states such as North Korea). Furthermore, the rules of engagement now established through the WTO (governing international trade) and by the IMF (governing international finance) instantiate neoliberalism as a global set of rules. All states that sign on to the WTO and the IMF (and who can afford not to?) agree to abide (albeit with a "grace period" to permit smooth adjustment) by these rules or face severe penalties. ..."
"... For any system of thought to become dominant, it requires the articulation of fundamental concepts that become so deeply embedded in commonsense understandings that they are taken for granted and beyond question. For this to occur, not any old concepts will do. A conceptual apparatus has to be constructed that appeals almost naturally to our intuitions and instincts, to our values and our desires, as well as to the possibilities that seem to inhere in the social world we inhabit. The founding figures of neoliberal thought took political ideals of individual liberty and freedom as sacrosanct -- as the central values of civilization. And in so doing they chose wisely and well, for these are indeed compelling and greatly appealing concepts. Such values were threatened, they argued, not only by fascism, dictatorships, and communism, but also by all forms of state intervention that substituted collective judgments for those of individuals set free to choose. They then concluded that without "the diffused power and initiative associated with (private property and the competitive market) it is difficult to imagine a society in which freedom may be effectively preserved." 1 ..."
"... The U.S. answer was spelled out on September 19, 2003, when Paul Bremer, head of the Coalition Provisional Authority, promulgated four orders that included "the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi U.S. businesses, full repatriation of foreign profits . . . the opening of Iraq's banks to foreign control, national treatment for foreign companies and . . . the elimination of nearly all trade barriers." 4 The orders were to apply to all areas of the economy, including public services, the media, manufacturing, services, transportation, finance, and construction. Only oil was exempt. A regressive tax system favored by conservatives called a flat tax was also instituted. The right to strike was outlawed and unions banned in key sectors. An Iraqi member of the Coalition Provisional Authority protested the forced imposition of "free market fundamentalism," describing it as "a flawed logic that ignores history." 5 Yet the interim Iraqi government appointed at the end of June 2004 was accorded no power to change or write new laws -- it could only confirm the decrees already promulgated. ..."
"... The redistributive tactics of neoliberalism are wide-ranging, sophisticated, frequently masked by ideological gambits, but devastating for the dignity and social well-being of vulnerable populations and territories. The wave of creative destruction neoliberalization has visited across the globe is unparalleled in the history of capitalism. Understandably, it has spawned resistance and a search for viable alternatives. ..."
Oct 23, 2017 | journals.sagepub.com

Neoliberalism has become a hegemonic discourse with pervasive effects on ways of thought and political-economic practices to the point where it is now part of the commonsense way we interpret, live in, and understand the world. How did neoliberalism achieve such an exalted status, and what does it stand for? In this article, the author contends that neoliberalism is above all a project to restore class dominance to sectors that saw their fortunes threatened by the ascent of social democratic endeavors in the aftermath of the Second World War. Although neoliberalism has had limited effectiveness as an engine for economic growth, it has succeeded in channeling wealth from subordinate classes to dominant ones and from poorer to richer countries. This process has entailed the dismantling of institutions and narratives that promoted more egalitarian distributive measures in the preceding era.

Neoliberalism is a theory of political economic practices proposing that human well-being can best be advanced by the maximization of entrepreneurial freedoms within an institutional framework characterized by private property rights, individual liberty, unencumbered markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices. The state has to be concerned, for example, with the quality and integrity of money. It must also set up military, defense, police, and juridical functions required to secure private property rights and to support freely functioning markets. Furthermore, if markets do not exist (in areas such as education, health care, social security, or environmental pollution), then they must be created, by state action if necessary. But beyond these tasks the state should not venture. State interventions in markets (once created) must be kept to a bare minimum because the state cannot possibly possess enough information to second-guess market signals (prices) and because powerful interests will inevitably distort and bias state interventions (particularly in democracies) for their own benefit.

For a variety of reasons, the actual practices of neoliberalism frequently diverge from this template. Nevertheless, there has everywhere been an emphatic turn, ostensibly led by the Thatcher/Reagan revolutions in Britain and the United States, in political-economic practices and thinking since the 1970s. State after state, from the new ones that emerged from the collapse of the Soviet Union to old-style social democracies and welfare states such as New Zealand and Sweden, have embraced, sometimes voluntarily and sometimes in response to coercive pressures, some version of neoliberal theory and adjusted at least some of their policies and practices accordingly. Post apartheid South Africa quickly adopted the neoliberal frame and even contemporary China appears to be headed in that direction. Furthermore, advocates of the neoliberal mindset now occupy positions of considerable influence in education (universities and many "think tanks"), in the media, in corporate board rooms and financial institutions, in key state institutions (treasury departments, central banks), and also in those international institutions such as the International Monetary Fund (IMF) and the World Trade Organization (WTO) that regulate global finance and commerce. Neoliberalism has, in short, become hegemonic as a mode of discourse and has pervasive effects on ways of thought and political-economic practices to the point where it has become incorporated into the commonsense way we interpret, live in, and understand the world.

Neoliberalization has in effect swept across the world like a vast tidal wave of institutional reform and discursive adjustment. While plenty of evidence shows its uneven geographical development, no place can claim total immunity (with the exception of a few states such as North Korea). Furthermore, the rules of engagement now established through the WTO (governing international trade) and by the IMF (governing international finance) instantiate neoliberalism as a global set of rules. All states that sign on to the WTO and the IMF (and who can afford not to?) agree to abide (albeit with a "grace period" to permit smooth adjustment) by these rules or face severe penalties.

The creation of this neoliberal system has entailed much destruction, not only of prior institutional frameworks and powers (such as the supposed prior state sovereignty over political-economic affairs) but also of divisions of labor, social relations, welfare provisions, technological mixes, ways of life, attachments to the land, habits of the heart, ways of thought, and the like. Some assessment of the positives and negatives of this neoliberal revolution is called for. In what follows, therefore, I will sketch in some preliminary arguments as to how to both understand and evaluate this transformation in the way global capitalism is working. This requires that we come to terms with the underlying forces, interests, and agents that have propelled the neoliberal revolution forward with such relentless intensity. To turn the neoliberal rhetoric against itself, we may reasonably ask, In whose particular interests is it that the state take a neoliberal stance and in what ways have those interests used neoliberalism to benefit themselves rather than, as is claimed, everyone, everywhere?

In whose particular interests is it that the state take a neoliberal stance, and in what ways have those interests used neoliberalism to benefit themselves rather than, as is claimed, everyone, everywhere?

The "Naturalization" of Neoliberalism

For any system of thought to become dominant, it requires the articulation of fundamental concepts that become so deeply embedded in commonsense understandings that they are taken for granted and beyond question. For this to occur, not any old concepts will do. A conceptual apparatus has to be constructed that appeals almost naturally to our intuitions and instincts, to our values and our desires, as well as to the possibilities that seem to inhere in the social world we inhabit. The founding figures of neoliberal thought took political ideals of individual liberty and freedom as sacrosanct -- as the central values of civilization. And in so doing they chose wisely and well, for these are indeed compelling and greatly appealing concepts. Such values were threatened, they argued, not only by fascism, dictatorships, and communism, but also by all forms of state intervention that substituted collective judgments for those of individuals set free to choose. They then concluded that without "the diffused power and initiative associated with (private property and the competitive market) it is difficult to imagine a society in which freedom may be effectively preserved." 1

Setting aside the question of whether the final part of the argument necessarily follows from the first, there can be no doubt that the concepts of individual liberty and freedom are powerful in their own right, even beyond those terrains where the liberal tradition has had a strong historical presence. Such ideals empowered the dissident movements in Eastern Europe and the Soviet Union before the end of the cold war as well as the students in Tiananmen Square. The student movement that swept the world in 1968 -- from Paris and Chicago to Bangkok and Mexico City -- was in part animated by the quest for greater freedoms of speech and individual choice. These ideals have proven again and again to be a mighty historical force for change.

It is not surprising, therefore, that appeals to freedom and liberty surround the United States rhetorically at every turn and populate all manner of contemporary political manifestos. This has been particularly true of the United States in recent years. On the first anniversary of the attacks now known as 9/11, President Bush wrote an op-ed piece for the New York Times that extracted ideas from a U.S. National Defense Strategy document issued shortly thereafter. "A peaceful world of growing freedom," he wrote, even as his cabinet geared up to go to war with Iraq, "serves American long-term interests, reflects enduring American ideals and unites Americas allies." "Humanity," he concluded, "holds in its hands the opportunity to offer freedom s triumph over all its age-old foes," and "the United States welcomes its responsibilities to lead in this great mission." Even more emphatically, he later proclaimed that "freedom is the Almighty's gift to every man and woman in this world" and "as the greatest power on earth [the United States has] an obligation to help the spread of freedom." 2

So when all of the other reasons for engaging in a preemptive war against Iraq were proven fallacious or at least wanting, the Bush administration increasingly appealed to the idea that the freedom conferred upon Iraq was in and of itself an adequate justification for the war. But what sort of freedom was envisaged here, since, as the cultural critic Matthew Arnold long ago thoughtfully observed, "Freedom is a very good horse to ride, but to ride somewhere." 3 To what destination, then, were the Iraqi people expected to ride the horse of freedom so selflessly conferred to them by force of arms?

The U.S. answer was spelled out on September 19, 2003, when Paul Bremer, head of the Coalition Provisional Authority, promulgated four orders that included "the full privatization of public enterprises, full ownership rights by foreign firms of Iraqi U.S. businesses, full repatriation of foreign profits . . . the opening of Iraq's banks to foreign control, national treatment for foreign companies and . . . the elimination of nearly all trade barriers." 4 The orders were to apply to all areas of the economy, including public services, the media, manufacturing, services, transportation, finance, and construction. Only oil was exempt. A regressive tax system favored by conservatives called a flat tax was also instituted. The right to strike was outlawed and unions banned in key sectors. An Iraqi member of the Coalition Provisional Authority protested the forced imposition of "free market fundamentalism," describing it as "a flawed logic that ignores history." 5 Yet the interim Iraqi government appointed at the end of June 2004 was accorded no power to change or write new laws -- it could only confirm the decrees already promulgated.

What the United States evidently sought to impose upon Iraq was a full-fledged neoliberal state apparatus whose fundamental mission was and is to facilitate conditions for profitable capital accumulation for all comers, Iraqis and foreigners alike. The Iraqis were, in short, expected to ride their horse of freedom straight into the corral of neoliberalism. According to neoliberal theory, Bremers decrees are both necessary and sufficient for the creation of wealth and therefore for the improved well-being of the Iraqi people. They are the proper foundation for an adequate rule of law, individual liberty, and democratic governance. The insurrection that followed can in part be interpreted as Iraqi resistance to being driven into the embrace of free market fundamentalism against their own will

It is useful to recall, however, that the first great experiment with neoliberal state formation was Chile after Augusto Pinochet s coup almost thirty years to the day before Bremers decrees were issued, on the "little September 11th" of 1973. The coup, against the democratically elected and leftist social democratic government of Salvador Allende, was strongly backed by the CIA and supported by U.S. Secretary of State Henry Kissinger. It violently repressed all left-of-center social movements and political organizations and dismantled all forms of popular organization, such as community health centers in poorer neighborhoods. The labor market was "freed" from regulatory or institutional restraints -- trade union power, for example. But by 1973, the policies of import substitution that had formerly dominated in Latin American attempts at economic regeneration, and that had succeeded to some degree in Brazil after the military coup of 1964, had fallen into disrepute. With the world economy in the midst of a serious recession, something new was plainly called for. A group of U.S. economists known as "the Chicago boys," because of their attachment to the neoliberal theories of Milton Friedman, then teaching at the University of Chicago, were summoned to help reconstruct the Chilean economy. They did so along free-market lines, privatizing public assets, opening up natural resources to private exploitation, and facilitating foreign direct investment and free trade. The right of foreign companies to repatriate profits from their Chilean operations was guaranteed. Export-led growth was favored over import substitution. The subsequent revival of the Chilean economy in terms of growth, capital accumulation, and high rates of return on foreign investments provided evidence upon which the subsequent turn to more open neoliberal policies in both Britain (under Thatcher) and the United States (under Reagan) could be modeled. Not for the first time, a brutal experiment in creative destruction carried out in the periphery became a model for the formulation of policies in the center. 6

The fact that two such obviously similar restructurings of the state apparatus occurred at such different times in quite different parts of the world under the coercive influence of the United States might be taken as indicative that the grim reach of U.S. imperial power might lie behind the rapid proliferation of neoliberal state forms throughout the world from the mid-1970s onward. But U.S. power and recklessness do not constitute the whole story. It was not the United States, after all, that forced Margaret Thatcher to take the neoliberal path in 1979. And during the early 1980s, Thatcher was a far more consistent advocate of neoliberalism than Reagan ever proved to be. Nor was it the United States that forced China in 1978 to follow the path that has over time brought it closer and closer to the embrace of neoliberalism. It would be hard to attribute the moves toward neoliberalism in India and Sweden in 1992 to the imperial reach of the United States. The uneven geographical development of neoliberalism on the world stage has been a very complex process entailing multiple determinations and not a little chaos and confusion. So why, then, did the neoliberal turn occur, and what were the forces compelling it onward to the point where it has now become a hegemonic system within global capitalism?

Why the Neoliberal Turn?

Toward the end of the 1960s, global capitalism was falling into disarray. A significant recession occurred in early 1973 -- the first since the great slump of the 1930s. The oil embargo and oil price hike that followed later that year in the wake of the Arab-Israeli war exacerbated critical problems. The embedded capitalism of the postwar period, with its heavy emphasis on an uneasy compact between capital and labor brokered by an interventionist state that paid great attention to the social (i.e., welfare programs) and individual wage, was no longer working. The Bretton Woods accord set up to regulate international trade and finance was finally abandoned in favor of floating exchange rates in 1973. That system had delivered high rates of growth in the advanced capitalist countries and generated some spillover benefits -- most obviously to Japan but also unevenly across South America and to some other countries of South East Asia -- during the "golden age" of capitalism in the 1950s and early 1960s. By the next decade, however, the preexisting arrangements were exhausted and a new alternative was urgently needed to restart the process of capital accumulation. 7 How and why neoliberalism emerged victorious as an answer to that quandary is a complex story. In retrospect, it may seem as if neoliberalism had been inevitable, but at the time no one really knew or understood with any certainty what kind of response would work and how.

The world stumbled toward neoliberalism through a series of gyrations and chaotic motions that eventually converged on the so-called 'Washington Consensus" in the 1990s. The uneven geographical development of neoliberalism, and its partial and lopsided application from one country to another, testifies to its tentative character and the complex ways in which political forces, historical traditions, and existing institutional arrangements all shaped why and how the process actually occurred on the ground.

There is, however, one element within this transition that deserves concerted attention. The crisis of capital accumulation of the 1970s affected everyone through the combination of rising unemployment and accelerating inflation. Discontent was widespread, and the conjoining of labor and urban social movements throughout much of the advanced capitalist world augured a socialist alternative to the social compromise between capital and labor that had grounded capital accumulation so successfully in the postwar period. Communist and socialist parties were gaining ground across much of Europe, and even in the United States popular forces were agitating for widespread reforms and state interventions in everything ranging from environmental protection to occupational safety and health and consumer protection from corporate malfeasance. There was. in this, a clear political threat to ruling classes everywhere, both in advanced capitalist countries, like Italy and France, and in many developing countries, like Mexico and Argentina.

Beyond political changes, the economic threat to the position of ruling classes was now becoming palpable. One condition of the postwar settlement in almost all countries was to restrain the economic power of the upper classes and for labor to be accorded a much larger share of the economic pie. In the United States, for example, the share of the national income taken by the top 1 percent of earners fell from a prewar high of 16 percent to less than 8 percent by the end of the Second World War and stayed close to that level for nearly three decades. While growth was strong such restraints seemed not to matter, but when growth collapsed in the 1970s, even as real interest rates went negative and dividends and profits shrunk, ruling classes felt threatened. They had to move decisively if they were to protect their power from political and economic annihilation.

The coup d'état in Chile and the military takeover in Argentina, both fomented and led internally by ruling elites with U.S. support, provided one kind of solution. But the Chilean experiment with neoliberalism demonstrated that the benefits of revived capital accumulation were highly skewed. The country and its ruling elites along with foreign investors did well enough while the people in general fared poorly. This has been such a persistent effect of neoliberal policies over time as to be regarded a structural component of the whole project. Dumenil and Levy have gone so far as to argue that neoliberalism was from the very beginning an endeavor to restore class power to the richest strata in the population. They showed how from the mid-1980s onwards, the share of the top 1 percent of income earners in the United States soared rapidly to reach 15 percent by the end of the century. Other data show that the top 0.1 percent of income earners increased their share of the national income from 2 percent in 1978 to more than 6 percent by 1999. Yet another measure shows that the ratio of the median compensation of workers to the salaries of chief executive officers increased from just over thirty to one in 1970 to more than four hundred to one by 2000. Almost certainly, with the Bush administrations tax cuts now taking effect, the concentration of income and of wealth in the upper echelons of society is continuing apace. 8

And the United States is not alone in this: the top 1 percent of income earners in Britain doubled their share of the national income from 6.5 percent to 13 percent over the past twenty years. When we look further afield, we see extraordinary concentrations of wealth and power within a small oligarchy after the application of neoliberal shock therapy in Russia and a staggering surge in income inequalities and wealth in China as it adopts neoliberal practices. While there are exceptions to this trend -- several East and Southeast Asian countries have contained income inequalities within modest bounds, as have France and the Scandinavian countries -- the evidence suggests that the neoliberal turn is in some way and to some degree associated with attempts to restore or reconstruct upper-class power.

We can, therefore, examine the history of neoliberalism either as a utopian project providing a theoretical template for the reorganization of international capitalism or as a political scheme aimed at reestablishing the conditions for capital accumulation and the restoration of class power. In what follows, I shall argue that the last of these objectives has dominated. Neoliberalism has not proven effective at revitalizing global capital accumulation, but it has succeeded in restoring class power. As a consequence, the theoretical utopianism of the neoliberal argument has worked more as a system of justification and legitimization. The principles of neoliberalism are quickly abandoned whenever they conflict with this class project.

Neoliberalism has not proven effective at revitalizing global capital accumulation, but it has succeeded in restoring class power.

Toward the Restoration of Class Power

If there were movements to restore class power within global capitalism, then how were they enacted and by whom? The answer to that question in countries such as Chile and Argentina was simple: a swift, brutal, and self-assured military coup backed by the upper classes and the subsequent fierce repression of all solidarities created within the labor and urban social movements that had so threatened their power. Elsewhere, as in Britain and Mexico in 1976, it took the gentle prodding of a not yet fiercely neoliberal International Monetary Fund to push countries toward practices -- although by no means policy commitment -- to cut back on social expenditures and welfare programs to reestablish fiscal probity. In Britain, of course, Margaret Thatcher later took up the neoliberal cudgel with a vengeance in 1979 and wielded it to great effect, even though she never fully overcame opposition within her own party and could never effectively challenge such centerpieces of the welfare state as the National Health Service. Interestingly, it was only in 2004 that the Labour Government dared to introduce a fee structure into higher education. The process of neoliberalization has been halting, geographically uneven, and heavily influenced by class structures and other social forces moving for or against its central propositions within particular state formations and even within particular sectors, for example, health or education. 9

It is informative to look more closely at how the process unfolded in the United States, since this case was pivotal as an influence on other and more recent transformations. Various threads of power intertwined to create a transition that culminated in the mid-1990s with the takeover of Congress by the Republican Party. That feat represented in fact a neoliberal "Contract with America" as a program for domestic action. Before that dramatic denouement, however, many steps were taken, each building upon and reinforcing the other.

To begin with, by 1970 or so, there was a growing sense among the U.S. upper classes that the anti-business and anti-imperialist climate that had emerged toward the end of the 1960s had gone too far. In a celebrated memo, Lewis Powell (about to be elevated to the Supreme Court by Richard Nixon) urged the American Chamber of Commerce in 1971 to mount a collective campaign to demonstrate that what was good for business was good for America. Shortly thereafter, a shadowy but influential Business Round Table was formed that still exists and plays a significant strategic role in Republican Party politics. Corporate political action committees, legalized under the post-Watergate campaign finance laws of 1974, proliferated like wildfire. With their activities protected under the First Amendment as a form of free speech in a 1976 Supreme Court decision, the systematic capture of the Republican Party as a class instrument of collective (rather than particular or individual) corporate and financial power began. But the Republican Party needed a popular base, and that proved more problematic to achieve. The incorporation of leaders of the Christian right, depicted as a moral majority, together with the Business Round Table provided the solution to that problem. A large segment of a disaffected, insecure, and largely white working class was persuaded to vote consistently against its own material interests on cultural (anti-liberal, anti-Black, antifeminist and antigay), nationalist and religious grounds. By the mid-1990s, the Republican Party had lost almost all of its liberal elements and become a homogeneous right-wing machine connecting the financial resources of large corporate capital with a populist base, the Moral Majority, that was particularly strong in the U.S. South. 10

The second element in the U.S. transition concerned fiscal discipline. The recession of 1973 to 1975 diminished tax revenues at all levels at a time of rising demand for social expenditures. Deficits emerged everywhere as a key problem. Something had to be done about the fiscal crisis of the state; the restoration of monetary discipline was essential. That conviction empowered financial institutions that controlled the lines of credit to government. In 1975, they refused to roll over New York's debt and forced that city to the edge of bankruptcy. A powerful cabal of bankers joined together with the state to tighten control over the city. This meant curbing the aspirations of municipal unions, layoffs in public employment, wage freezes, cutbacks in social provision (education, public health, and transport services), and the imposition of user fees (tuition was introduced in the CUNY university system for the first time). The bailout entailed the construction of new institutions that had first rights to city tax revenues in order to pay off bond holders: whatever was left went into the city budget for essential services. The final indignity was a requirement that municipal unions invest their pension funds in city bonds. This ensured that unions moderate their demands to avoid the danger of losing their pension funds through city bankruptcy.

Such actions amounted to a coup d'état by financial institutions against the democratically elected government of New York City, and they were every bit as effective as the military overtaking that had earlier occurred in Chile. Much of the city's social infrastructure was destroyed, and the physical foundations (e.g., the transit system) deteriorated markedly for lack of investment or even maintenance. The management of New York's fiscal crisis paved the way for neoliberal practices both domestically under Ronald Reagan and internationally through the International Monetary Fund throughout the 1980s. It established a principle that, in the event of a conflict between the integrity of financial institutions and bondholders on one hand and the well-being of the citizens on the other, the former would be given preference. It hammered home the view that the role of government was to create a good business climate rather than look to the needs and well-being of the population at large. Fiscal redistributions to benefit the upper classes resulted in the midst of a general fiscal crisis.

Whether all the agents involved in producing this compromise in New York understood it at the time as a tactic for the restoration of upper-class power is an open question. The need to maintain fiscal discipline is a matter of deep concern in its own right and does not have to lead to the restitution of class dominance. It is unlikely, therefore, that Felix Rohatyn, the key merchant banker who brokered the deal between the city, the state, and the financial institutions, had the reinstatement of class power in mind. But this objective probably was very much in the thoughts of the investment bankers. It was almost certainly the aim of then-Secretary of the Treasury William Simon who, having watched the progress of events in Chile with approval, refused to give aid to New York and openly stated that he wanted that city to suffer so badly that no other city in the nation would ever dare take on similar social obligations again. 11

The third element in the U.S. transition entailed an ideological assault upon the media and upon educational institutions. Independent "think tanks" financed by wealthy individuals and corporate donors proliferated -- the Heritage Foundation in the lead -- to prepare an ideological onslaught aimed at persuading the public of the commonsense character of neoliberal propositions. A flood of policy papers and proposals and a veritable army of well-paid hired lieutenants trained to promote neoliberal ideas coupled with the corporate acquisition of media channels effectively transformed the discursive climate in the United States by the mid-1980s. The project to "get government off the backs of the people" and to shrink government to the point where it could be "drowned in a bathtub" was loudly proclaimed. With respect to this, the promoters of the new gospel found a ready audience in that wing of the 1968 movement whose goal was greater individual liberty and freedom from state power and the manipulations of monopoly capital. The libertarian argument for neoliberalism proved a powerful force for change. To the degree that capitalism reorganized to both open a space for individual entrepreneurship and switch its efforts to satisfy innumerable niche markets, particularly those defined by sexual liberation, that were spawned out of an increasingly individualized consumerism, so it could match words with deeds.

This carrot of individualized entrepreneurship and consumerism was backed by the big stick wielded by the state and financial institutions against that other wing of the 1968 movement whose members had sought social justice through collective negotiation and social solidarities. Reagan's destruction of the air traffic controllers (PATCO) in 1980 and Margaret Thatchers defeat of the British miners in 1984 were crucial moments in the global turn toward neoliberalism. The assault upon institutions, such as trade unions and welfare rights organizations, that sought to protect and further working-class interests was as broad as it was deep. The savage cutbacks in social expenditures and the welfare state, and the passing of all responsibility for their well-being to individuals and their families proceeded apace. But these practices did not and could not stop at national borders. After 1980, the United States, now firmly committed to neoliberalization and clearly backed by Britain, sought, through a mix of leadership, persuasion -- the economics departments of U.S. research universities played a major role in training many of the economists from around the world in neoliberal principles -- and coercion to export neoliberalization far and wide. The purge of Keynesian economists and their replacement by neoliberal monetarists in the International Monetary Fund in 1982 transformed the U.S.-dominated IMF into a prime agent of neoliberalization through its structural adjustment programs visited upon any state (and there were many in the 1980s and 1990s) that required its help with debt repayments. The Washington Consensus that was forged in the 1990s and the negotiating rules set up under the World Trade Organization in 1998 confirmed the global turn toward neoliberal practices. 12

The new international compact also depended upon the reanimation and reconfiguration of the U.S. imperial tradition. That tradition had been forged in Central America in the 1920s, as a form of domination without colonies. Independent republics could be kept under the thumb of the United States and effectively act, in the best of cases, as proxies for U.S. interests through the support of strongmen -- like Somoza in Nicaragua, the Shah in Iran, and Pinochet in Chile -- and a coterie of followers backed by military assistance and financial aid. Covert aid was available to promote the rise to power of such leaders, but by the 1970s it became clear that something else was needed: the opening of markets, of new spaces for investment, and clear fields where financial powers could operate securely. This entailed a much closer integration of the global economy with a well-defined financial architecture. The creation of new institutional practices, such as those set out by the IMF and the WTO, provided convenient vehicles through which financial and market power could be exercised. The model required collaboration among the top capitalist powers and the Group of Seven (G7), bringing Europe and Japan into alignment with the United States to shape the global financial and trading system in ways that effectively forced all other nations to submit. "Rogue nations," defined as those that failed to conform to these global rules, could then be dealt with by sanctions or coercive and even military force if necessary. In this way, U.S. neoliberal imperialist strategies were articulated through a global network of power relations, one effect of which was to permit the U.S. upper classes to exact financial tribute and command rents from the rest of the world as a means to augment their already hegemonic control. 13

Neoliberalism as Creative Destruction

In what ways has neoliberalization resolved the problems of flagging capital accumulation? Its actual record in stimulating economic growth is dismal. Aggregate growth rates stood at 3.5 percent or so in the 1960s and even during the troubled 1970s fell to only 2.4 percent. The subsequent global growth rates of 1.4 percent and 1.1 percent for the 1980s and 1990s, and a rate that barely touches 1 percent since 2000, indicate that neoliberalism has broadly failed to

In what ways has neoliberalization resolved the problems of flagging capital accumulation? Its actual record in stimulating economic growth is dismal. Aggregate growth rates stood at 3.5 percent or so in the 1960s and even during the troubled 1970s fell to only 2.4 percent. The subsequent global growth rates of 1.4 percent and 1.1 percent for the 1980s and 1990s, and a rate that barely touches 1 percent since 2000, indicate that neoliberalism has broadly failed to stimulate worldwide growth. 14 Even if we exclude from this calculation the catastrophic effects of the collapse of the Russian and some Central European economies in the wake of the neoliberal shock therapy treatment of the 1990s, global economic performance from the standpoint of restoring the conditions of general capital accumulation has been weak.

Despite their rhetoric about curing sick economies, neither Britain nor the United States achieved high economic performance in the 1980s. That decade belonged to Japan, the East Asian "Tigers," and West Germany as powerhouses of the global economy. Such countries were very successful, but their radically different institutional arrangements make it difficult to pin their achievements on neoliberalism. The West German Bundesbank had taken a strong monetarist line (consistent with neoliberalism) for more than two decades, a fact suggesting that there is no necessary connection between monetarism per se and the quest to restore class power. In West Germany, the unions remained strong and wage levels stayed relatively high alongside the construction of a progressive welfare state. One of the effects of this combination was to stimulate a high rate of technological innovation that kept West Germany well ahead in the field of international competition. Export-led production moved the country forward as a global leader.

In Japan, independent unions were weak or nonexistent, but state investment in technological and organizational change and the tight relationship between corporations and financial institutions (an arrangement that also proved felicitous in West Germany) generated an astonishing export-led growth performance, very much at the expense of other capitalist economies such as the United Kingdom and the United States. Such growth as there was in the 1980s (and the aggregate rate of growth in the world was lower even than that of the troubled 1970s) did not depend, therefore, on neoliberalization. Many European states therefore resisted neoliberal reforms and increasingly found ways to preserve much of their social democratic heritage while moving, in some cases fairly successfully, toward the West German model. In Asia, the Japanese model implanted under authoritarian systems of governance in South Korea, Taiwan, and Singapore also proved viable and consistent with reasonable equality of distribution. It was only in the 1990s that neoliberalization began to pay off for both the United States and Britain. This happened in the midst of a long-drawn-out period of deflation in Japan and relative stagnation in a newly unified Germany. Up for debate is whether the Japanese recession occurred as a simple result of competitive pressures or whether it was engineered by financial agents in the United States to humble the Japanese economy.

So why, then, in the face of this patchy if not dismal record, have so many been persuaded that neoliberalization is a successful solution? Over and beyond the persistent stream of propaganda emanating from the neoliberal think tanks and suffusing the media, two material reasons stand out. First, neoliberalization has been accompanied by increasing volatility within global capitalism. That success was to materialize somewhere obscured the reality that neoliberalism was generally failing. Periodic episodes of growth interspersed with phases of creative destruction, usually registered as severe financial crises. Argentina was opened up to foreign capital and privatization in the 1990s and for several years was the darling of Wall Street, only to collapse into disaster as international capital withdrew at the end of the decade. Financial collapse and social devastation was quickly followed by a long political crisis. Financial turmoil proliferated all over the developing world, and in some instances, such as Brazil and Mexico, repeated waves of structural adjustment and austerity led to economic paralysis.

On the other hand, neoliberalism has been a huge success from the standpoint of the upper classes. It has either restored class position to ruling elites, as in the United States and Britain, or created conditions for capitalist class formation, as in China, India, Russia, and elsewhere. Even countries that have suffered extensively from neoliberalization have seen the massive reordering of class structures internally. The wave of privatization that came to Mexico with the Salinas de Gortari administration in 1992 spawned unprecedented concentrations of wealth in the hands of a few people (Carlos Slim, tor example, who took over the state telephone system and became an instant billionaire).

With the media dominated by upper-class interests, the myth could be propagated that certain sectors failed because they were not competitive enough, thereby setting the stage for even more neoliberal reforms. Increased social inequality was necessary to encourage entrepreneurial risk and innovation, and these, in turn, conferred competitive advantage and stimulated growth. If conditions among the lower classes deteriorated, it was because they failed for personal and cultural reasons to enhance their own human capital through education, the acquisition of a protestant work ethic, and submission to work discipline and flexibility. In short, problems arose because of the lack of competitive strength or because of personal, cultural, and political failings. In a Spencerian world, the argument went, only the fittest should and do survive. Systemic problems were masked under a blizzard of ideological pronouncements and a plethora of localized crises.

If the main effect of neoliberalism has been redistributive rather than generative, then ways had to be found to transfer assets and channel wealth and income either from the mass of the population toward the upper classes or from vulnerable to richer countries. I have elsewhere provided an account of these processes under the rubric of accumulation by dispossession. 15 By this, I mean the continuation and proliferation of accretion practices that Marx had designated as "primitive" or "original" during the rise of capitalism. These include

(1) the commodification and privatization of land and me forceful expulsion or peasant populations {as in Mexico and India in recent times);

(2) conversion of various forms of property rights (common, collective, state, etc.) into exclusively private property rights;

(3) suppression of rights to the commons;

(4) commodification of labor power and the suppression of alternative (indigenous) forms of production and consumption;

(5) colonial, neocolonial, and imperial processes of appropriation of assets (including natural resources); (6) monetization of exchange and taxation, particularly of land;

(7) the slave trade (which continues, particularly in the sex industry); and

(8) usury, the national debt, and, most devastating of all, the use of the credit system as radical means of primitive accumulation.

The state, with its monopoly of violence and definitions of legality, plays a crucial role in backing and promoting these processes. To this list of mechanisms, we may now add a raft of additional techniques, such as the extraction of rents from patents and intellectual property rights and the diminution or erasure of various forms of communal property rights -- such as state pensions, paid vacations, access to education, and health care -- won through a generation or more of social democratic struggles. The proposal to privatize all state pension rights (pioneered in Chile under Augusto Pinochet s dictatorship) is, for example, one of the cherished objectives of neoliberals in the United States.

In the cases of China and Russia, it might be reasonable to refer to recent events in "primitive" and "original" terms, but the practices that restored class power to capitalist elites in the United States and elsewhere are best described as an ongoing process of accumulation by dispossession that grew rapidly under neoliberalism. In what follows, I isolate four main elements.

1. Privatization

The corporatization, commodification, and privatization of hitherto public assets have been signal features of the neoliberal project. Its primary aim has been to open up new fields for capital accumulation in domains formerly regarded off-limits to the calculus of profitability. Public utilities of all lands (water, telecommunications, transportation), social welfare provision (public housing, education, health care, pensions), public institutions (such as universities, research laboratories, prisons), and even warfare (as illustrated by the "army" of private contractors operating alongside the armed forces in Iraq) have all been privatized to some degree throughout the capitalist world.

Intellectual property rights established through the so-called TRIPS (Trade Related Aspects of Intellectual Property Rights) agreement within the WTO defines genetic materials, seed plasmas, and all manner of other products as private property. Rents for use can then be extracted from populations whose practices had played a crucial role in the development of such genetic materials. Bio-piracy is rampant, and the pillaging of the worlds stockpile of genetic resources is well under way to the benefit of a few large pharmaceutical companies. The escalating depletion of the global environmental commons (land, air, water) and proliferating habitat degradations that preclude anything but capital-intensive modes of agricultural production have likewise resulted from the wholesale commodification of nature in all its forms. The commodification (through tourism) of cultural forms, histories, and intellectual creativity entails wholesale dispossessions (the music industry is notorious for the appropriation and exploitation of grassroots culture and creativity). As in the past, the power of the state is frequently used to force such processes through even against popular will. The rolling back of regulatory frameworks designed to protect labor and the environment from degradation has entailed the loss of rights. The reversion of common property rights won through years of hard class struggle (the right to a state pension, to welfare, to national health care) into the private domain has been one of the most egregious of all policies of dispossession pursued in the name of neoliberal orthodoxy.

The corporatization, commodification, and privatization of hitherto public assets have been signal features of the neoliberal project.

All of these processes amount to the transfer of assets from the public and popular realms to the private and class-privileged domains. Privatization, Arundhati Roy argued with respect to the Indian case, entails "the transfer of productive public assets from the state to private companies. Productive assets include natural resources: earth, forest, water, air. These are the assets that the state holds in trust for the people it represents. ... To snatch these away and sell them as stock to private companies is a process of barbaric dispossession on a scale that has no parallel in history." 16

2. Financialization

The strong financial wave that set in after 1980 has been marked by its speculative and predatory style. The total daily turnover of financial transactions in international markets that stood at $2.3 billion in 1983 had risen to $130 billion by 2001. This $40 trillion annual turnover in 2001 compares to the estimated $800 billion that would be required to support international trade and productive investment flows. 17 Deregulation allowed the financial system to become one of the main centers of redistributive activity through speculation, predation, fraud, and thievery. Stock promotions; Ponzi schemes; structured asset destruction through inflation; asset stripping through mergers and acquisitions; and the promotion of debt incumbency that reduced whole populations, even in the advanced capitalist countries, to debt peonage -- to say nothing of corporate fraud and dispossession of assets, such as the raiding of pension hinds and their decimation by stock and corporate collapses through credit and stock manipulations -- are all features of the capitalist financial system.

The emphasis on stock values, which arose after bringing together the interests of owners and managers of capital through the remuneration of the latter in stock options, led, as we now know, to manipulations in the market that created immense wealth for a few at the expense of the many. The spectacular collapse of Enron was emblematic of a general process that deprived many of their livelihoods and pension rights. Beyond this, we also must look at the speculative raiding carried out by hedge funds and other major instruments of finance capital that formed the real cutting edge of accumulation by dispossession on the global stage, even as they supposedly conferred the positive benefit to the capitalist class of spreading risks.

3. The management and manipulation of crises

Beyond the speculative and often fraudulent froth that characterizes much of neoliberal financial manipulation, there lies a deeper process that entails the springing of the debt trap as a primary means of accumulation by dispossession. Crisis creation, management, and manipulation on the world stage has evolved into the fine art of deliberative redistribution of wealth from poor countries to the rich. By suddenly raising interest rates in 1979, Paul Volcker, then chairman of the U.S. Federal Reserve, raised the proportion of foreign earnings that borrowing countries had to put to debt-interest payments. Forced into bankruptcy, countries like Mexico had to agree to structural adjustment. While proclaiming its role as a noble leader organizing bailouts to keep global capital accumulation stable and on track, the United States could also open the way to pillage the Mexican economy through deployment of its superior financial power under conditions of local crisis. This was what the U.S. Treasury/Wall Street/IMF complex became expert at doing everywhere. Volker s successor, Alan Greenspan, resorted to similar tactics several times in the 1990s. Debt crises in individual countries, uncommon in the 1960s, became frequent during the 1980s and 1990s. Hardly any developing country remained untouched and in some cases, as in Latin America, such crises were frequent enough to be considered endemic. These

debt crises were orchestrated, managed, and controlled both to rationalize the system and to redistribute assets during the 1980s and 1990s. Wade and Veneroso captured the essence of this trend when they wrote of the Asian crisis -- provoked initially by the operation of U.S.-based hedge funds -- of 1997 and 1998:

Financial crises have always caused transfers of ownership and power to those who keep their own assets intact and who are in a position to create credit, and the Asian crisis is no exception . . . there is no doubt that Western and Japanese corporations are the big winners. . . . The combination of massive devaluations pushed financial liberalization, and IMF-facilitated recovery may even precipitate the biggest peacetime transfer of assets from domestic to foreign owners in the past fifty years anywhere in the world, dwarfing the transfers from domestic to U.S. owners in Latin America in the 1980s or in Mexico after 1994. One recalls the statement attributed to Andrew Mellon: "In a depression assets return to their rightful owners." 18

The analogy to the deliberate creation of unemployment to produce a pool of low-wage surplus labor convenient for further accumulation is precise. Valuable assets are thrown out of use and lose their value. They lie fallow and dormant until capitalists possessed of liquidity choose to seize upon them and breathe new life into them. The danger, however, is that crises can spin out of control and become generalized, or that revolts will arise against the system that creates them. One of the prime functions of state interventions and of international institutions is to orchestrate crises and devaluations in ways that permit accumulation by dispossession to occur without sparking a general collapse or popular revolt. The structural adjustment program administered by the Wall Street/Treasury/ IMF complex takes care of the first function. It is the job of the comprador neoliberal state apparatus (backed by military assistance from the imperial powers) to ensure that insurrections do not occur in whichever country has been raided. Yet signs of popular revolt have emerged, first with the Zapatista uprising in Mexico in 1994 and later in the generalized discontent that informed anti-globalization movements such as the one that culminated in Seattle in 1999.

4. State redistributions

The state, once transformed into a neoliberal set of institutions, becomes a prime agent of redistributive policies, reversing the flow from upper to lower classes that had been implemented during the preceding social democratic era. It does this in the first instance through privatization schemes and cutbacks in government expenditures meant to support the social wage. Even when privatization appears as beneficial to the lower classes, the long-term effects can be negative. At first blush, for example, Thatchers program for the privatization of social housing in Britain appeared as a gift to the lower classes whose members could now convert from rental to ownership at a relatively low cost, gain control over a valuable asset, and augment their wealth. But once the transfer was accomplished, housing speculation took over particularly in prime central locations, eventually bribing or forcing low-income populations out to the periphery in cities like London and turning erstwhile working-class housing estates into centers of intense gentrification. The loss of affordable housing in central areas produced homelessness for many and extraordinarily long commutes for those who did have low-paying service jobs. The privatization of the ejidos (indigenous common property rights in land under the Mexican constitution) in Mexico, which became a central component of the neoliberal program set up during the 1990s, has had analogous effects on the Mexican peasantry, forcing many rural dwellers into the cities in search of employment. The Chinese state has taken a whole series of draconian measures through which assets have been conferred upon a small elite to the detriment of the masses.

The neoliberal state also seeks redistributions through a variety of other means such as revisions in the tax code to benefit returns on investment rather than incomes and wages, promotion of regressive elements in the tax code (such as sales taxes), displacement of state expenditures and free access to all by user fees (e.g., on higher education), and the provision of a vast array of subsidies and tax breaks to corporations. The welfare programs that now exist in the United States at federal, state, and local levels amount to a vast redirection of public moneys for corporate benefit (directly as in the case of subsidies to agribusiness and indirectly as in the case of the military-industrial sector), in much the same way that the mortgage interest rate tax deduction operates in the United States as a massive subsidy to upper-income home owners and the construction of industry. Heightened surveillance and policing and, in the case of the United States, the incarceration of recalcitrant elements in the population indicate a more sinister role of intense social control. In developing countries, where opposition to neoliberalism and accumulation by dispossession can be stronger, the role of the neoliberal state quickly assumes that of active repression even to the point of low level warfare against oppositional movements (many of which can now conveniently be designated as terrorist to garner U.S. military assistance and support) such as the Zapatistas in Mexico or landless peasants in Brazil.

In effect, reported Roy, "India's rural economy, which supports seven hundred million people, is being garroted. Farmers who produce too much are in distress, farmers who produce too little are in distress, and landless agricultural laborers are out of work as big estates and farms lay off their workers. They're all flocking to the cities in search of employment." 19 In China, the estimate is that at least half a billion people will have to be absorbed by urbanization over the next ten years if rural mayhem and revolt is to be avoided. What those migrants will do in the cities remains unclear, though the vast physical infrastructural plans now in the works will go some way to absorbing the labor surpluses released by primitive accumulation.

The redistributive tactics of neoliberalism are wide-ranging, sophisticated, frequently masked by ideological gambits, but devastating for the dignity and social well-being of vulnerable populations and territories. The wave of creative destruction neoliberalization has visited across the globe is unparalleled in the history of capitalism. Understandably, it has spawned resistance and a search for viable alternatives.

[Oct 04, 2017] The Trump-Goldman Sachs Tax Cut for the Rich by Jack Rasmus

Notable quotes:
"... The Trump Plan is actually the product of the former Goldman-Sachs investment bankers who have been in charge of Trump's economic policy since he came into office. Steve Mnuchin, the Treasury Secretary, and Gary Cohn, director of Trump's economic council, are the two authors of the Trump tax cuts. They put it together. They are also both former top executives of the global shadow bank called Goldman Sachs. ..."
"... Given that economic policy under Trump is being driven by bankers, it's not surprising that the CEO of the biggest US banks, Morgan Stanley, admitted just a few months ago that a reduction of the corporate nominal income tax rate from the current 35% nominal rate to a new nominal rate of 20% will provide the bank an immediate windfall gain of 15%-20% in earnings. ..."
"... Big multinational companies like Apple, i.e. virtually all the big tech companies, big Pharma corporations, banks and oil companies, pay no more than 12-13% effective tax rates today -- not the 35% nominal rate. ..."
"... Tech, big Pharma, banks and oil companies are the big violators of offshore cash hoarding/tax avoidance schemes. Microsoft's effective global tax rate last year was only 12%. IBM's even less, at 10%. The giant drug company, Pfizer paid 18% and the oil company, Chevron 14%. One of the largest US companies in the world, General Electric, paid only 1%. When their nominal rate is reduced to 20% under the Trump plan, they'll pay even less, likely in the single digits, if that. ..."
"... Tax cutting for business classes and the 1% has always been a fundamental element of Neoliberal economic policy ever since the Reagan years (and actually late Jimmy Carter period). Major tax cut legislation occurred in 1981, 1986, and 1997-98 under Clinton. George W. Bush then cut taxes by $3.4 trillion in 2001-04, 80% of which went to the wealthiest households and businesses. He cut taxes another $180 billion in 2008. Obama cut another $300 billion in his 2009 so-called recovery program. When that faltered, it was another $800 billion at year end 2010. He then extended the Bush tax cuts that were scheduled to expire in 2011 two more years. That costs $450 billion each year. And in 2013, cutting a deal with Republicans called the 'fiscal cliff' settlement, he extended the Bush tax cuts of the prior decade for another ten years. That cost a further $5 trillion. Now Trump wants even more. He promised $5 trillion in tax cuts during his election campaign. So the current proposal is only half of what he has in mind perhaps. ..."
"... Neoliberal tax cutting in the US has also been characterized by the 'tax cut shell game'. The shell game is played several ways. ..."
"... To cover the shell game, an overlay of ideology covers up what's going on. There's the false argument that 'tax cuts create jobs', for which there's no empirical evidence. There's the claim US multinational corporations pay a double tax compared to their competitors, when in fact they effectively pay less. There's the lie that if corporate taxes are cut they will automatically invest the savings, when in fact what they do is invest offshore, divert the savings to stock and bond and other financial markets, boost their dividend and stock buybacks, or stuff the savings in their offshore subsidiaries to avoid paying taxes. ..."
"... All these neoliberal false claims, arguments, and outright lies continue today to justify the Trump-Goldman Sachs tax plan -- which is just the latest iteration of neoliberal tax policy and tax offensive in the US. The consequences of the Trump plan, if it is passed, will be the same as the previous tax giveaways to the 1% and their companies: it will redistribute income massively from the middle and working classes to the rich. Income inequality will continue to worsen dramatically. ..."
"... Nothing will change so long as the Corporate Party of America is allowed to continue its neoliberal tax giveaways, its tax cutting 'shell games', and is allowed to continue to foment its ideological cover up. ..."
Oct 04, 2017 | www.counterpunch.org

Contradicting Trump, the independent Tax Policy Center has estimated in just the first year half of the $2 trillion plus Trump cuts will go to the wealthiest 1% households that annually earn more than $730,000. That's an immediate income windfall to the wealthiest 1% households of 8.5%, according to the Tax Policy Center. But that's only in the first of ten years the cuts will be in effect. It gets worse over time.

According to the Tax Policy Center, "Taxpayers in the top one percent (incomes above $730,000), would receive about 50 percent of the total tax benefit [in 2018]". However, "By 2027, the top one percent would get 80 percent of the plan's tax cuts while the share for middle-income households would drop to about five percent." By the last year of the cuts, 2027, on average the wealthiest 1% household would realize $207,000, and the even wealthier 0.1% would realize an income gain of $1,022,000.

When confronted with these facts on national TV this past Sunday, Trump's Treasury Secretary, Steve Mnuchin, quickly backtracked and admitted he could not guarantee every middle class family would see a tax cut. Right. That's because 15-17 million (12%) of US taxpaying households in the US will face a tax hike in the first year of the cuts. In the tenth and last year, "one in four middle class families would end up with higher taxes".

The US Economic 'Troika'

The Trump Plan is actually the product of the former Goldman-Sachs investment bankers who have been in charge of Trump's economic policy since he came into office. Steve Mnuchin, the Treasury Secretary, and Gary Cohn, director of Trump's economic council, are the two authors of the Trump tax cuts. They put it together. They are also both former top executives of the global shadow bank called Goldman Sachs. Together with the other key office determining US economic policy, the US central bank, held by yet another ex-Goldman Sachs senior exec, Bill Dudley, president of the New York Federal Reserve bank, the Goldman-Sachs trio of Mnuchin-Cohn-Dudley constitute what might be called the 'US Troika' for domestic economic policy.
The Trump tax proposal is therefore really a big bankers tax plan -- authored by bankers, in the interest of bankers and financial investors (like Trump himself), and overwhelmingly favoring the wealthiest 1%.

Given that economic policy under Trump is being driven by bankers, it's not surprising that the CEO of the biggest US banks, Morgan Stanley, admitted just a few months ago that a reduction of the corporate nominal income tax rate from the current 35% nominal rate to a new nominal rate of 20% will provide the bank an immediate windfall gain of 15%-20% in earnings. And that's just the nominal corporate rate cut proposed by Trump. With loopholes, it's no doubt more.

The Trump-Troika's Triple Tax-Cut Trifecta for the 1%

The Trump Troika has indicated it hopes to package up and deliver the trillions of $ to their 1% friends by Christmas 2017. Their gift will consist of three major tax cuts for the rich and their businesses. A Trump-Troika Tax Cut 'Trifecta' of $ trillions.

1.The Corporate Tax Cuts

The first of the three main elements is a big cut in the corporate income tax nominal rate, from current 35% to 20%. In addition, there's the elimination of what is called the 'territorial tax' system, which is just a fancy phrase for ending the fiction of the foreign profits tax. Currently, US multinational corporations hoard a minimum of $2.6 trillion of profits offshore and refuse to pay US taxes on those profits. In other words, Congress and presidents for decades have refused to enforce the foreign profits tax. Now that fiction will be ended by officially eliminating taxes on their profits. They'll only pay taxes on US profits, which will create an even greater incentive for them to shift operations and profits to their offshore subsidiaries. But there's more for the big corporations.

The Trump plan also simultaneously proposes what it calls a 'repatriation tax cut'. If the big tech, pharma, banks, and energy companies bring back some of their reported $2.6 trillion (an official number which is actually more than that), Congress will require they pay only a 10% tax rate -- not the current 35% rate or even Trump's proposed 20%�on that repatriated profits. No doubt the repatriation will be tied to some kind of agreement to invest the money in the US economy. That's how they'll sell it to the American public. But that shell game was played before, in 2004-05, under George W. Bush. The same 'repatriation' deal was then legislated, to return the $700 billion then stuffed away in corporate offshore subsidiaries. About half the $700 billion was brought back, but US corporations did not invest it in jobs in the US as they were supposed to. They used the repatriated profits to buy up their competitors (mergers and acquisitions), to pay out dividends to stockholders, and to buy back their stock to drive equity prices and the stock market to new heights in 2005-07. The current Trump 'territorial tax repeal/repatriation' boondoggle will turn out just the same as it did in 2005.

2. Non-Incorporate Business Tax Cuts

The second big business class tax windfall in the Trump-Goldman Sachs tax giveaway for the rich is the proposal to reduce the top nominal tax rate for non-corporate businesses, like proprietorships and partnerships, whose business income (aka profits) is treated like personal income. This is called the 'pass through business income' provision.

That's a Trump tax cut for unincorporated businesses -- like doctors, law firms, real estate investment partnerships, etc. 40% of non-corporate income is currently taxed at 39.6% (the top personal income tax rate). Trump proposes to reduce that nominal rate to 25%. So non-incorporate businesses too will get an immediately 14.6% cut, nearly matching the 15% rate cut for corporate businesses.

In the case of both corporate and non-corporate companies we're talking about 'nominal' tax rate cuts of 14.6% and 15%. The 'effective' tax rate is what they actually pay in taxes -- i.e. after loopholes, after their high paid tax lawyers take a whack at their tax bill, after they cleverly divert their income to their offshore subsidiaries and refuse to pay the foreign profits tax, and after they stuff away whatever they can in offshore tax havens in the Cayman Islands, Switzerland, and a dozen other island nations worldwide.

For example, Apple Corporation alone is hoarding $260 billion in cash at present -- 95% of which it keeps offshore to avoid paying Uncle Sam taxes. Big multinational companies like Apple, i.e. virtually all the big tech companies, big Pharma corporations, banks and oil companies, pay no more than 12-13% effective tax rates today -- not the 35% nominal rate.

Tech, big Pharma, banks and oil companies are the big violators of offshore cash hoarding/tax avoidance schemes. Microsoft's effective global tax rate last year was only 12%. IBM's even less, at 10%. The giant drug company, Pfizer paid 18% and the oil company, Chevron 14%. One of the largest US companies in the world, General Electric, paid only 1%. When their nominal rate is reduced to 20% under the Trump plan, they'll pay even less, likely in the single digits, if that.

Corporations and non-corporate businesses are the institutional conduit for passing income to their capitalist owners and managers. The Trump corporate and business taxes means companies immediately get to keep at least 15% more of their income for themselves -- and more in 'effective' rate terms. That means they get to distribute to their executives and big stockholders and partners even more than they have in recent years. And in recent years that has been no small sum. For example, just corporate dividend payouts and stock buybacks have totaled more than $1 trillion on average for six years since 2010! A total of more than $6 trillion.

But all that's only the business tax cut side of the Trump plan. There's a third major tax cut component of the Trump plan -- i.e. major cuts in the Personal Income Tax that accrue overwhelmingly to the richest 1% households.

3. Personal Income Tax Cuts for the 1%

There are multiple measures in the Trump-Troika proposal that benefits the 1% in the form of personal income tax reductions. Corporations and businesses get to keep more income from the business tax cuts, to pass on to their shareholders, investors, and senior managers. The latter then get to keep more of what's passed through and distributed to them as a result of the personal income tax cuts.

The first personal tax cut boondoggle for the 1% wealthiest households is the Trump proposal to reduce the 'tax income brackets' from seven to three. The new brackets would be 35%, 25%, and 12%.

Whenever brackets are reduced, the wealthiest always benefit. The current top bracket, affecting households with a minimum of $418,000 annual income, would be reduced from the current 39.6% to 35%. In the next bracket, those with incomes of 191,000 to 418,000 would see their tax rate (nominal again) cut from 28% to 25%. However, the 25% third bracket would apply to annual incomes as low as $38,000. That's the middle and working class. So households with $38,000 annual incomes would pay the same rate as those with more than $400,000. Tax cuts for the middle class, did Trump say? Only tax rate reductions beginning with those with $191,000 incomes and the real cuts for those over $418,000!

But the cuts in the nominal tax rate for the top 1% to 5% households are only part of the personal income tax windfall for the rich under the Trump plan. The really big tax cuts for the 1% come in the form of the repeal of the Inheritance Tax and the Alternative Minimum Tax, as well as Trump's allowing the 'carried interest' tax loophole for financial speculators like hedge fund managers and private equity CEOs to continue.

The current Inheritance Tax applies only to those with estates of $11 million or more, about 0.2 of all the taxpaying households. So its repeal is clearly a windfall for the super rich. The Alternative Minimum Tax is designed to ensure the super rich pay something, after they manipulate the tax loopholes, shelter their income offshore in tax havens, or simply engage in tax fraud by various other means. Now that's gone as well under the Trump plan. 'Carried interest', a loophole, allows big finance speculators, like hedge fund managers, to avoid paying the corporate tax rate altogether, and pay a maximum of 20% on their hundreds of millions and sometimes billions of dollars of income every year.
Who Pays?

As previously noted, folks with $91,000 a year annual income get no tax rate cuts. They still will pay the 25%. And since that is what's called 'earned' (wage and salary) income, they don't get the loopholes to manipulate, like those with 'capital incomes' (dividends, capital gains, rents, interest, etc.). What they get is called deductions. But under the Trump plan, the deductions for state and local taxes, for state sales taxes, and apparently for excess medical costs will all disappear. The cost of that to middle and working class households is estimated at $1 trillion over the decade.

Trump claims the standard deduction will be doubled, and that will benefit the middle class. But estimates reveal that a middle class family with two kids will see their standard deduction reduced from $28,900 to $24,000. But I guess that's just 'Trump math'.

The general US taxpayer will also pay for the trillions of dollars that will be redistributed to the 1% and their companies. It's estimated the federal government deficit will increase by $2.4 trillion over the decade as a result of the Trump plan. Republicans in Congress have railed over the deficits and federal debt, now at $20 trillion, for years. But they are conspicuously quiet now about adding $2.4 trillion more -- so long as it the result of tax giveaways to themselves, their 1% friends, and their rich corporate election campaign contributors.

And both wings of the Corporate Party of America -- aka Republicans and Democrats -- never mention the economic fact that since 2001, 60% of US federal government deficits, and therefore the US debt of $20 trillion, are attributable to tax cuts by George W. Bush and Barack Obama: more than $3.5 trillion under Bush and more than $7 trillion under Obama. (The remaining $10 trillion of the US debt due to war and defense spending, price gouging by the medical industry and big pharma driving up government costs for Medicare, Medicaid, and other government insurance, bailouts of the big banks in 2008-09, and interest payments on the debt).

The 35-Year Neoliberal Tax Offensive

Tax cutting for business classes and the 1% has always been a fundamental element of Neoliberal economic policy ever since the Reagan years (and actually late Jimmy Carter period). Major tax cut legislation occurred in 1981, 1986, and 1997-98 under Clinton. George W. Bush then cut taxes by $3.4 trillion in 2001-04, 80% of which went to the wealthiest households and businesses. He cut taxes another $180 billion in 2008. Obama cut another $300 billion in his 2009 so-called recovery program. When that faltered, it was another $800 billion at year end 2010. He then extended the Bush tax cuts that were scheduled to expire in 2011 two more years. That costs $450 billion each year. And in 2013, cutting a deal with Republicans called the 'fiscal cliff' settlement, he extended the Bush tax cuts of the prior decade for another ten years. That cost a further $5 trillion. Now Trump wants even more. He promised $5 trillion in tax cuts during his election campaign. So the current proposal is only half of what he has in mind perhaps.

Neoliberal tax cutting in the US has also been characterized by the 'tax cut shell game'. The shell game is played several ways.

In the course of major tax cut legislation, the elites and their lobbyists alternate their focus on cutting rates and on correcting tax loopholes. They raise rates but expand loopholes. When the public becomes aware of the outrageous loopholes, they then eliminate some loopholes but simultaneously reduce the tax rates on the rich. When the public complains of too low tax rates for the rich, they raise the rates but quietly expand the loopholes. They play this shell game so the outcome is always a net gain for corporations and the rich.

Since Reagan and the advent of neoliberal tax policy, the corporate income tax share of total US government revenues has fallen from more than 20% to single digits well below 10%. Conversely, the payroll tax has doubled from 22% to more than 40%. A similar shift within the personal income tax, steadily around 40% of government revenues, has also occurred. The wealthy pay less a share of the total and the middle class pays more. Along the way, token concessions to the very low end of working poor are introduced, to give the appearance of fairness. But the middle class, the $38 to $91,000 nearly 100 million taxpaying households foot the bill for both the 1% and the bottom. This pattern was set in motion under Reagan. His proposed $752 billion in tax cuts in 1981-82 were adjusted in 1986, but the net outcome was more for the rich and their corporations. That pattern has continued under Clinton, Bush, Obama and now proposed under Trump.

To cover the shell game, an overlay of ideology covers up what's going on. There's the false argument that 'tax cuts create jobs', for which there's no empirical evidence. There's the claim US multinational corporations pay a double tax compared to their competitors, when in fact they effectively pay less. There's the lie that if corporate taxes are cut they will automatically invest the savings, when in fact what they do is invest offshore, divert the savings to stock and bond and other financial markets, boost their dividend and stock buybacks, or stuff the savings in their offshore subsidiaries to avoid paying taxes.

All these neoliberal false claims, arguments, and outright lies continue today to justify the Trump-Goldman Sachs tax plan -- which is just the latest iteration of neoliberal tax policy and tax offensive in the US. The consequences of the Trump plan, if it is passed, will be the same as the previous tax giveaways to the 1% and their companies: it will redistribute income massively from the middle and working classes to the rich. Income inequality will continue to worsen dramatically. US multinational corporations will begin again to divert profits, and investment, offshore; profits brought back untaxed will result in mergers and acquisitions, dividend payouts, and financial markets investment. No real jobs will be created in the US. The wealthy will continue to pump their savings into financial asset markets, causing further bubbles in stocks, exchange traded funds, bonds, derivatives and the like. The US economy will continue to slow and become more unstable financially. And there will be another financial crash and great recession -- or worse. Only this time, the vast majority of US households -- i.e. the middle and working classes -- will be even worse off and more unable to weather the next economic storm.

Nothing will change so long as the Corporate Party of America is allowed to continue its neoliberal tax giveaways, its tax cutting 'shell games', and is allowed to continue to foment its ideological cover up. More articles by: Jack Rasmus

Jack Rasmus is the author of ' Systemic Fragility in the Global Economy ', Clarity Press, 2015. He blogs at jackrasmus.com . His website is www.kyklosproductions.com and twitter handle, @drjackrasmus.

[Sep 19, 2017] Time for a Conservative Anti-Monopoly Movement by Daniel Kishi

Sep 19, 2017 | www.theamericanconservative.com

Amazon, Facebook and Google: The new robber barons?

Amazon CEO Jeff Bezos in 2010. Credit: /CreativeCommons/SteveJurvetson Earlier this month Amazon, announced its plans to establish a second headquarters in North America. Rather than simply reveal which city would become its second home, the Seattle-based tech company opted instead to open a bidding war. In an eight page document published on its website, Amazon outlined the criteria for prospective suitors, and invited economic developers to submit proposals advocating for why their city or region should be the host of the new location.

Its potential arrival comes with the claim that the company will invest more than $5 billion in construction and generate up to 50,000 "high paying jobs." Mayors and governors, hard at work crafting their bids, are no doubt salivating at the mere thought of such economic activity. Journalists and editorial teams in eligible metropolises are also playing their parts, as newspapers have published a series of articles and editorials making the case for why their city should be declared the winner.

Last Tuesday Bloomberg reported that Boston was the early frontrunner, sending a wave of panic across the continent. Much to the relief of the other contenders, Amazon quickly discredited the report as misinformation, announcing in a series of tweets on Wednesday that it is "energized by the response from cities across [North America]" and that, contrary to the rumors, there are currently no front-runners on their "equal playing field."

That Amazon is "energized" should come as no surprise. Most companies would also be energized by the taxpayer-funded windfall that is likely coming its way. Reporters speculate that the winner of the sweepstakes!in no small part to the bidding war format!could be forced to cough up hundreds of millions of dollars in state and local subsidies for the privilege of hosting Amazon's expansion.

Amazon has long been the beneficiary of such subsidies, emerging in recent years as a formidable opponent to Walmart as the top recipient of corporate welfare. According to Good Jobs First, a Washington, D.C. organization dedicated to corporate and government accountability, Amazon has received more than $1 billion in local and state subsidies since 2000. With a business plan dedicated to amassing long-term market share in lieu of short-term profits, Amazon, under the leadership of its founder and chief executive, Jeff Bezos, operates on razor-thin profit margins in most industries, while actually operating at a loss in others. As such, these state and local subsidies have played an instrumental role in Amazon's growth

Advocates of free market enterprise should be irate over the company's crony capitalist practices and the cities and states that enable it. But more so than simply ruffling the feathers of the libertarian-minded, Amazon's shameless solicitation for subsidies capped off a series of summer skirmishes in the Democratic left's emerging war against monopolies.

Earlier this summer when Amazon announced its $13.7 billion purchase of Whole Foods, antitrust advocates called upon the Department of Justice and the Federal Trade Commission's Antitrust Division to block the sale and update the United States government's legal definition of monopoly. Although the acquisition!which was approved in August!only gives Amazon a 1.5 percent market share in the grocery industry, it more importantly provides the tech giant with access to more than 450 brick-and-mortar Whole Foods locations. Critics say that these physical locations will prove invaluable to its long term plan of economic dominance, and that it is but the latest advance in the company's unprecedented control of the economy's underlying infrastructure.

Google also found itself in the crosshairs of the left's anti-monopoly faction when, in late June, the European Union imposed a $2.7 billion fine against the tech company for anti-competitive search engine manipulation in violation of its antitrust laws. The Open Markets Program of the New America Foundation subsequently published a press release applauding the EU's decision. Two months later, the Open Markets Program was axed . The former program director Barry Lynn claims that his employers caved to pressure from a corporation that has donated more than $21 million to the New America Foundation. The fallout emboldened journalists to share their experiences of being silenced by the tech giant, and underscores the influence Google exerts over think tanks and academics

Most recently, Facebook faced criticism after it was discovered that a Russian company with ties to the Kremlin purchased $100,000 in ads from the social media company in an effort to influence the 2016 presidential election. Facebook, as a result, has become the latest subject of interest in Robert Mueller's special investigation into Russian interference in last fall's election. But regardless of whether the ads influenced the outcome, the report elicited demands for transparency and oversight in a digital ad marketplace that Facebook, along with Google, dominates . By using highly sophisticated algorithms, Facebook and Google receive more than 60 percent of all digital ad revenue, threatening the financial solvency of publishers and creating a host of economic incentives that pollute editorial autonomy.

While the Democratic left!in an effort to rejuvenate its populist soul !has been at the front lines in the war against these modern-day robber barons, Stacy Mitchell, co-director of the Institute of Local Self-Reliance, suggests that opposition to corporate consolidation need not be a partisan issue. In a piece published in The Atlantic , Mitchell traces the bipartisan history of anti-monopoly sentiment in American politics. She writes :

If "monopoly" sounds like a word from another era, that's because, until recently, it was. Throughout the middle of the 20th century, the term was frequently used in newspaper headlines, campaign speeches, and State of the Union addresses delivered by Republican and Democratic presidents alike. Breaking up too-powerful companies was a bipartisan goal and on the minds of many voters. But, starting in the 1970s, the word retreated from the public consciousness. Not coincidentally, at the same time, the enforcement of anti-monopoly policy grew increasingly toothless.

Although the modern Republican Party stands accused of cozying up with corporate interests, the history of conservative thought has a rich intellectual tradition of being skeptical!if not hostile!towards economic consolidation. For conservatives and libertarians wedded to the tenets of free market orthodoxy!or for Democrats dependent on campaign contributions from a donor class of Silicon Valley tycoons!redefining the legal definition of monopoly and rekindling a bipartisan interest in antitrust enforcement are likely non-starters.

But for conservatives willing to break from the principles of free market fundamentalism, the papal encyclicals of the Roman Catholic Church, the distributist thought of Hilaire Belloc and G.K. Chesterton, the social criticism of Christopher Lasch, and the observations of agrarian essayist Wendell Berry provide an intellectual framework from which conservatives can critique and combat concentrated economic power. With a respect for robust and resilient localities and a keen understanding of the moral dangers posed by an economy perpetuated by consumerism and convenience, these writers appeal to the moral imaginations of the reader, issuing warnings about the detrimental effects that economic consolidation has on the person, the family, the community, and society at large.

The events of this summer underscore the immense political power wielded by our economy's corporate giants. To those who recognize the dangers posed by our age of consolidation, the skirmishes from this summer could serve as a rallying cry in a bipartisan war for independence from our corporate crown.

Daniel Kishi is an editorial assistant at The American Conservative . Follow him on Twitter at @DanielMKishi

[Jun 18, 2017] Amazon is monopolist which just became bigger

Jun 18, 2017 | economistsview.typepad.com

Fred C. Dobbs , June 17, 2017 at 01:59 AM

(Is this anything?)

The Amazon-Walmart Showdown That Explains the Modern
Economy https://nyti.ms/2sxhIkx via @UpshotNYT
NYT - Neil Irwin - June 16

With Amazon buying the high-end grocery chain Whole Foods, something retail analysts have known for years is now apparent to everyone: The online retailer is on a collision course with Walmart to try to be the predominant seller of pretty much everything you buy.

Each one is trying to become more like the other - Walmart by investing heavily in its technology, Amazon by opening physical bookstores and now buying physical supermarkets. But this is more than a battle between two business titans. Their rivalry sheds light on the shifting economics of nearly every major industry, replete with winner-take-all effects and huge advantages that accrue to the biggest and best-run organizations, to the detriment of upstarts and second-fiddle players.

That in turn has been a boon for consumers but also has more worrying implications for jobs, wages and inequality.

To understand this epic shift, you can look not just to the grocery business, but also to my closet, and to another retail acquisition announced Friday morning. ...

Walmart to Buy Bonobos, Men's Wear Company, for $310 Million https://nyti.ms/2tuGhf9

paine - , June 17, 2017 at 08:10 AM
When you lose confidence in your
existing biz you buy bizes
Fred C. Dobbs - , June 17, 2017 at 10:19 AM
It turns out Neil Irwin has
a thing for fine dress shirts.
pgl - , June 17, 2017 at 10:41 AM
WTF? Amazon has not lost confidence in creating a monopsony for buying and selling stuff. It just expanded their empire to groceries.
Paine - , June 17, 2017 at 12:35 PM
Cornering as many markets as possible
is a fools mission

The problem
corporations get to keep their cash flow

Review the nonsense oil companies got into when rolling in cash
Thanks to OPEC

pgl - , June 17, 2017 at 02:38 PM
WTF? You clearly never looked at Amazon's income statement.
JohnH - , June 17, 2017 at 04:28 PM
Amazon's business model is to become the dominant intermediary between producers and consumers.

Whole Foods positions it to ideally serve this role in every local market in America...one stop shopping, whether you're buying from China or from the local Chinatown.

When a company like Amazon is capturing market share, profits don't matter, as its stock price shows.

And Bezos ownerships of the Washington Post gives him a powerful bully pulpit against anyone with thoughts about anti-trust...that and his deep pockets.

cm - , June 17, 2017 at 12:38 PM
I wouldn't call it confidence. Any line or mode of business can be grown only to a certain size. At some point S-curve effects and scale complexity lead to diminishing returns, even if the business is managed as well as it can be. Also in some cases there may simply not be enough demand for the one or few things the company does.

Then companies have to branch out into other ways of business, typically outside their current activities. Sometimes there is synergy, sometimes not, and it's just about buying market and revenue with the imagination one can manage it better to a higher rate of profit.

Paine - , June 17, 2017 at 01:31 PM
Or

They can turn into passive cash cows

cm - , June 17, 2017 at 04:40 PM
Yes, though usually there is a growth mandate imposed by management or "investors".
Paine - , June 18, 2017 at 07:11 AM
Now we are in the heart of darkness

Growth mandates
Where growth is earnings
Or revenues or market shares or

And indeed too often
management v stock holders mandates overt or tacit obtain

Gibbon1 - , June 17, 2017 at 10:19 PM
Comment over brunch: Must be getting late in the cycle. Amazon shrewdly using it's internet valuation to buy tangible things.
Paine - , June 18, 2017 at 07:11 AM
True

[May 30, 2017] The tendency toward monopoly among data gathering disrupters

May 26, 2017 | economistsview.typepad.com/economistsview
point May 26, 2017 at 05:55 AM
https://promarket.org/big-data-competition/

An enlightening discussion on the tendency toward monopoly among data gathering disrupters. Especially important seems to be the possibility of fine-grained price discrimination. While saying not all price discrimination is considered negative by economists without studying it, it does seem discrimination should be taken as prima facie evidence of monopoly.

While the article talks about monopoly and capture in this area, let me reiterate that looking around the more regular corporate ecosystem there is increasing concentration among buyers and often among suppliers that seems not to attract anti-trust attention as long as the final consumer seems to be not harmed. "Not harmed" does not include missing out on falling prices no longer competed for.

[May 27, 2017] "Markets Today Are Radically Different Than What We Believe - We Have the Fa�ade of Competition -

May 27, 2017 | promarket.org

Valletti, who is also a Professor of Economics at the Imperial College Business School and the University of Rome Tor Vergata, discussed the EC's investigation into the Facebook-WhatsApp merger during the panel. Facebook, he said, had "lied" to European regulators about its ability to absorb WhatsApp's user data, but the larger issue was market definition.

"Would the decision on the merger have changed had the Commission known that information at the time?" asked Valletti, who joined theEC in 2016. "At the time, the Commission defined the relevant market as non-search advertising. This is a huge market. In that ocean, even Facebook doesn't have a lot of market power. If instead the market definition had been, for instance, advertising on social networks, [it's]likely theywould have concluded that Facebook would have been dominant in that particular market, and that integrating that useful information from [WhatsApp] could have enhanced its market power." Valletti also stressedthe importance of having individual-level data when discussing issues like competition at the advertising market, and not just looking at market shares.

Pasquale and Taplin, meanwhile, criticized U.S. antitrust authorities, with Taplin saying that digital platforms have "done very well because they have a certain regulatory capture" and Pasquale remarkingthat "U.S. antitrust policy is rapidly becoming a pro-trust policy."

As an example of this "pro-trust" policy, Pasquale cited the FTC's lawsuit against online contact lens retailer 1-800 Contacts . 1-800 Contacts was sued by the FTC last yearfor having reached agreements with 14 other online contact lens sellers that they would not advertise to customers who had searched for 1-800 Contacts online."You would imagine that given the power of these [companies], and given the activity in Europe and many other nations, our enforcers would be extremely concerned about these platforms. They are-they're concerned about little companies hurting the platforms," he said.

The FTC, added Pasquale, had pursued the 1-800 Contacts case aggressively. "I'm not here to comment on the merits of this case, but I think that the choice of this enforcement target speaks volumes. What does it say? It says that if small firms arebeing exploited or hurt by a big digital behemoth, or think [they]are, don't try in any way to coordinate or maintain your independence. What you should do is all combine and merge and become a giant, say, contacts firm. In the media, they should all combine and merge and maybe all be bought by Comcast, so that then they can negotiate with Google in a way that they are relatively of the same size and power. That's the pro-trust message we're getting under current non-enforcement U.S. antitrust policy."

[Apr 28, 2017] Monopolization Amazon-style

Notable quotes:
"... Eros the bittersweet ..."
Apr 28, 2017 | www.nakedcapitalism.com
Carla , April 26, 2017 at 4:11 pm

You mean if Borders had become Barnes & Noble? Well, B&N is struggling, too.

Just like Walmart, Amazon's business model ELIMINATES the competition. In my view, every Amazon purchase is a rock thrown through the window of a local retailer, large or small. Personally, if I ever throw rocks, they're going to be aimed bigger and better targets than that.

Octopii , April 26, 2017 at 7:55 pm

B&N closed their Georgetown (DC) store a couple of years ago, IIRC right before the xmas season got started. It was an oasis on a side of town that would rather sell you a $500 pair of pants dotted with embroidered lobsters. The building was a nicely reclaimed three-floor warehouse space with coffee and lounging areas, and it had become a nice excuse to go into DC and hang out.

jrs , April 26, 2017 at 4:12 pm

because noone can afford what a new (dead tree) book costs. I get everything used for a few bucks a book.

RUKidding , April 26, 2017 at 4:14 pm

but but but used books have to start as new books sometime

Uahsenaa , April 26, 2017 at 5:34 pm

I'm not sure this is entirely true. Just as an example, a trade paperback I bought in 1998 for a cover price of $12.95 (Anne Carson's Eros the bittersweet ) now has a cover price of $13.95, only a dollar more. The BLS's CPI calculator says the book should cost $19.54 in today's dollars.

That doesn't strike me as unaffordable. It's possible that if I went out and bought a copy of the book now, the printing might be worse, or the paper of a lower quality, but I cannot imagine it being much worse than the copy I already own.

Tertium Squid , April 26, 2017 at 7:31 pm

Use interlibrary loan and never buy another book at all.

[Apr 06, 2017] Inequality and the Lake Wobegon Effect

Apr 06, 2017 | economistsview.typepad.com
"Our Efforts to Deal With Tech Firms' Market Dominance in the U.S. Have Been an Abject Failure" : ...Q: The five largest internet and tech companies-Apple, Google, Amazon, Facebook, and Microsoft-have outstanding market share in their markets. Are current antitrust policies and theories able to deal with the potential problems that arise from the dominant positions of these companies and the vast data they collect on users?
Our efforts to deal with the problems in the United States have been an abject failure. ...I might note that Facebook's dominant position in the market is due in part to its role as an innovator and partly to "network externalities"... Microsoft's dominant position is also attributable in part to network externalities...
But the antitrust agencies have not taken sufficient measures to remedy abuses of this advantage.
Q: Is there a connection between the growing inequality in the U.S. and concentration, dominant firms, and winner-take-all markets?
I believe there is. The evidence of rising wealth inequality, especially through the work of Piketty and co-authors, is compelling. Less well known is evidence compiled at M.I.T. of strongly rising inequality of compensation, especially at the top executive levels. The nexus has not to my knowledge been fully articulated.
Here's my hypothesis: In recent decades, most publicly-traded corporations, at least in the United States, have embraced executive compensation consultants to advise the board of directors on executive compensation levels. Those consultants provide data on compensation averages and distributions for companies in peer industries. But then the Lake Wobegon effect goes to work. The boards say, "Surely, our guy isn't below average," to the average reported by the compensation consultants becomes the minimum standard for compensation. If each top executive receives at least the minimum reported pay and often more, the average rises steadily.
Indeed, and here I tread on weaker ground, those compensation costs are built into the costs considered by companies in their product pricing decisions (in a kind of rent-seeking model), and so price levels rise to accommodate rising compensation. I might note that this dynamic applies not only for chief executives, but trickles down to embrace most of companies' management personnel. ...
JohnH , March 22, 2017 at 11:04 AM
As I said a couple days ago, "Good to see economists finally addressing issues that John Kenneth Galbraith raised 50 years ago...but were largely ignored since then by 'librul' economists who didn't want to cross the folks who had funded their academic chairs."

For the past 40 years, corporate strategic planning has been all about market dominance. Back in the late 1970s Harvard Business School professor Michael Porter was all the rage along with the Boston Consulting Group, Mitt Romney's Bain Capital, and GE's Jack Welch. the mantra was that if you couldn't dominate a market, best get out. Weaker players were tolerated mostly to allay anti-trust intrusion.

Meanwhile, Republicans tacitly supported it, Democrats turned a blind eye, and 'librul' economists were off doing whatever they do.

Maximilian , March 22, 2017 at 12:44 PM
Evidence in support of Sherer's hypothesis can be found in Tom DiPrete et al's 2010 article in AJS: Compensation Benchmarking, Leapfrogs, and the Surge in Executive Pay. They write: "Scholars frequently argue whether the sharp rise in chief executive officer (CEO) pay in recent years is "efficient" or is a consequence of "rent extraction" because of the failure of corporate governance in individual firms. This article argues that governance failure must be conceptualized at the market rather than the firm level because excessive pay increases for even relatively few CEOs a year spread to other firms through the cognitively and rhetorically constructed compensation networks of "peer groups," which are used in the benchmarking process to negotiate the compensation of CEOs. Counterfactual simulation based on Standard and Poor's ExecuComp data demonstrates that the effects of CEO "leapfrogging" potentially explain a considerable fraction of the overall upward movement of executive compensation since the early 1990s."
https://academiccommons.columbia.edu/catalog/ac%3A139538
point , March 22, 2017 at 01:08 PM
The story told is nearly exactly the one Warren Buffett has been telling since 95, maybe earlier, so I do not know who was prior.

[Mar 22, 2017] Market power in the U.S. economy today

Notable quotes:
"... Labor market anyone -- where market power also translates to political power -- if labor has decent market power? Toothless (as in no penalty for crushing unions for 80 years) institutions are the reality. ..."
"... Do you guys ever talk about anything other but what the other guys talk about? ..."
Mar 22, 2017 | economistsview.typepad.com
Overview The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions. The surprising conjunction of the exercise of market power with well-established antitrust norms, precedents, and enforcement institutions is the central paradox of U.S. competition policy today. Market power in the U.S. economy today : As this policy brief explains, the harms from the exercise of firms' market power may extend beyond individual markets affected to include slower overall economic growth and increased economic inequality. The implications for future economic productivity and welfare are troubling, but before detailing these consequences, it is necessary to understand why market power is a major issue despite well-established antitrust enforcement institutions and legal precedents. ...

anne : , March 20, 2017 at 11:34 AM

https://promarket.org/convincing-evidence-concentration-rising/

March 19, 2017

"There Is Convincing Evidence That Concentration Has Been Rising"
Interview of John E. Kwoka

mulp : , March 20, 2017 at 12:26 PM
Five Walmarts competing with each other would not raise worker wages above the wages Walmart pays. In fact, it would lower wages.

I remember Milton Friedman's Newsweek columns circa 1970 which are deep behind a paywall so I can't even find a date and title.

I remember one where he argued for utility deregulation and introduction of competition to lower prices of electricity and telephone service.

He argued that the PUC was captured by the utility that by regulation made a business profit only on ROIC plus a small rent on operating costs. By regulation, capital was always depreciating, thus a power plant or the wires and poles distributing power were constantly falling in value. The depreciation was an expense plus the labor costs which determined the base rate, with a 8-10% return on capital, the original labor costs of the power plant and wires and poles minus depreciation and a rent on operating labor.

So, how does a utility earn higher profit?

It must pay workers with capital to build more assets, more power plants, more and better power wires and poles. And it must pay more to workers to operate the utility.

In other words, profit increased the more paid to labor. The PUC had to approve these labor costs as prudent, but paying prevailing union wages was prudent. Thus, the utility could meet the demands of unions for higher wages, for more people on the job.

Worse, the PUC would get hammered with complaints if the utility was unreliable, so most regulators approved utility requests to build redundant power plants and build redundant power lines, plus hire redundant workers who could be put to work recovering from storm damage.

Thus, in Milton Friedman's view, government sanctioning a monopoly resulted in too much, too reliable service that paid too many workers too much money at the expense of all customers, especially customers who did not need the reliability.

Worse, the utilities were constantly trying to get customers to buy more to justify building more capital assets to increase profits.

And even worse, too many workers were paid too much which resulted in too much consumption, thus too much production, and that created too much demand for labor, driving up wages and increasing the number of workers, driving up I incomes and consumption.

He noted that the rush to build nuclear power plants was driven by their high capital costs and nearly purely utility labor operating costs - the utility did not pay for coal for which it got no business profit.

Thus his efforts to deregulate utilities: cutting labor costs, cutting business profits. He argued for fewer workers operating utilities and building capital assets, with economic profits driving investment decisions. Ie, a 20% profit would drive more investment, but a 5% profit would drive layoffs and cuts in reliability. Any individual who needed reliability would simply pay more to get higher reliability.

And as utilities were deregulated as he called or as best as it could be done, we have seen job losses, pay cuts, higher unreliability, sometimes bankruptcy, and other times extremely high profits, often both at the same time. When PURPA was implemented by States and utilities forced to sell power generation, then nuclear power plants were sold below the book capital cost, by these forced sales were deemed takings, so the losses from sales became stranded costs added to the rate base as depreciation. Meanwhile, as investment in new power plants fell, nuclear power plants became very profitable as market prices rose. So, the utility was going bankrupt after forced to sell assets while the assets were generating 20% or more on purchase price returns, but less than 10% on construction cost.

Friedman made the same argument for passenger airlines. Airlines paid high wages and had large cabin crews and most were profitable enough to work hard to increase customer demand. They got approval to offer low fares at the last minute to students and other classes of non-customers. Thanks to regulation. Then deregulation happened, and every airline but one went bankrupt, service quality declined, worker wages slashed, crews in the air and on the ground cut.

Friedman argued that everyone benefits from competition and is harmed by monopoly, especially regulated monopoly, because too many workers are paid too much, and those workers consume too much, and everyone is forced to pay too much to live.

Thus the creation of free lunch economics: Driving down prices but increasing profits will make everyone better off as those evil workers get less pay, costing consumers much less.

Workers are not valued consumers. Valued consumers are not workers.

Milton Friedman was not a worker, but a valued intellectual and consumer.

pgl -> mulp... , March 20, 2017 at 01:09 PM
"Five Walmarts competing with each other would not raise worker wages above the wages Walmart pays. In fact, it would lower wages."

So you accept the Economism view of labor markets where monopsony power does not exist? Sorry but the labor market evidence questions this perfectly competitive view of labor markets.

JohnH : , March 20, 2017 at 01:09 PM
Good to see economists finally addressing issues that John Kenneth Galbraith raised 50 years ago...but were largely ignored since then by 'librul' economists who didn't want to cross the folks who had funded their academic chairs.
pgl -> JohnH... , March 20, 2017 at 01:10 PM
So John Kenneth Galbraith was a right winger? Could you please stop this silly parade that liberal economists have never talked about what they often talk about. It is beyond pointless.
JohnH -> pgl... , March 20, 2017 at 01:45 PM
Oh, please. 'Librul' economists have mostly ignored monopoly and oligopoly for years. And Galbraith was definitely NOT a conservative, but academic economists largely ignored his valuable contributions.

Pay attention!

JohnH -> JohnH... , March 20, 2017 at 01:52 PM
As a measure of 'librul' concern about monopoly and oligopoly, Krugman talks about this even less than he talks about inequality...less than twice a year.
JohnH -> pgl... , March 20, 2017 at 07:05 PM
Market concentration, monopoly, and oligopoly aren't even listed as categories at economistsview!

Yet pgl tries to assure us that 'librul' economists take this issue seriously...guffaw, guffaw.

Flat Eric -> JohnH... , March 21, 2017 at 06:58 AM
Nor are labor economics, trade or public economics. So what?

Competition economics is still a huge and very active topic within the discipline. Indeed, the last but one Nobel winner, Jean Tirole, works extensively in this area.

Denis Drew : , March 20, 2017 at 02:08 PM
"Overview The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions."

Labor market anyone -- where market power also translates to political power -- if labor has decent market power? Toothless (as in no penalty for crushing unions for 80 years) institutions are the reality.

Do you guys ever talk about anything other but what the other guys talk about?

point : , March 20, 2017 at 05:54 PM
"The U.S. economy has a "market power" problem, notwithstanding our strong and extensive antitrust institutions. The surprising conjunction of the exercise of market power with well-established antitrust norms, precedents, and enforcement institutions is the central paradox of U.S. competition policy today."

Left off the subsequent list of possible explanations is that the first above statement just may be false.

point -> point... , March 20, 2017 at 09:46 PM
Thinking especially about the "notwithstanding our strong and extensive antitrust institutions" part.

[Mar 22, 2017] The Men Who Stole the World

Notable quotes:
"... History will look back at us with the same wonder that we look back on the mad excesses of certain nations founded in devotion to extreme, almost other-worldly, ideologies of the last century. ..."
"... Apparently the slashing of health benefits for the unfortunate is not severe enough in the proposed Trump/Ryan plan. Our GOP house neo-liberals are enthusiastic to unleash the wonders of the cure-all deregulated market on the American public, again. Like a dog returns to its vomit. ..."
Mar 22, 2017 | jessescrossroadscafe.blogspot.com
"The problem of the last three decades is not the 'vicissitudes of the marketplace,' but rather deliberate actions by the government to redistribute income from the rest of us to the one percent. This pattern of government action shows up in all areas of government policy."

Dean Baker

"When the modern corporation acquires power over markets, power in the community, power over the state and power over belief, it is a political instrument, different in degree but not in kind from the state itself. To hold otherwise - to deny the political character of the modern corporation - is not merely to avoid the reality.

It is to disguise the reality. The victims of that disguise are those we instruct in error."

John Kenneth Galbraith

And unfortunately the working class victims of that disguise are going to be receiving the consequences of their folly, and then some.

Secure in their monopolies and key positions with regard to reform and the law, the corporations are further acquiring access to the protections of the rights of individuals as well, it appears, at least according to Citizens United .

Maybe our leaders and their self-proclaimed technocrats will finally do the right thing. I personally doubt it, except that if they do it will probably be by accident.

More likely, the right thing will eventually come about the old-fashioned way- under the duress of a crisis, and the growing protests of the much neglected and long suffering.

History will look back at us with the same wonder that we look back on the mad excesses of certain nations founded in devotion to extreme, almost other-worldly, ideologies of the last century.

... ... ...

Apparently the slashing of health benefits for the unfortunate is not severe enough in the proposed Trump/Ryan plan. Our GOP house neo-liberals are enthusiastic to unleash the wonders of the cure-all deregulated market on the American public, again. Like a dog returns to its vomit.

Better if they start breaking up corporate health monopolies and embrace real reform at the sources of the soaring costs. The US pays far, far too much for drugs and healthcare, and deregulating the markets is not the solution. We do have the example of the rest of the developed world for what to do about this. It is called 'single payer.'

But players keep on playing. And politicians and their enablers in the professions will not see what their big money donors do not wish them to see. And that is one of their few bipartisan efforts.

Might one suggest that our political animals stop trying to do all the reforming and cost controls bottom up, while applying the stimulus top down? That approach they have been flogging to no avail for about thirty years is a recipe for a dying middle class.

Here is a short video from the Bernie Sanders WV town hall that shows The Face of American Desperation. By the way, the governor of West Virginia is a Democrat. He wasn't there.

...

[Feb 20, 2017] Globalism is just a mirage to lead the weak minded into subservience to corporatism.

Feb 20, 2017 | economistsview.typepad.com
rayward : February 20, 2017 at 05:29 AM , 2017 at 05:29 AM
A problem with today's views about globalization is that they look backward rather than forward. The future's globalization is much different from the past's globalization. In particular, growing nationalism is the future in the places, such as China, that have benefited from globalization. By that I mean China is beginning to produce goods for China firms rather than for western firms to compete with goods produced for western (American) firms including goods produced in China for western firms.

It's a much different dynamic than what we have experienced in the past 30 years. And the response to the new globalization should (and will) be much different.

Ironically, Trump's views about globalization come closer to what will be the response as western firms adjust to the new globalization. Is Trump that smart? No, it's just that everybody else is that dumb.

RC AKA Darryl, Ron -> rayward... , February 20, 2017 at 08:36 AM
China has never not had nationalism. Globalism is just a mirage to lead the weak minded into subservience to corporatism.

[Dec 05, 2016] New Class War

This is a very weak article from a prominent paleoconservative, but it is instructive what a mess he has in his head as for the nature of Trump phenomenon. We should probably consider the tern "New Class" that neocons invented as synonym for "neoliberals". If so, why the author is afraid to use the term? Does he really so poorly educated not to understand the nature of this neoliberal revolution and its implications? Looks like he never read "Quite coup"
That probably reflects the crisis of pealeoconservatism itself.
Notable quotes:
"... What do these insurgents have in common? All have called into question the interventionist consensus in foreign policy. All have opposed large-scale free-trade agreements. ..."
"... the establishment in both parties almost uniformly favors one approach to war, trade, and immigration, while outsider candidates as dissimilar as Buchanan, Nader, Paul, and Trump, and to a lesser extent Sanders, depart from the consensus. ..."
"... The insurgents clearly do not represent a single class: they appeal to eclectic interests and groups. The foe they have all faced down, however-the bipartisan establishment-does resemble a class in its striking unity of outlook and interest. So what is this class, effectively the ruling class of the country? ..."
"... The archetypal model of class conflict, the one associated with Karl Marx, pits capitalists against workers-or, at an earlier stage, capitalists against the landed nobility. The capitalists' victory over the nobility was inevitable, and so too, Marx believed, was the coming triumph of the workers over the capitalists. ..."
"... The Soviet Union had never been a workers' state at all, they argued, but was run by a class of apparatchiks such as Marx had never imagined. ..."
"... Burnham recognized affinities between the Soviet mode of organization-in which much real power lay in the hands of the commissars who controlled industry and the bureaucratic organs of the state-and the corporatism that characterized fascist states. Even the U.S., under the New Deal and with ongoing changes to the balance between ownership and management in the private sector, seemed to be moving in the same direction. ..."
"... concept popularized by neoconservatives in the following decade: the "New Class." ..."
"... It consists of a goodly proportion of those college-educated people whose skills and vocations proliferate in a 'post-industrial society' (to use Daniel Bell's convenient term). We are talking about scientists, teachers, and educational administrators, journalists and others in the communication industries, psychologists, social workers, those lawyers and doctors who make their careers in the expanding public sector, city planners, the staffs of the larger foundations, the upper levels of the government bureaucracy, and so on. ..."
"... I have felt that this 'new class' is, so far, rather thin gruel. Intellectuals, verbalists, media types, etc. are conspicuous actors these days, certainly; they make a lot of noise, get a lot of attention, and some of them make a lot of money. But, after all, they are a harum-scarum crowd, and deflate even more quickly than they puff up. On TV they can out-talk any of the managers of ITT, GM, or IBM, or the administration-managers of the great government bureaus and agencies, but, honestly, you're not going to take that as a power test. Who hires and fires whom? ..."
"... Burnham had observed that the New Class did not have the means-either money or manpower-to wield power the way the managers or the capitalists of old did. It had to borrow power from other classes. Discovering where the New Class gets it is as easy as following the money, which leads straight to the finance sector-practically to the doorstep of Goldman Sachs. Jerry Rubin's journey from Yippie to yuppie was the paradigm of a generation. ..."
"... Yet the New Class as a whole is less like Carl Oglesby or Karl Hess than like Hillary Clinton, who arguably embodies it as perfectly as McNamara did the managerial class. ..."
"... Even the New Class's support for deregulation-to the advantage of its allies on Wall Street-was no sign of consistent commitment to free-market principles ..."
"... The individual-mandate feature of Obamacare and Romneycare is a prime example of New Class cronyism: government compels individuals to buy a supposedly private product or service. ..."
"... America's class war, like many others, is not in the end a contest between up and down. It's a fight between rival elites: in this case, between the declining managerial elite and the triumphant (for now) New Class and financial elites. ..."
"... Donald Trump is not of the managerial class himself. But by embracing managerial interests-industrial protection and, yes, "big government"-and combining them with nationalistic identity politics, he has built a force that has potential to threaten the bipartisan establishment, even if he goes down to defeat in November. ..."
"... The New Class, after all, lacks a popular base as well as money of its own, and just as it relies on Wall Street to underwrite its power, it depends on its competing brands of identity politics to co-opt popular support. ..."
"... Marx taught that you identify classes by their structural role in the system of production. I'm at a loss to see how either of the 'classes' you mention here relate to the system of production. ..."
"... [New] Class better describes the Never Trumpers. Mostly I have found them to be those involved in knowledge occupations (conservative think tanks, hedge fund managers, etc.) who have a pecuniary interest in maintaining the Global Economy as opposed to the Virtuous Intergenerational Economy that preceded. Many are dependent on funding sources for their livelihoods that are connected to the Globalized Economy and financial markets. ..."
"... "mobilize working-class voters against the establishment in both parties. " = workers of the world unite. ..."
"... Where the class conflict between the Working and Knowledge Classes begins is where the Knowledge Class almost unilaterally decided to shift to a global economy, at the expense of the Working Class, and to the self-benefit of the Knowledge Class. Those who designed the Global Economy like Larry Summers of Harvard did not invite private or public labor to help design the new Globalist Economy. The Working Class lost out big time in job losses and getting stuck with subprime home loans that busted their marriages and created bankruptcies and foreclosures. The Knowledge Class was mostly unscathed by this class-based economic divide. ..."
"... Trump's distinguishing ideology, which separates him from the current elite, is something he has summed up many times � nationalism vs. Globalism. ..."
"... The financial industry, the new tech giants, the health insurance industry are now almost indistinguishable from the government ruling elite. The old left�represented by Sanders�rails against this as big money coopting government, even while conservatives are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America. Both are right in a sense. ..."
"... The hyperconcentration of power in Washington and a few tributary locations like Wall Street and Silicon Valley, elite academia and the media�call that the New Class if you like�means that most of America�Main Street, the flyover country has been left behind. Trump instinctively � brilliantly in some ways � tapped into the resentment that this hyperconcentration of wealth and government power has led to. That is why it cuts across right and left. The elites want to characterize this resentment as backwards and "racist," but there is also something very American from Jefferson to Jackson to Teddy Roosevelt that revolts against being lectured to and controlled by their would-be "betters." ..."
"... The alienation of those left out is real and based on real erosion of the middle class and American dream under both parties' elites. The potentially revolutionary capabilities of a political movement that could unite right and left in restoring some equilibrium and opportunities to those left out is tremendous, but yet to be realized by either major party. The party that can harness these folks � who are after all the majority of Americans � will have a ruling coalition for decades. If neither party can productively harness this budding movement, we are headed for disarray, civil unrest, and potentially the dissolution of the USA. ..."
"... . And blacks who cleave to the democrats despite being sold down the tubes on issues, well, for whatever reason, they just have thinner skin and the mistaken idea that the democrats deliver � thanks to Pres. Johnson. But what Pres. Johnson delivered democrats made a mockery of immediately as they stripped it of its intent and used for their own liberal ends. ..."
"... Let's see if I can help Dreher clear up some confusion in his article. James Burnham's "Managerial Class" and the "New Class" are overlapping and not exclusive. By the Managerial Class Burnham meant both the executive and managers in the private sector and the Bureaucrats and functionaries in the public sector. ..."
"... The rise of managers was a "revolution" because of the rise of modernization which meant the increasing mechanization, industrialization, formalization and rationalization (efficiency) of society. Burnham's concern about the rise of the managerial revolution was misplaced; what he should have focused on was modernization. ..."
"... The old left�represented by Sanders�rails against this as big money coopting government, even while conservatives are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America ..."
"... . Some 3 � 5% of the population facing no real opposition has decided that that their private lives needed public endorsement and have proceeded to upend the entire social order - the game has shifted in ways I am not sure most of the public fully grasps or desires ..."
"... There has always been and will always be class conflict, even if it falls short of a war. Simply examining recent past circumstances, the wealthy class has been whooping up on all other classes. This is not to suggest any sort of remedy, but simply to observe that income disparity over the past 30 years has substantially benefitted on sector of class and political power remains in their hands today. To think that there will never be class conflict is to side with a Marxian fantasy of egalitarianism, which will never come to pass. Winners and losers may change positions, but the underlying conflict will always remain. ..."
"... State governments have been kowtowing to big business interests for a good long while. Nothing new under the sun there. Back in the 80s when GM was deciding where to site their factory for the new Saturn car line, they issued an edict stating they would only consider states that had mandatory seat belt use laws, and the states in the running fell all over each to enact those. ..."
"... People don't really care for the actions of the elite but they care for the consequences of these actions. During the 1960's, per capita GDP growth was around 3.5%. Today it stands at 0,49%. If you take into account inflation, it's negative. Add to this the skewed repartition of said growth and it's intuitive that many people feel the pain; whom doesn't move forward, goes backwards. ..."
"... People couldn't care for mass immigration, nation building or the emergence of China if their personal situation was not impacted. But now, they begin to feel the results of these actions. ..."
"... I have a simple philosophy regarding American politics that shows who is made of what, and we don't have to go through all the philosophizing in this article: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli interests above America's is un-American. ..."
"... Re: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli interests above America's is un-American. ..."
"... The first has nothing whatsoever to do with American citizenship. It's just a political issue� on which, yes, reasonable people can differ. However no American citizen should put the interests of any other country ahead of our own, except in a situation where the US was itself up to no good and deserved its comeuppance. And then the interest is not that of any particular nation, but of justice being done period. ..."
"... A lot of this "New Class" stuff is just confusing mis-mash of this and that theory. Basically, America changed when the US dollar replace gold as the medium of exchange in the world economy. Remember when we called it the PETRO-DOLLAR. As long as the Saudis only accepted the US dollar as the medium of exchange for oil, then the American government could export it's inflation and deficit spending. Budget deficits and trade deficits are intrinsically related. It allowed America to become a nation of consumers instead of a nation of producers. ..."
"... It's really a form of classic IMPERIALISM. To maintain this system, we've got the US military and we prop up the corrupt dictatorships in Saudi Arabia, Iraq, Libya ..."
"... Yeah, you can talk about the "new class", the corruption of the banking system by the idiotic "libertarian" or "free market utopianism" of the Gingrich Congress, the transformation of American corporations to international corporations, and on and on. But it's the US dollar as reserve currency that has allowed it all to happen. God help us, if it ends, we'll be crippled. ..."
"... The Clinton Class mocks The Country Class: Bill Clinton, "We all know how her opponent's done real well down in West Virginia and eastern Kentucky. Because the coal people don't like any of us anymore." "They blame the president when the sun doesn't come up in the morning now," ..."
"... That doesn't mean they actually support Hillary's policies and position. What do they really know about either? These demographics simply vote overwhelmingly Democrat no matter who is on the ticket. If Alfred E. Newman were the candidate, this particular data point would look just the same. ..."
"... "On the contrary, the New Class favors new kinds of crony finance capitalism, even as it opposes the protectionism that would benefit hard industry and managerial interests." This doesn't ring true. Hard industry, and the managers that run it had no problem with moving jobs and factories overseas in pursuit of cheaper labor. Plus, it solved their Union issues. I feel like the divide is between large corporations, with dilute ownership and professional managers who nominally serve the interests of stock fund managers, while greatly enriching themselves versus a multitude of smaller, locally owned businesses whose owners were also concerned with the health of the local communities in which they lived. ..."
"... The financial elites are a consequence of consolidation in the banking and finance industry, where we now have 4 or 5 large institutions versus a multitude of local and regional banks that were locally focused. ..."
Sep 07, 2016 | www.theamericanconservative.com

Since the Cold War ended, U.S. politics has seen a series of insurgent candidacies. Pat Buchanan prefigured Trump in the Republican contests of 1992 and 1996. Ralph Nader challenged the Clinton wing of the Democratic Party from the outside in 2000. Ron Paul vexed establishment Republicans John McCain and Mitt Romney in 2008 and 2012. And this year, Trump was not the only candidate to confound his party's elite: Bernie Sanders harried Hillary Clinton right up to the Democratic convention.

What do these insurgents have in common? All have called into question the interventionist consensus in foreign policy. All have opposed large-scale free-trade agreements. (The libertarian Paul favors unilateral free trade: by his lights, treaties like NAFTA and the Trans-Pacific Partnership are not free trade at all but international regulatory pacts.) And while no one would mistake Ralph Nader's or Ron Paul's views on immigration for Pat Buchanan's or Donald Trump's, Nader and Paul have registered their own dissents from the approach to immigration that prevails in Washington.

Sanders has been more in line with his party's orthodoxy on that issue. But that didn't save him from being attacked by Clinton backers for having an insufficiently nonwhite base of support. Once again, what might have appeared to be a class conflict-in this case between a democratic socialist and an elite liberal with ties to high finance-could be explained away as really about race.

Race, like religion, is a real factor in how people vote. Its relevance to elite politics, however, is less clear. Something else has to account for why the establishment in both parties almost uniformly favors one approach to war, trade, and immigration, while outsider candidates as dissimilar as Buchanan, Nader, Paul, and Trump, and to a lesser extent Sanders, depart from the consensus.

The insurgents clearly do not represent a single class: they appeal to eclectic interests and groups. The foe they have all faced down, however-the bipartisan establishment-does resemble a class in its striking unity of outlook and interest. So what is this class, effectively the ruling class of the country?

Some critics on the right have identified it with the "managerial" class described by James Burnham in his 1941 book The Managerial Revolution . But it bears a stronger resemblance to what what others have called "the New Class." In fact, the interests of this New Class of college-educated "verbalists" are antithetical to those of the industrial managers that Burnham described. Understanding the relationship between these two often conflated concepts provides insight into politics today, which can be seen as a clash between managerial and New Class elites.

♦♦♦

The archetypal model of class conflict, the one associated with Karl Marx, pits capitalists against workers-or, at an earlier stage, capitalists against the landed nobility. The capitalists' victory over the nobility was inevitable, and so too, Marx believed, was the coming triumph of the workers over the capitalists.

Over the next century, however, history did not follow the script. By 1992, the Soviet Union was gone, Communist China had embarked on market reforms, and Western Europe was turning away from democratic socialism. There was no need to predict the future; mankind had achieved its destiny, a universal order of [neo]liberal democracy. Marx had it backwards: capitalism was the end of history.

But was the truth as simple as that? Long before the collapse of the USSR, many former communists -- some of whom remained socialists, while others joined the right-thought not. The Soviet Union had never been a workers' state at all, they argued, but was run by a class of apparatchiks such as Marx had never imagined.

Among the first to advance this argument was James Burnham, a professor of philosophy at New York University who became a leading Trotskyist thinker. As he broke with Trotsky and began moving toward the right, Burnham recognized affinities between the Soviet mode of organization-in which much real power lay in the hands of the commissars who controlled industry and the bureaucratic organs of the state-and the corporatism that characterized fascist states. Even the U.S., under the New Deal and with ongoing changes to the balance between ownership and management in the private sector, seemed to be moving in the same direction.

Burnham called this the "managerial revolution." The managers of industry and technically trained government officials did not own the means of production, like the capitalists of old. But they did control the means of production, thanks to their expertise and administrative prowess.

The rise of this managerial class would have far-reaching consequences, he predicted. Burnham wrote in his 1943 book, The Machiavellians : "that the managers may function, the economic and political structure must be modified, as it is now being modified, so as to rest no longer on private ownership and small-scale nationalist sovereignty, but primarily upon state control of the economy, and continental or vast regional world political organization." Burnham pointed to Nazi Germany, imperial Japan-which became a "continental" power by annexing Korea and Manchuria-and the Soviet Union as examples.

The defeat of the Axis powers did not halt the progress of the managerial revolution. Far from it: not only did the Soviets retain their form of managerialism, but the West increasingly adopted a managerial corporatism of its own, marked by cooperation between big business and big government: high-tech industrial crony capitalism, of the sort that characterizes the military-industrial complex to this day. (Not for nothing was Burnham a great advocate of America's developing a supersonic transport of its own to compete with the French-British Concorde.)

America's managerial class was personified by Robert S. McNamara, the former Ford Motor Company executive who was secretary of defense under John F. Kennedy and Lyndon Johnson. In a 1966 story for National Review , "Why Do They Hate Robert Strange McNamara?" Burnham answered the question in class terms: "McNamara is attacked by the Left because the Left has a blanket hatred of the system of business enterprise; he is criticized by the Right because the Right harks back, in nostalgia if not in practice, to outmoded forms of business enterprise."

McNamara the managerial technocrat was too business-oriented for a left that still dreamed of bringing the workers to power. But the modern form of industrial organization he represented was not traditionally capitalist enough for conservatives who were at heart 19th-century classical liberals.

National Review readers responded to Burnham's paean to McNamara with a mixture of incomprehension and indignation. It was a sign that even readers familiar with Burnham-he appeared in every issue of the magazine-did not always follow what he was saying. The popular right wanted concepts that were helpful in labeling enemies, and Burnham was confusing matters by talking about changes in the organization of government and industry that did not line up with anyone's value judgements.

More polemically useful was a different concept popularized by neoconservatives in the following decade: the "New Class." "This 'new class' is not easily defined but may be vaguely described," Irving Kristol wrote in a 1975 essay for the Wall Street Journal :

It consists of a goodly proportion of those college-educated people whose skills and vocations proliferate in a 'post-industrial society' (to use Daniel Bell's convenient term). We are talking about scientists, teachers, and educational administrators, journalists and others in the communication industries, psychologists, social workers, those lawyers and doctors who make their careers in the expanding public sector, city planners, the staffs of the larger foundations, the upper levels of the government bureaucracy, and so on.

"Members of the new class do not 'control' the media," he continued, "they are the media-just as they are our educational system, our public health and welfare system, and much else."

Burnham, writing in National Review in 1978, drew a sharp contrast between this concept and his own ideas:

I have felt that this 'new class' is, so far, rather thin gruel. Intellectuals, verbalists, media types, etc. are conspicuous actors these days, certainly; they make a lot of noise, get a lot of attention, and some of them make a lot of money. But, after all, they are a harum-scarum crowd, and deflate even more quickly than they puff up. On TV they can out-talk any of the managers of ITT, GM, or IBM, or the administration-managers of the great government bureaus and agencies, but, honestly, you're not going to take that as a power test. Who hires and fires whom?

Burnham suffered a stroke later that year. Although he lived until 1987, his career as a writer was over. His last years coincided with another great transformation of business and government. It began in the Carter administration, with moves to deregulate transportation and telecommunications. This partial unwinding of the managerial revolution accelerated under Ronald Reagan. Regulatory and welfare-state reforms, even privatization of formerly nationalized industries, also took off in the UK and Western Europe. All this did not, however, amount to a restoration of the old capitalism or anything resembling laissez-faire.

The "[neo]liberal democracy" that triumphed at "the end of history"-to use Francis Fukuyama's words-was not the managerial capitalism of the mid-20th century, either. It was instead the New Class's form of capitalism, one that could be embraced by Bill Clinton and Tony Blair as readily as by any Republican or Thatcherite.

Irving Kristol had already noted in the 1970s that "this new class is not merely liberal but truly 'libertarian' in its approach to all areas of life-except economics. It celebrates individual liberty of speech and expression and action to an unprecedented degree, so that at times it seems almost anarchistic in its conception of the good life."

He was right about the New Class's "anything goes" mentality, but he was only partly correct about its attitude toward economics. The young elite tended to scorn the bourgeois character of the old capitalism, and to them managerial figures like McNamara were evil incarnate. But they had to get by-and they aspired to rule.

Burnham had observed that the New Class did not have the means-either money or manpower-to wield power the way the managers or the capitalists of old did. It had to borrow power from other classes. Discovering where the New Class gets it is as easy as following the money, which leads straight to the finance sector-practically to the doorstep of Goldman Sachs. Jerry Rubin's journey from Yippie to yuppie was the paradigm of a generation.

Part of the tale can be told in a favorable light. New Left activists like Carl Oglesby fought the spiritual aridity and murderous militarism of what they called "corporate liberalism"-Burnham's managerialism-while sincere young libertarians attacked the regulatory state and seeded technological entrepreneurship. Yet the New Class as a whole is less like Carl Oglesby or Karl Hess than like Hillary Clinton, who arguably embodies it as perfectly as McNamara did the managerial class.

Even the New Class's support for deregulation-to the advantage of its allies on Wall Street-was no sign of consistent commitment to free-market principles. On the contrary, the New Class favors new kinds of crony finance capitalism, even as it opposes the protectionism that would benefit hard industry and managerial interests. The individual-mandate feature of Obamacare and Romneycare is a prime example of New Class cronyism: government compels individuals to buy a supposedly private product or service.

The alliance between finance and the New Class accounts for the disposition of power in America today. The New Class has also enlisted another invaluable ally: the managerial classes of East Asia. Trade with China-the modern managerial state par excellence-helps keep American industry weak relative to finance and the service economy's verbalist-dominated sectors. America's class war, like many others, is not in the end a contest between up and down. It's a fight between rival elites: in this case, between the declining managerial elite and the triumphant (for now) New Class and financial elites.

The New Class plays a priestly role in its alliance with finance, absolving Wall Street for the sin of making money in exchange for plenty of that money to keep the New Class in power. In command of foreign policy, the New Class gets to pursue humanitarian ideological projects-to experiment on the world. It gets to evangelize by the sword. And with trade policy, it gets to suppress its class rival, the managerial elite, at home. Through trade pacts and mass immigration the financial elite, meanwhile, gets to maximize its returns without regard for borders or citizenship. The erosion of other nations' sovereignty that accompanies American hegemony helps toward that end too-though our wars are more ideological than interest-driven.

♦♦♦

So we come to an historic moment. Instead of an election pitting another Bush against another Clinton, we have a race that poses stark alternatives: a choice not only between candidates but between classes-not only between administrations but between regimes.

Donald Trump is not of the managerial class himself. But by embracing managerial interests-industrial protection and, yes, "big government"-and combining them with nationalistic identity politics, he has built a force that has potential to threaten the bipartisan establishment, even if he goes down to defeat in November.

The New Class, after all, lacks a popular base as well as money of its own, and just as it relies on Wall Street to underwrite its power, it depends on its competing brands of identity politics to co-opt popular support. For the center-left establishment, minority voters supply the electoral muscle. Religion and the culture war have served the same purpose for the establishment's center-right faction. Trump showed that at least one of these sides could be beaten on its own turf-and it seems conceivable that if Bernie Sanders had been black, he might have similarly beaten Clinton, without having to make concessions to New Class tastes.

The New Class establishment of both parties may be seriously misjudging what is happening here. Far from being the last gasp of the demographically doomed-old, racially isolated white people, as Gallup's analysis says-Trump's insurgency may be the prototype of an aggressive new politics, of either left or right, that could restore the managerial elite to power.

This is not something that conservatives-or libertarians who admire the old capitalism rather than New Class's simulacrum-might welcome. But the only way that some entrenched policies may change is with a change of the class in power.

Daniel McCarthy is the editor of The American Conservative .

Johann , says: September 7, 2016 at 10:02 am
The New Class is parasitic and will drive the country to its final third world resting place, or worse.
Dan Phillips , says: September 7, 2016 at 11:32 am
Excellent analysis. What is important about the Trump phenomenon is not every individual issue, it's the potentially revolutionary nature of the phenomenon. The opposition gets this. That's why they are hysterical about Trump. The conservative box checkers do not.
g , says: September 7, 2016 at 11:51 am
"Donald Trump is not of the managerial class himself. But by embracing managerial interests-industrial protection and, yes, "big government"-and combining them with nationalistic identity politics, he has built a force that has potential to threaten the bipartisan establishment, even if he goes down to defeat in November."

My question is, if Trump is not himself of the managerial class, in fact, could be considered one of the original new class members, how would he govern? What explains his conversion from the new class to the managerial class; is he merely taking advantage of an opportunity or is there some other explanation?

Richard Terrace , says: September 7, 2016 at 12:09 pm
I'm genuinely confused by the role you ascribe to the 'managerial class' here. Going back to Berle and Means ('The Modern Corporation and Private Property') the managerial class emerged when management was split from ownership in mid C20th capitalism. Managers focused on growth, not profits for shareholders. The Shareholder revolution of the 1980s destroyed the managerial class, and destroyed their unwieldy corporations.
You seem to be identifying the managerial class with a kind of cultural opposition to the values of [neo]liberal capitalism. And instead of identifying the 'new class' with the new owner-managers of shareholder-driven firms, you identify them by their superficial cultural effects.

This raises a deeper problem in how you talk about class in this piece. Marx taught that you identify classes by their structural role in the system of production. I'm at a loss to see how either of the 'classes' you mention here relate to the system of production. Does the 'new class' of journalists, academics, etc. actually own anything? If not, what is the point of ascribing to them immense economic power?
I would agree that there is a new class of capitalists in America. But they are well known people like Sheldon Adelson, the Kochs, Linda McMahon, the Waltons, Rick Scott the pharmaceutical entrepreneur, Mitt Romney, Mark Zuckerberg, and many many hedge fund gazillionaires. These people represent the resurgence of a family-based, dynastic capitalism that is utterly different from the managerial variety that prevailed in mid-century.

If there is a current competitor to international corporate capitalism, it is old-fashioned dynastic family capitalism. Not Managerialism.

JonF , says: September 7, 2016 at 1:13 pm
There is no "new class". That's simply a derogatory trope of the Right. The [neo]liberal elite� educated, cosmopolitan and possessed of sufficient wealth to be influential in political affairs and claims to power grounded in moral stances� have a long pedigree in both Western and non-Western lands. They were the Scribal Class in the ancient world, the Mandarins of China, and the Clergy in the Middle Ages. This class for a time was eclipsed in the early modern period as first royal authority became dominant, followed by the power of the Capitalist class (the latter has never really faded of course). But their reemergence in the late 20th century is not a new or unique phenomenon.
Kurt Gayle , says: September 7, 2016 at 2:03 pm
In a year in which "trash Trump" and "trash Trump's supporters" are tricks-to-be-turned for more than 90% of mainstream journalists and other media hacks, it's good to see Daniel McCarthy buck the "trash trend" and write a serious, honest analysis of the class forces that are colliding during this election cycle.

Two thumbs way up for McCarthy, although his fine effort cannot save the reputation of those establishment whores who call themselves journalists. Nothing can save them. They have earned the universality with which Americans hold them in contempt.

In 1976 when Gallup began asking about "the honesty and ethical standards" of various professions only 33% of Americans rated journalists "very high or high."

By last December that "high or very high" rating for journalists had fallen to just 27%.

It is certain that by Election Day 2016 the American public's opinion of journalists will have fallen even further.

lee , says: September 7, 2016 at 2:37 pm
An article on the ruling elite that neglects to mention this ? . . . https://www.amazon.com/Revolt-Elites-Betrayal-Democracy/dp/0393313719
david helveticka , says: September 7, 2016 at 3:24 pm
Most of your argument is confusing. The change I see is from a production economy to a finance economy. Wall Street rules, really. Basically the stock market used to be a place where working folk invested their money for retirement, mostly through pensions from unions and corporations. Now it's become a gambling casino, with the "house"-or the big banks-putting it's finger on the roulette wheel. They changed the compensation package of CEO's, so they can rake in huge executive compensation�mostly through stock options-to basically close down everything from manufacturing to customer service, and ship it off to contract manufacturers and outside services in oligarchical countries like mainland China and India.

I don't know what exactly you mean about the "new class", basically its the finance industry against everyone else.

One thing you right-wingers always get wrong, is on Karl Marx he was really attacking the money-changers, the finance speculators, the banks. Back in the day, so-called "capitalists" like Henry Ford or George Eastman or Thomas Edison always complained about the access to financing through the big money finance capitalists.

Sheree , says: September 7, 2016 at 6:16 pm
Don't overlook the economic value of intellectual property rights (patents, in particular) in the economic equation.

A big chunk of the 21st century economy is generated due to the intellectual property developed and owned by the New Class and its business enterprises.

The economic value of ideas and intellectual property rights is somewhat implied in McCarthy's explanation of the New Class, but I didn't see an explicit mention (perhaps I overlooked it).

I think the consideration of intellectual property rights and the value generated by IP might help to clarify the economic power of the New Class for those who feel the analysis isn't quite complete or on target.

I'm not saying that IP only provides value to the New Class. We can find examples of IP throughout the economy, at all levels. It's just that the tech and financial sectors seem to focus more on (and benefit from) IP ownership, licensing, and the information captured through use of digital technology.

Commenter Man , says: September 7, 2016 at 10:19 pm
"What do these insurgents have in common? All have called into question the interventionist consensus in foreign policy."

But today we have this: Trump pledges big US military expansion . Trump doesn't appear to have any coherent policy, he just says whatever seems to be useful at that particular moment.

Wayne Lusvardi , says: September 7, 2016 at 10:37 pm
[New] Class better describes the Never Trumpers. Mostly I have found them to be those involved in knowledge occupations (conservative think tanks, hedge fund managers, etc.) who have a pecuniary interest in maintaining the Global Economy as opposed to the Virtuous Intergenerational Economy that preceded. Many are dependent on funding sources for their livelihoods that are connected to the Globalized Economy and financial markets.
jack , says: September 7, 2016 at 11:13 pm
"mobilize working-class voters against the establishment in both parties. " = workers of the world unite.

maybe Trump could use that

Wayne Lusvardi , says: September 7, 2016 at 11:33 pm
Being white is not the defining characteristic of Trumpers because it if was then how come there are many white working class voters for Hillary? The divide in the working class comes from being a member of a union or a member of the private non-unionized working class.

Where the real class divide shows up is in those who are members of the Knowledge Class that made their living based on the old Virtuous Economy where the elderly saved money in banks and the banks, in turn, lent that money out to young families to buy houses, cars, and start businesses. The Virtuous Economy has been replaced by the Global Economy based on diverting money to the stock market to fund global enterprises and prop up government pension funds.

The local bankers, realtors, private contractors, small savers and small business persons and others that depended on the Virtuous Economy lost out to the global bankers, stock investors, pension fund managers, union contractors and intellectuals that propounded rationales for the global economy as superior to the Virtuous Economy.

Where the class conflict between the Working and Knowledge Classes begins is where the Knowledge Class almost unilaterally decided to shift to a global economy, at the expense of the Working Class, and to the self-benefit of the Knowledge Class. Those who designed the Global Economy like Larry Summers of Harvard did not invite private or public labor to help design the new Globalist Economy. The Working Class lost out big time in job losses and getting stuck with subprime home loans that busted their marriages and created bankruptcies and foreclosures. The Knowledge Class was mostly unscathed by this class-based economic divide.

Mitzy Moon , says: September 8, 2016 at 12:32 am
Beginning in the 50's and 60's, baby boomers were warned in school and cultural media that "a college diploma would become what a high school diploma is today." An extraordinary cohort of Americans took this advice seriously, creating the smartest and most successful generation in history. But millions did not heed that advice, cynically buoyed by Republicans who � knowing that college educated people vote largely Democrat � launched a financial and cultural war on college education. The result is what you see now: millions of people unprepared for modern employment; meanwhile we have to import millions of college-educated Asians and Indians to do the work there aren't enough Americans to do.
Joe , says: September 8, 2016 at 1:25 am
Have to say, this seems like an attempt to put things into boxes that don't quite fit.

Trump's distinguishing ideology, which separates him from the current elite, is something he has summed up many times � nationalism vs. Globalism.

The core of it is that the government no longer serves the people. In the United States, that is kind of a bad thing, you know? Like the EU in the UK, the people, who fought very hard for self-government, are seeing it undermined by the erosion of the nation state in favor of international beaurocracy run by elites and the well connected.

Emil Mottola , says: September 8, 2016 at 2:15 am
Both this article and many comments on it show considerable confusion, and ideological opinion all over the map. What is happening I think is that the world is changing �due to globalism, technology, and the sheer huge numbers of people on the planet. As a result some of the rigid trenches of thought as well as class alignments are breaking down.

In America we no longer have capitalism, of either the 19th century industrial or 20th century managerial varieties. Money and big money is still important of course, but it is increasingly both aligned with and in turn controlled by the government. The financial industry, the new tech giants, the health insurance industry are now almost indistinguishable from the government ruling elite. The old left�represented by Sanders�rails against this as big money coopting government, even while conservatives are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America. Both are right in a sense.

The hyperconcentration of power in Washington and a few tributary locations like Wall Street and Silicon Valley, elite academia and the media�call that the New Class if you like�means that most of America�Main Street, the flyover country has been left behind. Trump instinctively � brilliantly in some ways � tapped into the resentment that this hyperconcentration of wealth and government power has led to. That is why it cuts across right and left. The elites want to characterize this resentment as backwards and "racist," but there is also something very American from Jefferson to Jackson to Teddy Roosevelt that revolts against being lectured to and controlled by their would-be "betters."

The alienation of those left out is real and based on real erosion of the middle class and American dream under both parties' elites. The potentially revolutionary capabilities of a political movement that could unite right and left in restoring some equilibrium and opportunities to those left out is tremendous, but yet to be realized by either major party. The party that can harness these folks � who are after all the majority of Americans � will have a ruling coalition for decades. If neither party can productively harness this budding movement, we are headed for disarray, civil unrest, and potentially the dissolution of the USA.

EliteCommInc. , says: September 8, 2016 at 3:29 am
I have one condition about which, Mr. Trump would lose my support - if he flinches on immigration, I will have to bow out.

I just don't buy the contentions about color here. He has made definitive moves to ensure that he intends to fight for US citizens regardless of color. This nonsense about white racism, more bigotry in reality, doesn't pan out. The Republican party has been comprised of mostly whites since forever and nearly all white sine the late 1960's. Anyone attempting to make hay out of what has been the reality for than 40 years is really making the reverse pander. Of course most of those who have issues with blacks and tend to be more expressive about it, are in the Republican party. But so what. Black Republicans would look at you askance, should you attempt this FYI.

It's a so what. The reason you joining a party is not because the people in it like you, that is really beside the point. Both Sec Rice and General Powell, are keenly aware of who's what it and that is the supposed educated elite. They are not members of the party because it is composed of some pure untainted membership. But because they and many blacks align themselves with the ideas of the party, or what the party used to believe, anyway.

It's the issues not their skin color that matters. And blacks who cleave to the democrats despite being sold down the tubes on issues, well, for whatever reason, they just have thinner skin and the mistaken idea that the democrats deliver � thanks to Pres. Johnson. But what Pres. Johnson delivered democrats made a mockery of immediately as they stripped it of its intent and used for their own liberal ends.

I remain convinced that if blacks wanted progress all they need do is swamp the Republican party as constituents and confront whatever they thought was nonsense as constituents as they move on policy issues. Goodness democrats have embraced the lighter tones despite having most black support. That is why the democrats are importing so many from other state run countries. They could ignore blacks altogether. Sen Barbara Jordan and her deep voiced rebuke would do them all some good.

Let's face it - we are not going to remove the deeply rooted impact of skin color, once part of the legal frame of the country for a quarter of the nations populous. What Republicans should stop doing is pretending, that everything concerning skin color is the figment of black imagination. I am not budging an inch on the Daughters of the American Revolution, a perfect example of the kind of peculiar treatment of the majority, even to those who fought for Independence and their descendants.
________________

I think that there are thousands and thousands of educated (degreed)people who now realize what a mess the educational and social services system has become because of our immigration policy. The impact on social services here in Ca is no joke. In the face of mounting deficits, the laxity of Ca has now come back to haunt them. The pressure to increase taxes weighed against the loss of manual or hard labor to immigrants legal and otherwise is unmistakable here. There's debate about rsstroom etiquette in the midst of serious financial issues - that's a joke. So this idea of dismissing people with degrees as being opposed to Mr. Trump is deeply overplayed and misunderstood. If there is a class war, it's not because of Mr. Trump, those decks were stacked in his favor long before the election cycle.
--------

"But millions did not heed that advice, cynically buoyed by Republicans who�knowing that college educated people vote largely Democrat�launched a financial and cultural war on college education. The result is what . . . employment; meanwhile we have to import millions of college-educated Asians and Indians to do the work there aren't enough Americans to do."

Hmmmm,

Nope. Republicans are notorious for pushing education on everything and everybody. It's a signature of hard work, self reliance, self motivation and responsibility. The shift that has been tragic is that conservatives and Republicans either by a shove or by choice abandoned the fields by which we turn out most future generations - elementary, HS and college education. Especially in HS, millions of students are fed a daily diet of liberal though unchecked by any opposing ideas. And that is become the staple for college education - as it cannot be stated just how tragic this has become for the nation. There are lots of issues to moan about concerning the Us, but there is far more to embrace or at the very least keep the moaning in its proper context. No, conservatives and Republicans did engage in discouraging an education.

And there will always be a need for more people without degrees than with them. even people with degrees are now getting hit even in the elite walls of WS finance. I think I posted an article by John Maulden about the growing tensions resulting fro the shift in the way trading is conducting. I can build a computer from scratch, that's a technical skill, but the days of building computers by hand went as fast it came. The accusation that the population should all be trained accountants, book keepers, managers, data processors, programmers etc. Is nice, but hardly very realistic (despite my taking liberties with your exact phrasing). A degree is not going to stop a company from selling and moving its production to China, Mexico or Vietnam - would that were true. In fact, even high end degree positions are being outsourced, medicine, law, data processing, programming . . .

How about the changes in economy that have forced businesses to completely disappear. We will never know how many businesses were lost in the 2007/2008 financial mess. Recovery doesn't exist until the country's growth is robust enough to put people back to work full time in a manner that enables them to sustain themselves and family.

That income gap is real and its telling.
___________________

even if I bought the Karl Marx assessment. His solutions were anything but a limited assault on financial sector oligarchs and wizards. And in practice it has been an unmitigated disaster with virtually not a single long term national benefit. It's very nature has been destructive, not only to infrastructure, but literally the lifeblood of the people it was intended to rescue.

Wayne Lusvardi , says: September 8, 2016 at 5:36 am
Let's see if I can help Dreher clear up some confusion in his article. James Burnham's "Managerial Class" and the "New Class" are overlapping and not exclusive. By the Managerial Class Burnham meant both the executive and managers in the private sector and the Bureaucrats and functionaries in the public sector.

There are two middle classes in the US: the old Business Class and the New Knowledge Class. A manager would be in the Business Class and a Bureaucrat in the New Class.

The rise of managers was a "revolution" because of the rise of modernization which meant the increasing mechanization, industrialization, formalization and rationalization (efficiency) of society. Burnham's concern about the rise of the managerial revolution was misplaced; what he should have focused on was modernization.

The New Class were those in the mostly government and nonprofit sectors that depended on knowledge for their livelihood without it being coupled to any physical labor: teachers, intellectuals, social workers and psychiatrists, lawyers, media types, hedge fund managers, real estate appraisers, financial advisors, architects, engineers, etc. The New Knowledge Class has only risen since the New Deal created a permanent white collar, non-business class.

The Working Class are those who are employed for wages in manual work in an industry producing something tangible (houses, cars, computers, etc.). The Working Class can also have managers, sometimes called supervisors. And the Working Class is comprised mainly of two groups: unionized workers and private sector non-unionized workers. When we talk about the Working Class we typically are referring to the latter.

The Trumpsters should not be distinguished as being a racial group or class (white) because there are many white people who support Clinton. About 95% of Blacks vote Democratic in the US. Nowhere near that ratio of Whites are supporting Trump. So Trumps' support should not be stereotyped as White.

The number one concern to Trumpsters is that they reflect the previous intergenerational economy where the elderly lent money to the young to buy homes, cars and start small businesses. The Global bankers have shifted money into the stock market because 0.25% per year interest rates in a bank isn't making any money at all when money inflation runs at 1% to 2% (theft). This has been replaced by a Global Economy that depends on financial bubbles and arbitraging of funds.

William Burns , says: September 8, 2016 at 5:45 am
How are the elites supporting Trump different from the elites supporting financier par excellence Mitt Romney?
EliteCommInc. , says: September 8, 2016 at 6:23 am
"The old left�represented by Sanders�rails against this as big money coopting government, even while conservatives are exasperated by the unholy cabal of big business and big government in cohoots in the "progressive" remake of America. Both are right in a sense."

Why other couching this. Ten years ago if some Hollywood exec had said, no same sex marriage, no production company in your town, the town would have shrugged. Today before shrugging, the city clerk is checking the account balance. When the governors of Michigan, and Arizona bent down in me culpa's on related issue, because business interests piped in, it was an indication that the game had seriously changed. Some 3 � 5% of the population facing no real opposition has decided that that their private lives needed public endorsement and have proceeded to upend the entire social order - the game has shifted in ways I am not sure most of the public fully grasps or desires.

Same sex weddings in US military chapels - the concept still turns my stomach. Advocates control the megaphones, I don't think they control the minds of the public, despite having convinced a good many people that those who have chosen this expression are under some manner of assault � that demands a legal change - intelligent well educated, supposedly astute minded people actually believe it. Even the Republican nominee believes it.

I love Barbara Streisand, but if the election means she moves to Canada, well, so be it. Take your "drag queens" impersonators wit you. I enjoy Mr. and Mrs Pitt, I think have a social moral core but really? with millions of kids future at stake, endorsing a terminal dynamic as if it will save society's ills - Hollywood doesn't even pretend to behave royally much less embody the sensitivities of the same.

There is a lot to challenge about supporting Mr. Trump. He did support killing children in the womb and that is tragic. Unless he has stood before his maker and made this right, he will have to answer for that. But no more than a trove of Republicans who supported killing children in the womb and then came to their senses. I guess of there is one thing he and I agree on, it's not drinking.

As for big budget military, it seems a waste, but if we are going to waste money, better it be for our own citizens. His Achilles heel here is his intentions as to ISIS/ISIL. I think it's the big drain getting ready to suck him into the abyss of intervention creep.

Missile defense just doesn't work. The tests are rigged and as Israel discovered, it's a hit and miss game with low probability of success, but it makes for great propaganda.

I am supposed to be outraged by a football player stance on abusive government. While the democratic nominee is turning over every deck chair she find, leaving hundreds of thousands of children homeless - let me guess, on the bright side, George Clooney cheers the prospect of more democratic voters.

If Mr. Trumps only achievements are building a wall, over hauling immigration policy and expanding the size of the military. He will be well on his way to getting ranked one of the US most successful presidents.

Joe F , says: September 8, 2016 at 11:11 am
I never understood why an analysis needs to lard in every conceivable historical reference and simply assume its relevance, when there are so many non constant facts and circumstances. There has always been and will always be class conflict, even if it falls short of a war. Simply examining recent past circumstances, the wealthy class has been whooping up on all other classes. This is not to suggest any sort of remedy, but simply to observe that income disparity over the past 30 years has substantially benefitted on sector of class and political power remains in their hands today. To think that there will never be class conflict is to side with a Marxian fantasy of egalitarianism, which will never come to pass. Winners and losers may change positions, but the underlying conflict will always remain.
JonF , says: September 8, 2016 at 1:32 pm
EliteCommInc,

State governments have been kowtowing to big business interests for a good long while. Nothing new under the sun there. Back in the 80s when GM was deciding where to site their factory for the new Saturn car line, they issued an edict stating they would only consider states that had mandatory seat belt use laws, and the states in the running fell all over each to enact those.

The split on Trump is first by race (obviously), then be gender (also somewhat obviously), and then by education. Even among self-declared conservatives it's the college educated who tend to oppose him. This is a lot broader than simply losing some "new" Knowledge Class, unless all college educated people are put in that grouping. In fact he is on track to lose among college educated whites, something no GOP candidate has suffered since the days of FDR and WWII.

Fabian , says: September 8, 2016 at 3:35 pm
People don't really care for the actions of the elite but they care for the consequences of these actions. During the 1960's, per capita GDP growth was around 3.5%. Today it stands at 0,49%. If you take into account inflation, it's negative. Add to this the skewed repartition of said growth and it's intuitive that many people feel the pain; whom doesn't move forward, goes backwards.

People couldn't care for mass immigration, nation building or the emergence of China if their personal situation was not impacted. But now, they begin to feel the results of these actions.

Gilly.El , says: September 8, 2016 at 3:36 pm
I have a simple philosophy regarding American politics that shows who is made of what, and we don't have to go through all the philosophizing in this article: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli interests above America's is un-American.
Richard Wagner , says: September 8, 2016 at 5:04 pm
EliteComic beat me to the punch. I was disappointed that Ross Perot, who won over 20% of the popular vote twice, and was briefly in the lead in early 1992, wasn't mentioned in this article.
JonF , says: September 8, 2016 at 5:07 pm
Re: Anyone who believes in same sex marriage has been brainwashed and is un-American and unreliable. Anyone who puts Israeli interests above America's is un-American.

The first has nothing whatsoever to do with American citizenship. It's just a political issue� on which, yes, reasonable people can differ. However no American citizen should put the interests of any other country ahead of our own, except in a situation where the US was itself up to no good and deserved its comeuppance. And then the interest is not that of any particular nation, but of justice being done period.

David Helveticka , says: September 8, 2016 at 6:12 pm
A lot of this "New Class" stuff is just confusing mis-mash of this and that theory. Basically, America changed when the US dollar replace gold as the medium of exchange in the world economy. Remember when we called it the PETRO-DOLLAR. As long as the Saudis only accepted the US dollar as the medium of exchange for oil, then the American government could export it's inflation and deficit spending. Budget deficits and trade deficits are intrinsically related. It allowed America to become a nation of consumers instead of a nation of producers.

Who really cares about the federal debt. REally? We can print dollars, exchange these worthless dollars with China for hard goods, and then China lends the dollars back to us, to pay for our government. Get it?

It's really a form of classic IMPERIALISM. To maintain this system, we've got the US military and we prop up the corrupt dictatorships in Saudi Arabia, Iraq, Libya

Yeah, you can talk about the "new class", the corruption of the banking system by the idiotic "libertarian" or "free market utopianism" of the Gingrich Congress, the transformation of American corporations to international corporations, and on and on. But it's the US dollar as reserve currency that has allowed it all to happen. God help us, if it ends, we'll be crippled.

And damn the utopianism of you "libertarians" you're worse then Marxists when it comes to ideology over reality.

Jim Houghton , says: September 8, 2016 at 6:56 pm
Ronald Reagan confounded the GOP party elite, too. They - rightly - considered him an intellectual lightweight.
EliteCommInc. , says: September 8, 2016 at 9:20 pm
"State governments have been kowtowing to big business interests for a good long while. Nothing new under the sun there. Back in the 80s when GM was deciding where to site their factory for the new Saturn car line, they issued an edict stating they would only consider states that had mandatory seat belt use laws, and the states in the running fell all over each to enact those."

Ah, not it's policy on some measure able effect. The seatbelt law was debate across the country. The data indicated that it did in fact save lives. And it's impact was universal applicable to every man women or child that got into a vehicle.

That was not a private bedroom issue. Of course businesses have advocated policy. K street is not a K-street minus that reality. But GM did not demand having relations in parked cars be legalized or else.

You are taking my apples and and calling them seatbelts - false comparison on multiple levels, all to get me to acknowledge that businesses have influence. It what they have chosen to have influence on -

That is another matter.

cecelia , says: September 9, 2016 at 1:34 am
I do not think the issue of class is relevant here � whether it be new classes or old classes. There are essentially two classes � those who win given whatever the current economic arrangements are or those who lose given those same arrangements. People who think they are losing support Trump versus people who think they are winning support Clinton. The polls demonstrates this � Trump supporters feel a great deal more anxiety about the future and are more inclined to think everything is falling apart whereas Clinton supporters tend to see things as being okay and are optimistic about the future. The Vox work also shows this pervasive sense that life will not be good for their children and grandchildren as a characteristic of Trump supporters.

The real shift I think is in the actual coalitions that are political parties. Both the GOP and the Dems have been coalitions � political parties usually are. Primary areas of agreement with secondary areas of disagreement. Those coalitions no longer work. The Dems can be seen as a coalition of the liberal knowledge types � who are winners in this economy and the worker types who are often losers now in this economy. The GOP also is a coalition of globalist corporatist business types (winners) with workers (losers) who they attracted in part because of culture wars and the Dixiecrats becoming GOPers. The needs of these two groups in both parties no longer overlap. The crisis is more apparent in the GOP because well � Trump. If Sanders had won the nomination for the Dems (and he got close) then their same crisis would be more apparent. The Dems can hold their creaky coalition together because Trump went into the fevered swamps of the alt. right.

I think this is even more obvious in the UK where you have a Labor Party that allegedly represents the interests of working people but includes the cosmopolitan knowledge types. The cosmopolitans are big on the usual identity politics, unlimited immigration and staying in the EU. They benefit from the current economic arrangement. But the workers in the Labor party have been hammered by the current economic arrangements and voted in droves to get out of the EU and limit immigration. It seems pretty obvious that there is no longer a coalition to sustain the Labor Party. Same with Tories � some in the party love the EU,immigration, globalization while others voted out of the EU, want immigration restricted and support localism. The crisis is about the inability of either party to sustain its coalitions. Those in the Tory party who are leavers should be in a political party with the old Labor working class while the Tory cosmopolitans should be in a party with the Labor cosmopolitans. The current coalitions not being in synch is the political problem � not new classes etc.

Here in the US the southern Dixiecrats who went to the GOP and are losers in this economy might find a better coalition with the black, Latino and white workers who are still in the Dem party. But as in the UK ideological culture wars have become more prominent and hence the coalitions are no longer economically based. If people recognized that politics can only address the economic issues and they aligned themselves accordingly � the membership of the parties would radically change.

So forget about class and think coalitions.

Clint , says: September 9, 2016 at 5:47 pm
The Clinton Class mocks The Country Class: Bill Clinton, "We all know how her opponent's done real well down in West Virginia and eastern Kentucky. Because the coal people don't like any of us anymore." "They blame the president when the sun doesn't come up in the morning now,"
someguy , says: September 10, 2016 at 9:25 pm
Collin, this is straight ridiculous.

"Trump's voters were most strongly characterized by their "racial isolation": they live in places with little ethnic diversity. "

During the primaries whites in more diverse areas voted Trump. The only real exception was West Virginia. Utah, Wyoming, Iowa? All voted for Cruz and "muh values".

In white enclaves like Paul Ryans district, which is 91%, whites are able to signal against white identity without having to face the consequences.

Rick , says: September 12, 2016 at 3:05 pm
Collin said:

"All three major African, Hispanic, & Asian-American overwhelming support HRC in the election."

That doesn't mean they actually support Hillary's policies and position. What do they really know about either? These demographics simply vote overwhelmingly Democrat no matter who is on the ticket. If Alfred E. Newman were the candidate, this particular data point would look just the same.

Craig , says: September 13, 2016 at 10:11 am
"On the contrary, the New Class favors new kinds of crony finance capitalism, even as it opposes the protectionism that would benefit hard industry and managerial interests."

This doesn't ring true. Hard industry, and the managers that run it had no problem with moving jobs and factories overseas in pursuit of cheaper labor. Plus, it solved their Union issues. I feel like the divide is between large corporations, with dilute ownership and professional managers who nominally serve the interests of stock fund managers, while greatly enriching themselves versus a multitude of smaller, locally owned businesses whose owners were also concerned with the health of the local communities in which they lived.

The financial elites are a consequence of consolidation in the banking and finance industry, where we now have 4 or 5 large institutions versus a multitude of local and regional banks that were locally focused.

[May 20, 2016] Nearly all German corporations/large companies funded the NSDAP rise and were complicit with the Nazi war and Holocaust machine and received the benefits of slave Labor

Notable quotes:
"... Ford werke built trucks for the Germans up until the end of the war. And Prescott Bush (father and grandfather to POTUS 41 & 43) had his assets frozen and seized for trading with the enemy. ..."
"... Nearly all German corporations/large companies (they funded the parties rise) were complicit with the Nazi war and Holocaust machine and received the benefits of free (to them) slave Labor (reminds me of the US prison Labor system) and the seizure of capital assets in conquered countries. ..."
"... Being and oligarch or a faceless Corporation certainly has it's benefits, especially if there are any "scary" communists (or terrorists) around. ..."
www.nakedcapitalism.com

ambrit , May 19, 2016 at 3:48 pm

I G Farben isn't alone in Holocaust related evilness. Check out IBMs' part, through their German subsidiary, in making the efficiency of the "Final Solution" feasible. Figures for the liquidation of "undesirables" were available to the New York headquarters of IBM in nearly real time.

As the war wound down, special units attached to the U.S.Army secured and protected IBM 'assets' in Germany, mainly the hardware and specialists who ran things.

See: http://www-03.ibm.com/ibm/history/documents/pdf/HistoryofIBMDataProcessing.pdf

The best source I find is: https://en.wikipedia.org/wiki/IBM_and_the_Holocaust

human , May 19, 2016 at 5:15 pm

Operation Paperclip

RP , May 19, 2016 at 7:22 pm

Ford werke built trucks for the Germans up until the end of the war. And Prescott Bush (father and grandfather to POTUS 41 & 43) had his assets frozen and seized for trading with the enemy.

But what do I know, I'm just a little prole with no Ivy league credentials. I should just trust my betters.

By all means, go ahead, coronate another .01%er Oligarch to be President. Worked great so far.

HBE , May 19, 2016 at 4:22 pm

Nearly all German corporations/large companies (they funded the parties rise) were complicit with the Nazi war and Holocaust machine and received the benefits of free (to them) slave Labor (reminds me of the US prison Labor system) and the seizure of capital assets in conquered countries.

What happened to them and their leaders. Not much, some were broken up (IG farben) some leaders spent a short stint in prison (alfried Krupp) but nearly all of the largest were allowed to immediately or eventually (Krupp) go on their merry way, so we could "stop communism".

So the very people that funded and were integral to the Nazi party having the funds and ability to rise and benefited most, were slightly scolded at most.

Being and oligarch or a faceless Corporation certainly has it's benefits, especially if there are any "scary" communists (or terrorists) around.

[Sep 24, 2015] Forget The New World Order, Here is Who Really Runs The World

"... A complex web of revolving doors between the military-industrial-complex, Wall Street, and Silicon Valley consolidates the interests of defense contracts, banksters, military actions, and both foreign and domestic surveillance intelligence. ..."
"... While most citizens are at least passively aware of the surveillance state and collusion between the government and the corporate heads of Wall Street, few people are aware of how much the intelligence functions of the government have been outsourced to privatized groups that are not subject to oversight or accountability. According to Lofgren, 70% of our intelligence budget goes to contractors. ..."
"... the deep state has, since 9/11, built the equivalent of three Pentagons, a bloated state apparatus that keeps defense contractors, intelligence contractors, and privatized non-accountable citizens marching in stride. ..."
"... Groupthink - an unconscious assimilation of the views of your superiors and peers - also works to keep Silicon Valley funneling technology and information into the federal surveillance state. Lofgren believes the NSA and CIA could not do what they do without Silicon Valley. It has developed a de facto partnership with NSA surveillance activities, as facilitated by a FISA court order. ..."
Sep 24, 2015 | TheAntiMedia.org,

For decades, extreme ideologies on both the left and the right have clashed over the conspiratorial concept of a shadowy secret government pulling the strings on the world's heads of state and captains of industry.

The phrase New World Order is largely derided as a sophomoric conspiracy theory entertained by minds that lack the sophistication necessary to understand the nuances of geopolitics. But it turns out the core idea - one of deep and overarching collusion between Wall Street and government with a globalist agenda - is operational in what a number of insiders call the "Deep State."

In the past couple of years, the term has gained traction across a wide swath of ideologies. Former Republican congressional aide Mike Lofgren says it is the nexus of Wall Street and the national security state - a relationship where elected and unelected figures join forces to consolidate power and serve vested interests. Calling it "the big story of our time," Lofgren says the deep state represents the failure of our visible constitutional government and the cross-fertilization of corporatism with the globalist war on terror.

"It is a hybrid of national security and law enforcement agencies: the Department of Defense, the Department of State, the Department of Homeland Security, the Central Intelligence Agency and the Justice Department. I also include the Department of the Treasury because of its jurisdiction over financial flows, its enforcement of international sanctions and its organic symbiosis with Wall Street," he explained.

Even parts of the judiciary, namely the Foreign Intelligence Surveillance Court, belong to the deep state.

How does the deep state operate?

A complex web of revolving doors between the military-industrial-complex, Wall Street, and Silicon Valley consolidates the interests of defense contracts, banksters, military actions, and both foreign and domestic surveillance intelligence.

According to Mike Lofgren and many other insiders, this is not a conspiracy theory. The deep state hides in plain sight and goes far beyond the military-industrial complex President Dwight D. Eisenhower warned about in his farewell speech over fifty years ago.

While most citizens are at least passively aware of the surveillance state and collusion between the government and the corporate heads of Wall Street, few people are aware of how much the intelligence functions of the government have been outsourced to privatized groups that are not subject to oversight or accountability. According to Lofgren, 70% of our intelligence budget goes to contractors.

Moreover, while Wall Street and the federal government suck money out of the economy, relegating tens of millions of people to food stamps and incarcerating more people than China - a totalitarian state with four times more people than us - the deep state has, since 9/11, built the equivalent of three Pentagons, a bloated state apparatus that keeps defense contractors, intelligence contractors, and privatized non-accountable citizens marching in stride.

After years of serving in Congress, Lofgren's moment of truth regarding this matter came in 2001. He observed the government appropriating an enormous amount of money that was ostensibly meant to go to Afghanistan but instead went to the Persian Gulf region. This, he says, "disenchanted" him from the groupthink, which, he says, keeps all of Washington's minions in lockstep.

Groupthink - an unconscious assimilation of the views of your superiors and peers - also works to keep Silicon Valley funneling technology and information into the federal surveillance state. Lofgren believes the NSA and CIA could not do what they do without Silicon Valley. It has developed a de facto partnership with NSA surveillance activities, as facilitated by a FISA court order.

Now, Lofgren notes, these CEOs want to complain about foreign market share and the damage this collusion has wrought on both the domestic and international reputation of their brands. Under the pretense of pseudo-libertarianism, they helmed a commercial tech sector that is every bit as intrusive as the NSA. Meanwhile, rigging of the DMCA intellectual property laws - so that the government can imprison and fine citizens who jailbreak devices - behooves Wall Street. It's no surprise that the government has upheld the draconian legislation for the 15 years.

It is also unsurprising that the growth of the corporatocracy aids the deep state. The revolving door between government and Wall Street money allows top firms to offer premium jobs to senior government officials and military yes-men. This, says Philip Giraldi, a former counter-terrorism specialist and military intelligence officer for the CIA, explains how the Clintons left the White House nearly broke but soon amassed $100 million. It also explains how former general and CIA Director David Petraeus, who has no experience in finance, became a partner at the KKR private equity firm, and how former Acting CIA Director Michael Morell became Senior Counselor at Beacon Global Strategies.

Wall Street is the ultimate foundation for the deep state because the incredible amount of money it generates can provide these cushy jobs to those in the government after they retire. Nepotism reigns supreme as the revolving door between Wall Street and government facilitates a great deal of our domestic strife:

"Bank bailouts, tax breaks, and resistance to legislation that would regulate Wall Street, political donors, and lobbyists. The senior government officials, ex-generals, and high level intelligence operatives who participate find themselves with multi-million dollar homes in which to spend their retirement years, cushioned by a tidy pile of investments," said Giraldi.

How did the deep state come to be?

Some say it is the evolutionary hybrid offspring of the military-industrial complex while others say it came into being with the Federal Reserve Act, even before the First World War. At this time, Woodrow Wilson remarked,

"We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world, no longer a government by conviction and the vote of the majority, but a government by the opinion and duress of a small group of dominant men."

This quasi-secret cabal pulling the strings in Washington and much of America's foreign policy is maintained by a corporatist ideology that thrives on deregulation, outsourcing, deindustrialization, and financialization. American exceptionalism, or the great "Washington Consensus," yields perpetual war and economic imperialism abroad while consolidating the interests of the oligarchy here at home.

Mike Lofgren says this government within a government operates off tax dollars but is not constrained by the constitution, nor are its machinations derailed by political shifts in the White House. In this world - where the deep state functions with impunity - it doesn't matter who is president so long as he or she perpetuates the war on terror, which serves this interconnected web of corporate special interests and disingenuous geopolitical objectives.

"As long as appropriations bills get passed on time, promotion lists get confirmed, black (i.e., secret) budgets get rubber stamped, special tax subsidies for certain corporations are approved without controversy, as long as too many awkward questions are not asked, the gears of the hybrid state will mesh noiselessly," according to Mike Lofgren in an interview with Bill Moyers.

Interestingly, according to Philip Giraldi, the ever-militaristic Turkey has its own deep state, which uses overt criminality to keep the money flowing. By comparison, the U.S. deep state relies on a symbiotic relationship between banksters, lobbyists, and defense contractors, a mutant hybrid that also owns the Fourth Estate and Washington think tanks.

Is there hope for the future?

Perhaps. At present, discord and unrest continues to build. Various groups, establishments, organizations, and portions of the populace from all corners of the political spectrum, including Silicon Valley, Occupy, the Tea Party, Anonymous, WikiLeaks, anarchists and libertarians from both the left and right, the Electronic Frontier Foundation, and whistleblowers like Edward Snowden and others are beginning to vigorously question and reject the labyrinth of power wielded by the deep state.

Can these groups - can we, the people - overcome the divide and conquer tactics used to quell dissent? The future of freedom may depend on it.

[Aug 22, 2015] Paul Craig Roberts America Is A Gulag

Aug 22, 2015 | Zero Hedge
Submitted by Paul Craig Roberts,

America's First Black President is a traitor to his race and also to justice.

Obama has permitted the corrupt US Department of Justice (sic), over which he wields authority, to overturn the ruling of a US Federal Court of Appeals that prisoners sentenced illegally to longer terms than the law permits must be released once the legal portion of their sentence is served. The DOJ, devoid of all integrity, compassion, and sense of justice, said that "finality" of conviction was more important than justice.

Indeed, the US Justice (sic) Department's motto is: "Justice? We don't need no stinkin' justice!"

Alec Karakatsanis, a civil rights attorney and co-founder of Equal Justice Under Law, tells the story here: http://www.nytimes.com/2015/08/18/opinion/president-obamas-department-of-injustice.html?_r=1

See also here: http://www.opednews.com/articles/Obama-s-DOJ-Perpetrates-In-by-Rob-Kall-Dept-Of-Justice-DoJ_Dept-Of-Justice-DoJ-Failures_Eric-Holder_Injustice-150820-644.html

The concept of "finality" was an invention of a harebrained Republican conservative academic lionized by the Republican Federalist Society. In years past conservatives believed-indeed, still do-that the criminal justice system coddles criminals by allowing too many appeals against their unlawful convictions. The appeals were granted by judges who thought that the system was supposed to serve justice, but conservatives demonized justice as something that enabled criminals. A succession of Republican presidents turned the US Supreme Court into an organization that only serves the interests of private corporations. Justice is nowhere in the picture.

Appeals Court Judge, James Hill, a member of the court that ruled that prisoners did not have to serve the illegal portion of their sentences, when confronted with the Obama/DOJ deep-sixing of justice had this to say:

"A judicial system that values finality over justice is morally bankrupt."

Obama's DOJ says that there are too many black prisoners illegally sentenced to be released without upsetting the crime-fearful white population. According to Obama's Justice (sic) Department, the fears of brainwashed whites take precedence over justice.

Judge Hill said that the DOJ "calls itself, without a trace of irony, the Department of Justice."

Judge Hill added: We used to call such systems as people sitting in prison serving sentences that were illegally imposed "gulags." "Now we call them the United States."

America is a gulag. We are ruled by a government that is devoid of all morality, all integrity, all compassion, all justice. The government of the United States stands for one thing and one thing only: Evil.

It is just as Chavez told the United Nations in 2006 referring to President George W. Bush's address to the assembly the day before: "Yesterday, at this very podium, Satan himself stood speaking as if he owned the world. You can still smell the sulfur."

If you are an American and you cannot smell the sulfur, you are tightly locked down in The Matrix. God help you. There is no Neo to rescue you. And you are too brainwashed and ignorant to be rescued by me.

You are part of the new Captive Nation.


Das Capitalist

I agree with the sentiment of this article, but finality was not invented by the Federalist Society. It's been a bedrock of American law since the earliest Supreme Ct cases. And yes, we herald it to the detriment of justice.

TeethVillage88s

Well if I understand you correct that the Supreme Court is now the ultimate body of law and supersedes common law, constitutional law, and other old sources of law (Roman Law)...

I would suggest that as our governments became corporations, that we began to see offices, services, branches as profit centers within the government corporation.

Corporitization of government and reducing services to profit centers or stand alone units... brings out concerns for business over the normal sense of what a government is for.

This is the Seed of Fascism.

I know we must be conservative in budgets for governments and small governments must balance their budget. But something is missing where we transfer $1 Trillion to Defense Contractors for Regional wars where the governments either don't exist or can't mount a navy or airforce to attack us. Another example is the $1 Trillion Medicare/Medicaid that flows through the govt.

These are constitutional issues.

But I'm thinking you are most concerned with Individual or Civil Rights which limit government and which provide the frame work for individual rights and liberties.

Bottom line I think the Supremes are looking at Budget Concerns partly and partly are being influences by politics, money, power, access, association, and networks.


Lore

Trump seems to be making strides because he has some grit and character, but he also seems to be something of a loose cannon, with a streak of stereotypical Ugly Americanism, and naive to the dangers of political life. One hopes that he has a good circle of smart and conscientious advisors, especially in economics and foreign affairs, and can learn quickly.

zhandax

Trump is a joke but fortunately he is forcing the point to the average americun idiot that the entire current election process is a bigger joke, although one which most of them still don't get. I heard educated people today describing the election in terms reminiscent of a facebook pissy-fight.

I don't care to speculate how this ends, but is is one hell of a show.

Enki Anu

In the court of law if one witnesses a crime and does nothing about it, is labeled as accessory to crime. We have a population who does not give a rat ass about all the murder our government commits around the world.

We are all accessory to the crime against humanity and whatever comes our way, we deserve it. May the prime creator grant victory to the free spirited Homosapeans.

August

>>>We have a population who does not give a rat ass about all the murder our government commits around the world.

This is the strongest argument in favor of Going Galt and/or expatriating.

Having one's labor, capital, intellect and life itself strip-mined by "government" is very difficult to avoid, but you can at least avoid supporting Imperial America... what it stands for, and what it does: lie, steal, and kill.

AssN9

"The UN was founded so that we would never forget the crimes of great power, are we now in danger of forgetting ? Do we forget the lies that justified the conquest of Iraq and disguised America's plans to dominate the world ? Do we forget that the British government has announced for the first time that it's prepared to launch an attack with nuclear weapons echoing yet again George Bush ? And do we accept the distortion of intellect and morality that empties noble words like "democracy" and "liberation" of their true meaning ? That says it's wrong for a terrorist to kill innocent people but right for government's to commit the same crimes in our name ? The answer is that we need not accept any of this if we recognise that there are now two superpowers, one is the regime in Washington and the other is public opinion, now stirring all over the world as perhaps never before. Make no mistake, it is an epic struggle. The alternative is not just the conquest of far away countries, it is the conquest of us, of our minds, our humanity and our self-respect. If we remain silent, victory over us is assured." John Pilger

TeethVillage88s

David Spears Addington (born January 22, 1957) was legal counsel (2001�2005) and chief of staff (2005�2009) to Vice President Dick Cheney,[1] and is now vice president of domestic and economic policy studies at The Heritage Foundation.[2][3][4][5]

During 21 years of federal service, Addington worked at the CIA, the Reagan White House, the Department of Defense, four congressional committees, and the Cheney Office of the Vice President.[6] He was appointed to replace I. Lewis "Scooter" Libby Jr. as Cheney's chief of staff upon Libby's resignation when Libby was indicted on charges of perjury and obstruction of justice on October 28, 2005.[7] Addington was described by U.S. News & World Report as "the most powerful man you've never heard of" in May 2006.[8]

TeethVillage88s

People don't get it.

When your leaders can go to foreign wars against people that can't mount a navy, air force, or army to attack you, or even have missile that can reach your shores... it is evil.

And this evil will be turned on the US Citizens at different points as their nature shows themselves in decisions.

They dehumanize to go to war, then they do the same to people on main street later on. That is why they don't give a shit about Jobs, Good Jobs, nor about the Wealth that was destroyed and then transferred to the wealthy in 2008 Crisis.

- They are Fascist.
- They think like Fascist.
- The Checks and Balances are gone.
- The Balance of Powers in the 3 Branches of Government Gone
- The power Divided between People, States, and Central Govt Gone

Broken Third Estate and fourth Estate. MSM is not Free Press.

- Free Speech has been usurped by Debt, the Need to Work, the Need for a Career, the Need for Promotions, Bonuses, and Instant Gratification.

mog

One of the best comments I have read on ZH. The only thing I would add is the co-relation between the of the fall of the old American ideal with the rise of forces of Zion

The original gulags were also a zionist construct of their day.

The Russians are trying to break free.


henry chucho

Thank God he's got PHD in front of his name. There for a minute, I thought it was just the rantings of another American nut job..

Really20

Do you seriously believe the BS on offer from our mainstream media? The economies, political systems, and even the natural environment of the Earth is collapsing under human pressure. Nature will after millions of years recover itself without our aid, but we would be reduced to isolated tribes, a shadow of our former selves. Is this the path that you want our species to take?

Make no mistake, our economy is about to enter a new recession; the third wave in the cascading failure of the global economy. There was 2000, 2008, and then there will be 2015. Given global, as opposed to localized, economic and political weakness/instability vis-�-vis 1999 or 2007, the results are going to be worse.

JustObserving

The government of the United States stands for one thing and one thing only: Evil.

America is a fascist, police state. Evil can easily flourish in such a state.

Democracy has been dead in the land of the free for decades now.

The Deep State, a triad of Wall Street, MIC and spooks, runs everything in America since at least Nov 22, 1963. The NSA spies on the Supreme Court, Congress and the White House and you.

The most extraordinary passage in the memo requires that the Israeli spooks "destroy upon recognition" any communication provided by the NSA "that is either to or from an official of the US government." It goes on to spell out that this includes "officials of the Executive Branch (including the White House, Cabinet Departments, and independent agencies); the US House of Representatives and Senate (members and staff); and the US Federal Court System (including, but not limited to, the Supreme Court)."

The stunning implication of this passage is that NSA spying targets not only ordinary American citizens, but also Supreme Court justices, members of Congress and the White House itself. One could hardly ask for a more naked exposure of a police state.

https://www.wsws.org/en/articles/2013/09/13/surv-s13.html

Essay: Anatomy of the Deep State

There is the visible government situated around the Mall in Washington, and then there is another, more shadowy, more indefinable government that is not explained in Civics 101 or observable to tourists at the White House or the Capitol. The former is traditional Washington partisan politics: the tip of the iceberg that a public watching C-SPAN sees daily and which is theoretically controllable via elections. The subsurface part of the iceberg I shall call the Deep State, which operates according to its own compass heading regardless of who is formally in power.

http://billmoyers.com/2014/02/21/anatomy-of-the-deep-state/

Who rules America?

The secret collaboration of the military, the intelligence and national security agencies, and gigantic corporations in the systematic and illegal surveillance of the American people reveals the true wielders of power in the United States. Telecommunications giants such as AT&T, Verizon and Sprint, and Internet companies such as Google, Microsoft, Facebook and Twitter, provide the military and the FBI and CIA with access to data on hundreds of millions of people that these state agencies have no legal right to possess.

Congress and both of the major political parties serve as rubber stamps for the confluence of the military, the intelligence apparatus and Wall Street that really runs the country. The so-called "Fourth Estate"-the mass media-functions shamelessly as an arm of this ruling troika.

https://www.wsws.org/en/articles/2013/06/10/pers-j10.html

"The Central Intelligence Agency owns everyone of any significance in the major media." -- William Colby, former CIA Director

Parrotile

They are certainly NOT clueless. They know who holds the real power (those with the real money), and they are going to be looking after their interests, especially when the penalties for upsetting those with power tend to be extrajudicial, but highly effective, as certain journalists have discovered.

"Justice", like "healthcare" comes with a price tag. Clients with a "better ability" to afford "justice" expect (and of course GET) a better brand. Why do you think the "well connected" seem to be able to avoid the slightest whiff of prosecution, whilst the minions are killed for no more than "looking the wrong way" at one of the Militia?

BarkingCat

I call bullshit on this article.
DOJ cannot override a court decision.
They can challenge it and ask for higher court to look at it (in this case the supreme court).

I like reading his article but I think PCR is going off the rails.
Login or register to post comments

Shad_ow

Have you kept up the last 6 years. They have and do. Obama has ignored several court decisions.

Duc888

"America's First Black President is a traitor to his race and also to justice. "


Jesus, so PCR actually thinks this puppet wasn't put into place? Really? A junior Senator on the Senate banking committee? With no fucking past? Really?

Jeez, water is wet. Fire is Hot. Who knew?

gregga777

Affirmative Action Barry Soetoro's allegiance is to the "green" race, that is, the color of money.

kappal_toba_dhu...

USA used to be one of the freest, richest countries on earth. Not today, deekras (dears). Today in many ways it is no different from any other developing country, not only in freedom but in police shootings searches, capital movement, infrastructure, public services, etc.
The trouble is that USA propaganda machine is still busy telling the whole world that America is "paradise" when in fact it is more like hell for those that are not rich. After 20 years of struggling we were lucky to get the opportunity to leave.
If you are planning to move there, DON'T!

August

PCR does skate fairly close to the edge.
I believe PCR uses the word Zionists, but he has certainly said that the Lobby basically controls US foreign policy in the Middle East. Openly making such a statement is still not good for a career in US Public Life (as Pat Buchanan might say), but the facts are pretty much beyond dispute.

[Jul 26, 2015] What Is Wrong with the West's Economies?

"...The jarring market forces? It was a political project with the desired results."
.
"..."We will all have to turn from the classical fixation on wealth accumulation and efficiency to a modern economics that places imagination and creativity at the center of economic life.""
.
"...AN excellent paper up until Eddie tries to solve the problem. His description of the long term societal effects of consolidation of corporations into corporatist behemoths and wealth into obscene levels of power, isolation, and self-indulgence was unerring. Too bad he had no idea what he was depicting."
.
"...Our financial leaders don't want a thriving economy. The want to crush the opposition and keep people under their thumb"
.
"...Perhaps well worth a rather long read, is Domhoff's piece titled, "The Class Domination Theory of Power, here: http://www2.ucsc.edu/whorulesamerica/power/class_domination.html"

This is from Edmund Phelps. It was kind of hard to highlight the main points in brief extracts, so you may want to take a look at the full article:

What Is Wrong with the West's Economies?: What is wrong with the economies of the West-and with economics? ...

Many of us in Western Europe and America feel that our economies are far from just...

With little or no effective policy initiative giving a lift to the less advantaged, the jarring market forces of the past four decades-mainly the slowdowns in productivity that have spread over the West and, of course, globalization, which has moved much low-wage manufacturing to Asia-have proceeded, unopposed, to drag down both employment and wage rates at the low end. The setback has cost the less advantaged not only a loss of income but also a loss of what economists call inclusion-access to jobs offering work and pay that provide self-respect. And inclusion was already lacking to begin with. ...

How might Western nations gain-or regain-widespread prospering and flourishing? Taking concrete actions will not help much without fresh thinking: people must first grasp that standard economics is not a guide to flourishing-it is a tool only for efficiency. Widespread flourishing in a nation requires an economy energized by its own homegrown innovation from the grassroots on up. For such innovation a nation must possess the dynamism to imagine and create the new-economic freedoms are not sufficient. And dynamism needs to be nourished with strong human values.

Of the concrete steps that would help to widen flourishing, a reform of education stands out. The problem here is not a perceived mismatch between skills taught and skills in demand. ... The problem is that young people are not taught to see the economy as a place where participants may imagine new things, where entrepreneurs may want to build them and investors may venture to back some of them. It is essential to educate young people to this image of the economy.

It will also be essential that high schools and colleges expose students to the human values expressed in the masterpieces of Western literature, so that young people will want to seek economies offering imaginative and creative careers. Education systems must put students in touch with the humanities in order to fuel the human desire to conceive the new and perchance to achieve innovations. This reorientation of general education will have to be supported by a similar reorientation of economic education.

We will all have to turn from the classical fixation on wealth accumulation and efficiency to a modern economics that places imagination and creativity at the center of economic life.

I'm skeptical that this is the answer to our inequality/job satisfaction problems.

Posted by Mark Thoma on Friday, July 24, 2015 at 10:38 AM in Economics, Income Distribution, Productivity | Permalink Comments (14)

Peter K. said...

"With little or no effective policy initiative giving a lift to the less advantaged, the jarring market forces of the past four decades-mainly the slowdowns in productivity that have spread over the West and, of course, globalization, which has moved much low-wage manufacturing to Asia-have proceeded, unopposed, to drag down both employment and wage rates at the low end."

The jarring market forces? It was a political project with the desired results.

JohnH said in reply to Peter K....

Indeed! And there is currently no meaningful effort to fix the problem, only to worsen it through TPP and TAFTA.

Rune Lagman said...

"We will all have to turn from the classical fixation on wealth accumulation and efficiency to a modern economics that places imagination and creativity at the center of economic life."

Well, ain't gonna happen by "reforming" the education system.

Everybody (more or less) knows what it takes to "fix" the western economies; lots of infrastructure investment (preferable green) and higher wages. I'm getting fed up with all these "economists" that keep justifying the status quo (probably because their paycheck depends on it).

dan berg said...

Could it possibly be that your skepticism arises from the fact that -precisely because you are an academic economist - you haven't got an imaginative or creative bone in your body?

RC AKA Darryl, Ron said in reply to dan berg...

Dear AH,

Doc Thoma wrote "I'm skeptical that this is the answer to our inequality/job satisfaction problems."

Everybody has imagination and creative potential. Most people just lack the mean to express it in a way that will enter the economy. Even Edmund realized that people got to eat. The obstacles run from there. It was Edmund's answer that Doc Thoma was skeptical of. This was Phelps answer to the question:

"... Of the concrete steps that would help to widen flourishing, a reform of education stands out. The problem here is not a perceived mismatch between skills taught and skills in demand. (Experts have urged greater education in STEM subjects-science, technology, engineering, and mathematics-but when Europe created specialized universities in these subjects, no innovation was observed.) The problem is that young people are not taught to see the economy as a place where participants may imagine new things, where entrepreneurs may want to build them and investors may venture to back some of them. It is essential to educate young people to this image of the economy.

It will also be essential that high schools and colleges expose students to the human values expressed in the masterpieces of Western literature, so that young people will want to seek economies offering imaginative and creative careers. Education systems must put students in touch with the humanities in order to fuel the human desire to conceive the new and perchance to achieve innovations. This reorientation of general education will have to be supported by a similar reorientation of economic education..."

If you agree with Edmund Phelps on his answer then at least we must all admit that you have an astronomical imagination.

djb said...

Our financial leaders don't want a thriving economy

The want to crush the opposition and keep people under their thumb

Give people real hope and the economy will thrive

anne said...

By way of Branko Milanovic, referring to randomized trials in economics:

http://www.sccs.swarthmore.edu/users/08/bblonder/phys120/docs/borges.pdf

1658

On Exactitude in Science
Suarez Miranda

�In that Empire, the Art of Cartography attained such Perfection that the map of a single Province occupied the entirety of a City, and the map of the Empire, the entirety of a Province. In time, those Unconscionable Maps no longer satisfied, and the Cartographers Guilds struck a Map of the Empire whose size was that of the Empire, and which coincided point for point with it. The following Generations, who were not so fond of the Study of Cartography as their Forebears had been, saw that that vast Map was Useless, and not without some Pitilessness was it, that they delivered it up to the Inclemencies of Sun and Winters. In the Deserts of the West, still today, there are Tattered Ruins of that Map, inhabited by Animals and Beggars; in all the Land there is no other Relic of the Disciplines of Geography.

(1946

Viajes de varones prudentes
Jorge Luis Borges)

cm said...

"The problem is that young people are not taught to see the economy as a place where participants may imagine new things, where entrepreneurs may want to build them and investors may venture to back some of them. It is essential to educate young people to this image of the economy."

He left out the part who will pay for all these new things. Aggregate demand. I don't know where this idea comes from that young people don't imagine creating new things. They do it all the time, until the rubber hits the road and they have to get a corporate job because there is just not enough interest and funding for what they are interested in offering. No amount of education will help there.

Not to put words in his mouth, but its sounds like an impersonalized form victim blaming - schools suck and young people have no imagination.

RC AKA Darryl, Ron said in reply to cm...

Schools suck and young people have too much imagination. But Edmund Phelps has more imagination that anyone that I have ever known :<)

cm said in reply to RC AKA Darryl, Ron...

Not sure how this relates to my point. How will "better education" fix the fact that when you have a good idea, more likely than not there is no market for it? A lot of tech innovation "rests" in actual or metaphorical drawers because of no ROI or no concrete customer/market to sell it. And this is not a recent phenomenon.

RC AKA Darryl, Ron said...

AN excellent paper up until Eddie tries to solve the problem. His description of the long term societal effects of consolidation of corporations into corporatist behemoths and wealth into obscene levels of power, isolation, and self-indulgence was unerring. Too bad he had no idea what he was depicting.

Lafayette said...

{... which has moved much low-wage manufacturing to Asia-have proceeded, unopposed, to drag down both employment and wage rates at the low end.}

Yes, unopposed. Just what should any nation do about it? Forbid it?

That's not the way economies work.

The Industrial Revolution took a lot of people off the farms, brought them into large cities, where accommodations were created for their families, and gave them jobs in factories with which to pay the rent.

Many then moved on to purchase those properties an become homeowners, which was a typical example of "economic progression".

Of course, the Industrial Revolution, which started in western developed nations, aided by a couple of wars, inevitably progressed from more developed to lesser developed societies.

We in the industrially developed West should not have permitted the Chinese, Vietnamese or Filipinos from bettering their lot by making exactly the same societal progression?

Where is the Social Justice in that, pray tell?

If there has been any failure in Social Justice, it is in the US. Piketty was very clear about that in this info-graphic: https://www.flickr.com/photos/68758107@N00/14266316974/

The income unfairness that has occurred since the US ratcheted down drastically upper-income taxation was not replicated in the EU. Is a third of all income going to only 10% of the population in Europe unfair? Perhaps.

But not quite as unfair as the nearly 50% in the United States. And as regards Wealth, the societal impact is even worse. As Domhoff's work shows, 80% of the American population obtain only 11% of America's wealth historically. See that tragic bit of unfairness here: http://www2.ucsc.edu/whorulesamerica/power/images/wealth/Net_worth_and_financial_wealth.gif

Lafayette said in reply to Lafayette...

Perhaps well worth a rather long read, is Domhoff's piece titled, "The Class Domination Theory of Power, here: http://www2.ucsc.edu/whorulesamerica/power/class_domination.html

Excerpt: {The argument over the structure and distribution of power in the United States has been going on within academia since the 1950s. It has generated a large number of empirical studies, many of which have been drawn upon here.

In the final analysis, however, scholars' conclusions about the American power structure depend upon their beliefs concerning power indicators, which are a product of their "philosophy of science". That sounds strange, I realize, but if "who benefits?" and "who sits?" are seen as valid power indicators, on the assumption that "power" is an underlying social trait that can be indexed by a variety of imperfect indicators, then the kind of evidence briefly outlined here will be seen as a very strong case for the dominant role of the power elite in the federal government.}

Thanks to RR in the 1980s.

No wonder "they" make statues of Reckless Ronnie. Can't believe that? See this from WikiPedia: "List of things named after Ronald Reagan", here: https://en.wikipedia.org/wiki/List_of_things_named_after_Ronald_Reagan

[May 30, 2015] Rand Paul declares surveillance war and hints at filibuster for NSA reform

"By collecting all of your records, we're wasting so much money, so much time, and the haystack's so large we can't find the terrorists," Paul said. "I'm for looking at all of the terrorists' records � I just want their name on the warrant and I just want it to be signed by a judge just like the constitution says."
Spiegel said it is Expired.... And they are a NSA Fish Wrap..... http://m.spiegel.de/politik/ausland/a-1036475.html
Notable quotes:
"... With controversial provisions of the Patriot Act scheduled to run out at midnight on Sunday, Paul, the Kentucky senator and Republican presidential hopeful, fielded questions about how he intended to win privacy campaigners a long hoped-for victory. ..."
"... "I think a lot of people in America agree with me," Paul said, "that your phone records should not be collected by your government, unless they suspect you of a crime and unless they call a judge and unless a warrant has your name on it." ..."
"... Apparently the real problem is Executive Order 12333, under which almost all of the mass surveillance is "authorized". ..."
"... By the time someone is a party candidate, they've already been bought off. National write-in. ..."
"... politicians listen to corporations and shareholders. What corporations dictate, their political lapdogs obediently listens. ..."
"... Please, tell me that porn sites are involved in this. Cut off Congress's porn access and they will be putty in our hands. ..."
"... "This is a blackout," read the site to which computers from congressional IP addresses were redirected. "We are blocking your access until you end mass surveillance laws." ..."
May 29, 2015 | The Guardian

Rand Paul indicated his intention on Friday to filibuster a surveillance reform bill that he considers insufficient, as privacy advocates felt momentum to tear the heart out of the Bush-era Patriot Act as its Snowden-era expiration date approaches.

With controversial provisions of the Patriot Act scheduled to run out at midnight on Sunday, Paul, the Kentucky senator and Republican presidential hopeful, fielded questions about how he intended to win privacy campaigners a long hoped-for victory.

... ... ...

"By collecting all of your records, we're wasting so much money, so much time, and the haystack's so large we can't find the terrorists," Paul said. "I'm for looking at all of the terrorists' records � I just want their name on the warrant and I just want it to be signed by a judge just like the constitution says."

... ... ...

"Right now we're having a little bit of a war in Washington," Paul said at the rally on Friday. "It's me versus some of the rest of them � or a lot of the rest of them."

... ... ...

In the middle is a bill that fell three votes shy of a 60-vote threshold. The USA Freedom Act, supported by Obama, junks the NSA's bulk collection of US phone records in exchange for extending the lifespan of the Patriot Act's controversial FBI powers.

While McConnell, Obama and many Freedom Act supporters describe those powers as crucial, a recent Justice Department report said the expiring "business records" provision has not led to "any major case developments". Another power set to expire, the "roving wiretap" provision, has been linked to abuse in declassified documents; and the third, the "lone wolf" provision, has never been used, the FBI confirmed to the Guardian.

... ... ...

The White House has long backed passage of the USA Freedom Act, calling it the only available mechanism to save the Patriot Act powers ahead of expiration now that the House has recessed until Monday.

Obama on Friday chastised what he said were "a handful of Senators" standing in the way of passing the USA Freedom Act, who he alleged risked creating an intelligence lapse.

James Clapper, the director of national intelligence whom Paul has criticized for lying to Congress about surveillance, issued a rare plea to pass a bill he has reluctantly embraced in order to retain Patriot Act powers.

"At this late date, prompt passage of the USA Freedom Act by the Senate is the best way to minimize any possible disruption of our ability to protect the American people," Clapper said on Friday.

At the Beacon Drive-in diner in Spartanburg, Paul chastised proponents of the Patriot Act for arguing the law would prevent another 9/11. "Bull!" a woman in the crowd exclaimed, as others groaned at the national security excuse cited by more hawkish lawmakers.

"I think a lot of people in America agree with me," Paul said, "that your phone records should not be collected by your government, unless they suspect you of a crime and unless they call a judge and unless a warrant has your name on it."

Multiple polls released this month have found overwhelming public antipathy for government surveillance.

Still, it remains unclear if the USA Freedom Act has the votes to pass. Senate rules permit Paul to effectively block debate on the bill until expiration. Few who are watching the debate closely felt on Friday that they knew how Sunday's dramatic session would resolve.

But privacy groups, sensing the prospect of losing one of their most reviled post-9/11 laws, were not in a mood to compromise on Friday.

"Better to let the Patriot Act sunset and reboot the conversation with a more fulsome debate," said Anthony Romero, the executive director of the American Civil Liberties Union.

See also:

Trenton Pierce -> phrixus 30 May 2015 21:18

He opposes indefinite detention in the NDAA, he opposes TPP and the fast track. He opposes the militarization of local police. He opposes the secrecy of the Federal Reserve. He opposes unwarranted civil asset forfeiture. He opposes no-knock home searches. He opposes the failed drug war. He opposes war without congressional approval. What is it about him you don't like?

Trenton Pierce -> masscraft 30 May 2015 21:14

Then line up behind Rand. He polls the best against Hilary. The era of big government Republican is over. Realize that or get ready for your Democrat rule.

Vintage59 -> Nedward Marbletoe 30 May 2015 16:20

The machine would chew him up and spit him out and he's smart enough to know that.

ripogenus 30 May 2015 07:47

Just listened to NPR's On the Media. They did a special podcast just on the patriot act and the consequences if it expires. Apparently the real problem is Executive Order 12333, under which almost all of the mass surveillance is "authorized".

seasonedsenior 29 May 2015 22:20

New technology is beginning to equal the playing field somewhat whether it be video of police misconduct or blocking out Congress from 10,000 websites to stop NSA spying. This part of technology is a real positive. There are too many secrets in our democracy-light that should be exposed for the greater good. There is too much concentrated power that needs to be opened up. I am happy to see these changes happening. Keep up the good work.

AmyInNH cswanson420 29 May 2015 22:12

By the time someone is a party candidate, they've already been bought off. National write-in.

Viet Nguyen -> cswanson420 29 May 2015 17:44

politicians listen to corporations and shareholders. What corporations dictate, their political lapdogs obediently listens.

Best examples? Retarded laws that discriminate against gay people in states like Indiana. When major corporations such as Wal-Mart and Apple, who only cares about money, condemn such retarded laws with potential boycotts, their political lackeys quickly follow in line.

I am waiting for another multinational corporation to declare the NSA process detrimental to businesses, and see how many former government supporters of the NSA do a complete 180 degree stance flip.

EdChamp -> elaine layabout 29 May 2015 17:22

Please, tell me that porn sites are involved in this. Cut off Congress's porn access and they will be putty in our hands.

Congratulations! You win the award of the day for that one gleaming guardian comment that truly made me smile.

Repent House 29 May 2015 16:13

"This is a blackout," read the site to which computers from congressional IP addresses were redirected. "We are blocking your access until you end mass surveillance laws."

This is so freekin awesome... mess with the bull you get the horns as I always say! They seem to under estimate the strength, knowledge, tenacity, of the "AMERICAN PEOPLE" This is what we need to do on a wider scale for a number of things wrong! Awesome!

[May 30, 2015]Dare to say NATO no

May 27, 2015 | Aftonbladet

...Politicians and editors look for opportunities to step up its campaign for the accession to NATO, and in the spring of 2016, the parliament is expected to approve a host-country agreements that make it easier for NATO to with Swedish permission to use our territory as a base for military activities, "including the attack", "in peace, emergencies, crisis and conflict or international tensions".

Everything appears to be � and sold � as a speedy response to Russian aggression. Sweden and other countries are prepared after the end of the cold war in the belief that European peace was secured. But the president saw in our kindness as a weakness and took the opportunity to obtain tear up a security order that has prevailed for decades.

The story goes is repeated again and again every day in our media. Vladimir Putin, with the annexation of Crimea and support for separatists in eastern Ukraine have shown "that he does not respect the European order that had been in place since the second world war and statutes that borders cannot be changed by force", writes, for example, the Daily News, in an editorial on January 12.

Such an argument is a deliberate memory gap. MSM presstitutes push the button "forget" and suddenly a decade of war in the former Yugoslavia erased from the public consciousness.

We can argue about reasons and circumstances of intervention, but it is undeniable that the USA, NATO and EU countries intervened using military force to redraw the map of the Balkans. The leadership in Moscow has thus set a precedent to cite. Putin reiterates at the conflicts with Georgia and Ukraine, word-for-word the reasons the western powers claimed for the bombing of Serbia and the recognition of cessation of Kosovo.

But the right to put himself above the principles of the inviolability of borders and non-interference in other countries ' internal affairs is in our official propaganda worldview a privilege reserved for the "international community", which is in reality the United States and its entourage of small and medium-sized European satellites. International law applies to all other states, but not for the United States, NATO and the EU.

NATO expanded in 1999 their mutual defense obligations to include global dangers such as terrorism and the "disruption of the flow of vital resources", and in 2003, the EU adopted its first security strategy, inspired by the Bush doctrine on the right to preventive war against terrorism and weapons of mass destruction: "With the new threats the first line of defense will often be abroad ... We need to develop a strategic culture that fosters early, rapid, and when necessary, robust intervention."

It was the doctrine of the first line of defense � not the dreams of peace, who guided the Swedish defense military industrial complex. Territorial defense was abandoned at the end of the 1990s, literally send to the junkyard. What was left was prestigious military projects in industry and the individual units of professional soldiers trained for NATO operations in foreign countries. The restructuring was led by a consulting firm from the united states, closely tied to the Pentagon, the NSA and the CIA The armed forces would prepare for "global action - especially in the continents of the world in which Sweden has a vital economic and/or political interests," the consultants wrote in a secret report.

"Sweden's role as a regional power in the Baltic sea changed from neutrality to leadership", was said. Now for some reason "koalitionskrigf�ring and Sweden's ability to operate in collaboration with organizations such as NATO ... get a new and greater significance". This was written in 1998, long before the war in Ukraine.

When the U.S. interest in the Arctic and the north flank, now rising to the fore the plans. Sweden becomes a bridgehead in the quest to penetrate back to Russia. Gotland will again be anchored, Russian submarines tops the news and B-52 bombers taking over the sky.

The major powers have never hesitated to tramp the UN-principles, but with the doctrine of the preventive intervention there is nothing left of the respect of all the member states' sovereignty. If NATO considers itself have the right to place a first line of defense in Afghanistan or Libya, then does not Russia the same rights in Ukraine?

The Russian leadership will see in the western privilege for preemptive interventions a precedent. Europe is sinking into a black hole that draws misfortune of countries and people.

Several politicians, editors, and the military now proclaim that that we should jump in, leave the last of the neutrality and comply with NATO going directly into the black hole. Multiyear efforts of dragging the country into the the alliance, shall result in the membership.

We should do the opposite. Pull us out. Keep us away. Say yes to the exclusion.

It reduces the risk that our own government or the foreign power will drag us into the war. But not only that. Swedish neutrality is also an opening for the people in eastern Europe who are looking for a rescue out of the tug-of-war between the Russian oil and gas barons, domestic oligarchs and western financial oligarchs.

Being outside zone of US protectorate, we can jointly deal with the social issues.

More can be read about the NATO mutual f�rsvarsf�rpliktelser in "The Alliance's Strategic Concept, Approved by the Heads of State and Government participating in the meeting of the North Atlantic Council in Washington, D. C., 990424".

The text was written in 1998 is available in the "SAIC: Perspective Study Dominant? Awareness 2020", Final Report, September 2, 1998, For The Swedish High Command, p. 5, 7

[May 21, 2015] Militarization Is More Than Tanks Rifles It's a Cultural Disease, Acclimating Citizens To Life In A Police State

May 21, 2015 | Zero Hedge
Submitted by John Whitehead via The Rutherford Institute,

"If we're training cops as soldiers, giving them equipment like soldiers, dressing them up as soldiers, when are they going to pick up the mentality of soldiers? If you look at the police department, their creed is to protect and to serve. A soldier's mission is to engage his enemy in close combat and kill him. Do we want police officers to have that mentality? Of course not."

- Arthur Rizer, former civilian police officer and member of the military

Talk about poor timing. Then again, perhaps it's brilliant timing.

Only now-after the Departments of Justice, Homeland Security (DHS) and Defense have passed off billions of dollars worth of military equipment to local police forces, after police agencies have been trained in the fine art of war, after SWAT team raids have swelled in number to more than 80,000 a year, after it has become second nature for local police to look and act like soldiers, after communities have become acclimated to the presence of militarized police patrolling their streets, after Americans have been taught compliance at the end of a police gun or taser, after lower income neighborhoods have been transformed into war zones, after hundreds if not thousands of unarmed Americans have lost their lives at the hands of police who shoot first and ask questions later, after a whole generation of young Americans has learned to march in lockstep with the government's dictates-only now does President Obama lift a hand to limit the number of military weapons being passed along to local police departments.

Not all, mind you, just some.

Talk about too little, too late.

Months after the White House defended a federal program that distributed $18 billion worth of military equipment to local police, Obama has announced that he will ban the federal government from providing local police departments with tracked armored vehicles, weaponized aircraft and vehicles, bayonets, grenade launchers, camouflage uniforms and large-caliber firearms.

Obama also indicated that less heavy-duty equipment (armored vehicles, tactical vehicles, riot gear and specialized firearms and ammunition) will reportedly be subject to more regulations such as local government approval, and police being required to undergo more training and collect data on the equipment's use. Perhaps hoping to sweeten the deal, the Obama administration is also offering $163 million in taxpayer-funded grants to "incentivize police departments to adopt the report's recommendations."

While this is a grossly overdue first step of sorts, it is nevertheless a first step from an administration that has been utterly complicit in accelerating the transformation of America's police forces into extensions of the military. Indeed, as investigative journalist Radley Balko points out, while the Obama administration has said all the right things about the need to scale back on a battlefield mindset, it has done all the wrong things to perpetuate the problem:

It remains to be seen whether this overture on Obama's part, coming in the midst of heightened tensions between the nation's police forces and the populace they're supposed to protect, opens the door to actual reform or is merely a political gambit to appease the masses all the while further acclimating the populace to life in a police state.

Certainly, on its face, it does nothing to ease the misery of the police state that has been foisted upon us. In fact, Obama's belated gesture of concern does little to roll back the deadly menace of overzealous police agencies corrupted by money, power and institutional immunity. And it certainly fails to recognize the terrible toll that has been inflicted on our communities, our fragile ecosystem of a democracy, and our freedoms as a result of the government's determination to bring the war home.

Will the young black man guilty of nothing more than running away from brutish police officers be any safer in the wake of Obama's edict? It's unlikely.

Will the old man reaching for his cane have a lesser chance of being shot? It's doubtful.

Will the little girl asleep under her princess blanket live to see adulthood when a SWAT team crashes through her door? I wouldn't count on it.

It's a safe bet that our little worlds will be no safer following Obama's pronouncement and the release of his "Task Force on 21st Century Policing" report. In fact, there is a very good chance that life in the American police state will become even more perilous.

Among the report's 50-page list of recommendations is a call for more police officer boots on the ground, training for police "on the importance of de-escalation of force," and "positive non-enforcement activities" in high-crime communities to promote trust in the police such as sending an ice cream truck across the city.

Curiously, nowhere in the entire 120-page report is there a mention of the Fourth Amendment, which demands that the government respect citizen privacy and bodily integrity. The Constitution is referenced once, in the Appendix, in relation to Obama's authority as president. And while the word "constitutional" is used 15 times within the body of the report, its use provides little assurance that the Obama administration actually understands the clear prohibitions against government overreach as enshrined in the U.S. Constitution.

For instance, in the section of the report on the use of technology and social media, the report notes: "Though all constitutional guidelines must be maintained in the performance of law enforcement duties, the legal framework (warrants, etc.) should continue to protect law enforcement access to data obtained from cell phones, social media, GPS, and other sources, allowing officers to detect, prevent, or respond to crime."

Translation: as I document in my book Battlefield America: The War on the American People, the new face of policing in America is about to shift from waging its war on the American people using primarily the weapons of the battlefield to the evermore-sophisticated technology of the battlefield where government surveillance of our everyday activities will be even more invasive.

This emphasis on technology, surveillance and social media is nothing new. In much the same way the federal government used taxpayer-funded grants to "gift" local police agencies with military weapons and equipment, it is also funding the distribution of technology aimed at making it easier for police to monitor, track and spy on Americans. For instance, license plate readers, stingray devices and fusion centers are all funded by grants from the DHS. Funding for drones at the state and local levels also comes from the federal government, which in turn accesses the data acquired by the drones for its own uses.

If you're noticing a pattern here, it is one in which the federal government is not merely transforming local police agencies into extensions of itself but is in fact federalizing them, turning them into a national police force that answers not to "we the people" but to the Commander in Chief. Yet the American police force is not supposed to be a branch of the military, nor is it a private security force for the reigning political faction. It is supposed to be an aggregation of the countless local civilian units that exist for a sole purpose: to serve and protect the citizens of each and every American community.

So where does that leave us?

There's certainly no harm in embarking on a national dialogue on the dangers of militarized police, but if that's all it amounts to-words that sound good on paper and in the press but do little to actually respect our rights and restore our freedoms-then we're just playing at politics with no intention of actually bringing about reform.

Despite the Obama Administration's lofty claims of wanting to "ensure that public safety becomes more than the absence of crime, that it must also include the presence of justice," this is the reality we must contend with right now:

Americans still have no real protection against police abuse. Americans still have no right to self-defense in the face of SWAT teams mistakenly crashing through our doors, or police officers who shoot faster than they can reason. Americans are still no longer innocent until proven guilty. Americans still don't have a right to private property. Americans are still powerless in the face of militarized police. Americans still don't have a right to bodily integrity. Americans still don't have a right to the expectation of privacy. Americans are still being acclimated to a police state through the steady use and sight of military drills domestically, a heavy militarized police presence in public places and in the schools, and a taxpayer-funded propaganda campaign aimed at reassuring the public that the police are our "friends." And to top it all off, Americans still can't rely on the courts, Congress or the White House to mete out justice when our rights are violated by police.

To sum it all up: the problems we're grappling with have been building for more than 40 years. They're not going to go away overnight, and they certainly will not be resolved by a report that instructs the police to simply adopt different tactics to accomplish the same results-i.e., maintain the government's power, control and wealth at all costs.

This is the sad reality of life in the American police state.

[Apr 10, 2015] Exhumation of fascism by neoliberalism

Apr 06, 2015 | Izvestia

... ... ..

The term "fascism" was initially defined as a local phenomenon - the regime of Italian dictator Benito Mussolini. Later, the term changed its meaning and has become synonymous with Nazism (national socialism) of the Third Reich. During 1950-1990-Western political science began to call fascism any repressive regime and introduced the term "totalitarianism". This was done in order to combine Nazism and communism, those two social phenomenon were ideologically polar and has had a different social base despite using similar cruel methods.--[ I do not see much difference in enslavement via Gulag with ensavement via decration of undermench -- NNB] In one case, the the driving force was large industrialists and the middle class, in another - mostly the urban poor and part of intelligencia, especially Jewish intelligencia.

The theory of binary totalitarianism has no serious scientific status. The term "fascism" has now been returned to its historical meaning. It is a synonym of racism and all of its varieties - crops-racism (the idea of cultural superiority), the social racism (the idea of social inequality as the nature of this division of people into masters and slaves), etc.

Usually researchers try to distill the signs of fascism. For example, the Italian philosopher Umberto Eco counted 14. But this approach only blurs the subject. The myth of superiority is a key symptom. The rest is optional. Additional definitions are generated by the desire to "attach" to fascism more than that.

For example, "nationalism". Normal people are proud of their nation and its culture, but do not seek to destroy other peoples. This is the difference between nationalism and Nazism.

Or "traditionalism". If fascism were based in the traditions of the peoples, then some nations would have dwelt for centuries in the fascist state of fever. Tradition is the enemy of the "voice of blood", and there is no logic of exclusion of other people in traditions, while fascism lives this logic . Not coincidentally, he is associated with the Protestant line in Christianity and its idea of "chosen for salvation". Apart from the idea of exclusiveness, fascism is born with the spirit of renewal, the destruction of the weak and "unnecessary" for the sake of winning power, novelty and rationality. I repeat: tradition is the main enemy of fascism.

The idea of a strong state accompanies fascism, but does not define it. The Olympics of 1936, "Olympia" by Leni Riefenstahl are symbols of a strong statehood. But Hitler's fascism was not defined by the Olympics, but by the Nuremberg racial laws, summary execution of Slavs, Jews and Gypsies, the plans of the colonization of the Eastern territories.

Yes, the war of 1941-1945 was the war between two authoritarian States, but only from the German side it was an ethnic war. There were no intentions to carry out the genocide of "inferior Aryans" in minds of Soviet soldiers or Joseph Stalin.

In Europe in recent decades, it was fashionable to talk about fascism as "a reaction to Bolshevism". Indeed, the growing influence of leftist ideas in Europe in the first half of the twentieth century caused activation of right-wing forces. But the roots of fascism are more ancient then Marxist and Bolshevik. Fascism arose as a justification for colonial expansion. Hitler didn't invent anything new. He just moved to the center of Europe bloody colonialist methods of the British, the French, the Spaniards, and made the destruction of people fast and technically perfect: gas chambers, mass graves. In a way fascism is application of colonial methods to the part of population of the country, internal colonization so to speak.

The regime of the 1930-ies in Germany is the legitimate child of the European liberal capitalism. But this conclusion is seriously injures European sense of identity. That's why this statement is a strict taboo in the West --[not really, the hypothesis of intrinsic connection of fascism with European (colonial) culture are pretty common --NNB]. But the truth eventually comes out. Authors from European left now more frequently touch this connection and try to develop this hypothesis.

Today we are witnessing a return to archaization of neoliberal society and slide of neoliberalism into "new barbarism." Hence the reasoning of the European politicians about Ukraine as an "Outpost of civilization". However, the assertion that Russia "does not meet democratic standards", those days unlikely will deceive anyone. Euphemisms is a product of distortion of the language, not political reality. This phrase marks Russia as a "defective" state, inhabited by "inferior" people - "watniks", "colorado bugs". Neo-fascist model within the framework of liberalism is often built by shifting the boundaries of tolerance. To some people tolerance applies, to other - no. The protection of the rights of one group in this case means the destruction of the rights of another.

Political myth about the deep opposition between liberalism and Nazism have always refuted by independent historians. Today this myth is completely discredited.

There are obvious interplay and close relationship between the two ideas - fascist and liberal - obviously. They both go back to the idea of natural selection, transferred to human society. In other words, the strongest must survive at the expense of the weakest. this doctrine is often called "Social Darwinism". Indeed, the principle of "preservation of the fittest races", transposed into social sciences, resulted in the adoption of the Nuremberg laws designed to protect the "purity of race and blood" - the "law of the citizen of the Reich" and "Law on the protection of German blood and German honor."

The return of fascism is a symptom of a certain historical tendencies. To such radical measures economic elites resort only for the postponement of the final world crisis. But in the end it is fascism that might again bring Western societies to the wedge of collapse.

[Mar 24, 2015] The Deep State

February 28, 2014 | theamericanconservative.com

Steve Sailer links to this unsettling essay by former career Congressional staffer Mike Lofgren, who says the "deep state" - the Washington-Wall-Street-Silicon-Valley Establishment - is a far greater threat to liberty than you think. The partisan rancor and gridlock in Washington conceals a more fundamental and pervasive agreement. Excerpts:

Excerpts:

These are not isolated instances of a contradiction; they have been so pervasive that they tend to be disregarded as background noise. During the time in 2011 when political warfare over the debt ceiling was beginning to paralyze the business of governance in Washington, the United States government somehow summoned the resources to overthrow Muammar Ghaddafi's regime in Libya, and, when the instability created by that coup spilled over into Mali, provide overt and covert assistance to French intervention there. At a time when there was heated debate about continuing meat inspections and civilian air traffic control because of the budget crisis, our government was somehow able to commit $115 million to keeping a civil war going in Syria and to pay at least �100m to the United Kingdom's Government Communications Headquarters to buy influence over and access to that country's intelligence. Since 2007, two bridges carrying interstate highways have collapsed due to inadequate maintenance of infrastructure, one killing 13 people. During that same period of time, the government spent $1.7 billion constructing a building in Utah that is the size of 17 football fields. This mammoth structure is intended to allow the National Security Agency to store a yottabyte of information, the largest numerical designator computer scientists have coined. A yottabyte is equal to 500 quintillion pages of text. They need that much storage to archive every single trace of your electronic life.

Yes, there is another government concealed behind the one that is visible at either end of Pennsylvania Avenue, a hybrid entity of public and private institutions ruling the country according to consistent patterns in season and out, connected to, but only intermittently controlled by, the visible state whose leaders we choose. My analysis of this phenomenon is not an expos� of a secret, conspiratorial cabal; the state within a state is hiding mostly in plain sight, and its operators mainly act in the light of day. Nor can this other government be accurately termed an "establishment." All complex societies have an establishment, a social network committed to its own enrichment and perpetuation. In terms of its scope, financial resources and sheer global reach, the American hybrid state, the Deep State, is in a class by itself. That said, it is neither omniscient nor invincible. The institution is not so much sinister (although it has highly sinister aspects) as it is relentlessly well entrenched. Far from being invincible, its failures, such as those in Iraq, Afghanistan and Libya, are routine enough that it is only the Deep State's protectiveness towards its higher-ranking personnel that allows them to escape the consequences of their frequent ineptitude.

More:

Washington is the most important node of the Deep State that has taken over America, but it is not the only one. Invisible threads of money and ambition connect the town to other nodes. One is Wall Street, which supplies the cash that keeps the political machine quiescent and operating as a diversionary marionette theater. Should the politicians forget their lines and threaten the status quo, Wall Street floods the town with cash and lawyers to help the hired hands remember their own best interests. The executives of the financial giants even have de facto criminal immunity. On March 6, 2013, testifying before the Senate Judiciary Committee, Attorney General Eric Holder stated the following: "I am concerned that the size of some of these institutions becomes so large that it does become difficult for us to prosecute them when we are hit with indications that if you do prosecute, if you do bring a criminal charge, it will have a negative impact on the national economy, perhaps even the world economy." This, from the chief law enforcement officer of a justice system that has practically abolished the constitutional right to trial for poorer defendants charged with certain crimes. It is not too much to say that Wall Street may be the ultimate owner of the Deep State and its strategies, if for no other reason than that it has the money to reward government operatives with a second career that is lucrative beyond the dreams of avarice - certainly beyond the dreams of a salaried government employee. [3]

The corridor between Manhattan and Washington is a well trodden highway for the personalities we have all gotten to know in the period since the massive deregulation of Wall Street: Robert Rubin, Lawrence Summers, Henry Paulson, Timothy Geithner and many others. Not all the traffic involves persons connected with the purely financial operations of the government: In 2013, General David Petraeus joined KKR (formerly Kohlberg Kravis Roberts) of 9 West 57th Street, New York, a private equity firm with $62.3 billion in assets. KKR specializes in management buyouts and leveraged finance. General Petraeus' expertise in these areas is unclear. His ability to peddle influence, however, is a known and valued commodity. Unlike Cincinnatus, the military commanders of the Deep State do not take up the plow once they lay down the sword. Petraeus also obtained a sinecure as a non-resident senior fellow at theBelfer Center for Science and International Affairs at Harvard. The Ivy League is, of course, the preferred bleaching tub and charm school of the American oligarchy.

Lofgren goes on to say that Silicon Valley is a node of the Deep State too, and that despite the protestations of its chieftains against NSA spying, it's a vital part of the Deep State's apparatus. More:

The Deep State is the big story of our time. It is the red thread that runs through the war on terrorism, the financialization and deindustrialization of the American economy, the rise of a plutocratic social structure and political dysfunction. Washington is the headquarters of the Deep State, and its time in the sun as a rival to Rome, Constantinople or London may be term-limited by its overweening sense of self-importance and its habit, as Winwood Reade said of Rome, to "live upon its principal till ruin stared it in the face."

Read the whole thing. Steve Sailer says that the Shallow State is a complement to the Deep State. The Shallow State is, I think, another name for what the Neoreactionaries call "The Cathedral," defined thus:

The Cathedral - The self-organizing consensus of Progressives and Progressive ideology represented by the universities, the media, and the civil service. A term coined by blogger Mencius Moldbug. The Cathedral has no central administrator, but represents a consensus acting as a coherent group that condemns other ideologies as evil. Community writers have enumerated the platform of Progressivism as women's suffrage, prohibition, abolition, federal income tax, democratic election of senators, labor laws, desegregation, popularization of drugs, destruction of traditional sexual norms, ethnic studies courses in colleges, decolonization, and gay marriage. A defining feature of Progressivism is that "you believe that morality has been essentially solved, and all that's left is to work out the details." Reactionaries see Republicans as Progressives, just lagging 10-20 years behind Democrats in their adoption of Progressive norms.

You don't have to agree with the Neoreactionaries on what they condemn - women's suffrage? desegregation? labor laws? really?? - to acknowledge that they're onto something about the sacred consensus that all Right-Thinking People share. I would love to see a study comparing the press coverage from 9/11 leading up to the Iraq War with press coverage of the gay marriage issue from about 2006 till today. Specifically, I'd be curious to know about how thoroughly the media covered the cases against the policies that the Deep State and the Shallow State decided should prevail. I'm not suggesting a conspiracy here, not at all. I'm only thinking back to how it seemed so obvious to me in 2002 that we should go to war with Iraq, so perfectly clear that the only people who opposed it were fools or villains. The same consensus has emerged around same-sex marriage. I know how overwhelmingly the news media have believed this for some time, such that many American journalists simply cannot conceive that anyone against same-sex marriage is anything other than a fool or a villain. Again, this isn't a conspiracy; it's in the nature of the thing. Lofgren:

Cultural assimilation is partly a matter of what psychologist Irving L. Janis called "groupthink," the chameleon-like ability of people to adopt the views of their superiors and peers. This syndrome is endemic to Washington: The town is characterized by sudden fads, be it negotiating biennial budgeting, making grand bargains or invading countries. Then, after a while, all the town's cool kids drop those ideas as if they were radioactive. As in the military, everybody has to get on board with the mission, and questioning it is not a career-enhancing move. The universe of people who will critically examine the goings-on at the institutions they work for is always going to be a small one. As Upton Sinclair said, "It is difficult to get a man to understand something when his salary depends upon his not understanding it."

A more elusive aspect of cultural assimilation is the sheer dead weight of the ordinariness of it all once you have planted yourself in your office chair for the 10,000th time. Government life is typically not some vignette from an Allen Drury novel about intrigue under the Capitol dome. Sitting and staring at the clock on the off-white office wall when it's 11:00 in the evening and you are vowing never, ever to eat another piece of takeout pizza in your life is not an experience that summons the higher literary instincts of a would-be memoirist. After a while, a functionary of the state begins to hear things that, in another context, would be quite remarkable, or at least noteworthy, and yet that simply bounce off one's consciousness like pebbles off steel plate: "You mean the number of terrorist groups we are fighting is classified?" No wonder so few people are whistle-blowers, quite apart from the vicious retaliation whistle-blowing often provokes: Unless one is blessed with imagination and a fine sense of irony, growing immune to the curiousness of one's surroundings is easy. To paraphrase the inimitable Donald Rumsfeld, I didn't know all that I knew, at least until I had had a couple of years away from the government to reflect upon it.

When all you know is the people who surround you in your professional class bubble and your social circles, you can think the whole world agrees with you, or should. It's probably not a coincidence that the American media elite live, work, and socialize in New York and Washington, the two cities that were attacked on 9/11, and whose elites - political, military, financial - were so genuinely traumatized by the events.

Anyway, that's just a small part of it, about how the elite media manufacture consent. Here's a final quote, one from the Moyers interview with Lofgren:

BILL MOYERS: If, as you write, the ideology of the Deep State is not democrat or republican, not left or right, what is it?

MIKE LOFGREN: It's an ideology. I just don't think we've named it. It's a kind of corporatism. Now, the actors in this drama tend to steer clear of social issues. They pretend to be merrily neutral servants of the state, giving the best advice possible on national security or financial matters. But they hold a very deep ideology of the Washington consensus at home, which is deregulation, outsourcing, de-industrialization and financialization. And they believe in American exceptionalism abroad, which is boots on the ground everywhere, it's our right to meddle everywhere in the world. And the result of that is perpetual war.

This can't last. We'd better hope it can't last. And we'd better hope it unwinds peacefully.

I, for one, remain glad that so many of us Americans are armed. When the Deep State collapses - and it will one day - it's not going to be a happy time.

Questions to the room: Is a Gorbachev for the Deep State conceivable? That is, could you foresee a political leader emerging who could unwind the ideology and apparatus of the Deep State, and not only survive, but succeed? Or is it impossible for the Deep State to allow such a figure to thrive? Or is the Deep State, like the Soviet system Gorbachev failed to reform, too entrenched and too far gone to reform itself? If so, what then?

[Mar 24, 2015] Regime Change America's Failing Weapon Of International Deception

Zero Hedge
Authored by Ben Tanosborn,

For years, Winston Churchill's famous quote, "It has been said that democracy is the worst form of government except all the others that have been tried," has served as Americans' last word in any political discussion which requires validation of the US government, no matter how corrupt or flawed in its behavior, as the best in the planet, comparatively or by default. Never mind the meaning that Mr. Churchill had intended back in 1947, or how the international political panorama has changed during the past seven decades.

These remarks were made by Britain's prime minister before the House of Commons a few months before there was a changing of the guards in the "Anglo-Saxon Empire" as the Brits gave away their colonial hegemony in favor of the super-influential economic and military power represented by the United States. And that was symbolically marked by Britain's relinquishing its mandate in Palestine, and the creation of Israel.

Such reference to democracy in the quote, explicitly defining it as a "government by the people," basically applied to Britain and the United States at the close of World War II; but such condition has deteriorated in the US to the point where the "common people" no longer have a say as to how the nation is run, either directly or through politicians elected with financial support provided by special interests, undoubtedly expecting their loyalty-vote. Yet, while this un-democratization period in our system of government was happening, there were many nations that were adopting a true code of democracy, their citizens having a greater say as to how their countries are governed. Recognizing such occurrence, however, is a seditious sin for an American mind still poisoned by the culture of exceptionalism and false pride in which it has been brainwashed.

And that's where our empire, or sphere of influence, stands these days� fighting the windmills of the world, giants that we see menacing "American interests," and doing it under the banner of "for democracy and human rights." Such lofty empire aims appear to rationalize an obscene military budget almost twice as large as those of Russia, China, India and United Kingdom combined! Americans, representing less than 5 percent of the world's population, are footing a military bill almost twice as large as that expended by half of the world's population. If that isn't imperialistic and obscene, it's difficult to image what other societal behavior could be more detrimental to peace and harmony in this global village where we all try to co-exist.

Empires and global powers of the past most often resorted to deposing of antagonistic foreign rulers by invading their countries and installing amicable/subservient puppet rulers. The United States and the United Kingdom, perhaps trying to find refuge, or an excuse, in their democratic tradition, have resorted to regime change "manipulations" to deal with adversary governments-nations. [Bush43's Iraq invasion stands as a critical exception by a mongrel government: half-criminal (Dick Cheney-as mentor), and half-moronic (George W. Bush-as mentee).]

Regime change has served the United States well throughout much of the Americas from time immemorial; an endless litany of dictators attesting to shameless in-your-face puppetry� manipulations taking the form of sheer military force, or the fear of such force; bribery of those in power, or about to attain power � usually via military coup; or the promise of help from the Giant of the North (US) in improving economic growth, education and health. Kennedy's 1961 Alliance for Progress proved to be more political-PR than an honest, effective effort to help the people in Latin America� such program becoming stale and pass� in Washington by decade's end; the focus shifting in a feverish attempt to counter the efforts by Castro's Cuba to awaken the revolutionary spirit of sister republics in Central and South America (Bolivia, Ecuador, Nicaragua�).

After almost two centuries of political and economic meddling in Latin America under the Monroe Doctrine (1823) banner, much of it involving regime change, the US is finally coming to terms with the reality that its influence has not just waned but disappeared. Not just in nations which may have adopted socialist politics, but other nations as well. US' recent attempt to get other regional republics to label Venezuela (Maduro's leftist government) as a security threat not only met with opposition from the twelve-country Union of South American Nations (UNASUR) but has brought in the end of an era. It's now highly unlikely that secretive efforts by the CIA to effect regime change in Latin America will find support; certainly not the support it had in the past.

To Washington's despair, similar results, if for other reasons, are happening throughout North Africa and the extended Middle East; certainly not the results the US had hoped for or anticipated from the revolutionary wave in the Arab Spring, now entering its fifth year. It is no longer the flow of oil that keeps Washington committed to a very strong presence in the Middle East. It is America's Siamese relationship with Israel.

But if regime change is no longer an effective weapon for the US in Latin America or the Middle East, the hope is still high that it might work in Eastern Europe, as America keeps corralling Russian defenses to within a holler of American missilery. Ukraine's year-old regime change is possibly the last hurrah in US-instigated regime changes� and it is still too early to determine its success; the US counting on its front-line European NATO partners to absorb the recoil in terms of both the economy and a confrontational status now replacing prior smooth relations.

Somehow it is difficult to envision an outcome taking place in Ukraine which would allow the United States a foothold at the very doorsteps of Russia; something totally as inconceivable as if China or Russia were contemplating establishing military bases in Mexico or any part of Central America or the Caribbean.

The era of using regime change as a weapon of mass deception may have already ended for the United States of America� and hopefully for the entire world.

Mon, 03/23/2015 - 22:46 | 5920475 JustObserving

America has always lied itself to war - few believe US lies now. Obama almost lied his way to a war with Syria about sarin:

Lies: An Abbreviated History of U.S. Presidents Leading Us to War

8. Vietnam (Kennedy, Johnson, 1964) -- Lies: Johnson said Vietnam attacked our ships in the Gulf of Tonkin in August, 1964.Truth: The US didn't want to lose the southeast Asia region, and its oil and sea lanes, to China. This "attack" was convenient. Kennedy initiated the first major increase in US troops (over 500).

9. Gulf War (G.H.W. Bush, 1991) -- Lies: To defend Kuwait from Iraq. Truth: Saddam was a threat to Israel, and we wanted his oil and land for bases.

10. Balkans (Clinton, 1999) -- Lies: Prevent Serb killing of Bosnians. Truth: Get the Chinese out of Eastern Europe (remember the "accidental" bombing of their embassy in Belgrade?) so they could not get control of the oil in the Caspian region and Eastward. Control land for bases such as our huge Camp Bondsteel in Kosovo, and for the proposed Trans-Balkan Oil pipeline from the Caspian Sea area to the Albanian port of Valona on the Adriatic Sea.

11. Afghan (G.W. Bush, 2001) -- Lies: The Taliban were hiding Osama. Truth: To build a gas/oil pipeline from Turkmenistan and other northern 'xxstan' countries to a warm water (all year) port in the Arabian Sea near Karachi (same reason the Russians were there), plus land for bases.

12. Iraq (G.W. Bush, 2003) -- Lies: Stop use of WMDs -- whoops, bring Democracy, or whatever.Truth: Oil, defense of Israel, land for permanent bases (we were kicked out of Saudi Arabia) to manage the greater Middle East, restore oil sales in USD (Saddam had changed to Euros)

http://www.activistpost.com/2010/12/13-lies-abbreviated-history-of-us.ht...

Lies and Consequences in Our Past 15 Wars

http://www.truth-out.org/news/item/9419-lies-and-consequences-in-our-pas...

gdogus erectus

Even articles like this erroneously refer to the US as a democracy. WTF. The programming runs deep.

"A republic...if you can keep it."

cornfritter

Very poorly written article. Better to say that Andy Jackson was about the last bad ass to fight of the banksters and die a natural death, then Salmon Chase and his buddies passed the legal tender laws, and shortly thereafter (or possibly before) London dispatched the Fabian socialists with their patient gradualism. We were firmly back under the yoke of London banking cartel come 1913. And you are correct, a republic is an EXTREMELY limited form of democracy (not truly akin to traditional 51% takes it democratic concepts at all). The elected leader's function was supposed to be to guard the principles of the Constitution and the limited Republic, and history will remember that, despite this cruft of an article.

In the eyes of many who founded this nation, it was only a stepping stone to a global government, the new Rome - but the new Rome will be the UN with a global bank, and the multinational corporations holding court, and then the end come.

Then again, I may be wrong.

negative rates

What passes for gvt is silly these days, we are a legend in our own minds.

suteibu

"Governments would become political churches"

Like in the Middle East? And you will counter by saying that people are forced to live under those governments and, yet, thousands are freely going there from around the world to join ISIS.

Otherwise, such a system would work right up until one government church decided there wasn't enough room in the area for competitors (probably within a year, maybe six months). Let the political/religious tribal wars begin.

anusocracy

Bankers couldn't be banksters without government.

Maybe it's the monopoly of force thingy you don't understand.

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[Mar 21, 2015] The Anatomy of Fascism by Robert O. Paxton

After Israeli elections and Ukrainian coup d'�tat the key question is "to what extent [...] the contemporary right [is] linked to classical fascism". And the picture is complex. As one reviewer of the book Fascism and Neofascism Critical Writings on the Radical Right in Europe noted "contrary to common perception, the Nazi movement was not repressive towards sex. In fact, it sneered at Christian morality much the same way that modern libertines and leftists do, and favored both premarital and extramarital sex. Attempts were made to discredit the Catholic Church by accusing priests in general of being homosexuals (sound familiar?). Much as modern feminists and other humanists, the Nazis accused Christianity of having a dislike for the human body and for showing disrespect towards women. This was supposed to be a carryover of "the Oriental attitude towards women." Similarly hate toward particular ethnic or racial group was never absolute: Among Nazi Germany fascist brass there were notable number of Jews. Also Italian fascism was quite different from German as well as the level of Social Darwinism adopted.
Neofascism movement share with classic fascism the belief in the necessary of hierarchical (authoritarian) world with the dominant and subordinate groups, as well as ethos of masculine violence. It is deeply rooted in European culture with and as Adorno noted that "totality" is a mode of domination that lies implicit in the Enlightenment drive to de-mythologize the world. In this sense "totalitarism" in not unique to fascism and communism but also is inherent in "consumer capitalism", which, as such, represent a potent background for emerging neofascist groups and movements. Fascist myths were the means of constituting identity and as such not tat different form mass advertizing . That also entails deep similarities of Hollywood and Nazi films. At the same time, new radical right movement and groups are clearly distinct from fascist of the past. While fascism emerged partially as a reaction to brutalities and injustices of WWI, new radical right is in large part the result of unease with the neoliberalism. Several members of Western European far right groups fight in Donbass with Donbass militia as they consider Kiev junta to be Washington puppets promoting its globalization agenda. At the same time several members of white supremacist groups fight with Kiev junta para-military formations (death squads) which openly brandish Nazi symbols.
Neofascist movements are using "invented historical context" or myths as a powerful means for making sense of human differences and organizing societies. Nationalism, based on however fictive consent of national identity, is powerful mean of organizing the society along of axis of domination and subordination, inclusion and exclusion. Racism and nationalism while not the same things are closely linked together. In a sense any political system that operate on the base of nationality of race is a neofascism in its essence. that includes Israel and Baltic states. In this sense neither the USA nor Russia can be classified as neofascist regimes became they do not adhere to the concept of "ingenious nationality" or white race supremacy. That does not exclude existence of groups that adhere to this mythology.
It is extremely interesting those football fans, skinheads and hooligans, who often utilized the gesture of rebellition against the society to trigger predictable outrage against the general population were mobilized during EuroMaydan events. Behaviors once deemed antisocial and vandalistic were harnessed in the service of the nationalist discourse and the they served as a part of storm troopers for the coup of February 22, 2014. Ultimately like in Serbia before unruly football hooligans were recruited into paramilitary formations that played important role in civil was in Donbass (like Serbia paramilitary formation in wars of Croatia, Bosnia and Kosovo) and committed the most horrendous crimes against civil population. .
Ukrainian events definitely correlated with disillusionment of the neoliberalism in specific form of crony capitalism of Yanukovich regime. In a way marginalization of extreme right from 1945 to 1991 was more exception the a rule Western societies, especially European, tend to generate powerful extreme right movements. In a few states neofascist have chances of coming to power (Ukraine is actually is not a good example as events here were externally driven).
Amazon.com

Panopticonman on May 1, 2004

Whose Reich Is It Anyway?

The Marquis de Mor�s, returning to 1890s Paris after his cattle ranching venture in North Dakota failed, recruited a gang of men from the Parisian cattle yards as muscle for his "national socialism" project -- a term Paxton credits Mor�s' contemporary Maurice Barres, a French nationalist author, with coining. Mor�s' project was potent and prophetic: his national socialism was a mixture of anti-capitalism and anti-Semitism. He clothed his men in what must have been the first fascist uniform in Europe -- ten-gallon hats and cowboy garb, frontier clothes he'd taken a shine to in the American West. (Author Paxton suggests the first ever fascist get-up was the KKKs white sheet and pointy hat). Mor�s killed a French Jewish officer in a duel during the Dreyfus affair and later was killed in the Sahara by his guides during his quest to unite France to Islam to Spain.

Mor�s had earlier proclaimed: "Life is valuable only through action. So much the worse if the action is mortal."

Here assembled together are all of the elements of what Paxton would classify as first stage fascism: "the creation of a movement." Most fascist movements stall in this first stage he notes -- think, for instance, of the skinheads, the American Nazi Party and Posse Comitatus.

Paxton's other stages are

  1. the rooting of the movement in the political system;
  2. the seizure of power;
  3. the exercise of power; and
  4. the duration of power, during which the regime chooses either radicalization or entropy.

He notes that although each stage

"is a prerequisite for the next, nothing requires a fascist movement to complete all of them, or even to move in only one direction. The five stages permit plausible comparison between movements and regimes at equivalent degrees of development. It helps us see that fascism, far from static, was a succession of processes and choices: seeking a following, forming alliances, bidding for power, then exercising it. That is why the conceptual tools that illuminate one stage may not necessarily work equally well for others." pg. 23.

Paxton also tentatively offers a definition of fascism, but only after tracing the rise of various movements from their beginnings in the 19th century through the present day. Other historians and philosophers, he suggests, have written brilliantly on fascism, but have failed to recognize that their analyses apply to only one stage or another. He also notes that often definitions of fascism are based on fascist writings; he maintains that fascist writings while valuable were often written as justification for the seizure of power, or the attempted seizure, and that what fascists actually did and do is more critical to understanding these movements. Indeed, the language of fascism has changed little since the days of the Marquis De Mores.

He hesitates in offering both his definition and his analytical stages, saying that he knows by doing so he risks falling into the nominalism of the "bestiary." He demonstrates that this is a common failing of definitions of fascism which are often incomplete or muddled as they typically describe only one or two typically late stages.

Other historians, for instance, split fascism into Nazism or Italian fascism, avoiding the problem of understanding their common elements by concentrating on their differences, insisting that they are incommensurable. Finally in the last pages, Paxton offers up this fairly comprehensive and useful definition:

"Fascism may be defined as a form of political behavior marked by obsessive preoccupation with community decline, humiliation, or victimhood and by compensatory cults of unity, energy and purity, in which a mass-based party of committed nationalist militants, working in uneasy but effective collaboration with traditional elites, abandons democratic liberties and pursues with redemptive violence and without ethical or legal restraints goals of internal cleansing and external expansion."

Paxton is particularly strong in showing how the circumstances in post WWI Germany and Italy -- the demobilized mobs of young soldiers, sent to war by elites who had no conception of the destruction and suffering they had unleashed upon the younger generation -- were ripe for fascism's appeals. For many, liberalism, conservatism and socialism all seemed equally complicit in the crack-up of Europe in the Great War. Fascism, rising from the ashes, employed the socialistic tools of mass marches, the military techniques of terror learned in the war, and as they gained power, the new tools of mass communication and propaganda developed in the US during WWI.

Fascists also reacted astutely to public discomfort toward the mass migrations from southern and eastern Europe coming in the wake of political and economic distress in those regions, using that fear to increase their power through scapegoating and its attendant rhetoric of purity.

Fascism is both charged and blurry word these days, used by both the left and the right to assail their critics and enemies.

The Nazi remains the evildoer par excellence in popular and political culture, invoked for a thrill of fear or the disciplinary scare or emotional incitement. In this masterful synthesis of writings in politics, history, philosophy and sociology, Paxton untangles the vast literature fascism has generated, establishes some essential ground rules for coming to grips with its many expressions, stages, and manifestations, and clears a space for further, better focused research.

Although academic in its orientation, it is well and clearly written. Finally, for the reader who is not familiar with modern European history, it is a very useful and informative text as it takes into its scope by necessity much of European and American history over the past one hundred years. Absolutely required reading.

[Mar 17, 2015] Top Google executive predicts end of the internet

Mar 17, 2015 | RT News

However, a group of Harvard professors depicted a much more grim Orwellian world, AFP reported on Thursday.

"Privacy as we knew it in the past is no longer feasible... How we conventionally think of privacy is dead," said Margo Seltzer, a professor in computer science at Harvard University.

Sophia Roosth, a Harvard's genetics researcher, said: "It's not whether this is going to happen, it's already happening... We live in a surveillance state today."

Depicting a terrifying world, where mosquito-sized robots fly around stealing samples of people's DNA, she said, "We are at the dawn of the age of genetic McCarthyism," referring to "witch-hunts" during Second Red Scare in the 1950s in America.

Goedelite Kurt 5 hours ago

Yoni D
Just like 50 years ago people couldn't always afford a tv but now everyone does. The expensive today is trash...

more...
Take 50 from 2015: 1965. I was 33yo then. As I recall, that was just about the high point of the middle-class in the US, before the inflation caused by the US aggression in southeast Asia hit us. Almost everyone who had a job - and unemployment was low - could afford a TV. Not only could they afford it, but I believe it offered viewers far better entertainment and journalism. I don't own a TV today, because mainstream TV news is untrustworthy.

Eric Blair 18.02 17:48

Eric Schmidt is not even close on this call. Go back and reread what he said about:

"so many devices, sensors, things that you are wearing, things that you are interacting with that you won't even sense it, it will be part of your presence all the time," he explained. "Imagine you walk into a room, and the room is dynamic. And with your permission and all of that, you are interacting with the things going on in the room."

No one will be able to afford this technical world that he is describing, and which in some degree is coming, but not to every man.

The system is headed to a cashless system where you will be compelled to trade the time in your life to multinational corporations, that will offer you something on the line of "Employee Purchasing Compacts" in lieu of compensation, which enable you to select a list of corporations that are bundled, with fixed prices, for the duration of your term contract. This is how you will be compensated and enslaved to the plutocracy.

You will be able to select from categories that include food, clothing, automobiles, electronics, goods and services. You will be locked into term contracts for the benefit of the corporations and controlled supply and demand.

This is what is being heralded as "Austerity". Each man and woman will only be able to purchase those things which they can afford. So, Schmidt is way off on this one~

Samanta Power

The internet will disappear but the net (NSA) will remain.

0040 14.02 21:50

I think the Harvard guys have it right. The computer, Internet, and cell phone age has done nothing positive for humanity. With the worlds economic and political systems all being neo-liberal and capitalistic, these devices are used to manipulate people for profits and taxes of a sort and on a scale not possible without them. It also puts all a countries infrastructure and resources into the hands of the few.

The World As It Is Dispatches on the Myth of Human Progress by Chris Hedges

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Powerful, damning, and more than a little sad, November 27, 2014


This review is from: The World As It Is: Dispatches on the Myth of Human Progress (Kindle Edition)

At the beginning of "The World As It Is: Dispatches on the Myth of Human Progress," Chris Hedges suggests that he is no longer really a journalist - now, he's more of a minister, trying to lead his flock down the paths of righteousness. It's in this spirit that Hedges, a Harvard divinity grad before he gave up organized religion, titles one of his essays "War Is Sin."

Hedges's tone is a mixture of anguish and anger, and his acerbic prose takes no prisoners. His style may be unattractive, even unsettling, but I can find no fault with his main arguments. His is a voice of truth in a wilderness of spin, and I wish that it weren't so.

Here's his assessment of Barack Obama, the candidate of change who became the president of the status quo:

"The American empire has not altered under Barack Obama. It kills as brutally and indiscriminately ... It steals from the U.S. Treasury to enrich the corporate elite as rapaciously. It will not give us universal health care, abolish the Bush secrecy laws, end torture or "extraordinary rendition," restore habeas corpus, or halt the warrantless wiretapping and monitoring of citizens. It will not push through significant environmental reform, regulate Wall Street, or end our relationship with private contractors that provide mercenary armies to fight our imperial wars and produce useless and costly weapons systems."

It's hard to disagree with this appraisal, and Obama is just one of the targets in Hedges's sights. Obama doesn't get anything close to the most space in the book - that "honour" is reserved for the government of Israel and its oppression of the Arab peoples of Palestine.

Hedges calls himself a socialist, a term that has quickly become almost quaint, tinged with a flavour of musty and archaic rationalism. He writes that "we must articulate and stand behind a viable and uncompromising socialism, one that is firmly and unequivocally on the side of working men and women."

Hedges is a journalist, and it's in this context that he blasts the mainstream media for retreating from their moral responsibility to tell the truth into their present stance as "recorders" of scripted and spun events. Hedges expresses his disdain for the bankrupt "objectivity" ethic of the press with a vehemence that is typical of his prose: "The tragedy is that the moral void of the news business contributed as much to its own annihilation as the protofascists who feed on its carcass."

And,

"The corporate forces that destroyed the country wil use the information systems they control to mask their culpability. The old game of blaming the weak and the marginal, a staple of despotic regimes, will empower the dark undercurrents of sadism and violence in American society and deflect attention from the corporate vampires who have drained the blood of the country."

In an echo of his previous book "The Death of the Liberal Class," Hedges describes liberals, and specifically the Democratic Party which is their political home, as a spent force that "prefers comfort to confrontation. "

Hedges writes: "It will not challenge the decaying structures of the corporate state. It is intolerant within its ranks of those who do. It clings pathetically to the carcass of the Obama presidency. It has been exposed as a dead force in American politics."

What, if anything, can be done? Hedges is not hopeful, but he is clear about the nature of the solution:

"If the hegemony of the corporate state is not soon broken, we will descend into a technologically enhanced age of barbarism."

Hedges cites Joseph Conrad's Heart of Darkness, in Hedges's version of the typical postcolonialist indictment of the Enlightenment. This is a most appropriate citation, for in The World As It Is, it is very clear that Chris Hedges, for one, has seen "the horror."

The horror for Hedges is the reality of war. That he has been changed, and forever scarred, by his years as a war correspondent is clear in his scorn for the official memorials to the honoured dead:

"War memorials and museums are temples to the god of war. The hushed voices, the well-tended grass, the flapping of the flags allow us to ignore how and why our young died. They hide the futility and waste of war. "

Hedges's compulsion to cut through the glorification and the censorship and instead to write the truth keeps him writing.

He may have little hope for himself, as the rage and bitterness with which he writes make clear, yet, as he says in the dedication, he must seek the solutions to our problems, for it is his three children "whose joy and laughter save me from despair and for whom I must always hope."

[Mar 10, 2015] The 17 Elements Of Martial Law

Mar 09, 2015 | zerohedge.com

The term "Martial Law" is thrown around with reckless disregard. "Is America under martial law?" is a question that is often discussed in the Independent Media.

Martial law occurs when the prevailing regime feels threatened by the message being offered by the loyal opposition. When normal means of censorship and marginalization fail, despotic regimes resort to martial law with all intended brutality of a violent crackdown on all of those being perceived as the "enemy".

Seventeen Martial Law Characteristics

Most experts agree that hard core martial contains the following 17 essential elements:

1-Mass roundup and/or execution of political dissidents

2-Dusk to dawn curfews

3-Rationing of essential resources

4-The seizing of personal assets such as food and water

5-Control over all food and water

6-The prohibition of weapons of any kind including guns, knives or chemicals which can be turned into explosives

7-The confiscation of property, homes and businesses

8-Arrests without due process

9-Massive "papers please" checkpoints with intrusive searches

10-Forced relocation

11-Forced conscription into various labor camps and even into the military

12-Outlawing of free speech

13-The installation of massive surveillance programs and the establishment of snitch programs

14-The total control or elimination of religion

15-Control of the media

16-Executions without due process of law

17-Total suspension of the Constitution

Just how many of these intrusive government policies are in place in the following video?

[Feb 21, 2015] The Chicago police used appalling military interrogation tactics for decades by Tracy Siska

Even Chicago police is kept by Guardian to higher standard then Kiev junta.
Feb 21, 2015 | theguardian.com

The Chicago police department has promised for more than a century to eliminate torture from its interrogation rooms. For more than a century, the Chicago police department has failed to deliver on that promise.

The latest shameful episode is the tale of Richard Zuley, a police officer who brought the tactics he learned in Chicago to Guant�namo Bay and back again, as reported by The Guardian.

Sadly, there is a precedent for Zuley.

For example, in a 2000 case that resulted in a successful federal civil rights lawsuit, a Latino teenager was held for four days chained to a wall in an interrogation room, where he was not only questioned repeatedly, but denied bathroom access and left to soil himself. During the boy's civil rights trial, officers could only prove that they fed him once during the four days. The teen eventually confessed to a murder he did not commit. After he spent just a few weeks in jail, another suspect was arrested with the murder weapon and confessed shortly after his arrest. How many others locked up have not been so fortunate?

Most infamously, there is highly decorated Chicago Police Commander Jon Burge who, during his 23-year tenure on the force from 1970 to 1993, used the techniques he learned from interrogating the Vietcong as a military policeman in Vietnam on black suspects in Chicago. These techniques included Russian roulette with pistols and shotguns, burning suspects on radiators, suffocation with typewriter covers, beatings with phone books and electric shocks to the ears, nose, fingers, and testicles.

Burge was a fast-rising and well-respected officer who operated with impunity; neither his colleagues nor his supervisors blew the whistle. Neither did prosecutors or officials in the Cook County State's Attorney's Office. Instead, Burge was accorded hero status � until community activists, public interest lawyers and one lonely journalist at the city's weekly exposed his horrid behavior what it really was: unacceptable.

Once public pressure mounted � and only then � Burge was finally fired in 1993, accused of torturing confessions out of what is believed to be more than 100 African American men. He was not, however, without his defenders: at the time of his firing, the Chicago Fraternal Order of Police, the largest union representing officers, attempted to run a float honoring Burge in the Chicago's St Patrick's Day parade. And it wasn't until 2006 that a special prosecutor was appointed to examine Burge's record and determine if a criminal case could be brought against him. (Only a perjury charge stuck.)

The relationship between communities of color in Chicago and the Chicago Police Department hasn't recovered from Burge's abuses. Residents remain wary, while the police remain largely unapologetic. Today, the Chicago Police Department's tactics � known as "touchless torture" � are less horrific but still abusive.

These new methods focus more on sensory deprivation and isolation to wear down a suspect � sometimes with the same result: false confessions. Because these methods do not leave marks, it is much harder for judges and juries to understand just how coercive they are.

A series of US supreme court cases over the last century have codified the rights that are supposed to protect suspects under our system. Sadly, those rights still mean next to nothing in Chicago interrogation rooms, which still bear too much resemblance to those in Guant�namo � and those from the now-distant past of Vietnam.

The way forward requires reform on a system's level � not at an individual case level. The use of these types of tactics is not a bad apple issue, but rather about a rotten-to-the-core system that turns a blind eye to massive civil rights violations because the system benefits from those civil rights violations. About 90% of all criminal cases in America result in a plea bargain, which makes any given confession so much more powerful than it would normally be and thus that more desirable to obtain. Sadly prosecutors who have a constitutional obligation to be a check on coercive police practices fail in their obligations in America because there is an institutional incentive for them to ignore civil rights violations and push for plea bargains using the coerced confessions.

Any meaningful reform starts with educating juries about the coerciveness of the interrogation room and the tactics used to extract confessions; after that, judges must live up to their responsibilities and deny plea bargains in case in which the only evidence is a confession. While hardly a cure-all, these two massive reforms of legal procedure could help remove the institutional incentives for those working for the system to obtain and use coerced confessions.

lostalien -> ExcaliburDefender 21 Feb 2015 09:55

The problem is most people can't afford to lawyer up, and the public defenders are over worked and don't always have clients best interest at heart. Our sytem of justice is for the rich.

ExcaliburDefender -> mfloydhall 20 Feb 2015 16:44

mfloydhall, you wrote "......... who are the likely perps."

Just want to understand a bit more about the use of the word 'PERP'. See a few that use it often, generally by those in support of police activities.

The only time I hear the word 'PERP' is on tv. Have never heard police use it when interviewed on events, nor I have heard actual police officers ever use this word when communicating with the public. Did use to work in a city ed/trauma unit, had loads of interaction with city police, 'PERP' was never uttered.

Just curious if you would care to comment.

Williamthewriter 20 Feb 2015 13:04

What goes for Chicago also goes for most American cities. Beating confessions out of suspects has throughout our history been just as much an art form in America as it was in Stalin's Russia and Hitler's Germany. The violence is only the most visual aspect of a corrupt system that has had the police often working in tandem with organized crime and running protection and kickback schemes of their own, not to mention the sexual favors expected from prostitutes if they wished to remain in business.

The two NYPD officers who were recently found guilty of moonlighting as hit-men for the mob is only the tip of the iceberg. Has anyone forgotten how America's Cop - Bernie Kerik - the right hand man of America's Mayor was convicted of corruption and sent to prison for four years not long after his name was put forward by his powerful friends to be the first head of Homeland Security?

The recent disrespect shown to the elected mayor of NYC or daring to criticize the police tactics that resulted in the death of Mr. Garner shows both how powerful and how perverse the police in this nation are.


imipak -> mfloydhall 20 Feb 2015 07:50

No, you want a police force that works, that's trusted, that does its job.

In the end, it's about real risk, not imagined risk. You can do nothing about fantasies. Real risk goes down when real criminals are caught and when real trust is high. Real risk goes up when real criminals are left on the streets and the innocent are tortured.

Real risk is the real concern of real businesses and real families.

imipak -> James Girod 20 Feb 2015 07:46

Ah, but Darth Vader helped people cross the road safely.

imipak -> mfloydhall 20 Feb 2015 07:45

People can want all they like. Democracy doesn't extend to voting on police tactics and can never be extended to voting on what tactics work.

Harsh tactics are a fail. Unequivocally. They can never succeed. They are doomed, as are all citizens under such a regime. Who the hell cares if the citizens want harsh? It's worse than no police at all. If you want to live in real gangster time, don't go asking city hall for the gangsters. It's not their job.

Give each city a referendum - mature, responsible, effective policing at cost, or no policing at all. No other options. If a city chooses the latter, order a compulsory evacuation of all medical staff and emergency services, seal the roads and rerun the referendum 6 months later. If they still say no, you've got those extra staff for places that want them. The city shouldn't get what the city doesn't want or need.

Police tactics should be tightly regulated, with clear and distinct consequences for failure.

If a cop is shown to have been involved in torture, all cases that cop was involved in are tainted and all convictions unsafe and unsatisfactory. No exceptions. It is better to let ten guilty people go free than to allow one innocent person to be convicted.

If a police unit is shown to have tolerated any corruption in its ranks, shut it down and fire the lot. No exceptions, no excuses.

To go along with that, confessions and eyewitness testimony do not belong in a court room. Evidence or bust.

Police divisions should pay out of pocket for wrongful convictions, at mean wage rates for white collar work. They should be on fixed budgets and fixed wages, no bonuses for clean-up rates just severe penalties for fraud and incompetence.

Police are not paramilitary units. They should not be equipt as such or trained as such. They maintain peace, not war.

Training should reflect the expected high standards - and they should be very high standards indeed - with pay and conditions reflecting the fact that it takes the best to be the best.

(High expectations cuts both ways. If you're going to demand high levels of integrity, a civil attitude and competence in the field, expect to pay for it. These things aren't free to acquire and aren't cheap to maintain. Ammunition is cheap. You get what you pay for, so pay for what you want to get.)

AlexeiK 20 Feb 2015 01:43

More generally, juries need to be given instructions dealing with a range of issues that well-meaning but unprepared citizens are likely to get wrong. New Jersey, for example, now requires juries to be instructed on eyewitness identification.

Any meaningful reform starts with educating juries about the coerciveness of the interrogation room and the tactics used to extract confessions; after that, judges must live up to their responsibilities and deny plea bargains in case in which the only evidence is a confession.

There are already proposals to require that interrogations be videotaped, but it is extremely important that juries watch these tapes in their entirety. If a cop keeps a suspect chained to a radiator for hours and then the suspect "confesses" and the jury only gets to see a three-minute clip of the confession, it just won't do. But that's what happened in the Adrian Thomas case in NY (the man was eventually acquitted in a retrial).

consciouslyinformed 19 Feb 2015 16:17

Spencer Ackerman's piece, about Lathierial Boyd, which included a video, about three minutes in length, left me holding back sobs, as I listened to his account, of how he was set up by this cop, for a bogus indictment against Lathierial, for an eighty-two year sentence, of which, he served twenty-three years. He was innocent! It is appalling. It needs to have this cop, along with every other who have taken away the lives of our black brothers and sisters, in prison for the rest of their miserable lives.

elaine layabout 19 Feb 2015 15:29

Chicago residents have shelled out nearly half a BILLION dollars over the past decade, spending $84.6 million last year alone, to "compensate" the victims of police abuse. Those monies, however, do nothing to address the costs of citizens being afraid to seek help from or cooperate with police.

Meanwhile, the City closes schools in the most victimized neighborhoods, cuts services for all, and our unrepaired, weather-ravaged streets look like they've been hit by cluster bombs. (But don't fret, tourists! The bulk of our infrastructure revenue goes to keeping corporate-centric Downtown, toney Lincoln Park, and the museum campus that we riffraff cannot afford to enjoy looking spiffy!)

Perhaps it's time that City and PD decision makers foot this bill, as well as the criminal cops. Then maybe these horrible practices will come to an end and we can begin to make this city liveable for all, not just the wealthy and well-connected.

Tags: Corporatism : Guardian

[Jan 11, 2015] Anti-torture activists protest on Dick Cheney's front porch, 2 arrested

January 11, 2015 | RT USA

​About 20 protesters made their way onto the property of the former vice president's Virginia home, where they protested the 14th anniversary of the opening of the Guantanamo Bay detention facility.

Activists from the anti-war group CODEPINK and Witness Against Torture, many of them wearing military-issued orange jumpsuits, broke through an iron gate surrounding the former vice president's sprawling property in McLean, Virginia, and demonstrated on his front porch.

Fairfax County Police soon arrived on the scene and escorted the protesters, some of them chanting "arrest Dick Cheney," off the property.

Two protesters who refused to leave the premises were arrested on trespassing charges, police spokesman Roger Henriquez said, Reuters reported.

Police identified the pair as Tighe Barry, 57, and Eve Tetaz, 83, both from the Washington DC area. The two face misdemeanor charges of trespassing and disorderly conduct, police said.

The demonstrators carried signs that read: "Torturer lives here" and "Stop torture now" and "Close Guantanamo Bay".

Earlier, the group staged a demonstration outside the home of CIA Director John Brennan, who also lives in McLean, Virginia. None of the activists were arrested in that protest.

The protests come one month after the Senate Intelligence Committee released its so-called "torture report" that revealed how the CIA allegedly misled the White House and Congress over the brutality of its "enhanced interrogation techniques" �a military euphemism for torture.

Cheney expressed no remorse over the cruel accounts of torture techniques performed by the CIA at various foreign "black sites" as described in the Senate Intelligence Committee's lengthy investigation.

"I'd do it again in a minute," Cheney told Meet the Press's Chuck Todd last month.

This was not the first time Cheney took to the airwaves to express his support of the controversial methods in gaining intelligence, as well as his wish to keep Gitmo open for business.

When Barack Obama attempted in the early days of his presidency to close Guantanamo, as he had pledged to do on the campaign trail, Cheney was suddenly ubiquitous on the news channels, demanding that Gitmo remain open and the prisoners � many of whom are innocent of any wrongdoing � appear before a secret military tribunal as opposed to a civil trial on US territory.

Cheney, despite basement ratings in opinion polls when he exited office, eventually got his way and today 127 detainees are still held at Guantanamo Bay, Cuba.

[Dec 13, 2014] William Binney� former NSA Technical Director-- signs AE911Truth petition

In this interview he talks about why he signed the petition, the NSA's spying program, and offers some words of advice to the 9/11 Truth movement on how to pursue justice through official channels.
911Blogger.com

William Binney is a former highly placed intelligence official with the United States National Security Agency (NSA) who, after more than 30 years of service, resigned in 2001 and became a whistleblower exposing the NSA's unconstitutional programs. He is also a recent signatory of AE911Truth's petition calling for a new investigation into the destruction of the Twin Towers and WTC 7 on 9/11.

In this interview he talks about why he signed the petition, the NSA's spying program, and offers some words of advice to the 9/11 Truth movement on how to pursue justice through official channels.

[Dec 12, 2014] Torture and the Violence of Organized Forgetting by HENRY GIROUX

Neoliberal regime is a brand of corporatism. And terror against opponents is a feature of corporatism as asocial system. So nothing very surprising here. "The war on terror had now reduced governance in the United States to a legalized apparatus of terror that mimicked the very violence it was meant to combat." ... "Neoliberalism has created a society of monsters for whom pain and suffering are viewed as entertainment or deserving of scorn, warfare is a permanent state of existence, torture becomes a matter of expediency, and militarism is celebrated as the most powerful mediator of human relationships."
Dec 12, 2014 | counterpunch.org

The maiming and breaking of bodies and the forms of unimaginable pain inflicted by the Bush administration on so-called "enemy combatants" was no longer seen in violation of either international human rights or a constitutional commitment to democratic ideals. The war on terror had now reduced governance in the United States to a legalized apparatus of terror that mimicked the very violence it was meant to combat. In the aftermath of 9/11, under the leadership of Bush and his close neoconservative band of merry criminal advisors, justice took a leave of absence and the "gloves came off." As Mark Danner states, "the United States transformed itself from a country that, officially at least, condemned torture to a country that practised it."[13] But it did more. Under the Bush-Cheney reign of power, torture was embraced in unprecedented ways through a no holds-barred approach to the war on terror that suggested the administration's need to exhibit a kind of ethical and psychic hardening-a hyper-masculine, emotional callousness that expressed itself in a warped militaristic mind-set fueled by a high testosterone quotient. State secrecy and war crimes now became the only tributes now paid to democracy.

... ... ...

Waterboarding, which has been condemned by democracies all over the world, consists of the individual being "bound securely to an inclined bench, which is approximately four feet by seven feet. The individual's feet are generally elevated. A cloth is placed over the forehead and eyes. Water is then applied to the cloth in a controlled manner [and] produces the perception of 'suffocation and incipient panic.'"[18] The highly detailed, amoral nature in which these abuses were first defined and endorsed by lawyers from the Office of Legal Council was not only chilling but also reminiscent of the harsh and ethically deprived instrumentalism used by those technicians of death in criminal states such as Nazi Germany.

Andy Worthington suggests that there is more than a hint of brutalization and dehumanization in the language used by the OLC's Principal Deputy Assistant Attorney General, Steven G. Bradbury, who wrote a detailed memo recommending:

"nudity, dietary manipulation and sleep deprivation"-now revealed explicitly as not just keeping a prisoner awake, but hanging him, naked except for a diaper, by a chain attached to shackles around his wrists-[as,] essentially, techniques that produce insignificant and transient discomfort. We are, for example, breezily told that caloric intake "will always be set at or above 1,000 kcal/day," and are encouraged to compare this enforced starvation with "several commercial weight-loss programs in the United States which involve similar or even greater reductions in calorific intake" � and when it comes to waterboarding, Bradbury clinically confirms that it can be used 12 times a day over five days in a period of a month-a total of 60 times for a technique that is so horrible that one application is supposed to have even the most hardened terrorist literally gagging to tell all.[19]

... ... ...

In spite of the appalling evidence presented by the report, members s of the old Bush crowd, including former Vice-President Cheney, former CIA directors, George J. Tenet and Michael V. Hayden, and an endless number of prominent Republican Party politicians are still defending their use of torture or, as they euphemistically contend, "enhanced interrogation techniques." The psychopathic undercurrent and the authoritarian impulse of such reactions finds its most instructive expression in former Bush communications chief Nicolle Wallace who while appearing on the "Morning Joe" show screeched in response to the revelations of the Senate Intelligence report "I don't care what we did." As Elias Isquith, a writer for Salon, contends, as "grotesque as that was, though, the really scary part was [the implication that] waterboarding, sleep deprivation, stress positions and sexual assault is part of what makes 'America 'great.'"[25] Wallace's comments are more than morally repugnant. Wallace embodies the stance of so many other war criminals who were either indifferent to the massive suffering and deaths they caused or actually took pride in their actions. They are the bureaucrats whose thoughtlessness and moral depravity Hannah Arendt identified as the rear guard of totalitarianism.

Illegal legalities, moral depravity, and mad violence are now wrapped in the vocabulary of Orwellian doublethink. For instance, the rhetorical gymnastics used by the torture squad are designed to make the American public believe that if you refer to torture by some seemingly innocuous name then the pain and suffering it causes will suddenly disappear. The latter represents not just the discourse of magical thinking but a refusal to recognize that "If cruelty is the worst thing that humans do to each other, torture [is] the most extreme expression of human cruelty."[26] These apostles of torture are politicians who thrive in some sick zone of political and social abandonment, and who unapologetically further acts of barbarism, fear, willful lies, and moral depravity. They are the new totalitarians who hate democracy, embrace a punishing state, and believe that politics is mostly an extension of war. They are the thoughtless gangsters reminiscent of the monsters who made fascism possible at another time in history. For them, torture is an instrument of fear; one sordid strategy and element in a war on terror that attempts to expand governmental power and put into play a vast (il)legal and repressive apparatus that expands the field of violence and the technologies, knowledge, and institutions central to fighting the all-encompassing war on terror. Americans now live under a government in which the doctrine of permanent warfare is legitimated through a state of emergency deeply rooted in a mass psychology of violence and culture of cruelty that are essential to transforming a government of laws into a regime of lawlessness.

... ... ...

There is another story to be told about another kind of torture, one that is more capacious and seemingly more abstract but just as deadly in its destruction of human life, justice, and democracy. This is a mode of torture that resembles the "mind virus" mentioned in the Senate report, one that induces fear, paralysis, and produces the toxic formative culture that characterizes the reign of neoliberalism. Isolation, privatization, and the cold logic of instrumental rationality have created a new kind of social formation and social order in which it becomes difficult to form communal bonds, deep connections, a sense of intimacy, and long term commitments. Neoliberalism has created a society of monsters for whom pain and suffering are viewed as entertainment or deserving of scorn, warfare is a permanent state of existence, torture becomes a matter of expediency, and militarism is celebrated as the most powerful mediator of human relationships.

Under the reign of neoliberalism, politics has taken an exit from ethics and thus the issue of social costs is divorced from any form of intervention in the world. This is the ideological metrics of political zombies. The key word here is atomization and it is the curse of both neoliberal societies and democracy itself. A radical democracy demands a notion of educated hope capable of energizing a generation of young people and others who connect the torture state to the violence and criminality of an economic system that celebrates its own depravities. It demands a social movement unwilling to abide by technological fixes or cheap reforms. It demands a new politics for which the word revolution means going to the root of the problem and addressing it non-violently with dignity, civic courage, and the refusal to accept a future that mimics the present. Torture is not just a matter of policy, it is a deadening mindset, a point of identification, a form of moral paralysis, a war crime, an element of the spectacle of violence, and it must be challenged in all of its dreadful registers.

Henry A. Giroux currently holds the McMaster University Chair for Scholarship in the Public Interest in the English and Cultural Studies Department and a Distinguished Visiting Professorship at Ryerson University. His most recent books are America's Education Deficit and the War on Youth (Monthly Review Press, 2013) and Neoliberalism's War on Higher Education (Haymarket Press, 2014). His web site is www.henryagiroux.com.

[Dec 12, 2014] Shock and anal probe: reading between the redactions in the CIA torture report

theguardian.com

This is a particularly despicable and illuminating look into how the CIA treated its officers who were carrying out torture techniques. After a detainee, Gul Rahman, was chained, nearly naked, to a concrete floor for an extended time and then froze to to death, no officer on-site nor at the CIA was disciplined � let alone prosecuted. In fact, the CIA officer in charge of the detention site was recommended to receive a bonus of $2,500 for his "consistently superior work". Five pages earlier in the report, we are told that this particular CIA officer was already known for dishonesty and lack of judgment when he was sent on his first overseas assignment to head this detention site. Eleven years and one page in the report later, the CIA acknowledged it "erred" in not holding anyone accountable for Rahman's death.

Eleven years.

When a government agency disregards human life so recklessly � and even considers rewarding those on the payroll who do the same � how is it possible to believe the United States can maintain the illusion of being a human rights champion? President Obama and Congress must ensure accountability � including prosecutions, as well as reparations for victims � and not just for torture but enforced disappearances and other human rights violations that leave the US in serious violation of its international legal obligations. -Steven W Hawkins, executive director, Amnesty International USA


gottliebvera, 11 Dec 2014 05:01

The 'beacon on the hill' has gone dark. Always preaching from the pulpit of hypocrisy, always admonishing, always threatening...and look at them. 'Exceptional' by NO means.

Janice Mitich, 11 Dec 2014 02:08

When you condone the use of torture on any person or class of people, you have taken a dangerous step that will not prevent the state from using torture on you. The 5th Amendment to the Constitution says that the accused person "shall not be compelled to testify against himself" thus exercising the right not to be tortured into a confession of something they may or may not have done. The 8th Amendment says that the state cannot impose excessive bail or fines, nor impose cruel or unusual punishment which includes torture. Torture cannot be used to force a person to testify against himself prior to trial, nor can he be tortured after being found guilty in order to name any co-conspirators---(This is what was done in the Salem Witch Trials.)

Just as monarch, tyrants, of old, who believed they had the right to do whatever they pleased ie: Hitler, Stalin, Saddam, Mao, to name a few, Bush and Cheney created a special class of human beings to whom they could do anything they wanted and the right to purge them from the earth. This is a dangerous step on the slippery slope down into hell where the people are powerless and rulers are absolute.

I don't think that any of you want that. I hope you will reconsider your decision and decide that torturing prisoners is in violation of our Constitution no matter what "appealing" reason is given for that action.

Using the term "Enhanced" interrogation is a term that turns my stomach. One generally uses the word 'enhanced' to make something better or more pleasing, or more beautiful. Leave it to the Government to coin a term in such a way as to make you think it is a positive and rightful thing to do.

That's like naming a cancerous tumor as "enhanced cell growth." or a nuclear bomb an "enhanced demolition device," or an amputation of one's foot as an "enhanced pedicure.

Arcane, 10 Dec 2014 16:58

The Americans have finally fessed up to what we already suspected, namely that their spooks were out of control and engaging in torture, murder and human rights violations without any purpose other than an ultra-right-wing addiction to the use of violence.

The British are now looking into their own sordid and sorry involvement in this disgraceful chapter in recent history. However, we have heard nothing from the Australian government as to what role - if any - their spooks played in this same set of events. There were at least two Australians held in the Guantanamo Bay prison. One of them, David Hicks, claims he was tortured and that the Australian government knew that this was taking place but did nothing.

There needs to be a criminal trial of the CIA contractors and other officials who carried out these crimes. If found guilty they need to be spend a lot of time in prison. Perhaps Guantanamo Camp X-Ray might be the best option. The criminal investigation and subsequent trials need to include the government leaders at the time, G.W. Bush, Dick Cheney, Donald Rumsfeld, Tony Blair and of course John Howard and Alexander Downer.

M of A - The U.S. Is Still Committed To Torture

james | Dec 9, 2014 12:34:00 PM | 2

feinsteins logic runs this way 'there were a few bad apples in the cia'.

was there any accountability? answer - nada. "Speaking to the New York Times, Cheney called the interrogation tactics "absolutely, totally justified," contrary to the committee's findings." will there ever be? no.. without the accountablity - the usa is essentially a tip pot dictatorship run by the military complex..

i am surprised they released this.. usually they file it under 'top secret' or 'state secrets' and people don't hear about it for another 50 years.. that is the way the folks in the land of the brave and free usually roll.

IhaveLittleToAdd | Dec 9, 2014 12:57:09 PM | 4
The low level people did it and are unnamed. The high level people ordered them to do it, openly brag about it, but are not prosecutable. Obama won't push it for fear that the next administrataion will get all high and mighty about his drone campaign, NSA overreach, or whatever. Congress won't because they either knew about it, or should have known about it. Not too mention the CIA probably, and rightfully, scares the bajeebies out of them.

Signals Inteligence got a shout out in the WaPo coverage. Look, torturing is really bad and we're not going to do that now that we can stare at you through your iphone camera. Then again we have these cool drones that save the judicial branch loads of time.

Yul | Dec 9, 2014 12:57:16 PM | 5
They have redacted the countries or so called Black Sites but we know that some "democratic" European countries, new members or prospective members of the EU are there - Poland, Lithuania, Romania, Kosovo , Bosnia, Macedonia and Italy ( the CIA judged in absentia )
To encourage governments to clandestinely host CIA detention sites, or to increase support for existing sites, the CIA provided millions of dollars in cash payments to foreign government officials

Rick | Dec 9, 2014 2:21:59 PM | 6

...say anything to stop the pain...?

Peter Kropoykin gave an account a "no pain" torture,

AN attempt was made to kill Rsar Alexander mid-1800s. The pepetrtor was kept awake/denied sleep. After 1-2 weeks, he had the appearance of a lump of jelly, in which condition he was carted to the gallows and hung.

Pain, then, must include physical and mental and even other psychological forces such as attack on the spiritual nature of the life force.

Rick from long ago.

WG | Dec 9, 2014 3:07:18 PM | 7

I believe the WH / CIA even redacted the pseudonyms used to identify the individuals involved within the report. You can't even get an idea of the number of individuals involved by seeing how often their fake names come up.

Also a few years ago the CIA destroyed all videotaped record of the actual torture sessions, ignoring orders expressly stating they needed to keep the material.

james | Dec 9, 2014 3:49:01 PM | 8

wg - but they will go after bradley manning, snowden or anyone else who is brave enough to show these same culpits.. shooting the messenger is all the usa knows how to do at this point..

jfl | Dec 9, 2014 3:50:02 PM | 9

The CIA is evil incarnate and needs to be disbanded. Barack Obama is under the thumb of the CIA. All subsequent presidents will be as well, now that the criminal operation has wrapped its tentacles so completely around the office.

The CIA wages war all the time, tells no one what it is doing, and has done so since its founding. There are two parts to the CIA, on paper : intelligence gathering and criminal actions. The first is just a fake cover for the other, the 'i' in CIA. The second, the CA, is the black heart of the organization, its raison d'�tre, and the hole in Uncle Sam's arm where all the money goes.

I don't know how it can come about but the CIA, the NSA must be 'put down'. Both are incompatible with democracy and antithetic to the rule of law. They are making over the USA in their image. If they cannot be eliminated it will be sad testimony to the transformation's ultimate realization.

Martin Finnucane | Dec 9, 2014 5:32:58 PM | 12

I am half way through reading The Half Has Never Been Told. It occurs to me that violence against captives - i.e., torture - is central to the history of the U.S. The glorification of the captor, and the demonization of the captive, is similarly a central part of the experience of being a white American.

@13 - How ridiculous. "Hey guys, I know you're referencing a 1600 page CIA torture report, but here's a YouTube link!"

I mean, we know you're a complete shill but jeez. Have some self-respect.

__________

The Rise of German Imperialism and the Phony "Russian Threat"
http://petras.lahaine.org/?p=2016


Posted by: guest77 | Dec 9, 2014 7:07:53 PM | 15

"CIA are amateurs."

Any organization with a $14 Billion a year budget making good money in drug sales other illicit activities deserve at least to be called "professionals".

The fact is, no one on this planet has killed like the CIA. Since the end of the Second World War, the United States has killed at least 10 million people - men, women, children - through sanctions, military activity, or sponsored bloodbaths. The CIA can claim at least 1 million of those themselves (if not two). Hardly "amateurs" in any sense.

The CIA organized massacres in Indonesia took anywhere between 500k-800k lives alone.

People ought to listen to real CIA agents like John Stockwell and Phil Agee to know what bloody deeds the CIA gets up to. Not some goofy, minimum wage internet lackey of theirs.

Posted by: guest77 | Dec 9, 2014 7:17:46 PM | 16

With respect, I disagree with our host's interpretation of this news.

This Senate document of 6.000 pages, released into the public record, is greatly significance. I am surprised it was released. It must create a cumulative impact as time passes; and I believe that one reason for the disclosure, from the nod that Senator Feinstein gave it, as chairman of the intelligence committee , is in one respect to defend the Senate from the overreach of the CIA. And let's remember that the Agency challenged the Senate's authority not long ago,--going so far as to hack the Senate's computers,--in order to remove evidence which Senate staff had gathered, in pursuit of this investigation of torture. For very practical political reasons they could not capitulate, or succumb to the threat, and the meaning of such a sinister act carried out by an intelligence agency, which by law is subordinate to Senate authority.

Clearly, to not publish this document, would be to admit that the Senate had been cowed into silence by the very spooks who had committed a felony against that chamber, a higher, constitutional authority.

I believe the consequences of having conceded and enumerated and identified the practice of torture, and placing this document in the public record, will have gathering repercussions. Because of the diligent and praiseworthy efforts of the alternative press, done years ago, these crimes cannot in the fullness of time, be fobbed off as a rogue activity inside an intelligence community--as happened with the Iran-Contra affair--when Reagan was in the White House.

On the contrary, the chain of responsibility goes straight to the legal minds (and we know who they are) in G. W. Bush's Justice Department, who characterized these particular war crimes as instruments legally permissible. And we have the statements of President Bush and Vice-President Cheney, which are fully incriminating, and would likely convince any fair-minded jury of their guilt, on the occasion of their trial.

None of us can say with any certainty, that the former President and Vice-President will ever have to face their day in court; but the release of this Senate document, as it details the sordid facts about a disgraceful series of crimes, must cast a mighty long shadow over the remaining years of Bush and Cheney. The same shadow lingers upon the loathsome attorneys who facilitated their heinous crimes.

May the sleep of these men be discomforted, and their dreams made unpleasant, because of the prolonged legal shadow, or possibly because of the tireless determination of prosecutors.

Posted by: Copeland | Dec 9, 2014 9:20:46 PM | 17

Invictus has the real rabbit hole... and has for years.


After destroying video evidence, CIA's Rodriguez slams Senate torture report

Posted by: Uncle $cam | Dec 9, 2014 9:21:15 PM | 18

@17 copeland. thanks for sharing your perspective which is very insightful. i would include the push pull of dems verses republicans as well.. i really enjoyed reading your post from december 1st on your website as well. thanks.

Posted by: james | Dec 9, 2014 9:41:24 PM | 19

Copeland @17: Today's release was the highly-redacted and yet still damning 500-page Executive Summary of the full 6,000 page report. I hadn't heard that there were plans to release the full document, but I could be wrong. What I would give to see these war criminals brought to trial and convicted. No high hopes.

Posted by: catlady | Dec 9, 2014 10:16:55 PM | 20

The torture is far more widespread then is generally discussed. I heard law professor Scott Horton state in an interview once that thousands of people have been tortured to death by the U.S. That is not the picture we are usually given. We need to be clear about the scope of what is taking place. I hope this report will do this.

Posted by: Edward | Dec 9, 2014 10:27:45 PM | 21

in re 13

Still pushin' that one I see.

Here are some real pros. An Elderly Man Murdered at Ukrainian Checkpoint for Refusing to Shout "Glory to Ukraine!" in Glinka in the Starobeshevo district, near the Russian Border. "A monument to the soldiers of the Great Patriotic War was destroyed. A resident of the neighboring village, an elderly man took some tools to repair the monument." Stopped at a Banderaist checkpoint, he refused to shout "Glory to the Ukraine." Beaten to the ground, he we shot several times.

Posted by: rufus magister | Dec 9, 2014 10:50:41 PM | 22

From b's outline...

"The report is also limited to the CIA and does not include the military which, as we know, also used torture and killed people in "interrogations".[1]
The U.S. is bound by law to prosecute all of them from top to bottom but it is unlikely to happen.[2]
Only one person from the CIA went to prison over the torture program. This not for committing torture but for revealing it."[3]

[1] & [2] tend to expose the International Criminal Court as a fake judicial panel every bit as corrupt, prejudiced and subservient to Power as the US judicial system.
At least the ICC's name confirms that it is inhabited by Criminals eager to do what they're told, to whomsoever they're told to do it (by US/UK and the rest of the Incredible Shrinking pseudo International Community).

[3] tells us everything we need to know about what and who Yankee Justice is designed to protect.

Copeland | Dec 9, 2014 9:20:46 PM @ 17 makes some very good points. This is going to resonate in all kinds of inconvenient ways. If nothing else it will wake up millions more people worldwide to the fact that if you're not anti-American, the day is fast approaching when you're going to need a VERY GOOD EXCUSE.

Posted by: Hoarsewhisperer | Dec 9, 2014 10:50:43 PM | 23

12 THINGS TO KEEP IN MIND WHEN YOU READ THE TORTURE REPORT

https://firstlook.org/theintercept/2014/12/02/x-things-keep-mind-ever-get-read-torture-report/

Posted by: easy e | Dec 9, 2014 10:52:13 PM | 24

@19

Thanks james for your kind words.

@20

catlady,

I don't know for a fact about the 6,000 pages; but I would be astounded if the body of the report, in redacted form, is not released. I don't see them going to the expense, time, and trouble, to bottle up the body of the research. What is astonishing to me is the tone that certain CIA spokesmen have taken with the Senate. How arrogant and highhanded these fellows have become. There are strong indications, and a good case to be made, that this Agency is guilty of tampering with evidence, destroying video evidence of torture, and stealing evidence or deleting files from the Senate's computers. As an educated guess, I would think the Senate would be wise make the whole document available to the public. For their own peace of mind and security.

I hope this turns out to be the case.

Posted by: Copeland | Dec 9, 2014 11:10:30 PM | 25

On the topic --

I've heard a lot of whining from the Right side of the aisle in public life about "this will endanger our people everywhere" and decrying the release of the report.

Doesn't the other side already know what's been done to them? Isn't the whole point of trying suppress or downplay it strictly for domestic consumption?

It's appalling. What we used to condone with distaste on the down-low by our foreign lackeys and collaborators we now proudly boast of as evidence of our "toughness" or our "resolve."

Copeland @ 17--

I hope you're right. One would have thought that the cumulative effect of decades of military and foreign policy debacles would have sunk in, as well. But I fear this will find it's way down MiniTrue's "memory hole," like Iran/Contra, the Iraq War, Syria....

Well, in fairness, drowned out by the latest celebrity gossip.

Posted by: rufus magister | Dec 9, 2014 11:12:58 PM | 26

The DOJ has already said they won't be pursuing charges against individuals named in the report. And has been stated before, we many never know the true scope of these crimes.

This is the real difference between America and other countries. Other places never reveal the ways they abuse their prisoners, nor do they punish them. The USA has these things revealed, THEN refuse to punish anyone.

Posted by: Almand | Dec 9, 2014 11:16:57 PM | 27

Copeland @ 25

I think you're onto something about the institutional struggle.

We might see how that struggle plays out soon. The "intelligence community" is already pushing back, saying, "oh no we got good intel." Cynic that I am, I wonder how long it will be before CIA assets in the Fourth Estate start dropping bad stuff about members of the Senate. When they do, it will be interesting to see R's v. D's on the hit list.

I would expect some of the Senate to put up a valiant rearguard action, but this war might have been lost with hysterical over-reaction to Sept. 11. Which Barry Choom has only intensified, really, with drones and loose talk about Russian "expansionism."

Again, I wouldn't mind be wrong on this one.

Posted by: rufus magister | Dec 9, 2014 11:24:58 PM | 28

rufus @28:

I also fear that it's only a matter of time before the CIA pushes back against the Senate, and generally goes on the offensive. The Intel Community and the mainstream media have historically had a more or less cozy relationship (including Hollywood). It will certainly be interesting to see how this power struggle plays out.

Posted by: Almand | Dec 9, 2014 11:39:18 PM | 29

Almand @ 29 --

Hollywood -- wasn't "24" just torture-porn? And what was that recent feature-length wet kiss to dark side of the dark sites, with the conflicted-yet-resolute female operative?

Posted by: rufus magister | Dec 9, 2014 11:48:52 PM | 30

This torture was permitted, with a wink and a nod, from the very top, to the very bottom. IMO, anyone who thinks differently is delusional. A few bad apples, oh please!

Posted by: ben | Dec 9, 2014 11:55:19 PM | 31

And still worse: From Penny

http://pennyforyourthoughts2.blogspot.com/

Posted by: ben | Dec 10, 2014 12:36:31 AM | 32

@28/29-

Ugh, it's disconcerting the amount of hack work propaganda gets churned out every year. I could be pessimistic and say the seventies was really the beginning of the end and blame Warren Beatty and Reds for putting the last nail in the coffin, but that would be sentimental. You're right it goes back a ways- I like the story of Dulles and Animal Farm:


"The trade press reported that de Rochemont financed Animal Farm with the frozen British box-office receipts from his racial 'passing' drama Lost Boundaries; in fact, Animal Farm was almost entirely underwritten by the CIA. De Rochemont hired Halas and Batchelor (they were less expensive and, given their experience making wartime propaganda cartoons, politically more reliable than American animators) in late 1951; well before that, his 'investors' had furnished him with detailed dissections of his team's proposed treatment. Animal Farm was scheduled for completion in spring 1953, but the ambitious production, which made use of full cell animation, was delayed for more than a year, in part because of extensive discussion and continual revisions. Among other things, the investors pushed for a more aggressively 'political' voice-over narration and were concerned that Snowball (the pig who figures as Trotsky) would be perceived by audiences as too sympathetic.

Most problematic, however, was Orwell's pessimistic ending, in which the pigs become indistinguishable from their human former masters. No matter how often the movie's screenplay was altered, it always concluded with a successful farmyard uprising in which the oppressed animals overthrew the dictatorial pigs. The Animal Farm project had been initiated when Harry Truman was president; Dwight Eisenhower took office in January 1953, with John Foster Dulles as his secretary of state and Allen Dulles heading the CIA. Leab notes that Animal Farm's mandated ending complemented the new Dulles policy, which � abandoning Truman's aim of containing Communism � planned a 'roll back', at least in Eastern Europe. As one of the script's many advisors put it, Animal Farm's ending should be one where the animals 'get mad, ask for help from the outside, which they get, and which results in their (the Russian people) with the help of the free nations overthrowing their oppressors'."

http://www.lrb.co.uk/v29/n13/j-hoberman/short-cuts


Posted by: Nana2007 | Dec 10, 2014 12:56:38 AM | 33

On more than one level, and for more than one reason, the Senate committee's release of this report about past torture, permitted and encouraged by the Bush Jr, crowd, is the right thing to do. The Senate not only drew a line against the CIA, after it invaded the private deliberations and was bold enough to go rifling through Senate files, and deleting some files.

Along with rufus m., I feel there is danger if the political dirty work is taken up in the media. But the report, if it is fully released, works powerfully for the Senate, and is more of a counteraction politically, than it is a holding action; and it is not a sign of weakness by any means. The Senate has plenty of strong legal minds, and it can bypass Obama's Justice Dept. and broaden its investigations, in the event of any similar assault against it.

Yet I have some suspicion that the branch at Langley that jerked around with a powerful institution like the Senate, in the way they did, would never do this on their own, without the guarantee that someone in higher authority has their back. In fact, if CIA doubles down on the belligerence and bluster, that would tend to arouse more suspicion of a hidden hand.

Posted by: Copeland | Dec 10, 2014 2:11:32 AM | 34

The CIA spied upon the comittee (headed by Diane Feinstein) that composed this report. This angered Feinstein and made her more determined to publish the report.

Posted by: Willy2 | Dec 10, 2014 3:03:49 AM | 35

A commentator on CNN yesterday, while admitting that the whole story was unsavory, still had to add, that the report in itself was another sign of the United States greatness. Why? Well, "Putin would never allow such a thing"!

Posted by: Bert | Dec 10, 2014 3:38:19 AM | 36

@16 I thought this is what you guys have been doing here for the last half year. I post HRW, AI and OSCE reports on Donbass - you respond with rogue translations of some Russian blogs?

Also it's interesting to see you seriously discussing an US Senate report while you have rejected any reports by US administration in the past as "CIA sponsored" etc. Why this torture report is reliable, but previous reports calling for military support for Ukraine were not reliable?

By the way, as we're on the topic of arms: Russian arms delivery for Boko Haram was just arrested in Nigeria.

Posted by: Ulster | Dec 10, 2014 4:02:34 AM | 37

Consulting psychologists were paid 80 of an 180m contract to train torturers. I wonder how many other programs in the 'black budget' are likewise inflated 100x.

Posted by: Crest | Dec 10, 2014 4:20:47 AM | 38

Copeland

The 6000 pages wont be released to public, its just the shorter censured version that have been released.

Posted by: Anonymous | Dec 10, 2014 4:21:33 AM | 39

I just don't get it. NeoLiberal Capitalism IS 'torture'.

Banksters create synthetic debt out of thin air, and charge all of us egregious usury for the use of it, while the Fat Cats roll their gambling losses into public Treasury bailouts. Everything flows from that heinous crime: the win-or-die competitive rat race, the vicious street life, the 90,000,000 jobless or homeless 'disappeared', the -$18 TRILLION perpetual debt, the $4 TRILLION phony Oil Crusades, massively bloated $3.4 TRILLION Mil.Gov.Sci.Edu rice bowl Fed bureaucracy, even the unregulated 501(c)3 tax-dodge 'rice tent' charity (sic) fraud to take care of 'poor victims', making their CEOs rich with 30% APR 'micro-loans'.

Capitalism is raping 998 people to give 2 people a life of ease: the Ricos, and their Pols. Born naked, die naked, immersed in a life-long electronic swamp of lies and disinformation.
'You Deserve a Break Today'. Which leg do you want to limp on?

I mean, what else do you expect? Tea and crumpets at 4PM? Jebeezus!

This is what our world would've been like if the Nazis had won. It just took a few years longer than they planned to return to the Reign of the Habsburgs.

Posted by: ChipNikh | Dec 10, 2014 5:48:36 AM | 40

If America is still torturing, which I don't dispute by the way, then why didn't China detain and arrest Obama during his recent visit since he is a Human Rights abuser and therefore a criminal? Is China not committed to Human Rights? Is China afraid? Or does China not give a shit about Human Rights?

Posted by: Cold N. Holefield | Dec 10, 2014 6:49:14 AM | 41

A commentator on CNN yesterday, while admitting that the whole story was unsavory, still had to add, that the report in itself was another sign of the United States greatness. Why? Well, "Putin would never allow such a thing"!

Ha! It is absurd. There is no greatness in being only marginally more humane than a psychopathic, sadistic megalomaniac like Putin who is hell-bent on nuking the planet.

Posted by: Cold N. Holefield | Dec 10, 2014 6:52:30 AM | 42

Hi Ben

Sick isn't it? Yes, human experimentation is what's not mentioned in all the newsiness? The Human experimentation aspect of the torture program- which was alluded to as early as 2009- Doctors monitoring how the torture was affecting the innocent humans- studying it. In hopes of what? It's simply MKULTRA/DELTA etc continued on- That horror show never went away.

What is sickening is the way this is being spun no doubt with the assistance of the usual PR firms?

The US is a good guy for releasing this and does so at great risk (another terror attack 9/11 9/11 9/11) but since we are just so great we have to make the sacrifice, though we could be the victims yet again- Sickening stuff really

Posted by: Penny | Dec 10, 2014 7:09:29 AM | 43

Cold N H @ 42

You know the US has "already nuked the planet" right?
Hiroshima Nagasaki
Speaking of sadistic megalomania?

Posted by: Penny | Dec 10, 2014 7:11:22 AM | 44

@17

' Clearly, to not publish this document, would be to admit that the Senate had been cowed into silence by the very spooks who had committed a felony against that chamber, a higher, constitutional authority. '

Have they published the report? I don't think so. I think they redacted 90% of the report and then re-redacted that again. And that's what everyone is reading.

There is no evidence of anyone's culpability here. It's the usual 15 minutes of 'oh, how horrible' ... and then its over.

If the senate were 'heroic' ... even if they were just still warm ... one of them, the poseur Udall for instance ... would have dumped the full report into the Congressional Record. That's not even original. Mike Gravel did it 43 years ago.

No, the problem is that doing so ... looking out for the nation's interest instead of his own ... would have disappeared the pot of gold on the other side of the revolving door.

There are no men and women among the American political class ... have you had a look at the video of Sahra Wagenknecht reading Ms. Merkel the riot act in the German Parliament that was posted in thread 30? Nothing like that in America, just slugs and trails of slime.

I want to be hopeful as much as you do, Copeland. But hope in the American political class is misplaced. My hope is in the poor people of Ferguson, Detroit, of all the cities who have slipped and fallen once too often in the slime, and are working to regain control of their lives themselves.

Posted by: jfl | Dec 10, 2014 7:23:43 AM | 45

The most glaring example of the utter incompetence of the CIA can be seen in the people that it contracted to develop its "enhanced interrogation" techniques.

Because I would have thought it obvious - a no-brainer - that if you wanted to know how to "interrogate" then you would bring in people who.... do interrogations for a living.

You know, get in police officers to tell them the Secret of The Good Cop / Bad Cop Routine.

Or ask the Customs Service to come over and explain how their "interviews" allows them to separate the wheat from the chaff at airports and seaports all around the Good Ol USofA.

You'd contract those guys, because those guys actually do this for a living.

But, no, those weren't the guys the CIA paid $millions for.

The CIA actually contracted in guys Who Had Never Actually Interrogated Anyone For Real.

The CIA engaged psychiatrists who taught the US Military how to WITHSTAND torture.

Think about that: these are the guys who were going around saying: Torture doesn't work, and I'm here to teach you why.

Those were the guys that the CIA paid untold $millions to teach the CIA how Torture Works when - in reality - all the CIA was proving is that Money Talks.

Posted by: Johnboy | Dec 10, 2014 7:41:42 AM | 46

If those countries where torture takes place
attract public dissatisfaction/opposition against things such as torture,
then why is it that we never hear about such public dissatisfaction/opposition.
( i know, its a bit of a rhetorical question because there is no actual public oppsition. whatever opposition you do see is only there for "show" purposes mainly)


Dont countries such as Italy,Canada,Germany,Greece etc have such a thing called Democracy,thru which people can voice their opposition.

Or have these countries "privatised" their political systems to unnamed private foreigners.
Is "Democracy,", "Rule of law", due process, accountability etc all dead?
After all Greeks,Romans and others were the inventors of these things.


( i only refer to actions done on behalf of foreign organisations such as CIA, US Government, and any other foreign organisation, i suppose that torture that takes place on behalf of your own Government would be perfectly legitimate, sadly)

Posted by: chris m | Dec 10, 2014 7:42:42 AM | 47

chris m

We are talking about western populations here, same western populations that is getting fooled on Iraq, Syria, Russia, Iran, Palestine etcetera.
Western populations are hopelessly brainwashed today.

Posted by: Anonymous | Dec 10, 2014 8:19:34 AM | 48

@42
There is no greatness in being only marginally more humane than a psychopathic, sadistic megalomaniac like Putin who is hell-bent on nuking the planet.

Crock of shit.

Posted by: MRW | Dec 10, 2014 8:29:06 AM | 49

JohnBoy@46

"The most glaring example of the utter incompetence of the CIA can be seen in the people that it contracted to develop its "enhanced interrogation" techniques"

I'm calling complete bullbiscuits on the incompetence meme (and will be at my blog in a new post)

People have got to stop promoting this meme. It's utterly ridiculous.
The CIA contracted these people because it was politically expedient.
Gave them a "deniability" card that could be played to promote incompetence as an example and also to enrich their compatriots.
That is not incompetent. It is in fact very competent and very evil!

Posted by: Penny | Dec 10, 2014 8:59:26 AM | 50

@17 Copeland
I can see your angle, it was important that the report was released in light of the tampering by the CIA.

But, we will never know to what degree the CIA tampering led to an untoward censorship either. Similar to the "rectal re-hydration" being viewed as a way to leverage total control over the prisoner, wasn't the hacking of senate computers a way for the CIA to exert total control? They have perfected the panopticon concept. Who knows, maybe the report initially was going to name names, or the redaction pen wasn't going to be used so heavily.

The hacking was such a flagrant and egregious violation of any sense of the law, you almost wonder if they wanted to get caught in order to send the message. Similarly, torture itself doesn't have the desired effect unless the outside world knows you are using it. The people in custody are already off the battlefield and on their way to becoming innocuous non-persons, the object is to make someone considering joining a cause to consider it a bit harder. I would argue this was the point of the hacking. The intended effect seems to have manifested itself in a report that acts more of as a tonic than a disinfectant.

Posted by: IhaveLittleToAdd | Dec 10, 2014 9:04:45 AM | 51

Off topic BUT GOOD NEWS

09:01 Wednesday 10 December 2014
The Dail (Irish Parliament) last night voted in favour of the government recognising the State of Palestine based on its 1967 borders - before Israeli occupation. The Senate has already voted for it
All parties in the Dail supported the Sinn Fein motion during Private Members time in the Dail.
The government parties backed the motion saying that they were in favour of a two state solution for Israel and Palestine.
Labour's Jed Nash said that passing the motion was an important step in what will be a long process for Palestinian Statehood:
Last month the Minister for Foreign Affairs, Charlie Flanagan, said Ireland might recognise a Palestinian state if it helped to advance the peace process in the Middle East.
Currently eight EU states recognise Palestine as a state, with Sweden the most recent to adopt the stance and the first to do so while an EU member state.
There is widespread recognition of Palestine as a state across Asia, Africa and South America, but far less within the EU and North America.
Jewish opposition has already started

Posted by: Boindub | Dec 10, 2014 11:02:57 AM | 52

https://irrussianality.wordpress.com/2014/12/10/never-again/

Posted by: KMF | Dec 10, 2014 11:25:45 AM | 53

Here's an interview with ex-US Military Attorney, Major Dan Mori on the ABC.net.au program, The Drum. Major Dan was appointed by the US Military to defend David Hicks against trumped up charges related to the Fake War on Terror. Hicks' plight was made infinitely worse by PM John Dubya Howard, cock-sucking coward, liar, cur, and the only non-Jew ever to be awarded the B'nai B'rith Gold Medal (+ $1,000,000) for services to "Israel", who refused to tell G Dubya Bush to return Hicks to Oz (because the "crimes" Hicks was accused of were NOT crimes in Australia).
Howard refused and Hicks eventually appeared before a Yankee Kangaroo Court, aka Military Tribunal where he was plea-blackmailed into accepting a sentence of two years plus time-served. And then returned to Oz to serve out the remainder of his sentence in Australian custody.

Major Dan was a harsh critic of the US Military Tribunal system from the outset (prior to the trial), and is, without a shadow of doubt, a Man Among Men. Not at all like the indignant little girly-boys such as Obama, Tony Abbott, Sarkozy, Cameron, Wm Hague and Tony Bliar who plague and litter the Western political landscape.

Anyhow, here's a 6 minute interview with Major Dan who, after his departure from the US Military, migrated to Oz with his family and wrote a book about his experiences with the US Military Injustice System called In The Company of Cowards.

The most stunning revelation in the interview is a reference to the fact that the torture report points out that of 119 detainees studied during its compilation, the committee concluded that:
1. 26 of the victims were completely innocent of any 'wrong-doing' and should never have been detained.
2. The Report understates the number of detainees studied to less than 100.

http://www.abc.net.au/news/2014-12-10/dan-mori-on-cia-torture-report/5958696

Posted by: Hoarsewhisperer | Dec 10, 2014 11:34:37 AM | 54

While You're Being Distracted With The MSM Torture Narrative, The 1,618 page 2015 NDAA Will Be Voted on in the Senate ...

http://www.reddit.com/r/conspiracy/comments/2ouukp/while_youre_being_distracted_with_the_msm_torture/


Oh, and on torture, don't forget the boiled bodies in the old USSR.

http://youtu.be/ZOTgwG6Wdnw

Posted by: Uncle $cam | Dec 10, 2014 3:06:05 PM | 55

every time I

Posted by: slothrop | Dec 10, 2014 3:19:10 PM | 56

Every time I post here, I bitch. But, this is spot on, b.

I wonder how much Germany assisted in "extraordinary renditions"?

Posted by: slothrop | Dec 10, 2014 3:23:25 PM | 57

From Cannonfire:http://cannonfire.blogspot.ca/

Posted by: ben | Dec 10, 2014 3:29:10 PM | 58

The map of all the countries who were complicit � actively or passively � with CIA's torture program includes most of the countries who speak loudest and most sanctimoniously about human rights. Add to this all the other countries (Russia, China, India, South American countries, �. ) who also use torture in some form, and I come to the conclusion that there is not a single country today where some form of torture (physical as well as mental) is not at least tolerated under some specific conditions.

Posted by: ktwop | Dec 10, 2014 4:03:49 PM | 59

Well gracious of you not to bitch for a welcome change sloth, but isn't your second sentence a bit of a subtle bitch? I suspect the original Nazis that the US imported/rescued after WWII had a lot to do with it but give the Germany of today, including b but excluding Merkel, a break will you.

Actually it is good to hear from you again sloth. Your input can be valuable when you're not "bitching".

Posted by: juannie | Dec 10, 2014 4:10:18 PM | 60

ben @ 58

I have my second part up so come over and check it out
and tell me what you think- definite human experimentation went on

Posted by: Penny | Dec 10, 2014 6:30:05 PM | 61


Brazil 'Building the politics of memory': An Interview with Paulo Abrao

[W]e are building politics of memory, which are more and more capable of understanding the types of repression that were used against the victims of the dictatorship. There are also now several Brazilian states and municipalities that are creating spaces for memory and for the creation of understanding and knowledge. The truth is that before we lived in a country that was dominated by an ethic of the forgotten and today we have another environment, where the country is valuing our memory and the past.

A short while ago, we head from all of the principle Brazilian newspapers, which published fairly strong and insistent editorials from the perspective that we should not look to the past and that we should only and exclusively look toward the future. They said that eventually, any excerise into the past would imply a rupture with our democracy, and would put at risk the current public institutions and freedoms. The simple affirmation of these ideas is in itself a representation of the frailty of our democracy. And now we have a new environment.


The same American Criminals In Action responsible for so much terrorism, torture, and death in this milennium were responsible for much of the same in Latin America ... worldwide ... in the last.

We need to build a politics of memory here in the USA, where forgetfulness in institurionalized. The Criminal In Action In Chief here directly mouthed himself what was left to the MSM in Brazil ... "that we should not look to the past and that we should only and exclusively look toward the future."

We cannot understand the present without knowing the past nor can we have any control of our future without understanding the present as it is perfected. There is no time but the present, created by the past and in turn creating the future, and there is nobody here but ourselves to create it. We North Americans are certainly near the end of the line when it comes to understanding our past, and so our present, and so to deliberately affecting our future.

Posted by: jfl | Dec 10, 2014 6:30:06 PM | 62

in re 37

FYI, the latest details. Curiously, the page linked to says nothing about Boko Haram. Only that a Russian-owned plane with arms bound for Chad has been detained on 6 Dec. Russia has supplied weapons to the gov't. since at least 2001, according to Wikipedia (see army of chad and the foreign operators of t-55 tanks), so why would this be at all suspicious?

The latest report, 8 Dec. Nigerian govt. releases Chad-bound Russian plane detained in Kano in Premium Times (online since 2011, so no doubt right up there with TNR, I'm sure) states that the cargo aboard the plane, chartered by the French military, was being redeployed within the region by French peacekeepers. The aircraft made an unscheduled landing in Nigeria due to what the article describes as "technical problems." Local security in Kano, in the north, apparently has a history of detaining aircraft.

This is the third time since 2009 that planes loaded with arms would be arrested in Kano, our correspondent says.

The detained planes were later released after investigations.

The destination of the latest aircraft has however raised concerns amid increasing worries in Nigeria over Chad's alleged role in the Boko Haram insurgency plaguing Nigeria's northeast.

This bit at the tail of the pc. is all I see about Boko Haram.

Ponder if you would, my fellow Barflies what this might mean about the intent and honesty of our distinguished poster, who thoughtfully provided the link on the 10th.

I wonder -- maybe it was just a scam by some local security types -- Russia, France, the UN, perhaps financially enabled the expeditious handling of the investigation. The article makes it clear that local authorities, in view of the nationality of the plane, undertook the investigation.

Thanks for allowing me to wander off thread. We now return you to your regularly unscheduled postings, already in progress.

Posted by: rufus magister | Dec 10, 2014 8:13:52 PM | 63

To get back on topic -- Chris Floyd is an old favorite of mine, from his Moscow News days. Here he is at Counterpunch on the report.

A truncated version of the Senate investigation into the CIA's Terror War torture regime has finally been released. Even in its limited form, it details an operation of vile depravity, one which would plunge a civilized nation into a profound crisis of conscience....

Needless to say, nothing like that is going to happen in America. Indeed, even before the report was released, the New York Times - the standard-bearer and shaper of "decent" liberal thought for the nation - was... demanding that we "Pardon Bush and Those Who Tortured." This was the very first "think piece" pushed by the Times on the morning of the report's release.

And you know, I'm a little annoyed at the Grey Lady for finally jumping the shark after I touted it's (limited) virtues over at the TNR thread. Well, I'm sure Mrs. M has a few good recipes for crow; she's served me up that dish before.

Posted by: rufus magister | Dec 10, 2014 8:49:01 PM | 64

@63 rufus.. you have to give it up for number 2 bullshite artist ulster.. he runs a close 2nd to cold..

Posted by: james | Dec 10, 2014 9:01:52 PM | 65

james @ 65 --

No, I'm going with our distinguished correspondent as no. 1 source of shite. Maybe I'm being a snob, imported over domestic. It's got a more subtle bouquet.

Posted by: rufus magister | Dec 10, 2014 9:18:41 PM | 66

for what it is worth, the black and tan should not get a Christmas bonus, his disinformation is poorly produced and so sloppy that the very links he provides contradict his accusation.

if anyone is paying for that I would like to get into that racket as well.

Posted by: dan of steele | Dec 10, 2014 10:17:31 PM | 67

actually this is yet another demonstration of murikka's greatness !

dianne feinstein
*But I came to the conclusion that America's greatness is being able to say we made a mistake and we are going to correct it and go from there.*

Posted by: denk | Dec 11, 2014 2:01:45 AM | 68

Billmon posted a great series of tweet about the parallels between the Torture Report/ Wall St. Bailouts: the curtain coming up and everyone briefly seeing the true ugliness of the system before they try VERY hard to make us forget.

I can guarantee however that the rest of the world will not forget. I wonder what the reaction will be next time the US tries to come down on another country for human rights abuses? Perhaps laughter?

Posted by: Almand | Dec 11, 2014 4:39:03 AM | 69

@66 rufus - fair enough.. i agree with dan of steele - he can't possibly be paid for that crap.

@69 almand.. good questions. either these human rights organizations are independent organizations, or they are dependent on gov't or usaid type hand outs and they don't want to bite the hand that feeds them. regardless - it is laughable at this point any suggestion of the usa having any moral ground to stand on. we knew that beforehand, and the cozy relationship with kiev the past year is more testimony of the wretchedness of their ways..

Posted by: james | Dec 11, 2014 2:10:46 PM | 70

@james: Kiev, and also Saddam, Pinochet, the Contras, Mobuto, Bin Laden, Suharto, Marcos, Musharaf, and all the way back to Uncle Adolf... the list goes on and on. Like you said, it's something we all knew, and have known for a very long time but damned if it doesn't keep happening. The Guardian did a story about Amnesty and HRW did come out today demanding prosecutions. At least they have some sense of shame, it seems.

Posted by: Almand | Dec 11, 2014 6:25:56 PM | 71

jas, dan, 65, 67, 70 --

I gotta go w/our distinguished poster. CDH on occasion makes sense (like once or twice in the Ferguson/NYC discussion) and he's got decent taste in Pink Floyd albums. Regrettably, our faux Irishman has no such socially redeeming virtues.

But still, aren't y'all channeling your inner Grinch or Scrooge? What about Mrs. U and all the little counties? He gets his bonus, a traditional bag of coal, perhaps, since he is on the "naughty" list. We know he's not in the Ukraine; otherwise, that would count as a thoughtful gift.

And besides, he's pd. to be irritating, not right.

I agree, however, that quality is not good, repertory is a bit stale & weak; see g77's bon mot @ 15.

If I were his boss, I'd have him on a Corrective Action Program. But my guess, he's gaming his metrics and hiding it, at least for now.

Posted by: rufus magister | Dec 11, 2014 10:25:31 PM | 72


[Nov 20, 2014] The NY Fed's Attempt To Explain That It Is Not A Subsidiary Of Goldman Sachs

Nov 20, 2014 | zerohedge.com

The most shocking, if already completely buried, news of the day was that - in yet another confirmation that Goldman Sachs is in charge of the New York Fed - a NY Fed staffer was colluding and leaking confidential, material information to a 29-year-old Goldman vice president, himself a former Federal Reserve employee.

This only happened because on the day Carmen Segarra disclosed her 47 hours of "secret Goldman tapes" on This American Life, Goldman executives asked the former Fed staffer where he had gotten what appeared to be confidential information from.

To nobody's surprise the answer was: The New York Fed. So as the latter, also known as the biggest hedge fund of the western world with $2.7 trillion in AUM, is scrambling to once again prove it is shocked, shocked, that it has become merely the latest subsidiary of Goldman Sachs, Inc., it released the following statement explaining what "really" happened.

From the NY Fed:

As soon as we learned that Goldman Sachs suspected one of its employees may have inappropriately obtained confidential supervisory information, we alerted law enforcement authorities. We have been working with law enforcement authorities since then. Because any public statement about the investigation could be prejudicial to a potential future criminal case, we are unable to comment on the specific facts that are under investigation.

As a general matter, we have detailed rules and controls protecting confidential information. All employees with access to confidential supervisory information need to agree to safeguard that information appropriately, and not to disclose it without the necessary approval. Employees receive training relating to the handling and protection of confidential supervisory information and other information security matters. Employees are informed that a violation of these restrictions could lead to criminal prosecution.

Employees also receive ongoing ethics training and are required to do an annual certification that they understand and will adhere to the Bank's Code of Conduct. In addition, we use off-boarding procedures to confirm with departing employees that no confidential information may be taken. With respect to all New York Fed staff, departing Officers may have no official contact with the Federal Reserve System for a period of one year. In addition, all departing New York Fed employees may not have substantive business contacts with the New York Fed relating to any particular matter that he or she had worked on when employed by the New York Fed. Further, with respect to employees departing from the financial institution supervision group, if the departing employee had served as a senior supervisory officer or central point of contact at a large and complex banking organization, that employee may not receive compensation from the supervised organization as an employee, officer, director or consultant for a period of one year. Finally, the New York Fed has in place technology to help identify and prevent the forwarding of confidential information in violation of our rules.

So did this technology fail? Or is Goldman simply one of the exempted parties?

Selected Skeptical Comments

hedgeless_horseman

Is the NY FED trying to say that Goldman Sachs does not own shares in the New York Federal Reserve Bank?

The 12 regional Federal Reserve Banks, which were established by the
Congress as the operating arms of the nation's central banking system,
are organized similarly to private corporations--possibly leading to
some confusion about "ownership." For example, the Reserve Banks issue
shares of stock to member banks. However, owning Reserve Bank stock is
quite different from owning stock in a private company. The Reserve
Banks are not operated for profit, and ownership of a certain amount of
stock is, by law, a condition of membership in the System
. The stock may
not be sold, traded, or pledged as security for a loan; dividends are,
by law, 6 percent per year.

http://www.federalreserve.gov/faqs/about_14986.htm

Because...

Goldman Sachs Bank USA ("GS Bank") is a New York State-chartered bank and a member of the Federal Reserve System.

http://www.goldmansachs.com/what-we-do/investing-and-lending/banking/

Which is why it is a complete farce and racket to have The NY Federal Reserve Bank be responsible for regulating the member banks that own it.

The Board of Governors of the Federal Reserve System has supervisory and regulatory authority over a wide range of financial institutions, including state-chartered banks that are members of the Federal Reserve System (state member banks), bank holding companies, thrift holding companies and foreign banking organizations that have a branch, agency, a commercial lending company subsidiary or a bank subsidiary in the United States...

http://www.ny.frb.org/banking/supervisionregulate.html

SoberOne
Nice HH.

" Finally, the New York Fed has in place technology to help identify and prevent the forwarding of confidential information in violation of our rules. "

Fancy way of saying the NSA, eh?

insanelysane

insanelysane's picture

It takes two to tango. Goldman wacked a couple of employees but the FED has kept all of theirs. Apparently law enforcement led by Mr. Holder are undertaking another extensive "investigation."

Either that or they are waiting for a memo from Goldman detailing what their "investigation" found.

Bay of Pigs

They don't need to explain anything. The William Dudley's bio....

"Prior to joining the Bank in 2007, Mr. Dudley was a partner and managing director at Goldman, Sachs & Company and was the firm's chief U.S. economist for a decade."

http://www.newyorkfed.org/aboutthefed/orgchart/dudley.html

madbraz

If this was a just country, by now the FBI would have an undercover operation, bug Dudley and KHenry and obtain irrefutable evidence that would be enough to end the NY FED and put them behind bars.

As we don't, and Goldman owns the FBI, we watch and cringe at these masters of arrogance and corruption.

[Nov 19, 2014] Senate Report Reveals Powerful Manipulative Positions of Goldman, JPM In Global Commodities

"We had to struggle with the old enemies of peace--business and financial monopoly, speculation, reckless banking, class antagonism, sectionalism, war profiteering.

They had begun to consider the Government of the United States as a mere appendage to their own affairs. We know now that Government by organized money is just as dangerous as Government by organized mob."

Franklin D. Roosevelt

"Why is JP Morgan getting so much heat? Maybe because it is a massive international crime syndicate."

Matt Taibbi, Talking JPM With Sam Seder

JPM and Goldman sought and obtained manipulative powers in global commodities, even while they were being bailed out on the back of the American people? Oh no, nothing like this could be true, or so the shills and toadies of the moneyed interests will say. Just get the government out of our way, and everything will be all right. The market is naturally rational and efficient, pure and pristine. No Bank would risk its reputation by doing anything illegal.

Especially when they buy off and intimidate enforcement, write the laws, and do what they will.

I doubt that anything meaningful will be done about this. The corruption runs deep. In corporatism the private and public elites are largely interchangeable. Different roles, similar objectives.

The politicians may make a good show of it, and talk harshly to their witnesses. And then take their money, and lick their hands.

But at least we know more about what is true, and what is not.

Perhaps this may help you understand those who do not wish to remain under the power of the Banking cartel, and may be in a better position to do something about it.

Related: Wiseguys: Drawing Parallels Between the Mafia and Wall Street

Dealbook

Senate Report Criticizes Goldman and JPMorgan Over Their Roles in Commodities Market

By Nathaniel Popper and Peter Eavis

November 19, 2014

A two-year Senate-led investigation is throwing back the curtain on the outsize and sometimes hidden sway that Wall Street banks have gained over the markets for essential commodities like oil, aluminum and coal.

The Senate's Permanent Subcommittee on Investigations found that Goldman Sachs and JPMorgan Chase assumed a role of such significance in the commodities markets that it became possible for the banks to influence the prices that consumers pay while also securing inside information about the markets that could be used by the banks' own traders

Bankers from both firms, along with other industry executives and regulators, will testify about the allegations at hearings on Thursday and Friday.

The 400-page report, which was made public on Wednesday evening, included case studies on nine different commodities in which banks have taken big positions, including the 100 oil tankers and 55 million barrels of oil storage that were owned by Morgan Stanley, and the 31 power plants owned by JPMorgan at one point.

The subcommittee discussed several reasons that these commodity operations could create problems. The potential for price manipulation and the unfair advantage that banks can gain in these markets were among the top concerns expressed by Senator Levin and Senator John McCain, the top Republican on the subcommittee.

But both senators also echoed previous warnings that the enormous holdings of oil, uranium and other hazardous materials could expose the banks to significant legal liability that could, in turn, lead to runs on the banks.

A 2012 study by the Federal Reserve, cited in the report, found that banks have not put aside enough money and insurance to adequately prepare for the "extreme loss scenarios" involving commodities...

Read the entire article here.

[Sep 02, 2014] The End of Democracy as we Knew it by Bernd Hamm

Sep 02, 2014 | informationclearinghouse.info

2.1 The Rise of the Neocons

Americans regularly insist that the U.S. is the only global governing authority that underpins the world's security and prosperity, that without it, there would be widespread chaos, economic stagnancy, and far more frequent international warfare. The proponents of this conception emphasize the dependency of world order on US military, economic, diplomatic, and ideological capabilities (Falk, R., 2014). Falk mentions Michael Mandelbaum as the most passionate proponent of this position [9]. Recently Mandelbaum (2014) bluntly restated this argument, saying, "The United States stands alone as the world's de facto government." Though administered from its statist headquarters in Washington, according to its promoters, this form of world government is meta-political and unselfish, qualities that should be appreciated by all people of good will since the U.S. is contributing to the betterment of humanity (Kagan, R. 2006). Indeed, there was only one group on earth which claimed the right to global governance: the US neo-conservatives.

By the mid-1970s, then US Secretary of Defense Donald Rumsfeld began to argue that the Soviet government would be ignoring bilateral treaties and secretly building up weapons with the intention of attacking the United States. Together with Paul Wolfowitz he wanted to create a much more severe view of the Soviet Union, its intentions, and views about fighting and winning a nuclear war. When George H. W. Bush became Director of Central Intelligence in 1976, he set up a team of sixteen outside experts who were to take an independent look at highly classified data used by the intelligence community to assess Soviet strategic forces, commonly referred to as Team B [10]. Their allegations proved all wrong. The CIA director concluded that the Team B approach set "in motion a process that lends itself to manipulation for purposes other than estimative accuracy."

The "neo-conservative offensive" (Hamm, B., 2005, 1-18), which started in August 1971 with the Powell Manifesto (Nace, T., 2003 [11]), had its first great success when Ronald Reagan came into power und brought many of the neocon hawks with him. They had been in place before and were waiting for their chance. Ronald Reagan was the worst informed president, an old man who napped even in meetings of the National Security Council, and who perceived the world through the lens of Hollywood movies: "A man of limited knowledge but deep religious beliefs and strong conservative convictions, he provided little guidance on policy and had no interest in or grasp of detail. � Reagan's disengaged style and lack of foreign policy experience left the door open to palace intrigue among his subordinates, who were eager to fill the void" (Stone, O., Kuznick, P., 2013:421-4).

After the collapse of the socialist regimes the neocons lost influence while still opposing the foreign policy establishment of the republican Bush Sr. administration as well as of that of its democratic successor under President Clinton. Their major foreign policy concern was how to prevent the rise of a new rival. The Defense Planning Guide, a document prepared by the then Undersecretary for Defense Policy Paul Wolfowitz mentions: "Our most important goal is it to prevent to emergence of a new rival, whether on the territory of the former Soviet Union or elsewhere, which would represent a threat similar to that of the former Soviet Union. This reflection governs the new regional defense strategy and demands that we prevent every hostile power to dominate a region the resouces of which would suffice to justify a claim to global power" [12].

In 1997, a group surfaced under the name of Project for a New American Century (PNAC), a think tank based in Washington, D.C. founded by William Kristol and Robert Kagan. The PNAC's stated goal is "to promote American global leadership." Fundamental to the PNAC were the views that "American leadership is both good for America and good for the world" and support for "a Reaganite policy of military strength and moral clarity." After the faked presidential elections of 2000 (Palast, G. 2002), its members came in numerous key administrative positions and the PNAC exerted influence on high-level government officials in the administration of George W. Bush and shaped its military and foreign policies.

As J. Petras (2013b) writes, the restoration of "direct US imperial interventions, unhindered by Congressional and popular opposition, was gradual in the period 1973-1990. It started to accelerate in the 1990's and then really took off after September 11, 2001" The first military test after the collapse of the Soviet empire was how Iraq President Saddam Hussein was lured into the Kuwait trap in 1990. The 28 nations "coalition of the willing" was bought together, and war was waged over the people of Iraq, a war that first was fought with murderous weapons, then with sanctions, and has continued until this very day. On January 16, 1998, members of the PNAC, including Donald Rumsfeld, Paul Wolfowitz, and Robert Zoellick drafted an open letter to President Bill Clinton urging him to remove Saddam Hussein from power. They argued that Saddam would pose a threat to the United States, its Middle East allies, and oil resources in the region if he succeeded in maintaining what they asserted was a stockpile of Weapons of Mass Destruction. The PNAC also supported the Iraq Liberation Act of 1998, which some have regarded as evidence that the 2003 invasion of Iraq was a foregone conclusion (Mackay, N., 2004).

It should not be forgotten that the war against Afghanistan, too, was being planned well before the 9/11 attacks. US officials had been in talks with the Taliban about building an oil pipeline from the Caspian Sea to Karachi, Pakistan, via Afghanistan in order to avoid crossing Iran. In July 2001, a German diplomat was reported saying that the talks ended with the announcement from the US side: "Either we cover you with a carpet of gold [if you comply], or we cover you with a carpet of bombs". Even the date when bombings would begin was given as October 2001 [13]. This had nothing whatsoever to do with the 9/11 attacks, nor with Osama bin Laden (Chossudovsky, M. 2005).

Rebuilding America's Defenses (September 2000), the most widely circulated document of the PNAC group, was developed by Rumsfeld, Cheney, Wolfowitz and Scooter Libby, and devoted to matters of "maintaining US pre-eminence, thwarting rival powers and shaping the global security system according to US interests." Section V, entitled "Creating Tomorrow's Dominant Force", includes the sentence: "Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event��like a new Pearl Harbor". Though not necessarily implying that Bush administration members were complicit in those attacks, it was often been argued that PNAC members used the events of 9/11 as the "Pearl Harbor" that they needed��that is, as an "opportunity" to capitalize on in order to enact long-desired plans.

In a 2007 speech before the Commonwealth Club, retired General Wesley Clark cited a classified Pentagon Memorandum of 2001 (months before the September attacks) which read that the US would attack seven countries in the next five years, i.e. Iraq, Syria, Lebanon, Libya, Somalia, Sudan and Iran in order to gain control over their natural resources, oil in the first place, and enable fabulous profits for the arms and oil industries. "Our country was governed by a group of paranoids like Paul Wolfowitz, Dick Cheney, Donald Rumsfeld and others who wanted to destabilize the Middle East and gain control over its resources" [14].

By the end of 2006, PNAC was "reduced to a voice-mail box and a ghostly website", with "a single employee left to wrap things up". In 2006, Gary Schmitt, former executive director of the PNAC, a resident scholar at the American Enterprise Institute and director of its program in Advanced Strategic Studies, stated that PNAC had come "to a natural end." Instead, untiring neocon hawk Robert Kagan replaced it with the Foreign Policy Initiative [15].

[Sep 02, 2014] Thoughts on Neoconservatism and Neoliberalism by Hugh

08/19/2012 | Corrente

I got to thinking today about how neocon and neoliberal are becoming interchangeable terms. They did not start out that way. My understanding is they are ways of rationalizing breaks with traditional conservatism and liberalism. Standard conservatism was fairly isolationist. Conservatism's embrace of the Cold War put it at odds with this tendency. This was partially resolved by accepting the Cold War as a military necessity despite its international commitments but limiting civilian programs like foreign aid outside this context and rejecting the concept of nation building altogether.

With the end of the Cold War conservative internationalism needed a new rationale, and this was supplied by the neoconservatives. They advocated the adoption of conservatism's Cold War military centered internationalism as the model for America's post-Cold War international relations. After all, why drop a winning strategy? America had won the Cold War against a much more formidable opponent than any left on the planet. What could go wrong?

America's ability not simply to project but its willingness to use military power was equated with its power more generally. If America did not do this, it was weak and in decline. However, the frequent use of military power showed that America was great and remained the world's hegemon. In particular, the neocons focused on the Middle East. This sales pitch gained them the backing of both supporters of Israel (because neoconservatism was unabashedly pro-Israel) and the oil companies. The military industrial complex was also on board because the neocon agenda effectively countered calls to reduce military spending. But neoconservatism was not just confined to these groups. It appealed to both believers in American exceptionalism and backers of humanitarian interventions (of which I once was one).

As neoconservatism developed, that is with Iraq and Afghanistan, the neocons even came to embrace nation building which had always been anathema to traditional conservatism. Neocons sold this primarily by casting nation building in military terms, the creation and training of police and security forces in the target country.

9/11 too was critical. It vastly increased the scope of the neocon project in spawning the Global War on Terror. It increased the stage of neocon operations to the entire planet. It effectively erased the distinction between the use of military force against countries and individuals. Individuals more than countries became targets for military, not police, action. And unlike traditional wars or the Cold War itself, this one would never be over. Neoconservatism now had a permanent raison d'�tre.

Politically, neoconservatism has become the bipartisan foreign policy consensus. Democrats are every bit as neocon in their views as Republicans. Only a few libertarians on the right and progressives on the left reject it.

Neoliberalism, for its part, came about to address the concern of liberals, especially Democrats, that they were too anti-business and too pro-union, and that this was hurting them at the polls. It was sold to the rubiat has pragmatism.

The roots of neoliberalism are the roots of kleptocracy. Both begin under Carter. Neoliberalism also known at various times and places as the Washington Consensus (under Clinton) and the Chicago School is the political expression for public consumption of the kleptocratic economic philosophy, just as libertarian and neoclassical economics (both fresh and salt water varieties) are its academic and governmental face. The central tenets of neoliberalism are deregulation, free markets, and free trade. If neoliberalism had a prophet or a patron saint, it was Milton Friedman.

Again just as neoconservatism and kleptocracy or bipartisan so too is neoliberalism. There really is no daylight between Reaganism/supply side economics/trickledown on the Republican side and Clinton's Washington Consensus or Team Obama on the other.

And just as we saw with neoconservatism, neoliberalism expanded from its core premises and effortlessly transitioned into globalization, which can also be understood as global kleptocracy.

The distinctions between neoconservatism and neoliberalism are being increasingly lost, perhaps because most of our political classes are practitioners of both. But initially at least neoconservatism was focused on foreign policy and neoliberalism on domestic economic policy. As the War on Terror expanded, however, neoconservatism came back home with the creation and expansion of the surveillance state.

At the same time, neoliberalism went from domestic to global, and here I am not just thinking about neoliberal experiments, like Pinochet's Chile or post-Soviet Russia, but the financialization of the world economy and the adoption of kleptocracy as the world economic model.

jest on Mon, 08/20/2012 - 5:55am

I'm now under the opinion that you can't talk about any of the "neo-isms" without talking about the corporate state.

That's really the tie that binds the two things you are speaking of.

With neocons, it manifests itself through the military-industrial complex (Boeing, Raytheon, etc.), and with neolibs it manifests itself through finance and industrial policy.

For example, you need the US gov't to bomb Iraq (Raytheon) in order to secure oil (Halliburton), which is priced & financed in US dollars (Goldman Sachs). It's like a 3-legged stool; if you remove one of these legs, the whole thing comes down. But each leg has two components, a statist component and a corporate component.

The entity that enables all of this is the corporate state.

It also explains why economic/financial interests (neolib) are now considered national security interests (neocon). The viability of the state is now tied to the viability of the corporation.

lambert on Mon, 08/20/2012 - 9:18am

Corporate/statist (not sure "corporate" captures the looting/rentier aspect though). We see it everywhere, for example in the revolving door.

I think the stool has more legs and is also more dynamic; more like Ikea furniture. For example, the press is surely critical in organizing the war.

But the yin/yang of neo-lib/neo-con is nice: It's as if the neo-cons handle the kinetic aspects (guns, torture) and the neo-libs handle the mental aspects (money, mindfuckery) but both merge (like Negronponte being on the board of Americans Select) over time as margins fall and decorative aspects like democratic institutions and academic freedom get stripped away. The state and the corporation have always been tied to each other but now the ties are open and visible (for example, fines are just a cost of doing business, a rent on open corruption.)

And then there's the concept of "human resource," that abstracts all aspects of humanity away except those that are exploitable.

First they ignore you, then they ridicule you, then they fight you, then you win. -- Mahatma Gandhi

jest on Mon, 08/20/2012 - 1:37pm

I like the term much better than Fascist, as it is 1) more accurate, 2) avoids the Godwin's law issue, and 3) makes them sound totalitarianist.

Yes, I would agree that additional legs make sense. The media aspect is essential, as it neutralizes the freedom of the press, without changing the constitution. It dovetails pretty well with the notion of Inverted Totalitarianism.

I think you could also make the argument that Obama is perhaps the most ideal combination of neolib & neocon. The two sides of him flow together so seamlessly, no one seems to notice. But that's in part because he is so corporate.

Lex on Mon, 08/20/2012 - 8:28am

Actually, neoliberalism is an economic term. An economic liberal in the UK and EU is for open markets, capitalism, etc. You're right that neoliberalism comes heavily from the University of Chicago, but it has little to do with American political liberalism.

A reading of the classical liberal economists puts some breaks on the markets, corporations, etc. Neoliberalism goes to the illogical extremes of market theory and iirc, has some influence from the Austrian school ... which gives up on any pretense of scientific exposition of economics or rationality at the micro level, assuming that irrationality will magically become rational behavior in aggregate.

Therefore, US conservatives post Eisenhower but especially post Reagan are almost certainly economic neoliberals. Since Clinton, liberals/Democrats have been too (at least the elected ones). You nailed neoconservative and both parties are in foreign policy since at least Clinton ... though here lets not forget to go back as far as JFK and his extreme anti-Communism that led to all sorts of covert operations, The Bay of Pigs, Vietnam, and the Cuban Missile Crisis. Remember, the Soviets put the missiles in Cuba because we put missiles in Turkey and they backed down from Cuba because we agreed to remove the missiles from Turkey; Nikita was nice enough not to talk about that so that Kennedy didn't lose face.

"Don't believe them, don't fear them, don't ask anything of them" - Aleksandr Solzhenitsyn

Hugh on Mon, 08/20/2012 - 3:57pm

I agree that neoconservatism and neoliberalism are two facets of corporatism/kleptocracy. I like the kinetic vs. white collar distinction.

The roots of neoliberalism go back to the 1940s and the Austrians, but in the US it really only comes into currency with Clinton as a deliberate shift of the Democratic/liberal platform away from labor and ordinary Americans to make it more accommodating to big business and big money. I had never heard of neoliberalism before Bill Clinton but it is easy to see how those tendencies were at work under Carter, but not under Johnson.

This was a rough and ready sketch. I guess I should also have mentioned PNAC or the Project to Find a New Mission for the MIC.

Hugh on Mon, 08/20/2012 - 10:44pm

I have never understood this love of Clinton that some Democrats have just as I have never understood the attraction of Reagan for Republicans. There is no Clinton faction. There is no Obama faction. Hillary Clinton is Obama's frigging Secretary of State. Robert Rubin and Larry Summers, both of whom served as Bill Clinton's Treasury Secretary, were Obama's top financial and economic advisors. Timothy Geithner was their prot�g�. Leon Panetta Obama's Director of the CIA and current Secretary of Defense was Clinton's Director of OMB and then Chief of Staff.

The Democrats as a party are neoconservative and neoliberal as are Obama and the Clintons. As are Republicans.

What does corporations need regulation mean? It is rather like saying that the best way to deal with cancer is to find a cure for it. Sounds nice but there is no content to it. Worse in the real world, the rich own the corporations, the politicians, and the regulators. So even if you come up with good ideas for regulation they aren't going to happen.

What you are suggesting looks a whole lot another iteration of lesser evilism meets Einstein's definition of insanity. How is it any different from any other instance of Democratic tribalism?

Lex on Mon, 08/20/2012 - 11:49pm

Perhaps it should be pointed out that the Clintons became fabulously wealthy just after Bill left office, mostly on the strength of his speaking engagements for the financial sector that he'd just deregulated. Both he and Hillary hew to a pretty damned neoconservative foreign policy ... with that dash of "humanitarian interventionism" that makes war palatable to liberals.

But your deeper point is that there isn't enough of a difference between Obama and Bill Clinton to really draw a distinction, not in terms of ideology. What a theoretical Hillary Clinton presidency would have looked like is irrelevant, because both Bill and Obama talked a lot different than they walked. Any projection of a Hillary Clinton administration is just that and requires arguing that it would have been different than Bill's administration and policies.

The unfortunate fact of the matter is that at that level of politics, the levers of money and power work equally well on both party's nomenklatura. They flock to it like moths to porch light.

That the money chose Obama over Clinton doesn't say all that much, because there's no evidence suggesting that the money didn't like Clinton or that it would have chosen McCain over Clinton. It's not as if Clinton's campaign was driven into the ground by lack of funds.

Regardless, that to be a Democrat i would kind of have to chose between two factions that are utterly distasteful to me just proves that i have no business being a Democrat. And since i wouldn't vote for either of those names, i guess i'll just stick to third parties and exit the political tribalism loop for good.

"Don't believe them, don't fear them, don't ask anything of them" - Aleksandr Solzhenitsyn

[Jan 10, 2014] The Roots of the Next Crisis, and the Dark Hallway Beyond

Jesse's Caf� Am�ricain
"Those who fail to exhibit positive attitudes, no matter the external reality, are seen as maladjusted and in need of assistance. Their attitudes need correction...

Suddenly, abused and battered wives or children, the unemployed, the depressed and mentally ill, the illiterate, the lonely, those grieving for lost loved ones, those crushed by poverty, the terminally ill, those fighting with addictions, those suffering from trauma, those trapped in menial and poorly paid jobs, those whose homes are in foreclosure or who are filing for bankruptcy because they cannot pay their medical bills, are to blame for their negativity.

The ideology justifies the cruelty of unfettered capitalism, shifting the blame from the power elite to those they oppress."

Chris Hedges

Here is a recent conversation I had with a friend about the current state of the US recovery. As an accountant with a wide range of exposures, I enjoy hearing his perspective since I no longer have that sort of current insight into the corporate culture in America. I have years of background running large businesses in corporations, and some forays into large scale M&A work, so I have seen quite a bit of it. The methods rarely change, merely the guises and degrees.

Here are excerpts from his side of the conversation with only one parenthetical comment of my own.

"I don't think we're seeing profits in a traditional sense. Instead, it appears to me that we're watching a long, drawn out LBO'ing of America. It appears that companies are liquidating capital and returning it as opposed to earnings spreads on revenue.

It seems like we're seeing the final blow-off phase that started with the stock option becoming the primary form of compensation for corporate talent. By drawing out the LBO, they re-stock their options each year with a guaranteed return thanks to the Fed and their own Treasury Departments.

The problem is that you can't have systematic corporate buybacks with employment/economic growth as they create diametrically opposite outcomes. The more work I do, the more I conclude that the US economy has not expanded since 2006.

I was looking at mutual fund data the other day and it showed that people moved their fixed income money into domestic equity - $185 billion in liquidated bond funds to buy $175 billion in equity funds. This happened after the Fed announced tapering was on the table. Just like the gold market, I suspect that "someone" forced the liquidation of bond funds and herded the money into equity funds to keep the rally going. (I think it is perfectly reasonable to flee bond funds at any time that interest rates are turning higher. Bond funds often take it on the chin in such a deleveraging of a long term interest rate trend. However, I think the whole taper thing was hyped and used by the wiseguys, as are most things these days by our financial masters of the universe. - Jesse)

Coincidentally, corporations used half a trillion in cash flow on buybacks. It's a liquidity game but with limitations. What's the next asset that can be liquidated or levered? They're still working on gold but sometime soon, the price of gold will be set in the East, where the gold resides. Agricultural commodities are being liquidated but that ensures a drop in planting next year. Oil is too valuable on the geopolitical front to liquidate.

There are certainly winners in this economy but far more losers. At some point, the weight of the losers acts against the winners, many of whom are levered up with confidence. Corporations can liquidate equity capital but we all know how the LBO'd companies operated in the 1990's. In many ways, they've gotten corporations to behave like consumers did in the 2000's, only this time they're trained to buy back their own stock. Every cycle has natural limits.

We know that corporate cash flow is no longer growing and we know that it's more expensive to sell debt today than a year ago. We also know that the Fed sees the stock market as their proof of success. So how does this shakeout? If corporations are a lemon, how much juice can you squeeze out of the lemon?"

Although I do not wish to be an alarmist, I have to say that this trend of attempting to sustain the unsustainable has gone on longer than I had previously thought possible.

I am fairly sure that the next crisis will bring these things to a head and some sort of resolution. But therein also lies great danger. Philosophies that have grown time can have deep roots, and when faced with what to them is an intolerable change, can react somewhat excessively. They may even welcome the opportunity to act excessively and decisively, at least in their own minds, as the path to winning.

When a ruling subculture that has become accustomed to crushing and liquidating things for its own power and pleasure, whether it is natural resources, the environment, crops, animals, land, or social organizations, eventually runs out of things, it can become frustrated and angry in its seeming impotence to continue on, to keep expanding.

Indirectly and somewhat benignly at first, but with a growing efficiency and determination over time, it will begin with the weak and the defenseless, attacking and objectifying them, even in the most petty of ways and impositions. It will turn to its critics, and then everyone who is defined by them as 'the other.'

That is when a predatory social and economic philosophy can turn into pure fascism, and start liquidating people. And finally it liquidates and consumes itself.

But really, no one wakes up one morning and suddenly decides, 'Today I will become a monster, and wantonly kill innocent women and children.'

Otherwise ordinary people get to that point slowly, one convenient rationalization for their 'necessary and expedient' behavior at a time. After all, they are the good people, they are the strong, they are the most successful and the favored.

They are the entitled, and not these others who would seek to drain them, drag them back down. They are the champions of progress and achievement and civilisation, the hardest working, and the epitome of mankind.

What could possibly go wrong?

"He prompts you what to say, and then listens to you, and praises you, and encourages you. He bids you mount aloft. He shows you how to become as gods. Then he laughs and jokes with you, and gets intimate with you; he takes your hand, and gets his fingers between yours, and grasps them, and then you are his."

J. H. Newman, The AntiChrist

If you are one who thinks that the above 'could not possibly happen here,' and I am sure that there are many, you may wish to read the following vignette from modern US history. Alan Nasser, FDR's Response to the Plot to Overthrow Him

[Jan 10, 2014] The Recovery� In One Chart

08 January 2014 | Jesse's Caf� Am�ricain
"A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules...

Such an economy kills. "

Jorge Mario Bergoglio, Francis I

"When you won, you divided the profits amongst you, and when you lost, you charged it to the Bank [of the United States]...

You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table), I will rout you out."

Andrew Jackson

Corporatism by any other name, or brand...

h/t for the chart to those wild and crazy guys at GMU.

Posted by Jesse at 9:45 PM

Category: audacious oligarchy, corporatism, financial coup d'etat, potemkin, Second Bank of the United States

The Economic System of Corporatism

I think another important distinction between state capitlism and corporatism is that in state capitalism state control corporations (like was the case in the USSR), while in corporatism corporations control the state (like is the case in the USA).

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

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

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

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

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

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

In the above table several of the regimes were brutal, totalitarian dictatorships, usually labeled fascist, but not all the regimes that had a corporatist foundation were fascist. In particular, the Roosevelt New Deal despite its many faults could not be described as fascist. But definitely the New Deal was corporatist.

The architect for the initial New Deal program was General Hugh Johnson. Johnson had been the administrator of the military mobilization program for the U.S. under Woodrow Wilson during World War I. It was felt that he did a good job of managing the economy during that period and that is why he was given major responsibility for formulating an economic program to deal with the severe problems of the Depression. But between the end of World War I and 1933 Hugh Johnson had become an admirer of Mussolini's National Corporatist system in Italy and he drew upon the Italian experience in formulating the New Deal. It should be noted that many elements of the early New Deal were later declared unconstitutional and abandoned, but some elements such as the National Labor Relations Act which promoted unionization of the American labor force are still in effect. One part of the New Deal was the development of the Tennessee River Valley under the public corporation called the Tennessee Valley Authority (TVA). Some of the New Dealer saw TVA as more than a public power enterprise. They hoped to make TVA a model for the creation of regional political units which would replace state governments. Their goal was not realized. The model for TVA was the river development schemes carried out in Spain in the 1920's under the government of Miguel Primo de Rivera. Jose Antonio Primo de Rivera, the son of Miguel Primo de Rivera, was the founder of Franco's National Syndicalism.

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

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

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

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

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

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

[Nov 20, 2013] How Washington D.C. Is Sucking The Life Out Of America

Zero Hedge

The root cancer at the core of the U.S., and indeed global economy, is cronyism and an absence of the rule of law when it comes to oligarchs. In the U.S., this cronyism is best described as an insidious relationship between large multi-national corporations and big government to funnel all of the wealth and resources of the nation to themselves at the expense of everyone else. In a genuine free market defined by heightened competition and governed by an equal application of the rule of law to all, the 0.1% does not aggregate all of a nation's wealth. This sort of thing only happens in crony capitalism, which is basically nothing more than complete and total insider deals to aggregate newly created money into the hands of the few. The following profile of Washington D.C.'s so-called "boom" from the St. Louis Post-Dispatch pretty much tells you all you need to know.

* * *

The more corrupt the state, the more numerous the laws.
- Tacitus

Ever since I started writing about what is happening in the world around me, my primary theme has been that the root cancer at the core of the U.S., and indeed global economy, is cronyism and an absence of the rule of law when it comes to oligarchs. In the U.S., this cronyism is best described as an insidious relationship between large multi-national corporations and big government to funnel all of the wealth and resources of the nation to themselves at the expense of everyone else. In a genuine free market defined by heightened competition and governed by an equal application of the rule of law to all, the 0.1% does not aggregate all of a nation's wealth. This sort of thing only happens in crony capitalism, which is basically nothing more than complete and total insider deals to aggregate newly created money into the hands of the few.

The following profile of Washington D.C.'s so-called "boom" from the St. Louis Post-Dispatch pretty much tells you all you need to know. While I think the tone of the article is absurd considering this is no "economic boom," but merely parasitic wealth extraction on a unprecedented scale, it is still quite telling. It is no coincidence that as D.C. has grown wealthier, the nation has become much, much poorer. Key excerpts below:

The avalanche of cash that made Washington rich in the last decade has transformed the culture of a once staid capital and created a new wave of well-heeled insiders.

The winners in the new Washington are not just the former senators, party consiglieri and four-star generals who have always profited from their connections. Now they are also the former bureaucrats, accountants and staff officers for whom unimagined riches are suddenly possible. They are the entrepreneurs attracted to the capital by its aura of prosperity and its super-educated workforce. They are the lawyers, lobbyists and executives who work for companies that barely had a presence in Washington before the boom.

At the same time, big companies realized that a few million spent shaping legislation could produce windfall profits. They nearly doubled the cash they poured into the capital.

Sorry these aren't "entrepreneurs," they are parasitic opportunists.

At Cafe Joe, a greasy spoon near the National Security Agency in suburban Maryland, software engineers with top-secret clearances merely have to look at the place mats under their fried eggs to find federal contractors trying to entice them away from their government jobs with six-figure salaries and stock options. The place-mat ads cost $250 a week. They are sold out through 2014.

During the past decade, the region added 21,000 households in the nation's top 1 percent. No other metro area came close.

Two forces triggered the boom.

The share of money the government spent on weapons and other hardware shrank as service contracts nearly tripled in value. At the peak in 2010, companies based in Rep. James Moran's congressional district in Northern Virginia reaped $43 billion in federal contracts - roughly as much as the state of Texas.

Back in 2000, the company spent a mere $260,000 lobbying Congress, federal records show. Its lobbyists mostly talked to lawmakers about health care: medical manufacturing issues, Medicare reimbursement rates, privacy of health records, and congressional oversight of the Food and Drug Administration.

By the end of the decade, the company had broadened its horizons dramatically. "Government relations" now accounted for $2.6 million - a tenfold increase. On one quarterly disclosure report from 2010, Boston Scientific listed 35 different pieces of legislation on which it was lobbying. They included proposals on patent reform, tax penalties for moving American jobs abroad, tax credits for research and development, rules for transporting lithium batteries, limits on workers' ability to form labor unions and federal regulation of certain types of financial derivatives.

Government relations has become so important to the bottom line of a modern company, Becker said, that it should be a required course at business school. The numbers suggest she's right. Companies spent about $3.5 billion annually on lobbying at the end of the last decade, a nearly 90 percent increase from 1999 after adjusting for inflation, political scientist Lee Drutman notes in a forthcoming book, "The Business of America Is Lobbying."

And you wonder why the economy sucks?

Legal services also boomed, fueled by the growing complexities of federal business regulations. The number of lawyers in the D.C. metro area increased by a third from 2000 to 2012, nearly twice as fast as the growth rate nationwide. And those lawyers have the highest mean salaries in the country, according to George Mason University's Center for Regional Analysis.

The more companies spend on influence, the lower their effective tax rates and the higher their stock returns compared with competitors', according to recent research. A company called Strategas has built an index to track the stock performance of the 50 companies that lobby the most; last year, that index outperformed the rest of the market by 30 percent.

If you still are confused why the U.S. economy is completely stuck in the mud, look no further than the parasites of Washington D.C.

Full article here.

The Ghost of Authoritarianism in the Age of the Shutdown by Henry A Giroux

October 15, 2013

(Image: <a href=" http://www.flickr.com/photos/truthout/5079871652/in/set-72157628843920995" target="_blank"> Jared Rodriguez / t r u t h o u t; Adapted: cliff1066™, j / f / photos</a>)(Image: Jared Rodriguez

In the aftermath of the reign of Nazi terror in the 1940s, the philosopher Theodor Adorno wrote:

National Socialism lives on, and even today we still do not know whether it is merely the ghost of what was so monstrous that it lingers on after its own death, or whether it has not yet died at all, whether the willingness to commit the unspeakable survives in people as well as in the conditions that enclose them.1

.... ... ...

For Adorno, the conditions for fascism would more than likely crystallize into new forms. For instance, they might be found in the economic organization of a society that renders

"the majority of people dependent upon conditions beyond their control and thus maintains them in a state of political immaturity. If they want to live, then no other avenue remains but to adapt, submit themselves to the given conditions."3

In part, this speaks to the role of corporate-controlled cultural apparatuses that normalize anti-democratic ideologies and practices as well as to the paramount role of education in creating a subject for whom politics was superfluous. For Adorno, fascism in its new guise particularly would launch a systemic assault on the remaining conditions for democracy through the elimination of public memory, public institutions in which people could be educated to think critically and the evisceration of public spaces where people could learn the art of social citizenship, thoughtfulness and critical engagement. He also believed that the residual elements of the police state would become emergent in any new expression of fascism in which the corporate and military establishments would be poised to take power. Adorno, like Hannah Arendt, understood that the seeds of authoritarianism lie in the

"disappearance of politics: a form of government that destroys politics, methodically eliminating speaking and acting human beings and attacking the very humanity of first a selected group and then all groups. In this way, totalitarianism makes people superfluous as human beings."4

The American political, cultural, and economic landscape is inhabited by the renewed return of authoritarianism evident in the ideologies of religious and secular certainty that legitimate the reign of economic Darwinism, the unchecked power of capital, the culture of fear and the expanding national security state. The ghosts of fascism also are evident in what Charles Derber and Yale Magress call elements of "the Weimer Syndrome," which include a severe and seemingly irresolvable economic crisis, liberals and moderate parties too weak to address the intensifying political and economic crises, the rise of far-right populist groups such as the Tea Party and white militia, and the emergence of the Christian Right, with its racist, anti-intellectual and fundamentalist ideology.5 The underpinnings of fascism are also evident in the reign of foreign and domestic terrorism that bears down on the so called enemies of the state (whistleblowers and nonviolent youthful protesters) and on those abroad who challenge America's imperial mission; it is also visible in a growing pervasive surveillance system buttressed by the belief that everyone is a potential enemy of the state and should be rightfully subject to diverse and massive assaults on rights to privacy and assembly.6

... ... ...

During the past few decades, it has become clear that those who wield corporate, political and financial power in the United States thrive on the misery of others. Widening inequality, environmental destruction, growing poverty, the privatization of public goods, the attack on social provisions, the elimination of pensions and the ongoing attacks on workers, young protesters, Muslims and immigrants qualify as just a few of the injustices that have intensified with the rise of the corporate and financial elite since the 1970s. None of these issues are novel, but the intensification of the attacks and the visibility of unbridled power and arrogance of the financial, corporate and political elite that produces these ongoing problems are new and do not bode well for the promise of a democratic society.

Such failings are not reducible either to the moral deficiencies and unchecked greed of both major political parties or the rapacious power of the mega banks, hedge funds and investment houses. Those intellectuals writing to acknowledge the current state of politics in America understand the outgrowth of a mix of rabid racism, religious fundamentalism, civic illiteracy, class warfare and a savage hatred of the welfare state that now grips the leadership of the Republican Party.8 The new extremists and prophets of authoritarianism are diverse, and their roots are in what Chris Hedges calls the radical Christian right,9 Michael Lind calls the reincarnation of the old Jeffersonian-Jacksonian right10 and what Robert Parry and Andrew O'Hehir call racist zealots.11 All of these elements are present in American politics, but they are part of a new social formation in which they share, even in their heterogeneity, a set of organizing principles, values, policies, modes of governance and ideologies that have created a cultural formation, institutional structures, values and policies that support a range of anti-democratic practices ranging from the militarization of public life and acts of domestic terrorism to the destruction of the social state and all those public spheres capable of producing critical and engaged citizens.

Needless to say, all of these groups play an important role in the rise of the new extremism and culture of cruelty that now characterizes American politics and has produced the partial government shutdown and threatens economic disaster with the debt-ceiling standoff. What is new is that these various fundamentalist registers and ideological movements have produced a coalition, a totality that speaks to a new historical conjuncture, one that has ominous authoritarian overtones for the present and future. There is no talk among the new extremists of imposing only an extreme Christian religious orthodoxy on the American people or simply restoring a racial state; or for that matter is there a singular call for primarily controlling the economy. The new counter-revolutionaries and apostles of the Second Gilded age are more interested in imposing a mode of authoritarianism that contains all of these elements in the interest of governing the whole of social life. This suggests a historical conjuncture in which a number of anti-democratic forces come together to "fuse and form a kind of configuration" - a coming together of diverse political and ideological formations into a new totality.12 The partial government shutdown is a precondition and test run for a full coup d'�tat by the social formations driving this totality. And while they may lose the heated battle over the government shutdown and the debt ceiling, they have succeeded in executing their project and giving it some legitimacy in the dominant media.

Hiding beneath the discourse of partisan politics as usual, the authoritarian face of the new extremism is overlooked in the dominant media by terms such as "the opposing party," "hard-line conservatives"13 or, in the words of New York Times columnist Sam Tanenhous, the party of "a post consensus politics."14 In fact, even progressives such as Marian Wright Edelman fall into this trap in writing that "some members of Congress are acting like children - or, more accurately, worse than children."15 In this case, the anti-democratic ideologies, practices and social formations at work in producing the shutdown and the potential debt-ceiling crisis are not merely overlooked but incorporated into a liberal discourse that personalizes, psychologizes or infantilizes behaviors that refuses to acknowledge or, in fact, succumbs to totalitarian tendencies.

.... ... ...

Obama may not be responsible for the government shutdown and the debt ceiling crisis, but he can be charged with furthering a climate of lawlessness that feeds the authoritarian culture supportive of a range of political, economic and cultural interests. The American anti-war activist Fred Branfman argues that:

Under Mr. Obama, America is still far from being a classic police-state of course. But no President has done more to create the infrastructure for a possible future police-state. This infrastructure will clearly pose a serious danger to democratic ideals should there be more 9/11s, and/or increased domestic unrest due to economic decline and growing inequality, and/or massive global disruption due to climate change.23

The new extremists in the Republican Party are simply raising the bar for the authoritarian registers and illegal legalities that have emerged under Bush and Obama in the past decade - including the bailing out of banks guilty of the worst forms of corporate malfeasance, the refusal to prosecute government officials who committed torture, the undermining of civil liberties with the passage of the Patriot Act, the National Defense Authorization Act, the establishment of a presidential kill list and the authorization of widespread surveillance to be used against the American people without full transparency.

The current crisis has little to do with what some have called a standoff between the two major political parties. It is has been decades in the making and is part of a much broader coup d'�tat to benefit the financial elite, race baiters, war mongers and conservative ideologues such as the right-wing billionaires, David and Charles Koch, Rand Paul, Ted Cruz, Americans for Prosperity, the Club for Growth, the Heritage Foundation policy hacks and other extremist individuals and organizations that believe that democracy poses a threat to a government that should be firmly in the hands of Wall Street and other elements of the military-industrial-surveillance-prison complex.

... ... ...

In 2004, I wrote a book titled The Terror of Neoliberalism: The New Authoritarianism and the Eclipse of Democracy.33 What is different almost a decade later is a mode of state repression and an apparatus of symbolic and real violence that is not only more pervasive and visible but also more unaccountable, more daunting in its arrogance and disrespect for the most fundamental elements of justice, equality and civil liberties

... ... ...

To read more articles by Henry A. Giroux and other authors in the Public Intellectual Project, click here.

[Sep 06, 2013] William Greider on the New American Caste System (and the Slow Return to Liberalism) By David Dayen

January 27, 2011

...you can confirm the end of New Deal liberalism with the last couple years, although the dismantling begun in the 1970s.

We have reached a pivotal moment in government and politics, and it feels like the last, groaning spasms of New Deal liberalism. When the party of activist government, faced with an epic crisis, will not use government's extensive powers to reverse the economic disorders and heal deepening social deterioration, then it must be the end of the line for the governing ideology inherited from Roosevelt, Truman and Johnson.

Political events of the past two years have delivered a more profound and devastating message: American democracy has been conclusively conquered by American capitalism. Government has been disabled or captured by the formidable powers of private enterprise and concentrated wealth. Self-governing rights that representative democracy conferred on citizens are now usurped by the overbearing demands of corporate and financial interests. Collectively, the corporate sector has its arms around both political parties, the financing of political careers, the production of the policy agendas and propaganda of influential think tanks, and control of most major media.

That's a nice 150-word encapsulation of what has happened.

[Aug 27, 2013] The Unconscious Civilization by John Ralston Saul

Amazon.com

Writing in the same iconoclastic spirit he brought to Voltaire's Bastards: The Dictatorship of Reason in the West, Canadian writer Saul offers a damning indictment of what he terms corporatism, today's dominant ideology. While the corporatist state maintains a veneer of democracy, it squelches opposition to dominant corporate interests by controlling elected officials through lobbying and by using propaganda and rhetoric to obscure facts and deter communication among citizens.

Corporatism, asserts Saul, creates conformists who behave like cogs in organizational hierarchies, not responsible citizens. Moreover, today's managerial-technocratic elite, while glorifying free markets, technology, computers and globalization, is, in Saul's opinion, narrowly self-serving and unable to cope with economic stagnation.

His prescriptions include eliminating private-sector financing from electoral politics, renewing citizen participation in public affairs, massive creation of public-service jobs and a humanist education to replace narrow specialization. His erudite, often profound analysis challenges conservatives and liberals alike with its sweeping critique of Western culture, society and economic organization.

LeeBoy (Pine Bluff, Arkansas)

A coup d'etat in slow motion?, August 12, 2005

A key premise of the book is that a life worth living, the so-called examined life, the fully aware life cannot take place without individuals in the society being fully conscious - or without seeking the kind of self-knowledge that readily can be translated into action.

Saul maintains that we have a "new religion," the blind pursuit of self-interest. It is led by an ideology of "corporatism," which has deformed the American ideal of a life worth living into one devoid of a concept of the common public good. Through it, one of America's most noble ideas, that of "rugged individualism" has been sullied, distorted and transformed into an ideology of selfishness; an ideology that has so manipulated our reality that our the language and knowledge, usually placed in the service of actions and designed to improve our way of life, has become useless.

The corporate compartmentalization of, and distortion of public knowledge, and the accompanying enforced conformity has so confused us and has so muted our voices that knowledge no longer has any effect on our consciousness nor on our actions. Individual selfishness as "modeled" by corporate self-interest has hi-jacked Western civilization as we have come to know it.

The book describes how corporatism has accomplished this feat: It has used its own ideology of self-interest (and the promise of certainty that all ideologies promote) to render us passive and conformist in areas that matter and non-conformist in those that do not. This new pseudo or false individualism has the effect of immobilizing and disarming our civilization intellectually and thus renders it unconscious.

The most important way it does this is by denying and undermining the legitimacy of the individual as the primary unit and defender of, as well as the center of gravity of the public good. The public good becomes deformed by, and subordinate to, and equated with the narrow pursuit of corporate self-interests, as most often defined by the pursuit of profits and associated corporate perks. The hedonistic model of the corporate life is projected on to society writ large as the only life worth living.

The impetus for placing corporate interests (and the corporate model of our humanity) at center stage in the drama of Western Civilization, seems to have come about through the misconception that rugged individualism, democracy and our current understanding of the public good were once defined by, depend on, and proceed directly from, the pursuit of economic interests. This is a misconception because in actual fact exactly the reverse is true: It was notions of the public good as defined by democracy and individualism that gave rise to economic interests, and not the other way around.

Moreover, economic models have been so spectacularly wrong and unsuccessful, that they could not have survived without an ideology that renders the public unconscious. Saul suggests that even the best economic models amount to little more than passive tinkering. The fact that we have come to rely on them -- even though we know they are seriously flawed and have little or no basis in reality -- is compelling evidence of our lack of memory and thus, of our lack of collective consciousness.

According to the author, it is the proper use of knowledge and memory that renders us conscious (and thus by extension, also renders us human). The misuse of knowledge and memory through corporate and technological, manipulation, specialization and compartmentalization is just a deeper form of collective denial.

Said differently, (corporate generated) specialization creates its own illusions. When knowledge actually becomes confused and is sufficiently narrowed, compartmentalization promotes the illusion that knowledge is multiplied when in fact it has shrunken. It leaves the impression that more rather than less knowledge is being created. It promotes the illusion that truth is only what the specialist can measure; that "m (and more importantly that a managerial class is important and necessary). Finally, it creates the illusion that the ideology, which promotes corporatism, produces certainty (the main job of any ideology).

These illusions all have facilitated the corporate takeover of what would otherwise be seen as, the public interest. By doing so, the legitimacy of the individual as the center of gravity of the public good is crowded out, undermined and denied.

Thus the management elite, (with their suitcases full of money to buy off our elected representatives) like a cancer, is let loose on society. It lives within its own insulated cocoon creating an artificially interiorized sense of its own importance, wellbeing and its own distorted vision of civilization as a whole. Insulated from within, the management elite is free to grow without bounds, without accountability, and in complete disregard for the reality "out there," and always only to satisfy and service its own selfish needs. Truth is not in the world "out there" but is in what the professionals can measure and whatever is reported to these insulated elites. The deeper the insulated managerial class retreats into its own interiorized illusions of reality, the more confused language becomes and the less likely knowledge can be translated into actions that will effect the wider reality, and thus the public good.

In its pursuit to deny the legitimacy of the public good and to replace it with corporate econometric models of reality, Saul has traced the history of this process and gives many examples of how it works: through media propaganda, films, ads, music, sports and style-and always through insinuations of what is considered proper thought and ways of behaving.

One of the better examples he gives is how unemployment keeps getting redefined downward with no relation to the reality of the labor market but mostly to suit the needs of the neo-cons (the courtiers of the corporate elites). Or how, even as companies are losing money and are laying-off large numbers of ordinary workers, the salaries and incentive packages of the managerial elites continue to rise - often even until the very day the companies actually go bust.

Another example given is how through the process of globalization, that by the year 2020 the U.S. will be fully reduced to a Third World country. We are told that our future standard of living will depend entirely on globalization. Here globalization (like its companion concept, productivity) is a synonym for pegging workers' wage rates to the lowest wages available worldwide. It is never mentioned in such discussions that the salaries and incentive packages of the managerial elites will actually rise significantly as this "mother of all least common denominators economic formulas" is being applied to the lower end of the economic class scale. Taken to its logical conclusion, the salary of U.S. workers will equal those of Chinese peasants by 2020; and the corporate elites all will be filthy rich like Sam Walton. This "Wal-Martization" of America is already well in train.

Why are we so susceptible to being manipulated by corporate generated ideology and power? Saul gives an answer: We have an addictive weakness for large illusions that are tied to power and that can simplify our worldview by promising emotional certainty. The examples he gives are none other than the great religions themselves, and their spin-offs of Marxism, fascism and most of the autocratic governments of the past, including Hitler's Third Reich.

The roads to serfdom, or to fascism or communism (or pick your own ism) all intersect at the same ideology reference points: they begin as enforced social and political orthodoxy and conformity: first fashion and style; then the social enforcement of ways of thinking; and then patriotism is made into a religious-like requirement; after which rights and free speech are suppressed in the name of national security or loyalty to the state. One-by-one laws are suspended and then arbitrary arrests and disappearances begin; and finally the country is rendered completely passive and unconscious - compressed into a pseudo-patriotic religious trance.

In the modern era, this progression is by now all too familiar: It leads directly to the de-legitimatization of the citizen as the primary defender of the public good. This just as inevitably leads to handing over power to those whose self-interests are larger than their dedication to the preservation of the public good or even to the preservation and defense of the state itself.

The citizen then ceases to be able to determine what is, and is not real. He becomes immobilized like a child, unable to judge what is in his own best interests -- let alone what is in the best interest of the public good or the state. He is then forced to sing for his dinner and to dance to the corporate tune for any sense of wellbeing or self-worth. The "public good" becomes completely subordinate to the "corporate good."

What Saul admonishes us about is already imminently clear: that the kind of society we have is determined by where the true source of legitimacy lies. Today legitimacy in America -- that is its power, organization, and influence -- lies not in the vote and in stylized but impotent public citizen participation, but in the hands of the lobbyists, the technocrats, and the anti-democratic and anti-patriotic corporate vampires.

Saul did not need to tell us that all the serious decisions are now made in the back rooms without consulting the people. The best "the people" can hope for (and indeed what they yearn for) is that the decisions made over their heads will at least retain a semblance of emotional ideological purity.

While the corporate robber barons sneak out the back door to their off-shore tax havens (with the nations valuables in tow), the public good has been distorted and transformed into little more than "What I have" or into bumper sticker sized emotionalisms: the advancement of creative design and the right to post the Ten Commandments on the court house steps, abortion and gun rights, anti-Affirmative Action, states rights, etc. Because of its lack of consciousness, Americans have lost the ability to conceptualize a common good larger than their own immediate individual narrowly defined self-interests.

How do we get out of this coup d'etat in slow motion? Saul's answer is that we must change the dynamics of the process but he gives few specifics on how this can be done. This a great and very sobering read. Five stars.

Joyce (Bonham, Texas)

Makes the complex understandable, November 29, 2012

Saul has unusual skill in making complex entanglements understandable, colorful, and often humorous. His satire is biting. His irony is satisfying. His writing is dense with fresh insights about difficult subjects, so reading him is challenging at times but worth the effort. In this book, Saul explores how the dictatorship of reason unbalanced by other human qualities (common sense, ethics, intuition, creativity, memory) leads to the rational but antidemocratic structures of corporatism. He lays out the historical roots of corporatist doctrines (going back to Plato) and how they are so woven into our social fabric that they threaten the practice of democracy. He notes how our civilization is blinded to its true character by sentiment and ideology and argues that while Fascism was defeated in World War II, its corporatist doctrines are powerfully influencing our society today.

For Saul, one central aspect of the corporatist doctrine is its hijacking of the term "individualism," defining it as self-absorption or selfishness. Both Left and Right positions are based upon that definition. The Left agrees with the Right that individualism is selfishness, only it wants individual rights to be equally distributed and more fair. Whereas Saul talks about individualism thus:

"Rights are a protection from society. But only by fulfilling their obligations to society can the individual give meaning to that protection. . . Real individualism then is the obligation to act as a citizen."

And further:

"The very essence of corporatism is minding your own business. And the very essence of individualism is the refusal to mind your own business. This is not a particularly pleasant or easy style of life. It is not profitable, efficient, competitive or rewarded. It often consists of being persistently annoying to others as well as being stubborn and repetitive."

And further still:

"Criticism is perhaps the citizen's primary weapon in the exercise of her legitimacy. That is why, in this corporatist society, conformism, loyalty, and silence are so admired and rewarded."

Saul discusses the role that four economic pillars play in either accentuating or reducing our unconscious state as citizens: (1) the marketplace, (2) technology, (3) globalization, and (4) money markets.

Here is my summary of his lessons on these four.

  1. The danger of using the marketplace as our guide is that we are limiting ourselves to the narrow and short-term interests of exclusion. If we wish to lead society we must calculate inclusive costs.
  2. Business schools (following the "scientific management" Frederick Taylor brought to Harvard) treat men and women as mechanisms to be managed along with machines. And we are lining up students behind machines, educating them in isolation when what is really needed is to show them how they can function together in society.
  3. Trade cannot in and of itself solve societal problems. The main effect of globalization has been to shift the tax burden from large corporations onto the middle class. Adam Smith's repeated admonition has been ignored. It is: high wages are essential to growth and prosperity.
  4. Money is not a value in itself. Money in money markets is not available for taxation, and it doesn't really exist. It is pure speculation. We must see what is truly of value to society and reward those things.

This is only a bit of the clarity Saul's book gives us as citizens about what we are dealing with, empowering us with weaponry to overcome the Fascistic creation of corporatism.

Christopher (Seattle, Washington, USA)

A roundhouse shot at corporatist, group-think American life, March 19, 2002

"Are we truly living in a corporatist society that uses democracy as little more than a pressure release valve?"

Not satisfied with hurtling the literary hand-grenade of the 1990's, "Voltaire's Bastards", into the midst of our oblivious Western society, John Ralston Saul has now equipped his metaphorical sniper rifle, and in his crosshairs is the 'deviant class' which has destabilized our American dream. In "The Unconscious Civilization", Saul targets `corporatist' groups, the special interests (both economic and social) which have lulled citizens into replacing their own thoughts with those of factions who magically (and absurdly) claim to represent their beliefs and dreams.

"One of the difficulties faced by citizens today is making sense of what is presented as material for public debate, but is actually no more than the formalized propaganda of interest groups. It is very rare now in public debate to hear from someone who is not the official voice of an organization."

Characteristic of Saul's previous work, "The Unconscious Civilization" is a firm, wind-knocking shot to the gut. But luckily for you, your opponent is also teaching you how to fight. Hear him shout: `Stand up, slothful citizen. Your constitution is failing.'

"The statistics of our crisis are clear and unforgiving. Yet they pass us by--in newspapers, on television, in conversations--as if they were not reality. Or rather, as if we were unable to convert knowledge into action."

Do you feel protected by the Internet, by the millions of voices which you feel will conglomerate to represent you? So how's it working for you so far? Sure we have information, but what the hell good is it doing for the spirit of our nation?

"Knowledge is more effectively used today to justify wrong being done than to prevent it. This raises an important question about the role of freedom of speech. We have a great deal of it. But if it has little practical effect on reality, then it is not really freedom of speech. Without utility, speech is just decorative."

In this work, Saul scopes out the corporatist mindset, the coalescence of many minds into one body with only one voice (corpus from Latin, meaning body), which has invaded business, politics, and civil society alike. The result is chilling, for when we rise to speak, we find our individual words have different meanings to each of these bodies. As a consequence, we are learning to speak less.

"In a corporatist society there is no serious need for traditional censorship or burning, although there are regular cases. It is as if our language itself is responsible for our inability to identify and act upon reality."

We may be blind to the corporatist processes, but we should be able to fairly see their results. In politics: 38% voter turnout rates, lowest political convention viewership, the quashing of third-party voices; in business: the plastering of disclaimers, sloganeering, and that opaque wall of business-speak between every salesman and their customer; in civil society: the inability to progress in conversation without soundbites, and the number of people who flat-out don't want to talk to you.

This partition of words has not obstructed John Ralston Saul, though. An advocate of "aggressive common sense", Saul portrays himself correctly as a classic liberal, defender and klaxon for the citizen, neither champion nor foe of the marketplace.

"The market does not lead, balance, or encourage democracy. However, properly regulated it is the most effective way to conduct business."

"Every important characteristic of both individualism and democracy has preceded the key economic events of our millennium. What's more, it was these characteristics that made most of the economic events possible, not vice-versa."

John Ralston Saul's work consists of five chapters loosely based off a series of 1995 lectures at the University of Toronto. Like "Voltaire's Bastards", Saul here is discursive and entertaining; each chapter is a new dive into an invigorating Arctic lake of realization. Chapter One, "The Great Leap Backwards" launches the assault. The remaining chapters focus on reconstruction... their titles: "From Propaganda to Language", "From Corporatism to Democracy", "From Managers and Speculators to Growth", "From Ideology Towards Equilibrium".

Moderately mistitled (resulting in a one-point demerit in the overall review score), a more appropriate title for this book would have been "The Corporatist Civilization". A true attack on the `unconscious' among us would have been welcome, though Saul does meander briefly into this realm, with a few sections that fit cozily into the overall thesis:

"Perhaps the difficulty with the psychoanalytic movement is that from the beginning it has sent out a contradictory message: Learn to know yourself--your unconscious, the greater unconscious. This will help you to deal with reality. On the other hand, you are in the grip of great primeval forces--unknown and unseen--and even if you do know and see them, it is they who must dominate."

One-quarter the size of "Voltaire's Bastards", Saul this time out initiates a concise attack: on utopias, ideology, technocracy, demagoguery, and group mentality... all of which direct the individual to replace their view of the world with that of an `official spokesman', eerily reversing the vector of our society towards a fascist state. An insightful read; terse, but somewhat condensed and abstract at places. The trade-offs are more than acceptable, though. Steel yourself for a barrage of Truth.

seydlitz89

Lacks The Big Picture, July 3, 2000

John Ralston Saul is considered one of the great humanist essayists of this time. That is true but he is also very much a man of our times, with both the advantages and disadvantages of the current Weltanschauung. I bought this book after having read some rather rave reviews and had high expectations. I can't say that I have got anything from this book that I didn't already have or suspect. He's reinforced some of my opinions without adding to my empherical knowledge to back them. The concept of the individual, individualism if you will, is dominant today, representing a narrow and superficial deformation of the Western idea. Market Capitalism does not guarantee democracy; you can have poor democracies and prosperous dictatorships. Today we are in an unconscious process of masochistic suicide destroying the very substance of our public institutions, institutions which were the products of decades of thought and democratic debate, all in the pursuit of making things more `effective', more `business-like'. . . So according to Saul, and on target IMHO, but what does this all mean? What can we draw from these intermediate conclusions?

He then goes on to describe the crisis that grips the West, which he dates from 1973. Bureaucratic thinking and rationalization continue to manipulate our perceptions, dominate and drive our existence, controlled by what he describes as `Corporatism'. He states,

"the corporatist movement was born in the nineteenth century as an alternative to democracy. It proposed the legitimacy of groups over that of the individual citizen." Pp16-17

Napoleon, Hegel and Bismarck helped the process along by emphasizing rule by elites and adherence to the state. This was all only a lead up to the great

"new all-powerful clockmaker god - the marketplace - and his archangel, technology. Trade is the marketplace's miraculous cure for all that ails us. . . I would suggest that Marxism, fascism and the marketplace strongly resemble each other. They are all corporatist, managerial and hooked on technology as their own particular golden calf." Pp19-20

...Weber warned of the dangers of bureaucracy, of how capitalism mated with ever increasing rationalization and technological innovation would become a very difficult beast to control. He also warned against the subversion of democratic institutions by powerful non-democratic groups with oligarchic tendencies. Saul's view on the triumph of rationalism is also, by the way, influenced by Weber. So instead of damning Weber he should be thanking him. Here we see the tendency so common among US (and Canadian) intellectuals today of putting the blame for their perceived crisis on foreign thinkers (usually German or French) who have some how lead the well-intentioned, but all too trusting North Americans astray. Alan Bloom, on the right, was guilty of the same thing in his The Closing of the American Mind. In all, this tendency represents a mixing up of cause and effect. If you want to look for a foreign culpret, how about the English Utilitarians who put morally accepted self-interest and quest for profit in the service of individual gain above anything else? An attitude that has since then been enthusisatically and uncritically accepted by the mass of American intellectuals.

What is Saul's solution? Persistent public commitment by the citizenry can turn the tables on corporatism. But how, given the power that Saul says the elites have to manipulate and control all the spheres of our existence? What of their ability to define "freedom" in wholly consumerist terms, making it a mere matter of material choice? As long as the US Constitution allows for majority rule, the public will have the last say, but how to mobilize the public, how to educate them as to defending their best interests when the reigns of mass communication are in the hands of the corporatists? How do we make the interests of society take priority over the interests of profit? The moral dilemma in all this is ignored by Saul who distrusts anyone who even mentions it. Unable to follow Nietzsche's lead he stumbles. Nietzsche, alas a foreigner, was also primarily a moralist. Morals are important since they shape the way that we adjust to the struggle for our very existence in an ever more competitive world. While a sense of the spiritual is necessary, the vast bulk of our actions, the reality we must deal with in our every day lives, is economic due to the pervasive market system which is the very air we breathe. It is therefore very much man-made, synthetic, something that has been grafted onto society, not a component of it. Morals are as necessary now as when we lived in small farming communities, since it is by working together, by accepting each others' strengths and weaknesses, by learning to control our own impulses and irrational drives and by accepting the inate worth of each person that we insure not only our own but the survival of our species in the coming hard winter. A, "myth-building" exercise you say, but is it any more a myth than that of "the Market corrects itself and all we need do is trust in it"?

Since the end of the 18th Century we in the West have lost almost every remnant of our pre-Capitalist past. We have forgotten our entire community or social or human-to-human history, we are unable to recall when an action did not infer some sort of self-benefit. We fail to see that the so-called Third World is as we were two hundred years ago. It is not a question of scientific or technological or commercial progress, in the most human sense, but of the maturing and decay of an ideological-based social system.

Saul's main drawback is that he lacks the indepth knowledge of the numerous disciplines necessary for this very complex subject. That and `distance' since he approaches the problem with far too many preconceptions. A much better book in a related subject is Karl Polanyi's The Great Transformation. His history of the market economy provides much of the background necessary to illuminate our current situation. Few if any thinkers today have the breadth of knowledge to provide the big picture of our current post-modern situation. Men like Max Weber, who had a encyclopedic knowledge of several wide fields of study no longer walk the earth. Still a much more refined, yet wide view which would include a fuller understanding of social economics, history, political science, sociology, theology and philosophy is necessary in order to get a grip on the tendencies which are slowly eating away our society and threaten to turn us all into what Max Weber described as "a culture of specialists without spirit, sensualists without heart".

Herbert L Calhoun

Wake up and Smell the Oil Wal-Mart Shoppers, August 10, 2005

If the doubling, in less than a year, of the price of oil for no discernable reason (with no end in sight), and with absolutely no reaction from us or our government is not evidence that something is terribly wrong with our collective mind. Then surely an order of magnitude increase in the cost of medical care and prescription drugs, and the quintupling of our health insurance (for those of us who have any), should be.

Or, one might have imagined that the juxtaposition of soaring corporate profits (in these very same areas) with an effective reduction in "actual wages" everywhere else, would also have shaken us from our deep collective slumber?

Or maybe the fact that we have been led into yet another war for no defensible reasons and without either an exit strategy or a fighting plan -- a war whose justifications and rationale keeps changing with each increased attack from the terrorists as our national debt continues to soar -- would have shaken us out of our passivity.

While our government's response to the needs of the "rank-and-file" is increasingly non-existent, or completely ineffectual, and the "managerial class" continues to rob us blind as they laugh all the way to the bank; we are obsessed with the risk of breast implants, abortion rights, hanging the Ten Commandments in the public square, reality shows (that are anything but real), Janet Jackson's wardrobe malfunction, and how to continue to win at the game of "Democrats and Republicans (or liberals and conservatives, or Blacks versus Whites, or males versus females, or pick your own senseless emotional dichotomy)."

But the very best evidence yet of our lack of consciousness and proof that our society is being thrown under the bus while we watch in horror with our eyes wide open, is when the most devastating critique of our own slothfulness is also the sanest, most compassionate and most eloquent.

Saul in this trenchant sanity check of the society that leads the Western World realizes that the time for vitriol and shouting has long since passed. That is why with eloquence, understated passion and with measured but devastating logic and reason (that quality he so distrusts), he has issued a broadside at the foundation stone of what ails our society most: Rampant and immoral Corporatism.

And even though in the end, his prescription for how we are to extricate ourselves from this dilemma is unconvincing, he has laid the necessary groundwork for serious thinking to begin. If "the people" in Western Democracies are ever to regain control of their minds, and then eventually their societies; Saul's ideas in this small volume must inevitably be contended with.

A Customer

Saul is a modern secular prophet!, March 28, 1999

You can add the name John Ralston Saul to those of Noam Chomsky, Ivan Illich, Franz Fanon (and who else?) on your list of the key late 20th century 'global conspiracy theorists' - people who are visionary seers/prophets who have unorthodox views and make outrageous pronouncements on this and that, but with whom you have to broadly agree. Because they operate outside the conventions of fixed ideologies, they're able to see the broader picture, and see more deeply into the nature of things.

The Unconscious Civilization - the 1995 Massey Lectures - was written in an oral style by Canadian freelance intellectual, essayist and novelist John Ralston Saul.

His thesis is disarmingly simple: in the long line of history's totalitarianisms, we can now add undemocratic 'corporatism'.

Our society, he argues, is only superficially based on the individual and democracy.

[Aug 19, 2013] Shiller Why Innovation Is Still Capitalism's Star

Shiller plays a sock puppet of corporatist propaganda...
Economist's View

Tom Shillock

We are indeed fortunate that Dr. Robert Pangloss Shiller has shared his edifying personal story about how to be innovative and successful through hard work and self-financing. A more straightforward example of the psychological phenomenon of projection would be hard to find.

Phelps' observation about institutions is not a "disturbing trend" but reality. While institutions are necessary for the efficient functioning of large industrial societies they also stifle whatever gets in their way. America has become largely a society of institutions not citizens. It is slightly exaggerated to say that the average citizen enjoys rights to the extent of the power of the institution/s he or she belongs to. Individuals with wealth enjoy rights in proportion to their wealth, an elite institution.

Too many of America's institutions, private and public, steer the country in rather the ways that they and the wealthy did in the latter part of the 19th century when the government was much smaller. The result is an increasingly ossified Kafkaesque society. The interests and power of institutions makes them refractory to change no matter the toll they take on society. The mega financial institutions are the best recent example. They (along with help from politicians and the Fed) caused the Great Recession but have yet to be reformed. Their executives have the power to avoid criminal prosecution even indictment e.g,, HSBC. Savings and Loan executives were not as powerful.

Health care institutions such as medical insurance and the pharmaceutical companies blocked reform of health care to the detriment of America. Physicians and health care organizations like hospitals block public disclosure of their performance while fleecing patients and society.

Public and private universities like Yale have institutionalized themselves as expensive tollbooths to employment not unlike those imposed on river traffic between 800 and 1800 on the Rhine by nobility and the Holy Roman Empire.

Before 1980 the government more or less enforced the laws against monopolies and other illegal combinations and collusion. This gave individuals and smaller companies with innovative ideas and products something of a chance and created an "innovator's dilemma" for large ossified companies. Creating economic and market space for innovators helped. Using government money to fund "incubators" or entrepreneurs is just another way to finance R&D for large corporations who buy up the innovators. It reinforces institutional interests and arrangements.

anne said in reply to Tom Shillock...

We are indeed fortunate that Dr. Robert Pangloss Shiller has shared his edifying personal story about how to be innovative and successful through hard work and self-financing. A more straightforward example of the psychological phenomenon of projection would be hard to find....

[ Projection, perfect and perfectly blinding. As for the individual-institutional tension or conflict, that is simply copying John Kenneth Galbraith, but sadly with no particular focus that would allow an extension of the ideas of Galbraith after all these decades since "Countervailing Power." ]

Randy :

I don't think it is correct to think of innovation as something done by Ayn Rand heroes. Most innovation is small and incremental, and most of it is done by workers and/or customers. A different kind of oil here, a different resistor there, a few minor but useful modifications to an algorithm today, and a few suggestions for more tomorrow. But the way property laws and customs exist today, the real innovators seldom get any financial reward for it. If they're really lucky, they get a nod and a wink in the staff meeting while the management team takes all the credit.

Second Best :

There's too much emphasis on future innovation compared to efficiency losses caused by corporatism blocking existing innovation.

For example consider what AT&T and Verizon have done to phone service and the internet, essentially returning to an industry structure similar to the early days of the Ma Bell monopoly, except with a dominant unregulated monopoloy (a duopoly only if areas are served by both) free to extract maximum economic rent while choking off bandwidth, volume throughput and access with an underbuilt system intentionally denied technology ungrades in many areas.

This is common in many industries in different ways, where the market power acquired may not reach that evident in telecommunications but is still substantial. Of course the important new version of market power since Ma Bell comes on a global scale from MNCs.

The great irony is corporations achieve overwhelming lock-in of economic power politically in the name of innovation when in fact, they selectively trample the impact of past innovation and block competitive new innovation at the same time.

What innovation is left for themselves is used to maximize productive efficiency for which most gains are distributed to themselves rather than consumers and labor, through targeted administered pricing disciplined more by market power and price discrimination than competition.

No amount of pollyanish localized new innovation is going to break through the entry barriers going forward until legal action is used to break up the vast network of monopoly and oligopoly power already in place.

Google eats the world by Rebecca Solnit

Finally, journalists have started criticizing in earnest the leviathans of Silicon Valley, notably Google, now the world's third-largest company in market value. The new round of discussion began even before the revelations that the tech giants were routinely sharing our data with the National Security Agency, or maybe merging with it. Simultaneously another set of journalists, apparently unaware that the weather has changed, is still sneering at San Francisco, my hometown, for not lying down and loving Silicon Valley's looming presence.

The criticism of Silicon Valley is long overdue and some of the critiques are both thoughtful and scathing. The New Yorker, for example, has explored how start-ups are undermining the purpose of education at Stanford University, addressed the Valley's messianic delusions and political meddling, and considered Apple's massive tax avoidance.

The New York Times recently published an opinion piece that startled me, especially when I checked the byline. WikiLeaks founder Julian Assange, the fugitive in the Ecuadorean Embassy in London, focused on The New Digital Age, a book by top Google executives Eric Schmidt and Jared Cohen that to him exemplifies the melding of the technology corporation and the state.

It is, he claimed, a startlingly clear and provocative blueprint for technocratic imperialism, from two of our leading "witch doctors who construct a new idiom for United States global power in the twenty-first century." He added, "This idiom reflects the ever closer union between the State Department and Silicon Valley."

What do the US government and Silicon Valley already have in common? Above all, they want to remain opaque while making the rest of us entirely transparent through the capture of our data. What is arising is simply a new form of government, involving vast entities with the reach and power of government and little accountability to anyone.

Google, the company with the motto "Don't be evil", is rapidly becoming an empire. Not an empire of territory, as was Rome or the Soviet Union, but an empire controlling our access to data and our data itself. Antitrust lawsuits proliferating around the company demonstrate its quest for monopoly control over information in the information age.

Its search engine has become indispensable for most of us, and as Google critic and media professor Siva Vaidhyanathan puts it in his 2012 book The Googlization of Everything,

"[W]e now allow Google to determine what is important, relevant, and true on the Web and in the world. We trust and believe that Google acts in our best interest. But we have surrendered control over the values, methods, and processes that make sense of our information ecosystem."

And that's just the search engine. About three-quarters of a billion people use Gmail, which conveniently gives Google access to the content of their communications (scanned in such a way that they can target ads at you). Google tried and failed to claim proprietary control of digital versions of every book ever published; librarians and publishers fought back on that one. As the New York Times reported last fall, Paul Aiken, executive director of the Authors Guild, summed the situation up this way:

"Google continues to profit from its use of millions of copyright-protected books without regard to authors' rights, and our class-action lawsuit on behalf of US authors continues."

The nonprofit Consumer Watchdog wrote to the attorney general on June 12th urging him "to block Google's just announced $1 billion acquisition of Waze, developers of a mobile mapping application, on antitrust grounds... Google already dominates the online mapping business with Google Maps. The Internet giant was able to muscle its way to dominance by unfairly favoring its own service ahead of such competitors as Mapquest in its online search results. Now with the proposed Waze acquisition, the Internet giant would remove the most viable competitor to Google Maps in the mobile space. Moreover it will allow Google access to even more data about online activity in a way that will increase its dominant position on the Internet."

The company seems to be cornering the online mapping business, seems in fact to be cornering so many things that eventually they may have us cornered.

In Europe, there's an antitrust lawsuit over Google's Android phone apps. In many ways, you can map Google's rise by the litter of antitrust lawsuits it crushed en route. By the way, Google bought Motorola. You know it owns YouTube, right? That makes Google possessor of the second and third most visited Websites on earth. (Facebook is first, and two more of the top six are also in Silicon Valley.)

Imagine that it's 1913 and the post office, the phone company, the public library, printing houses, the US Geological Survey mapping operations, movie houses, and all atlases are largely controlled by a secretive corporation unaccountable to the public. Jump a century and see that in the online world that's more or less where we are. A New York venture capitalist wrote that Google is trying to take over "the entire fucking Internet" and asked the question of the day: "Who will stop Google?"

The tipping point

We ask that question all the time in San Francisco, because here Google isn't just on our computers, it's on our streets. I wrote earlier this year about "the Google bus" - the armadas of private Wi-Fi-equipped luxury buses that run through our streets and use our public bus stops, often blocking city buses and public transit passengers while they load or unload the employees taking the long ride down the peninsula to their corporation of choice. Google, Apple, Facebook, and Genentech run some of the bigger fleets, and those mostly unmarked white buses have become a symbol of the transformation of the city.

... ... ...

Like Gandhi, only with guns

Enough minions of Silicon Valley's mighty corporations could arrive to create a monoculture. In some parts of town, it already is the dominant culture. A guy who made a fortune in the dot-com boom and moved to the Mission District (the partly Latino, formerly blue-collar eye of the housing hurricane) got locals' attention recently with a blog post titled "Douchebags Like You are Ruining San Francisco". In it, he described the churlish and sometimes predatory behavior of the very young and very wealthy toward the elderly, the poor, and the nonwhite.

He wrote, "You're on MUNI [the city bus system] and watch a 20-something guy reluctantly give up his seat to an elderly woman and then say loudly to his friends, 'I don't know why old people ride MUNI. If I were old I'd just take Uber.'" Yeah, I had to look it up, too: Uber.com, a limousine taxi service you access via a smartphone app. A friend of mine overheard a young techie in line to buy coffee say to someone on his phone that he was working on an app that would be "like Food Not Bombs, to distribute food, only for profit." Saying you're going to be like a group dedicated to free food, only for profit, is about as deranged as saying you're going to be like Gandhi, only with guns.

"An influx of techies will mean more patrons for the arts," trilled an article at the Silicon Valley news site Pando, but as of yet those notable patrons have not made an appearance. As a local alternative weekly reported, "The tech world in general is notoriously uncharitable: According to the Chronicle of Philanthropy, only four of 2011's 50 most generous US donors worked in tech, despite the fact that 13 of Forbes 50 Richest Americans in 2012 had made some or all of their fortunes in tech."

Medici in their machinations, they are not Medici-style patrons. There is no noticeable trickle-down in the Bay Area, no significant benevolence toward the needy or good causes or culture from the new tech fortunes.

Instead, we get San Francisco newcomer, Facebook CEO, and billionaire Mark Zuckerberg pursuing his own interest with ruthless disregard for life on Earth. This year, Zuckerberg formed a politically active nonprofit, FWD.us, that sought to influence the immigration debate to make it easier for Silicon Valley corporations to import tech workers. There has been no ideology involved, only expediency, in how FWD.us pursued its ends. It decided to put its massive financial clout to work giving politicians whatever they wanted in hopes that this would lead to an advantageous quid pro quo arrangement.

Toward that end, the group began running ads in favor of the Keystone XL pipeline (that will bring particularly carbon-dirty tar sands from Canada to the US Gulf Coast) to support a Republican senator and other ads in favor of drilling in Alaska's pristine Arctic National Wildlife Refuge to support an Alaskan Democrat.

The takeaway message seemed to be that nothing is off limits in pursuing self-interest, and that the actual meaning and consequences of these climate-impacting projects was not of concern at least to that 29-year-old who's also the 25th richest person in the United States. (To give credit where it's due: Silicon Valley billionaire Elon Musk, Paypal cofounder and electric car mogul, quit FWD.us.) Zuckerberg and his Valley associates were pushing things they didn't care about and demonstrating that they didn't care about much except what makes their corporations run and their profits rise. Here, where the Sierra Club was founded in 1892 and many are environmentally minded, this didn't go over well. Protests ensued at Facebook headquarters and on Facebook itself.

Rising hostility to the tech surge in San Francisco is met with fury and bewilderment by many Silicon Valley employees. They tend to sound like Bush-era strategists dumbfounded that the Iraqis didn't welcome their invasion with flowers.

Here's something else you should know about Silicon Valley: according to Mother Jones, 89% of the founding teams of these companies are all male; 82% are all white (the other 18% Asian/Pacific Islander); and women there make 49 cents to the male dollar. Silicon Valley female powerhouses like Facebook CEO Sheryl Sandberg get a lot of attention because they're unusual, black swans in a lake full of white swans.

As Catherine Bracy, on whose research Mother Jones based its charts, put it, "The current research I've seen shows that wealth creation from the tech industry is extremely unequally distributed, and current venture capital is going overwhelmingly to a small, homogeneous elite." That's what's encroaching on San Francisco.

... ... ...

The Armada of the .0001%

If Google represents the global menace of Silicon Valley, and Zuckerberg represents its amorality, then Oracle CEO Larry Ellison might best represent its crassness. ...

Rebecca Solnit is just winding up several months as a research fellow at Stanford Libraries and Stanford's Bill Lane Center for the American West. Her work there will lead to a book about California history, but her new book, out this month, is The Faraway Nearby.

Used with permission TomDispatch

[Jul 10, 2013] Fundamentalist Christians, Science, and the Democracy Logos by Lawrence Davidson

Is financial oligarchy a "special interest group" as Lawrence Davidson suggests? I think it is more of a class.

Democracy has a very positive connotation for most modern peoples. It suggests that the individual citizens are important and that their opinions will be paid attention to by those they elect to political office. In a modified fashion, this is true. Take, for instance, democracy in the United States. The U.S. is not exactly a democracy of individuals whose numbers run to over 300 million. It is instead, a democracy competing interest groups. These interest groups are made up of subsets of the population�that is individuals who have come together based on shared interests and outlooks. They pool their voting numbers and financial capabilities and approach the elected government bodies as collectives. In that way they manage to exert (in the form of lobbies) much more influence than an individual voter ever could.

There are numerous examples of such special interests. Are you a retired or older American concerned about maintaining social security and medicare? Then join the American Association of Retired Persons (AARP). This organization has a membership of approximately 40 million citizens. When it speaks, the politicians in the U.S. government tend to listen. Are you a gun afficionado who fears losing your alleged Second Amendment right to go around the neighborhood with an automatic weapon? Then join the National Rifle Association (NRA). This organization has approximately 4.5 million members and has successfully prevented meaningful gun control laws from being enacted. Similar special interest groups exist on the foreign policy side of the U.S. political scene and have proved influential enough to control American policy toward individual countries such as Cuba and Israel as well as entire regions such as the Middle East.

[Jul 10, 2013] Reversing the Labor Movement's Free Fall by Stanley Aronowitz

Logos

Everybody is aware that unions are in free-fall. In 2013 they represent less than 7% of private sector workers. And, while unions are still numerically dense among workers in the public sector-they represent a third-the recent assaults on collective bargaining at the state and local levels, the o% four year wage settlements in New York and elsewhere, and the leadership's pervasive fear of breaking no-strike contracts and state

laws, has weakened them. In short let us begin by stipulating the crisis of Organized Labor. Rather than dwelling on the woes, this article will address only two aspects of the crisis: some of the historical and structural factors that have contributed to unions' demise; and what can be done to reverse labor's outrageous fortune.

After more than a decade of steady retreat during the 1920s and early 1930s, in 1933 and 1934 the labor movement experienced a dramatic rebirth. Without the crutch of law or the state's approbation, workers in the mines, garment shops, textile mills, North and South, truck companies, auto factories, and the docks staged mass strikes for union recognition, against wage cuts and onerous working conditions and in some instances against the timidity and class collaboration by the mainstream AFL unions. Some of these struggles were conducted by or within established unions but others, particularly in the Minneapolis and San Francisco general strikes and the Toledo Auto Lite walkout were conducted by insurgencies against both the corporations and the old unions.

The Roosevelt administration was alarmed. The first New Deal, 1933-35, was an effort to revive industrial production and finances by giving federal funds to banks and imposing corporatism upon industrial relations in which labor was assigned a subordinate role. The National Industrial Recovery Act (NIRA) set up tri-partite industry boards-business, labor and public members-to regulate wages, prices and profits. With the exceptions of the apparel and mining industries, labor had little leverage over board decisions. Workers' wages were often frozen, and their power to impose better working conditions was severly limited. Radicals judged the NIRA as an American version of industrial fascism because it paralleled the Italian example. This perception was reinforced when, after promising to bring textile employers to the bargaining table, Roosevelt persuaded the AFL union leaders to call off the 400,000 worker strike. He reneged on his promise and 7000 activists were blacklisted from the industry, many of them Southern women. Roosevelt's betrayal contributed to the tough sledding unions faced in the American South for decades.

According to historian Richard Hofstadter Roosevelt, therefore, "stumbled" into social reform. The mass strikes prompted pro-administration Congress members to cooperate with the administration in proposing a new form of regulation: the Wagner Act (NLRA) granted workers the right to form unions "of their own choosing" and provided a series of procedures for determining whether and how workers could form unions that would be recognized by law and therefore by their employers. It also encouraged collective bargaining to resolve labor disputes. Organized Labor did not renounce the strike weapon-indeed before final Supreme Court approval in 1937 of the new labor law Akron rubber workers and Flint and Cleveland auto workers staged factory occupations termed sit-down strikes rather than conventional walkouts to gain recognition, a tactic which the Supreme Court outlawed in 1938 because workers violated the most sacred of all common laws: the sanctity of private property. But with the notable exception of what Jeremy Brecher termed the 1946 general strike that embraced almost all of the major production industries, the wildcat walkouts in auto in the 1950s and 1970s, the historic 1959 116 day steel strike over the right of workers to negotiate over the introduction of new technology, and the early 1960s strikes among teachers and other public workers for union recognition, in private sector organizing the strike weapon mostly gave way to the Board-supervised representation election and to arbitration to resolve labor disputes. The public workers' strike wave of the 1960s prompted many state legislatures and the federal government to outlaw strikes as a condition of granting union recognition. Most public employees' unions readily accepted the deal because it brought millions of new members into the unions and strengthened collective bargaining, a goal that had become primary for all unions since the New Deal. As a result few public workers' unions forged their culture in the baptism of fire; during organizing campaigns one of the main messages to workers was that there would be little risk if they joined the union.

The post-war labor movement became an ardent devotee of the union contract, especially its main features: locked -in wages, work-rules that gave unions some power over the labor process, a series of benefits that constituted, in effect, a private welfare state, and by limiting management's right to fire workers arbitrarily, a degree of job security. The union contract was the most important concrete expression of the new social contract. It signified that Labor accepted the prevailing capitalist economic system, management's control over the production and distribution of goods and services, and the law of labor relations in which workers rights and responsibility were rigorously enforced by the company and the union. In this regime the union becomes a partner of capital as well as a representative of its members, the tension between the two roles that is more or less constant.

Labor's adaptation to legalism was a symptom of its embrace of the key elements of modern liberalism: a new social contract with capital that provided union recognition (except in the South); steady wage increases at least until the late 1970s; a privately-funded social wage following the failure of national health care legislation in 1949 and the stagnation of old age (social security) benefits, and the privatization of workers' housing. And, besides becoming a devotee of the law and the Democratic party, Labor became a major ally of the post-war administration's permanent war program: perpetual off-shore military and economic interventions, huge defense contracts that some union leaders viewed in terms of full employment, and anti-communism at home and abroad.

The post-war unions were among the most reliable allies of the Cold War. Conservative and progressive unions alike conducted a relentless purge of Communists and others who refused to cooperate with Congressional committees and government agencies in fingering fellow radicals. The Taft-Hartley amendments of 1947 to the Labor Relations Act not only barred Communists from holding union office, but barred unions from conducting solidarity strikes-sympathy, secondary boycotts, refusal of workers to handle struck goods and gave the US president the right to impose and 80 day strike prohibition when the "national interest" was involved. The CIO and many AFL unions blasted Taft-Hartley and vowed to seek its repeal. Brave words notwithstanding, the mainstream labor movement failed to mount a concerted campaign and after some refused to sign the requisite non-communist affidavits, dutifully fell in line. Even Miners president John L. Lewis and former CIO president who characterized Taft-Hartley as a "slave labor act" finally submitted to the law. Meanwhile the CIO expelled 11 of its affiliates for alleged Communist dominations and deprived the labor movement of many of its most militant and capable institutions and activists. The Auto, Steel, Electrical and Machinists unions spent much of the 1950s raiding the left-wing unions. By the mid-1950s many on the left determined that discretion was the better part of resistance; they re-entered the mainstream unions after publicly renouncing their Communist pasts or, in some cases, quietly quitting the CP. After the smoke cleared only the United Electrical Workers and the West Coast Longshore unions remained independent. Eventually Longshore re-entered the AFL-CIO, but UE has held out to this day.

Why did the unions fail to unshackle themselves from government control? One reason was that they were comfortable with the anti-Communist restrictions. Eliminating a large fraction of the Left protected the leadership from criticism and potential opposition. Another is that the CIO was actively distancing itself from its own history. It no longer had a taste for direct action but instead sought respectability and stability in labor relations. And, the progressives no less than the business unions became devoted to electorism as a strategy rather than relying, primarily, on organizing. Less than a decade after the enactment of Taft-Hartley, in 1955 the two federations merged. Among its impetuses was to halt the fierce competition that marked the 20 years since the founding of the CIO. Never mind that most CIO unions were no longer repositories of direct action and other forms of industrial conflict. The leaders of both federations sought labor peace and, indeed, in the midst of post-war relative prosperity, fueled, in part, by Corporate America's domination of world markets, the ordinary processes of collective bargaining were able to register continuous improvements in workers' living standards. And the Labor Board elections were resolved, generally, in unions' favor. By 1953, unions represented more than a third of private sector workers. The South, professional and technical workers, and the retail and wholesale trades posed the greatest challenges. Of course, until the 1960s, unions were painfully weak in the public sector, a condition that was soon to change. By the end of that decade, unions were on the way, especially in state and local jurisdictions, and in the Post Office. But Labor's increasing density barely disguised growing rank and file discontent. Labor-management cooperation in auto, coal mining and steel prompted wildcat strikes and, by the mid-1970s a burgeoning rank and file that expressed itself as opposition slates for top and many local union offices. The auto and steel rank and file movements did not succeed at the national level , but Miners for Democracy took union power. The established leadership was shaken ,but remained unbowed in most instances where a rank and file mounted a challenge.

Until the late 1960s the AFL-CIO was a bastion of support for the war policies of the Kennedy-Johnson administrations and with the exception of some important unions like the Auto Workers and the growing public unions, were opposed to the militant civil rights movement and when not indifferent were hostile to feminism and environmentalism. With the exception of its core support for expanding the social wage, Organized Labor drifted to the right on most social issues, a position that alienated many young people women, blacks and Latinos. Although it was never true that women and blacks were not part of the labor movement, the public face of the unions was, in the main, white, male and middle-aged. Intellectually the unions were part of the backwater of society; more to the point, when American unions took an interest in International Labor affairs where ideas matter, they aligned with US foreign policy which encouraged and often financed anti-communist, antirevolutionary unions in Italy, France, Africa and Latin America.

Having been integrated into law and prevailing capitalist social relations during the New Deal and its successors, Labor's fate was further sealed by its profound anti-radical stances during the second social movements' upsurge of the 1960s and early 1970s. Even as US political hegemony was under siege in many developing countries, the American century in economic terms was challenged by the reemergence of Japan, Germany and France which became export societies on the basis of technologies that were, for various reasons, more advanced that those practiced by US industrial corporations. And the productivity of US industrial workers declined, largely due to shop-floor resistance. US corporations responded in two principal ways: intense technological investments reduced the relatively high wage force within the United States. And Northeastern and Middle Western-based industries moved first to the American South and then to Mexico and to the countries of Southeast Asia.

Unions adapted to these changes rather than waging struggles against plant closings and the emergence of Southeast auto, textile and metal-working factories. For example, the Auto Workers permitted the Big Three to move South, provided they agreed to unionize them. The union's compliance was by no means innocent. The Mid-west, especially Detroit, was a hotbed of opposition to the national leadership. In effect, the union colluded with management to diffuse discontent. Wages were not reduced, but since the plants were generally relocated in rural or small town areas, the chance of shop-floor disruption was sharply reduced. And, displaced union members had the right to relocate as well.

However, other unions faced plant closings with far less bargaining power. Most relocated plants reopened on a non-union basis but the unions were either unable or unwilling to commit to a Southern organizing strategy that would entail a long-term presence in the communities without an immediate chance of obtaining recognition or winning a union contract. Having failed in the immediate post-war years to make significance organizing gains in the South, the AFL-CIO unions were hesitant to drain their resources on Mexico, Guatamala and Southeast Asia because even the non-union workers in the US made too much money in the wake of global competition . The apparel industries were the first to go, but within a few decades Chinese contractors for Apple, Hewlett Packard and other companies were employing millions of workers in the production of computers and electronic parts. And, in textiles, whose Southern base traced to the 1920s, even the mechanization of the industry failed to inhibit migration to China and India. By the late 1990s, the South had been partially deindustrialized. Its economic woes became an occasion for European and Japanese auto corporations to install "transplants", all of them non-union. The UAW's sporadic efforts to organize Nissan and other plants have been unsuccessful. As of this writing, there are 13 transplants, among them a huge 4000 worker Nissan assembly plant in Mississippi. The union is engaged in organizing drive there. This time it has forsaken the hit and run pattern of Southern organizing, declaring it will engage the community, not only the plant, on a long-term basis. Whether the lessons of the recent past have been fully assimilated remains to be seen.

Two contrary developments in the post-war economy have almost completely missed Organized Labor's attention. The first was linked to the technological revolution and the expansion of health care. In technology the programming and systems analytic basis of computerization of both the industrial and service workplaces demanded the creation of a whole new series of job categories. From less than 4% of the labor force at the close of world war two, by the 1980s they had almost tripled in size. By the year 2013 they were just about 20% of the workforce or about 16 million. Many are wage and salaried workers and an expanding number are so-called "contractors" who do not draw a salary but are paid by the job and are offered no benefits. Although they are contingent workers because they are obliged to seek new employment when the job is finished, those with high qualifications such as computer engineers and website designers usually find new contracts. But lower down in the ladder, in times of economic slum programmers systems analysts and middle managers have trouble finding a job. In New York, Philadelphia, and San Francisco many public high-tech employees are union members. But with few exceptions-the Communication Workers (CWA) efforts among Microsoft workers in Seattle, a small engineers union on the East Coast and technical workers at GM's Detroit area Tech center-unions have made almost no efforts to organize intellectual labor in high-tech.

[Jul 10, 2013] Corporatism in the United States Today

Democratic Underground
Perhaps the greatest threat to freedom and democracy in the world today comes from the formation of the unholy alliances between government and business. This is not a new phenomenon. It used to be called fascism� The outward appearances of the democratic process are observed, but the powers of the state are diverted to the benefit of private interests. � George Soros

"I fear what they're doing� is setting the crown for a corporate state�. And by that I mean a rather small but very powerful circle of financial institutions� also some industrial corporations� Too big to fail� protected by (government)� The leading banks and corporations� will have the means to monopolize democracy."

� William Greider, discussing the Geithner plan to address our economic crisis, in an interview with Bill Moyers, March 27, 2009.

The United States and the other Allied Nations fought World War II against the Fascist nations of the world, which posed a severe and imminent danger to world-wide freedom and livelihood. The United Nations was conceived by President Roosevelt and brought to fruition largely by the efforts of President Truman with an eye towards identifying future fascist threats to world freedom and imposing a barrier against them.

Definition of fascism

The Fascism that we fought against is often defined by its warning signs, which include:

1. Powerful and continuing nationalism; 2. Disdain for human rights; 3. Identification of enemies/scapegoats as a unifying cause; 4. Supremacy of the military; 5. Rampant sexism; 6. Controlled mass media; 7. Obsession with national security; 8. Interweaving of religion with government; 9. The combining of government and corporate power (corporatism); 10. Suppression of labor; 11. Disdain for intellectuals and the arts; 12. Obsession with crime and punishment; 13. Rampant cronyism and corruption, and; 14. Fraudulent elections.

These warning signs of fascism can be seen as combining two major groups of characteristics: corporatism (# 9) and scapegoating alleged enemies as a unifying cause (# 3). Those two characteristics represent the core of fascism. The other traits follow as a consequence of those core characteristics.

Nationalism (# 1) is the ultimate unifying cause that fascists aim to produce. The "nation" takes precedence over all else, and anyone who doesn't fall in line is an "enemy" of the state. Disdain for human rights (# 2) follows, as the "enemy" is dehumanized, thus rationalizing its brutal repression. Disdain for intellectuals (# 11) is necessary because they are among the most likely to speak out against the state � and they make a convenient enemy.

Corporatism requires corruption (# 13) because governments are supposed to serve their people; therefore, when they decide to serve corporate power instead, that by definition constitutes corruption. Suppression of labor (# 10) is necessary for the corporatist state because labor is the natural enemy of excessive corporate power.

The connection between corporatism and scapegoating

Why the connection between the scapegoating of enemies as a unifying cause and corporatism? In a corporatist state, the corrupt alliance between government and corporate power means that power and wealth are concentrated among a small elite few at the top, which leads to corresponding lack of power and wealth among the vast majority of the population, with corresponding great potential for mass suffering. The corporatist state must find a way to convince these great masses of people to happily accept their fate. The scapegoating of alleged enemies has been found to be one of the best ways to do this. Item #s 4, 6, 7, 8, 12, and 14 in the warning list are just more methods that the corporatist state uses to keep its subjects in line.

The vicious cycle of increasing corporate power

In the United States today, the deepening ties between our government and private corporate power is bringing us dangerously close to the kind of fascism/corporatism that we fought against in World War II. The fact that bribery of government officials, in the form of "campaign donations", is essentially legal in our country, has opened the door to the merging of government and corporate power that defines fascism. Corporate propaganda and monopolization of our airways has opened the door still wider. Worse yet, it creates a vicious cycle. Corporate money is used to bribe government officials to pass legislation favorable to their agenda, which inevitably leads to further increase in corporate wealth and power. It has gotten to the point where a majority of our elected officials at the federal level feel dependent upon corporate contributions to remain in office. Even many of those who may have basically good intentions have succumbed to the need to placate corporate power. In so doing, they prioritize the desire of a small minority of corporate elites above the needs of the vast majority of their constituents. The bottom line is that corporations have become powerful enough to enter into corrupt bargains with government, thereby enabling private corporations and government to mutually enrich each other at the expense of everyone else. This is the tyranny of fascism. With that in mind, let's consider how we got to this point:

The Rise of Corporate Tyranny in the United States

A corporation has been defined as:

The most common form of business organization, and one which is chartered by a state and given many legal rights as an entity separate from its owners. This form of business is characterized by the limited liability of its owners�
In 1819, the U.S. Supreme Court ruled against the state of New Hampshire when it attempted to revoke the corporate charter of New Hampshire, in Dartmouth College v. Woodward. New Hampshire citizens were outraged by that decision, arguing that corporations are created by the state, with the purpose of serving the public interest.

In a democracy, ALL actions of the state should be to serve the public interest. If the state grants a charter to a corporation, it should have the right to regulate that corporation in the public interest, in return for the privileges that it bestows upon the corporation.

The threat of corporate power at the founding of our nation

Adam Smith's "The Wealth of Nations", published in the same year (1776) as the U.S. Declaration of Independence, expounded on the advantages of a free market economic system, while at the same time warning of the dangers of corporations. That seems ironic on the surface, since today's right wingers constantly push their own version of the "free market", while using Smith as their authority.

But in reality, Smith was deeply antagonistic towards any view of so-called "free market" principles that favored corporations � the very opposite of the stance advocated by today's right-wing movement. This is what Smith had to say about the effect of corporate power on free markets:

It is to prevent this reduction of price, and consequently of� profit, by restraining that free competition which would most certainly occasion it, that all corporations, and the greater part of corporation laws, have been established� This prerogative of the crown seems to have been reserved rather for extorting money from the subject, than for the defense of the common liberty against such oppressive monopolies.

David Corten explains that our Declaration of Independence and the American Revolution that coincided with it were in large part a reaction against the same corporate abuses that Smith warned against in "The Wealth of Nations":

It is noteworthy that the publication of The Wealth of Nations and the signing of the U.S. Declaration of Independence both occurred in 1776. Each was, in its way, a revolutionary manifesto challenging the abusive alliance of state and corporate power to establish monopolistic control of markets and thereby capture unearned profits and inhibit local enterprise. Smith and the American colonists shared a deep suspicion of both state and corporate power.
The conferring of corporate personhood

There is nothing in our Declaration of Independence, nor our Constitution, nor any of the amendments to our Constitution that conferred special rights or privileges upon corporations. Indeed, as late as 1855 the U.S. Supreme Court made perfectly clear, in Dodge v. Woolsey, that corporations have no special rights or privileges, and that they are subservient to the American people:

That the people of the States should have released their powers over the artificial bodies (i.e. corporations) which originate under the legislation of their representatives� is not to be assumed. Such a surrender was not essential to any policy of the Union, nor required� Such an abandonment could have served no other interest than that of the corporations, or individuals who might profit by the legislative acts themselves. Combinations of classes in society, united by the bond of a corporate spirit, for the accumulation of power, influence, or wealth� unquestionably desire limitations upon the sovereignty of the people� But the framers of the constitution were imbued with no desire to call into existence such combinations�
But in 1886, in an unofficial opinion by U.S. Supreme Court Chief Justice Morrison R. Waite, before any oral arguments took place in the case of Santa Clara County v. Southern Pacific Railroad Company, and without any explanation whatsoever, Waite simply announced:
The court does not wish to hear argument on the question whether the provision in the Fourteenth Amendment to the Constitution, which forbids a State to deny to any person within its jurisdiction the equal protection of the laws, applies to these corporations. We are all of the opinion that it does.
This offhand statement � which cannot possibly constitute an official opinion of the court, which is always preceded by extensive research and debate � has since been considered the law of the land.

And as such it greatly increased the power of corporations against individuals by allowing them the protections given to persons under our Constitution, even though corporations are simultaneously showered with various powers that actual persons don't have and exempted from many of the responsibilities and obligations that actual persons have. David Korten puts this in perspective in his book, "When Corporations Rule the World":

Thus corporations finally claimed the full rights enjoyed by individual citizens while being exempted from many of the responsibilities and liabilities of citizenship.

Furthermore, in being guaranteed the same right to free speech as individual citizens, they achieved, in the words of Paul Hawken, "precisely what the Bill of Rights was intended to prevent: domination of public thought and discourse."

The subsequent claim by corporations that they have the same right as any individual to influence the government in their own interest pits the individual citizen against the vast financial and communications resources of the corporation and mocks the constitutional intent that all citizens have an equal voice in the political debates surrounding important issues.

The restraint of corporate power by FDR

Excessive corporate power led to vast disparities of wealth, which in the late 19th Century became known as the Gilded Age. This culminated in the Stock Market Crash of 1929, which led to the Great Depression and the election of Franklin Delano Roosevelt as President.

FDR aggressively criticized the conditions that led to this state of affairs in his 1936 Democratic Convention speech to the American people. In that speech he condemned the men who were responsible for the nation's economic woes, whom he referred to as "Economic Royalists".

Out of this modern civilization economic royalists carved new dynasties. New kingdoms were built upon concentration of control over material things. Through new uses of corporations, banks and securities, new machinery of industry and agriculture, of labor and capital � the whole structure of modern life was impressed into this royal service. There was no place among this royalty for our many thousands of small business men and merchants who sought to make a worthy use of the American system of initiative and profit.

The privileged princes of these new economic dynasties, thirsting for power, reached out for control over Government itself. They created a new despotism and wrapped it in the robes of legal sanction. In its service new mercenaries sought to regiment the people, their labor, and their property. And as a result the average man once more confronts the problem that faced the Minute Man.

The hours men and women worked, the wages they received, the conditions of their labor � these had passed beyond the control of the people, and were imposed by this new industrial dictatorship. The savings of the average family, the capital of the small business man, the investments set aside for old age � other people's money � these were tools which the new economic royalty used to dig itself in.

The abuses of power that FDR detailed in that speech provided much of the rationale for his New Deal, which lifted tens of millions of Americans out of poverty and created a vibrant middle class, while taxing corporations at unprecedented levels.

The New Deal didn't just fade away after FDR's death. Instead, due to its stunning success, most of its components lasted for decades. Largely as a result of this, we experienced for the next three decades what Nobel Prize-winning economist Paul Krugman calls "the greatest sustained economic boom in U.S. history". Beginning in 1947, when accurate statistics first became available, median family income rose steadily (in 2005 dollars) from $22,499 in 1947 to more than double that, $47,173 in 1980.

The "Reagan Revolution" reversal of New Deal economic policy

With the advent of the Reagan Revolution in 1981, characterized by a return to the "free market" ideology of the Gilded Age, the route marked out by FDR was reversed. Since that time, except for a brief respite during the latter years of the Clinton presidency, the income of American workers has been virtually stagnant, despite large increases in American productivity which have enriched the already wealthy.

The reign of "free-market" ideology has been characterized by an ideological ban against government intervention in economic matters to help those who most need it, which played out domestically and internationally. William Greider, in his book, "Come Home, America � The Rise and Fall (And Redeeming Promise) of our Country", explains how this played out on the international stage:

The World Trade Organization enforces rules that protect capital investors and corporations, but it has no rules protecting workers and communities, that is, people. The so-called Washington Consensus � a stern dogma imposed on developing countries that borrow from the World Bank and International Monetary Fund preaches that national governments must not try to protect their people from the harsh side effects of capital and commerce. America's representative democracy, meanwhile, is offered as the model the world should follow, despite the democratic breakdown that Americans well know is in progress

Greider mentions globalization as another of the factors contributing to the demise of the United States. However, he also notes that other nations are affected by globalization just as much as the United States is, and yet other industrialized nations have much less economic inequality than the United because they are not bounded by the inflexible right wing ideology of the so-called "free market".

James Galbraith, in his book, "The Predator State", explains why globalization and free trade agreements need not cause serious adverse effects for American workers, if only we would give up that radical "free market" ideology that the right wingers have foisted upon us:

The populist objective is to raise American wages, create American jobs, and increase the fairness and security of our economic system� Is there a better way to do this�? Of course there is � and that is to do it directly. You want higher wages? Raise them. You want more and better jobs? Create them.

In other words, our government should work directly for the average American, not the corporatocracy using the rationale that expansion of corporate wealth will "trickle down" to everyone.

Corporate propaganda to pervert our concept of democracy

In addition to routinely bribing government officials to promote their agenda, the corporatocracy has bombarded the American people for several decades with incessant propaganda aimed at perverting our concepts of the workings of democratic government, in order to gain our acquiescence in their continuing power grabs:

Perversion of the concept of "freedom"

The concept of freedom has become perverted in our county. Freedom has been defined as "the power to act or speak or think without externally imposed restraints" � and that's how most people use it. Another way of saying that is "the power to do whatever one wants to do".

As an absolute concept, it is not plausible or reasonable or even possible for a functioning society to allow its members such powers � for a very simple reason. The freedom of the powerful to do whatever they want tends to impinge tragically on the freedom of the vulnerable members of society. Some men for example like to rape women. But enabling them to do that whenever they want would impinge on the freedom of women not to be raped. The vast majority of people realize that giving men the freedom to rape at will would be a very bad idea.

At the societal level, powerful corporations often dump vast quantities of poisons into the air, soil, and water without having to bear the costs or other consequences of their activities. Most Americans agree that such activities should be prohibited or otherwise strongly regulated, or that corporations that engage in such activities should be made to bear the costs or other consequences � in other words, that the "freedom" of corporations to pollute and ruin our environment should be strictly controlled. Yet, corporate power in the United States has perverted the concept of "freedom" to justify ever more unrestricted expansion of their power, with the consequent diminishment of freedom for the vast majority of Americans.

George Lakoff discusses the nuances and frequent contradictions of the word "freedom" in great detail in his book, "Whose Freedom � The Battle over America's Most Important Ideal". Here is an one of many excerpts from that book that make the point of how the freedom of the few often diminishes the freedom of the many:

The focus of (George Bush's) presidency is defending and spreading freedom. Yet, progressives see in Bush's policies not freedom but outrages against freedom. They are indeed outrages against the traditional American ideal of freedom� It is not the American ideal of freedom to invade countries that don't threaten us, to torture people and defend the practice, to jail people indefinitely without due process, and to spy on our own citizens without warrant�
Bill Moyers discussed this idea in an article titled "A New Story for America". He notes how Ronald Reagan put our country on the road to fascism (though he didn't use that word) by convincing many or most Americans that "big government" destroys our freedom and that we must therefore shrink government and give business unlimited "freedom" to do as they please. With regard to Reagan's idea of "freedom", Moyers says:
But what that� means today is the freedom to accumulate wealth without social or democratic responsibilities and the license to buy the political system right our from under everyone else, so that democracy no longer has the ability to hold capitalism accountable for the good of the whole� It has taken us down a terribly mistaken road toward a political order where government ends up servicing the powerful and taking from everyone else�

Nor does it assure the availability of economic opportunity� Yet it has been used to shield private power from democratic accountability, in no small part because conservative rhetoric has succeeded in denigrating government even as conservative politicians plunder it� But government is � often the only way we preserve our freedom from private power and its incursions.

The hypocrisy of the corporate version of "free market" ideology

There is nothing "free" about the right wing corporate version of so-called "free markets". Rather, through the amassing of great wealth and power and the use of that wealth and power to legally bribe our elected officials, they have stacked the deck in their favor so as to acquire monopoly control over so many aspects of our economic and political life. As Adam Smith, whom the right wing ideologues are so fond of quoting, says, creation of true free markets requires at a minimum the limiting of the power of corporations. Our corporate elites are not interested in "free" markets. They are interested only in gathering unto themselves as much wealth and power as they possibly can.

This is all part and parcel of the utterly nonsensical doctrine of "trickle down economics", which was never supported by a shred of evidence. They want us to believe that the road to a healthy economy is to shower the wealthy with privileges and riches, so that eventually this wealth will shower (or trickle) down on the rest of us, by virtue of making the wealthy more productive. Well, we're still waiting.

With their control of the news media, corporate America has foisted a toxic ideology on the American people that serves to maintain their wealth and power. When powerful banks lose money, they warn that the taxpayers must save them, lest our economy go into a permanent tailspin. Yet when the American people attempt to devise a health care system that will keep them financially solvent and prevent twenty thousand deaths each year, the corporate elite scream SOCIALISM!!

This is all part and parcel to the idea that "big government" is our biggest problem. The corporatocracy would have us believe that any infringement of our government on the "freedom" of corporations do whatever they please constitutes "interference" with the "free market". Bill Moyers takes us back in history to explain how our country's greatest leaders, from Jefferson to Lincoln to Teddy Roosevelt to FDR, have used the powers of government to provide opportunity for Americans to create a decent and better life for themselves. Thus Moyers concludes about our present state:

So it is that contrary to what we have heard rhetorically for a generation now, the individualist, greed-driven, free-market ideology is at odds with our history and with what most Americans really care about � Indeed, the American public is committed to a set of values that almost perfectly contradicts the conservative agenda that has dominated politics for a generation now.
Opposing the public interest

Corporations, as creations of the state were originally required to act in support of the public interest in return for the many favors they received from the state. But instead, they have come to oppose the public interest, in pursuit of their own private goals and the goals of their owners, and in the process they have cast a progressively darkening cloud of tyranny over our country and the world. In reality it is difficult or impossible to separate the goals of a corporation from the goals of its owners � those who exercise control over the corporation. After all, a corporation is merely a financial tool, which can be utilized for whatever purposes those who control it wish. Yet it is legally defined as an entity separate from its owners. Thus those who control the corporation have a powerful tool at their disposal, while at the same time utilizing corporate law to shield them from the liabilities that mere individuals would incur without a corporation to hide behind.

That would be ok if the state was determined to regulate corporations in the public interest. However, especially since the 1980s corporate propaganda has achieved a measure of success in convincing Americans that government regulation of corporations � in the public interest or otherwise � is bad for our economy and therefore bad for our people. Perhaps most Americans don't really believe that absurdity. But enough do that, in combination with the power of money, the public interest has taken a back seat to corporate "freedom".

Monopoly

It has long been recognized that corporations have a tendency to form monopolies, which reduce competition and raise prices. That is why, beginning with the Sherman Anti-trust law of 1890, and continuing with President Theodore Roosevelt's trust busting efforts, the U.S. government has had a long and justified history of intervening to prevent unfair monopolistic practices, especially with regard to services that are essential to us, such as gas and electric utilities.

When monopolies are allowed to flourish, competition is stifled and the result is an increasing wealth gap and poverty. Specific examples of monopolies leading to bad consequences include the lax regulation that led to the energy blackouts in California in 2001 and policies that allow price gouging by oil companies. Yet, for reasons that they've never explained, the right wing "free market" ideologues are the first ones to allow the stifling of competition by monopolies.

Monopoly provides the financial foundation of corporate power. With rampant monopolization of U.S. industries in recent years, competitive obstacles to the accumulation of wealth have been removed for a select few, at the expense of almost everyone else. Barry Lynn discusses in his book, "Cornered � The New Monopoly Capitalism and the Economics of Destruction" � how the monopolization of so much industry in the United States, which began under the Reagan Presidency, has led us towards a corporatist state that has vastly limited the freedom of so many Americans:

The structural monopolization of so many systems has resulted in a set of political arrangements similar to what we used to call corporatism. This means that our political economy is run by a compact elite that is able to fuse the power of our public government with the power of private corporate governments in ways that enable members of the elite not merely to offload their risk onto us but also to determine with almost complete freedom who wins, who loses, and who pays. Then suddenly there was Secretary of the Treasury Henry Paulson� using our tax money to fix his bank and the banks of all his friends�

The Bush and Obama administrations and� Congress all responded to the collapse of our financial system in most instances by accelerating consolidation� The effects are clear� the derangement not merely of our financial systems but also of our industrial systems and political systems. Most terrifying of all is that this consolidation of power � and the political actions taken to achieve it � appears to have impaired our ability to comprehend the dangers we face and to react in an organized and coherent manner.

The bottom line: Too much freedom for the powerful impinges greatly upon the freedom of everyone else.

"Too big to prosecute"

Perhaps the greatest indicator of the tyranny of corporate power in America today is the approach that our criminal justice system takes towards corporate criminals. Our country is still suffering from our worst financial crisis since the Great Depression of the 1930s, which is largely the result of corporate irresponsibility and malfeasance. Yet not one of those responsible for this crisis has even been prosecuted, let alone sent to jail. To the contrary, the American taxpayers have bailed out our irresponsible financial institutions to the tune of several trillion dollars.

William Greider explains, in an article titled "How Wall Street Crooks Get out of Jail Free":

The nation is left to face a disturbing spectacle: crime without punishment. Massive injuries were done to millions of people by reckless bankers, and vast wealth was destroyed by elaborate financial deceptions. Yet there are no culprits to be held responsible.
Former U.S. Senator Ted Kaufman put the problem in perspective:
People know that if they rob a bank they will go to jail� Bankers should know that if they rob people, they will go to jail too� At the end of the day this is a test of whether we have one justice system in this country or two. If we do not treat a Wall Street firm that defrauded investors of millions of dollars the same way we treat someone who stole $500 from a cash register, then how can we expect our citizens to have any faith in the rule of law?
Greider explains the system that is routinely used in the United States today to deal with corporate criminals, and its purported rationale:
Instead of "Old Testament justice," federal prosecutors seek "authentic cooperation" from corporations in trouble, urging them to come forward voluntarily and reveal their illegalities. In exchange, prosecutors will offer a deal. If companies pay the fine set by the prosecutor and submit to probationary terms for good behavior� then government will defer prosecution indefinitely or even drop it entirely.

The favored argument for the more conciliatory approach was that criminal indictment may amount to a death sentence for a corporation. The fallout will destroy it, and the economy will lose valuable productive capacity. The collateral consequences are unfair to employees who lose jobs and stockholders who lose wealth.

That's a lot of sympathy of corporations, corporate employees and stockholders. Where is the comparative sympathy for the tens of millions of other Americans who are out of work or who lost their homes?

Russell Mokhiber, longtime editor of the Corporate Crime Reporter, explains the real reason for this kid glove treatment of corporate criminals:

Over the past twenty-five years the corporate lobbies have watered down the corporate criminal justice system and starved the prosecutorial agencies. Young prosecutors dare not overstep their bounds for fear of jeopardizing the cash prize at the end of the rainbow � partnership in the big corporate defense law firms after they leave public service. The result � if there are criminal prosecutions, they now end in deferred or nonprosecution agreements � instead of guilty pleas.
Greider continues:
Deferring prosecution was made standard practice by George W. Bush's Justice Department� During Obama's first two years, Justice deferred action on fifty-three corporate defendants� Leading lawyers dubbed deferred prosecution "the new normal for handling corporate misconduct".
In other words, they have more money than we do, and in today's United States, justice is for sale.

Setting the crown for a corporate state � Corporate power in perspective

William Greider has warned us many times in the past about the dire consequences of government becoming too cozy with the corporatocracy:

This will sound extreme to some people, but I came to it reluctantly. I fear what they're doing� in their design is setting the crown for a corporate state�. And by that I mean a rather small but very powerful circle of financial institutions the old Wall Street banks, famous names. But also some industrial corporations� Too big to fail. Yes, watched closely by the Federal Reserve and others in government, but also protected by them� The leading banks and corporations are sort of at the trough, ahead of everybody else in Washington, they will have the means to monopolize democracy. And I mean that literally. Some of my friends would say, hey, that already happened�. The corporate state is here�. The fact is, if the Congress goes down the road I see them going down, they will institutionalize the corporate state in a way that will be severely damaging to any possibility of restoring democracy.

wecorporatism

THE CORPORATIST MODEL Grows from a close relationship between the trade union movement and social democratic parties. Even in "pluralist" Britain, economic policy approached the corporatist model in brokering "SOCIAL CONTRACT" between government and unions during the 1974-79 Labour administration.

Often institutionalizes a system of centralized wage bargaining: government and the "social partners" of organized labor and business sit round a table and trash out a national incomes policy.

As a policy-making and implementation system: set of institutional arrangements that entrenches major social groups in the overall management of the national economy and other types of public policies

Definition from Philip Schmitter and Gerhard Lehmbruch: "Corporatism is more than a particular pattern of articulation of interests. Rather, it is an institutionalized pattern of policy-formation in which large interest organizations cooperate with each other and with public authorities not only in the articulation of interests, but� in the 'authoritative allocation of values' and in the implementation of such policies".

ORIGINS: 1) Catholic Social Thought - early decades of the twentieth century, Church leaders were concerned that the role of the church was being undermined by trade unions, and growth of modern state apparatus; wanted to renew social organization represented by medieval craft guilds; advocated enhanced role for self-governing interest groups (the "voluntary" sector", involved not only in the planning but also in the provision of major social services such as health care and education) 2) Fascist corporation was a system of totalitarian state control of society based on an intimate interpretation of interest groups and the state. Hitler's Germany, Mussolini's Italy and Salazar's Portugal. 3) post-WW II impulse for "national unity" sense that industry and labor had to work together in order to rebuild war-torn economies fostered tripartite (i.e., industry , labor and government) cooperation in places such as Austria and Germany.

Features of corporatism systems:

Values/behaviors (i.e political cultural prerequisites) required to make corporatism work:

Interrelated contextual factors: - a long tradition of social democratic rule; - a small, open economy; - high expenditures on social programs and low expenditures on defense.

Table 14-1 groups countries into 3 clusters.

CORPORATISM IN AUSTRIA

Austria is usually taken as the classic case of a political system that is characterized by a very high level of corporatist policy making. Austria is a "model generator".

Important role of CHAMBERS, designed to provide formal representation for the interests, respectively, of labor, commerce, and agriculture.

Statutory position and vital role that they play in decision making. All working citizens in Austria are obliged by law to belong to the appropriate chamber. [discuss how this is perceived from an American point of view]

The chambers have the formal right to be consulted on and represent in a wide range of matters, as well as to nominate members to many other public bodies.

"Peak" trade union organization, the OGB, and the League of Austrian Industrialists, the VOI. The Chamber of Labor must also consider the "public interest". OGB is highly centralized. SOCIAL PARTNERSHIP.

The Chamber of Labor and the OGB are dominated by the Socialists (SPO), and the Chamber of Commerce and Chamber of Agriculture are dominated by the conservative Austrian People's party (OVP).

Interpenetration of interest groups and parliament, and this symbiosis has been identified by many as one of the strengths of Austrian corporatism.

Social partners traditionally have been concerned first and foremost with economic policy making (prices and incomes). Both the negotiation and the implementation of policies on prices and incomes.

Concept of parity: strictly equal membership for representatives of business and labor in all important policy-making bodies.

Success during the affluent 1960s and 1970s. The Austrian economy enjoyed steady growth and a record on inflation and unemployment that was much better than the European norm.

Full-fledged corporatism is a comprehensive and deep-rooted decision-making culture rather than just a collection of superficial solutions.

Soul of a Nation The Corporatist State Sgpolitics.net

I think the reason is that the Corporatist model has become so entrenched in the mindset of the ruling elite that they are unable to divest themselves from it.

The enormous success of Singapore's initial years of independence has gone to their heads. It has fooled them into thinking Corporatism is the way to go, and that when the hardware is in place, the software can be taken care of later. This inverted philosophy is the reason why Singapore has evolved into the current state where control of the nation's wealth is placed in the hands of the few and where the ordinary folk do not have much control over their own economic destinies. It is also the reason why a culture of materialism has sunk in together with a sense of disempowerment and disenfranchisement.

Today we have casinos causing social problems for the heartlanders. Under the government's Corporatist model, the wealth generated for the elite by the casinos is worth these social problems.

Today, the government keeps saying that we cannot provide more social safety nets at the risk of going down the slippery slope of becoming a welfare state. Under its own Corporatist model, the government deems that it is better instead to invest the money into building external and foreign reserves.

Today, public services are going up in price because under the Corporatist model, it is more important to be profitable than it is to be caring.

ABC-CLIO - Product - Corporatist Decline in Advanced Capitalism - Mark James Gobeyn

This study represents the first book-length treatment of the declining significance of corporatist governance in advanced capitalist states.

Gobeyn presents the first book-length treatment of the declining significance of corporatist governance in advanced capitalism, linking that decline to international political economic forces. He contends that current patterns of conflict within corporatist political bargaining institutions in capitalist states can be traced to attitudinal shifts on the part of capitalists toward corporatist institutional arrangements. Business interests, it is argued, may no longer be viewing traditional practices of national corporatist action as either beneficial or necessary given recent changes in domestic and international economic environments. Recent state modifications to corporatist forms have therefore been initiated.

[Jul 10, 2013] Corporatism - The Canadian Encyclopedia

Corporatism was originally a 19th-century doctrine which arose in reaction to the competition and class conflict of capitalist society. In opposition to the trend towards both mass suffrage and independent trade unionism, it promoted a form of functional representation - everyone would be organized into vocational or industrial associations integrated with the state through representation and administration. The contention was that if these groups (especially capital and labour) could be imbued with a sense of mutual rights and obligations, such as presumably united the medieval estates, a stable order based on "organic unity" could be established. Although the notion of industrial parliaments was commonly raised in liberal democracies after WWI, the only states that explicitly adopted a corporative form of representation were the fascist regimes of Italy, Germany, Spain, Portugal, Vichy France and various South American dictatorships.

In all these cases, corporatist structures were primarily a decorative fa�ade for authoritarian rule, state repression of independent trade unionism being the main motive and consequence. Given this experience, corporatist ideology has not been popular in Western liberal democratic societies, but by the 1970s it became increasingly common for social scientists to discern that certain political arrangements had developed within these frameworks, which in operative premise and institutional form bore some resemblance to the functional-representation notions of corporatism.

This was particularly true in many West European countries, where the central trade-union and business federations had joined government representatives in national economic and incomes policy planning. These arrangements helped sustain the Keynesian welfare state, in which governments sought to stem inflationary tendencies in the economy and encourage productivity. Central to all such arrangements was the effort to persuade unions to accept national wage-restraint policies in exchange for representation in economic decision making.

Corporatism temporarily came to be seen by many social scientists as either a new economic system, successor to capitalism, where the state controls and directs a highly concentrated but still privately owned economy; or a new form of state, where the important representation, decision making and administration take place not in the parties, parliaments and ministerial bureaucracies but in the tripartite structures where business, labour and governments are joined; or a new form of interest-group politics, where instead of the competitive, lobbying activities of many pressure groups, there is a monopoly of access to the state by one group from each sector of society, with the state exercising reciprocal influence over the groups.

While each of these scenarios captured some aspects of modern corporatist developments, they were all too expansive and grandiose. Corporatist structures may have supplemented parliamentary forms in certain countries, but they hardly became the centre of the liberal democratic state. They were confined primarily to the relations among big business, organized labour and government. Above all, corporatist arrangements do not challenge capitalism as the economic system of these societies.

Important key investment decisions, although influenced by the state partly through corporatist structures, remained with private corporations. Indeed, far from emerging as the new dominant institutions, corporatist structures displayed an inherent instability, reflecting the asymmetry of the relative power of capital and labour and the tendency of trade unions to withdraw their co-operation in wage-restraint policies when members insist that their leaders represent their demands rather than act as junior partners in managing the modern capitalist economy. In turn, capitalist classes have shown themselves less and less interested, for their part, in maintaining such partnerships, and this has led to corporatist arrangements to be increasingly abandoned along with the Keynesian welfare state through the last two decades of the 20th century.

[Apr 05, 2013] Neoliberalism Neoconservatism Without a Smirk by Thomas H. Naylor

February 16, 2010 | Second Vermont Republic

It has become increasingly obvious that the only difference between Barack Obama and George W. Bush is that the famous Bush smirk has been replaced by the Obama smile. The neoconservatism of Dick Cheney, Paul Wolfowitz, and Bill O'Reilly has given way to the neoliberalism of Bill Clinton, Timothy Geithner, Bernie Sanders, and Chris Matthews. The differences between neoliberalism and neoconservatism are similar to the differences between Coke and Pepsi, virtually nil.

Neoconservatism is best defined by its foreign policy agenda which includes full spectrum dominance, imperial overstretch, nuclear primacy, the right of pre-emptive strike, and unconditional support for the State of Israel. Although neoliberals are much less bellicose in their rhetoric than their neoconservative counterparts, they passively acquiesce to the neocon foreign policy paradigm. They do little or nothing to end the wars with Iraq and Afghanistan as well as the annihilation of Palestine carried out by our close ally Israel. Obama's Nobel Peace Prize acceptance speech in Oslo was little short of a global call to arms couched in the language of the doctrine of "just war." Although neocons make it abundantly clear that they are military hawks, most neoliberals are closet hawks as well.

Consider the case of Vermont Senator Bernie Sanders, the darling of the Left, who pretends to be a socialist, which he is not. Not only does Sanders support all military appropriation bills and military aid to Israel, but he is currently promoting the opening of a satellite facility of the Sandia Corporation in Vermont. The Sandia Corporation, a subsidiary of Lockheed Martin Company, develops, creates, maintains, and evaluates nuclear weapons systems. Sandia's roots go back to the Manhattan Project in World War II. Just what peace loving Vermonters need, a nuclear weapons manufacturer located in their own backyard.

Both neolibs and neocons are apologists for globalization and are steeped in the ideology that bigger, faster, and more high-tech make better. In their heart of hearts neolibs and neocons know that only the federal government can solve all of our problems, failing to realize that the federal government is the problem. Both embrace corporate socialism, socialism for the rich, and the social welfare state while pretending to be opposed to publicly financed social welfare. It's all about people of the lie.

Neoliberals pretend to be concerned about inequities in the distribution of income and wealth. Neoconservatives make it abundantly clear that they couldn't care less.

Both neolibs and neocons are authoritarian statists each with their own definition of political correctness. Politically correct neolibs are expected to be pro-abortion, pro-gay-lesbian, pro-affirmative action, pro-Israel, pro-gun control, anti-clerical, pro-big government, and pro-American Empire. Anyone who does not conform to this litany or who associates with those who do not, is at risk of being attacked by a left wing truth squad such as the Southern Poverty Law Center and accused of the likes of homophobia, racism, anti-semitism, religious fundamentalism, or even hate crimes. Politically correct neocons are more likely to be pro-life, anti-gay-lesbian, anti-affirmative action, pro-Israel, anti-gun control, pro-clerical, pro-big government, and pro-Empire. Both are vehemently opposed to secession.

Above all, what neoliberals and neoconservatives have in common is that they are technofascists. Benito Mussolini defined fascism as "the merger of state and corporate power." Technofascism is the melding of corporate, state, military, and technological power by a handful of political elites which enables them to manipulate and control the population through the use of money, markets, media and the Internet.

Neoliberals and neoconservatives alike march to the beat of the same drummer � the largest, wealthiest, most powerful, most materialistic, most racist, most militaristic, most violent empire of all time.

Ultimately the differences between neoliberalism and neoconservatism are purely cosmetic. You may either have your technofascism with a smirk or you can have it with a smile.

[Oct 02, 2012] The TPP A Quiet Coup for the Investor Class by Hilary Matfess

September 25, 2012 | FPIF

The struggle over the Trans-Pacific Partnership reveals a disturbing trend in American politics. The much discussed Citizens United ruling granting corporations personhood has given way to a trade negotiation process in which corporations are granted more rights than American citizens, their elected representatives, or foreign governments impacted by the deal. That trade negotiations with such an immense potential impact on numerous sectors of the American economy have been conducted in secret is troubling enough. To consider that those negotiating the treaty have willfully ignored experts and elected representatives in favor of corporate interests calls into question the sustainability of American democracy.

tom anocu

Patricia Gray is right. It's better if we stop using the much maligned term 'democracy' to a system that works against and NOT for the interests or ordinary people. Using it to justify the abuses government and corporations commit against citizens the world over is a travesty. You CAN'T have both, concentrations of power in the hands of the few and democracy. That is a contradiction not very well understood in the US. Journalists should recognize this and stop perpetuating the patent FARSE. The illusion of 'choice' in the Nov. elections reflects all this.

[Sep 27, 2010] Auerback- Where is Huey Long When You Need Him

If you consider the Obama regime is almost one-to-one continuation of Bush II regime the argument about corporatism does make sense.
It's become patently obvious to anybody with half a brain and a pulse that President Obama's "progressivism" has more in common with Mussolini's corporatism than anything remotely connected to a genuinely progressive agenda.

If you think I'm exaggerating, I suggest you read Denis Mack Smith's excellent accounts of Il Duce's tenure in Smith's "Modern Italy: A Political History", or his biography, "Mussolini".

Both works describe a country which, while claiming to reduce an inflated bureaucracy, needed to do precisely the opposite in order to reward personal "clients" and followers. Both books also recount that in spite of the efforts of Mussolini's first Fascist Finance Minister De'Stefani's efforts to curb tax evasion and limit stock exchange speculation, his efforts were constantly thwarted by other political cronies of Il Duce, as well as Mussolini himself, who soon allowed the majority of his Cabinet to discredit one of the few competent ministers, who was of above average intelligence and competence (Elizabeth Warren, watch out).

steve from virginia:

PS read Ritholtz:

http://www.ritholtz.com/blog/2010/09/you-vs-corporations/

Valissa:

Great link! Barry Ritholtz NAILS IT� here is the title of the post�

The Left Right Paradigm is Over: Its You vs. Corporations

Many of us have figured this out already, but Barry does a succint job of summarizing key points.

Personally I think discussing what's wrong with the so-called left and how one might 'fix it' is a waste of time given that premise is stuck in a fading and more-irrelevant-by-the-day political paradigm.

brian:

Lawrence of Arabia (1962)

Dryden: Well. It seems we're to have a British waterworks with an Arab flag on it. Do you think it was worth it?

General Allenby: Not my business. Thank God I'm a soldier.

And it seems we are to have an Italian government (1930s version)

And a Japanese economy (1980s-90s version)

Soldier on�

Doug Terpstra:

Thank you, Marshall (and Yves), for a righteously wicked post! Why not you, as Huey, Marshall? Worried about "extra-judicial punishment", are we?

Of course, you covered key 'failures' quite well, but the full story is even worse: including the Patriot Act, GITMO, rendition, Abu Ghraib reclassification, citizen assassination, gay rights, union disempowerment, SHAFTA, Palestine, land mine treaty abandonment, lobbying, secrecy, etc.

In fact, Obama is doing far more damage as a Neocon ringer, a wolf in sheep's clothing, than any naked con could get away with, and it is my suspicion that Rahm's Chicago game is far more devious-that midterm "losses" are part of the game to consolidate a Neocon agenda.

Next on the block, courtesy of the Obama-stacked Cat Food Commission, is Social Security-under the cover of the same prickly briar patch Clinton used after 1994 for welfare reform, SHAFTA, repeal of Glass-Steagall etc. The willful blindness of some Obama apologists here is rather stunning.

Stelios Theoharidis:

It takes a really special kind of idiot to think that you can have legitimate financial, tax, military, prison, or healthcare reform without first actually having political reform in this country. Comparing Obama to Mussolini is such absolute and utter BS, who here amongst us expects that the political and economic class that brought us into this quagmire to be the same one that brings us out. What just because you insert some sort of political outsider into it that is going to change the army of insiders around him. By making that characterization you are no better than the idiot tea baggers who want to dress him up like Hitler in posters. Obama didn't put us where we are but he has to deal with all the complexities of our position. Sure many decisions have led us further into collapse, but we are basically in a political system with widespread capture, you can't make meaningful reform in that kind of situation and his and our largest failure is chase after financial and healthcare reforms when we should first be making political reforms.

No matter who would have been put in there the situation would have varied little. The same people (Summers, Geitner, Orzag, or their republican counterparts) are going to get into the political process as before. The same power brokers and lobbyists are going to influence the direction of legislation to the benefit of special interests. You talk about Obama as if he has options, that illusion of choice is one we like to maintain. But, choice is basically a few predetermined options, that more and more seem the same. We had an inherited war, an inherited debt, corporate shills in SCOTUS, a massive lobbying complex, and an inherited political class that has put us on that trajectory and will neuter any attempt to get on a different path.

Change doesn't happen because we vote someone into office. When has real reform happened without people getting out in the streets to get their heads beat in. It is pretty much going to be the same political and economic class, but change will only happen when they learn to be afraid about losing their bread and butter. Otherwise they are just going to continue milking the cow until someone kicks the bucket out from underneath their ass. Any political class only maintains power through consent.

The decent portion of the progressive left is too busy building alternative economies and disconnecting themselves from the detrimental social and environmental impacts that our present system is generating. Why even try to make futile efforts to prop up this deteriorating behemoth.

Howard Dean's people, who tried to work through the political process, only managed to push a bunch of moderates into power that did nothing but slow down any real reform.

Doug Terpstra:

"It takes a really special kind of idiot�"

"You talk about Obama as if he has options�"

Careful with the finger-pointing. Of course he has options, he also has real power, or did, with 59-seat majority. That's what elections are supposed to be for. The problem, as Auerbach has ably shown, is that Obama has consistently made affirmative choices in exactly the wrong direction on issue after issue for two years now.

See Andrew Bacevich's "Prisoners of War Bob Woodward and All the President's Men" at TomDispatch for another example of recent bad, in this case criminally insane, choices our president is making.

http://www.tomdispatch.com/post/175300/tomgram:_andrew_bacevich,_the_washington_gossip_machine__/

I repeat, "The willful blindness of some Obama apologists here is rather stunning."

Tom Hickey:

The decent portion of the progressive left is too busy building alternative economies and disconnecting themselves from the detrimental social and environmental impacts that our present system is generating. Why even try to make futile efforts to prop up this deteriorating behemoth.

Right. This process began back in the Sixties, when a lot of us realized what was going on and that the mainstream would never change without a revolution. Revolutions happen spontaneously. In the meanwhile, thinking and feeling people are continuing to network and create their own underground economy.

readerOfTeaLeaves:

Standing in front of my computer clapping an ovation for this post� And now, to listen to it again�.

emca:

Huey Long was an American populist's phenomena.

Sometimes credited with moving FDR more toward the Left, noted for improving the lives of many of the rabble in Louisiana which faithfully supported him and in general, pulling the state out of ravages of neo-feudal corporate colonialism through implementation of policy of state investment in the welfare of the common.

The definitive work on the life of Huey Long is a book by one Harry T. Williams. For anyone interested in a straightforward (and with Long, this is about as impartial as your going to get) account of Long's life, I recommend this book.

Here's a quote from a Long speech given in support of re-election of Senator Hattie Caraway (D-AR)which could still resonate today:

"They've got a set of Republican waiters on one side and a set of Democratic waiters on the other side, but no matter which set of waiters brings you the dish, the legislative grub is all prepared in the same Wall Street kitchen."

Long was assassinated by a disgruntled conservative 'aristocrat' (by a doctor no less) seeking to free Louisiana from its 'demagogue' dictator.

He was though reportedly targeted by several conservative 'death squads' so it all may have just been a matter of time and indeed Long himself may have understood this.

Their about many good quotes about H. Long, in ending here are a few to humor my indulgence:

"He has not only common ways, but a common, sordid, dirty soul."

and from Drew Pearson epitaph:

"He was a crook - but he had no money; a corrupt politician - but the cost of government is third-lowest in the country; a demagogue - but he kept his campaign promises; a hillbilly - but he had no racial prejudices; an ignoramus - but he ran a business administration; a dictator - but he broadened the suffrage; an opportunist - but he had ideals."

and an observation made while Long was a mere Public Service Commissioner for the state of Louisiana:

"They don't know Huey Long. They never saw him and would not know him if he stepped off the train at our station. But they know him in name and you can't make them believe he is not their defender."

Ellen Anderson:

@ Paul T. The world economy has been propped up by permanent war and, probably, drug dealing since WWII. War is critical to keeping the current system up and running. You really can't think that you will be able to end wars without restraining corporate control of the dialogue.

Thanks for that link, Steve from V. That is great to see this dialogue breaking out on financial blogs.

As Bill Moyers recently discovered "It's over and money won."

Tom Hickey:

Gosh, Marshal, you are sounding like me. Or maybe I am sounding like you. Whatever, The Mussolini analogy fits.

What we have is what President Eisenhower warned against in his farewell address, a military-industrial (financial)-government complex aka the corporate state - or what Jamie Galbraith has called "the predator state" in his book bearing that title.

What you did not mention is that the US runs on military Keynesianism. It is government expenditure on the military and related operations. often black, that accounts for a major portion of US demand. Couple that with low tax rates, low inflation due to imports that favor the multinationals but deprive US workers of jobs, and reduced bargaining power of labor due to business-sponsored legislation and global labor arbitrage, and you have the recipe for an economy that inflates assets and keeps worker incomes low while allowing income and wealth to explode toward the top.

The only things needed to complete this picture are t privatizing SS by handing it to Wall Street, privatizing government institutions thereby creating a toll booth economy, and delivering health care including Medicare and Medicaid entirely to the insurance industry. This is all on the table.

Ed:

There is an academic debate about what exactly fascism is. Corporatism is definitely an important element, and US federal economic policy is increasingly corporatist. But other important elements include a sort of hypernationalism and military adventurism, along with the silencing of internal dissent. I'm worried that we will see more of this in the future, but we are not there yet.

Kevin de Bruxelles makes some important points that got lost as the thread started verring in some odd directions. First, one thing the Obama administration has demonstrated is that the federal government may well have become too corrupt and corporate influenced to effectively deliver "progressive" politics. The Right in the U.S. may have been more correct than they knew when they argued that well, other countries could run single payer health care systems, but the U.S. couldn't. The American left may have to make a strategic switch and start arguing for a weaker federal government, plus no new programs without substantial political and administrative reform. It would look more like the eighteenth century and nineteenth century left which, after all, included Smith and Ricardo as well as Marx.

Kevin is correct on his second point. I'm amazed at how insistent commentators on some left-leaning websites have become at making support for essentially open borders a litmus test. Its pretty clear that increased immigration, at least in the short term, lowers wages by increasing competition for employment. I'm not sure why exactly you would want to bring more workers into countries with high rates of unemployment, nor how that benefits the immigrants. But it seems the only people even addressing the weakening power of labor are the paleocons.

In 2008 the candidates for President who got substantial support, in terms of winning primaries, were Obama, Hilary Clinton, McCain, Romney, and Huckabee. Of this group, the also rans were to the right of the winner on national security policy and civil liberties, and with the possible exception of Huckabee on economic policy as well. It was a somewhat more restricted choice than in past presidential elections, but the options keep getting narrower each cycle.

Paul Tioxon:

I referenced Chalmers Johnson, please tell me you've read at least one of his books on the military industrial complex. If you have, surely you must know that he calls for shutting down nearly nearly all military bases around the world, including the ridiculous number of carriers afloat. My response is directed to the specifics I read in MAs essay. I don't have the time or inclination to bring up every point of the oligarchic political economy every time I address one piece of writing here. Although I have been accused of digressing on occasion, on NC, I try to stick at one outrage at a time. I'm glad you are voting, can you please put up the damn law sign for the candidate of your choice. That's a good start.

Glenn Condell:

Barack Obama is the biggest disappointment in history. Never have so many felt so betrayed by so few. We have been had. Change, my arse.

There have been worse presidents, Bush for one, and we are a long way from say Idi Amin, but what did anyone expect of these people? The weight of the world's expectancy, generated largely by his own soaring rhetoric (tellingly, his signature talent) has simply been ignored and those he should have been limiting have been set free to enslave us all. He is too intelligent not to know what he is responsible for.

My candidate for the next best disappointment in history is another who specialised in noble-browed platitudes to move the masses, one W. Clinton, who is almost as smart as Obama.

Anyone else seeing a pattern here?

Marcello:

He sure strikes me as a Manchurian Candidate. it is a plain and simple answer to his puzzling behaviour.

funny, but search Obama Manchurian Candidate and you get a lot of hits. Many people are thinking the same thing

Tom Shillock:

I suspect Obama and his corrupt regime understand that ideologically and policy wise they are the successors to the Bush Cheney regime. But he and the Democrats are playing a game similar to the one Bill Clinton played in which they co-op Republican issues and carry water for oligarchs and plutocrats while pretending otherwise. That enables them to snag oligarch and plutocrat campaign funding while it forces Republicans into more of a corner, as it were, where they have to adopt more extreme positions and tactics to distinguish themselves. Promoting Tea Party types shows they learned something from Karl Rove about the value of clean hands.

The point is that Obama need only vaguely blather on about "change" and use the rhetoric of social and economic justice in order to be re-elected. As angry as people may get with him the alternative probably seems less palatable and probably is. If the majority of Americans truly want change they will have to look to history for guidance: 1776, 1789 and 1917. After all, we have voted many times since Jimmy Carter yet the financial crises have worsened, inequality has widened and life has become more financially precarious for most Americans.

Ellen Anderson:

@ Paul T. I understand that this is a financial blog. I read it a lot but don't usually have anything to contribute. However, today and yesterday Yves raised a question that I do feel qualified to answer and have tried to do. I agree that we have a duty to vote. However, there is no point in organizing to fight the military industrial complex or corporatism or whatever you want to call it.

Perhaps some people will choose to try to reform around the edges, but most of the activist lefties and other well intentioned citizens I know are busy at the local level where they may be able to make a real difference.

[Dec 27, 2005] Asian news and current affairs

Asia Times Online

The exaltation of big business at the expense of the citizen was a central characteristic of government policy in Germany and Italy in the years before those countries were chewed to bits and spat out by fascism.

Fascist dictatorships were borne to power in each of these countries by big business and they served the interests of big business with remarkable ferocity. These facts have been lost to the popular consciousness in North America. Fascism could therefore return to us, and we will not even recognize it. Indeed, Huey Long, one of America's most brilliant and most corrupt politicians, was once asked if America would ever see fascism. His answer was, "Yes, but we will call it anti-fascism."

By exploring the disturbing parallels between our own time and the era of overt fascism, I am confident that we can avoid the same hideous mistakes. At present, we live in a constitutional democracy. The tools necessary to protect ourselves from fascism remain in the hands of the citizen. All the same, I believe that North America is on a fascist trajectory. We must recognize this threat for what it is, and we must change course.

Consider the words of Thurman Arnold, head of the antitrust division of the US Department of Justice in 1939: "Germany, of course, has developed within 15 years from an industrial autocracy into a dictatorship. Most people are under the impression that the power of Hitler was the result of his demagogic blandishments and appeals to the mob ... Actually, Hitler holds his power through the final and inevitable development of the uncontrolled tendency to combine in restraint of trade."

Arnold made his point even more clearly in a 1939 address to the American Bar Association: "Germany presents the logical end of the process of cartelization. From 1923 to 1935 cartelization grew in Germany until finally that nation was so organized that everyone had to belong either to a squad, a regiment or a brigade in order to survive. The names given to these squads, regiments or brigades were cartels, trade associations, unions and trusts. Such a distribution system could not adjust its prices. It needed a general with quasi-military authority who could order the workers to work and the mills to produce. Hitler named himself that general. Had it not been Hitler it would have been someone else."

I suspect that to most readers, Arnold's words are bewildering. Most people today are quite certain that they know what fascism is. When asked to describe it, however, they will typically tell you what it was, the assumption being that it no longer exists. Most people associate fascism with concentration camps and rows of stormtroopers, yet they know nothing of the political and economic processes that led to these horrible end results.

Before the rise of fascism, Germany and Italy were liberal democracies. Fascism did not swoop down on these nations as if from another planet. To the contrary, fascist dictatorship was the end result of political and economic changes these nations underwent while they were still democratic. In both these countries, economic power became so utterly concentrated that the bulk of all economic activity fell under the control of a handful of men. Economic power, when sufficiently vast, becomes by its very nature political power. The political power of big business supported fascism in Italy and Germany.

Business tightened its grip on the state in both Italy and Germany by means of intricate webs of cartels and business associations. These associations exercised a very high degree of control over the businesses of their members. They frequently controlled pricing, supply and the licensing of patented technology. These associations were private, but were entirely legal. Neither Germany nor Italy had effective antitrust laws, and the proliferation of business associations was generally encouraged by government.

This was an era eerily like our own, insofar as economists and businessmen constantly clamored for self-regulation in business. By the mid 1920's, however, self-regulation had become self-imposed regimentation. By means of monopoly and cartel, the businessmen had wrought for themselves a "command and control" economy that effectively replaced the free market. The business associations of Italy and Germany at this time are perhaps history's most perfect illustration of 18th century economist and philosopher Adam Smith's famous dictum, "People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices."

How could the German government not be influenced by Fritz Thyssen, the man who controlled most of Germany's coal production? How could it ignore the demands of the great I G Farben industrial trust, controlling as it did most of that nation's chemical production? Indeed, the German nation was bent to the will of these powerful industrial interests. Hitler attended to reduction of certain taxes applicable to large businesses, while simultaneously increasing the same taxes as they related to small business.

Previous decrees establishing price ceilings were repealed such that the cost of living for the average family was increased. Hitler's economic policies hastened the destruction of Germany's middle class by decimating small business. Ironically, Hitler pandered to the middle class and they provided some of his most enthusiastically violent supporters. The fact that he did this while simultaneously destroying them was a terrible achievement of Nazi propaganda.

Hitler also destroyed organized labor by making strikes illegal. Notwithstanding the socialist terms in which he appealed to the masses, Hitler's labor policy was the dream come true of the industrial cartels that supported him. Nazi law gave total control over wages and working conditions to the employer. Compulsory (slave) labor was the crowning achievement of Nazi labor relations. Along with millions of people, organized labor died in the concentration camps. The camps were not only the most depraved of all human achievements, they were a part and parcel of Nazi economic policy.

Hitler's untermenschen (sub-humans), largely Jews, Poles and Russians, supplied slave labor to German industry. Surely this was a capitalist bonanza. In another bitter irony, the gates over many of the camps bore a sign that read "Arbeit Macht Frei" (work shall set you free). I do not know if this was black humor or propaganda, but it is emblematic of the deception that lies at the heart of fascism.

The same economic reality existed in Italy between the two world wars. In that country, nearly all industrial activity was owned or controlled by a few corporate giants, Fiat and the Ansaldo shipping concern being the chief examples. Land ownership in Italy was also highly concentrated and jealously guarded. Vast tracts of farmland were owned by a few latifundisti (estate owners). The actual farming was carried out by a landless peasantry who were locked into a role essentially the same as that of the sharecropper of the US deep south. As in Germany, the few owners of the nation's capital assets had immense influence over government.

As a young man, Mussolini had been a strident socialist, and he, like Hitler, used socialist language to lure the people to fascism. Mussolini spoke of a "corporate" society wherein the energy of the people would not be wasted on class struggle. The entire economy was to be divided into industry specific "corporazioni", bodies composed of both labor and management representatives. The corporazioni would resolve all labor/management disputes, and if they failed to do so, the fascist state would intervene.

Unfortunately, as in Germany, there laid at the heart of this plan a swindle. The corporazioni, to the extent that they were actually put in place, were controlled by the employers. Together with Mussolini's ban on strikes, these measures reduced the Italian laborer to the status of peasant.

Mussolini, the one-time socialist, went on to abolish the inheritance tax, a measure which favored the wealthy. He decreed a series of massive subsidies to Italy's largest industrial businesses and repeatedly ordered wage reductions. Italy's poor were forced to subsidize the wealthy. In real terms, wages and living standards for the average Italian dropped precipitously under fascism.

Even this brief historical sketch shows how fascism did the bidding of big business. The fact that Hitler called his party the "National Socialist Party" did not change the reactionary nature of his policies. The connection between the fascist dictatorships and monopoly capital was obvious to the US Department of Justice in 1939. As of 2005, however, it is all but forgotten.

It is always dangerous to forget the lessons of history. It is particularly perilous to forget about the economic origins of fascism in our modern era of deregulation. Most Western liberal democracies are currently held in the thrall of what some call market fundamentalism. Few nowadays question the flawed assumption that state intervention in the marketplace is inherently bad. As in Italy and Germany in the 1920s and 1930s, business associations clamor for more deregulation and deeper tax cuts.

The gradual erosion of antitrust legislation, especially in the United States, has encouraged consolidation in many sectors of the economy by way of mergers and acquisitions. The North American economy has become more monopolistic than at any time in the post-World War II period. (By way of example, US census data from 1997 show that the largest four companies in the food, motor vehicle and aerospace industries control 53.4%, 87.3% and 55.6% of their respective markets. More than 20% of commercial banking in the US is controlled by the four largest financial institutions, with the largest 50 controlling more than 60%.

Even these numbers underestimate the scope of concentration, since they do not account for the myriad interconnections between firms by means of debt instruments and multiple directorships, which further reduce the extent of competition. Actual levels of US commercial concentration have been difficult to measure since the 1970s, when strong corporate opposition put an end to the Federal Trade Commission's efforts to collect the necessary information.)

Fewer, larger competitors dominate all economic activity, and their political will is expressed with the millions of dollars they spend lobbying politicians and funding policy formulation in the many right-wing institutes that now limit public discourse to the question of how best to serve the interests of business. The consolidation of the economy, and the resulting perversion of public policy are themselves fascistic. I am quite certain, however, that president Bill Clinton was not worrying about fascism when he repealed federal antitrust laws that had been enacted in the 1930's.

The Canadian Council of Chief Executives is similarly unworried about fascism when it lobbies the Canadian government to water down our Federal Competition Act. (The 1985 act regulates monopolies, among other things, and itself represents a watering down of Canada's previous antitrust laws. It was essentially written by industry and handed to the Brian Mulroney government to be enacted.)

At present, monopolies are regulated on purely economic grounds to ensure the efficient allocation of goods. If we are to protect ourselves from the growing political influence of big business, then our antitrust laws must be reconceived in a way that recognizes the political danger of monopolistic conditions. Antitrust laws do not just protect the marketplace, they protect democracy.

It might be argued that North America's democratic political systems are so entrenched that we needn't fear fascism's return. The democracies of Italy and Germany in the 1920's were in many respects fledgling and weak. Our systems will surely react at the first whiff of dictatorship. Or will they? This argument denies the reality that the fascist dictatorships were preceded by years of reactionary politics, the kind of politics that are playing out today. Further, it is based on the conceit that whatever our own governments do is democracy.

Canada still clings to a quaint, 19th century "first past the post" electoral system in which a minority of the popular vote can and has resulted in majority control of parliament. In the US, millions still question the legality of the sitting president's first election victory, and the power to declare war has effectively become his personal prerogative.

Assuming that we have enough democracy to protect us is exactly the kind of complacency that allows our systems to be quietly and slowly perverted. On paper, Italy and Germany had constitutional, democratic systems. What they lacked was the eternal vigilance necessary to sustain them. That vigilance is also lacking today.

Our collective forgetfulness about the economic nature of fascism is also dangerous at a more philosophical level. As contradictory as it may seem, fascist dictatorship was made possible because of the flawed notion of freedom that held sway during the era of laissez-faire capitalism in the early twentieth century. It was the liberals of that era that clamored for unfettered personal and economic freedom, no matter what the cost to society.

Such untrammeled freedom is not suitable to civilized humans. It is the freedom of the jungle. In other words, the strong have more of it than the weak. It is a notion of freedom that is inherently violent, because it is enjoyed at the expense of others. Such a notion of freedom legitimizes each and every increase in the wealth and power of those who are already powerful, regardless of the misery that will be suffered by others as a result.

The use of the state to limit such "freedom" was denounced by the laissez-faire liberals of the early twentieth century. The use of the state to protect such "freedom" was fascism. Just as monopoly is the ruin of the free market, fascism is the ultimate degradation of liberal capitalism.

In the post-war period, this flawed notion of freedom has been perpetuated by the neo-liberal school of thought. The neo-liberals denounce any regulation of the marketplace. In so doing, they mimic the posture of big business in the pre-fascist period. Under the sway of neo-liberalism, Thatcher, Reagan, Mulroney and George W Bush have decimated labor and exalted capital. (Currently, only 7.8% of workers in the US private sector are unionized - about the same percentage as in the early 1900s.)

Neo-liberals call relentlessly for tax cuts which, in a previously progressive system, disproportionately favor the wealthy. Regarding the distribution of wealth, the neo-liberals have nothing to say. In the result, the rich get richer and the poor get poorer. As in Weimar Germany, the function of the state is being reduced to that of a steward for the interests of the moneyed elite. All that would be required now for a more rapid descent into fascism are a few reasons for the average person to forget that he is being ripped off. The racist hatred of Arabs, fundamentalist Christianity or an illusory sense of perpetual war may well be taking the place of Hitler's hatred for communists and Jews.

Neo-liberal intellectuals often recognize the need for violence to protect what they regard as freedom. Thomas Freidman of the New York Times has written enthusiastically that "the hidden hand of the market will never work without a hidden fist", and that "McDonald's cannot flourish without McDonnell Douglas, the designer of the US Air Force F-15 ... ".

As in pre-fascist Germany and Italy, the laissez-faire businessmen call for the state to do their bidding even as they insist that the state should stay out of the marketplace. Put plainly, neo-liberals advocate the use of the state's military force for the sake of private gain. Their view of the state's role in society is identical to that of the businessmen and intellectuals who supported Hitler and Mussolini. There is no fear of the big state here. There is only the desire to wield its power. Neo-liberalism is thus fertile soil for fascism to grow again into an outright threat to our democracy.

Having said that fascism is the result of a flawed notion of freedom, I respectfully suggest that we must re-examine what we mean when we throw around the word "freedom". We must conceive of freedom in a more enlightened way. Indeed, it was the thinkers of the Enlightenment who imagined a balanced and civilized freedom that did not impinge upon the freedom of one's neighbor. Put in the simplest terms, my right to life means that you must give up your freedom to kill me. This may seem terribly obvious to decent people. Unfortunately, in our neo-liberal era, this civilized sense of freedom has, like the dangers of fascism, been all but forgotten.

Paul Bigioni is a lawyer practicing in Markham, Ontario. He is a commentator on trade and political issues. This article is drawn from his work on a book about the persistence of fascism.

What is American Corporatism? By Robert Locke
FrontPageMagazine.com | Friday, September 13, 2002

FrontPage Magazine

We are probably heading into some economic heavy weather which will spur needed debate on what's right and wrong with our economy. This will require our being clear about what kind of economy we really have. I have mentioned before that we increasingly live not in a capitalist society but in a corporatist one, and I would like to flesh out this notion.

What is corporatism? In a (somewhat inaccurate) phrase, socialism for the bourgeois. It has the outward form of capitalism in that it preserves private ownership and private management, but with a crucial difference: as under socialism, government guarantees the flow of material goods, which under true capitalism it does not. In classical capitalism, what has been called the "night-watchman" state, government's role in the economy is simply to prevent force or fraud from disrupting the autonomous operation of the free market. The market is trusted to provide. Under corporatism, it is not, instead being systematically manipulated to deliver goods to political constituencies. This now includes basically everyone from the economic elite to ordinary consumers.

Unlike socialism, corporatism understands that direct government ownership of the means of production does not work, except in the limiting case of infrastructure.1 But it does not represent a half-way condition between capitalism and socialism. This is what the West European nations, with their mixed economies in which government owned whole industries, tried to create until Thatcherism. Corporatism blends socialism and capitalism not by giving each control of different parts of the economy, but by combining socialism's promise of a government-guaranteed flow of material goods with capitalism's private ownership and management.

What makes corporatism so politically irresistible is that it is attractive not just to the mass electorate, but to the economic elite as well. Big business, whatever its casuists at the Wall Street Journal editorial page may pretend, likes big government, except when big government gets greedy and tries to renegotiate the division of spoils. Although big business was an historic adversary of the introduction of the corporatist state, it eventually found common ground with it. The first thing big business has in common with big government is managerialism. The technocratic manager, who deals in impersonal mass aggregates, organizes through bureaucracy, and rules through expertise without assuming personal responsibility, is common to both. The second thing big business likes about big government is that it has a competitive advantage over small business in doing business with it and negotiating favors. Big government, in turn, likes big business because it is manageable; it does what it is told. It is much easier to impose affirmative action or racial sensitivity training on AT&T than on 50,000 corner stores. This is why big business has become a key enforcer of political correctness. The final thing big business likes about big government is that, unlike small government, it is powerful enough to socialize costs in exchange for a share of the profits.

The key historical moments in the development of American corporatism can be easily traced. It got its start from the realization, during the Progressive period around 1900, that the night-watchman state was too weak to make the large corporate actors of the economy play fair. The crucial premise that enters here is that the capitalist economy cannot be trusted to be self-regulating, as it previously had been. This collapse of trust was also implicit in the 1913 creation of the Federal Reserve system. What the Great Depression did was destroy a second kind of trust: that the economy would reliably deliver material goods without government intervention. With these two different kinds of trust gone, corporatism becomes not only worthwhile, but necessary. Crucially, it becomes psychologically necessary, independently of whether government can deliver on its promises, because people instinctively turn to government as their protector.

Anyone who is serious about getting rid of corporatism must explain how they are going to restore these two kinds of trust or persuade people to live without them. In particular, it is almost certainly useless, as verified by the fact that government has grown under every postwar Republican administration, to try to nibble away at big government without renegotiating the social contract that underlies it. If we don't have a plan to renegotiate this social contract, we must face the fact that the electorate will demand that it be respected. Newt Gingrich, who thought that the failure of Clinton's health plan signified the electorate's rejection of "socialism," learned this the hard way.

Clearly, the New Deal was the biggest jump forward into corporatism, though this was not fully understood at the time. Many people, both pro and con, misunderstood it as a move towards socialism.2 As is well known, Roosevelt was an empiricist, not a systematic thinker, and many elements of the New Deal that were tried, such as the notorious National Recovery Administration, were rightly discarded. But the fundamental proposition, that government should take responsibility for ensuring the flow of material goods to the people, was rapidly embraced by the American people, which continues to embrace it today whether it admits it or not. When people demand that the government "do something" about a falling stock market, they are playing at capitalism while practicing corporatism.

The fundamental essence of corporatism is not technocratic but moral: what does government have the responsibility to do? What do people have the right to demand be done for them?

The economic Left likes corporatism for three reasons:

  1. It satisfies its lust for power.
  2. It makes possible attempts to redistribute income.
  3. It enables them to practice #2 while remaining personally affluent.
The economic Right likes corporatism for three different reasons:
  1. It enables them to realize capitalist profits while unloading some of the costs and risks onto the state.
  2. The ability to intertwine government and business enables them to shape government policy to their liking.
  3. They believe the corporatist state can deliver social peace and minimize costly disruptions.
This process has been described as "socializing the losses, privatizing the profits" by its leftist critics, who also call parts of it corporate welfare. What they don't get is that in a society which grants the fundamental premise that government should take care of everybody, government will, and big business is part of "everybody." Most economic arguments today are not between a socialistic ideal and a capitalistic one, as many seem to believe, but are arguments within the corporatist consensus. This consensus is incapable of gelling into a unitary consensus because it is supported by the two sides for different reasons. There is also no public, coherent ideology of corporatism because almost no-one is willing to admit they believe in it.

Let's look at some specific examples of corporatism:

  1. The Export-Import Bank. This government agency helps finance exports of American products. The aim, laudable enough, is to create jobs in the US. But there is still the problem that doing this requires the government to consume capital, which might have created more jobs, (or just more wealth) if it had been allocated elsewhere. So this is classic corporatism: government allocating capital to private industry on the basis of political favoritism.
  2. Agricultural price-supports. Contrary to myth, most of the money goes to agribusiness, not small farmers.
  3. Industrial bailouts, like the recent one of the airlines. People do not trust the market to provide the airline service they think they "need." The truth is this country has more carriers than the market can support and a few should be allowed to die. No-one who really believes in free-market economics accepts the argument that jobs can be saved in the long run in this fashion.
  4. Corporate bankruptcy law. This law assigns an artificial value, not supported by economics, to keeping dying companies alive, rather than letting the carcasses of competition's losers nourish the winners. It is responsible, for example, for preventing a needed cull of the airline business by letting Continental Airlines pass through its protections not once but twice.
  5. Tariffs, quotas, and other trade restrictions. These transfer wealth from consumers to producers in the affected industries, whatever their other possible merits.
  6. Affirmative action is generally viewed as a social-policy question rather than an economic-policy one, but it fits neatly into the corporatist model: government forces private industry to distribute jobs to a favored political constituency. If people really believed in markets, they would realize that irrational discrimination imposes a cost on employers, who therefore already have an incentive not to engage in it.
  7. Fannie Mae, the government agency which raises money for mortgage loans in the private capital markets. This agency has deliberately been spinning out loans to sub-par borrowers who are doomed to default on them. It has become a major prop holding up real-estate prices, and is thus a key culprit in the ongoing mortgage bubble. Conservatives accept it on the grounds that home ownership makes people more conservative. But this may not be true forever if private ownership of housing becomes a public entitlement. This is part of an ongoing phenomenon that corporatism helps to drive: the erosion of the determination of political preferences by the ownership of property.3
  8. Sallie Mae, the government agency which supervises student loans. The government has a system of directly-financed public universities, but is has also in effect annexed private universities. Cleverly, it uses a relatively small amount of public money to package the flow of a much larger amount of private capital to tuition. The principal problem with this is that it has become a subsidy machine for the spiraling cost of higher education. There is also the problem that any institution receiving federal funds becomes susceptible to regulations that otherwise wouldn't be legal. Bribes-if-you-do are a much less disruptive means of manipulating behavior than sanctions-if-you-don't, and corporatism hates disruption and loves business as usual.4 One way to interpret corporatism is as a systematic way for government to distribute bribes for submission to its authority.
  9. In local government, corporatism is principally a matter of real estate. Let's take New York as an example, just because I know it best and the pattern is clearest here, though similar dynamics work in other locales to a greater or lesser degree. Basically, real estate development here has become so over-regulated and over-taxed that it is virtually impossible to do profitably without government help. Government is aware that it has strangled development, but still wants it to occur because voters want jobs, campaign contributors want their projects, and projects create patronage opportunities for politicians. Therefore, government selectively lifts the burden of taxation and regulation on certain projects to push them into the black. It does this with tax abatements, loan guarantees, zoning changes, condemnations, outright subsidies, tax-exempt bond issues, exemption from regulations, and selective public infrastructure investments. As a result, only projects with political support can happen, and every skyscraper is a monument to the political deals that enabled it to get built. The result is capitalist in the sense of being privately owned, but it is not a free market. Government is expected by developers to keep a steady flow of profits going (while keeping politically-unconnected competitors out of the game.) It is expected by construction unions to keep a steady flow of construction jobs. It is expected by the public to deliver shiny new skyscrapers full of jobs.
  10. In science and technology, corporatism principally takes the form of federal government financing of research expenditures whose value is difficult for the private sector to capture on its own. Government pays for universities to provide industry with the raw feedstock of new discoveries that can be commercialized. State governments have entered this game on a lesser scale. Tax credits for research and development may also be interpreted as a public subsidy.
  11. In the capital markets, the quintessential corporatist institution is the Federal Reserve Bank. Legally, it is not technically a government agency at all but a cartel of private banks. Prior to 1913, the maintenance of a viable capital market in the U.S. was not a government responsibility.5 From the 30's to the 70's, the Fed tried to institute the grand corporatist project of Keynesianism, but abandoned it when inflation proved it unworkable. Nevertheless, the responsibilities of the Fed have tended to grow as people expect it, for example, to bail out a falling stock market with cheap credit, as I have mentioned before.
  12. Bankers are quite well aware that they can make speculative loans to financially weak nations and count on being bailed out by the government if anything goes wrong. Naturally, this creates a moral hazard, not to mention a misallocation of capital. But given that the Left wants to see capital allocated to the Third World, the Right wants banks to be profitable, and the public fears a crash, the bankers can always count on a bailout.

One can see how corporatism is likely to expand in the future. The privatization of Social Security is off for now, but remains inevitable, simply because there is no sustainable way to provide for a future income stream other than saving money now. But the stock market decline of the past few years has destroyed public trust that this market will always provide a reliable store of value, meaning that people will inevitably turn to government to make it provide one. What form this will take, cannot be predicted, but any privatization of Social Security will be accompanied by some governmental mechanism to stabilize investments. At best, this may mean diversification requirements. At worst, it may mean some horrible politicization of the capital markets.

The concept of corporatism provides a good way to analyze the failure of HillaryCare. With its attempt to involve private insurance companies, this plan clearly made a (clumsy) attempt to conform to the corporatist model. It was supported by big companies like GM, which saw it as a way to offload its huge health-care costs. Fundamentally, I think it would have worked if it hadn't been such an arrogant, secretive, heavy-handed, all-at-once undertaking. We are gradually getting the corporatist equivalent of socialized medicine in this country anyway. Corporatized medicine will mean nominally private health plans for the employed that are so heavily regulated in what they can charge and what they must provide that they might as well be run by government. It will mean requirements for all businesses to give their employees health coverage (something big business will love because it will destroy a lot of their small-business competitors.) It will mean regulation of drug prices, which will eventually make drug companies wards of the state. Lastly, Medicare and Medicaid will expand, with the help of state plans, to cover whomever is left, with a tacit subsidy to emergency rooms to cover the last dregs.

As I said, all these can be viewed as ways in which the corporatist state buys people's cooperation. But one cannot play this game without becoming susceptible to it, so that people buy the state's cooperation, too. Naturally, this produces the partly-valid complaint that we have a government for sale to the highest bidder. But in a society where people, institutions, and social groups are politically for sale to the highest bidder, what else could one possibly expect?

Both Right and Left like corporatism in practice and are very cozy with it. But they are also ambivalent about it in theory, because it contradicts many of their cherished ideological beliefs.6 At the level of ideological self-characterization, neither side has fully grasped what corporatism is nor can quite bring itself to admit that it endorses it. Thus in its utterances, the intellectual Left is still reflexively anti-corporate and the Right anti-government. Part of the twisted genius of Bill Clinton was that he came closer to admitting we live in a corporatist society than any previous president. Bush, who made his personal fortune off a public-private deal concerning a stadium, is just as good at playing the game in practice, but on the ideological plane he mistakenly thinks that what the corporatist synthesis takes from socialism is "compassion." Hence his painfully sincere efforts to be politically correct and nice about everybody, since he intuitively grasps that Americans will not accept the rhetoric of pure capitalism.

Realizing that our society is corporatist is the key to undoing many conservative misunderstandings. For example, we tend to be puzzled when the rich support the Left, which under classical capitalism they generally didn't. But in a society where government takes care of business, they often have a lot to gain from big government. Not to mention the fact that whole classes of the wealthy, i.e. lawyers, doctors, lobbyists, environmental consultants, defense contractors and others, make their money either helping people deal with government or are indirectly funded by government. Ownership of property used to make people conservative because they intuitively grasped that the means of the conservation of property were bound up with the means of the conservation of everything else: religious orthodoxy to social mores to cultural tradition to the Constitution. But now that corporatism has co-opted threats to property ownership, they don't feel the need for these things anymore.

I consider it highly unlikely that corporatism can be overthrown, though objectionable parts of it can certainly be fought. I will discuss what it means to be conservative in a corporatist environment in a future article. The key thing for us to understand is that many of our assumptions about what furthers our cause and what doesn't were derived under the conditions of a more capitalist society and increasingly no longer hold.


1 This is not to say that government is necessarily the most efficient owner of infrastructure; I am well aware of the arguments for private toll roads and investor-owned utilities. It's just that, compared with the state-owned steel mills and supermarkets of pre-Thatcher Europe or the Soviet Union, they are not obvious failures. The quality, cost and productivity of publicly-owned utilities compares acceptably to privately-owned ones. And privatization of natural monopolies has problems of its own, as we saw in the California electricity crisis, even if these problems are caused by politics and do not refute the free-market ideal itself.
2 The final irony of corporatism is that it represents the triumph of the one 20th-Century ideology that is considered so utterly discredited that most educated people don't even bother to learn what it believed about economics: fascism. The exact means by which the end was carried out were very different in Mussolini's Italy, Franco's Spain, Hitler's Germany, or Tojo's Japan, and the manner was occluded by a lot of violence caused by other things, but the fundamental dynamic is the same as here: government assumed responsibility for guaranteeing the flow of material goods by private means after public confidence in the market's ability to do this collapsed. The fascists did it to avert communism. We did it for less desperate reasons, but the idea is similar. (The German and Japanese Nazis were not fascists, strictly speaking, but the core of their economics, separate from their use of plunder, was similar. See my article on what the Nazis were really about.)
3 See my review of BoBos in Paradise. The Republican share of the rich vote is declining.
4 The political class loves corporatism because it enables them to establish themselves in stable, profitable brokerage-relationships in which they manage the exchange of favors between government and the public in exchange for political support. This is a much easier way to stay in office than focusing their efforts on contentious issues and the public's fickle opinions about them.
5 This responsibility devolved in practice onto the Morgan Bank on Wall Street, which organized ad-hoc groups of banks to stabilize markets and enforce standards when needed. See the fascinating account in Ron Chernow's The House of Morgan.
6 The recently faddish book Empire is an attempt to understand global corporatism from a neo-Marxist point of view. Although rich in hit-or-miss insights, its Marxist assumptions prevent it from getting it right. Marxists have been observing the emergence of corporatism, and desperately trying to update Marxism to accommodate it, for a long time now, the most philosophically interesting attempt being that of J�rgen Habermas in Legitimation Crisis. Such attempts can only be accurate insofar as they pass out of Marxism entirely.

Plutocracy & Corporate Rule

Mattern: The Rise Of Plutocracy & Corporate Rule

Friday, 9 December 2005, 4:16 pm
Opinion: Douglas Mattern

The Decline Of Democracy And Rise Of Plutocracy And Corporate Rule

We can have democracy in this country, or we can have great
wealth concentrated in the hands of a few, but we can't have both
- Supreme Court Justice Louis B. Brandeis

By Douglas Mattern

It's difficult to comprehend how the political leadership in the United States of America has degenerated from the brilliant leadership of Franklin Roosevelt and the inspiration of John Kennedy to the current administration of Bush the Second.

The U.S. has sadly declined from the noble democratic ideals so eloquently expressed by President Roosevelt on the role of government: "The pace of our progress is not whether we add more to the abundance of those who have much, it is whether we provide enough to those who have too little."

This ideal has degraded to a "greed is good" philosophy and the Ronald Reagan drivel that "government is the problem." Add the many politicians that are bought by corporate America through campaign donations and the result is legislation that is transforming the U.S. from a democracy to a plutocracy where the rich rule.

And today we do not have both. The richest 1 percent of Americans now have more income that the bottom 96 million. The richest 1 percent owns nearly half the country's wealth. The top 10 percent owns 80 percent of the wealth. The Census Bureau reports the gap between rich and poor is the largest in 75 years, just before the Great Depression.

Moreover, it's getting worse under the woeful leadership of the Bush Administration. Last year, for example, another one million Americans were added to the poverty role that now totals 37 million of our citizens. As the number of people in poverty rises, so does the number of billionaires in this country, over 225 and increasing.

The 2005 Human Development Report (HDR) that is issued annually by the United Nations and covers all 191 Member States shows the U.S. ranks 10th among the world's nations in the category that combines health quality, education, and standard of living. In the category of life expectancy the U.S. ranks 29th. In the poverty index involving the richest 18 countries, the U.S. ranks at the bottom in 17th place. This is a disgraceful condition in the world's richest country and a betrayal of the hard-fought struggles for democracy and equality waged in past decades by American workers.

The globalization free-market policy led by the U.S. has also produced gross inequality in many parts of the world. The HDR states: "Large parts of the Developing World are being left behind." and further, "human development gaps between rich and poor countries, already large, are widening."

The HDR states: "For all of the highly visible achievements, the reach of globalization and scientific advance falls far short of ending the unnecessary suffering, debilitating diseases and death from preventable illness that blight the lives of the world's poor people."

On the global level, 20 percent of the population holds over 75 percent of the wealth. A few hundred billionaires have compiled as much wealth as half of humanity. This inequality is the source of great unrest and protest with the most recent example at the Fourth Summit of the Americas held in Argentina with most of the hostility directed at Bush the Second.

Poverty is the parent of revolution and crime
- Aristotle

Academician Bernard Poirot-Delpech wrote in the French newspaper Le Monde a few years ago: "The temptation is to shut ourselves off,cover our eyes and applaud the use of force, but the tide of the poor keeps coming, wave after wave, each time stronger and stronger. The Third World War has begun, waged by the rich against all others."

Globalization should mean working together to create a just world community for the 21st century and not waging a kind of economic warfare to hoard the world's wealth and resources for a minority that also has no consideration for leaving precious resources for future generations.

What we have is not globalization for the many, but corporate globalization to serve the interests of a few rich governments, the multinationals, and in the process making the rich fabulously richer.

Corporate globalization is undemocratic and destructive. It is also an environmental nightmare due to its dependency on mass consumption and waste, along with turning our planet into a giant marketplace where everything is for sale to the highest bidder.

We must achieve globalization that is democratic and serves all the people with new economic models, and where it would be unthinkable for a few billionaires to possess as much wealth a billion poor people.

In addition to education and peaceful protests against unjust free- market policies and the mind-numbing "let the market rule" mentality, we need to find, support, and elect a new kind of political leadership with idealism and a democratic vision of the future. Senator William Fulbright described this kind of leadership in his book, The Price of Power: "The age of warrior kings and of warrior presidents has passed. The nuclear age calls for a different kind of leadership-a leadership of intellect, judgment, tolerance and rationality, a leadership committed to human values, to world peace, and to the improvement of the human condition�The attributes upon which we must draw are the human attributes of compassion and understanding between cultures."

Such a change would bring people back to the voting booth and help rescue our democracy here and the world community. It's a non-violent imperative revolution, and it's time to begin.

*************

Douglas Mattern is president of the Association of World Citizens, a San Francisco based international peace organization with branches in 30 countries, and author of the forthcoming book "Looking for Square Two - Moving From War and Violence to Global Community" published by American Book Publishing Co.

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