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Contents Bulletin Scripting in shell and Perl Network troubleshooting History Humor

Audacious Oligarchy and "Democracy for Winners"

Oligarchic "Quiet Coup" in the USA, "Greed is good" slogan and loss of trust in neoliberal governments

News Elite [Dominance] Theory And the Revolt of the Elite Recommended Links Quiet coup The Deep State National Security State / Surveillance State In Goldman Sachs we trust: classic example of regulatory capture by financial system hackers
Neoliberalism as a New Form of Corporatism Two Party System as polyarchy The Iron Law of Oligarchy The Pareto Law Media-Military-Industrial Complex Groupthink Bureaucracy as a Political Coalition
Corporatism Inverted Totalitarism US and British media are servants of security apparatus Casino Capitalism Ayn Rand and Objectivism Cult Amorality and criminality of neoliberal elite Corruption of Regulators
Neoliberal Brainwashing: Journalism in the Service of the Powerful Few The Guardian Slips Beyond the Reach of Embarrassment The importance of controlling the narrative New American Caste System The Essential Rules for Dominating Population What's the Matter with Kansas Big Uncle is Watching You
Nation under attack meme American Exceptionalism Neo-fascism Bureaucracies Military Bureaucracy Military Incompetence Bureaucratic Collectivism
Toxic Managers The psychopath in the corner office Female Sociopaths Office Stockholm Syndrome Quotes about Psychopaths Humor Etc


Introduction


There is an 'audacious oligarchy' of self-defined rulers who move freely between private industry and government, whose primary objective is preserving and furthering their own power and self-interest.

Jesse's Café Américain, Audacious Oligarchy

Audacious behaviour is often connected with the weakened self-preservation instinct, typical for sociopaths. So their audacity take the form of Chutzpah (shameless audacity; impudence, unmitigated effrontery or impudence; gall). It's inherently connected with the lack of empathy, which is a defining feature of sociopaths. The key question here is: to what extent the US elite became infected with substantial or even dominant number of sociopaths? Including female sociopaths as we saw recently in the reaction of behaviour of a wife of former president on killing Gaddafy (Hillary Clinton on Gaddafi: We came, we saw, he died ) ?

In fact this process of self-selection of sociopaths into neoliberal elite reached dangerous level was noted be many, including famous remark of Robert Johnson at Culture Project's IMPART 2012 Festival that essentially defined the term ("Legitimate if you can, coerce if you have to, and accommodate if you must."):

Oligarchy now is audacious. They don't really care if they are legitimate.

"Legitimate if you can, coerce if you have to, and accommodate if you must."

Robert Johnson serves as the Executive Director of the Institute for New Economic Thinking (INET) and a Senior Fellow and Director of the Global Finance Project for the Franklin and Eleanor Roosevelt Institute in New York. Previously, Johnson was a Managing Director at Soros Fund Management where he managed a global currency, bond and equity portfolio specializing in emerging markets. Prior to working at Soros Fund Management, he was a Managing Director of Bankers Trust Company managing a global currency fund.

Johnson served as Chief Economist of the US Senate Banking Committee under the leadership of Chairman William Proxmire (D. Wisconsin) and of Chairman Pete Domenici (R. New Mexico). Johnson received a Ph.D. and M.A. in Economics from Princeton University and a B.S. in both Electrical Engineering and Economics from the Massachusetts Institute of Technology.

As you can see this idea "Legitimate if you can, coerce if you have to, and accommodate if you must." does not differ much with the modus operandi of three-letter agencies, so the terms "audacious oligarchy" and "deep state" are closely related: deep state can be viewed as a social system in this audacious oligarchy rules the population.

We can also think about the term "audacious oligarchy" as the term related to the rise of neo-fascism, (be it neoliberal fascism or Inverted Totalitarism). For some details National Security State / Surveillance State: Review of Literature and a very interesting discussion of Robert Johnson remarks on financial oligarchy at “They’re All Standing on the Deck of the Titanic Looking in Each Other’s Eyes” (naked capitalism, April 21, 2013). That means the key elements of fascist ideology are preserved, with the replacement of Arian Nation for financial oligarchy, but without ruthless physical suppression of opposition which are replaced by financial instruments, blacklisting, economic sanctions and color revolutions in "deviant" countries. Like in Third Reich dominance is supported by relentless propaganda and brainwashing with mechanisms polished since Reagan to perfection. there is now no problem to create an "enemy of the people" when the elite wants and it does not matter which country or individual is selected as an enemy. The essence of elite politics in this area was best formulated by Hermann Goering, President of the Reichstag, Nazi Party, and Luftwaffe Commander in Chief

Naturally the common people don't want war: Neither in Russia, nor in England, nor for that matter in Germany. That is understood. But, after all, it is the leaders of the country who determine the policy and it is always a simple matter to drag the people along, whether it is a democracy, or a fascist dictatorship, or a parliament, or a communist dictatorship. Voice or no voice, the people can always be brought to the bidding of the leaders. That is easy. All you have to do is tell them they are being attacked, and denounce the peacemakers for lack of patriotism and exposing the country to danger. It works the same in any country.

One interesting side effect of the dominance of financial oligarchy is loss of trusts in experts, especially economic expects, professors who now are nothing more then a prostitutes at the service of financial capital Ian Klaus in "Forging Capitalism: Rogues, Swindlers, Frauds, and the Rise of Modern Finance gives the following definition:

Trust, to be simple with our definition, is an expectation of behavior built upon norms and cultural habits. It is often dependent upon a shared set of ethics or values. It is also a process orchestrated through communities and institutions. In this sense, it is a cultural event and thus a historical phenomenon.

As Robert Johnson noted:

"People don't trust experts. If you saw 'Inside Job', you know why. People do not trust the private markets, and they don't trust government."

See also Neoclassical Pseudo Theories and Crooked and Bought Economists as Fifth Column of Financial Oligarchy.

In the case of neoliberal transformation of the USA the state to a large extent seized to defend the population. Instead the state became a predictor, defender of international corporations, as hostile to the US people as Bolshevik rule was to Russians and other nationalities of the USSR. In other word the USA population became hostages of the system much like population of the USSR was. In a way nothing is new in human history.

The most important side effect of neoliberal transformation of the US society is the destruction (or more correctly emasculation) of legal system, which effectively lead to the situation when like in monarchy, some people are above the law. And we can suspect, judging from recent the USSR nomenklatura experience that such a caste might quickly degrades. As Long Aston said "Power corrupts and absolute power corrupts absolutely". If you willfully and recklessly tear down the laws in the name of some misbegotten ideology the benefit to "chosen" few, blowback might come sooner or later. even if you successfully hide this in a smokescreen of sophisticated scam ideology (neoliberalism in case of current crony or casino capitalism, which replaced the New Deal "live and giver other chance to live" motto) the blowback eventually might knock the particular country down. In such system nobody trust anybody and the whole society gradually disintegrates becoming just extended version of a mafia clan. With typical for such clans deadly internal fights for power. Mexican drug cartels saying - plomo y plobo ('silver or lead'): either you accept our bribes or accept our bullets is perfectly applicable in this situation. And that's how "audacious oligarchy really operates at least of international scène. But the law of the jungle has one important difference with the regular law system: any more powerful group of states can became both a judge and executioner for less powerful, or competing group of states.

When you take some self-serving fairy tale and take it an extreme by sticking an 'ism' on the end of it, like is the case with neoliberalism, at the beginning everything is fine and population is carries by this lie with ease. But as soon as people discover this despite all the power of propaganda their standard of living is going down, some trouble appear on the horizon and there is no other way then to concert the state into national security state, as proponent of communism have found in the USSR. And under neoliberalism, the essence of which is redistribution of wealth in favor of the top 0.01% of the world population, this disillusionment in inevitable, unless we experience a new technological revolution, similar to computer revolution. it can't be hidden with fairly tales about "undemocratic nature" of poor state or corruption. People can only be suppressed by brute force. and the lead to overextension of the neoliberal empire.

When the financial oligarchy is completely exempt from the law and in this particular area regulation is burned to the ground to serve the interests of financial oligarchy, strange things start to happen. The first glimpse on which we already saw in 2008. There was a demonstration of an immanent feature of neoliberal regimes which might be called financial sector induced systemic instability of economy. The latter which lead to periodic booms and busts with unpredictable timing, severity and consequences for the society at large, but so far all of those crisis work also as mechanism of redistribution of the society wealth toward the top . this time the US oligarchy managed to swipe the dirt under the rug.

This instability happens automatically and does not depend on the presence of "bad apples" in the system, because the financial sector under neoliberalism functions not as the nerve system of the economy of the particular country, but more like an autoimmune disease. In other words financial sector destabilizes the "immune system" of the country by introducing positive feedback look into economic (and not only economic, look at the USA foreign policy since 1991) activities.

What exactly is neoliberal oligarchy ?

When we say audacious oligarchy we essentially mean neoliberal oligarchy, and first of all financial oligarchy. Oligarchy is a form of power structure in which power effectively rests with an elite class distinguished by wealth, family ties, commercial, government and/or military positions. The actual literal translation from the Greek is the "rule of the few". The word oligarchy is derived from the Greek words "ὀλίγος" (olígos), "a few"[2] and the verb "ἄρχω" (archo), "to rule, to govern, to command".

Throughout history, most oligarchies have been tyrannical, relying on public servitude to exist, although some have been relatively benign. Plato pioneered the use of the term in Chapter Four, Book Eight of "The Republic" as a society in which wealth is the criterion of merit and the wealthy are in control.

However oligarchy is not always a rule according to the size of the wealth, as oligarchs can simply be a privileged group, and do not have to be distinguished from plebs by iether personal wealth or bloodlines as in a monarchy. Although often those two types of distinction are present too. For example, in the USSR the oligarchy was represented by special class of government and party servants (nomenklatura). The same is by-and-large true for Communist China. Those types of oligarchy has a lot of features in common with neoliberal oligarchy, although they are national in character. First of all in both system oligarchs are "working oligarchs". They actively participate in the their business or government activities. The second thing is that neoliberal oligarchy has very interesting connection with the idea of Communist International, and can be viewed as an interesting perversion of this concept ("Capitalism International") with some flavor of Trotskyism -- as it strives for and adopts Trotskyism central idea of permanent revolution as the method of reaching of the world dominance (see, neocons and color revolutions)

At the same time starting from 80th in the USA oligarchy by-and-large started to correspond to European aristocracy as vertical mobility became very limited and suppressed in the USA (actually more then in European countries, despite all the hype about the American dream).

The USA oligarchy by-and-large corresponds to European aristocracy, with substantial number of its members being children of oligarchic families. Vertical mobility, despite hype, is very limited and suppressed (actually more then in European countries). In no way the USA con be considered "the county of opportunities" anymore.

Russian oligarchy is very atypical in this sense, and is a pretty interesting case of a very high vertical mobility. As a country Russia is unique that in its history it several times wiped out its entrenched oligarchy. Two last "rotations" happened in 1917 then large part of old oligarchy lost their power and after neoliberal revolution of 1991 which brought into power the corrupt government of Boris Yeltsin. The drunkard, who imitated French proclaiming "enrich yourself" and launches (with gentle support from USA in a form of Harvard mafia) the most corrupt privatization of state wealth in human history.

But most members of the new, Post-Soviet Russian oligarchy did demonstrated tremendous level of upward mobility. Since the collapse of the Soviet Union on 31 December 1991, many directors and sometimes middle managers of state owned Russia-based corporations, especially producers of petroleum, natural gas, and metals managed to privatize their holdings and have become oligarchs. Criminal privatization under Yeltsin regime allowed them to amass phenomenal wealth and power almost overnight. In May 2004, the Russian edition of Forbes identified 36 of these oligarchs as being worth at least US$1 billion. And not of all them came from Nomenklatura. Many members of nomenklatura (even on the level of Politburo) did not fit in the new economic system and stopped being oligarchs.

All modern democracies should be viewed as oligarchies

Robert Michels believed that any political system eventually evolves into an oligarchy. He called this the iron law of oligarchy. According to this school of thought, modern democracies should be considered to be oligarchies. this is what his "iron law of oligarchy" is about. In other word when we speak the word democracy about such regimes as current exist in the USA or Western Europe, it is most self-deception.

That gives a pretty sinister meaning to the "promotion of democracy" and "support of democracy" activities, as in reality it is installation of more favorable to the promoter oligarchic group in power, often via coup d'état (with a specific neoliberal variant, which use developed by Gene Sharp political technology, called Color revolution), as recently happened in Libya and Ukraine.

In "modern democracies", the actual differences between viable political rivals are small, the oligarchic elite impose strict limits on what constitutes an acceptable and respectable political position, and politicians' careers depend heavily on unelected economic and media elites. Thus the popular phrase: there is always only one political party, the party of oligarchy.

This is especially true for winner takes all election systems, which create two party environment, with both party being a factions of the same elite. See Two Party System as Polyarchy

Quiet coup

The term "Quiet coup" which means the hijacking of the political power in the USA by financial oligarchy was introduced by Simon H. Johnson (born January 16, 1963). Simon Johnson is a British-American economist, who currently is the Ronald A. Kurtz Professor of Entrepreneurship at the MIT Sloan School of Management and a senior fellow at the Peterson Institute for International Economics. From March 2007 through the end of August 2008, he was Chief Economist of the International Monetary Fund.

The term was introduced in Simon Johnson article in Atlantic magazine, published in May 2009(The Quiet Coup - Simon Johnson - The Atlantic). Which opens with a revealing paragraph:

The crash has laid bare many unpleasant truths about the United States. One of the most alarming, says a former chief economist of the International Monetary Fund, is that the finance industry has effectively captured our government—a state of affairs that more typically describes emerging markets, and is at the center of many emerging-market crises. If the IMF’s staff could speak freely about the U.S., it would tell us what it tells all countries in this situation: recovery will fail unless we break the financial oligarchy that is blocking essential reform. And if we are to prevent a true depression, we’re running out of time.

The wealth of financial sector gave it unprecedented opportunities of simply buying the political power:

Becoming a Banana Republic

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

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

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

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

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

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

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

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

Financial oligarchy as an key part of modern neoliberal elite

Corporate oligarchy is a form of power, governmental or operational, where such power effectively rests with a small, elite group of inside individuals, sometimes from a small group of educational institutions, or influential economic entities or devices, such as banks, commercial entities that act in complicity with, or at the whim of the oligarchy, often with little or no regard for constitutionally protected prerogative. Monopolies are sometimes granted to state-controlled entities, such as the Royal Charter granted to the East India Company. In this regime people move freely from government posts to private industry and back.

In the USA the most rapidly rising part of national oligarchy is financial oligarchy. As Senator Dick Durbin noted referring to the US Congress Banks Frankly Own The Place. Moreover in many cases it is unclear who owns whom, for example whether Goldman Sachs owns NY FED or NY FED Goldman Sachs ( The Fed Under Goldman's Thumb - Bloomberg )

Senators questioned Dudley, 61, on issues ranging from whether some banks are too big to regulate to the Fed’s role in overseeing their commodities businesses.

Some of the criticism was pointed. Warren, a frequent critic of financial regulators, asked Dudley if he was “holding a mirror to your own behavior.”

Jeff Merkley, an Oregon Democrat, complained that bank employees involved in misdeeds haven’t been prosecuted and are “too big to jail.”

Dudley repeatedly disagreed with assertions that the New York Fed wasn’t doing enough to regulate banks and said lenders have become stronger and safer in the past few years.

... ... ...

Today’s Senate hearing follows reports that Goldman Sachs fired two bankers after one of them allegedly shared confidential documents from the New York Fed within the firm.

A junior banker, who had joined the company in July from the New York Fed, was dismissed a week after the discovery in late September, along with another employee who failed to escalate the issue, according to an internal memo obtained by Bloomberg News. Goldman Sachs confirmed the memo’s contents.

As Adair Turner noted in The Consequences of Money Manager Capitalism

In the wake of World War II, much of the western world, particularly the United States, adopted a new form of capitalism called “managerial welfare-state capitalism.”

The system by design constrained financial institutions with significant social welfare reforms and large oligopolistic corporations that financed investment primarily out of retained earnings. Private sector debt was small, but government debt left over from financing the War was large, providing safe assets for households, firms, and banks. The structure of this system was financially robust and unlikely to generate a deep recession. However, the constraints within the system didn’t hold.

The relative stability of the first few decades after WWII encouraged ever-greater risk-taking, and over time the financial system was transformed into our modern overly financialized economy. Today, the dominant financial players are “managed money” — lightly regulated “shadow banks” like pension funds, hedge funds, sovereign wealth funds, and university endowments—with huge pools of capital in search of the highest returns. In turn, innovations by financial engineers have encouraged the growth of private debt relative to income and the increased reliance on volatile short-term finance and massive uses of leverage.

What are the implications of this financialization on the modern global economy? According to Adair Lord Turner, a Senior Fellow at the Institute for New Economic Thinking and a former head of the United Kingdom’s Financial Services Authority, it means that finance has become central to the daily operations of the economic system. More precisely, the private nonfinancial sectors of the economy have become more dependent on the smooth functioning of the financial sector in order to maintain the liquidity and solvency of their balance sheets and to improve and maintain their economic welfare. For example, households have increased their use of debt to fund education, healthcare, housing, transportation, and leisure. And at the same time, they have become more dependent on interest, dividends, and capital gains as a means to maintain and improve their standard of living.

Another major consequence of financialized economies is that they typically generate repeated financial bubbles and major debt overhangs, the aftermath of which tends to exacerbate inequality and retard economic growth. Booms turn to busts, distressed sellers sell their assets to the beneficiaries of the previous bubble, and income inequality expands.

In the view of Lord Turner, currently there is no countervailing power (in John Kenneth Galbraith terms) able to deal with the consequences of neoliberalism, as he calls it "money manager capitalism.” The net result likely will be years more of economic stagnation and deteriorating living standards for many people around the world.

Finance is a form of modern warfare

As Michael Hudson aptly noted in Replacing Economic Democracy with Financial Oligarchy (2011)

Finance is a form of warfare. Like military conquest, its aim is to gain control of land, public infrastructure, and to impose tribute. This involves dictating laws to its subjects, and concentrating social as well as economic planning in centralized hands. This is what now is being done by financial means, without the cost to the aggressor of fielding an army. But the economies under attacked may be devastated as deeply by financial stringency as by military attack when it comes to demographic shrinkage, shortened life spans, emigration and capital flight.

This attack is being mounted not by nation states as such, but by a cosmopolitan financial class. Finance always has been cosmopolitan more than nationalistic – and always has sought to impose its priorities and lawmaking power over those of parliamentary democracies.

Like any monopoly or vested interest, the financial strategy seeks to block government power to regulate or tax it. From the financial vantage point, the ideal function of government is to enhance and protect finance capital and “the miracle of compound interest” that keeps fortunes multiplying exponentially, faster than the economy can grow, until they eat into the economic substance and do to the economy what predatory creditors and rentiers did to the Roman Empire.

Simon Johnson, former IMF Chief Economist, is coming out in May’s 2009 edition of The Atlantic with a fascinating, highly provocative article, on the collusion between the US’ “financial oligarchy” and the US government and how its persistence will contribute to prolonging the economic crisis. Here is the summary (hat tip to Global Conditions):

One thing you learn rather quickly when working at the International Monetary Fund is that no one is ever very happy to see you (…)

The reason, of course, is that the IMF specializes in telling its clients what they don’t want to hear.(…)

No, the real concern of the fund’s senior staff, and the biggest obstacle to recovery, is almost invariably the politics of countries in crisis. (…)

Typically, these countries are in a desperate economic situation for one simple reason—the powerful elites within them overreached in good times and took too many risks. Emerging-market governments and their private-sector allies commonly form a tight-knit—and, most of the time, genteel—oligarchy, running the country rather like a profit-seeking company in which they are the controlling shareholders (…)

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. (…)

In its depth and suddenness, the U.S. economic and financial crisis is shockingly reminiscent of moments we have recently seen in emerging markets (…).

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

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

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

The financial industry has not always enjoyed such favored treatment. But for the past 25 years or so, finance has boomed, becoming ever more powerful. The boom began with the Reagan years, and it only gained strength with the deregulatory policies of the Clinton and George W. Bush administrations.

(…) the American financial industry gained political power by amassing a kind of cultural capital—a belief system. Once, perhaps, what was good for General Motors was good for the country. Over the past decade, the attitude took hold that what was good for Wall Street was good for the country. (…)

One channel of influence was, of course, the flow of individuals between Wall Street and Washington. Robert Rubin, once the co-chairman of Goldman Sachs, served in Washington as Treasury secretary under Clinton, and later became chairman of Citigroup’s executive committee. Henry Paulson, CEO of Goldman Sachs during the long boom, became Treasury secretary under George W.Bush. John Snow, Paulson’s predecessor, left to become chairman of Cerberus Capital Management, a large private-equity firm that also counts Dan Quayle among its executives. Alan Greenspan, after leaving the Federal Reserve, became a consultant to Pimco, perhaps the biggest player in international bond markets.

A whole generation of policy makers has been mesmerized by Wall Street, always and utterly convinced that whatever the banks said was true (…).

By now, the princes of the financial world have of course been stripped naked as leaders and strategists—at least in the eyes of most Americans. But as the months have rolled by, financial elites have continued to assume that their position as the economy’s favored children is safe, despite the wreckage they have caused (…)

Throughout the crisis, the government has taken extreme care not to upset the interests of the financial institutions, or to question the basic outlines of the system that got us here. In September 2008, Henry Paulson asked Congress for $700 billion to buy toxic assets from banks, with no strings attached and no judicial review of his purchase decisions. Many observers suspected that the purpose was to overpay for those assets and thereby take the problem off the banks’ hands—indeed, that is the only way that buying toxic assets would have helped anything. Perhaps because there was no way to make such a blatant subsidy politically acceptable, that plan was shelved.

Instead, the money was used to recapitalize banks, buying shares in them on terms that were grossly favorable to the banks themselves. As the crisis has deepened and financial institutions have needed more help, the government has gotten more and more creative in figuring out ways to provide banks with subsidies that are too complex for the general public to understand (…)

The challenges the United States faces are familiar territory to the people at the IMF. If you hid the name of the country and just showed them the numbers, there is no doubt what old IMF hands would say: nationalize troubled banks and break them up as necessary (…)

In some ways, of course, the government has already taken control of the banking system. It has essentially guaranteed the liabilities of the biggest banks, and it is their only plausible source of capital today.

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

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

To ensure systematic bank breakup, and to prevent the eventual reemergence of dangerous behemoths, we also need to overhaul our antitrust legislation (…)

Caps on executive compensation, while redolent of populism, might help restore the political balance of power and deter the emergence of a new oligarchy. (…)

(…) Over time, though, the largest part may involve more transparency and competition, which would bring financial-industry fees down. To those who say this would drive financial activities to other countries, we can now safely say: fine”.

The predatory nature of financial oligarchy

The nature of financial oligarchy is such that the government’s capacity to take control of an entire financial system, and to clean, slice it up and re-privatize it impartially is almost non-existent. Instead we have growing, corrupt collusion between financial elites and government officials which is hall mark of corporatism in its most modern form -- neoliberalism.

Second probably is that institutions are more powerful them individuals and replacement or even jailing of corrupt current officials while a quite welcome move, can't by itself lead to drastic changes. You need to reinstall the whole system of government controls dismantled by Clinton-Bush regime. Otherwise one set of players will be simply replaced by the other, no less corrupt, hungry and unprincipled. As Daron Acemoglu pointed out recently, we are in a situation that attempt to fix the financial system will have to involve those same bankers (albeit in lower positions at the time of the crisis) that created the mess in the first place. To push the analogy a bit strongly, even in Germany post 1945 and Iraq post 2003 new governments still needed to work with some civil servants in the judicial and educational system from the previous regime as well as with tainted industrialists.

In theory, the best way to diminish the power of financiers is to limit the size (limiting the damage) and let them fail and crash badly. Also introduction of a tax of transactions (Tobin tax) can help to cool the frenzy of derivative trading. But there is nobody in power who can push those changes. That means the "silent coup" in which financial oligarchy got control of the state is complete.

Loss of trust led to conversion of the country into national security state

Paranoya of financial oligarchy after 2008 when most of the country wished them what was reflected in the slogan of the corner of Wallstreet (see the picture), led to speed up of creation of comprehensive network of spying over the citizens.

According to UN Human Right Council Report (17 April 2013) innovations in technology not only have increased the possibilities for communication and protections of free expression and opinion, enabling anonymity, rapid information-sharing and cross-cultural dialogues. They also simultaneously increased opportunities for State surveillance and interventions into individuals’ private communications facilitating to transformation of the state into National Security State, a form of corporatism characterized by continued and encompassing all forms of electronic communication electronic surveillance of all citizens.

Even if we assume that data collection is passive and never used it is like a ticking bomb or "skeleton in the closet" it is a powerful method of control of population, not the different from what was used by KGB in the USSR or STASI in East Germany.

So it does not really matter much what the data are collected for and what if official justification of such a collection. The mere fact of collection changes the situation to the worse, making opposition to the system practically impossible. The net result is what is matter. And the net result definitely resembles a move in the direction of a tyranny. US Senator Frank Church said in 1975:

"I know the capacity that is there to make tyranny total in America, and we must see to it that this agency [the National Security Agency] and all agencies that possess this technology operate within the law and under proper supervision, so that we never cross over that abyss. That is the abyss from which there is no return.".

Today his words sound even more true then in 1975 when computers were still in their infancy and mainframes dominated the computer landscape. With the proliferation of cheap electronic devices such as PCs and laptops, tablets and cell phones this really became "the abyss from which there is no return".

So the real, the key goal is not what is officially declared. Convenience of access to information has a side effect that it makes collection of information about you trivial and at the same time comprehensive. It is to keep the elite safe from common folks, not all those lies about national security. It is all about the security of the elite.

In other words 1984 dystopia materialized in slightly different, slightly more gentle form. The elite as a whole is not interesting in dismantling the tool that serve its interests so well even if it has some side effects on the elite members themselves. This is another confirmation of The Iron Law of Oligarchy

All-in-all it's a good time to smell the coffee and talk about the rise of a new mutation of totalitarism in the USA. That's exactly what this "Internet-inspired" flavor of total surveillance due to modern technical capabilities means. There is also distinct shadow of Stasi in all those activities. As countries of the USSR camp got into similar trap before, nothing is new under the sun. As Reinhold Niebuhr noted

"Communism is a vivid object lesson in the monstrous consequences of moral complacency about the relation of dubious means to supposedly good ends."

There is actually little difference between total surveillance as practiced by NSA and what was practiced by three letters agencies of Eastern block dictatorships. The key goal in both cases is protection and preservation of power of existing elite against the will of common people. So this is more about oppression of 99.9% from top 0.1% then surveillance per see.

Phone hacking and police corruption represent neoliberalism attempt to cling to life even entering in 2008 a zombie status. And we do not know if the change is possible (The zombie of neoliberalism can be beaten)

Poor growth figures put a "new" financial collapse back on the cards. The response from politicians, bankers and business leaders is more of the same – more of the same neoliberal policies that got us into this situation in the first place.

Neoliberalism no longer "makes sense", but its logic keeps stumbling on, without conscious direction, like a zombie: ugly, persistent and dangerous. Such is the "unlife" of a zombie, a body stripped of its goals, unable to adjust itself to the future, unable to make plans. It can only act habitually as it pursues a monomaniacal hunger. Unless there is a dramatic recomposition of society, we face the prospect of decades of drift as the crises we face – economic, social, environmental – remain unresolved. But where will that recomposition come from when we are living in the world of zombie-liberalism?

... ... ...

Neoliberalism, however, requires more than the internal realignment of a national ruling class. Every semi-stable form of capitalism also needs some sort of settlement with the wider population, or at least a decisive section of it. While the postwar Keynesian settlement contained an explicit deal linking rising real wages to rising productivity, neoliberalism contained an implicit deal based on access to cheap credit. While real wages have stagnated since the late 1970s, the mechanisms of debt have maintained most people's living standards. An additional part of neoliberalism's tacit deal was the abandonment of any pretence to democratic, collective control over the conditions of life: politics has been reduced to technocratic rule. Instead, individuals accepted the promise that, through hard work, shrewd educational and other "life" choices, and a little luck, they – or their children – would reap the benefits of economic growth.

The financial crisis shattered the central component of this deal: access to cheap credit. Living standards can no longer be supported and, for the first time in a century, there is widespread fear that children will lead poorer lives than their parents.

Conclusions

After 2008 the irresponsibility of the financial elites, the power and proliferation of special interest groups that defend interests of oligarchy, the paralysis of Congress and executive power to deal with challenges the financial oligarchy created have created atmosphere of public cynicism.

This correlated with withdrawal from public activity and elections. voter participation in the 1996 Presidential election reached similar to 1924 figure of 49%, less then half of eligible population. And with electronic surveillance reaching it zenith after 9/11/2001, the country quietly slid in the darkness of Inverted Totalitarism

Disillusionment with government and large corporation is a noticeable feature of contemporary America. There is a the widespread sense that big companies and those who run them are immune from prosecution and can't be held accountable by government for their crimes as that they are ... Too Big To Jail. Part of this leniency is connected with corruption of regulators. Which is an immanent part of neoliberal social order. There is also the issue off gaming the system. For very large and profitable multinationals paying some law firm or accounting firm a couple of million dollars to game the tax system in some sleazy way to park most of the income in tax havens represents a small fraction of their tax savings. So the big boys get away with this and middle market firms are the only ones who really pay corporate taxes.

The fact that no one has been imprisoned for the crime committed before 2008 is seen as outrageous by most Americans and large part of Main Street. At the same time, the multibillion-dollar fines and enforcement actions against financial institutions are providing large TBTF firms such as Goldman Sachs with wrong incentives. Paying with shareholders’ money as the price of protecting themselves is a very attractive trade-off. Punishment of individual executives who committed crimes or who failed in their managerial duty to monitor the behavior of their subordinates is short-changed because the principle that leaders should take responsibility for failure and resign contradicts neoliberal worldview.


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[Feb 21, 2017] The Term "Deep State" in Focus: Usage Examples, Definition, and Phrasebook

Notable quotes:
"... By Lambert Strether of Corrente . ..."
"... The Atlantic ..."
"... derin devlet ..."
"... Glenn Greenwald, Democracy Now! ..."
"... Peggy Noonan, Patriot Post ..."
"... Breitbart ..."
"... Jefferson Morley, Alternet ..."
"... Greg Grandin, The Nation ..."
"... Benjamin Wallace, The New Yorker ..."
"... Counterpunch ..."
"... New York Times ..."
"... Marc Ambinder, NPR ..."
"... Marc Ambinder, Foreign Policy ..."
"... "Deep State Blooper" ..."
"... "Deep State Operation" ..."
"... "Deep State Actor" ..."
"... "Deep State Faction" ..."
"... That's ..."
"... Extreme Prejudice: The Terrifying Story of the Patriot Act and the Cover Ups of 9/11 and Iraq ..."
"... Conjuring Hitler: How Britain and America Made the Third Reich ..."
"... within the territory of the State ..."
"... Arrogant Capital: Washington, Wall Street, and the Frustration of American Politics ..."
"... "permanent government" ..."
"... "permanent government", ..."
"... "permanent government", ..."
"... "conducting killings" ..."
"... The Deep State: The Fall of the Constitution and the Rise of a Shadow Government ..."
Feb 21, 2017 | www.nakedcapitalism.com
Posted on February 20, 2017 by Lambert Strether By Lambert Strether of Corrente .

Since today is President's Day, there will be no Water Cooler. Which is a good thing, because this puppy took forever to write. –lambert

* * *

"It's called the ruling class because it rules." –Arthur Silber

Readers know that I've been more than dubious about that incredibly virulent earworm of a term, "deep state" ( December 1, 2014 ). However, in the last week or so, "deep state" is all over mainstream discourse like kudzu, and so it's time to look at it again. As we shall see, it's no more well-defined than before, but I'm hoping that if we aggregate a number of usage examples, we'll come up with a useful set of properties, and a definition. Following the aggregation, I'll propose a number of phrases that I hope can attenuate deep state 's virulence, and render it a sharper and more subtle analytical tool in posts and comments.

While the usage of "deep state" exploded last week after General Flynn's defenestration by Trump, it seems likely to me that the term had been spreading in the recent past before that, given that a series of politically motivated leaks by the "intelligence community" (IC) from summer 2016 onwards could colorably be attributed to such an entity. The examples are in no particular order; I haven't had the time to find a "patient zero."

Usage Examples of "Deep State"

1. The Atlantic . Since "deep state" as a term originated in Turkey ( derin devlet ), I'll start with a Turkish analyst:

There Is No American 'Deep State'

Zeynep Tufekci, a Turkish sociologist and writer at the University of North Carolina, tweeted a string of criticisms about the analogy Friday morning. " Permanent bureaucracy and/or non-electoral institutions diverging with the electoral branch [is] not that uncommon even in liberal democracies," she wrote. "In the Turkey case, that's not what it means. There was a shadowy, cross-institution occasionally *armed* network conducting killings, etc. So, if people are going to call non electoral institutions stepping up leaking stuff, fine. But it is not 'deep state' like in Turkey."

Comment: One danger I always face is projecting American politics onto other countries. Tufekci warns us the opposite is a bad idea too!

Properties: Permanent bureaucracy and/or non-electoral institutions; "shadowy," cross-institutional. We cross out "conducting killings" for the American context (or do we?).

2. Glenn Greenwald, Democracy Now! . Greenwald thinks the term is sloppy too (though "scientific" is a high bar):

The deep state, although there's no precise or scientific definition , generally refers to the agencies in Washington that are permanent power factions . They stay and exercise power even as presidents who are elected come and go. They typically exercise their power in secret , in the dark, and so they're barely subject to democratic accountability, if they're subject to it at all. It's agencies like the CIA, the NSA and the other intelligence agencies, that are essentially designed to disseminate disinformation and deceit and propaganda, and have a long history of doing not only that, but also have a long history of the world's worst war crimes, atrocities and death squads. This is who not just people like Bill Kristol, but lots of Democrats are placing their faith in, are trying to empower, are cheering for as they exert power separate and apart from-in fact, in opposition to-the political officials to whom they're supposed to be subordinate.

Comment: Later in the show, Greenwald says that the deep state is "almost engag[ing] in like a soft coup." Here's the Kristol tweet to which Greenwald alludes, explicitly applauding that coup with the bracing clarity so foreign to most Democrats:

I characterized Greenwald's soft coup - and Kristol's - more delicately as "a change in the Constitutional Order" ( "Federalist 68, the Electoral College, and Faithless Electors" ) but the sense is the same.

Properties: Kristol, not normal, not democratic, not constitutional; Greenwald: permanent power factions, agencies, especially intelligence agencies, which specialize in deception and require secrecy.

3. Peggy Noonan, Patriot Post :

Is [the current chaos], as some suggest, "deep state" revenge for the haughty, dismissive way Donald Trump spoke of the U.S. intelligence community during and after the campaign? Is it driven by the antipathy of the permanent government toward Mr. Putin, and a desire to bring down those, like Mr. Trump, who hope for closer relations with Russia?

It is a terrible thing if suddenly, in America, there is a government within the government that hates the elected government - and that secretly, silently, and with no accountability , acts on it.

Properties: Government within a government; secret; not accountable.

4. Breitbart . I don't normally cite to Breitbart, but since they're in the heart of the battle and have a usage example:

The "deep state" is jargon for the semi-hidden army of bureaucrats, officials, retired officials, legislators, contractors and media people who support and defend established government policies .

Comment: Interestingly, Breitbart finds it necessary to define the term for its readership, meaning it didn't originate on the right. Even more interestingly, Breitbart - very much unlike the more staid Peggy Noonan - urges, in my view correctly, that actors outside the alphabet agencies need to be considered.

Properties: Bureaucrats, officials (some retired), legislators, contractors, media. Brietbart doesn't use Janine Werel's term, Flexian - retired officials become talking heads, for example - but the concept is implicit.

5. Jefferson Morley, Alternet :

What Is the 'Deep State'-And Why Is It After Trump?

The Deep State is shorthand for the nexus of secretive intelligence agencies whose leaders and policies are not much affected by changes in the White House or the Congress . While definitions vary, the Deep State includes the CIA, NSA, Defense Intelligence Agency, and components of the State Department, Justice Department, Department of Homeland Security, and the armed forces.

With a docile Republican majority in Congress and a demoralized Democratic Party in opposition, the leaders of the Deep State are the most-perhaps the only-credible check in Washington on what Senator Bob Corker (R-Tenn.) calls Trump's "wrecking ball presidency."

And Roger Stone, a man who knows his memes:

"This is an effort by the Deep State to destabilize the president," Stone said.

Comment: Morley, then, agrees with Kristol (the "only check" in Trump).

Properties: Intelligence agencies; permanent.

6. Greg Grandin, The Nation . A useful review of the literature:

What Is the Deep State?

So at least as long as there has been private property, there has been private plotting, and talk of a "deep state" has been a vernacular way of describing what political scientists like to call "civil society," that is, any venue in which powerful individuals, either alone or collectively, might try to use the state to fulfill their private ambitions, to get richer and obtain more power .

Much of the writing frames the question as Trump versus the Deep State, but even if we take the "deep state" as a valid concept, surely it's not useful to think of the competing interests it represents as monolithic , as David Martin in an e-mail suggests. Big Oil and Wall Street might want deregulation and an opening to Russia. The euphemistically titled "intelligence community" wants a ramped-up war footing. High-tech wants increased trade. In 1956, C. Wright Mills wrote that "the conception of the power elite and of its unity rests upon the corresponding developments and the coincidence of interests among economic, political, and military organizations." If nothing else, the "Trump v. Deep State" framings show that unity is long gone.

Comment: Grandin does give an early usage example, but I'm totally unpersuaded by his identification of the "deep state" with "civil society." Rather - as Breitbart, amazingly enough, suggests - the deep state more plausibly includes components of civil society (media, contractors, etc.).

Properties: Not monolithic; includes (components of) civil society.

7. Benjamin Wallace, The New Yorker :

The Deep-State Theory Cuts Both Ways

This pattern of dissent ["#TheResistance"], and its early successes, has brought about a vogue for the theory of the deep state, usually used in analyzing authoritarian regimes, in which networks of people within the bureaucracy are said to be able to exercise a hidden will of their own

The federal government employs two million people; its sympathies move in more than one direction. While many federal employees may want to oppose the White House, others (especially border-patrol and immigration agents, whose support Trump often cited on the campaign trail) have already been taking some alarming liberties to advance the President's politics.

Comment: Wallace urges that some Federal employees in the permanent bureaucracy are, in essence, "working toward the Fuhrer," which is a consequence of the deep state not being monolithic. He attributes the "vogue" for "deep state" to the resistance, but I (and most others cited here) think it's the Flynn firing.

Properties: Bureaucratic networks; hidden.

8. Counterpunch

A Deep State of Mind: America's Shadow Government and Its Silent Coup

So who or what is the Deep State?

It's the militarized police, which have joined forces with state and federal law enforcement agencies in order to establish themselves as a standing army. It's the fusion centers and spy agencies that have created a surveillance state and turned all of us into suspects. It's the courthouses and prisons that have allowed corporate profits to take precedence over due process and justice. It's the military empire with its private contractors and defense industry that is bankrupting the nation. It's the private sector with its 854,000 contract personnel with top-secret clearances, 'a number greater than that of top-secret-cleared civilian employees of the government.' It's what former congressional staffer Mike Lofgren refers to as 'a hybrid of national security and law enforcement agencies': the Department of Defense, the State Department, Homeland Security, the CIA, the Justice Department, the Treasury, the Executive Office of the President via the National Security Council, the Foreign Intelligence Surveillance Court, a handful of vital federal trial courts, and members of the defense and intelligence committees."

Comment: Seems pretty big to be deep

Properties: Law enforcement, contractors, agencies, the courts.

9. New York Times

As Leaks Multiply, Fears of a 'Deep State' in America

Though the deep state is sometimes discussed as a shadowy conspiracy, it helps to think of it instead as a political conflict between a nation's leader and its governing institutions.

That can be deeply destabilizing, leading both sides to wield state powers like the security services or courts against one another, corrupting those institutions in the process.

In countries like Egypt, Mr. El Amrani said, the line is much clearer.

There, "the deep state is not official institutions rebelling," he said, but rather "shadowy networks within those institutions, and within business, who are conspiring together and forming parallel state institutions."

Comment: Weird all around: The President is the President , the Chief Magistrate of the United States. He's not the "nation's leader," like in the title of sone kinda hardback in the "Business" section of your airport bookstore. And quite frankly, the description of the deep state in Egypt ("shadowy network," "parallel state institutions") jibes with a several of the other usage examples I've collected, right here in the United States.

Properties: I'll use Egypt's! Network, shadowy, businesses forming parallel state institutions.

10. Marc Ambinder, NPR :

With Intelligence Leaks, The 'Deep State' Resurfaces

GARCIA-NAVARRO: So how do you define the deep state?

AMBINDER: Well, I try to define it simply – maybe the national security and intelligence bureaucracy , the secret-keepers in the United States, people who have security clearances, who have spent 10 to 20 to 30 years working in and around secrets.

GARCIA-NAVARRO: So when we're hearing about this term this week to do with Michael Flynn, what do we – what are people making that connection with potentially a huge group of people and this particular case?

AMBINDER: They're essentially alleging that the national security state, this metastate that exists and, again, traffics totally in secret – used its collective power in order to bring down a duly chosen national security adviser because they disagreed with him or they disagreed with his president or they disagreed with his policies. It is a term of derision, a term that suggests people are using their power for ill-begotten ends. And that, if true, sets up a crisis.

Comment: Ambinder, then, rejects putting a "civil society" construction on "deep state." (He also rejects Greenwald, and Kristol's, "soft coup.")

Properties: National security and intelligence bureaucracy; long-term.

11. Marc Ambinder, Foreign Policy . Ambinder gives an example of the deep state in action:

Trump Is Showing How the Deep State Really Works

The fact the nation's now-departed senior guardian of national security was unmoored by a scandal linked to a conversation picked up on a wire offers a rare insight into how exactly America's vaunted Deep State works. It is a story not about rogue intelligence agencies running amok outside the law, but rather about the vast domestic power they have managed to acquire within it.

Sometime before January 12, the fact that these [Flynn's] conversations [with the Russian ambassador] had occurred was disclosed to David Ignatius, who wrote about them. That day, Sean Spicer asked Flynn about them. Flynn denied that the sanctions were discussed. A few days later, on January 16, Vice President Mike Pence repeated Flynn's assurances to him that the calls were mostly about the logistics of arranging further calls when Trump was President.

Comment: Note the lack of agency in "was disclosed." Had the deep state not been able to use David Ignatius as a cut-out, the scandal would never have occured. Therefore, a media figure, a member of civil society, was essential to the operation of the Deep State, even though Ambinder's definition of the deep state doesn't reflect this.

Properties: Network; civil society.

* * *

So now I'm going to aggregate the properties suggested by these 10 sources, and make some judgements about what to keep and what to throw away. Throwing out Noonan's concept of "a government within a government", I get this. The deep state:

1. Gains power through (legal) control of state functions of secrecy and deception

2. Is "permanent"

3. Is not monolithic

4. Is composed of "cross-institutional" networks of individuals in both state (agencies, law enforcement) and civil society (media, contractors)

5. Is not democratic in its operation; and (potentially) is not accountable, not normal, not constitutional.

(Individuals within the deep state belong to factions that compete and cooperate, often in addition to their "day jobs," rather as in a "matrix management" construct.)

So, what'd I miss?

A "Deep State" Phrasebook

So, here are some phrases to use that reflect the above - very tentative - understanding. What I really want to do - and who know, maybe I'm trying to shovel back the tide here, too - is get away from the notion of "the" deep state. The deep state is not monolithic! Factional conflict within the deep state exists! So, in my view, the definite article is in this case disempowering; it prevents you from, as it were, knowing your enemy. So, if I have to join the chorus of people using the term, I'm going to think carefully about how do it. This list is a step toward doing that. (I'm going to use examples from the run-up to the Iraq War because it's less tendenitious and way less muddled than the Flynn defenestration.)

1. "Deep State Blooper" . I'm putting this first as an antidote to CT. Quoting Frank Herbert's Dune :

" [I]t occurred to Kynes that his father and all the other scientists were wrong, that the most persistent principles of the universe were accident and error."

It's important to put into our thinking right from the start that Deep State actors are not all-powerful, and that Deep State operations are not invariably successful. I mean, can anybody look at the foreign and nationally security outcomes from what these guys are doing and urge that the baseline for performane is very high? I don't think so. Accidents happen all the time, and these guys, for all the power their positions bring them, are accident-prone. (After all, they're not accountable, so they never get accurate feedback, in a typical Banana Republic power dynamic.

Example: "The Iraq WMD's yellowcake uranium episode was a Deep State Blooper." ( See here for details; the yellowcake uranium was part of the Bush administration's WMD propaganda operation to foment the Iraq War.)

2. "Deep State Operation" . I think it's important to view the Deep State (as defined above) as able to act opportunistically; although many Deep State Actors work for agencies, their operations are not bureaucratic in nature.

Example: "The White House Iraq Group was a Deep State propaganda operation that succeeded tactically but failed strategically" (See here for details ; the WHIG planted stories in the press to foment the Iraq War. They succeeded in that narrow goal, but the war itself was a debacle, and the damage to the credibility of the press as an institution took a hit.)

3. "Deep State Actor" . An individual can be a member of the Deep State as an official, and then later as media personality or contractor. (It also seems to me that once you have been within the intelligence community, you can never be said to have left it, since how could anyone know you have really left?

Example: "Leon Panetta is a consummate Deep State Actor." ( Panetta has been OMB Director, CIA Director, White House Chief of Staff, and Secretary of Defense. "[Panetta] regularly obtains fees for speaking engagements, including from the Carlyle Group.[55] He is also a supporter of Booz Allen Hamilton."

4. "Deep State Faction" . This is a no-brainer:

Example: "The Neoconservatives are a Deep State Faction."

Conclusions

I apologize for the length as I fought my way through the material, and I hope I haven't made any gross errors - especially political science-y ones! And any further additions to the Deep State Phraseology will be very welcome (but watch those definite articles!).

1 0 27 0 0 This entry was posted in Banana republic , Politics on February 20, 2017 by Lambert Strether . About Lambert Strether

Readers, I have had a correspondent characterize my views as realistic cynical. Let me briefly explain them. I believe in universal programs that provide concrete material benefits, especially to the working class. Medicare for All is the prime example, but tuition-free college and a Post Office Bank also fall under this heading. So do a Jobs Guarantee and a Debt Jubilee. Clearly, neither liberal Democrats nor conservative Republicans can deliver on such programs, because the two are different flavors of neoliberalism ("Because markets"). I don't much care about the "ism" that delivers the benefits, although whichever one does have to put common humanity first, as opposed to markets. Could be a second FDR saving capitalism, democratic socialism leashing and collaring it, or communism razing it. I don't much care, as long as the benefits are delivered. To me, the key issue - and this is why Medicare for All is always first with me - is the tens of thousands of excess "deaths from despair," as described by the Case-Deaton study, and other recent studies. That enormous body count makes Medicare for All, at the very least, a moral and strategic imperative. And that level of suffering and organic damage makes the concerns of identity politics - even the worthy fight to help the refugees Bush, Obama, and Clinton's wars created - bright shiny objects by comparison. Hence my frustration with the news flow - currently in my view the swirling intersection of two, separate Shock Doctrine campaigns, one by the Administration, and the other by out-of-power liberals and their allies in the State and in the press - a news flow that constantly forces me to focus on matters that I regard as of secondary importance to the excess deaths. What kind of political economy is it that halts or even reverses the increases in life expectancy that civilized societies have achieved? I am also very hopeful that the continuing destruction of both party establishments will open the space for voices supporting programs similar to those I have listed; let's call such voices "the left." Volatility creates opportunity, especially if the Democrat establishment, which puts markets first and opposes all such programs, isn't allowed to get back into the saddle. Eyes on the prize! I love the tactical level, and secretly love even the horse race, since I've been blogging about it daily for fourteen years, but everything I write has this perspective at the back of it.

View all posts by Lambert Strether → Subscribe to Post Comments 109 comments Carolinian , February 20, 2017 at 2:21 pm

Gee you didn't even mention California's Bohemian Grove meeting where CEOs romp in togas and such.

And taken literally Deep State would presumably mean a secretive (deep) and more or less permanent ruling apparatus. We may have the latter but it doesn't seem all that secretive since they love to join think tanks and talk about their loony ideas. The term is often used to bolster conspiracy theories about how the CIA killed Kennedy and are secretly running the country. While recent movies like to portray CIA operatives as super human martial arts specialists they are just as likely boobs who make many mistakes but nevertheless don't mind ratting out Trump's phone calls as petty revenge. I'd say it's the not so secretive but still behind the scenes state we have to worry about. Think the CFR or that Kristol guy. In other words if the term means anything it could be the secondary tier of influencers who have the ear of our MSM.

sgt_doom , February 20, 2017 at 3:59 pm

Nothing theoretical about elements within the CIA (such as the fired Allen Dulles, and his still-in-the CIA cousin, Tracy Barnes - oopsy, Fake News never told you they were cousins, now did they?) - just requires a bit of reading and cross-referencing with declassified documents from the CIA, State and the FBI.

Deep State is really the financial-intelligence-complex who believes they are running things - the intel establishment was originally founded by the super-rich and their minions (such as Lovett and McCloy, etc.). When JFK was assassinated the Deputy Director of the CIA was Gen. Marshall Carter, recommended to McCone for that position by Nelson Rockefeller. And the fellow in charge of the reorganization of the CIA at the same time was Gen. Schuyler, Nelson Rockefeller's assistant.

You just have to look a bit . . .

Direction , February 20, 2017 at 4:34 pm

Juicy comment! Can you recommend any books or favorite articles?

James McFadden , February 20, 2017 at 11:42 pm

Some book recommendations about the deep state:

C. Wright Mills "The Power Elite" – describes how the indoctrination mechanisms create the deep state (military industrial political complex).

David Talbot "The Devil's Chessboard" – about the rise of the CIA and Allan Dulles

Laurence Shoup "Wall Street's Think Tank" – about the Council on Foreign Relations – the deep state's premier think tank

Michael Parenti "Dirty Truths" – about empire

John Perkins "Confessions of an Economic Hit Man" – CIA coups and soft coups

I'm sure other readers can recommend many more on this subject.

Caveat Emptor , February 21, 2017 at 12:39 am

The Deep State: The Fall of the Constitution and the Rise of a Shadow Government
Mike Lofgren

The American Deep State: Wall Street, Big Oil, and the Attack on U.S. Democracy
Peter Dale Scott

WhatsNotToLike , February 21, 2017 at 10:27 am

James Galbraith, Deep State: The Fall of the Constitution and the Rise of a Shadow Government

nonsense factory , February 21, 2017 at 12:55 am

There are a couple of books by Dan Briody that are very illuminating about how Deep State actors in government interface with corporate agendas:
The Halliburton Agenda: The Politics of Oil and Money (2004)
The Iron Triangle: Inside the Secret World of the Carlyle Group (2003)

I think of the Deep State as the military-industrial-intelligence-Congressional long-term national-security complex that grew up after World War II, there are perhaps four major elements:
(1) military and intelligence contractors who rely on the massive $600 billion military budget for their profits.
(2) executive branch bureaucrats who develop the contracts that are delivered to contractors (State/Pentagon/CIA/NSA/NRO/FBI/DOE etc.)
(3) Congressmembers (long-serving) on appropriations, intelligence, etc. committees who sign off on budget requests.
(4) Elements of mass media and think tanks who work overtime to promote the interests of the Deep State elements of the above actors.

It's a kind of self-perpetuating system that's primary agenda is to keep their budget from being cut by a healthy 50% – which is what we'd need to do to rebuild infrastructure, set up high-quality public education, and create a first-world health care system, i.e. to get up to German or Japanese standard-of-living norms.

Some have also pointed out that there's an element of the judicial branch that can be included in "Deep State" definitions (such as FISA Court); note that judicial review of executive foreign policy decisions is very rare in the American court system.

It's also factionalized; i.e. there's the nuclear weapons sector (DOE/NNSA and their contractors), the various Pentagon branches and their suppliers, NSA and their contractors, CIA and their contractors, etc. So they compete with each other for a share of the pie, but they all have a shared interest in preventing the overall pie from shrinking.

jo6pac , February 20, 2017 at 6:44 pm

Please a little help as Direction ask just to get us started. The dulles bros were truly evil and have trained their puppets well.

Vatch , February 20, 2017 at 7:18 pm

he intel establishment was originally founded by the super-rich and their minions (such as Lovett and McCloy, etc.).

Wow, Robert Lovett and John J. McCloy. For about three decades they were at the pinnacle of the United States Establishment. They were like Sejanus during the reign of Tiberius or Marcus Agrippa during the reign of Augustus. Very, very influential behind the scenes.

DH , February 20, 2017 at 8:08 pm

Yeah, and they totally missed Davos.

I always thought the original deep state was the networks of the Knights Templar, Masons, and Illuminati.

However, I was wrong – according to the definitions above, it is probably Treadstone and Blackbriar.

Enquiring Mind , February 20, 2017 at 2:23 pm

Rex Tillerson's dealing with the seventh floor apparatchiks at the State Department is another productive step in calling out the nomenklatura . Russian themes seem so popular these days.

Cat's paw , February 20, 2017 at 2:39 pm

Perhaps helpful to know the original provenance of the term it comes from Turkish journalism when one fine evening a sedan was involved in a nasty wreck. Passengers in said sedan included a high ranking military official, a state or federal(?) representative/official, a crime boss, and a beauty queen.

My understanding: trying to comprehend what such a collection of worthies were doing in the same car led journalists to coin the term deep state. A networked web of power interests/relations across sectors and institutions that operate beyond above below out of sight of normative or visible politics.

Emma , February 20, 2017 at 4:27 pm

Here are more details: https://en.wikipedia.org/wiki/Susurluk_scandal

Charles Tuttle , February 20, 2017 at 2:41 pm

David Chibo in Unz Review Political Science's "Theory of Everything"
http://www.unz.com/article/political-sciences-theory-of-everything/

neo-realist , February 20, 2017 at 9:05 pm

I checked out that article from a previous post of the link and thought it was a very valuable, terrific and detailed explanation of Deep State theories w/ some fine literature recommendations.

Grebo , February 20, 2017 at 10:45 pm

The totality of truths is that the US "elephant" consists of a power elite hierarchy overseeing a corporatocracy, directing a deep state that has gradually subverted the visible government and taken over the "levers of power."

Complete with tables and diagrams! A must read IMHO.

oh , February 21, 2017 at 8:51 am

It's a good recommendation and well worth reading.

Qufuness , February 20, 2017 at 2:42 pm

People within the American Deep State are said to have compassed the removal of General Flynn, who was a prominent member of DS organizations himself, so yes, the DS is not a monolith. But are there powerful "permanent" factions with the DS that pursue long-term strategies?

There is another way of asking this. Much of what is now labelled "DS" grew out of the investment-banker+intelligence nexus in the immediate postwar period, or at least came to the surface around that time. America has made a series of disastrous unforced errors in the past 70 years, Vietnam and Iraq being the most prominent examples. While these errors have been harmful to the American people at large, is there a clique (besides the Military Industrial Complex) that benefits from these "errors," that has far-reaching goals that completely diverge from those of American constitutional democracy?

Minh , February 20, 2017 at 5:58 pm

Both Kennedy's and Diem brothers' assasinations and 911 mass murders were deep events to sell and organize war for the Empire part of American democracy. Not mentioning Peter Dale Scott is a minus of the listing of properties. What does the Deep state did ? 911 and JFK so Afghan Iraq and Vietnam wars.

ex-PFC Chuck , February 20, 2017 at 8:33 pm

It's my understanding that the investment banking crowd served as the government's intelligence arm on an informal, sub rosa basis well before WW II. Prescott Bush, GHWB's father, was involved in that.

Mark P , February 20, 2017 at 2:48 pm

Lambert, there is a Deep State in the U.S. as distinct from the mere ruling class (and yes, by definition, it has competing factions and power centers at different agencies).

A clarifying example of that is this guy, Andy Marshall, aka Yoda, who arguably had more effect on the direction of U.S. policy than any U.S. president over the last half-century and was finally removed from heading the Pentagon's Office of Net Assessment just before his 95th birthday. That's power.
https://en.wikipedia.org/wiki/Andrew_Marshall_(foreign_policy_strategist)#cite_note-5

Yet most people have never heard of Marshall and he never enriched himself particularly. You won't be able to tell the influence he exerted from his Wiki page either, except perhaps for the mention of Marshall 'proteges' being the likes of Rumsfeld, Cheney, etc. Furthermore, before Nixon installed him at the Pentagon, in the 1950s and 60s Marshall was at the RAND corporation helping to formulate nuclear strategy.

Here's an old trove of press material from over the years.
https://web.archive.org/web/20070309161816/http://portland.indymedia.org:80/en/2004/02/281049.shtml

Emma , February 20, 2017 at 4:04 pm

Interesting. And taking into account the comment from Cat's Paw above, I'd suggest to Lambert there are two distinct components to the term 'Deep State'. One element comprises the majority ie. the facilitators who foster the deep state, while the other element consists of the all-important minority ie. the instigators or 'deep state en nom propre' .

michael hudson , February 20, 2017 at 2:50 pm

I think the key to the "Deep state" is simply COVERT.
It is all covert activities that a public relations officer for the neocons and neoconservatives would not acknowledge in their fairy-tale view of the state.

Mark P. , February 20, 2017 at 2:53 pm

Yes.

Josh Stern , February 20, 2017 at 3:18 pm

Technical note – for CIA/Pentagon, a *covert* activity is something that is known, but where US influence or the extent of that is supposed to stay hidden – e.g. a coup d'etat. And a *clandestine activity* is something where the entire activity is supposed to stay hidden – e.g. CIA running Heroin and Cocaine, unlicensed human experimentation, or controlling the editorial desk & ownership if the Washington Post. In that sense, the clandestine activity are even deeper, and the set of people in the know, is even smaller.

Jim Haygood , February 20, 2017 at 3:58 pm

" barely subject to democratic accountability, if they're subject to it at all " - Glenn Greenwald

The $50 billion-plus black budget for the IC, covering many clandestine projects and activities, is not even subject to Congressional accountability. It is discussed verbally with the majority and minority leaders, and the ranking members of the intelligence committees.

Then the other 427 members (or at least a majority of them) are obliged on instructions from their caucus to whoop it through, without a clue (or even a right to ask) what is in it. To paraphrase the great stateswoman Nancy Pelosi, " We have to pass it to avoid finding out what's in it. "

Secret funding via this procedure is unconstitutional and illegitimate. Yet neither the president, the judiciary, nor anyone in Congress appears able to stop it. The IC is a fourth-stage cancer devouring the guts of the former republic.

Josh Stern , February 20, 2017 at 4:59 pm

Secret funding is a huge unknown. Everything from mostly legitimate front companies, to business donations for favors, to drug running. One would think, incorrectly, that the drug running is some kind of big secret the following links show it is not:
Collection of quotes from DEA agents, John Kerry, etc:
http://www.democraticunderground.com/?com=view_post&forum=1002&pid=5878115
Video with Robert Bonner, ex-head of DEA, on 60 minutes in 1993, just after he stepped down:
https://www.youtube.com/watch?v=lx1bL_Gp03g

Persona au gratin , February 20, 2017 at 5:37 pm

YES!

Crazy Horse , February 20, 2017 at 7:42 pm

50 billion? That is just the cost of coffee and donuts. A week before 911 Rumsfeld acknowledged that 2.3 TRILLION dollars was missing and unaccounted for in the DOD budget.

" CBS News Correspondent Vince Gonzales reports, while its own auditors admit the military cannot account for 25 percent of what it spends.
"According to some estimates we cannot track $2.3 trillion in transactions," Rumsfeld admitted.
$2.3 trillion - that's $8,000 for every man, woman and child in America. To understand how the Pentagon can lose track of trillions, consider the case of one military accountant who tried to find out what happened to a mere $300 million.
"We know it's gone. But we don't know what they spent it on," said Jim Minnery, Defense Finance and Accounting Service.

http://www.cbsnews.com/news/the-war-on-waste/
https://www.youtube.com/watch?v=xU4GdHLUHwU

Conveniently the accounting records that might have made possible an investigation of that little error were located in Building 7 of the WTC and in the exact section of the Pentagon which the skilled Saudi pilots targeted and and then vaporized their airliner leaving only a few token pieces on the lawn.Of course 911 is ancient history that nobody cares about anymore. Apparently we are in need of another accounting cleansing, since the Inspector General reports that an additional 6.5 TRILLLION has gone missing since then.

http://www.newstarget.com/2016-08-18-how-did-the-pentagon-lose-over-6-5-trillion-in-taxpayer-money.html

JTMcPhee , February 20, 2017 at 8:46 pm

What, me worry? those are all MMT dollars, after all plenty more where that came from.

ex-PFC Chuck , February 20, 2017 at 9:19 pm

Susan Lindauer, in her memoir of her role as a CIA asset serving as a go-between in the failed negotiations to avert the Iraq War ( Extreme Prejudice: The Terrifying Story of the Patriot Act and the Cover Ups of 9/11 and Iraq ), recounts that in the desperate last few weeks before March 20, 2003, she was paying her considerable expenses out-of-pocket. Her handler was having trouble getting her reimbursement approved, and by the time he did she was making a pest of herself about the fact that the negotiations had been deliberately sabotaged, and had become a pariah. At that point the handler had no difficulty, not to mention compunction, about simply stiffing her and diverting the funds to the McMansion he was building.

How much of that $50B black budget is similarly diverted?

Elasmo Branch , February 20, 2017 at 4:28 pm

"Covert" means the activity is against the law. "Clandestine" means the activity is secret but within the confines of the law. The military undertakes clandestine activity authorized by law, not covert activity. A US soldiers cannot break the law. On the other hand paramilitary activity is often covert.

For example, a US soldier on a clandestine mission is captured. Since the soldier is acting legally, albeit in secret, he is afforded all of the rights as a prisoner of war if he id's himself as a US soldier in uniform, name, rank, serial number. A CIA agent [likely a contractor and not a gov't employee] is captured on a covert mission, he can be summarily executed, legally, on the spot for a number of reasons: conducting warfare in civilian clothes and not in uniform, espionage, piracy, etc. There is grey area, for instance, if soldiers ingress to an area in civilian clothes [or the enemy's uniform] then put on their own uniforms before conducting an attack, as the SS did in the Ardenne.

Josh Stern , February 20, 2017 at 4:54 pm

This article: Joseph Berger III. "Covert Action – Title 10, Title 50, and the Chain of Command." Joint Force Quarterly 67 (Q4 2012). http://ndupress.ndu.edu/Portals/68/Documents/jfq/jfq-67/JFQ-67_32-39_Berger.pdf . is exactly on this topic. I take my definitions from there. The article does note that it takes some doing to resolve the different usages within CIA and DOD.

DH , February 20, 2017 at 8:10 pm

Sounds like the Koch Brothers network.

SerenityNow , February 20, 2017 at 2:52 pm

It seems to me that the Canadian "poet, academic and diplomat" author Peter Dale Scott should be included in any mention of "Deep State" Activities.

Here is an excerpt from his well foot-noted book:

"The American Deep State: Wall Street, Big Oil and the Attack on U.S. Democracy"

He has many more interesting excerpts and articles on the same site :

Lambert Strether Post author , February 20, 2017 at 4:04 pm

I bought, read, and reviewed one of Scott's books; link in the first para .

NotSoSure , February 20, 2017 at 2:58 pm

Don't forget the final property of Deep State: "No objections to Goldman Sachs". At least in that one they see eye to eye with Trump.

ebr , February 20, 2017 at 3:12 pm

No Illuminati ? - but I jest.

It would be good if we could separate 'what is the deep state' and 'what are the factions of the deep state' and 'who belongs to the deep state' I suspect that Cambridge Analytics & their Facebook scraping could answer the question 'who belongs to the deep state' as they could they easier track a social network of people more loyal to each other than to the US Gov or the POTUS of the day. Asking the 'Deep State' to define itself could be an exercise in futility as members of the 'Deep State' likely mix ideology & the opportunity to make money in ways that blind them to the full implications of their actions.
Slate magazine today had an article up of a doctor who tried the revolving door and then wrote about it
http://www.slate.com/articles/health_and_science/medical_examiner/2017/02/going_undercover_through_washington_s_revolving_door.html
If you all need a fun book to read, try Interface by Neal Stephenson (written after Snow Crash and before Cryptonomicon)

UserFriendly , February 20, 2017 at 7:19 pm

IMO: Deep State: Anyone who will be in DC regardless of who is president and can still have some degree of power. They are sometimes well known people like Neera Tanden and sometimes they work in the IC. They are the people who no matter how many times they fuck up, destroy lives, lose a campaign, or completely fail at whatever task they are given, they can always count on a nice cushy paycheck and a new gig where they can [Family Blog} it up some more. The entire class of DC insiders who just can't fail down no matter what.

Carla , February 20, 2017 at 3:15 pm

A couple more books of interest: "National Security and Double Government" by Michael J Glennon (2014) and "The Deep State" by Mike Lofgren (2016).

ewmayer , February 20, 2017 at 6:33 pm

A PDF version of Glennon's book is freely available online at the Harvard National Security Journal website.

REDPILLED , February 20, 2017 at 3:16 pm

DEEP STATE READING LIST:

The Devil's Chessboard: Allen Dulles, the CIA, and the Rise of America's Secret Government by David Talbot

The American Deep State: Wall Street, Big Oil, and the attack on U.S. Democracy by Peter Dale Scott

The Deep State: The Fall of the Constitution and the Rise of a Shadow Government by Mike Lofgren

Shadow Government: Surveillance, Secret Wars, and a Global Security State in a Single-Superpower World by Tom Engelhardt and Glenn Greenwald

Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right by Jane Mayer

Manufacturing Consent: The Political Economy of the Mass Media by Edward S. Herman and Noam Chomsky

The New Media Monopoly: A Completely Revised and Updated Edition With Seven New Chapters by Ben H. Bagdikian

They Rule: The 1% VS. Democracy by Paul Street

NATO's Secret Armies: Operation GLADIO and Terrorism in Western Europe (Contemporary Security Studies) by Daniele Ganser

An Act of State: The Execution of Martin Luther King (Updated Edition) by William F. Pepper

The True Story of the Bilderberg Group by Daniel Estulin

JFK and the Unspeakable: Why He Died and Why It Matters by James W. Douglass

9/11 Ten Years Later: When State Crimes Against Democracy Succeed by David Ray Griffin (2011)

JFK: The CIA, Vietnam, and the Plot to Assassinate John F. Kennedy by Fletcher L. Prouty (2011)

The Secret Team: The CIA and Its Allies in Control of the United States and the World by Fletcher L. Prouty (2011)

Mounting Evidence: Why We Need A New Investigation Into 9/11 by Paul W. Rea (2011)

The War Conspiracy: JFK, 9/11, and the Deep Politics of War by Peter Dale Scott (2013)

JFK-9/11: 50 Years of Deep State by Laurent Guyenot (2014)

All the Presidents' Bankers: The Hidden Alliances That Drive American Power by Nomi Prins (2014)

The Orwellian Empire by Gilbert Mercier (2015)

The Hidden Structure of Violence: Who Benefits from Global Violence and War
by Marc Pilisuk (2015)

Base Nation: How U.S. Military Bases Abroad Harm America and the World (American Empire Project) by David Vine (2015)

The New Confessions of an Economic Hit Man by John Perkins (2016)

The End of the Republic and the Delusion of Empire by James Petras (2016)

Two web sites:

Architects and Engineers for 9/11 Truth: http://www.ae911truth.org/

Patriots Question 9/11 – Responsible Criticism of the 9/11 Commission Report: http://patriotsquestion911.com/

Jim Haygood , February 20, 2017 at 4:03 pm

Excellent list.

Don't forget the late, great Chalmers Johnson, who coined the term blowback and left us with guides such as The Sorrows of Empire: Militarism, Secrecy, and the End of the Republic.

Lambert Strether Post author , February 20, 2017 at 4:05 pm

Chalmers Johnson is great.

Emma , February 20, 2017 at 6:17 pm

Another suggestion for your list of additional reading material:
https://wikispooks.com/wiki/Document:Democratic_State_v_Deep_State
It's a document/paper by Ola Tunander ( https://en.wikipedia.org/wiki/Ola_Tunander ) who is quite familiar with the topic (see his experience/research of US/UK PSYOPs naval activities in Scandinavian waters ..).

Ulysses , February 21, 2017 at 9:21 am

Good book!!

dbk , February 20, 2017 at 4:32 pm

Yes, thanks for that list, much appreciated.

As long as we're on the subject, more or less, I have a question about Dark Money (I'm reading Mayer's book these days) and the Deep State: Do they overlap, or are they rivals? Or are their goals sometimes in sync and sometimes at odds with one another?

Another way of posing this question is this: If we assume that the President is not the preference of the Deep State, are we also to assume he was not the preference of Dark Money?

I'm having a hard time figuring out who's going after whom these days, and what short- and long-term objectives are being fought out, almost – but not quite – before our eyes.

Here's a case from a different field, education, which is the one I follow most closely. A blogger has recently identified the "blueprint" for the new Sec of Education to follow, laid out in a planning document by a Dark Money group which is below the radar (well, below my radar, anyway). It's pretty clear that the Sec is their cabinet member, but are there others? Were these appointments made in the form of favors called in? For what, though, if the Pres isn't part of this network?

The Sec of Education, it emerged in the course of contentious hearings, had contributed to no less than 23 Republican Senators' campaign war chests. What are we to conclude about them?

Anyway, here's the link to the post (link to the actual document through it – it was removed from the organization's own site, so is no longer available there):
http://www.eclectablog.com/2017/02/chilling-this-is-why-weve-been-trying-to-warn-the-usa-about-betsy-devos-destroying-the-wall-between-church-state.html

Josh Stern , February 20, 2017 at 5:12 pm

Another good book to mention, which plays a different role, is "Legacy of Ashes" by Tim Weiner. It covers a lot of CIA dirt – coups, assassinations, defying/lying to Presidents, etc. – but it is different because basically all of it is drawn from the CIA's own files. So it is purely historical and outside of any "conspiracy" controversy. The files are not complete. Richard Helms ordered the most incriminating ones destroyed in a giant purge in the early '70s – this is described in the book too. But what is there and was saved is often pretty dirty.

Scott Noble's film series is entertaining on free video: http://metanoia-films.org/counter-intelligence/

Persona au gratin , February 20, 2017 at 6:11 pm

To add: Family of Secrets : The Bush Dynasty, America's Invisible Government, and the Hidden History of the Last Fifty Years, by Russ Baker (2010).

JCC , February 20, 2017 at 9:15 pm

Definitely a good list. I've read a few of these books and want to read more on the list. And don't forget any of Sheldon Wolin's recent books and essays. This one is 13 to 14 years old and still appropriate – https://www.thenation.com/article/inverted-totalitarianism/

He points out the basic structure, I think, in which following the money makes the most sense.

neo-realist , February 20, 2017 at 9:38 pm

Pepper's last book on the MLK assassination, The Plot to Kill King: The Truth behind the Assassination of Martin Luther King would also be a worthy addition to the list.

Excellent discussion about it on this podcast.

https://kpfa.org/episode/guns-and-butter-june-29-2016/

ex-PFC Chuck , February 20, 2017 at 9:56 pm

I second your recommendation of Pepper's book.

Kim Kaufman , February 20, 2017 at 10:05 pm

Imo, a must read: Operation Gladio: The Unholy Alliance Between the Vatican, the CIA and the Mafia by Paul Williams. I think it's newer than most of the books above and connects a lot of dots.

peter , February 21, 2017 at 6:24 am

I've always throught that 'Manufacturing Consent: The Political Economy of the Mass Media by Edward S. Herman and Noam Chomsky' should be mandatory on high school curriculum as a speed course on intellectual self-defense.

nobody , February 21, 2017 at 9:42 am

Another for the list:

Conjuring Hitler: How Britain and America Made the Third Reich , by Guido Giacomo Preparata

nobody , February 21, 2017 at 10:24 am

Three essays by Charles Hollander: "Pynchon's Inferno," "Pynchon's Politics: The Presence of an Absence," and "Pynchon, JFK and the CIA: Magic Eye Views of The Crying of Lot 49."

PlutoniumKun , February 20, 2017 at 3:25 pm

I would put it simpler and define a 'Deep State' as a major (i.e. not minority rogue) element within the existing government structures (or quasi-government structures) which is willing to commit serious illegal acts or unauthorised acts of violence within the territory of the State to achieve its aims independent of the legally constituted government. In other words, I'd not define it by its structure or nature, but by what it actually does.

I'd define it this way to distinguish it from the sort of bureaucratic plotting which takes place within any large institution which finds itself led by someone who doesn't buy into the organisations core consensus. An example I would use would be Operation Gladio . If Operation Gladio had simply operated as designed, as a secretive military operation which government leaders may not have been aware of, then it was not an example of Deep State. But if, as alleged (but never proved), it carried out acts of terrorism and false flag operations with the specific aim of forcing elected governments to do what they didn't want to do, and this was part of a deliberate high level strategy (i.e. not just the act of a rogue element), then it would be an example of the Deep State at work within democratic western governments.

Put into contemporary terms, if the internal resistance to Trump takes the form of leaks, internal manoeuvres to slow down his agenda, etc., then that is 'normal' bureaucratic operations. If it takes the form of blackmail, false flag terrorist attacks, assassinations, etc., then it is the Deep State in operation.

Given that we know parts of the US and allied intelligence communities have for decades been involved in highly illegal operations around the world which has included torture, murder, blackmail and high level assassinations, is it really so far fetched that there is an element willing to do the same thing within the US?

Greg Taylor , February 20, 2017 at 4:18 pm

Defining "Deep State" by its actions is appealing. Would the military veto of Kerry-negotiated ceasefire in Syria count? Some officers acted without apparent authority and were not reprimanded as a result. Would this have transpired "within the territory of the State" and, thus, meet this definition? Should it?

PlutoniumKun , February 21, 2017 at 3:34 am

Thats an interesting question. There can be a fine line between bureaucratic infighting and actual illegal and anti-democratic actions. On my definition I would say 'no', its not Deep State in that the actions were insubordinate and dangerous, but they took place outside the US so arguably were more the result of a power struggle between government factions. It was the result I think of Obama's weakness as a leader, not an actual Deep State action.

Quentin , February 20, 2017 at 3:32 pm

Wouldn't any so-called Deep State be supported by factions in Congress? Sure. For instance, John McCain is in my view the epitome of the Deep State, one of its chief representatives, out in the open, a vanguard. The Clintons too, doubtless, though now outside government. If Congress gives no pushback, it bestows tacit/active agreement. Congress can rescind the privileges and power of all the organisations observers ascribe to the Deep State. So what's so mysterious? The notion of a Deep State's existence might just serve as a way to avoid responsibility, accountability, deny agency. Some shadowy bunch is running things, anything else new? On the other hand think tanks, contractors and subcontracters are less easily kept in place. Yet Congress can put an end to prisons for profit and erase one element of the deception, reduce the numbers if security clearances by defunding, etc. not things were are about to do. Eminence grise, one two buckle my shoe

sgt_doom , February 20, 2017 at 4:13 pm

McCain is too stupid. To better understand the Deep State, one must go a bit higher up the ladder.

Look into the membership of the Bretton Woods Committee - the lobbyist group for the international super-rich (www.brettonwoods.org), and the Group of Thirty (www.group30.org).

Once you understand these two groups, you'll be more aware.

Persona au gratin , February 20, 2017 at 6:05 pm

Loved the Group of Thirty pictorials on their home page. I counted exactly one genuine person of color (aka, "token negro") among the melange, with a handful of "half and halfs" of former British colonial heritage who of course have had time to assimilate and duly "see the light" as to the wisdom of continued perpetual white northern European supremacy. As for the few token Asians, they'll come around soon enough as well, although they ARE amazing students, aren't they?

Kim Kaufman , February 20, 2017 at 10:06 pm

Politicians are the puppets not the puppetmasters.

Steve H. , February 20, 2017 at 3:47 pm

We can avoid definite articles, but this is a defining article, and could become the definitive article.

The most curious fact is that the phrase is showing up in the msm. I take it as confirmation of Lambert's point: 'Factional conflict within the deep state exists!'

roger gathmann , February 20, 2017 at 4:11 pm

I always attributed the use of the word to Peter Dale Scott. The Turkish phrase seems to me more of a parallel usage than the place from which the phrase is derived. In my cursory reading, the phrase originated in conspiracy theory – particularly around the assassination of JFK. I am not using conspiracy theory in a disparaging sense, since I don't think a belief in conspiracies (which is legally recognized, and was long one of the great themes of political science, from Aristotle to Montesquieu) is per se disqualifying. Scott, in the preface to Deep Politics and the Death of JFK, has a good take on the prototype of the Deep State – in his theory, there is always a deep political practice that is unacknowledged officially. For instance, Tammany New York of the late 19th century operated, on the surface, according to the legal order with a mayor and a bureaucracy, etc., but in practice, it was run by an elaborate system of kickbacks and the investment of certain private players with enormous governmental power. The Deep State, under this p.o.v., shouldn't be confused with bureaucrats and those invested with public power, but instead, is a collaboration between such bureaucrats and those in private positions who retain unacknowledged public power. To quote Scott: " A deep political system or process is one which habitually resorts to decision making and enforcement procedures outside as well as inside those publicly sanctioned by law and society." By this definition, the endorsement of Trump by the National Border Patrol Council and the way in which, under Obama, certain Border Patrol officials sought to impede or change processes for taking in and giving due process to refugees are evidences of a deep political process.

Cat's paw , February 20, 2017 at 5:33 pm

Well, Scott's Deep Politics is published in 93. The Turkish term Deep State appears in print around 96 (maybe as late as 98–I'd have to look around for a cite). While the terms are relatively synonymous they are by no means equal. Best I can tell, Scott's starts using the word Deep State widely in the mid-2000's.

Additionally, as I've come to understand it the term did not originate in conspiracy theory. Rather the term was picked up by conspiracy theorists from Turkish journalism as a useful shorthand for the alleged (and hidden) events and actors they were trying to describe. Personally, not that it matters, I think it's important to keep the original usage/meaning in mind. 1. b/c it was coined to describe a real yet inexplicable event–not speculation or a theory of some conspiracy: i.e., the JFK assassination. Wherein agents of military, representative government, and criminality (along with a "bimbo" straight out of central casting) who have no legitimate business doing business were obviously doing business–but what kind of business? Who knows, that's why it's Deep. 2. The term itself can easily drift into being an amorphous, ill-defined, but overdetermined and overly unified signifier on the order of "cabal" which is likely to happen anyway now that its wound its way into common parlance.

I may just be quibbling, but I don't see deep political processes like Tammany or Border Patrol shenanigans as being of the same phenomena as the so-called Deep State. Deep State would usually imply elements of the military or, more especially, elements of the security apparatus (public and private) at times coordinating with, at other times interfering with, known political/institutional actors, corporate power, and criminal concerns that might involve money laundering or drug and human trafficking. As most here are noting, it is factional and adversarial–a network of several or many discreet entities that coordinate, align, and conflict according to shifting interests. It's paralegal, parapolitical, paraeconomic (or paramarket), and parainstitutional.

And all of that to say that such a definition is wholly contingent upon there being empirical and on-going phenomena which corresponds approximately to the term itself.

Yves Smith , February 20, 2017 at 7:58 pm

Lambert debunked Scott's sloppy and internally inconsistent analysis, per the link he provided at the very top of the post. That's why he kept arguing against its use.

DonCoyote , February 20, 2017 at 4:13 pm

Thanks Lambert. Here's a bit more grist for this particular mill/passages from the rabbit hole (depending on what set of metaphors you like)

1) Paranoia , a tabletop RPG game from the 80's. "The game's main setting is an immense, futuristic city called Alpha Complex. Alpha Complex is controlled by The Computer, a civil service AI construct The Computer employs Troubleshooters, whose job is to go out, find trouble, and shoot it. Player characters are usually Troubleshooters The player characters frequently receive mission instructions from the Computer that are incomprehensible, self-contradictory, or obviously fatal if adhered to, and side-missions (such as Mandatory Bonus Duties) that conflict with the main mission each player character is generally an unregistered mutant and a secret society member (which are both termination offenses in Alpha Complex), and has a hidden agenda separate from the group's goals, often involving stealing from or killing teammates."

So: big on non-monolithic, also big on double/triple identities (troubleshooter/mutant/secret society), which we associate with the intelligence agencies, but also with revolving door politicians/lobbyists.

2) The "incomprehensible/self-contradictory/conflict with the main mission" made me think of seven/eleven/twelve (depending on scholarship/personal preference) chess, most recently attributed to BHO–that is, actions who on the surface don't seem to make sense given the situation, but which conspiracy theorists/true believers think are actually directed at a future/buried/hidden/alternative problem. Although this would seem to fit better with at least a semi-monolithic Deep Society, because it is strategy, and a non-monolithic Deep Society would presumably be less organized/more tactically inclined.

3) The Final Reflection , and especially the Klingon "equivalent" of chess, klin zha , and it's reflective version. Reflective klin zha is played with only one set of pieces. "The Reflective is not so much a variation but a strategic approach to an otherwise tactical game Once set up, the first to place is also the first to move. During each turn, the player chooses one piece, making all others the enemy. The player who captures the Goal on his turn is the victor." So I kill a piece protecting (next to) the goal, but on your turn you now control that piece, use it to capture the goal, and beat me.

So: a smaller (but still non-monolithic) Deep State, with a large unitary set of "pieces" (the non-Deep State?). Again, while there are two sides playing, they are both using the same pieces to try to do the same thing, and they only have "control of the board" some of the time.

So my takeaways: non-monolithic (and especially more than two sides), partial control (whether because of multiple/hidden identities or non-monolithic is unknown), and given the pathetic state of most of our media, most motives are "hidden", at least from casual view (cf for the media's "hidden" motives in today's links

sgt_doom , February 20, 2017 at 4:14 pm

Globalists against (non-deep state capitalists) economic nationalists?

susan the other , February 20, 2017 at 4:26 pm

Here's a reminder (from NC a while back). It is a waste of time to deliberate over the existence of the deep state. What's important is participating in a state – a society – that is well run; where inequality is always exposed; where propaganda is always obvious. It's impossible to define "the deep state." I think Lambert was right when he said the definition of the deep state always turned out to be a big hairball.

hemeantwell , February 20, 2017 at 8:15 pm

I agree with the spirit of what you're saying, but try this: I think that factional conflict, occurring during periods of systemic strain/crisis, is what leads otherwise contented and inertial sections of the state to act in ways that require concealment, either of actor or action. Reading a bit from the Glennon book linked above, wherein he makes much of Bagehot, reminded me of how the French political system used to be described as having something like a bureaucratic ballast keeping the ship of state from capsizing. That sort of conservative, continuity-maintaining function can grow claws, and that's what we're seeing now, particularly when US elites are trying to cobble a revised foreign/imperial policy to deal with China and Russia and the president is having trouble intoning the verities of US exceptionalism.

barrisj , February 20, 2017 at 4:41 pm

Well, that lengthy disquisition seems to indeed "validate" – as it were – the "deep state" terminology if not its epistemological derivation(s) at the very least, readers keeping to the various formulae offered for "correct usage" won't be whacked upside their haids by the moderators if the term appears in a comment.
Cheers.

Michael , February 20, 2017 at 4:43 pm

My first encounter with the idea of the Deep State was from Mike Lofgren's 2014 essay, "Anatomy of the Deep State", based upon his 25 year career as a Capitol Hill staffer. Here is the link:

http://billmoyers.com/2014/02/21/anatomy-of-the-deep-state/

JTMcPhee , February 20, 2017 at 4:44 pm

Maybe worth a footnote or something? Is Charlie Wilson "deep state" in any way? https://en.wikipedia.org/wiki/Charlie_Wilson_(Texas_politician) And his apparently occasional bed partner, Joanne Herring? https://en.wikipedia.org/wiki/Joanne_Herring

How about those little quiet gatherings of the Koch-convened sort, that attract so little "press" attention, at Palm Springs and etcetera? Is the "deep state" limited to Great Game and globalism, or is the long steady erosion of even the myth of "democracy" and the transformation of that word into its opposite, via the efforts of all those very small number of people who profit from killing public education and regulatory capture and ascension to elected positions in everything from little town councils and school boards to state legislatures and statehouses, constitute part of what might qualify as some sort of "deep state?" ALEC is not on everyone's tongue, after all, but the power the people in it exert, through long application, sure forks over a whole lot of what maybe most people would think of as "the general welfare" and "public goods." IS Davos "over?" Is Bilderburg?

Interesting how many of what would seem to me to be deep-staters are tied to Afghanistan, and of course Israel. One might even posit the Israelites have their own deep state, that has interlocking membership with players and factions and elements of the unelected and maybe public but mostly invisible thing that the phrase calls up in the minds of many of us.

Having named the demon, if there is ever any agreement on a name and frame, does that give us mopes any power over the demon, or just another opening for its immanence in our sad little lives?

integer , February 20, 2017 at 10:49 pm

The first step would seem to be forcing the demon out from the shadows and into the sunlight so everyone can get a good look at it. I imagine it will then lash out with everything it has like a cornered animal, which will harden public opinion against it, and then it will be game on for real. A very dangerous game, to be sure, but what is the alternative?

Horsewithnoname , February 20, 2017 at 5:04 pm

From http://www.oftwominds.com/blogfeb14/dollar-deep-state2-14.html [Charles Hugh Smith, 02/2014]
I have been studying the Deep State for 40 years, before it had gained the nifty name "deep state." What others describe as the Deep State I term the National Security State which enables the American Empire, a vast structure that incorporates hard and soft power–military, diplomatic, intelligence, finance, commercial, energy, media, higher education–in a system of global domination and influence.

Back in 2007 I drew a simplified chart of the Imperial structure, what I called the Elite Maintaining and Extending Global Dominance (EMEGD):

stockbrokher , February 20, 2017 at 5:14 pm

1. "Example: "The Iraq WMD's yellowcake uranium episode was a Deep State Blooper." (See here for details; the yellowcake uranium was part of the Bush administration's WMD propaganda operation to foment the Iraq War.)"

How is this an example of a blooper? It helped to achieve its intended goal. That it was exposed much later as a fabrication didn't vitiate its effect.

2. Surprised so many examples/references (especially here) but none with Wall Street as a primary Deep State actor. Read something revelatory ( to me, anyway) recently re the CIA ( post WWII) being engineered mostly by Wall Street for the sole purpose of protecting big U.S Corporate interests. Sorry no time to dig it up, but I'm sure others more knowledgeable can expound. (As SerenityNow notes, Scott's book puts WS in the title.)

Skip Intro , February 21, 2017 at 10:23 am

Good points.
What is interesting to me is the similarity of the modus operandi revealed in the yellowcake episode, where privileged information was 'leaked' to a tame 'journalist' to take out an enemy. In the case of the yellowcake, we generally accept the narrative that blowing Joe Wilson's wife's Non-Official Cover, but as part of a non-proliferation team, Valerie Plame was also in a position to directly interfere with WMD claims from the administration. OTOH, the WHIG and OVP are not very deep.
In addition, it is easy to point to the Iraq debacle as a failure on the part of the 'deep state' that contrived it, but a more cynical view would consider that a quick victory is less profitable than a slow defeat. In that light, apparently glaring errors, like the disbanding of the Iraqi Army, may be understood to be insurance that has paid off with a successful insurgency, a weakened state where oil can be bought or taken without any pesky national government interference, and eventually, trained military leaders for IS, the next-gen enemy with actual ground troops and conquered territory.

I was surprised that there wasn't a reference to Ike's warning about the Military Industrial Complex, which seems like the original American reference to an extra-democratic coalition of interests that could influence or control policy.
Another milestone would be the Iran-Contra affair, where we heard North and Poindexter drooling over an 'off the shelf operational capacity' to circumvent constitutional control of foreign policy (a market niche now filled by Erik Prince and Blackwater/Xe/Academi). In connection with this scheme, we also witnessed intelligence officials colluding with arms merchants to influence a US election by arming enemies, as well as running drugs into the US to fund said independent foreign policy. I think the illegality is well established, as for killings within the US territory, we can ask Orlando Letelier.

scraping_by , February 20, 2017 at 6:10 pm

Ran into an interesting passage in Kevin Phillips's 1994 book Arrogant Capital: Washington, Wall Street, and the Frustration of American Politics . He speaks of an 'iron triangle' of politics, interest groups, and media that turns aside the cyclic outsider revolutions that would otherwise renew American political institutions. If Trump has this view of his populism, it makes sense he spends so much time disparaging the MSM; not just a celebrity feud, not just annoyance about bitchiness, but a reasoned effort to break an elite power tool.

If Phillips's iron triangle fits the description of a Deep State, and it can, this may be an actual conflict over principles and convictions. Because the elite believe deeply in their own position, and are convinced they're doing God's work.

PhilM , February 20, 2017 at 6:10 pm

To me this is the kind of synthetic journalism that really sifts meaning from noise. And uniquely, on this site, the reading lists and comments are sophisticated and thoughtful additions and refinements, like the peer review offered from any scholarly community. This article is not definitive; but it could grow and grow, and then one could easily call it "seminal." This is work that I happily pay for.

From the history of the 1930s: one notes that for Heydrich to consolidate his bosses' power over Germany, he felt it necessary to "declare war" on the existing German civil service in 1935–not just the police force, but the entire bureaucracy; and to seize control of the foreign intelligence services as well as the domestic. The only successful hold-out was the Abwehr, the military intelligence service, which succeeded in preserving its independence in a very much more closely circumscribed field.

So Heydrich definitely felt there was a "state within the state" that needed to be co-opted and ideologically purified and above all surveilled, before Hitler's power was secured. That, in my humble view, is what the "deep state" is. It's the most important part of the question "quis custodiet custodes ipsos," and why Plato had a philosopher king instead of just a bunch Guardians, and why a nobility requires a monarchy.

integer , February 20, 2017 at 10:42 pm

Yes it's great to see this issue being given the attention it deserves and being subjected to serious analysis by NC and the commentariat. Thanks Lambert!

witters , February 21, 2017 at 2:22 am

A philosopher king who was poor, lived on public provision, owned no property, had no family, and lived in accomodation from whom none could be forbidden. And so just & virtuous.

Gman , February 20, 2017 at 6:15 pm

Only relatively recently having become aware of the term, 'deep state' I would assume, in its most basic form, it refers to those mostly 'unseen' and 'unknown' conservative we know best types who wield uninterrupted, often disproportionate influence without having to suffer the dreadful inconvenience or potential indignity of seeking a periodic democratic mandate.

Watt4Bob , February 20, 2017 at 6:29 pm

It seems to me that there was a lot of talk about the birth of the DHS being the biggest reorganization of the federal government since the New Deal.

That talk included concerns that Bush was putting thousands of dead-enders in bureaucratic positions, and that they would be impossible to remove in the future.

From Occupy.com (May 2013);

But here's the strange thing: unlike the Pentagon, this monstrosity draws no attention whatsoever - even though, by our calculations, this country has spent a jaw-dropping $791 billion on "homeland security" since 9/11. To give you a sense of just how big that is, Washington spent an inflation-adjusted $500 billion on the entire New Deal.

We've been talking around here about the breaking of rice bowls and its affect on the credentialed class, the implication being the hysterical, unorganized revolt of people who feel their well-being threatened by the rise of Trump.

Bush II broke a lot of rice bowls when he leveraged the fearful post 9/11 environment to bring about the reorganization of the federal government under the DHS;

From Legislating Civil Service Reform:
The Homeland Security Act of 2002
; (emphasis mine)

The Administration presents their strategy as one that requires them
to have more control over federal personnel in order to provide national
security and protect America. For example, President Bush argued that he needed the freedom "to put the right people at the right place at the right
time to protect the American people."

The metaphor of physical placement-to "put" federal workers in particular places at particular times-is rationalized as a strategy to protect America,
much like one would move a Bishop or Knight in a chess game to protect
the King.

This physical placement metaphor was also picked up by the news
media. In one summary of the issues, an article in the Washington Post
noted, "The White House wants to retain the ability to remove
some employees from unions for national security reasons," and "Bush
wants the ability to move workers from one part of the department to
another to meet rapidly changing needs.

This metaphor of physical placement suggests that the Administration requires a particularly high degree of power and control over personnel,
but that degree of power is presented as rational and justified in light of national security.

To the extent that the audience is concerned about national security, then
they are invited to see the Administration strategy-in this case,
its need for power over personnel-as one that is consistent with that concern.

From the same paper, the other side of the argument ; (emphasis mine)

Union leaders saw this issue in a different light; they disputed the details of the proposal and also questioned the motives behind them.
Brian DeWyngaert, Assistant to the President of AFGE, saw the reforms
as an attempt by the administration to weaken the civil service system, to shift from "public administration" to "political administration."

DeWyngaert cites a paper, written by two former Republican personnel
management officials, that asserts, " The President can expect opposition
from official Washington's 'permanent government ,' a network that includes the career civil service, and its allies in Congress, the leaders of federal
unions, and the chiefs of managerial and professional associations
representing civil servants."

DeWyngaert expresses union distrust of the administration, arguing that
the real goal of the administration was to "control what agencies do
[ ] to change some of the personnel rules [ ] to the point where they are going to follow your line because you control their pay, their determination at will,
their layoff.

W4B;

What I'm pointing out, is that what we're calling the Deep State includes the "permanent government" mentioned above, and that in reorganizing the government under the control of the new DHS, the right, in the person of Bush II was attempting to replace a unionized, independent, New Deal flavored government bureaucracy with one that could be more easily controlled, because it was more politicized.

I'm saying that both the democratic, and the republican wings of the republican party have made peace with the notion of a more politicized "permanent government", and that more politicized "permanent government", is now showing its loyalty to the status quo by doing what's expected of it, joining the resistance.

PhilM , February 20, 2017 at 9:24 pm

This is exactly what I think, too, and what Heydrich recognized in 1935: that a large government has a hive mind. Without the SD ("Security Services"), the SS, and the Nazi Party organization, he could never have bent that hive mind, made of all those entrenched, entitled, relatively law-abiding functionaries, to his will.

Trump has none of those tools at his disposal, so there's no reason to expect his lasting very long or getting much done.

That's what makes the hysteria about his being like Hitler so very misplaced. If Trump had an organization like the Nazi party hundreds of thousands strong, ready to die in the streets for him, with operatives ready to put into place to take over the management of the government effectively at all upper levels, it would be another matter. As it is, he's grasping at straws from other talent pools. No wonder the bookies are giving him lower odds.

schultzzz , February 20, 2017 at 6:48 pm

Chris Hedges, on his RT show, recently defined it almost exclusively in terms of big business. I think the quote was something very short like, "It's Raytheon, Goldman, and Exxon!!!"

Which complicates things, as Trump's cabinet has reps from Goldman and Exxon in it.

neo-realist , February 20, 2017 at 10:36 pm

On that tip more or less, I recall watching a video of Dick Gregory and Mark Lane talking about the MLK Assassination, and Gregory made a point of saying more or less that the intelligence apparatus doesn't act unilaterally, but that it acts at the direction of the aristocrats, i.e., oligarchs, big business, etc. The aristocrats tells the apparatus to go after those governments and politicians that are acting against their interests.

In a documentary called King–Montgomery to Memphis (GREAT DOCUMENTARY), Harry Belafonte said that when King antagonized the "money power" , he was pretty much marked for death.

Anonymous , February 20, 2017 at 6:52 pm

Anecdotally, I was working with a former Senator at the time of the DHS formation who was still highly involved with the Bush administration. in fact Cheney had them on speed dial. I can tell you flat out that despite spouting the same garbage about freedom to reorganize on the fly, if you talked with them long enough the ability to fire employees at will ALWAYS ended up being the reason when anyone pinned him down about how departments would be reorganized on the fly. Very clearly it was about making sure that employees would know that they should show no integrity at all in doing their job most particularly in regards to either upholding the Constitution or recognizing the legal rights of any person, citizen of America or not.

Dave in Austin , February 20, 2017 at 7:16 pm

Deep state versus deep government

All modern states are bureaucratic. So the surface state which the public can replace, what we usually call "the government", is underpinned by a deep and essentially invisible substrate of people and institutions. The characteristics of the deep government are 1) opaque bureaucratic decision-making and written output designed to mislead not inform, 2) invisibility because the press cant easily turn the story into a narrative with individuals who represent good and evil, and because the national press (NYT, WP, and even the WSJ) no longer reports the news but filters the policies to either spark outrage or encourage cooperation, 3) The deep government employees are smart, educated and have come up through the ranks (think Bob Gates). They are great people, fun to be with but often incredibly insular and sure that "You people out there don't understand". And they are often right about that. Don't underestimate their knowledge.

Under most conditions the surface government, the deep government and the parts of the deep state outside the government (ie the press) are in general agreement and work together smoothly. Today the surface state (President, congress and soon probably the courts) are trying to bring about change that the individuals within the deep government fundamentally disagrees with on issues like immigration, national self-sufficiency and overseas threats. All major changes (our entry into WWI and WWII, the civil rights movement, tax and subsidy law, Obama's immigration program) generate resistance. Sometimes I agree with the deep, sneaky part of the government (entering WWII); other times, I don't (Vietnam, Bush in Iraq, Obama's immigration policy).

Our deep state is like that of most democracies and differs from authoritarian deep states in a number of fundamental ways: 1) our military is adamantly apolitical. All officers take an oath of allegiance to the Constitution, not the government (in the late 1960s, as the military got sucked into domestic policing, many senior officers started reading and discussing the Constitution among themselves), 2) No U.S. deep state emerged out of our two formative struggles, the revolution and the Civil War . Much of the world (China, Russia and the colonies that became free in the 1950s and 60s) had a different history, 3) We have no ethnic and religious deep states- no Moslem Brotherhood, no Burmese Buddhist nationalist, although we do have passionate ethnic groups that prefer to operate out-of-sight (Jewish, Irish Catholic, Cuban, Indian to name a few) . 4) Countries that fight overseas wars or that fear internal revolutions all develop a deep state. All the ex-colonies that didn't (Iraq, Egypt, Guatemala and a hundred more) had the weak state overthrown and replaced with a strong and deep state. In the US the first deep state hints came after WWI (not WWII) with large caches of unappropriated money going into the hands of Naval Intelligence (who do you think paid for the Flying Tigers?). The original sin of our liberal deep state was the campaign to get us into WWII. A good cause- and a terrible precedent.

Finally, the deep government and the national elite are not the same. The deep government is largely a meritocracy filled with alert people who know which way the wind is blowing. If real Communists or real Fascists took over they would either stay inside, keep getting paid, and quietly try to undermine the new leaders or they would take early retirement. They don't write biographies or make statements because they are essentially private people immersed in their private lives, what the Communists used to call Careerists. The national elites are something else. They either feel independent (the hereditary rich, celebrities and Trump and the self-made billionaires) or are the insecure product of upper middle class families, Ivy League and second-level private colleges and good social backgrounds. They work in large institutions they don't own or control. The latter group wants to exercise power because it gives meaning to their otherwise uninteresting lives (think, academics, the non-profit sector and Federal judges). The self-made rich exercise power to become richer and because they love to control organizations that compete (Who owns all the NFL teams?). Both the deep state and the deep government are open to people of education, good breeding, ambition, discretion and good luck.

Is there any way to fix this? Probably not but nobody seems to bother the countries that don't do foreign adventures To roughly quote from the Bin Laden interview after 9/11, when he as asked "Why did you attack America?" he laughed and said "We didn't attack Switzerland". A better national press would help. If there are any billionaires out there interested in providing $100K salaries to real smart MBA students who like to dig, let me know. A few platoons of young I.F. Stones of various political hews might go a long way. But deep states are here to stay. The best we can do is monitor. analyze and publicize them.

Patricia , February 20, 2017 at 8:03 pm

What a fascinatingly bland presentation, revering deep state careerists for their solid private lives and good-breeding, while others are power-hungry insecure product searching for a cure to their dullness.

And calling for "platoons" of new IF Stones from among MBAs, of all places!

Thanks for the entertainment.

integer , February 20, 2017 at 10:31 pm

+1

Tomonthebeach , February 20, 2017 at 7:54 pm

As a retired member of the Deep State, I find it amusing at the imbecility of right- (or left) wing conspiracy nuts who can invent amazing chains of undermining collaboration across agency lines orchestrated by some powerful shadow demons.

If federal employees were really that effective, there would be no private sector wage gap, the VA and DOD would share a seamless electronic record system, and Snowden would have the Medal of Freedom, and HRC's fingerprints would have been all over the gun that killed Vince Foster.

The Deep State, if you want to call it that, exists so the people get the support and services they need despite confusing and often conflicting legislation, presidential directives, and agency regulations.

DH , February 20, 2017 at 8:27 pm

I generally apply Occam's Razor to conspiracy theories. It is generally more likely that events occur due to incompetence, lack of attention, or emotional reactions than conspiracy. To pull a secret conspiracy off successfully over a long time, you need to be really smart, really focused and not have many people, otherwise it is no longer secret.

The bigger the organization, the more likely you are to have a reversion to the mean of most of the population, and most people are more likely to turn a blind eye than participate in something that means they could lose their pension as well as getting home late for dinner.

So the biggest issue that Trump has with the bureaucracy is how to manage Parkinson's Law. He did in the private sector by running around saying "You're fired" but he can't do that to career civil servants. http://www.economist.com/node/14116121

I am sure that there are a bunch of bureaucrat top dogs that don't like the invasion of their turf. They are, after all, fundamentally political animals very jealous of their territory. Some of them might even talk to each other, but probably half of them despise the other half.

The biggest threat to us is that we slowly acquiesce to security theater that quietly gets more and more invasive. The police etc. are the most likely to be organized as some sort of "deep state" as some departments already have an us vs. them attitude.

JTMcPhee , February 20, 2017 at 8:43 pm

Tom, maybe one part of the bigger thing called "federal service" does that. I spent 13 years with the US EPA through the Reagan Revolution (and it was an amazing coup). A number of EPA employees, despite the threats of "RIFs" (reductions in force, or wholesale politically motivated firings), worked hard and quietly to do everything they could to slow the assault on "regulation" of sh!tty corporate behavior that threatened human health and the environment. There were a lot of go-alongs, usually later comers who were looking to get their resumes padded before moving to the dark side, but there were a lot who were serious in their commitment, and aware of their vulnerability, who continued to press for enforcement actions, regulations with teeth that required industries to spend money ("internalize") to install process changes and end-of-pipe-or-stack controls (which often resulted in increased profits for the corpos who had an excuse and tax deductions to update their plants. And there was continued insistence on doing the data gathering that supported the proofs of harm that pollution and toxics cause. There was an 'environmental justice" initiative despite the "f__k the poor" administration attitudes and policies, and a criminal enforcement operation that actually put corporate officers in jail and at least made them take notice of potential consequences. There are obviously still a lot of employees at EPA to take their mission to be protection of public health and the environment, preserving decades of data collection and soldiering on despite the "Mandate for Leadership" quackery and fear-and-loathing fomenting.

But your limiting the definition as you do is incomplete at best. The state security overlords, the oligokleptocracy, and the other inimical factions and parties that have been described in this post and comments, seem to me the real nuts and bolts of what 'deep state' is getting at. Not the many federal employees who, despite all the sh!t that flows down from above and laterally from the culture inside and outside the agencies, actually try to do the job of "positive governance," like a few people I have dealt with in the Social Security Admin, the VA, the CMS behemoth and a few others. I often wonder how people persist in those jobs and don't burn out or get fired. I was close to both while doing my thing at EPA, 1980-90 (the Reagan years - I had two-plus with Carter as president before that, to see how a less hostile-to-regulation-in-the-best-sense admin might operate.

Vatch , February 20, 2017 at 9:27 pm

Tom, I'm curious. In which department of the federal government were you employed?

integer , February 20, 2017 at 10:22 pm

Hard to take your comment seriously. Do you really think that the Deep State consists of federal employees who are concerned with VA and the rank and file of the DOD, or that they are interested in providing "support and services" to the people? I think it's likely that your belief that you were part of the Deep State is incorrect.

Mothy , February 20, 2017 at 8:01 pm

No discussion of the Deep State would be complete without reading "Spooks," by Jim Hougan. It was a seminal book written in 1980 (I believe) that introduced the notion of retiring IC operatives joining private company security apparati. Tell your compatriots you're acting on behalf of the government and a patriot will do ANYTHING. "The Conversation" was a depiction of one of the main characters in the book who had previously wiretapped most of Manhatten back in the early Sixties; he worked for either Hoffa or the Kennedy brothers or both. Really an unbelievable book getting more and more difficult to find. Ironically– or not– I believe it was Hougan's last piece of investigative journalism.

No Idea , February 20, 2017 at 9:14 pm

We cross out "conducting killings" for the American context (or do we?).

"Character assassination. What a wonderful idea. Ordinary assassination only works once, but this one works every day."
― Terry Pratchett, The Truth

Fool , February 20, 2017 at 10:02 pm

A succinct way that i like to think of the "deep state" is whoever the CIA works for.

Vatch , February 20, 2017 at 10:13 pm

"It's called the ruling class because it rules." –Arthur Silber

The rulers are the ones who rule. The ruling class includes non-rulers who are in the same socio-economic class as most of the people who rule.

buermann , February 21, 2017 at 12:48 am

I'd always assumed the concept originated with Peter Dale Scott, who, before he wrote the book "The American Deep State", used it all over the place in 2007's "The Road to 9/11". I've read neither but for excerpts, the concept merely referred to covert agencies acting outside the scope of democratic oversight - whether it's local police departments running out of control torture squads and black sites or national intelligence agencies acting as the private armies of the executive. That such groups might oust a sitting executive is of course the heart and soul of all his conspiracy mongering about the JFK assassination (I like his poetry an awful lot, but I remember trying to get through Cocaine Politics and either the sources didn't check out or they were untraceable, in any case I gave up on it).

https://books.google.com/books?id=op39ymd2um0C&printsec=frontcover&q=%22deep%20state%22

H. Alexander Ivey , February 21, 2017 at 1:18 am

If you want to find a consistent, broad, and useful meaning of a concept, and a phase or 'name' for that concept, look for books written on the subject. Postings, blogs, and even published articles do not have the authority that books have (it's not just because being hit upside the head with a book will hurt a lot more than with a blog posting, har,har).

My recommendation is Deep State, based on my understanding on Mike Lohgren's The Deep State: The Fall of the Constitution and the Rise of a Shadow Government .

I must say I personally don't like the term. When I use it with people who believe that Rep & Dem describe the US government, I get the old eye roll, tin foil hat outfitting treatment. Humm, maybe I'll lead in with the term 'Washington Consensus'. They get that one around here in Southeast Asia. They haven't forgotten or forgiven the IMF about the 1997 Asian financial crisis.

St Jacques , February 21, 2017 at 4:03 am

I hate the term deep state because, unlike the mic, for example, which has a clarity about it, it is so vague and malleable a term as to be almost useless except for Hollywood films and conspiracy nutters, but if there is such a thing, here is what it might look like:
https://www.youtube.com/watch?v=B8IvKx0c19w

Damson , February 21, 2017 at 6:56 am

It goes back to 9/11.

A must-read is the 'Collateral Damage' investigation in which the Office Of Naval Intelligence features as the main exposing agency of exactly this issue – a parallel power structure operating on a black budget:

https://wikispooks.com/wiki/File:Collateral_Damage_-_part_1.pdf

fairleft , February 21, 2017 at 7:36 am

The central task of the U.S. 'deep state' is to maintain or expand the permanent war economy. So it is the military-industrial complex. The top-of-food-chain spy agencies - whose primary task within the MIC is to create enemies and paranoia - are the brains and mouthpiece of the deep state.

begob , February 21, 2017 at 7:58 am

Didn't see any mention of organised crime. And does the DS distinguish between unlawful and illegal?

PH , February 21, 2017 at 8:53 am

Think kaleidoscope in motion. Colors are real but hard to predict. Preset patterns, but affected by outside movement.

I love histories, but I know they simplify and often mislead. Anyway, the trick is to spot the power emerging, not how it turned out with the last generation.

I suggest that the best approach looking forward is to start with the existing visible power bureaucracies both inside govt and outside govt but on its periphery.

For each behemoth, daily routine is the biggest driver. And with that usually goes shared values. Such things usually push events.

Offhand, I can think of a few starting points. If these separate bureaucracies are subject to some common control, I would like to know exactly who and exactly how.

Military/defense contractors. Mostly consumed with myopic concerns. Top generals and bureaucrats do think tank type stuff, but mostly technical. Obvious collusion with industry over defense budgets.

Not sure what attitude is toward Donald.

NSA and tech contractors. Foreign world to me, but obvious iceberg.

State Dept and White House and press chattering class. Propaganda organizations, basically. I am sure they have clubs and secret handshakes, but not sure should've called organized.

Main CIA. Narrow bureaucrats.

Off-the-books CIA intersecting with business. These have been the most spectacular stories and escapades. Edwin Wilson. Air America. Coups in the 50s. Maybe CIA assassination of Kennedy.

Did these operations drive history? Maybe. If those types of connections drive events today, what are they?

I do not see a unitary deep state.

Steven Greenberg , February 21, 2017 at 9:10 am

Nobody has raised the issue of COG. Here is one excerpt from Peter Dale Scott's book that talks about and somewhat defines it. Much more in the book of course.

One factor linking Dallas, Watergate, the 1980 "October Surprise" plot to prevent Carter's reelection, Iran-Contra, and 9/ 11 has been the background involvement in all these deep events of personnel from America's highest-level emergency planning, that is, Continuity of Government (COG) planning, known inside the Pentagon as "the Doomsday Project." The implementation of COG plans on 9/ 11 was the culmination of decades of such planning, and has resulted in the permanent militarization of the domestic United States, and the imposition at home of institutions and processes designed for domination abroad.

Scott, Peter Dale. The American Deep State: Wall Street, Big Oil, and the Attack on U.S. Democracy (War and Peace Library). Rowman & Littlefield Publishers.

Mattski , February 21, 2017 at 9:28 am

"Seems pretty big to be deep "

Not logical. The Deep State is those elements of the establishment that direct the course of government irrespective of e pluribus.

Perfectly good term, arising from popular usage, whose boundaries–hopefully needless to say–people who know better will not dictate anyway. Would have been much better, rather than to attack its use at the outset, just to investigate it. Elitist exercise, shaped like this.

[Feb 21, 2017] The rise in income inequality was promoted by the Reagan revolution. That in many ways was its purpose. It is also the agenda of Paul Ryan and his A Better Way .

Notable quotes:
"... Democrats sold out 35 years ago. ..."
"... Yes it's more profitable to have a non-unionized workforce. ..."
"... Doesn't mean we should. Doesn't mean we should get rid of environmental or safety regulations. ..."
Feb 21, 2017 | economistsview.typepad.com
pgl : , -1

"it is never good to pass up an opportunity to remind readers that the rise in inequality since 1980 has been something that those who made the Reagan Revolution hoped to accomplish and are proud of.

Bargaining power has flowed to finance and the executive suite and away from the shop- and assembly-floor. Top tax rates have come way down. It could have been otherwise--this is, primarily, a thing that has happened in English-speaking countries. It has happened much less elsewhere. It could have happened much less here."

The rise in income inequality was promoted by the Reagan revolution. That in many ways was its purpose. It is also the agenda of Paul Ryan and his "A Better Way".

We used to know how to lower trade barriers and welcome new technology and have the benefits accrue to all. We lost our political will some 35 years ago. And electing Trump has not exactly regained our old mojo.

Peter K. -> pgl... February 20, 2017 at 12:24 PM , 2017 at 12:24 PM
"We lost our political will some 35 years ago. "

Who is this we kemosabe?

Democrats sold out 35 years ago. And you keep defending them.

libezkova -> Peter K.... , February 20, 2017 at 05:41 PM
"Democrats sold out 35 years ago."

Bill Clinton was elected in 1982. He essentially sold the Party to Wall Street, although first signs appeared under Carter/

Peter K. -> Sanjait... , February 20, 2017 at 03:39 PM
Yes it's more profitable to have a non-unionized workforce.

Doesn't mean we should. Doesn't mean we should get rid of environmental or safety regulations.

libezkova -> Peter K.... , February 20, 2017 at 05:44 PM
"it's more profitable to have a non-unionized workforce"

And that was partially accomplished by moving manufacturing South.

[Feb 21, 2017] Does the Chicago Bears quarterback really need 126 million for seven years -- up from to top NFL paid Joe Namath's 600K a couple of generations back?

Feb 21, 2017 | economistsview.typepad.com
Denis Drew : February 20, 2017 at 02:10 PM , 2017 at 02:10 PM
Manufacturing, manufacturing, manufacturing. Everybody misses the BRONTOSAURUS in the room. 4% of jobs gone from automation and trade - half and half -- true. But, 50% of employees have lost 10% of overall income -- out of the 20% of a couple of generations back.

(This reminds me of comparing EITC's 1/2 1% redistribution with 45% of workers earning less than $15 an hour.)

Could 50% of the workforce squeeze 10% of income back out of the 49% who take 70% (14% of their earnings!)? They sure could if they could collectively agree not to show up for work otherwise. Could if the 49% in turn could squeeze 10% out of the 1% (the infamous one percent) who lately take 20% of overall income -- up from 10% a couple of generations back.

(Does the Chicago Bears quarterback really need $126 million for seven years -- up from to top NFL paid Joe Namath's $600,000 [adjusted truly] a couple of generations back?)

Mechanism? Ask Germany (ask Jimmy Hoffa).

* * * * * *

In case nobody thought about it -- I never thought about until Trump -- it goes like this. The NLRA(a) was written in 1935 leaving blank the use criminal sanctions for muscling the labor market. Even if it did specify jail time for union busting it is extremely arguable that state penalties for muscling ANY persons seeking to collectively bargain (not just union organizers and joiners following fed procedure) would overlap, not violate federal preemption.

It seems inarguable -- under long established First Amendment right to organize collective bargaining -- that federal preemption cannot force employees down an organizing road that is unarguably impassable, because unenforceable.

Upshot: states may make union busting a felony -- hopefully backed by RICO for persistent violators.

6% union density is like 20/10 blood pressure. It starves every other healthy process.

RC AKA Darryl, Ron -> Denis Drew ... , February 20, 2017 at 02:14 PM
Understood. Lost manufacturing jobs was a big hit to union employment aside from the longshoremen.
ken melvin -> RC AKA Darryl, Ron... , February 20, 2017 at 02:37 PM
In 1967-68 was working the waterfront in SF. Saw the crews of Stevedores and Longshoremen load the ships; on the docks, down in the holds, using boom winches, forklifts, and muscle (dangerous work). By 1970, containerization had replaced 90% of them. And, it continues with computerization of storage and loading of containers (something I worked on in 1975). Remember the nephew in the 'Wire'? One day a week if he was lucky. David Simon knew of what he wrote.
cm -> RC AKA Darryl, Ron... , February 20, 2017 at 05:02 PM
One of the Michael Moore movies (probably but not sure whether about Flint) made the point rather explicitly - former manufacturing workers retrained as law enforcement or prison officers perhaps for employment in other states or "dealing with" their former colleagues driven to crime or at least into the arms of the law enforcement system.

[Feb 20, 2017] Why Extreme Inequality Causes Economic Collapse naked capitalism

Notable quotes:
"... Fig. 3a Income Share of U.S. Top 1% (Reich, 2013) & 3b Reich notes that the two peaks look like a suspension bridge, with highs followed by precipitous drops. (Original Source: Piketty & Saez, 2003) ..."
"... Paying for policy favors ..."
"... Removing constraints on dangerous behavior ..."
"... Increasing the public's vulnerability ..."
"... Increasing their own intake ..."
"... financial intermediaries. ..."
"... Or Ben Bernanke in his book "The Courage to Act": "Money is fungible. One dollar is like any other". ..."
"... "I adapted this general idea to show how, by affecting banks' loanable funds, monetary policy could influence the supply of intermediated ..."
"... no longer depend exclusively on insured deposits for funding, nondeposit sources of funding are likely to be relatively more expensive than deposits" ..."
"... The first channel worked through the banking system By developing expertise in gathering relevant information, as well as by maintaining ongoing relationships with customers, banks and similar intermediaries ..."
"... and thus hurt borrowers" (Bernanke [1983b]). ..."
"... A herding started by William McChesney Martin Jr, that thought "banks actually pick up savings and pass them out the window, that they are intermediaries ..."
"... obviously not so in any human activity. ..."
"... We believe Regenerative Economics can provide a unifying framework capable of galvanizing a wide array of reform groups by clarifying the picture of what makes societies healthy. But, this framework will only serve if it is backed by accurate theory and effective measures and practice. This soundness is part of what Capital Institute and RARE are trying to develop. ..."
"... haha, unfortunately it's the apex predator species that is in danger of sudden extinction as its prey declines. Of course the Darwinian analogy doesn't hold up well because Darwinian selection works on all individuals of a species without distinction. A much better analogy is a rigged game. ..."
Feb 20, 2017 | www.nakedcapitalism.com
According to a recent study by Oxfam International, in 2010 the top 388 richest people owned as much wealth as the poorest half of the world's population– a whopping 3.6 billion people. By 2014, this number was down to 85 people. Oxfam claims that, if this trend continues, by the end of 2016 the top 1% will own more wealth than everyone else in the world combined. At the same time, according to Oxfam, the extremely wealthy are also extremely efficient in dodging taxes, now hiding an estimated $7.6 trillion in offshore tax-havens.[3]

Why should we care about such gross economic inequality?[4] After all, isn't it natural? The science of flow says: yes, some degree of inequality is natural, but extreme inequality violates two core principles of systemic health: circulation and balance.

Circulation represents the lifeblood of all flow-systems, be they economies, ecosystems, or living organisms. In living organisms, poor circulation of blood causes necrosis that can kill. In the biosphere, poor circulation of carbon, oxygen, nitrogen, etc. strangles life and would cause every living system, from bacteria to the biosphere, to collapse. Similarly, poor circulation of money, goods, resources, and services leads to economic necrosis – the dying off of large swaths of economic tissue that ultimately undermines the health of the economy as a whole.

In flow systems, balance is not simply a nice way to be, but a set of complementary factors – such as big and little; efficiency and resilience; flexibility and constraint – whose optimal balance is critical to maintaining circulation across scales. For example, the familiar branching structure seen in lungs, trees, circulatory systems, river deltas, and banking systems (Fig. 1) connects a geometrically constant ratio of a few large, a few more medium-sized, and a great many small entities. This arrangement, which mathematicians call a fractal, is extremely common because it's particular balance of small, medium, and large helps optimize circulation across different levels of the whole. Just as too many large animals and too few small ones creates an unstable ecosystem, so financial systems with too many big banks and too few small ones tend towards poor circulation, poor health, and high instability.

In his documentary film, Inequality for All, Robert Reich uses virtuous cycles to clarify how robust circulation of money serves systemic health. In virtuous cycles, each step of money movement makes things better. For example, when wages go up, workers have more money to buy things, which should increase demand, expand the economy, stimulate hiring, and boost tax revenues. In theory, government will then spend more money on education which will increase worker skills, productivity and hopefully wages. This stimulates even more circulation, which starts the virtuous cycle over again. In flow terms, all of this represents robust constructive flow, the kind that develops human and network capital and enhances well-being for all.

Of course, economies also sometimes exhibit vicious cycles, in which weaker circulation makes everything go downhill – i.e., falling wages, consumption, demand, hiring, tax revenues, government spending, etc. These are destructive flows, ones that erode system health.

Both vicious and virtuous cycles have occurred in various economies at various times and under various economic theories and policy pressures. But, for the last 30 years, the global economy in general and the American economy in particular has witnessed a strange combination pattern in which prosperity is booming for CEOs and Wall Street speculators, while the rest of the economy – particularly workers, the middle class, and small businesses – have undergone a particularly vicious cycle. Productivity has grown massively, but wages have stagnated. Consumption has remained reasonably high because, in an effort to maintain their standard of living, working people have: 1) added hours, becoming two-income families, often with two and even three jobs per person; and 2) increased household debt. Inequality has skyrocketed because effective tax rates on the 1% have dropped (notwithstanding a partial reversal under Obama), while their income and profits have risen steeply.

We should care about this kind of inequality because history shows that too much concentration of wealth at the top, and too much stagnation everywhere else indicate an economy nearing collapse. For example, as Reich shows (Figure 1a & b), both the crashes of 1928 and 2007 followed on the heels of peaks in which the top 1% owned 25% of the country's total wealth.

Fig. 3a Income Share of U.S. Top 1% (Reich, 2013) & 3b Reich notes that the two peaks look like a suspension bridge, with highs followed by precipitous drops. (Original Source: Piketty & Saez, 2003)

What accounts for this strange mix of increasing concentration at the top and increasing malaise everywhere else? Putting aside the parallels to 1929 for a moment, most common explanations for today's situation include: the rise of technology which makes many jobs obsolete; and globalization which puts incredible pressures on companies to lower wages and outsource jobs to compete against low-wage workers around the world.

But, while technology and globalization are clearly creating transformative pressures, neither of these factors completely explains our current situation. Yes, technology makes many jobs obsolete, but it also creates many new jobs. Yet, where the German, South Korean and Norwegian governments invest in educating their workforce to fill those new jobs, the American government has been cutting back on education for decades. A similar thought holds for globalization. Yes, high-volume industrialism – that is, head-to-head competition over price of mass-produced, uniform goods – leads to a race to the bottom; that's been known for a long time. But in The Work of Nations (2010), Robert Reich also points out that the companies that are flourishing through globalization and technology are ones pursuing what he calls high-value capitalism, the high-quality customization of goods and services that can't be duplicated by mass-produced uniformity at cheap places around the world.

So, while the impacts of globalization and technology are profound, the real explanation for inequality lies primarily with an economic belief that, intentionally or not, serves to concentrate wealth at the top by extracting it from everywhere else. This belief system is called variously neoliberalism, Reaganomics, the Chicago School, and trickle-down economics. It is easily recognized by its signature ideas: deregulation; privatization; cut taxes on the rich; roll back environmental protections; eliminate unions; and impose austerity on the public. The idea was that liberating market forces would cause a rising tide that lifted all boats, but the only boat that actually rose was that of the .01%. Meanwhile, instability has grown.

The impact this belief system has had on the American economy and its capacities can be seen in American education. Trickle-down theories are all about cutting taxes on the wealthy, which means less money for public education, more young people burdened with huge college debt, and fewer American workers who can fill the new high-tech jobs.

To be fair, this process is not just about greed. Most of the people who participate in this economic debacle do not realize its danger because they believed what they were told by the saints and sages of economics, and many are rewarded for following its principles. So, what really causes the kind of inequality that drives economies toward collapse? The basic answer from the science of flow is: economic necrosis. But, let me flesh out the story.

Institutional economists talk about two main types of economic strategies: extractive and solution-seeking. (Hopefully, these names are self-explanatory.) Most economies contain both. But, if the extractive forces become too powerful, they begin to use their power to rig the rules of the economic game to favor themselves. This creates what scientists call a positive feedback loop, one in which "the more you have, the more you get." Seen in many kinds of systems, this loop creates a powerful pull that sucks resources to the top, and drains it away from the rest of the system causing necrosis. For example, chemical runoff into the Gulf of Mexico accelerates algae growth. This creates an escalating, "the more you have, the more you get" process, in which massive algae growth sucks up all the oxygen in the surrounding area, killing all of the nearby sea life (fish, shrimp, etc.) and creating a large "dead zone."

Neoliberal economics set up a parallel situation by allowing the wealthy to use their money to extract ever more money from the overall economy. The uber-wealthy grow wealthier by:

All of these processes help the already rich concentrate more, and circulate less. In flow terms, therefore, gross inequality indicates a system that has: 1) too much concentration and too little circulation; and 2) an imbalance of wealth and power that is likely to create ever more extraction, concentration, unaccountability, and abuse. This process accelerates until the underlying human network becomes exhausted and/or the ongoing necrosis reaches a point of collapse. When this point is reached, the society will have three choices: learn, regress, or collapse.

What then shall we do? Obviously, we need to improve our "solution seeking" behavior in realms from business and finance to politics and media. Much of this is already taking place. From socially-responsible business and alternative forms of ownership, to democratic reform groups, alternative media, and the new economy movement – reforms are arising on all sides.

But, the solutions we need are also often blocked by the forces we are trying to overcome, and impeded by the massive merry-go-round momentum of "business as usual." Today's reforms also lack power because they are taking place piecemeal, in a million separate spots with very little cross-group unity.

How do we overcome these obstacles? The science of flow offers not so much a specific strategy, as an empowering change of perspective. In essence, it provides a more effective way to think about the processes we see every day.

The dynamics explained above are very well known; they are basic physics, just like the law of gravity. Applying them to today's economic debates can be extremely helpful because the latter have devolved into ideological debates devoid of any scientific foundation.

We believe Regenerative Economics can provide a unifying framework capable of galvanizing a wide array of reform groups by clarifying the picture of what makes societies healthy. But, this framework will only serve if it is backed by accurate theory and effective measures and practice. This soundness is part of what Capital Institute and RARE are trying to develop.

55 0 0 3 11 This entry was posted in Banana republic , CEO compensation , Doomsday scenarios , Economic fundamentals , Guest Post , Income disparity , The destruction of the middle class on February 18, 2017 by Yves Smith . Subscribe to Post Comments 69 comments Disturbed Voter , February 18, 2017 at 6:18 am

System Dynamics of Steve Keene is clearly more useful than equilibrium dogma. He predicted the 2008 crash, though I think he was only lucky .. modeling is always only good for interpolation, never for extrapolation, unless you are lucky enough to only be dealing with linear changes over time.

Spencer , February 18, 2017 at 7:02 am

POSTED: Dec 13 2007 06:55 PM |
The Commerce Department said retail sales in Oct 2007 increased by 1.2% over Oct 2006, & up a huge 6.3% from Nov 2006.
10/1/2007,,,,,,,-0.47,,,,,,, -0.22 * temporary bottom
11/1/2007,,,,,,, 0.14,,,,,,, -0.18
12/1/2007,,,,,,, 0.44,,,,,,,-0.23
1/1/2008,,,,,,, 0.59,,,,,,, 0.06
2/1/2008,,,,,,, 0.45,,,,,,, 0.10
3/1/2008,,,,,,, 0.06,,,,,,, 0.04
4/1/2008,,,,,,, 0.04,,,,,,, 0.02
5/1/2008,,,,,,, 0.09,,,,,,, 0.04
6/1/2008,,,,,,, 0.20,,,,,,, 0.05
7/1/2008,,,,,,, 0.32,,,,,,, 0.10
8/1/2008,,,,,,, 0.15,,,,,,, 0.05
9/1/2008,,,,,,, 0.00,,,,,,, 0.13
10/1/2008,,,,,,, -0.20,,,,,,, 0.10 * possible recession
11/1/2008,,,,,,, -0.10,,,,,,, 0.00 * possible recession
12/1/2008,,,,,,, 0.10,,,,,,, -0.06 * possible recession
Trajectory as predicted:
BERNANKE SHOULD HAVE SEEN THIS COMING. IN DEC. 2007 I COULD.

Disturbed Voter , February 18, 2017 at 10:39 am

With a simple spreadsheet projection of flows one can see a lot, without fancy mathematics, using just simple difference equation models, even models that display cyclical behavior. For example, with any internal software development, the quantity of legacy applications increase as they are created, unless retirement of legacy applications is more rapid.

More often replacement occurs, rather than actual retirement. But retirement of legacy applications is harder than you might think, because of real dependency one can't retire them by fiat. The cost of maintaining legacy applications, isn't zero. So with a fixed software development/maintenance budget, the percentage of expenditures to legacy applications approaches saturation, even without figuring in the cost of replacement (similar to the rolling over of loans vs retiring of loans). Short term maintenance using patches, can only continue for so long, eventually wholesale replacement is necessary.

Usually the only way to retire a legacy application is to produce a newer and more expensive application, that itself has higher maintenance costs. We dig the problem well deeper. Thus the exponential decay of funds available for new development, or replacement development, not only strangles new initiatives, but even strangles the ability to maintain operations long term. That is why there are still millions of lines of Cobol still working every day.

There is no free lunch, entropy reigns unless countered by new forms of initiative. Usually the end result is an extension and dilution of the problem, which then resumes decay on a larger scale. This is what happens with the attempt to allay insurance costs by ever larger pools, but there is a limit to the size of the pool, once that limit is reached, the gambit no longer works. Long term problems overwhelm short term solutions.

Generalfeldmarschall von Hindenburg , February 18, 2017 at 1:28 pm

That's Joseph Tainters rap if I remember it right.

Disturbed Voter , February 18, 2017 at 1:33 pm

An exponentially increasing real economy covers all sins. In absence of that, an exponentially increasing debt economy covers all sins, temporarily because interest has a way of catching up with you. See Greece.

Mattski , February 18, 2017 at 6:38 pm

"An exponentially increasing real economy covers all sins." Not if you're Mother Nature–or maybe only for another 10-40 years.

kimsarah , February 18, 2017 at 9:17 pm

Banks turned off the money spigot to developers by the start of '07, if I recall. Developers and policy makers knew then there was a recession, but the public was kept in the dark. After the market crash, the consumers were punished instead of the Wall Street looters.

John , February 19, 2017 at 7:23 am

The only people who predicted the crisis were a handful of post-Keynesians and Marxists. I'm more familiar with the work of the latter, but for them it wasn't luck. They identified structural problems with the economy that could not be fixed by simply utilizing stabilizers (fiscal/monetary policy) and knew a massive crisis would occur once the bubbles popped and exposed the real economy's underlying weakness. Some believed that this crisis was the result of the tendency of the rate of profit to fall and simultaneous downturns in the business cycle and the profit cycle. I think the more convincing view is that low profit rates in the manufacturing sector caused by a global crisis of overproduction/under-utilization of capacity has meant that the real economy has been weak since the 70's and that growth since then has come from asset bubbles (Japanese real estate in the 80's, US stock market in the 90's, US real estate in the 00's). These are problems that no amount of fiscal stimulus can fix in the long run.

Spencer , February 18, 2017 at 6:58 am

The author briefly touched on it. It's ALL about the circular flow of savings. And the flow's stopped beginning in 1981, though really in 1966 (also Larry Summer's start of secular strangulation). That's why N-gDp decelerated and there was a 35 year bull market in bonds.

You have to retain the capacity, like Albert Einstein, to hold two thoughts in your mind simultaneously – "to be puzzled when they conflicted, and to marvel when he could smell an underlying unity". "People like you and me never grow old", he wrote a friend later in life. "We never cease to stand like curious children before the great mystery into which we were born".

The smartest man to walk on earth was Leland Pritchard, Ph.D. Chicago, 1933, Economics, MS, Syracuse, statistics.

All bank-held savings originate, and are impounded and ensconced, within the commercial banking system. Say what? Yes, the CBs do not loan out existing deposits, saved or otherwise. The CBs always create new money whenever they lend/invest (loans + investments = deposits). Thus bank-held savings are un-used and un-spent. They are lost to both consumption and investment. From the standpoint of an individual bank, the institution is an intermediary (micro-economics), however, from the standpoint of the collective system of member banks (macro-economics), the institution is a deposit taking, money creating, financial institution, DFI.

The upshot is profound. The welfare of the CBs is dependent upon the welfare of the non-banks (the CB's customers). I.e., money (savings) flowing through the NBs never leaves the CB system. Consequently the expansion of "saved" deposits, in whatever deposit classification, adds nothing to a total commercial bank's liabilities, assets, or earning assets (nor the forms of these earning assets). And the cost of maintaining interest-bearing deposit accounts is greater, dollar for dollar, than the cost of maintaining non-interest-bearing demand deposits. Interest collectively for the commercial banking system, is its' largest expense item (and thus its' size isn't necessarily synonymous with its profitability).

This is the source of the pervasive error (and our social unrest, e.g., higher murder rates), that characterizes the sui generis Keynesian economics (the Gurley-Shaw thesis), that there is no difference between money and liquid assets.

Spencer , February 18, 2017 at 7:34 am

The CBs & NBs have a symbiotic relationship. And so do the have's and have not's. Unless the upper quintile's savings are expeditiously activated, a corrosive degenerative economic impact is subsequently fostered.

The Golden Era in U.S. economics (Les trente glorieuses) was where democratized pooled savings were expeditiously activated (put back to work) and matched with real-investment, non-inflationary, outlets by the thrifts, MSBs, CUs, and S&Ls (principally investments in long-term residential mortgages). And in the good ol days, we had gov't incentivized, FSLIC safety nets for non-bank conduits. Now we only have FDIC safety nets for the commercial bank clientele (which further retards savings velocity).

I.e., "risk on" is not higher FDIC insurance coverage (the FDIC formally modified the assessment base in 2011 to include all bank liabilities – which along with the LCR, contracted the E-$ market), not increased Basel bank capital adequacy provisioning (which literally destroys the money stock), not an increased FDIC assessment fee on 1/1/2007, or 4/1/2009, or 4/1/2011, or an increased churn in speculative stock purchases (the transfer of ownership in existing assets).

digi_owl , February 18, 2017 at 7:39 am

"uses recent scientific advances – specifically, the physics of flow[2″

Ye deities

craazyman , February 18, 2017 at 7:53 am

This post laudably critiques wealth inequality, but it suffers from the "Newtonia Delusion" that confuses economic thought in general through metaphorical malapropism.

Physcial systems possess a determinism and time-invariant structure that enables mathematical modelling. Economic systems are cultural artificacts that are not time-invariant. Money is a cultural construct, a form of social imagination and lacks any sort of deterministic attributes. Newtonian metaphors of flow and accumulation restrict analytical illlumination even though they enable quick and simple calculation.

Money is only one form of a "coordinate system" that enables the measurement of forms of social interaction and cooperation. And it's one-dimensional. This makes it useful given its parsimonious simplicity but it badly restricts complete explanatory power. Physicists know the choice of a coordinate systems influences measurements of phenomenon, and they developed math techniques to neutralize that influence - I think use of tensors in relativity is one example. Economics relies on "money" and resultant ideas of "growth" or 'recessionn" because that's all it knows how to do.

First, what does "collapse" mean in the context of the post. The word is vague, undefined and subject to a multitude of interpretations - that's not "scientific" at all. "Wealth" is also vague. Presumably it means possession of assets that can be converted into money, so in effect is uses "money" as a sole coordinate basis, and that's reasonable as a form of dimensional reduction, but it fails to measure the implied asset value of any sort of social safety net available to those without assets. That's no rationale for inequality - and anybody wants a job more than a safety net - but it's a logical flaw. Third, the nature of economic structures and cultural relations isn't easily quantifiable or translateable into money; living in a just, fair and inclusive society has an intrinsic value that defies easy measurement through the "money basis". Measuring relies instead on application of a sense of justice and honest sensibility.

It would be bettter to start analysis with a non-monetary vision of the social rights any citizen of a community should have access to. This form of thinking in fact was the normal and dominant form over most of human history, when people lived in non-monetary tribal structures. And what their implied responsibilities are to gain that accesss. Use that as a time-invariant basis and then introduce money but only as one method of measurement of economic change, there could be other social indicators that might be used as coordinate systems too; use of these could result in very different measurements of ecoonomic phenomeenon than result with the money basiis. That would force the sort of thinking that's required for analytical clarity and ompleteness, but that doesn't exist in economics

(See I can bang out a comment that doesn't mention jungle boogie butts or hot women! Calling women hot isn't bad, as long as it's respectful and flattering and inclusive. Women in general are hot! What do you want? to live in a world full of gay guys or what? Hahaha. Sorry I can't help it.)

Steve H. , February 18, 2017 at 11:46 am

Turchin has been working on proxies, to get some measures of well-being and political instability. One measure of social rights could be the right to live, so life expectancy could be used. Dead is dead and is a hard number. Chicago police historically have a different criteria of what my rights are than I do, so the ecological measures can avoid such definitional fuzziness.

Another Turchin point relevant to the post is that in-group variance is only meaningful used as a multiplier of in-group selection, and in context of other groups. Extreme inequality does not necessarily cause economic collapse, and coherent elites consistently crush popular revolts. The "the more you have, the more you get" feedback loop can also be seen as a consolidation and success of a certain trait ("rich"), and a re-sort of within-group dynamics (national citizenry) to between-group dynamics (haves & nots).

(Also, economics does not concern itself with ompleteness, as rational actors cannot be omplete, and an agent who is omplete often withdraws from economic systems.)

Vedant Desai , February 18, 2017 at 1:03 pm

I believe that biggest problem in economics is not the dogma created by money(though its a problem of Course) , but rather biggest problem is lack of a clearly defined goal. "Economic development" ,which is generally termed as goal of economics , is very ambiguous and this ambiguity is creating problems.

susan the other , February 18, 2017 at 1:51 pm

Thanks Craazy – that was very coherent. more please.

UserFriendly , February 18, 2017 at 2:28 pm

Physcial systems possess a determinism and time-invariant structure that enables mathematical modelling. Economic systems are cultural artificacts that are not time-invariant.

Very, very few physical systems involve time invariant modeling. Almost every physical system represented by a mathematical model describes how that system changes with time. Otherwise it wouldn't be a very useful model. Few things can be said to be at steady state and even when they are it is usually a simplification, not an outgrowth of time invariance. For example a chemical reaction A + B-> C at rate k1 and C -> A + B at rate k2 is said to be at equilibrium (steady state) when k1=-k2. Even at steady state the reaction is proceeding in both directions and can be thrown out of equilibrium by a change in concentration, temperature, volume, or any host of other factors. After the shock the system will again tend towards an equilibrium but there is no requirement that the new equilibrium be the same as the last one. And all the equations that describe how we went from equilibrium 1 to 2 all involve time. Neoclassical morons obsessed with equilibrium seam to be confused by this and assume time is irrelevant and that full employment will always return.

Economists are pretty much the only people I see that try to use time invariant models. I think it is a great step forward that economists like Keen have been trying to use the full spectrum of time variant models. The fact that the models are relatable to models of other physical systems is more an outgrowth of calculous than anything else.

craazyman , February 18, 2017 at 3:06 pm

I actually was out today doing stuff & plan to go star gazing tonite!

What I meant is the equations that map the movement of the moon and planets or heat diffusion or chemical reactions or sound propagation worked in November 1887 the same way they'll work in July 2020.

Of course experimental measurements change through time, depending on the phenomenon being measured. But the natural phenomenon modeled by the equations themselves are time invariant as are the equations, or science wouldn't work. That's why they're called natural laws.

UserFriendly , February 18, 2017 at 4:17 pm

Ah. You mean Frame Invariant , not time invariant.

craazyman , February 18, 2017 at 4:55 pm

Timeframe invariant! :-)

H. Alexander Ivey , February 19, 2017 at 3:25 am

Now wait a minute here. While I appreciate getting my terms correct and such – frame invariant, yeah, that's what I need to know – craazyman is a gift not to be distracted or encouraged wrongly. Yes, his posting clarified the great lie of most economic theory and its teaching and modeling, but his calling is greater than that. "jungle boogie butts or hot women" are rare on this site and should not be lightly diverted. Not that I'm implying that our hostess or commentators of the female persuasion aren't "hot women" or that jungle boogie butts aren't finance, economics, politics, or power, but based on past personal history, if I tried a craazyman, or even a craazyboy, posting, I would be forever marked as hopeless.

Ruben , February 19, 2017 at 12:36 am

Physical systems can be time-variant in that way too, it's called a regime shift. We have observed that in several real natural systems. In some cases apparent randomness actually is very complicated but fully deterministic dynamics. Look up "bifurcation diagram". Mathematical analysis can deal with that too.

Instead of the monetary system and flow, the analysis of human populations, including the production and exchange of the fruits of their labour, should start with the amount of cooperation as the driving variable (or coordinate as you prefer to say)?

Thanks for the thought-provoking post.

Sam F , February 18, 2017 at 8:01 am

Odd that education investment is shown in the article as part of the loop between employment and consumer spending. That is a very slow regenerative path compared with the direct effect of employment, spending, and labor demand.

The article wastes time extolling circulation merely because it resembles that in natural systems such as tigers, but these do not necessarily serve human interests. It benefits most people simply because they need the inputs and outputs.

oho , February 18, 2017 at 9:10 am

>>> But this sounds an awful lot like a new improved version of system dynamics,

One of the board members from Capital Institute (sounds like the "Human Fund") is from Soros-backed the Institute for New Economic Thinking.

And Soros loves reflexivity, which is basically repackaged system dynamics.

not being aluminum foil-y. just interesting how Soros has his fingers in so many pots.

http://capitalinstitute.org/board/

oho , February 18, 2017 at 9:12 am

just institute a progressive tax on bank assets above-say-$700 billion. would literally only affect a handful of banks and do much to rein in the seize of the megabanks.

oh wait, all these banks are blue state banks (JPM, C, WFC, BAC) and friends w/Schumer, Pelosi and Uncle Warren owns big chunks in WFC and AXP.

Sound of the Suburbs , February 18, 2017 at 9:41 am

Capitalism is a balance between supply and demand but we only put in half a system.

1) Money at the top is mainly investment capital as those at the top can already meet every need, want or whim. It is supply side capital.

2) Money at bottom is mainly consumption capital and it will be spent on goods and services. It is
demand side capital.

Marx noted the class struggle between the two sides that neither can win, to do so destroys the system, either supply or demand will cease to exist.

The balance has yet to be recognised and we flick between the two sides until everything crashes into the end stops.

Before the 1930s – Supply Side, Neoclassical Economics

By the 1920s, productivity has reached a stage where supply exceeds demand and extensive advertising is required to manufacture the demand for the excess supply.

Taxes are lowered on the wealthy and there is an excess of investment capital which pours into the US stock market. The banks get in on the act and use margin lending to fuel this boom in US stocks.

There is a shortage of consumption capital and the necessary consumption can only be maintained with debt.

1929 – Wall Street Crash

The investment capital was used to blow an asset bubble and not for productive investment, it all ends in tears. The Great Depression is the debt deflation that follows from an economy saturated with debt.

After the 1930s – Demand Side, Keynesian Economics

The New Deal starts the turnaround of the US economy and after the Second World War there is the Golden Age of the 1950s and 1960s. Redistributive capitalism looks after the demand side of the equation.

With the target of full employment, the unions start to abuse their power and by the 1970s we enter into stagflation. There is a shortage of investment capital and demand exceeds supply leading to inflation, there is not enough investment capital to redress the balance.

After the 1980s – Supply Side, Neoclassical Economics

Taxes are lowered on the wealthy and there is an excess of investment capital which pours into various different asset classes and the first round of crashes occur in the late 1980s. Leading to an early 1990s recession.

There is a shortage of consumption capital and the necessary consumption can only be maintained with debt.

After the early 1990s recession the speculative, investment capital look for another bubble to blow and finds the new dot.com companies.

Housing booms take off around the world, a speculative bubble for everyone to get involved with and the UK and Japan have already been through their first boom/bust by 1989.

Wall Street get's into 1920s mode and leverages up the speculative bubble that is occurring there.

2008 – Wall Street Crash

The West is laid low and growth is concentrated in the East but they start to use debt to keep things running.

Even with the Central Banker's best efforts the global economy falls into the new normal of secular stagnation, the debt repayments are a constant drag on the global economy.

2017 – World's eight richest people have same wealth as poorest 50%

All that investment capital with almost nowhere to invest due to the lack of demand.

We just swing from the supply side, to the demand side and back again until we crash into the end stops.

We could recognise the system requires a balance between supply and demand.

Jabawocky , February 18, 2017 at 1:58 pm

An interesting idea, which adds economics itself to the dynamics of the economic system.

susan the other , February 18, 2017 at 2:14 pm

a balance in real time, not over decades with crashes and booms harder to do globally than nationally which is prolly why nationalism is rising it was China imploding c. 2008 that brought the growth of the global economy to a stop, I read somewhere .anyway the growth-forever premise of globalism was nuts. Not even the push for austerity by the neoliberals could make the required adjustments – and not for lack of trying. Yes a new balance (good shoes ;-) is what we need. One that understands the old saying 'form follows function' and create a functioning economy, the scaffold of a new sustainable human society. One in which banking actually follows the economy.

Sound of the Suburbs , February 18, 2017 at 5:39 pm

Bankers should be servants of the real economy and nothing more.

flow5 , February 19, 2017 at 11:28 am

It's not a math error, it's an accounting error. It wasn't precipitated as Alan Greenspan pontificated in his book "The Map and the Territory", viz., FDR's Social Security Act. It wasn't Nixon who introduced "indexing". It wasn't because from 1959 to 1966 the federal gov'ts net savings was in a rare surplus. It wasn't because between 1965 & 2012 total gross domestic savings (as a percent of gDp) declined from 22% to 13% (9 percentage points).

No, the New York Times sobriquet, the "Three-Card Maestro's" error, like all other Keynesian economists, is the macro-economic persuasion that maintains a commercial bank is a financial intermediary (conduit between savers and borrowers matching savings with investment):

Greenspan: "Much later came the evolution of finance, an increasingly sophisticated system that enabled savers to hold liquid claims (deposits) with banks and other financial intermediaries. Those claims could be invested by banks in in financial instruments that, in turn, represented the net claims against the productivity enhancing tools of a complex economy. Financial intermediation was born"

Or Ben Bernanke in his book "The Courage to Act": "Money is fungible. One dollar is like any other".

"I adapted this general idea to show how, by affecting banks' loanable funds, monetary policy could influence the supply of intermediated credit" (Bernanke and Blinder, 1988)."

For example, although banks and other intermediaries no longer depend exclusively on insured deposits for funding, nondeposit sources of funding are likely to be relatively more expensive than deposits"

The first channel worked through the banking system By developing expertise in gathering relevant information, as well as by maintaining ongoing relationships with customers, banks and similar intermediaries develop "informational capital."

"that the failure of financial institutions in the Great Depression increased the cost of financial intermediation and thus hurt borrowers" (Bernanke [1983b]).

A herding started by William McChesney Martin Jr, that thought "banks actually pick up savings and pass them out the window, that they are intermediaries in the true sense of the word."

From the standpoint of an individual bank (micro-economics), a bank is an intermediary, however, from the standpoint of the entire economy, the system process (macro-economics), a bank is a deposit taking, money creating, financial institution.

The promulgation of commercial bank interest rate deregulation (banks introducing liability management, buying their liquidity, instead of following the old fashioned practice of storing their liquidity), i.e., the removal of Reg. Q ceilings (the non-banks were already deregulated until 1966), by the oligarch – the ABA, (public enemy #1), or an increasing proportion of time to transaction deposits liabilities within the DFIs, metastasized stagflation and secular strangulation. Remunerating IBDDs exacerbates this phenomenon (as subpar R-gDp illustrates).

I.e., every time a commercial bank buys securities from, or makes loans to, the non-bank public it creates new money – deposit liabilities, somewhere in the system. I.e., deposits are the result of lending, and not the other way around. Bank-held savings are un-used and un-spent. They are lost to both consumption and investment. Unless savings are expeditiously activated outside of the system (and all savings originate within the payment's system), thru non-bank conduits, said savings exert a dampening economic impact (destroying saving's velocity & thus AD). I.e., savings flowing thru the non-banks, never leaves the CB system.

LT , February 19, 2017 at 12:28 am

I've never believed a country joining the casino economy was a sign of strength.

Sound of the Suburbs , February 19, 2017 at 5:36 am

Debt based consumption is always unsustainable, people max. out on debt.

Greece was happy with debt based consumption until it maxed. out on debt.

Anything that relies on debt based consumption in the long term can only fail.

Neoliberalism relies on debt based consumption, it works until it doesn't.

witters , February 18, 2017 at 5:36 pm

"With the target of full employment, the unions start to abuse their power."

Yeah, sure.

Actually full employment is experienced by capital as an abuse of its power.

Here is Kalecki in 1943 explaining beforehand how this generates neoliberalism.

http://delong.typepad.com/kalecki43.pdf

tongorad , February 18, 2017 at 6:18 pm

Yes, I'd like to see what this abuse of union power looked like. Any evidence of this?
Landlords and bosses were reduced to beggars?

PhilM , February 18, 2017 at 10:13 am

Craazyman says it all, but I have to say it too, just for my own mental health.

How often do social "scientists" have to make this same mistake? Biology is not physics, and human society is biology, and economics is not even close to accurately describing human society, not even the economics part of it.

Equilibria are achieved, and thermodynamic laws obeyed, on much greater and on much smaller scales than an economy, which is not even a system, per se. Life is anti-entropic, but the universe, the solar system, is not. Communities are not "social networks." Terry Pratchett as usual brings common sense to bear on metaphors like this. Metaphor, you know, using words to convey something like the truth, but not exactly: "Oh, so it's a lie, then."

Vedant Desai , February 18, 2017 at 12:50 pm

How economy is not a system?

Jabawocky , February 18, 2017 at 2:07 pm

You have just lost me. Of course economics is a complex system but it is a system nonetheless. Wynne Godley's sectoral balance model is an excellent example of a systems approach to economics, and it's precisely the systems peoperties that attract me to it. MMT is a systems approach by design and easily approached mathematically in that way if desired. I have often considered how I would do it but no doubt there is someone more able to do it than me.

The bonus of a systems approach would be the possibility of a multitude of possible equilibrium states, some could be fixed, some oscillatory if they include feedback with delay.

The author could also consider adding futile cycles to her list of cycles, long recognised by biochemists.

PhilM , February 19, 2017 at 4:10 am

Craazyman says it above. A "system of pulleys" is a system. A "solar system" is a system. A galaxy, a liter of sodium bicarbonate solution under defined temperature and pressure conditions, these are systems. How is "economics" a system? What is it even a system of? Can you define the parameters of even one of the aspects of economics in some way that does not "leak energy" through every other aspect of human activity, which is not accounted for in some way by the "system" of economics? You can try, but you can't do it. That is why economics is scientific just like astrology: it describes and explains everything, but its only prediction is more jobs for its practitioners.

Foppe , February 19, 2017 at 6:28 am

There are "closed" and "open" systems. The behavior of the former can be modeled and understood; the latter, less so (possible only to some extent, and heavily dependent on the intellectual framework that you bring to the table).

Jabawocky , February 19, 2017 at 7:24 am

My experience is opposite. Usually in systems approaches most of the detail can be ignored until it becomes important. They do not require knowing the details of the system, instead they try to simplify as far as is practical. Systems approaches attempt to infer micro from gross macro behaviour. This is fundentally opposite to orthodox economics. Godley's model illustrates this well. You don't need to know details about every transaction because parameters for aggregated transactions can be inferred from macro data. You don't need to assume anything about motivations of individuals or firms, but if necessary you could try to infer them.

PhilM , February 19, 2017 at 12:28 pm

I clearly need to go and do reading on open systems, because understanding them makes for a richer intellectual life, like poetry, or skimming rocks. For me, the chafing starts when people try to apply a rigorous, mathematically based scientifically accepted reproducible set of theories like those of fluid dynamics (itself by no means fully elaborated) to a field where the described system cannot be even be defined by consensus.

What, for instance, exactly constitutes an "economic system," or a "system of economics," or an "economy"? Where is the universally accepted definition of something even as basic as money, a definition with scientific reliability, like the definition of an atom in 1930? They just aren't there. You can tell me yours, but it will not be the same as his, or hers. If real scientists behaved that way, there could be no breakthroughs: without a definition, there is nothing even solid enough to break through.

And by scientific, I just have to fall back on Popper, however old-fashioned that may seem. The propositions of economics, like those of astrology and sociology, and also of human nutrition, and so many other fields flogged by their practitioners, remain unaccompanied by experimental methodologies that result in reliable predictions of reproducible results. They are therefore prolific with unfalsifiable claims. They are, therefore, fraudulent at worst and noisy at best, at a time where the direction of the public discourse is increasingly controlled by central authorities with agendas. A signal among the noise is harder and harder to distinguish without the further impediment of additional publish-or-perish verbiage which will be, more often than not, weaponized by an interest group, if that was not actually the reason for its creation to begin with.

Systematizers of non-scientific systems are either virtuous "pre-scientists" or frauds. What they claim as the wider social value of their work is the discriminating test. Alchemy and astrology of yore ultimately evolved into chemistry and astronomy, without actually contributing much information as such: but without the need to make magic or gold from powders, alembics, crucibles, and retorts, those tools moved into hands directed by serious, patient minds, where they produced useful and reliable information. (Not that circus entertainment, handwaving, and noise were not great disseminators and motivators of science, and remain so today!)

Until the dynamics of human society and psychology have been fully described by anthropology, there will not be a "fundamental atomic theory" for Economics to use to underpin its scientific pretensions. It still rests completely on demonstrably untrue assumptions, rules that can be proven not to apply to human behavior. Most recently, the use of the "normal curve" as generally applicable to economic "systems," because of its near-universal employment in statistics, had catastrophic results. This was easily predicted by anyone who has worked with the normal curve; the Central Limit Theorem that underpins the normal curve assumes that the assembled variables are independent, not related functions of each other; and this is obviously not so in any human activity. So much of the use of the normal curve is nothing more than hand-waving hocus-pocus.

No serious reputable historian would claim any longer to be a scientist, and if he did, he would be no true Scotsman, either. But then, despite what I seem to be doing on these forums, neither would a professionally trained historian think to dictate public policy by appealing to the systematic rigor of his craft.

Economists today should modestly retreat from their claims to exercise any influence on public policy and direct their efforts elaborating a true science. I believe that may never happen; and I personally fear the unintended consequences that will result from the political use of the kind of knowledge about human motivations and collective activity that will be required to bring it about; maybe less, however, than I fear nuclear war or planetary desolation through aggressive environmental destruction, which may be the alternative outcomes to that kind of advance.

Bam_Man , February 18, 2017 at 10:16 am

"Flow Dynamics" of Money Supply are a BIG tell.
Velocity of MZM Money Supply (Money of Zero Maturity) is falling like a rock and at an ALL-TIME low.

flow5 , February 19, 2017 at 12:43 pm

Money velocity falls because more and more savings are impounded and ensconced within the payment's system. This started in 1981 with the plateau in deposit financial innovation, the widespread introduction of ATS, NOW, and MMDA accounts. Thus money velocity, formally a monetary offset, started decelerating dropping N-gDp with it (and producing the 35 year bull market in bonds).

This should be evident with the remuneration of IBDDs beginning in Oct. 2008. I.e., the 1966 S&L credit crunch is the economic paradigm and precursor (lack of funds, not their cost). The "complete evaporation of liquidity" on 8/9/2007 for BNP Paribas, "runs on ABCP money funds", "shortage of safe, liquid, assets", "the funding crunch forced fire sales", "efforts to replace funding that had evaporated in the panic", i.e., non-bank dis-intermediation (an outflow of funds or negative cash flow).

"Our goal was to increase the supply of short-term funding to the shadow banking system"
Ben Bernanke, August 10, 2007:

"Our goal is to provide liquidity not to support asset prices per se in any way. My understanding of the market's problem is that price discovery has been inhibited by the illiquidity of the subprime-related assets that are not trading, and nobody knows what they're worth, and so there's a general freeze-up. The market is not operating in a normal way. The idea of providing liquidity is essentially to give the market some ability to do the appropriate repricing it needs to do and to begin to operate more normally. So it's a question of market functioning, not a question of bailing anybody out."

I.e., Bankrupt u Bernanke doesn't know a credit from a debit. Bad Ben was solely responsible for the world-wide GR. My "market zinger" forecast of Dec. 2012 foretold of the expiration of unlimited transaction deposit insurance (putting savings back to work), not a "taper tantrum, not budget "sequestration".

Jesper , February 18, 2017 at 10:17 am

Seems like a sales-pitch to the 1% trying to convince the 1% that sharing would be good .. I have my doubts about that strategy, the 1% respects power and care very little (if anything at all) for the common good. Use the power of the many in an democracy and force through the needed changes.

Disturbed Voter , February 18, 2017 at 10:45 am

Continuing the model of a firm that requires software to function. If the executives of the firm keep taking expensive vacations at the expense of the firm, starving the software development/maintenance department of resources .. then even if there were no other systemic problems, the firm will fail (unless bailed out by a greater entity, as happened in 2008/2009). But in the end, who will be big enough, after we have extended the risk pool to the entire planet, to bail out the planet, from foolish management? I would suggest that the Roman Empire failed because it was unable to overcome either long term systemic trends, nor irresponsible management.

Robert NYC , February 18, 2017 at 11:11 am

Inequality is directly correlated to corruption and the U.S. has an exceeding corrupt political economy, hence the extreme inequality. Germany and Japan, to take two prime examples, are part of the same global system and are subject to the same forces, technology, corporate tax arbitrage strategies, etc but neither of them have any where near the inequality of the U.S. It's also worth noting they don't have financial grifters like Mitt Romney and Steven Schwarzman amongst their most esteemed citizens.

So yes, it is all pretty complicated but at the end of the day the U.S. is one of the most corrupt countries on Earth, certainly the most corrupt of the Western democracies so our problems are no surprise. All this talk about globalization, tax policy, education and technology are all distractions. And that doesn't even begin to touch on the subject of our monetary system which is at the root of the corruption.

Dick Burkhart , February 18, 2017 at 1:03 pm

Right on! – And the corruption is permitted, even encouraged, by the "greed is good" philosophical basis of mainstream economics, and the concentration of both media ownership and campaign finance and lobbying in the hands of the wealthy.

David , February 18, 2017 at 11:15 am

Yes, this does deserve some kind of award for expressing a simple idea in a pointlessly complicated way. When I was studying economics in the paleolithic era, we were taught about the "propensity to consume" – in other words the idea that the poorer you were the more of any extra income you would spend as opposed to save. So if you give everyone on the minimum wage 20% more, then they will probably put it straight back into the economy. If you give billionaires 20% more they probably won't. The more widely wealth is spread, the more of it will be spent. This isn't a scientific law, but it's an observation borne out by common sense.

Gman , February 19, 2017 at 4:06 am

Hallelujah!

Even Henry Ford, not exactly known for his altruism or philanthropy, knew it made sense to give his workers a significant rise so that they could afford the cars they were building for him.

Denis Drew , February 18, 2017 at 11:22 am

I can't read this whole post this morning - but - my one note tune: 6% labor union density in non-gov work is like 20/10 blood pressure : it starves every other healthy process - even while starving the employee herself.

Easy way back: if the 1935 Congress had intended (they didn't) to leave any criminal enforcement of NLRA prohibited union busting to individual states - Congress would not have had to change one word of the NLRA. States in fact were left to make any form of collective bargaining (NLRA connected or not) muscling an economic felony. There is no problem of federal preemption when the area has been left blank.

Nor may the fed force local labor down an impassable road to union organizing - because rules of road unenforceable and unenforced - when a First Amendment protected right is at stake. To state that clearly: the First Amendment is violated when government insists on a mode of action that dismembers freedom of economic association before it starts.

JEHR , February 18, 2017 at 12:07 pm

Sometimes metaphors bring clarity to a vision and sometimes metaphors befuddle: I am befuddled.

heresy101 , February 18, 2017 at 1:27 pm

I'll second that. He is either a scab and Pinkerton employee or provides a confused argument in support of unions?

Grebo , February 18, 2017 at 5:00 pm

I think he's saying more unions are needed, but the Federal Government left it up to the states to stop the union busting, which they have declined to do. The Feds can't enforce union membership or collective bargaining as that would violate the first amendment right to free association.

Denis Drew , February 18, 2017 at 8:50 pm

Let's try again - maybe it was too compressed

[cut-and-paste]
America should feel perfectly free to rebuild labor union density one state at a time - making union busting a felony. Republicans will have no place to hide.

Suppose the 1935 Congress passed the NLRA(a) intending to leave any criminal sanctions for obstructing union organizing to the states. Might have been because NLRB(b) conducted union elections take place local by local (not nationwide) and Congress could have opined states would deal more efficiently with home conditions - or whatever. What extra words might Congress have needed to add to today's actual bill? Actually, today's identical NLRA wording would have sufficed perfectly.

Suppose, again, that under the RLA (Railroad Labor Act - covers railroads and airlines, FedEx) - wherein elections are conducted nationally - that Congress desired to forbid states criminalizing the firing of organizers - how could Congress have worded such a preemption (assuming it was constitutionally valid)? Shouldn't matter to us. Congress did not!

Dick Burkhart , February 18, 2017 at 1:19 pm

"Renewable energy" is obviously the foundation of Regenerative Economics, simply because energy itself is the foundation of all economics (as well as of all life and of the "active" part of the universe). Yet all the focus on renewable energy in recent years has done little or nothing to stop escalating economic inequality.

I think a big thing missing from RARE is a theory and program for power. What we need are institutional values and structures that will keep greed under control without much effort. This means not just getting the incentives right, but also the "political revolution" that will be needed to implement them.

So I think not just about limits-to-growth but about the need for partial universal ownership of all the major sources of wealth, combined with limited stakeholder ownership (fossil fuels, large corporations, etc).

susan the other , February 18, 2017 at 2:39 pm

flow is entropy

HotFlash , February 18, 2017 at 3:26 pm

We believe Regenerative Economics can provide a unifying framework capable of galvanizing a wide array of reform groups by clarifying the picture of what makes societies healthy. But, this framework will only serve if it is backed by accurate theory and effective measures and practice. This soundness is part of what Capital Institute and RARE are trying to develop.

Accuracy of analytical method aside, who will implement it? Who can? Not those 8 dudes with 1/2 the world's wealth.

Hilario , February 18, 2017 at 5:01 pm

And what does extreme economic equality lead to?

witters , February 18, 2017 at 5:40 pm

Give me all your income and wealth and let us find out

Steve Roth , February 19, 2017 at 4:42 am

Not really a salient issue for us at the moment, is it?

Carla , February 19, 2017 at 2:40 pm

Equality–economic or any other kind–cannot be extreme. Equality exists, or it does not.

Temporarily Sane , February 19, 2017 at 8:02 pm

That depends on what kind of inequality you're talking about. Men being paid $10/hr and women $8/hr to perform the same task is an example of "binary" inequality. Either everyone is paid the same wage (before the first performance review anyway) or they are not.

Income inequality is a bit different. If a CEO takes home 20 x more per year than the lowest paid worker in the company income equality is low (way lower than in any modern capitalist economy) if the CEO makes 300 x as much as the lowest paid worker, it is high. Income equality – everyone being paid the same wage regardless of what they're doing to earn it – is not the goal. Rather, it is reducing the gap between the lowest and highest paid members of society.

Scott , February 18, 2017 at 6:31 pm

Only jet settesr get the advantages of civilization at its heights. My own partial solution has been an airport nation that advances flying literacy and availability.
There is an amorphous factor arising out of the defined structure and standard rights afforded travelers & businesses based on a separate airport nation. (I admit this amorphous factor which causes me some presentation problems.)
No human system will function without a common committed belief in it.
Airport movement of people & parcels is simpler to make comprehensive.
For example I have difficulty in attempting to expand passenger service in NC because the corporation Norfolk Southern was given power to inhibit it while getting the advantages of state responsibilities created with a buyout of a rail company state company where it was controlled by shareholders.
A trick was done on us with the collusion of legislators.
We can simply say the RR as analogous is a matured industry to the point of immaturity compared to an international airport accommodating both freighters & passenger airliners.
These things will not directly make an economic theory, but are about economic activity as enabled from basic port theory & the sociology of ports.
For instance I advise women in nations prone to put them at a disadvantage to put business offices on international airports which tend to be more culturally neutral.

Chauncey Gardiner , February 19, 2017 at 12:12 am

Appreciated the author's thought-provoking observations about the effects of extreme concentration of wealth, with its enormous feedback loops and low circulation of money that materially reduce the overall debt servicing capacity of the private sector. But I also felt that she understated the roles that private sector debt growth, central bank monetary policy, asset price speculation and manipulation, and financial fraud have historically played in causing economic collapse.

Gman , February 19, 2017 at 8:38 am

Playing Devil's Advocate I suppose you could argue that there is something Darwinian about the way things are nowadays.

Apex predators are indeed flourishing and in a curious way they are searching further afield and adapting to new 'food sources' as those closer to home become less appealing, less nourishing and less worth the effort of expending the energy trying to exploit, particularly when other tastier morsels are so plentiful and readily available elsewhere.

Maybe we should just all get with the programme, know our places in the grand scheme of things and resign ourselves to our evolutionary fate?

;-)

LT , February 19, 2017 at 12:10 pm

If it's Darwinian, it's an example of artificial selection – nothing natural about it.

Gman , February 19, 2017 at 3:47 pm

'Life is like a box of chocolates. More and more people know what they're gonna git'

Darwin's artificial selection.

St Jacques , February 19, 2017 at 5:20 pm

haha, unfortunately it's the apex predator species that is in danger of sudden extinction as its prey declines. Of course the Darwinian analogy doesn't hold up well because Darwinian selection works on all individuals of a species without distinction. A much better analogy is a rigged game.

Altandmain , February 19, 2017 at 10:09 am

We basically have an economic system where the very rich steal the productive capacity of the rest of us and add it to their own wealth.

That is the dirty not so secret truth. As the Spirit Level demonstrates, inequality is as bad for the rich at times as it can be for the rest of us.

There is also this:
https://www.theatlantic.com/magazine/archive/2011/04/secret-fears-of-the-super-rich/308419/

Our problem is that the rich really suck. They are greedy and I would not be surprised if many were psychologically diagnosed with anti social personality disorder. They are without integrity and would fight tooth and nail for their pilfered money.

But the status quo is like the Congo under Mobut Sese Seko. It is a society build on kleotocracy. Like any such society, it is inherently unstable with money going to a few.

The late 1960s had problems. The costs of the Vietnamese War, the excess deficit spending, and the dependence on Middle Eastern oil all lead to problems in the 1970s.

Ruben , February 19, 2017 at 12:24 pm

"As Paul Samuelson stressed, that assumption [propensity to equilibrium] is necessary for economics to be science, as in mathed up, and the dominance that economists have achieved is due to their scientific appearances and the fact that their mathematical exposition enables them to dismiss lay critics."

Why? Non-equilibrium is accessible to maths.

In branching systems such the one imagined for monetary flow in this article, growth in the number of nodes at the terminals (and thus necrosis of excess of nodes) is controlled/limited by the number of terminals of the branching, let's call these capillaries, that can be accommodated inside the volume of the whole versus the number of nodes than can be accommodated inside the whole. Since the total number of capillaries grow at a lower rate than the number of nodes as the volume of the whole increases, growth is limited and excess growth in times of higher volume of the whole suffers necrosis when the volume of the whole shrinks.

IHTH

[Feb 19, 2017] The Shadow Governments Destruction Of Democracy

Notable quotes:
"... "The Deep State does not consist of the entire government. 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." ..."
"... "It's agencies like the CIA, the NSA and the other intelligence agencies, that are essentially designed to disseminate disinformation and deceit and propaganda, and have a long history of doing not only that, but also have a long history of the world's worst war crimes, atrocities and death squads." ..."
"... Greenwald asserts the the CIA preferred Clinton because, like the clandestine agency, she supported regime change in Syria. In contrast, Trump dismissed America's practice of nation-building and declined to tow the line on ousting foreign leaders, instead advocating working with Russia to defeat ISIS and other extremist groups. ..."
"... "So, Trump's agenda that he ran on was completely antithetical to what the CIA wanted," Greenwald argued. "Clinton's was exactly what the CIA wanted, and so they were behind her. And so, they've been trying to undermine Trump for many months throughout the election. And now that he won, they are not just undermining him with leaks, but actively subverting him." ..."
"... But on the other hand, the CIA was elected by nobody. They're barely subject to democratic controls at all. And so, to urge that the CIA and the intelligence community empower itself to undermine the elected branches of government is insanity. ..."
"... He also points out the left's hypocrisy in condemning Flynn for lying when James Clapper, Director of National Intelligence during the Obama administration, perpetuated lies without ever being held accountable. ..."
Feb 19, 2017 | www.zerohedge.com
And on the heels of Dennis Kucinich's warnings , The Intercept's Glenn Greenwald, who opposes Trump for a variety of reasons, warns that siding with the evidently powerful Deep State in the hopes of undermining Trump is dangerous. As TheAntiMedia's Carey Wedler notes , Greenwald asserted in an interview with Democracy Now, published on Thursday, that this boils down to a fight between the Deep State and the Trump administration.

Though Greenwald has argued the leaks were "wholly justified" in spite of the fact they violated criminal law, he also questioned the motives behind them.

"It's very possible - I'd say likely - that the motive here was vindictive rather than noble," he wrote. "Whatever else is true, this is a case where the intelligence community, through strategic (and illegal) leaks, destroyed one of its primary adversaries in the Trump White House."

According to an in-depth report by journalist Mike Lofgren:

"The Deep State does not consist of the entire government. 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."

As Greenwald explained during his interview:

"It's agencies like the CIA, the NSA and the other intelligence agencies, that are essentially designed to disseminate disinformation and deceit and propaganda, and have a long history of doing not only that, but also have a long history of the world's worst war crimes, atrocities and death squads."

Greenwald believes this division is a result of the Deep State's disapproval of Trump's foreign policy and the fact that the intelligence community overwhelmingly supported Hillary Clinton over Trump because of her hawkish views. Greenwald noted that Mike Morell, acting CIA chief under Obama, and Michael Hayden, who ran both the CIA and NSA under George W. Bush, openly spoke out against Trump during the presidential campaign.

Greenwald asserts the the CIA preferred Clinton because, like the clandestine agency, she supported regime change in Syria. In contrast, Trump dismissed America's practice of nation-building and declined to tow the line on ousting foreign leaders, instead advocating working with Russia to defeat ISIS and other extremist groups.

"So, Trump's agenda that he ran on was completely antithetical to what the CIA wanted," Greenwald argued. "Clinton's was exactly what the CIA wanted, and so they were behind her. And so, they've been trying to undermine Trump for many months throughout the election. And now that he won, they are not just undermining him with leaks, but actively subverting him."

"[In] the closing months of the Obama administration, they put together a deal with Russia to create peace in Syria. A few days later, a military strike in Syria killed a hundred Syrian soldiers and that ended the agreement. What happened is inside the intelligence and the Pentagon there was a deliberate effort to sabotage an agreement the White House made."

Greenwald, who opposes Trump for a variety of reasons, warns that siding with the evidently powerful Deep State in the hopes of undermining Trump is dangerous. "Trump was democratically elected and is subject to democratic controls, as these courts just demonstrated and as the media is showing, as citizens are proving," he said, likely alluding to a recent court ruling that nullified Trump's travel ban.

He continued:

"But on the other hand, the CIA was elected by nobody. They're barely subject to democratic controls at all. And so, to urge that the CIA and the intelligence community empower itself to undermine the elected branches of government is insanity."

He argues that mentality is "a prescription for destroying democracy overnight in the name of saving it," highlighting that members of both prevailing political parties are praising the Deep State's audacity in leaking details of Flynn's conversations.

As he wrote in his article, " it's hard to put into words how strange it is to watch the very same people - from both parties, across the ideological spectrum - who called for the heads of Edward Snowden, Chelsea Manning, Tom Drake, and so many other Obama-era leakers today heap praise on those who leaked the highly sensitive, classified SIGINT information that brought down Gen. Flynn."

He also points out the left's hypocrisy in condemning Flynn for lying when James Clapper, Director of National Intelligence during the Obama administration, perpetuated lies without ever being held accountable.

[Feb 19, 2017] https://nyti.ms/2luxitI

Feb 19, 2017 | nyti.ms

NYT - Masha Gessen - Feb 18

Everybody lies. But American politics has long rested on a shared understanding of what it is acceptable to lie about, how and to whom.

One of the many norms that Donald J. Trump has assaulted since taking office is this tradition of aspirational hypocrisy, of striving, at least rhetorically, to act in accordance with moral values - to be better. This tradition has set the standard of behavior for government officials and has shaped Americans' understanding of what their government and their country represent. Over the last four weeks, Mr. Trump has lashed out against any criticism of his behavior, because, as he never tires of pointing out, "We won." In requesting the resignation of his national security adviser, Michael T. Flynn, however, Mr. Trump made his first public concession to political expectations. Hypocrisy has scored a minor victory in America. This is a good thing.

The word "hypocrisy" was thrown around a lot during the 2016 presidential campaign. Both Mr. Trump and Bernie Sanders accused their respective parties and the country's elites of hypocrisy. As the election neared, some journalists tried to turn the accusation around on Mr. Trump, taking him to task, for example, for his stand on immigration. If Mr. Trump favored such a hard line on immigration, the logic went, should he not then favor the deportation of his own wife, Melania, who was alleged to have worked while in the United States on a visitor's visa?

The charge of hypocrisy didn't stick, not so much because it placed its proponents, unwittingly, in the distasteful position of advocating the deportation of someone for a long-ago and common transgression, but because Mr. Trump wasn't just breaking the rules of political conduct: He was destroying them. He was openly claiming that he abused the system to benefit himself. If he didn't pay his taxes and got away with it, this made him a good businessman. If he could force himself on women, that made him more of a man. He acted as though this primitive logic were obvious and shared by all.

Fascists the world over have gained popularity by calling forth the idea that the world is rotten to the core. In "The Origins of Totalitarianism," Hannah Arendt described how fascism invites people to "throw off the mask of hypocrisy" and adopt the worldview that there is no right and wrong, only winners and losers. Hypocrisy can be aspirational: Political actors claim that they are motivated by ideals perhaps to a greater extent than they really are; shedding the mask of hypocrisy asserts that greed, vengeance and gratuitous cruelty aren't wrong, but are legitimate motivations for political behavior.

In the last decade and a half, post-Communist autocrats like Vladimir V. Putin and Viktor Orban have adopted this cynical posture. They seem convinced that the entire world is driven solely by greed and hunger for power, and only the Western democracies continue to insist, hypocritically, that their politics are based on values and principles. This stance has breathed new life into the old Soviet propaganda tool of "whataboutism," the trick of turning any argument against the opponent. When accused of falsifying elections, Russians retort that American elections are not unproblematic; when faced with accusations of corruption, they claim that the entire world is corrupt.

This month, Mr. Trump employed the technique of whataboutism when he was asked about his admiration for Mr. Putin, whom the host Bill O'Reilly called "a killer." "You got a lot of killers," responded Mr. Trump. "What, you think our country's so innocent?" To an American ear, Mr. Trump's statement was jarring - not because Americans believe their country to be "innocent" but because they have always relied on a sort of aspirational hypocrisy to understand the country. No American politician in living memory has advanced the idea that the entire world, including the United States, was rotten to the core. ...

Hungary's PM Viktor Orbanpraises Trump for saying countries should put their own interests first
http://www.independent.co.uk/news/world/europe/donald-trump-nationalist-hungary-pm-viktor-orban-praise-america-first-a7542361.html
Reply Saturday, February 18, 2017 at 02:26 PM ilsm said in reply to Fred C. Dobbs... the dems' deep state have already trodden the Bill of Rights how worse can it get......

fascism is in the US for 8 years or so. Reply Saturday, February 18, 2017 at 05:35 PM

[Feb 12, 2017] Instead of the endless perception management or strategic communication or psychological operations or whatever the new code words are, you could open up the files regarding key turning-point moments and share the facts with the citizens

Notable quotes:
"... This bizarre feature of Trump's executive order shows how deep Official Washington's dysfunction goes. Trump has picked a major constitutional battle over a travel ban that targets the wrong countries. ..."
"... But there's a reason for this dysfunction: No one in Official Washington can speak the truth about terrorism without suffering severe political damage or getting blacklisted by the mainstream media. Since the truth puts Israel and especially Saudi Arabia in an uncomfortable position, the truth cannot be spoken. ..."
"... There was some hope that President Trump – for all his irascibility and unpredictability – might break from the absurd "Iran is the principal source of terrorism" mantra. But so far he has not. Nor has Trump moved to throw open the files on the Syrian and Ukraine conflicts so Americans can assess how the Obama administration sought to manipulate them into supporting these "regime change" adventures. ..."
"... But Trump has resisted intense pressure to again entrust U.S. foreign policy to the neoconservatives, a number of whom lost their jobs when President Obama left office, perhaps most significantly Assistant Secretary of State for European Affairs Victoria Nuland, who helped orchestrate the violent overthrow of Ukraine's elected president and is an architect of the New Cold War with Russia. ..."
"... Other neocons who angled for jobs in the new administration, including John Bolton and James Woolsey, have failed to land them. Currently, there is pressure to ensconce Elliott Abrams, a top neocon dating back to the Reagan administration, in the key post of Deputy Secretary of State but that idea, too, has met resistance. ..."
"... The neocon threat to Trump's stated intent of restoring some geopolitical realism to U.S. foreign policy is that the neocons operate almost as an ideological cabal linked often in a subterranean fashion – or as I. Lewis Libby, Vice President Dick Cheney's neocon chief of staff, once wrote in a cryptic letter to neocon journalist Judith Miller that aspen trees "turn in clusters, because their roots connect them." ..."
"... What is less clear is whether Trump, Tillerson and his fledgling State Department team have the intellectual heft to understand why U.S. foreign policy has drifted into the chaos and conflicts that now surround it – and whether they have the skill to navigate a route toward a safe harbor. ..."
"... My first concern, however, is the USA predilection for 'regime change" wars - and for that I blame the neocons. ..."
Feb 12, 2017 | economistsview.typepad.com
RGC : February 10, 2017 at 06:44 AM

If you wanted to bring sanity to a U.S. foreign policy that has spun crazily out of control, there would be some immediate steps that you – or, say, Secretary of State Rex Tillerson – could take, starting with a renewed commitment to tell the truth to the American people.

Instead of the endless "perception management" or "strategic communication" or "psychological operations" or whatever the new code words are, you could open up the files regarding key turning-point moments and share the facts with the citizens – the "We the People" – who are supposed to be America's true sovereigns.

For instance, you could release what the U.S. government actually knows about the Aug. 21, 2013 sarin gas attack in Syria; what the files show about the origins of the Feb. 22, 2014 coup in Ukraine; what U.S. intelligence analysts have compiled about the July 17, 2014 shoot-down of Malaysia Airlines Flight 17 over eastern Ukraine. And those are just three examples of cases where U.S. government propagandists have sold a dubious bill of goods to the American and world publics in the "information warfare" campaign against the Syrian and Russian governments.

If you wanted to base U.S. foreign policy on the firm foundation of reality, you also could let the American people in on who is actually the principal sponsor of the terrorism that they're concerned about: Al Qaeda, Islamic State, the Taliban – all Sunni-led outfits, none of which are backed by Shiite-ruled Iran. Yet, all we hear from Official Washington's political and media insiders is that Iran is the chief sponsor of terrorism.

Of course, that is what Saudi Arabia, the Gulf states and Israel want you to believe because it serves their regional and sectarian interests, but it isn't true. Saudi Arabia and the Gulf states are the ones arming and financing Al Qaeda and Islamic State with Israel occasionally bombing Al Qaeda's military enemies inside Syria and providing medical support for Al Qaeda's Syrian affiliate operating near the Golan Heights.

The reason for this unsavory network of alliances is that Israel, like Saudi Arabia and the Sunni-led Gulf states, sees Iran and the so-called "Shiite crescent" – from Tehran through Damascus to Beirut – as their principal problem. And because of the oil sheiks' financial wealth and Israel's political clout, they control how pretty much everyone in Official Washington's establishment views the Middle East.

But the interests of Israel, Saudi Arabia and the Gulf states are not in line with the interests of the American people – nor the average European – who are not concerned about militant Shiites as much as militant Sunnis. After all, the worst terror attacks on Europe and the U.S. have come from Sunni extremists belonging to or inspired by Al Qaeda and Islamic State.

This gap between the reality of Sunni-extremist terrorism and the fantasy of Official Washington's "group think" fingering Shiite-ruled Iran explains the cognitive dissonance over President Trump's travel ban on people from seven mostly Muslim countries. Beyond the offensive anti-Muslim prejudice, there is the fact that he ignored the countries that produced the terrorists who have attacked the U.S., including the 9/11 hijackers.

This bizarre feature of Trump's executive order shows how deep Official Washington's dysfunction goes. Trump has picked a major constitutional battle over a travel ban that targets the wrong countries.

But there's a reason for this dysfunction: No one in Official Washington can speak the truth about terrorism without suffering severe political damage or getting blacklisted by the mainstream media. Since the truth puts Israel and especially Saudi Arabia in an uncomfortable position, the truth cannot be spoken.

There was some hope that President Trump – for all his irascibility and unpredictability – might break from the absurd "Iran is the principal source of terrorism" mantra. But so far he has not. Nor has Trump moved to throw open the files on the Syrian and Ukraine conflicts so Americans can assess how the Obama administration sought to manipulate them into supporting these "regime change" adventures.

But Trump has resisted intense pressure to again entrust U.S. foreign policy to the neoconservatives, a number of whom lost their jobs when President Obama left office, perhaps most significantly Assistant Secretary of State for European Affairs Victoria Nuland, who helped orchestrate the violent overthrow of Ukraine's elected president and is an architect of the New Cold War with Russia.

Other neocons who angled for jobs in the new administration, including John Bolton and James Woolsey, have failed to land them. Currently, there is pressure to ensconce Elliott Abrams, a top neocon dating back to the Reagan administration, in the key post of Deputy Secretary of State but that idea, too, has met resistance.

The neocon threat to Trump's stated intent of restoring some geopolitical realism to U.S. foreign policy is that the neocons operate almost as an ideological cabal linked often in a subterranean fashion – or as I. Lewis Libby, Vice President Dick Cheney's neocon chief of staff, once wrote in a cryptic letter to neocon journalist Judith Miller that aspen trees "turn in clusters, because their roots connect them."

In other words, if one neocon is given a key job, other neocons can be expected to follow. Then, any Trump deviation from neocon orthodoxy would be undermined in the classic Washington tradition of strategic leaking to powerful media and congressional allies.

So far, the Trump inner circle has shown the administrative savvy to avoid bringing in ideologues who would dedicate their efforts to thwarting any significant change in U.S. geopolitical directions.

What is less clear is whether Trump, Tillerson and his fledgling State Department team have the intellectual heft to understand why U.S. foreign policy has drifted into the chaos and conflicts that now surround it – and whether they have the skill to navigate a route toward a safe harbor.

https://consortiumnews.com/2017/02/09/trumps-foreign-policy-at-a-crossroads/

Julio -> RGC... , February 10, 2017 at 09:04 AM
Very good analysis.
The first and obvious question about the ban is "why isn't Saudi Arabia included"? As the article shows, this question unravels this (Trump's) current version of dysfunctional foreign policy based on misleading the public.
RGC -> Julio ... , February 10, 2017 at 09:43 AM
Yes, Trump seems to want to act directly but he also seems to often be off-target.

My first concern, however, is the USA predilection for 'regime change" wars - and for that I blame the neocons.

sanjait said in reply to RGC... , February 10, 2017 at 10:56 AM
I am all for transparency but very strongly opposed to asinine conspiracy theories.
RGC -> sanjait... , February 10, 2017 at 11:29 AM
Why should anyone care? Maybe you should actually learn something about a topic before you comment on it.

https://en.wikipedia.org/wiki/Project_for_the_New_American

[Feb 12, 2017] Russia Will Not Sell Snowden To Trump; Heres Why Zero Hedge

Feb 12, 2017 | www.zerohedge.com

Submitted by Alexander Mercouris via TheDuran.com,

On Friday 10th February 2017 NBC circulated a report the Russian government in order to improve relations with the Trump administration was preparing to hand Edward Snowden over to the US.

The report obviously worried Snowden himself, who tweeted that the report proved that he was not and never had been a Russian agent . That suggests that he took the report seriously.

Snowden should not be worried, since the report is groundless and is clearly a provocation. To see why it is only necessary to look at the NBC report itself , which makes it clear who is behind it...

U.S. intelligence has collected information that Russia is considering turning over Edward Snowden as a "gift" to President Donald Trump - who has called the NSA leaker a "spy" and a "traitor" who deserves to be executed.

That's according to a senior U.S. official who has analyzed a series of highly sensitive intelligence reports detailing Russian deliberations and who says a Snowden handover is one of various ploys to "curry favor" with Trump. A second source in the intelligence community confirms the intelligence about the Russian conversations and notes it has been gathered since the inauguration.

(bold italics added)

It turns out that the story does not originate in Russia. It originates with our old friends the 'anonymous officials' of the US intelligence community.

One of these officials claims that the story is based on "intelligence" of "Russian conversations" that the US intelligence community has 'gathered since the inauguration". We have no way of knowing at what level these "conversations" took place, assuming they took place at all, but it is inconceivable that the US intelligence community is genuinely informed of discussions within the top level of the Russian leadership – where such a question would be discussed – or if it is that it would publicise the fact by blurting the fact out to NBC.

The reality is that there is no possibility of the Russians handing Snowden over to the US in order to please Donald Trump . Not only would doing so almost certainly breach Russian law – as Snowden's lawyer, who has denied the whole story , has pointed out – but it contradicts what I personally heard Russian President Putin say at the St. Petersburg International Economic Forum in 2014 when the subject of Snowden was brought up, which is that Russia never hands over people like Snowden once they have gained asylum in Russia. That is indeed Russian practice extending far back into the Soviet period, and I can think of no exceptions to it.

As it happens Russian Foreign Ministry spokesman Maria Zakharova has denied the story in a Facebook post which links it to the ongoing struggle between the Trump administration and the US intelligence community (about which see more below). Here is how RT translates her post

Today, US intelligence agencies have stepped up their work, updating two stale stories, 'Russia can gift Snowden to Trump' and 'confirmation found on the details of the scandalous dossier on Trump allegedly collected by an ex-employee of British intelligence.' But it may seem so only to those who do not understand the essence of the game. None of these statements have been made by representatives of the special services, but is information coming from NBC and CNN, citing unnamed sources. The difference is obvious, but only to experts. Yet it is useful for scandalizing the public and maintaining a degree of [public outrage] .

It is evident that the pressure on the new administration on the part of political opponents within the United States continues, bargaining is going on. And that's why the US foreign policy doctrine has not yet been formed

It is just possible that US intelligence overheard some gossip in Moscow about the Kremlin handing Snowden over to Donald Trump in order to curry favour with him. The various reports the US intelligence community released during the Clinton leaks hacking scandal show that the US intelligence community is not actually very well informed about what goes on in Moscow or how the Russian government works. In light of that it would not be entirely surprising if someone overheard some gossip about Snowden in Moscow which the US intelligence community is over-interpreting.

Far more likely however is that – as Maria Zakharova says – this is a deliberate provocation, spread by someone within the US intelligence community who either wants to signal to Moscow what Moscow 'needs to do' if it wants better relations with the US, or (more probably) as a signal to Donald Trump of the minimum the US intelligence community expects of him if he wants the US intelligence community's support in seeking better relations with Russia.

This story is interesting not because of what it says about what the Russians are going to do to Snowden – which in reality is nothing. Rather it is interesting because it shows the degree to which Snowden continues to be an object of obsession for the US intelligence community.

The reason for that is that the US intelligence community knows that Snowden is not a Russian spy.

As Snowden has pointed out, if he really were a Russian spy no-one in Washington would be talking about the Russians handing him over. The Russians do not hand their spies over any more than the US does, and if Snowden really were a Russian spy no-one in Washington would talking about the Russians handing him over.

However if Snowden had been a Russian spy his actions would in that case have been simply a Russian intelligence operation of which the US intelligence community was the victim, of which there have been many since the Second World War. Espionage is what the US and Russia routinely do to each other, and there would be nothing remarkable about Snowden in that case.

It is the fact that Snowden is on the contrary a deeply patriotic American who acted from patriotic motives that has the US intelligence community enraged and alarmed. From their point of view having a patriotic American publicly expose their practices Jason Bourne style is a far greater threat than have a Russian spy penetrate their systems, since because of the far greater publicity it is far more likely to damage them politically.

This explains the extraordinary feud the US intelligence community has waged against Snowden, which in part explains why it has become so hostile to Russia, the country which has become his protector.

Mr.Sono -> knukles •Feb 12, 2017 5:41 PM
Putin is a man of his words and not a little bitch like Obama. I was suprised that fake news was all over zerohedge regarding this topic, but at the end zerohedge confirmed the fake news.
Giant Meteor -> FreeShitter •Feb 12, 2017 5:35 PM
One of the smartest plays the deep state could make is allowing him back, make small fuss, and issue a pardon. It would go far in deflating, diffusing the situation, de minimis so to speak. But, I suppose it is more about absolute control, control of the narrative, full spectrum dominance, cautionary tales etc. Pride goeth before the fall (destruction) I believe. Eventually this laundry is going to get sorted and cleaned, one way or the other.
boattrash •Feb 12, 2017 5:13 PM
" as Maria Zakharova says – this is a deliberate provocation, spread by someone within the US intelligence community who either wants to signal to Moscow what Moscow 'needs to do' if it wants better relations with the US, or (more probably) as a signal to Donald Trump of the minimum the US intelligence community expects of him if he wants the US intelligence community's support in seeking better relations with Russia."

A full pardon from Trump would improve his standing with the American people, IMHO, on both the left and the right.

HumanMan -> boattrash •Feb 12, 2017 5:29 PM
This was my thought when the story broke. Putin can no longer claim to be a protector of human rights if he hands over Snowden...Unless Trump is going to pardon him. As you pointed you, that would be great (politically) for Trump too. Done this way would be a win win for the two and another win for We The People. On top of that, Putin doesn't want to babysit Snowden. I'm sure the Russians would be happy to have a politically expediant way to get the American spy out of their country.
HRClinton •Feb 12, 2017 5:16 PM
The Deep State rules, no matter what DJT thinks.

The roots go deep in my fomer DOS and in the CIA. Even in the DOD and Senate. Bill and I know this better than anyone.

FAKE NEWS:

On Friday 10th February 2017 NBC circulated a report the Russian government in order to improve relations with the Trump administration was preparing to hand Edward Snowden over to the US.

How many gringos were fooled???--- not many

shovelhead •Feb 12, 2017 5:37 PM
Pissgate II...

Brought to you from your friends at the CIA.

Mr. Crisp •Feb 12, 2017 5:50 PM
Snowden showed the world that the NSA wasn't just tracking terrorists, they were tracking pretty much everyone, everywhere. He deserves a full pardon.

[Feb 11, 2017] Welfare is assumed to be based upon real income and not relative income with ones group

Feb 01, 2017 | economistsview.typepad.com

Robert C Shelburne : January 23, 2017 at 09:10 AM

Another good article by Rodrik but a weakness of his analysis is that welfare is assumed to be based upon real income and not relative income with ones "group".

Most analyses of welfare find that relative income is quite important. Obviously if one assumes that one's reference group is the world, then the problem goes away; but empirically this is not the case.

Assuming that welfare is strongly affected by relative income with a group which is smaller than the world, then global equality is no longer welfare maximizing.

Those interested in these issues might be interested in Robert Shelburne, A Utilitarian Welfare Analysis of Trade Liberalization , available as a UN working paper.

[Feb 09, 2017] How lies work

Feb 09, 2017 | stumblingandmumbling.typepad.com

Nick Cohen makes a good point : it is not congenital liars that should worry us, but congenital believers – those who fall for the lies of charlatans. We know that many do so: almost half of voters believed the lie that leaving the EU would allow us to spend an extra £350m a week on the NHS.

This poses the question: why do people fall for lies? Here, we can learn from behavioural economics and research (pdf) into criminal fraud. I reckon there are several factors that liars exploit in politics.

One is wishful thinking. People want to believe there's a simple solution to NHS underfunding (leave the EU!) or to low wages (cut immigration!) just as they want to believe they can get rich quick or make money by taking no risk: Ponzi schemers like Bernie Madoff play upon that last one. The wish is often the father to the belief.

Relatedly, perhaps, there are lottery-type preferences. People like long-odds bets and pay too much for them: this is why they back longshots (pdf) too much and pay over the odds for speculative shares . To such people, the fact that an offer seems too good to be true is therefore, paradoxically, tempting. A study of fraud by the OFT found :

Some people viewed responding to a scam as taking a long-odds gamble: they recognised that there was something wrong with the offer, but the size of the possible prize or reward (relative to the initial outlay) induced them to give it a try on the off-chance that it might be genuine.

There's a particular type that is especially likely to take a long-odds bet: the desperate. Lonely people are vulnerable to the romance scam; gamblers who have lost take big bets to get even; losing teams try "hail Mary" tactics. In like fashion, people who feel like they have lost out in the era of globalization were tempted to vote for Trump and Brexit.

There's another mechanism here: people are likely to turn to con-men if the alternatives have failed. Werner Troesken shows (pdf) how snake-oil sellers exploited this. They invested a lot in advertising and in product differentiation and so when other products failed they could claim that theirs would work when the others hadn't. I suspect that fund managers use a similar trick: the failure of many to beat the market leads investors simply to trust others rather than tracker funds. The fact that previous policies had failed working people thus encouraged them to try something different – be it Brexit or Trump.

Yet another trick here is the affinity fraud. We tend to trust people like ourselves, or who at least who look like ourselves. Farage's endless posturing as a "man of the people" – fag and pint in hand, not caring about "political correctness" – laid the basis for people to trust him, just as Bernie Madoff joined all the right clubs to encourage wealthy (often Jewish) folk to trust him. By contrast, the claims from the Treasury and various think-tanks that Brexit would make us poorer came from metropolitan elites who were so different from poorer working class people that they weren't trusted. And in fact the very talk of "liberal elites" carried the subtext: "don't trust them: they're not like you".

All of these tendencies have been reinforced by another – the fact that, as David Leiser and Zeev Kril have shown , people are bad at making connections in economics. The idea that Brexit would hurt us rested upon tricky connections: between the terms of Brexit and trade rules; from trade rules to actual trade; and from trade to productivity. By contrast, the idea that leaving the EU would save us money was simple and easy to believe.

Now, I don't say all this merely to be a Remoaner; complaining about liars is like a fish complaining that the water is wet. Instead, I want to point out that it is not sufficient to blame the BBC for not calling out Brexiters' lies. Yes, the BBC disgraced itself during the plebiscite campaign. But we must also understand how voters fall for such mendacity. As Akerlof and Shiller write:

Voters are phishable in two major ways. First, they are not fully informed; they are information phools. Second, voters are also psychological phools; for example, because they respond to appeals such as lawnmower ads [a candidate seen mowing his own lawn is regarded as a man of the people] ( Phishing for Phools , p 75)

All this raises a challenge for liberals. Many used to believe the truth would win out over lies in the marketplace for ideas. This is no longer true, if it ever were. Instead, the questions now are: what can we do about this? And what should we do? The two questions might well have different answers. But we can make a start by understanding how lies are sometimes believed. Keith | February 07, 2017 at 04:47 PM

The marketplace of ideas assumes that the consumers are able and willing to inform themselves and be rational rather than emotional. Clearly this is not true of a lot of voters when confronted by a manipulative press and Tories like Jim with their right wing agenda slyly hidden for the time being.

Equally as in other areas such as health care shopping around is impossible to do as the consumers lack expert knowledge. Allowing the profit motive to apply to many areas is sure to be a disaster for human welfare as the profit incentive stops the experts using their knowledge for good. Finance is a classic example of the uninformed being repeatedly duped into unsound investments decade after decade. Benjamin Graham describes how in his first job selling Bonds to grannies he came to realise that he was being asked to steal the life savings of pensioners via commissions designed to get a sale of junk paper. Which is why he moved elsewhere to a more ethical line of work. But I am sure leaving the biggest most integrated market in the world where lots of foreigners have helpfully learned our language will surely increase our prosperity....Nigel says so.

Matthew Moore | February 07, 2017 at 05:37 PM
There will always be gullible people (/ people constrained by high opportunity cost of information search, as I prefer to think of them)

And there will always be liars looking to take advantage of them. Like 99% of politicians ever.

It's very Marxist to wonder how we might change this basic fact of humanity, when the real solution is clear. Don't set up powerful central institutions that rely on coercion: it attracts liars, rewards them, and makes new liars out of honest people.

Dipper | February 07, 2017 at 07:47 PM
Oh, we Leavers are being lectured again by our Remainer betters on our stupidity.

If the statements of the amount we pay to the EU were lies, how come we owe them €50 billion?

how come no-one ever asks why we have to implement the four freedoms when Germany gets a free pass on the Free market in Services?

the government announced house building plans today, and no-one asks whether a cause of high house prices and a housing shortage is too much immigration?

It's not the lies, it's the questions never asked that stand out.

Dipper | February 07, 2017 at 08:09 PM
@ Keith - "Tories like Jim"

I don't read Jim as a Tory. I read him as someone who was a Labour supporter but now just stares in amazement at a group of people who have become EU Federalist fanatics spouting delusional slogans who can never answer a straight question and refuse to acknowledge the obvious problems of democratic accountability.

How on earth did that happen? How did apparently intelligent people completely lose their critical faculties and join a quasi-religious cult that chants empty slogans and denounces anyone who questions them?

But I'm sure Jim can speak for himself.

Ralph Musgrave | February 07, 2017 at 09:45 PM
Chris missed out the fact that people tend to give others the benefit of the doubt. I.e. if X tells a monster lie, peoples' immediate reaction is: "X is is a bastard". But then on second thoughts they feel ashamed at accusing someone else of being a bastard, and assume it's they themselves that must be wrong.

Sotto Voce | February 07, 2017 at 10:45 PM
There is a bit of a danger here of another comment thread being derailed with Brexit mud-slinging. Chris's post isn't really about the pros and cons of Brexit, it just offers a vivid example of the phenomenon under discussion.

The point Chris makes in the last paragraph is more general and profound. If any and all data/information/evidence/argument is interpreted in partisan fashion and subject to massive confirmation bias so that debates increasingly polarise - or if different sides in debates proffer their own favoured but incompatible versions of the truth - then meaningful dialogue, deliberation and compromise become near impossible. All we get is intolerance, mistrust and greater partisanship. Clearly these are not entirely new issues, but it seems undeniable that there has been a qualitative shift in 'quality' of public debate.

We appear to be witnessing the US political system at great risk of imploding, as enlightenment values are abandoned and key tenets of liberal democratic practice are wilfully rejected. This is the route to chaos.

The questions Chris poses are, to my mind at least, the right ones. The very nature of the problem means that the old/favoured remedies are unlikely to be effective. But what can replace them? Is a violent conflagration the only way of shocking the system out of hyper-partisanship and the rejection of the foundational belief that we live in a shared reality (i.e. for people to 'come to their senses')? Or can we back out of this particular cul-de-sac peacefully? You've got to hope so. But, if so, how?

e | February 07, 2017 at 10:57 PM
Our upper echelon, i.e. our long-standing middle of the road Labour MPs and commentators, have long been successful in fighting off calls for left leaning policy/talk of how things work (because who knows where this will end) under a guise of fighting off racism/ a closed shop mentality; the routes of least resistance 50s – 00s which should alert us to the ability of the English working class to embrace immigration and avoid base philosophies. But it seems not. Seems to me our shared interest beyond race creed colour and gender continues to be deliberately and systematically no-platformed. What I fail to understand, given the rise of UKIP, is why this is not glaringly obvious; because if you're one of the majority who live life as best you might with as much consideration and tolerance as you can muster where does credence go when an ordinary workers tendency to sound 'populist' is marked up to racism no matter known history...

aragon | February 07, 2017 at 11:53 PM
Not again!
Phishing for Phools. The Political Brain...

http://www.nytimes.com/2007/08/26/books/review/Brooks-t.html

"Serious thinkers set to work, and produced a long shelf of books answering this question. Their answers tended to rely on similar themes. First, Democrats lose because they are too intelligent. Their arguments are too complicated for American voters. Second, Democrats lose because they are too tolerant. They refuse to cater to racism and hatred. Finally, Democrats lose because they are not good at the dark art of politics. Republicans, though they are knuckle-dragging simpletons when it comes to policy, are devilishly clever when it comes to electioneering. They have brilliant political consultants like Lee Atwater and Karl Rove, who frame issues so fiendishly, they can fool the American people into voting against their own best interests."

And immigration is about economics. This is Sweden an immigration superpower.

http://www.express.co.uk/news/world/755997/Sweden-Malmo-military-intervention-no-go-zone-crime-surge

"Swedish police last year issued a report where it detailed incidents from more than 55 areas which it branded as "no-go zones" as it detailed brutal attacks on police, sexual assaults, children carrying weapons and general turmoil sweeping across the country."

http://www.independent.co.uk/news/world/europe/most-europeans-want-muslim-ban-immigration-control-middle-east-countries-syria-iran-iraq-poll-a7567301.html

"A ban was supported by 71 per cent of people in Poland, 65 per cent in Austria, 53 per cent in Germany and 51 per cent in Italy.
In the UK, 47 per cent supported a ban.
In no country did more than 32 per cent disagree with a ban."

aragon | February 08, 2017 at 12:29 AM
Phishing for Phools

"It thereby explains a paradox: why, at a time when we are better off than ever before in history, all too many of us are leading lives of quiet desperation."

http://nfs.sparknotes.com/macbeth/page_162.html

"Pour the sweet milk of concord into hell,
Uproar the universal peace, confound
All unity on earth."

Human Nature has not changed.

Guano | February 08, 2017 at 12:42 AM
The truth is complicated.

The truth is challenging.

Tony Holmes | February 08, 2017 at 09:13 AM
Chris, a bit off the point, but if everyone followed your advice and put money in tracker funds and active funds disappeared, what would happen to the stock market ? Instinct tells me it would become extremely volatile, but instinct is a bad guide...

gastro george | February 08, 2017 at 09:35 AM
FFS aragon, that "report" from Sweden is from the Express quoting directly a Swedish fascist.

reason | February 08, 2017 at 11:29 AM
Isn't the key point here prospect theory (I've just finished reading Kahneman). People with no good options gamble.

reason | February 08, 2017 at 11:30 AM
P.S. The no good options bit is a very good reason for opposing first past the post and the limited options consequence.

aragon | February 08, 2017 at 11:47 AM
gasto george

It is not an extreme story, I don't speak Swedish or have any contact with Sweden. I only read the main stream media which includes the Daily Express.

As you would expect most of the media does not report on Sweden, unless it has a British angle.
e.g. Birmingham Boy killed by a hand grenade.
(I don't know how you can spin Hand Grenade)

The report originates with the Swedish Police the situation in Malmo is serious and individual police officers like Peter Springare's Facebook post.

Here is a report from the thelocal.se
http://www.thelocal.se/20170127/malmo-police-chief-help-us

"After a wave of violence in Sweden's third city, police boss Stefan Sintéus has appealed to residents in Malmö: "Help us. Help us to tackle the problems. Cooperate with us.""

Dipper | February 08, 2017 at 12:03 PM
@ gastro george

This isn't the first time facists have made inflammatory comments about muslims. Nick Griffin did this and was prosecuted for inciting racial hatred in 2006. The summary of what he said is some way down this article.

http://www.independent.co.uk/news/uk/crime/tougher-race-laws-likely-after-bnp-pair-cleared-423820.html

Eleven years later we have this http://www.bbc.co.uk/news/uk-england-south-yorkshire-38845332

And that, in a nutshell, is the problem with banning "fake news". You have to be really open, transparent and clear and be absolutely sure you are right, otherwise you end up making heroes of facists and stoking the notion that its all a plot to hide the truth from the people. And that is a really bad outcome.

MPs wrestling with their consciences, loud debates, arguments about the truth ... this is the sound of a properly functioning parliamentary democracy and long may that noise continue.

Guano | February 08, 2017 at 02:06 PM
The first two words of the article: Nick Cohen.

Nick Cohen does make some good points but he himself has a complicated relationship with the truth in some areas. When he isn't talking about congenital liars and congenital believers, he continues to get into a rage about people who opposed the invasion of Iraq. As far as I can see, the invasion of Iraq has been the disaster that some of us feared (because regime change involves putting in place a new regime change, which is very difficult and for which the USA and UK do not have the skills). And, as far as I can see, some of the assumptions made by Nick Cohen in 2002 and 2003 in supporting the invasion (such as the ability of the Iraqi National Congress to create a new regime) were very dubious and their weakness of these assumptions is why the invasion was a failure and has had created an array of other problems.

In his campaign to avoid a post-truth future, Nick Cohen claims that people like him "are on their own" and he explicitly rejects working with the kind of people who opposed the invasion of Iraq. That's a pity, really, because many people appear to have started their opposition to the invasion because the information provided and the logic used appeared to be dodgy. The period from August 2002 to March 2003 prefigured the Trump/Brexit era for post-truth information and arguments. Nick Cohen would be on stronger ground if he admitted that the invasion of Iraq has not necessarily worked to anyone's advantage.

I guess that what is going on in Nick Cohen's mind (and I can only guess) is that he has built up a negative image of the type of person who opposed the invasion of Iraq and he has difficulty getting past that image and come to terms with what those people were saying and what has actually happened in Iraq. Thus in between writing articles about the need for truth, Nick Cohen writes expressions of outrage about opponents of the invasion of Iraq as if they had been found to be wrong.

It seems to be a very extreme example of seeing the messenger and not the message, which is one of the issues with failing to recognise lies.

gastro george | February 08, 2017 at 02:24 PM
@aragon

OK, well I've worked most of my life with Swedes and Norwegians, and have regularly visited Malmo three or four times a year recently, although the last was a bit over a year ago.

So, yes, immigration is an issue, and the Sweden Democrats (fascists) have been rising in the polls. Malmo itself has some problems in the suburbs.

But there are no no-go areas. Armed violence has more traditionally been associated with biker-gang turf-related drug wars - otherwise with the far right (see Breivik in Norway) and then, as your last link discusses, lone serial killers.

Reading anything the Sweden Democrats have to say is the equivalent of believing Wilders in the Netherlands - they are loons.

Barbara Konstant | February 08, 2017 at 05:36 PM
Despairing as it seems, our humanity has not reached the necessary level of awareness needed to function peacefully in our world.

[Feb 08, 2017] The U.S. Tax Code Actually Doesn't 'Soak the Rich'

Feb 08, 2017 | economistsview.typepad.com
The U.S. Tax Code Actually Doesn't "Soak the Rich" : In 2012, Republican presidential candidate Mitt Romney famously commented that 47 percent of Americans were "dependent on government" because they didn't pay any federal income taxes. He went on to explain that his job was "not to worry about those people."
Journalists and other public figures often claim that only the rich pay taxes, supporting this with the argument that the rich pay the vast majority of federal income taxes. However, federal income taxes are just one part of the broader tax code. When we consider other types of federal taxes as well as state and local taxes, it becomes clear that the overall tax code isn't extremely progressive – in other words, it doesn't "soak the rich," and it certainly doesn't let the poor off the hook. ...

pgl : February 08, 2017 at 01:11 PM

"Journalists and other public figures often claim that only the rich pay taxes, supporting this with the argument that the rich pay the vast majority of federal income taxes. However, federal income taxes are just one part of the broader tax code. When we consider other types of federal taxes as well as state and local taxes, it becomes clear that the overall tax code isn't extremely progressive – in other words, it doesn't "soak the rich," and it certainly doesn't let the poor off the hook."

Great detail. Mankiw is particularly bad in terms of citing only Federal taxes as if state and local taxation did not exist. He used to have a comment section where a few of us would remind him of the above. I hear that is why he turned off his comment section.

Peter K. -> pgl... , February 08, 2017 at 01:54 PM
So you've ruined more than one comment section. Was that the plan or can you just not help yourself?
Sanjait -> Peter K.... , February 08, 2017 at 02:39 PM
Look in the mirror, bro.
pgl -> Sanjait... , February 08, 2017 at 04:23 PM
He is actually defending Mankiw now? I guess pointing out facts is being rude in PeterK's world.
Peter K. -> pgl... , February 08, 2017 at 05:47 PM
Just pointing out how you shut down Mankiw's comment section and are currently trying to shut down Thoma's.

What do you have against dialogue and debate?

Jay -> pgl... , February 08, 2017 at 05:13 PM
And corporations pay no taxes. Well, PGL is only considering federal corporate income taxes when making such a ridiculous statement. Guess what, corporations pay other taxes too!
Sanjait : , February 08, 2017 at 02:41 PM
A point that should be well known by now, but worth repeating because many remain unaware. Federal income taxes are but a progressive subset of all taxes, the rest of which, in aggregate, is actually quite regressive.
pgl -> Sanjait... , February 08, 2017 at 04:24 PM
Yep! Mankiw tries to deny this. And now PeterK is taking Mankiw's side? OK!
DrDick -> Sanjait... , February 08, 2017 at 04:28 PM
And even they are not terribly progressive.
Jay -> Sanjait... , February 08, 2017 at 05:18 PM
That FICA is regressive is pretty meaningless, given you can do much more honest analysis by looking at the ROI. OASDI is simply coerced retirement savings along with forced purchase of various insurance.

But as we saw with ObamaCare, progtards will take every opportunity to include in legislation completely unrelated clauses that act as income redistribution - see the 3% income tax. Then again, to some morons (PGL, DrDonk and EMichael included) 100% of you income is owned by the government and there is a certain percentage that they leave you have. Looking at it from a "tax rate" perspective is wrong-headed and backwards.

Sanjait -> Jay... , February 08, 2017 at 05:29 PM
That is a great example ... of the borderline incoherent and histrionic way conservatives often talk about policy issues when they are trying to act intellectual.
JF : , February 08, 2017 at 03:59 PM
I commented on Dean Baker's blog and on this CEPR article too.

The gust is to get people to discuss public finance in net worth terms and not just by income taxation type or just by the transactional flows in a 12 month period.

The headline they chose fir this article would have been more informative.

Just think, looking at the top 1percent, what is their contribution to public finance compared to their net worth. Compare this to the medium, or just about any other strata and I think many might be better educated.

DrDick : , February 08, 2017 at 04:30 PM
More shocking news that has been available for decades, but which conservatives and the media (redundant?) studiously ignore.

[Feb 07, 2017] Don't Side With Neoliberalism in Opposing Trump

Notable quotes:
"... By Les Leopold, the director of the Labor Institute, who is currently working with unions and community organizations to build the educational infrastructure for a new anti-Wall Street movement. His new book Runaway Inequality: An Activist's Guide to Economic Justice serves as a text for this campaign. All proceeds go to support these educational efforts. Originally published at Alternet ..."
"... Thin Reed? Authoritarian rule for the oligarchs ..."
"... Most manufacturing jobs are lost via automation, not outsourcing. ..."
"... wasn't ..."
Feb 07, 2017 | www.nakedcapitalism.com
Posted on February 6, 2017 by Yves Smith Yves here. As reader John Z pointed out, the policy program described in this post is very much in synch with the recommendations Lambert has been making. One small point of divergence is that Leopold reinforces the idea that taxes fund Federal spending. Taxes serve to create incentives, and since income inequality is highly correlated with many bad social outcomes, including more violence and shorter lifespans even for the rich, progressive taxation is key to having a society function well. However, he does get right (as very few do) that the purpose of a transaction tax is to discourage the activity being taxed, rather than raise money (aside from the MMT issue, the tax would shrink the level of transactions in question, making it not very productive in apparent revenue terms).

By Les Leopold, the director of the Labor Institute, who is currently working with unions and community organizations to build the educational infrastructure for a new anti-Wall Street movement. His new book Runaway Inequality: An Activist's Guide to Economic Justice serves as a text for this campaign. All proceeds go to support these educational efforts. Originally published at Alternet

During the Bernie Sanders campaign I heard a high-level official give a powerful speech blasting the Trans-Pacific Partnership Act for the harm it would bring to workers, environmentalists and to all who cared about protecting democracy.

Donald Trump now has signed an executive order pulling out of the TPP negotiations.

Is this a victory or a defeat for the tens of thousands of progressives who campaigned to kill the TPP?

On the same day Trump killed the TPP, he met with corporate executives saying he would cut taxes and regulations to spur business development. But he also warned that "a company that wants to fire all of the people in the United States and build some factories someplace else and think the product is going to flow across the border, that is not going to happen." He said he would use "a substantial border tax" to stop those practices.

Is this a victory or a defeat for workers and unions who for three decades have been begging politicians to stop the outsourcing of decent middle-class jobs?

Breaking the Spell of Neoliberalism

Our answers may be clouded by four decades of the neoliberal catechism-tax cuts on the wealthy, Wall Street deregulation, privatization of public services and "free" trade. Politicians, pundits and overpaid economists long ago concluded that such policies will encourage a "better business climate," which in turn will lead to all boats rising. Instead those very same policies led to a massive financial crash, runaway inequality and a revolt against neoliberalism which fueled both the Sanders and Trump insurgencies. (See enough facts to make you nauseous.)

This ideology is so pervasive that today no one is shocked or surprised to see Democratic governors on TV ads trying to lure business to their states by promising decades of tax holidays. No one gags when politicians lavish enormous tax gifts on corporations-even hedge funds-in order to keep jobs from leaving their states .

Similarly, we have grown accustomed to the neoliberal notion that we should go deeply into debt in order to gain access to higher education. Free higher education, which was the norm in New York and California until the 1970s, was "unrealistic" until Sanders rekindled the idea.

More troubling still, elites propagated the idea that public goods should not be free and available to all via progressive taxation. Rather public goods were denigrated and then offered up for privatization. Even civil rights icon Representative John Lewis used the neoliberal framework to attack Bernie Sanders' call for free higher education and universal health care: "I think it's the wrong message to send to any group. There's not anything free in America. We all have to pay for something. Education is not free. Health care is not free. Food is not free. Water is not free. I think it's very misleading to say to the American people, we're going to give you something free."

Obama/Clinton Didn't, Trump did

Ironically, while Lewis is defending neoliberalism, Trump actually is attacking two of its foundational elements-free trade and unlimited capital mobility. Not only is Trump violating neoliberal theory, he also is clashing with the most basic way Wall Street cannibalizes us. Without the free movement of capital, assisted by trade deals, financial elites and their corporate partners would not be able to slash labor costs, destroy unions and siphon off wealth into their own pockets.

In particular, we should be extremely worried about how Trump is approaching the loss of manufacturing jobs. The neoliberal fog should not cause us to miss the obvious: presidents Obama and Clinton did absolutely nothing to stop the hemorrhaging of middle-class manufacturing jobs to low-wage countries. (U.S. manufacturing fell from 20.1 percent of all jobs in 1980 to only 8.8 percent by 2013.) Not only did Obama and Clinton fail to stop even one factory from moving away, but they truly believed that capital mobility and free trade were good for America and the world. In other words they had sipped plenty of the neoliberal Kool-Aid.

Meanwhile, Trump is all in. He is saying that jobs in the U.S. are more important than the long-run benefits of capital mobility and TPP/NAFTA agreements. If he keeps bashing corporations for moving jobs abroad and if he manages to ignite even a mini U.S. manufacturing jobs boom, Trump could be with us for eight long years.

But What About the Poor in Other Countries?

To many progressives, saving American jobs sounds jingoistic and "protectionism" is a bad word. Isn't global trade helping the poor become less so around the world? Isn't it selfish only to protect American jobs? Isn't it more moral to share scarce manufacturing jobs with the poor in Mexico and Asia? After all, even if a plant closes in the Rust Belt, service sector jobs can be found at wages that still are far higher than what the poor can hope for in low-wage countries.

You can be sure corporations will be playing this tune if Trump tightens the screws on capital mobility.

These arguments however have little to do with how the world actually functions.

No, it's not possible to make a credible progressive case for outsourcing your neighbor's job

What Do We Do?

The progressive instinct, and rightfully so, is to trash Trump. If he's for it, we must be against it. When it comes to immigration, civil rights, abortion, freedom of the press and many, many other issues, that's a sound strategy.

But trashing Trump for saving jobs in the U.S. is suicidal.

In opposing Trump, we must not slip into defending neoliberalism. It's not okay for corporations to pack up and leave. We should have some control over our economic lives and not leave all the crucial decisions to Wall Street and their corporate puppets. Trade deals are bad deals unless they enforce the highest health, safety, environmental and labor standards. And those measures must be enforceable by all the parties. The race to the bottom is real and must stop.

In the U.S. We Should Be Mobilizing the Following Areas:

1. Organize the outsourced : We should identify and organize all those at risk from off-shoring. We need to make sure Trump and Congress hear from these actual and potential victims. Trump needs to be reminded each and every day that there are millions of jobs he must protect. At the same time we should be rounding up support for the Sanders bill to stop off-shoring .

2. Resist: Trump has made it clear to corporate America that in exchange for job creation in the U.S. he will cut their taxes and regulations. We should demand that all tax "reforms" include a new financial speculation tax ( Robin Hood Tax ) on Wall Street to slow down their insatiable greed. Also, we need to fight tooth and nail against any weakening of workplace health, safety and environmental regulations. We have to destroy the Faustian bargain where jobs are protected but the workers and the communities are poisoned.

3. Connect: More than 3 million people protested against Trump. But it is doubtful that dislocated workers and those facing outsourcing were involved in these marches. That's because the progressive movement has gotten too comfortable with issue silos that often exclude these kinds of working-class issues. That has to change in a hurry. We need to reach out to all workers in danger of off-shoring-blue and white collar alike.

4. Expand: Many key issues-from having the largest prison population in the world to having one the lowest life-spans-are connected through runaway inequality . Outsourcing is deeply connected to the driving force behind runaway inequality-a rapacious Wall Street and its constant pressure for higher returns. We need to broaden the outsourcing issue to include stock buybacks and the other techniques used by Wall Street to strip-mine our jobs and our communities. It's time for a broad-based common agenda that includes a Robin Hood Tax on Wall Street, free higher education, Medicare for All, an end to outsourcing, fair trade and a guaranteed job at a living wage for all those willing and able.

5. Educate: In order to build a sustained progressive movement we will need to develop a systematic educational campaign to counter neoliberal ideology. We need reading groups, study groups, formal classes, conferences, articles and more to undermine this pernicious ideology. Some of us are fortunate to be part of new train-the-trainer programs all over the country. We need to expand them so that we can field thousands of educators to carry this message.

Yes, all of this is very difficult, especially when it seems like a madman is running the country. It is far easier to resist than to tear apart neoliberalism. But we have to try. We need to recapture the job outsourcing issue and rekindle the flames that ignited Occupy Wall Street and the Sanders campaign.

34 0 191 0 2 Gerard Pierce , February 6, 2017 at 3:28 am

Les Leopold explained some of his beliefs on the Smirking Chimp. I made a comment to that article that I think should be repeated here ==>

At the moment, it's hopeless because we do not have a platform.

Most of the supposed liberals out there cannot defend welfare of any kind, cannot defend Social Security and cannot defend most of what they supposedly stand for in any kind of intelligent way.

There are circumstances where "welfare" is a moral necessity. There are also circumstances where you tell the claimants to get a job. Sometimes you help them to get that job.

It's necessary to be able to tell the difference and to be able to explain the difference.

Too many supposed liberals do not understand how the labor movement became corrupt enough that "right to work" looked good to people who were paying dues and getting little back.

If you do not understand your own "liberal" beliefs, some uneducated red-state buffoon will make you look like the bad guy

You not only need to understand your own beliefs, but you need to be able to debate them with other wanna-be liberals until you have a platform that means something.

flora , February 6, 2017 at 3:41 am

"we do not have a platform ."

The Sanders' campaign platform works for me.

BeliTsari , February 6, 2017 at 6:30 am

Yep, everything Trump will do to bait Liberal "resistance," they will eagerly fall for. It leaves a LOT of wiggle room for a movement to get between DC's Kleptocrats and Trump's supposed constituency (victims? marks?) about to lose their jobs, homes, equity, retirements & kids to imperialistic wars. If there's a Left in this country, it simply HAS to be more than white kids on TV, in black face masks we need to dodge Trump's trolling and fight unremittingly FOR living wages, job safety, healthcare, upwards mobility & AGAINST a predatory FIRE sector, ALEC kleptocracy & their media's 24/7 reality infomercial. For way too long, the whole good cop/ bad cop scam has been Yuppie liberals vs Oligarch's running dogs, we've tried to live off any chunks that'd trickle down through the maelstrom above our heads, to which we were not invited

nycTerrierist , February 6, 2017 at 9:17 am

Same here.

Katharine , February 6, 2017 at 10:04 am

+1

Mel , February 6, 2017 at 12:05 pm

Quite. No reason Sanders' platform can't be used. There's also a 5-point platform right in plain sight at the end of Leopold's article.
Some people seem to have this urge to outsource the platform to somebody else - the Democrat Party, or maybe others. No. No need to go elsewhere. There's two platforms right here. Use them.

b1daly , February 6, 2017 at 5:53 am

The problem is that economic systems are complex, emergent phenomena. They influenced by culture, chance, ideas, tribal instincts, technology (including financial technology), geography, tradition, the environment, human nature, migration, religion, and on and on.

This notion that something as complex as human society can be analyzed under an intellectual construct, whether neo-liberalism, socialism, or Rastafarianism defies common sense. Centuries of intense theorizing by some very smart people have led to an understanding of parts of social systems. But, for example, economists disagree profoundly on basic aspects of macroeconomics.

Neo-liberalism is not even a well defined concept. I don't know of any politician in the US who declare themselves "neo-liberal." Read the Wikipedia article to see just how poorly this concept is defined.

Among some self-imagined progressives it's become a perjorative term to apply to leaders who they disagree with. IMO, politicians do not govern according to abstract concepts. The honest ones are simply trying to govern, in the context of the society they live in. At times, historically unique situations arise, and political leaders are stumped for solutions. At such a time, some kind of think tank might propose their pet theory to be considered as a factor in making decisions (the "neo-cons" had their chance in the build up to the Iraq war).

I want Trumps ability to wreak havoc on the economy and civil infrastructure minimized, and him gone as President as soon as possible. This is not going to be easy. If, at the same time, think you can throw in the reform of global economic structures, and succeed, you're delusional.

FWIW, to the extent that policians like Chuck Shumer or Hilary Clinton are influenced by neo-liberal ideas, it is at the level of ideas. People can change their mind, or have it changed, on things like this. Quickly. In contrast to something like pro-Zionist policies, to which a polician might have a deeper attachment, very resistant to change.

Outis Philalithopoulos , February 6, 2017 at 11:09 am

I was a bit confused by this comment.

The first two paragraphs are making a broad sort of argument, which if taken with its full force seems to mean that any attempt to use theoretical generalizations to understand the world is oversimplifying and therefore questionable.

The third and fourth paragraphs take issue more specifically with the term "neoliberalism."

However, the fifth paragraph seems to imply that anti-neoliberalism involves "reform of global economic structures," and therefore maybe isn't as poorly defined as the previous paragraphs would have led one to assume.

Meanwhile, the sixth paragraph undercuts the fifth. The fifth implies that opposing Trump is so important that we should temporarily abandon any attempt to move the discourse on the overall economic direction of the country or the world. The reason given is that moving said discourse is supposed to be a herculean, nearly impossible task. The sixth paragraph, instead, suggests that Schumer and HRC can have their mind changed "quickly" on these sorts of issues, and so maybe the overall project isn't so infeasible after all.

Vatch , February 6, 2017 at 11:55 am

"FWIW, to the extent that policians like Chuck Shumer or Hilary Clinton are influenced by neo-liberal ideas, it is at the level of ideas."

I'm skeptical about this. Chuck Schumer and Hillary Clinton are influenced by neo-liberal ideas at the level of massive donations to their campaign committees or family foundation.

jrs , February 6, 2017 at 12:20 pm

If you just get Trump gone, another Trump or worse will be produced in a decade or so (never mind Pence in the meantime, that we could endure, I'm focusing longer term). An awful system, that makes everyone poor (mass impoverishment), stupid, and exhausted, produces awful results in terms of governance (money in politics does not help of course).

old flame , February 6, 2017 at 12:46 pm

I always took neo-liberalism to mean world domination by banks FIRE sector and neoconservatism by the military and their suppliers and also oil which greases the military wheels. Farms fall into the latter I guess for the defense of the "landed gentry". Watched the farm reports lately and they are quite upset by the non-passage of the TPP which would have given them higher price supports. All of it is ruled by multi-nationals' money and clout so there is overlap.

flora , February 6, 2017 at 2:22 pm

Don't equate the giant corporate agri-biz sector – Monsanto, ADM, IBP, et al – with small family farms. Factory farms might be for TPP. The small family farm, the independent farmer, not so much.

see, for example:
http://www.sraproject.org/2014/11/unfair-trade-ttp-and-ttip-vs-family-farms/

flora , February 6, 2017 at 2:43 pm

adding: Wall St speculates in grain and farm/food commodities. Wall St isn't happy with the demise of TTP. This from a few years back, but still relevant.

" Futures markets traditionally included two kinds of players. On one side were the farmers, the millers, and the warehousemen, market players who have a real, physical stake in wheat .

"On the other side is the speculator. The speculator neither produces nor consumes corn or soy or wheat, and wouldn't have a place to put the 20 tons of cereal he might buy at any given moment if ever it were delivered. Speculators make money through traditional market behavior, the arbitrage of buying low and selling high. And the physical stakeholders in grain futures have as a general rule welcomed traditional speculators to their market, for their endless stream of buy and sell orders gives the market its liquidity and provides bona fide hedgers a way to manage risk by allowing them to sell and buy just as they pleased.

"But Goldman's index perverted the symmetry of this system. The structure of the GSCI paid no heed to the centuries-old buy-sell/sell-buy patterns. This newfangled derivative product was "long only," which meant the product was constructed to buy commodities, and only buy. At the bottom of this "long-only" strategy lay an intent to transform an investment in commodities (previously the purview of specialists) into something that looked a great deal like an investment in a stock - the kind of asset class wherein anyone could park their money and let it accrue for decades (along the lines of General Electric or Apple). Once the commodity market had been made to look more like the stock market, bankers could expect new influxes of ready cash. But the long-only strategy possessed a flaw, at least for those of us who eat. The GSCI did not include a mechanism to sell or "short" a commodity. "

More neoliberalism in action. It doesn't benefit either the small farmer or the person buying groceries.

flora , February 6, 2017 at 2:46 pm

oh, link:
Foreign Policy
How Goldman Sachs Created the Food Crisis, 2011
http://foreignpolicy.com/2011/04/27/how-goldman-sachs-created-the-food-crisis/

Wall St. certainly wants the TTP.

Brad , February 6, 2017 at 1:20 pm

Either reality is an unknowable fog, or it isn't. I say its knowable, however complex.

PH , February 6, 2017 at 6:11 pm

I agree many people here get caught up in labels. I think there is value in iconoclasm, but ultimately we have to take practical actions if we want to avoid trouble. Or, at least, avoid the worst trouble.

Many who comment do not seem to take seriously the danger of right wing fanaticism. I am not sure what would convince them.

Unfortunately, we may find out someday.

that guy , February 6, 2017 at 7:38 pm

You might be right. I certainly don't take right wing fanaticism seriously. Moreover I don't think it should be taken seriously, and unless things seriously changed recently, I live in a state that, statistically, has a lot of right wing fanatics.

They're not organized, they don't have a message that truly appeals, they don't have messengers with mass appeal, there's nothing there anyone can build on. Moreover, anti-immigrant sentiment comes and goes. In the 1840's we were having riots and people were beating Irishmen in the street because the economy sucked. But when things don't suck so bad economically, that evaporates like the morning fog.

Until right wing fanaticism can look like anything other than some angry guy with too many tattoos shouting angry slogans, or some weird dude who wants to actually create White America that srsly nobody listens to, y'know, until there's some unifying figurehead who can take it further and make it sensible-sounding and mainstream to the folks at home who work a 9-to-5, it's not even worth worrying about. I'm more worried about left wing extremists who show up in huge mobs and cause property damage, personally.

Altandmain , February 6, 2017 at 10:43 am

They are liberals, not left wing people.

By that I mean, they want neoliberal econoimcs with a socially left wing platform. No wonder they hate the left and supported Clinton so much. They want the status quo. Many are safely in the upper middle class, as the comments on the Women's March in Washington DC have revealed. They will never have to deal with the consequences of neoliberalism.

The Sanders base by contrast wants left wing economics and socially.

NotTimothyGeithner , February 6, 2017 at 11:45 am

The neoliberals don't even want left wing social identity progress. They just use it as a tool to capture voters. Team Blue types did jack to advance social issues until they were forced too or were simply bypassed. Obama's "personal endorsement" of gay marriage was covered by his support of state rights.

Allegorio , February 6, 2017 at 12:14 pm

Remember "Don't ask, don't tell."? Oh so socially liberal!

jrs , February 6, 2017 at 12:25 pm

Is anyone all that safely in the middle class these days? Even if they have a nice middle class job, so much that they don't have to worry about age discrimination as they get older? I don't think so. So much that even if they have a nice plum insurance plan at work, they never have to worry about healthcare for themselves or their loved ones? I'm not so sure

But sure it's not as immediate a threat, doesn't have the immediacy of say facing immediate eviction for the lack of a rent payment or something.

Michael Berger , February 6, 2017 at 4:44 am

What appeals to me most is the recognition here (item 3.) of the same concern for visa holders being locked out of entering the country needing to be shown to the laboring class already in the country.

For those laborers, seeing a few hundred (or goodness gracious, a few thousand) people protesting another production line being shipped off is better "messaging" than anything our ruling class will ever manage to conceive.

Seriously, I can think of no better image than social justice warriors standing up for workers desperate enough to vote Trump (or resigned enough to not vote at all).

There are potential friendships – or allyships if you prefer – to be created that could do wonders for much beyond economic concerns.

John Rose , February 6, 2017 at 12:41 pm

This has been my position from the early days of the Tea Party movement when I couldn't understand why the Democratic Party immediately sent organizers to help them with both organization and more importantly consciousness-raising.

Kramer , February 6, 2017 at 5:12 am

My problem is that I'm in a Red state. Democrats don't win elections here. I need a political organization that can give me the best possible republican. This would look like America first economics to protect American jobs (there is a huge appetite for this among the Republican voters I talk to.) It would mean accepting conservative social positions. The democratic party might be able to this but it would require one hell of a make over.

b1daly , February 6, 2017 at 6:08 am

It would, but it might be doable. A lot of the divide in American politics is around "the culture wars." I think people can adopt new ideas, and ways of looking at things, if they get that "tribal sanction."

This is just arm chair theorizing, but one of the big hang ups is that cultural difference is interwoven with historical precedents that operated at a more substantive, fundamental level in the society. For example, the theories of white supremacy were used to justify the appalling institution of slavery in the US. At that time, this enabled the dominant culture to benefit at the expense of the exploited.

But when cultural conditions change, such that economic systems like slavery are no longer operative, the ideas of white supremacy can live on as simply cultural identity.

For all the problems of our society, we have made progress, and the overt, legal racism that existed just 50 years ago has been minimized. So perhaps people interested in social justice can relax the hyper-vigilant, hyper-accusatory attitudes of political correctness, to make common cause with populations they have common interests with.

When social justice activists use the label of "racist" as a badge of shame on someone who transgresses whatever social line, it tends to cause hurt feelings. And accusations of reverse racism. Sigh. It could be different.

Terry Humphrey , February 6, 2017 at 11:07 am

They divide culturally because the social and economic is too complex to put on a sign.

Allegorio , February 6, 2017 at 12:27 pm

The Kulture Wars were specifically designed to put economic and Class issues on the back burner, Divide and Rule. What is the point of Lady Gaga waving her pussy in our faces at the super bowl, but to drive the socially conservative working class into the Republican party. Frankly the issue of who sleeps with who, who marries who and who has a baby, is done , covered by the assertion of privacy protection by the constitution. In any case, economic justice should take precedence. Time to move on from socially divisive issues.

Booqueefius , February 6, 2017 at 4:22 pm

Love your line about Lady Gaga. It is as if the powers that be understand completely the "backfire effect" and deploy it consciously to their advantage.

Steve H. , February 6, 2017 at 8:41 am

I completely disagree. While party organizations in red states may have little impact on those elected from their state, a hostile takeover of a state party can have real impact in terms of control of the national organization.

NotTimothyGeithner , February 6, 2017 at 9:49 am

Democratic Parties in red states especially are interested in keeping their invitations to Inaugural balls and holding Jefferson-Jackson (one would think these would have been renamed by now given how totes woke Team Blue types are, sarc) dinners. Who knows what could happen if they cared about results?

NotTimothyGeithner , February 6, 2017 at 9:34 am

I disagree. "Good Democrats" can win. People respect people who fight for their values or seem to fight for those values more than say a Hillary. The messaging of Hillary as a defender for women and children wasn't an accident.

The problem for the "deplorables" in regards to Team Blue is the neo liberals treat their concerns with contempt and have a recent history of betrayal.

It might take a while, but Virginia's fifth congressional district is the largest district by area east of the Mississippi. It's bigger than New Jersey and a relatively good Democrat (probably not the most pro choice person) won in 2008 against a Republican who won by huge numbers every years. That win didn't start in early 2008. It started in 2001 with a couple of sacrificial lambs to build operations to register voters, making sure the blue precpincts were registered and to go into the precincts that should be blue believed they can win.

I believe people will make good choices when presented with options, but putting up a non entity with cash who bemoans partisanship especially those "tax and spend liberals" is why Democrats fail. How did Alan Grayson get into Congress despite running in a district that went for Bush/Cheney twice while an adjacent district that went for Gore and Kerry keeps sending Republicans to Congress? The answer is people respect when they aren't being pondered too, and that is all Clinton Inc knows how to do.

John Rose , February 6, 2017 at 12:47 pm

This is probably how it needs to be done, district by district. Was this entirely home-grown or was there outside help from move-on or other groups?

NotTimothyGeithner , February 6, 2017 at 2:46 pm

Entirely home grown for all intents and purposes. Lynchburg produced a fair amount of volunteers and money despite not being in the actual district.

Dean's 50th the strategy didn't come from no where. The Internet existed before Facebook, and people have long memories of Democrats that did organization before 1994 (gee, I wonder who was in charge of Team Blue) and the destruction of the then permanent Democratic majority. People discussed this all over. Admittedly, I didn't entirely buy it until Kaine thumped a well liked Republican in 2005 running up the vote tally in areas where people had been organizing.

There is a reason why Clinton Inc is despised by otherwise seemingly, sensible Democratic types. The Clintons under perform because they run childish goldilocks campaigns. In 1992, Bill mustered 43% of the vote against 41 and a guy who basically wanted to bring back prohibition.

Philip Martin , February 6, 2017 at 9:26 pm

Thanks for bringIng up Dr. Dean's 50 state strategy. What the heck happened to that? I'm convinced that the strategy was a good part of Obama's victory in 2008. In Kansas, the Dems took a seat from the Republicans that year, and won Indiana and North Carolina. Lost Missouri by only 4000 votes. We could compete in these states and others (Arizona, Texas, Georgia) if the state Democratic parties would arouse themselves and do a bit of listening to people in their state.

ArkansasAngie , February 6, 2017 at 7:01 am

No more wedgies.

We are so wedged that we cannot form coalitions.

The Fallacy of the false dilemma.

Example we are wedged on refugees. How about we stop bombing Syria so that the urgency of refugees is reduced.

PH , February 6, 2017 at 7:12 am

Not sure study groups are the answer. Couldn't hurt, I suppose.

The article makes it sound like there was nothing but a clash of ideas for 40 years.

Out of the 70's there was a lot of racism and resentment at the stagflation that got channeled into Reagan. The right wing think tanks started an Amen chorus, abortion wars reached a fever pitch, and Dems started scrambling to try to win elections that they used to win on a FDR platform.

Then came the bubble of the 90s, and Wall Street Dems looked like geniuses.

A lot of people were drinking the Koolaid. Not just sold out Dem pols.

New day now. Lessons have been learned. Unfortunately, many people have learned the wrong lessons, nodding to the siren call of fanatical nationalism and Trump.

I am not sure what plan the proprietors of this blog favor, but I hope it includes the Dem party because that thin reed is the only thing between us and authoritarian rule for the billionaires.

Eureka Springs , February 6, 2017 at 8:48 am

Thin Reed? Authoritarian rule for the oligarchs

The Dems are the very embodiment of neoliberalism, representatives of oligarchs and soft sellers of authoritarian rule. Far far on the wrong side of the thin reed.

As the post mentioned – Largest imprisoned, in the world. Lowest life expectancy, for highest expenditures.Allowing millions to be foreclosed upon while further enriching the banksters who rigged the system. That's authoritarian in an extreme and only a few oligarchs benefit. Neoliberalism/Liberalism is authoritarian. Dems are the first to shoot down those who challenge them with so much as polite rhetoric. Feckless as Sanders was he clarified that for anyone who dare look-see, admit it to themselves.

If Dems were the only party in existence we would be where we are today, if not far worse. Just the way they structure and operate their party is more than enough to prove these points.

Love the post title but I would wear a t-shirt which say either of these things:

Don't Side With Neoliberalism in Opposing Trump.

Don't Side With Democrats in Opposing Trump

In fact I would prefer the latter.

PH , February 6, 2017 at 10:51 am

Why do you prefer Trump and the Republicans?

Mel , February 6, 2017 at 12:18 pm

Who said prefer? The thing with siding with the Democrats in opposing Trump is that in four or eight years we're left with nothing but siding with somebody else in opposing the Democrats. How about getting something done, finally? Crazy dream: make the Democrats side with us in opposing Trump.

tegnost , February 6, 2017 at 9:17 am

Naked Capitalism is both a reading and study group hey here's a thought, why don't the dems try to include usians, we're not democrats we're americans, after all, and we don't need them if they're going to continue to play the game as they have been playing it, supporting authoritarianism and heaping favors on billionaires. I don't see lessons having been learned, none of the hillary marchers I know can have a cogent , fact based conversation, it's just omg trump, marching is good, globalization o care what will the poor illegal immgrants do, cheap labor is essential, self driving trucks blah blah blah bail out wall st while fraudulent MERS documents are fabricated to steal peoples homes, remember linda green, remember non dischargeable student loans? Have you noticed all those tents under the bridges? The dems ruled for the 10% but it's a big country and a numbers game. You need to get out more. If the dems wanted to win bernie was the ticket. Instead they chose wall st and war then lost like they deserved to lose. In a representative democracy they are supposed to represent us, we're not supposed to represent the dems. They'll be included when they deserve to be, no one owes them allegiance.

PH , February 6, 2017 at 12:07 pm

I understand you do not like Dem leaders. But ultimately, the politics are not about them. It is about us.

How do we protect our kids, our parents, and our friends.

It involves organizing behind candidates at election time.

And at this point in time (where we are now) that means organizing through the Dems, through the Repubs, or some third party.

None of those options are obvious paths to success.

But we have to pick one, or do nothing.

jrs , February 6, 2017 at 12:34 pm

"And at this point in time (where we are now) that means organizing through the Dems, through the Repubs, or some third party."

Sometimes I figure it may as well be the Repubs (but not of course with their current platform, yea I know people think the Dems is an easier party to take over, but due to LOTE voting I'm not so sure.

beth , February 6, 2017 at 7:46 pm

Maybe you can tell me which is better? Cory Booker voted to prevent importation of Canadian drugs to lower the outrageous rx costs. Ted Cruz voted to import drugs so that we are not held hostage to US companies raising drug costs with impunity. Unless the dems are benefiting citizens why should we support them. Bernie's bill would have passed except for 14 dem senators voted to keep drug costs high . Who should we vote for in the next election?

I hope I am not posting too late. Please delete this if you think I am.

PH , February 6, 2017 at 9:51 pm

Booker is a phony. Cruz is a creep. Not much to cheer for in either case.

I am not suggesting that you owe allegiance to any candidate or party.

I am suggesting that party politics is an avenue for organizing, and Dem party and traditional coalition is the better avenue for action. Not to do the same things, but to work for peace justice and tolerance.

Where to target work for change.

The Repubs are not what some people here imagine. And they will do great harm.

Ulysses , February 6, 2017 at 7:43 am

"That thin reed is the only thing between us and authoritarian rule for the billionaires."

No, that "thin reed" would have continued to obfuscate the existence of authoritarian rule for the billionaires through cynical, insincere manipulation of idpol wedge issues.

The regime change we are witnessing, here in the U.S., is the cutting out of a layer of cynical, professional grifters between the kleptocrats and the people. In other words authoritarian rule for the billionaires is morphing into direct, in-your-face kleptocracy by and for the billionaires.

There was an important discussion earlier, here at NC, that I think is relevant to our current situation, sparked by Kalecki's observation that:

"One of the important functions of fascism, as typified by the Nazi system, was to remove capitalist objections to full employment."

http://www.nakedcapitalism.com/2012/08/kalecki-on-the-political-obstacles-to-achieving-full-employment.html

It is understandable that American workers would find a genuine commitment to full employment, after so many decades of neoliberal job outsourcing, exhilarating.

Yet, smashing unions and "othering" large segments of the population didn't end well for the Germans in the mid-20th century, and there's no reason to believe it would work out any better over here.

PH , February 6, 2017 at 8:16 am

Maybe that was a significant aspect of the rise of Nazi rule, but it seems to me a bit reductionist to see the Nazis through such a narrow lense.

Similarly, I think we should resist the temptation of seeing Trump exclusively through the lenses of our anger at Bluedogs for getting us into this mess. I am angry. And those soulless climbers are still running the show in Congress. I am angry about that too.

But these are dangerous times. We need to organize. We need to win elections. And we do not have ANY easy path that I can see.

In my view, we need to channel our energy into primary challenges in the Dem party.

Gman , February 6, 2017 at 9:53 am

The US Democratic Party has more than a little in common with the British Labour Party sadly.

I wouldn't pin your hopes on their resolve to stand up for the average working voter in the face of big money interests.

Both parties have steadily rendered themselves irrelevant to their erstwhile core voters through a toxic combination of venality, hubris, contempt, obsessive virtue signalling/ political correctness, vacuous ideologies, a reliance on endless empty rhetoric, populism, 'foreign misadventure' and much more besides.

Their currency, in the eyes of swathes of once loyal voters, has been so devalued under the leaderships of flag of convenience crypto-neoliberal politicians like Blair, Brown, the Clintons and Obama that this is going to be a Herculean task to row back from in order to recentre and reconnect with betrayed, bruised voters.

Trump might be a crass out and out shameless, populist, self-serving sociopathic assh#le, but unlike those mentioned above, in the eyes of many of those disenfranchised who backed him, some most likely out of desperation, at least he's currently less of a lying hypocrite and, more importantly, he hasn't let them down badly yet.

Ulysses , February 6, 2017 at 10:56 am

"Both parties have steadily rendered themselves irrelevant to their erstwhile core voters through a toxic combination of venality, hubris, contempt, obsessive virtue signalling/ political correctness, vacuous ideologies, a reliance on endless empty rhetoric, populism, 'foreign misadventure' and much more besides."

Very well said!

Gman , February 6, 2017 at 3:20 pm

Many, many thanks.

Steven Greenberg , February 6, 2017 at 8:37 am

This is not quite right "Trade deals are bad deals unless they enforce the highest health, safety, environmental and labor standards."

Labor in the underdeveloped countries consider some of this to be the developed countries' trick of preventing the people in the underdeveloped countries from getting jobs. There is some truth to this idea. When we negotiate trade deals, we must remember that in a fair negotiation neither side gets everything it wants, but each side must get enough of what it wants to agree to the terms of the negotiation.

The trouble with past trade pacts is that only the corporations on both sides of the deal were represented. In the future, labor and environment on both sides must be represented in the negotiations.

tegnost , February 6, 2017 at 9:25 am

not quite right, the stateless multinationals play both sides off each other. Globalzation deals like TPP with ISDS clauses are designed to limit sovereignty. We have free trade, you can go anywhere in the world and buy whatever you want to, your "fair negotiation" is a canard and misdirection.

John Wright , February 6, 2017 at 9:33 am

One may also refer to USA communities who will accept higher levels of pollution caused by an EPA targeted local industry/plant that provides local jobs where they are in short supply..

This is very similar to a foreign country accepting higher pollution in trade for jobs for their citizens.

When someone is desperate to support their family, compromises are made, and the USA has plenty of examples.

BeliTsari , February 6, 2017 at 10:03 am

That's kind of representative of the basic problem: before the white working class morphed into The Middle Class during Reagan's Miracle, they'd long since abandoned hell with the lid off, for suburbia (the nation's economy was based upon this; unions, political parties, finance all fed off of upward mobility, basically away from the poor, polluted, neglected, heavily policed industrial areas (bottom feeders like Trump's dad or DNC's slumlord super-delegates hardly invented this). EZ Credit, Bail Bonds, Party Stores, doc-in-a-box, PayCheck Loans sucked-up what the politicians' business associates left behind. As Trump moves on from trolling liberal elites to fomenting race war, mass incarceration, etc, as LBJ, Nixon, Reagan & Clinton did with urban renewal, the war on drugs, welfare reform some of us will scrambling to figure out just how we're not just another part of the problem?

BeliTsari , February 6, 2017 at 12:15 pm

PS: The rust belt is a fascinating place just now! http://www.adweek.com/brand-marketing/the-ending-of-84-lumbers-super-bowl-ad-is-a-beautiful-and-provocative-take-on-immigration/

John Rose , February 6, 2017 at 1:04 pm

I wish I was still building houses so I could change suppliers.

jrs , February 6, 2017 at 12:37 pm

U.S. = 3rd world country.

digi_owl , February 6, 2017 at 8:47 am

As best i can tell, the neolibs have hijacked feminism for their own ends

NotTimothyGeithner , February 6, 2017 at 9:19 am

"When fascism comes to America, it will be wrapped in the flag and carrying a cross." -Upton Sinclair

One group of corporate war mongers likes different symbols.

polecat , February 6, 2017 at 3:17 pm

A contemporary version of that Sinclair quote could be stated as such :

"When Neo-fascism comes to America, it will be wrapped in a Lady Gaga p#ssy-gown and carrying a case of birth-control pills . while screaming 'White, Deplorable, F#cker' !!"

Gaylord , February 6, 2017 at 9:44 am

Offshore tax sheltered wealth in the trillions must be reigned in, but nobody in a position of leadership is allowed to touch it, only to make token noises about it like Sen. Warren does.

John Wright , February 6, 2017 at 9:58 am

It appears that Leopold misses another issue that hits American workers, that being the "insourcing" of foreign workers, either legally (H1-B's) or illegally to the USA.

American workers are certainly aware that some jobs can be outsourced via computer/phone networks to other countries, but are also aware that neo-libs have been more than willing to also let jobs that require a physical presence in the USA be wage arbitraged down via increasing the domestic labor supply via immigration.

I don't believe the old assertion that "an immigrant displacing an American worker frees the American to find a better job" gathers much support from American workers/voters, if it ever did.

Trump tapped into this, and the Democrats will ignore this issue at their peril..

Neither political party wants to enforce employer sanctions, via mandatory E-Verify, as that would be frowned on by both party's paymasters.

Sam , February 6, 2017 at 9:59 am

"Trump actually is attacking two of its foundational elements-free trade and unlimited capital mobility. Not only is Trump violating neoliberal theory, he also is clashing with the most basic way Wall Street cannibalizes us. Without the free movement of capital, assisted by trade deals, financial elites and their corporate partners would not be able to slash labor costs, destroy unions and siphon off wealth into their own pockets."

Given the ease with which Trump reverses himself, I wouldn't take these utterances seriously.

Vatch , February 6, 2017 at 10:03 am

At the same time we should be rounding up support for the Sanders bill to stop off-shoring.

I couldn't find "Outsourcing Prevention Act" at Congress.gov. It is possible that the bill hasn't been introduced yet? Or maybe it has another name? I found these possibilities:

H.R.357 – Overseas Outsourcing Accountability Act

H.R.685 – Bring Jobs Home Act

S.234 – A bill to provide incentives for businesses to keep jobs in America.

Carolinian , February 6, 2017 at 10:05 am

Good article but needs an addendum: don't side with Democrats in opposing Trump. There's a case to be made that Trump himself is really an independent even though he has by necessity stuffed his administration with some GOP trogs. Therefore when Trump does something our side likes he should be praised even though it might diminish the chances of the dearly sought Trumpexit. The US public at large increasingly see themselves as independents rather than supporters of the duopoly and the left–including and perhaps especially Sanders–should stop fooling themselves that they will ever reform the Dems. In fact the thing that might do the most to reform the Dems would be some vibrant third party competition that forces them to protect their left flank.

PH , February 6, 2017 at 2:24 pm

Nothing wrong with a third party approach in theory.

In practice, it would likely take many years. It is not culturally accepted, nor do our voting laws favor third parties.

I do not think we have that much time.

joe citizen , February 6, 2017 at 4:05 pm

But we have enough time to hope the Democratic Party who is completely subservient to corporate interests will suddenly decide to forget about all the money they are making and side with the workers, poor, and the environment? Voting in all new people would take many years, not to mention the party structure that cannot be changed by voting. The majority of registered democrats support neo-liberal candidates. How do you propose this quick change of the democratic party to support traditional leftist policy will take place?

paul Tioxon , February 6, 2017 at 10:18 am

Note to self: I will not be bamboozled into self-destructive political adventurism by mindlessly opposing the perfectly legitimate President Trump when ever he happens to do something so swell that helps pay the rent, buys food and keeps a roof over my head. I will stop going to ALL of those protest marches that demands that rowhouse Philadelphia give up their jobs in reparations for neo-colonial and hegemonic neo-liberal bad stuff by sending them to Mexico and the Dominican Republic or even Viet Nam or China. I understand that people in America are people too, and need their jobs and do not have trust funds to live off of when they donate their employment with no hope for a replacement job to prevent a downward spiral into poverty.

I get it, by not focusing on real pocket book issues and major social programs, like the ones we used to get in the afterglow of post WWII economic expansion, we just left the barn door open for all of the wronged white guys in coal mines, all 57,000 of them nationally, to come out in the full force of democracy in action under our definition of democracy, the electoral college. By not recognizing that the iron law of democracy, where the consent of the majority of people is the deciding principle in American politics, and marching after a political loss instead of going out in front of the coal mines and factories and laying down in front of the trucks hauling jobs away, I am a dope. I promise to fete The President Trump in editorial pages, blog sites, graffitti on walls and other public property when he creates jobs as a result, direct or indirect, of his policies. After all, it is axiomatic that if Trump repeatedly fails to do anything of value for our nation, most of us will suffer. If he puts forth an infrastructure financial package with the Japanese and their global investment bank, I will hail as a partnership in progress.

After all, if we can fix up the country's faltering highways and bridges and air ports and sea ports, we will modernized America, give people good paying jobs. And that is a good thing. I am all for it. President Trump is supposed to be all for it. So, when the jobs start pouring in with all of the concrete and rebar, I will not protest. I will publicly applaud him. I will however be organizing behind the scenes to crush him like a bug in the next election. I foresee a bidding war in jobs offered to the forgotten and not so forgotten and I expect to come out on top as the highest bidder.

Left in Wisconsin , February 6, 2017 at 10:31 am

Les Leopold is a smart guy and always has interesting things to say. But in this case, I think he glosses over the biggest issue: people will not organize into unions if they believe that doing so, or trying to do so, risks making their personal employment situation worse, not better.

Anti-union activity by employers is now so routine and expected, and protections for workers trying to organize, either from unions or government, are so weak that the vast majority of working people have come to view trying to organize as insane. (Yes, card check will help in a few situations but is not a game changer.) The purported low unemployment rate does nothing to empower working people because (except for the occasional exception that proves the rule) it is still overwhelming the case that one's current job is better than any likely other job one would have to get if one lost it. And irritating your boss is still the likeliest way to get fired, or get your department outsourced, or get your entire workplace shut down.

And the fact that some public sector workers still have workplaces that make them less likely to get fired or replaced for trying to exercise workplace "rights" just points out how poor things are for most private sector workers, resulting in even less sympathy for those workers.

What Trump gets is that, in this environment, most working people will support the (anti-tax, anti-regulation) platform their boss supports, rather than the (higher-tax, stronger-regulation) one their boss hates, if the (strong union) platform that is good for them that their boss really, really hates is off the table.

Platforms and study groups are well and good but we need much more. As said above, we need a new labor movement, in particular one that can organize in the private export-sensitive sector. There is no such thing as a(n even moderately) successful labor movement without strong unions in the private export-sensitive sector. But there is no way to organize workers in this sector without being able to demonstrate why being in a union is likely to materially improve their well-being. But one can't get such a thing without strong government support to ensure trying to organize doesn't in fact risk resulting in losing your job. Chicken-And-Egg problem.

old flame , February 6, 2017 at 12:20 pm

Employers have so much power over workers now: right-to -work laws, tax incentives, H1B and undocumented workers, Chamber of Commerce and lobbyists. Probably the only way to have any clout would be to have a National Strike and boycotts which would be tough to organize. I know that employers in an area will collude with other companies to set and limit wages and benefits. I had a friend that I worked with in a factory back in the 70s who was promoted to the office in a secretarial position who told me about meetings our company had with other ones in the community where they discussed and made agreements on labor issues. This was back in the 70s. They were always threatening us about unions and I never had heard anyone talk about joining one or any kind of union activity.

TG , February 6, 2017 at 10:32 am

Yes, well said as usual.

As regards the standard of living in third-world countries, it should by now be apparent that the model of 'development' that uses low wages to attract foreign businesses simply can not – and does not – increase general prosperity. How can it? The model is that low wages ('affordable labor costs') are the engine, therefore the wages need to stay low to keep the multinationals in place.

Look at the effects of NAFTA: the United States lost a lot of jobs, Mexico gained jobs, but Mexican wages remain low. The NAFTA model is pulling the United States down and not pulling Mexico up. That is now well established. Nobody need feel any guilt about opposing trade agreements like NAFTA.

Ah, but what about China? Well China is a little different from Mexico – they are more mercantilist. In the long run the established method of creating prosperity is to have a stable or slowly growing population, and slowly but steadily build up endogenous industries and a strong internal market. "Race to the bottom" trade agreements yield exactly what the term suggests.

PQS , February 6, 2017 at 11:08 am

Where do I sign up? I'm ready to go. However, I think one aspect of this transformational mission is missing: MONEY.

The RW has metric tons of billionaires who use their money to propagate their ideologies and build "think tanks" and other institutions to provide the veneer of respectability. I believe it's one of the primary reasons that they've been so successful in pushing their extreme ideas on everybody. They have an ALEC branch in every statehouse writing laws, which I'm sure they don't do for free. They can gerrymander, buy off, and otherwise distort the entire process for little more than walking around money for them.

I know Sanders nearly won with small donors, so perhaps that could be replicated in this scenario, but long term, I think having some serious money to back up these initiatives is going to make the job actually doable. And there are a few actual billionaires who might be amenable to using their wealth for the greater good. Nick Hanauer comes to mind.

JEHR , February 6, 2017 at 11:33 am

During the Depression of the 1930's in the Maritimes, the Antigonish Movement began:

The Antigonish Movement blended adult education, co-operatives, microfinance and rural community development to help small, resource-based communities around Canada's Maritimes improve their economic and social circumstances. A group of priests and educators, including Father Jimmy Tompkins, Father Moses Coady, Rev. Hugh MacPherson and A.B. MacDonald led this movement from a base at the Extension Department at St. Francis Xavier University (St. F.X.) in Antigonish, Nova Scotia.

The credit union systems of Nova Scotia, New Brunswick and PEI owe their origins to the Antigonish Movement, which also had an important influence on other provincial systems across Canada. The Coady International Institute at St. F.X. has been instrumental in developing credit unions and in asset-based community development initiatives in developing countries ever since.

It is noteworthy that the movement began with Adult Education: if people do not understand what has brought them debt and poverty, it will be difficult to counteract them.

I'm sure that in the US during the Depression, there were many such movements which helped people understand and defeat the Depression.

Looking back at what succeeded in the past can help towards a better future. Of course, it will have to be adapted for the present problems, but starting with education is a really positive move.

John Rose , February 6, 2017 at 1:13 pm

How about online adult education drawing on the talents of charismatic teachers and more local face-to-face seminars to provide the core activists we need.

Jack , February 6, 2017 at 11:33 am

Good article which made some good points.
"The progressive instinct, and rightfully so, is to trash Trump. If he's for it, we must be against it."
One instance of this is the huge play the immigration fight is getting. I don't agree with how Trump enacted his immigration "reform" but I agree that immigration needs to be curtailed. Significantly curtailed. H1B visas pretty much need to be done away with, and if you are in this country illegally, you need to leave. And any further immigration needs to be reduced. This outcry against immigration reform by the liberals, what many in this country see as a huge problem, is not winning over any hearts and minds in flyover country. It's like when Bill Clinton first got elected and he wasted a lot of time and political capital on the gays i the military issue. Only this time the Dems are not even in office. Still a waste of political capital. In my mind this whole immigration reform paranoia is just another form of identity politics by the Democrats. What progressives need to focus on is campaign finance reform, jobs, health care reform, education, and increasing taxes on the wealthy and corporations. Those issues resonate with everyone, Republicans and Democrats alike. It is why Trump won. Don't fix these problems and immigration will be the least of our worries as a nation. If things get worse in our economy, immigrants and refugees are going to be in a much worse place than they are right now. People who are going hungry and who are sick with no hope on the horizon have to blame someone. And Americans are not known for the high level of intelligence and knowledge of how the world really works. Anyone who looks "different" will be blamed and there will be blood in the streets. I think we are almost to that point now.

jrs , February 6, 2017 at 12:46 pm

"This outcry against immigration reform by the liberals, what many in this country see as a huge problem, is not winning over any hearts and minds in flyover country. It's like when Bill Clinton first got elected and he wasted a lot of time and political capital on the gays i the military issue. Only this time the Dems are not even in office. Still a waste of political capital. In my mind this whole immigration reform paranoia is just another form of identity politics by the Democrats."

The Dims maybe, but that's not why actual people protest, it's mostly because they know illegals are those who serve their food when they order breakfast, are on the train on the way to work, etc.. I know fly-over just doesn't get it, because they don't live among and with illegals as part of their daily life, but it's hard to see them driven out if one does.

Generalfeldmarschall von Hindenburg , February 6, 2017 at 12:02 pm

re "But What About the Poor in Other Countries?"

All the points made in answer to that need to be memorized, because if you're to the left of Andrew Carnegie or Ayn Rand that's what they'll throw at you. 'Americans consume 99% of all fossil fuels and create 98% of all the trash and blah blah!' We're a little sick of it.

jrs , February 6, 2017 at 12:49 pm

"Americans consume 99% of all fossil fuels and create 98% of all the trash and blah blah!' We're a little sick of it."

It's all true of course.

But yea they rely on left/liberals basic goodness (ok not all liberals have any real goodness (or why don't they oppose the wars more?), most leftists are pretty darn moral though) and they'll use it to enrich themselves, because they are not good at all, but know how to get good people to be subserviant to their own selfish ends.

Wade Riddick , February 6, 2017 at 12:07 pm

Most manufacturing jobs are lost via automation, not outsourcing. What do we plan to do about that?

The cheaper the capital (e.g., low interest rates), the easier it is to substitute capital for labor. Whenever the Fed bails out a bubble via monetization, labor takes another hit.

Solar's more cost-effective and adding more jobs now than the fossil fuel industry – yet official policy now seems hell-bent on ginning up another oil reserve lending bubble.

Plenty of inconsistencies abound

Left in Wisconsin , February 6, 2017 at 12:09 pm

Most manufacturing jobs are lost via automation, not outsourcing.

Do you a citation for that? I have looked for actual evidence/proof of this claim and have not been able to locate any.

Brad , February 6, 2017 at 2:17 pm

Wade is correct. I've posted a chart of the BLS statistics on long term manufacturing employment in absolute and relative terms on this site. Manufacturing employment's relative share of total employment has fallen in a straight and steady diagonal line from upper right to lower left from its peak in the 1950's to the present. Began long before off-shoring was a thing, and off-shoring doesn't even clearly show as an independent variable. Otherwise we'd see a significant bend in the curve. Instead, significant deviations are conjunctural, connected to recessions.

The BLS charts can be easily researched by anybody on this site. I don't want to hear conspiracy theories about how BLS has politically rigged the stats for 60 years as lazy substitute for critical approaches to BLS statistical methods. If you want to refute the evidence, that's what is required.

BTW, as I've also mentioned, there is a "revolutionary left" version of this emphasis on off-shoring over automation/mechanization, "Imperialism in the Twenty-First Century" by John Smith, http://monthlyreview.org/2015/07/01/imperialism-in-the-twenty-first-century/

It fails to assess the real weight of off-shoring vs automation because Smith doesn't base his analysis on the effects of automation, and then move to assess the effects of off-shoring. Therefore Smith can never present a clear quantification of the effects of off-shoring on employment in a metropolitan country like the US.

At root Smith's limitations are found in his Andre G. Frank "development of underdevelopment" bias. This cannot conceive of under- or uneven- development in an "already developed" country like the US. But that is precisely, palpably, what has happened. And it is inevitable under capitalist automation once it reaches a tipping point. As I believe it has, where only some 25% of the total available labor force is required to produce everything we (very wastefully) consume now, today.

As an aside, note that off-shoring is not to include products never produced in the US in the first place, like most of Apples' iProducts. You can't "off-shore" jobs you never worked at, now can you! This represents a different process, the export of *new* capital investment, in this case in a contract relation with Chinese SEZ capitalists, not the transfer of *existing* productive investment overseas. But Smith includes iProducts in his "off-shoring" mix.

The Smith example shows this is a matter of the basic facts about capitalism, not about left or right politics. That is exactly why people gravitate towards off-shoring as a prime-mover in job loss, precisely because something politically can be done about that. Yet if you somehow forced all US corporations to 100% invest production in the US, you will only greatly accelerate the trend of job loss due to automation, as it will be the only lever they have left. Unless you want to halt all human progress in the productivity that has already freed up 75% of our labor time to do something other than maintain the current standard of living.

The real political problem we need to confront is that, despite these real productivity gains, capitalism requires that the whole mob of proles be continuously prodded onto the wage labor market, whether their labor is necessary or not. That's the fundamental program of the Congressional snakepit and its Statehouse auxiliaries. The wage labor social relation is the source of the social power of capitalists, and without it they and their system go Poof.

A good reform proposal would be: a guaranteed *medium* income for all (or alternatively, a guaranteed "job" for all at the same income or greater); a system for equitably circulating the total potential labor pool in and out of the pool of necessary labor. It will require a revolution to achieve such a reform.

pricklyone , February 6, 2017 at 5:31 pm

@Brad
"As an aside, note that off-shoring is not to include products never produced in the US in the first place, like most of Apples' iProducts. You can't "off-shore" jobs you never worked at, now can you! This represents a different process, the export of *new* capital investment, in this case in a contract relation with Chinese SEZ capitalists, not the transfer of *existing* productive investment overseas. But Smith includes iProducts in his "off-shoring" mix."

Doesn't seem like a different process to those needing work to survive. This is why "economists" are being ridiculed and derided among large swathes of the populace. Distinctions without differences which only serve to fit data into precious formulae, based on preconceived ideals. If I develop a new product in the US, and seek only China manufacture (to save myself the labor cost, and evade the external costs of environment, etc.) the result is the same. "New capital investment " is just a matter of timing. Lucky me, I didn't have to go thru the expense of tearing down an existing facility, or relationship, here first.

dragoonspires , February 6, 2017 at 6:37 pm

This seems to me one of the more incisive of the comments. So many are coming at it from the framework of what solutions best get us back to a situation that was better, like one we experienced between the 1950s to the turn of the century. This was a unique period of advantage for the US economically and industry-wise that is unlikely to be repeated, imo, and for awhile seemed to have more easy opportunities for all.

The progressive platform recognizes how the pillars providing for more equality of opportunity have been battered, and I agree with some of its proposals. But just reversing the tax burden shifts and trying to reinstate more affordable healthcare or education still leaves us with the situation where the need for and nature of work may still be changing radically. I have trouble seeing how a conservative half of the country with extremely powerful propaganda outlets, interest groups, and fountains of money will allow some if any of the ideas proposed in this article (hence Brad's claim that it would require a revolution sways me a good deal).

I also do not think that Bernie, basically not subjected to any big negative hits in the primary, would have won the general after the right's smear machine was done with him. Even then, the republican congress would have stopped cold any of his more significant proposals.

Progressives need to get realistic. This agenda will be slow in coming, unless things get so horrible that a true revolution does occur. What that would entail I do not know, but powerful forces are aligned against it. All who spend time theorizing (including me) on keyboards will have to start and sustain the very hard work of getting into the trenches, spreading and fighting for ideas, and most of all, actually winning primaries and elections and helping to get people out to vote. The right wing started doing this methodically over 45 years ago, with patience and persistence.

Trump/RW domination needs to be stopped asap, by whatever plausible if less than ideal tools we have. Protests are getting attention, and I hope more participation and results will come next. Purity tests of progressive ideals is a cancer that will only doom the cause. It will be hard and maybe slow, but we're going to need more than just the faithful to get this turned around. Bernie was a start, but too many are throwing up their hands just because he lost the primary.

I plan to keep working to change the democratic party for the better, at a pace that is realistic. Getting a more progressive tax structure again to fund any of these ideas is critical first. I also can't see a guaranteed income without a required work contribution to address the evolving economy, given this country's attitude towards earning one's keep. A sort of advanced CCC to work on massively fixing and improving our crumbling infrastructure and public spaces, fighting forest fires, etc. using these tax funds is one idea. Subsidizing quick as possible job training as new jobs evolve with the radical changes in the economy is another. More support for local small business and entrepreneurs (perhaps funding employees who they need for awhile in startup phase as part of minimum guaranteed income in exchange for work) until they prove to be an ongoing concern is another thought. Even if these ideas are flawed, we need to rethink the paradigm of work with which we grew up.

Yves Smith , February 6, 2017 at 7:04 pm

I don't agree. Obama could not only have done a Roosevelt 100 days, he literally could have re-implemented many of his policies. This was a window of opportunity that he ignored and bizarrely, the public at large airbrushes out of its memory.

I don't at all buy that the US can't afford this. Did you forget we spend ginormous amounts on our military, and that could instead be be redirected to domestic uses? Japan, a less rich country generally considered to be in decline, is vastly more egalitarian than America and scores way above us and every other country in the world on social indicators. Some of that, sadly, may prove out that ethnically mixed societies don't "do" egalitarianism because some groups don't want to cut less advantaged groups in.

The issue is that the elites (a word used only on sites like Alex Jones before the crisis) are all in for increasing inequality. That means not investing in education for the masses and much heavier policing, since unequal societies are more violent, among other things.

aab , February 6, 2017 at 7:43 pm

I also do not think that Bernie, basically not subjected to any big negative hits in the primary, would have won the general after the right's smear machine was done with him.

Progressives need to get realistic.

Purity tests of progressive ideals is a cancer that will only doom the cause. It will be hard and maybe slow, but we're going to need more than just the faithful to get this turned around.

I have pulled these out of your comments, because they are generally used by tribal Democrats to rationalize the party's incompetent, destructive behavior. I am not saying that's why you're doing it. But I'd like to address them.

I heartily concur with Yves' reply to you, to start.

Second, you mention in other places than the ones I quoted this idea of doing what's "realistic" and being "realistic." What do you mean by that? The neoliberal Democrats had a quarter of a century to demonstrate that their way worked for the citizens of the United States and the Democratic Party. They failed on both counts. More of strategy and policy that has a proven record of failure would be unwise - do you agree?

If you do agree, and you want to reform the Democratic Party, as you state above, then your choice is easy: focus your energies on getting rid of all the entrenched neoliberals and corporate-aligned Democrats, both party functionaries and elected officials. No positive change can occur until that task is completed.

If you do NOT agree that the neoliberal New Democrats must be purged from the party, what is your vision of realistic change, what makes it realistic, and what makes it change?

Also, you are simply incorrect about Bernie and the general election. All data we have demonstrates strongly that he would have won. There's no smear machine in America better than the Clinton machine plus the major corporate media aligned with it. He was smeared constantly with vile falsehoods - one of which you clearly fell for, which is that he wasn't smeared. He would have held the Democratic states unquestionably, and held the Rust Belt, and thus won the election. Tell me what states you imagine he would have lost to Trump?

The realistic approach is get rid of the New Democrats utterly and completely. They have failed catastrophically. That will be a hard task, but that doesn't' make it unrealistic. To leave them in place and think the party will win back governing power or do anything good for the average citizen would be unrealistic.

blucollarAl , February 6, 2017 at 12:29 pm

Can anyone any longer deceive oneself about the primary meaning and purpose of the Democratic Party? The DP, as it has been redefined and transformed since the Nixon-McGovern election of 1972, is a political vehicle that primarily seeks to represent the interests of mainly urban upper-middle suburban well-educated and well-off professionals, managers, educators, and technologists, along with those other racial/ethnic/social groups that happen to be privileged by elite opinion at any given time.

If the quixotic Sanders run taught us anything, it is that there is no interest, no room within the DP for critical economic and social argument. Not just radical class-based neo-Marxist criticism but even the kind of economic issue-framing that became a hallmark of the DP in the FDR regime and persisted with sometimes more, other times less strength until the 70's.

The so-called "resistance" to Trump has only reaffirmed this conclusion. Insofar as it is being led by DP and DP-leaning media and other talking-head pseudo-intelligentsia, it has focused almost entirely on the same social lifestyle and individual empowerment sexual/gender issues that have characterized it over the past 40 years. This inability to think outside of what too often reduces in final analysis to solipsistic "me-isms", for example by framing important political questions like immigration, imperial reach, and deregulation in ways that transcend the usual racial-ethnic-gender identity differences, prevents the DP and its sycophants from suggesting deeper grounds for solidarity-in-opposition. Most readers of NC understand what these deeper grounds are!

As I wrote another time a few years ago, DP players and pundits, often urban in residence and outlook, and often themselves financially well off, ensconced in high-priced city dwellings, shopping at Whole Foods, frequenting high-end fashion boutiques, attending the best schools on mommy and daddy's dime, often appear more transparently hostile and condescending to what they judge to be the unsophisticated prejudices and religious backwardness of lower, working, and middle class Americans than do the Trumps of the Republican Party. The latter, equally or even more well-heeled than their ersatz opponents, have learned beginning in the Nixon-Colson "silent majority" days, how to project a kind of "rural, small town folksiness", filling their rallies with country music stars and NASCAR heroes, and who know enough to drag out a "social-cultural conservative" every now and then to show that they "hear and care" for the "forgotten American" even if they consistently ignore these very people in the political arena.

To be sure, the Republicans don't give a rat's ass about these things. Applying the categories of the silent-majority Americans, they are as "amoral" as the Democrat special-interest spokespeople. However, when it is a case of neither party addressing the causes that underlie the real deep-rooted rottenness that has become 21st Century America, the blue collar "ordinary" American will often fall back on the party of lip-service that at least to him or her seems to be listening to the anxieties and resentments felt by them. The irony of course is that neoliberal policies consistently applied will destroy (have destroyed) whatever was real and true about the America they think has been left behind.

Livius Drusus , February 6, 2017 at 9:57 pm

Great post. As an example of what you are talking about, I see very little concern from Democrats and liberals about the current Republican efforts to pass a national right to work law, even though this will hurt unions which are supposed to be one of the core elements of the Democratic coalition. Is this surprising? Of course not, given Obama's failure to fight for card check and to give support to the embattled unions in Wisconsin during their fight with Scott Walker. What happened to those comfortable shoes? Did Obama lose them? Unions give the Democrats money and troops during election years and are then kicked to the curb when the Democrats are in power or at most given scraps.

The upper-middle class professionals and managers who dominate the Democratic Party want to continue the identity politics emphasis with regard to opposition to Trump because they are making out well under neoliberalism and are opposed to anything that would tilt the economy in a direction that is more favorable to ordinary workers because they would lose their relative status. Upper-middle class types don't want to go back to the days of the mid-20th century when doctors and lawyers might have to share a neighborhood with factory workers.

Elizabeth Burton , February 6, 2017 at 1:14 pm

To many progressives, saving American jobs sounds jingoistic and "protectionism" is a bad word. Isn't global trade helping the poor become less so around the world? Isn't it selfish only to protect American jobs? Isn't it more moral to share scarce manufacturing jobs with the poor in Mexico and Asia? After all, even if a plant closes in the Rust Belt, service sector jobs can be found at wages that still are far higher than what the poor can hope for in low-wage countries.

May I just say that as a deplorable member of the poor white working class who is a bone-deep progressive that these are classist views of people who sit in their comfortable middle-class bubbles and pretend there are n't people in this country who are suffering from the very things they are so nobly seeking to protect workers in the third world from suffering?

If you want to know why otherwise sensible, intelligent people voted for Trump, that paragraph right there is a major example. The content is bad enough, but that an author who has written an excellent overview of the situation would automatically attribute that kind of thinking to "progressives" shows just how insidious the academic mindset is, and why the working class, regardless of race, gender, religion, or sexual preference, automatically shuts out both categories when they stroll in to "educate."

Tim , February 6, 2017 at 1:58 pm

The idealism is correct in thought, BUT, if a nation doesn't take care of its own then who will? Nobody.

If everybody took care of those closest to their sphere of influence the world would be a better place.

pricklyone , February 6, 2017 at 7:03 pm

Any attempt to equalize wages in "poorer" countries, would also have to address cost-of-living differences, as well.
You are not allowed, in "developed" nations, to live a subsistence lifestyle, any longer.
With higher living standards, comes an obligation to provide citizens with a level of income which can sustain that standard.

Gman , February 6, 2017 at 6:19 pm

'Before you judge a man, walk a mile in his shoes.

after that, who cares?
He's a mile away and you've got his shoes.'

~ Billy Connolly

*great comment by the way.

that guy , February 6, 2017 at 8:28 pm

Thank you. Better-put than I could have done. Might I add to this that I wasn't voting for the president of Uruguay or Mexico or whatever, who could reasonably be expected to look out for those people. I was voting for the next president of the United States, who I should be able to reasonably believe will look out for me, as an American, first and foremost.

Jeremy Grimm , February 6, 2017 at 4:52 pm

The recent primaries and Presidential election made clear to me how little the concerns of ordinary people mean to the two national parties. However Trump was and remains something of a wildcard - at least promising actions reflecting the concerns of the hoi polli. He has indeed delivered in short order on several of his promises.

I have trouble characterizing the opposition and protests against Trump. Are they inspired by the Democratic Party's knee-jerk opposition to anything Trump or Neoliberal opponents to Trump's dismantling of the grand corporate take-over embodied in the TPP or upper-middle "liberals" fuming about one or another of their pet issues of the moment like immigration or climate change - issues which Trump seems determined to throttle. My daughter was tempted to join the women's march because she will sorely miss planned parenthood clinics when their funds are cutoff - they were for her the only place she could find real healthCARE at any price.

At this point I tend to agree with Bernie Sanders assessment of Trump (ref. today's links - https://www.washingtonpost.com/news/powerpost/wp/2017/02/05/after-trump-moves-to-undo-financial-regulations-sanders-calls-him-a-fraud/ ). I am glad the US seems more cozy with Russia - worried about the US and China and Iran - glad the TPP has been - at least temporarily - dismantled - in short I view Trump as a very mixed blessing whose actions and intents remain opaque. I believe Trump will benefit the obscenely wealthy classes but I'm not sure yet which portions of the obscenely wealthy. I believe there is a power struggle ongoing between different behemoth factions of the uber-rich but the waters they fight in are darkly murky.

witters , February 6, 2017 at 6:52 pm

"upper-middle "liberals" fuming about one or another of their pet issues of the moment like immigration or climate change "

Yeah, climate change an 'issue of the moment'.

Here is the bedrock of modern political stupdity. A total unconcern for the future of all of us. I don't care where you think you are on the left/right BS, anyone with your view is just another instance of the great problem.

Scott , February 6, 2017 at 8:07 pm

I cannot read all the comments & know my own will be but a wisp in the wind. I am grateful to naked capitalism, Yves & Lambert for publishing the best thinking on the subjects.
"Workers of the World Unite" is about all I can see as the real option to pursue. How to really do that means using all the means of the winners.
It's seems simply impossible on one hand to be nationalistic, and fair to labor internationally at the same time.
I keep looking at WWI.
Workers of the World Unite? How? Fair Trade, Internationally the world is a struggle between the Rich who have inherited wealth & get compound interest, pass on deeds that survive as if a neofeudalism is just ordained.
Ah hell, I say if you cannot even imagine a utopia you ought not call yourself a human being.
Purchasing Power Parity & World Government?
Without private property things get weird & corruption grows from elites getting access to all.
In my Transcendia Insurodollar I overcome the flaw of Communist theory.
I have a part of it going. I have a gov. in govs. concept workable as permanently small.
Time to expand. Doubtful, really really doubtful.
I do recognize Les is on the right track and has the correct goals. The puzzle is how to really work at the Two Nation Solution of Workers & Power, corporate Power is immense.
They throw out regulations we know are necessary.
Force & mind control propaganda are levers at their fingertips.
Force? 8 have so much wealth the majority divided by language & borders a challenge is seen as doomed.
I shall imagine.

VietnamVet , February 6, 2017 at 8:23 pm

I found myself agreeing with most of the points in the post. We must be clear that Donald Trump is anti-Globalist but to get GOP support and appointees he assimilated their tribal beliefs. If he is stupid or crazy we must say so and explain why. If he is right and does something that benefits American citizens such as ratcheting down the Cold War 2.0 with Russia, we must applaud. I am fairly certain that to spite him and keep the bribes flowing, Democrats will not support the re-branding of "Medicare for All" to "TrumpCare".

It may be my history or old age; but, I am afraid that the global elite have decided the USA is ripe for a final harvest and have gr

[Feb 04, 2017] A color revolution is under way in the United States

Notable quotes:
"... Question: why can there be no color revolution in the United States? Answer: because there are no US Embassies in the United States. ..."
"... US intelligence agencies are now investigating their own boss! Yes, according to recent reports , the FBI, CIA, National Security Agency and Treasury Department are now investigating the telephone conversations between General Flynn and the Russian ambassador Sergey Kislyk. ..."
"... In other words, his security clearance is stratospherically high and he will soon become the boss of all the US intelligence services. And yet, these very same intelligence services are investigating him for his contacts with the Russian Ambassador. That is absolutely amazing. ..."
"... Even in the bad old Soviet Union, the putatively almighty KGB did not have the right to investigate a member of the Communist Party Central Committee without a special authorization of the Politburo (a big mistake, in my opinion, but never mind that). ..."
"... But in the case of Flynn, several US security agencies can decide to investigate a man who by all standards ought to be considered at least in the top 5 US officials and who clearly has the trust of the new President. And that does not elicit any outrage, apparently. ..."
"... By the same logic, the three letter agencies might as well investigate Trump for his telephone conversations with Vladimir Putin. ..."
"... This is all absolutely crazy because this is evidence that the US intelligence community has gone rogue and is now taking its orders from the Neocons and their deep state and not from the President and that these agencies are now acting against the interests of the new President. ..."
"... pussyhat revolution ..."
"... pussyhat revolution ..."
"... Make no mistake, such protests are no more spontaneous than the ones in the Ukraine. Somebody is paying for all this, somebody is organizing it all. And they are using their full bag of tricks. One more example: ..."
"... Remember the pretty face of Nayirah , the Kuwaiti nurse who told Congress that she had witnessed Iraqi soldiers tossing our babies from Kuwaiti incubators (and who later turned out to be the daughter of Saud Al-Sabah, the Kuwaiti ambassador to the United States)? Do you remember the pretty face of Neda , who " died on TV " in Iran? Well, let me introduce you to Bana Alabe, who wrote a letter to President Trump and, of course, the media got hold of the latter and now she is the "face of the Syrian children". ..."
"... Okay, click here and take a look at a sampling of anti-Trump caricatures and cartoons compiled by the excellent Colonel Cassad. Some of them are quite remarkable ..."
"... My purpose in listing all the examples above is to suggest the following: far from having accepted defeat, the Neocons and the US deep state have decided, as they always do, to double-down and they are now embarking on a full-scale "color revolution" which will only end with the impeachment, overthrowal or death of Donald Trump. ..."
"... One of the most amazing features of this color revolution against Trump is the fact that those behind it don't give a damn about the damage that their war against Trump does to the institution of the President of the United States and, really, to the United States as a whole. That damage is, indeed, immense and the bottom line is this: President Trump is in immense danger of being overthrown and his only hope for survival is to strike back hard and fast. ..."
"... The other amazing thing is the ugly role Britain plays in this process: all the worst filth against Trump is always eventually traced back right to the UK. How come? Simple. Do you recall how, formally at least, the CIA and NSA did not have the right to spy on US nationals and the British MI6 and GCHQ had no right to spy on British nationals. Both sides found an easy way out: they simply traded services: the CIA and NSA spied on Brits, the MI6 and GCHQ spied on Americans, and then they simply traded the data between "partners" (it appears that since Obama came to power all these measures have now become outdated and everybody is free to spy on whomever the hell they want, including their own nationals). The US Neocons and the US deep state are now using the British special services to produce a stream of filth against Trump which they then report as "intelligence" and which then can be used by Congress as a basis for an investigation. Nice, simple and effective. ..."
"... 9/11 was a collective crime par excellence . A few men actually executed it, but then thousands, possibly tens of thousands, have used their position to execute the cover-up and to prevent any real investigation. They are ALL guilty of obstruction of justice. By opening a new investigation into 911, but one run by the Justice Department and NOT by Congress, Trump could literally place a "political handgun" next to the head of each politician and threaten to pull the trigger if he does not immediately give up on trying to overthrow Trump. What Trump needs for that is a 100% trusted and 100% faithful man as the director of the FBI, a man with " clean hands, a cool head and a burning heart " (to use the expression of the founder of the Soviet Secret Police, Felix Dzerzhinsky). This man will immediately find himself in physical danger so he will have to be a man of great personal courage and determination. And, of course, this "man" could be a woman (a US equivalent of the Russian prosecutor, Natalia Poklonskaia). ..."
"... First, at the very least, the Trump Presidency itself: the Neocons and the US deep state will not let Trump implement his campaign promises and program. Instead they will sabotage, ridicule and misrepresent everything he does, even if this is a big success. ..."
"... Second, it appears that Congress now has the pretext to open several different congressional investigations into Donald Trump. If that is the case, it will be easy for Congress to blackmail Trump and constantly threaten him with political retaliation if he does not "get with the program". ..."
"... Third, the rabid persecution of Trump by the Neocons and the deep state is weakening the institution of the Presidency. For example, the latest crazy notion floated by some politicians is to " prohibit the President of the United States from using nuclear weapons without congressional authorization except when the United States is under nuclear attack ." From a technical point of view, this is nonsense, but what it does is send the following signal to the rest of the planet: "we, in Congress, believe that our Commander in Chief cannot be trusted with nuclear weapons." Never mind that they would trust Hillary with the same nukes and never mind that Trump could use only conventional weapons to trigger a global nuclear war anyway (by, for example, a conventional attack on the Kremlin), what they are saying is that the US President is a lunatic that cannot be trusted. How can they then expect him to be take seriously on any topic? ..."
"... Fourth, can you just imagine what will happen if the anti-Trump forces are successful?! Not only will democracy be totally and terminally crushed inside the USA, but the risks of war, including nuclear, will simply go through the roof. ..."
"... will Trump have the intelligence to realize the fact that he is under attack and will he have the courage to strike back hard enough ..."
Feb 04, 2017 | www.unz.com

A Russian joke goes like this: " Question: why can there be no color revolution in the United States? Answer: because there are no US Embassies in the United States. "

Funny, maybe, but factually wrong: I believe that a color revolution is being attempted in the USA right now.

Politico seems to feel the same way. See their recent cover :

While I did predict that " The USA is about to face the worst crisis of its history " as far back as October of last year, a month before the elections, I have to admit that I am surprised and amazed at the magnitude of the struggle which we see taking place before our eyes. It is now clear that the Neocons did declare war on Trump and some, like Paul Craig Roberts, believe that Trump has now returned them the favor . I sure hope that he is right.

Let's look at one telling example:

US intelligence agencies are now investigating their own boss! Yes, according to recent reports , the FBI, CIA, National Security Agency and Treasury Department are now investigating the telephone conversations between General Flynn and the Russian ambassador Sergey Kislyk.

According to Wikipedia, General Flynn is the former

Director of the Defense Intelligence Agency Joint Functional Component Command for Intelligence, Surveillance and Reconnaissance Chair of the Military Intelligence Board Assistant Director of National Intelligence Senior intelligence officer for the Joint Special Operations Command.

He is also Trump's National Security Advisor. In other words, his security clearance is stratospherically high and he will soon become the boss of all the US intelligence services. And yet, these very same intelligence services are investigating him for his contacts with the Russian Ambassador. That is absolutely amazing.

Even in the bad old Soviet Union, the putatively almighty KGB did not have the right to investigate a member of the Communist Party Central Committee without a special authorization of the Politburo (a big mistake, in my opinion, but never mind that).

That roughly means that the top 500 members of the Soviet state could not be investigated by the KGB at all. Furthermore, such was the subordination of the KGB to the Party that for common criminal matters the KGB was barred from investigating any member of the entire Soviet Nomenklatura , roughly 3 million people (and even bigger mistake!).

But in the case of Flynn, several US security agencies can decide to investigate a man who by all standards ought to be considered at least in the top 5 US officials and who clearly has the trust of the new President. And that does not elicit any outrage, apparently.

By the same logic, the three letter agencies might as well investigate Trump for his telephone conversations with Vladimir Putin.

Which, come to think of it, they might well do it soon

This is all absolutely crazy because this is evidence that the US intelligence community has gone rogue and is now taking its orders from the Neocons and their deep state and not from the President and that these agencies are now acting against the interests of the new President.

In the meantime, the Soros crowd has already chosen a color: pink. We now are witnessing the " pussyhat revolution " as explained on this website. And if you think that this is just a small fringe of lunatic feminists, you would be quite wrong. For the truly lunatic feminists the "subtle" hint about their " pussyhat revolution " is too subtle, so they prefer making their statement less ambiguous as the image on the right shows.

This would all be rather funny, in a nauseating way I suppose, if it wasn't for the fact that the media, Congress and Hollywood are fully behind this "100 days of Resistance to Trump" which began by a, quote, "queer dance party" at Mike Pence's house.

This would be rather hilarious, if it was not for all gravitas with which the corporate media is treating these otherwise rather pathetic "protests".

Watch how MCNBS's talking head blissfully reporting this event:

Listen carefully to what Moore says at 2:00. He says that they will "celebrate the fact that Obama is still the President of the United States" and the presstitute replies to him, "yes he is" not once, but twice.

What are they talking about?! The fact that Obama is still the President?!

How is it that Homeland Security and the FBI are not investigating MCNBC and Moore for rebellion and sedition ?

So far, the protests have not been too large, but they did occur in various US cities and they were well covered by the media:

Make no mistake, such protests are no more spontaneous than the ones in the Ukraine. Somebody is paying for all this, somebody is organizing it all. And they are using their full bag of tricks. One more example:

Remember the pretty face of Nayirah , the Kuwaiti nurse who told Congress that she had witnessed Iraqi soldiers tossing our babies from Kuwaiti incubators (and who later turned out to be the daughter of Saud Al-Sabah, the Kuwaiti ambassador to the United States)? Do you remember the pretty face of Neda , who " died on TV " in Iran? Well, let me introduce you to Bana Alabe, who wrote a letter to President Trump and, of course, the media got hold of the latter and now she is the "face of the Syrian children".

Want even more proof?

Okay, click here and take a look at a sampling of anti-Trump caricatures and cartoons compiled by the excellent Colonel Cassad. Some of them are quite remarkable. From this nauseating collection, I will select just two:

The first one clearly accuses Trump of being in the hands of Putin. The second one make Trump the heir to Adolf Hitler and strongly suggests that Trump might want to restart Auschwitz. Translated into plain English this sends a double message: Trump is not the legitimate President of the USA and Trump is the ultimate Evil.

This goes far beyond the kind of satire previous Presidents have ever been subjected to.

My purpose in listing all the examples above is to suggest the following: far from having accepted defeat, the Neocons and the US deep state have decided, as they always do, to double-down and they are now embarking on a full-scale "color revolution" which will only end with the impeachment, overthrowal or death of Donald Trump.

One of the most amazing features of this color revolution against Trump is the fact that those behind it don't give a damn about the damage that their war against Trump does to the institution of the President of the United States and, really, to the United States as a whole. That damage is, indeed, immense and the bottom line is this: President Trump is in immense danger of being overthrown and his only hope for survival is to strike back hard and fast.

The other amazing thing is the ugly role Britain plays in this process: all the worst filth against Trump is always eventually traced back right to the UK. How come? Simple. Do you recall how, formally at least, the CIA and NSA did not have the right to spy on US nationals and the British MI6 and GCHQ had no right to spy on British nationals. Both sides found an easy way out: they simply traded services: the CIA and NSA spied on Brits, the MI6 and GCHQ spied on Americans, and then they simply traded the data between "partners" (it appears that since Obama came to power all these measures have now become outdated and everybody is free to spy on whomever the hell they want, including their own nationals). The US Neocons and the US deep state are now using the British special services to produce a stream of filth against Trump which they then report as "intelligence" and which then can be used by Congress as a basis for an investigation. Nice, simple and effective.

The bottom line is this: President Trump is in immense danger of being overthrown and his only hope for survival is to strike back hard and fast.

Can he do that?

Until now I have suggested several times that Trump deal with the US Neocons the way Putin dealt with the oligarchs in Russia: get them on charges of tax evasion, corruption, conspiracy, obstruction of justice, etc. All that good stuff which the US deep state has been doing for years. The Pentagon and the Three Letter Agencies are probably the most corrupt entities on the planet and since they have never been challenged, never mind punished, for their corruption, they must have become fantastically complacent about how they were doing things, essentially counting on the White House to bail them out in case of problems. The main weapons used by these circles are the numerous secrecy laws which protect them from public and Congressional scrutiny. But here Trump can use his most powerful card: General Flynn who, as former director of the DIA and current National Security Advisor to the President will have total access. And if he doesn't – he can create it, if needed by sending special forces to ensure "collaboration".

However, I am now beginning to think that this might not be enough. Trump has a much more powerful weapon he can unleash against the Neocon: 9/11.

Whether Trump knew about it before or not, he is now advised by people like Flynn who must have known for years that 9/11 was in inside job. And if the actual number of people directly implicated in the 9/11 operation itself was relatively small, the number of people which put their full moral and political credibility behind the 9/11 official narrative is immense. Let me put it this way: while 9/11 was a US "deep state" operation (probably subcontracted for execution to the Israelis), the entire Washington "swamp" has been since "9/11 accomplice after the fact" by helping to maintain the cover-up. If this is brought into light, then thousands of political careers are going to crash and burn into the scandal.

9/11 was a collective crime par excellence . A few men actually executed it, but then thousands, possibly tens of thousands, have used their position to execute the cover-up and to prevent any real investigation. They are ALL guilty of obstruction of justice. By opening a new investigation into 911, but one run by the Justice Department and NOT by Congress, Trump could literally place a "political handgun" next to the head of each politician and threaten to pull the trigger if he does not immediately give up on trying to overthrow Trump. What Trump needs for that is a 100% trusted and 100% faithful man as the director of the FBI, a man with " clean hands, a cool head and a burning heart " (to use the expression of the founder of the Soviet Secret Police, Felix Dzerzhinsky). This man will immediately find himself in physical danger so he will have to be a man of great personal courage and determination. And, of course, this "man" could be a woman (a US equivalent of the Russian prosecutor, Natalia Poklonskaia).

I fully understand that danger of what I am suggesting as any use of the "9/11 weapon" will, of course, result in an immense counter-attack by the Neocons and the deep state. But here is the deal: the latter are already dead set in impeaching, overthrowing or murdering Donald Trump. And, as Putin once said in an interview, "if you know that a fight is inevitable, then strike first!".

You think that all is this over the top? Consider what is at stake.

  1. First, at the very least, the Trump Presidency itself: the Neocons and the US deep state will not let Trump implement his campaign promises and program. Instead they will sabotage, ridicule and misrepresent everything he does, even if this is a big success.
  2. Second, it appears that Congress now has the pretext to open several different congressional investigations into Donald Trump. If that is the case, it will be easy for Congress to blackmail Trump and constantly threaten him with political retaliation if he does not "get with the program".
  3. Third, the rabid persecution of Trump by the Neocons and the deep state is weakening the institution of the Presidency. For example, the latest crazy notion floated by some politicians is to " prohibit the President of the United States from using nuclear weapons without congressional authorization except when the United States is under nuclear attack ." From a technical point of view, this is nonsense, but what it does is send the following signal to the rest of the planet: "we, in Congress, believe that our Commander in Chief cannot be trusted with nuclear weapons." Never mind that they would trust Hillary with the same nukes and never mind that Trump could use only conventional weapons to trigger a global nuclear war anyway (by, for example, a conventional attack on the Kremlin), what they are saying is that the US President is a lunatic that cannot be trusted. How can they then expect him to be take seriously on any topic?
  4. Fourth, can you just imagine what will happen if the anti-Trump forces are successful?! Not only will democracy be totally and terminally crushed inside the USA, but the risks of war, including nuclear, will simply go through the roof.

There is much more at stake here than just petty US politics.

Every time I think of Trump and every time I look at the news I always come back to the same anguished thought: will Trump have the intelligence to realize the fact that he is under attack and will he have the courage to strike back hard enough ?

I don't know.

I have a great deal of hopes for General Flynn. I am confident that he understands the picture perfectly and knows exactly what is going on. But I am not sure that he has enough pull with the rest of the armed forces to keep them on the right side should a crisis happen. Generally, "regular" military types don't like intelligence people. My hope is that Flynn has loyal allies at SOCOM and JSOC as, at the end of the day, they will have the last say as to who occupies the White House. The good news here is that unlike regular military types, special forces and intelligence people are usually very close and used to work together (regular military types also dislike special forces). SOCOM and JSOC will also know how to make sure that the CIA doesn't go rogue.

Last but not least, my biggest hope is that Trump will use the same weapon Putin used against the Russian elites: the support of the people. But for that task, Twitter is simply not good enough. Trump needs to go the "RT route" and open his own TV channel. Of course, this will be very hard and time consuming, and he might have to begin with an Internet-based only channel, but as long as there is enough money there, he can make it happen. And, just like RT, it needs to be multi-national, politically diverse (including anti-Empire figures who do not support Trump) and include celebrities.

One of the many mistakes made by Yanukovich in the Ukraine was that he did not dare to fully use the legal instruments of power to stop the neo-Nazis. And to the degree that he used them, it was a disaster (like when the riot cops beat up student demonstrators). After listening to a few interviews of Yanukovich and of people near him during those crucial hours, it appears that Yanukovich simply did not feel that he had a moral right to use violence to suppress the street. We will never now if what truly held him back are moral principles of basic cowardice, but what is certain is that he betrayed his people and his country when he refused to defend real democracy and let the "street" take over replacing democracy with ochlocracy (mob rule). Of course, real ochlocracy does not exists, all mobs are always controlled by behind-the-scenes forces who unleash them just long enough to achieve their goals.

The forces which are currently trying to impeach, overthrow or murder President Trump are a clear and present danger to the United States as a country and to the US Federal Republic. They are, to use a Russian word, a type of "non-system" opposition which does not want to accept the outcome of the elections and which by rejecting this outcome essentially oppose the entire political system.

I am not a US citizen (I could, but I refuse that citizenship on principle because I refuse to take the required oath of allegiance) and the only loyalty I owe the USA is the one of a guest: never to deliberately harm it in any way and to obey its laws. And yet it turns my stomach to see how easy it has been to turn millions of Americans against their own country. I write a lot about russophobia on this blog, but I also see a deep-seated "Americanophobia" or "USophobia" in the words and actions who today say that Trump is not their President. To them, they micro-identity as a "liberal" or as a "gay" or as "African-American" means more than the very basic fundamental principles upon which this country has been built. When I see these crowds of Trump-bashers I see pure, seething hatred not of the AngloZionist Empire, or of a plutocracy masquerading as a democracy, but a hatred of what I would call the "simple America" or the "daily America" – the simple people amongst whom I have now lived for many years and learned to respect and appreciate and whom the Clinton-bots only think of as "deplorables

It amazes me to see that the US pseudo-elites have as much hatred, contempt and fear of the American masses as the Russian pseudo-elites have hatred, contempt and fear of the Russian masses (the Russian equivalent or Hillary's "deplorables" would be a hard to pronounce for English speakers word " быдло ", roughly "cattle", "lumpen" or "rabble"). It amazes me to see that the very same people which have demonized Putin for years are now demonizing Trump using exactly the same methods. And if their own country has to go down in their struggle against the common people – so be it! These self-declared elites will have no compunction whatsoever to destroy the nation their have been parasitizing and exploiting for their own class interest. They did just that to Russia exactly 100 years ago, in 1917. I sure hope that they will not get away with that again in 2017.

[Feb 04, 2017] Is Inequality a Political Choice?

Notable quotes:
"... Cross posted from the Institute for New Economic Thinking website ..."
"... Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'." ..."
"... no sh*t, Sherlock ..."
"... Wealth and Democracy ..."
"... However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. ..."
"... early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)? https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html ..."
"... What socio-econ OU ..."
"... Cross posted from the Institute for New Economic Thinking website ..."
"... Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'." ..."
"... no sh*t, Sherlock ..."
"... Wealth and Democracy ..."
"... However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. ..."
"... early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)? https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html ..."
"... What socio-econ OUTCOMES have resulted in even PAMPLIN MEDIA GROUP ..."
"... and the so-called alternative weeklies who only make news hole available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or Booze\Gourmet venture ..."
"... Mitch Ritter\Paradigm Shifters Lay-Low Studios, Ore-Wa Media Discussion Group ..."
"... TCOMES have resulted in even PAMPLIN MEDIA GROUP ..."
"... and the so-called alternative weeklies who only make news hole available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or Booze\Gourmet venture ..."
"... Mitch Ritter\Paradigm Shifters Lay-Low Studios, Ore-Wa Media Discussion Group ..."
Feb 04, 2017 | www.nakedcapitalism.com
Posted on February 4, 2017 by Yves Smith Yves here. Both economists and the press do such a good job of selling the idea that inequality is the fault of those who come out on the short end of the stick that academics need to develop empirical evidence to prove what ought to be intuitively obvious.

Cross posted from the Institute for New Economic Thinking website

The fact that most of the fruits of US economic growth have not been shared with the lower-middle and working class is accepted across the political spectrum in America. But that inequality is often treated as a somehow inevitable consequence of globalization and technological change. That view is contradicted by the comparison of income growth and distribution statistics between the US and three others rich countries, France, Norway and the UK - according to new research by Max Roser and Stefan Thewissen of the Institute for New Economic Thinking at Oxford. Writing in Vox on the database they've constructed, Roser and Thewissen note:

"We compare the evolution of the income an individual needs to be right at the 10th percentile of the income distribution to the evolution of the income of an individual at the 90th percentile. We call these two groups the 'poor' and the 'rich.' We can then look at how much incomes grew for the poor and the rich in absolute terms as well as relative to each other - and thereby assess the extent to which growth was widely shared. We measure income after taxes and transfers, and adjust for differences in prices over time and across countries using inflation and purchasing power information. Our database can be accessed online, with more information on our exact measure and data for other countries."

The US performs poorly by comparison to these countries, for reasons that may have more to do with structure, institutions and policy. Roser and Thewissen conclude:

"The differences we have identified across countries and time imply that increased globalization and technological change cannot be blamed as sole causes for rising inequality. Those forces work across borders and should affect all countries. The fact that other developed countries have been able to share the benefits of these market forces suggests that policy choices on the national level play a central role for boosting living standards. Policies can make a difference not just in growth levels, but also in who gets the benefits of that growth."

8 0 16 3 1 This entry was posted in Banana republic , Free markets and their discontents , Global warming , Guest Post , Income disparity , Politics , Regulations and regulators , The destruction of the middle class on February 4, 2017 by Yves Smith . Subscribe to Post Comments 36 comments Disturbed Voter , February 4, 2017 at 7:03 am

The intuitively obvious, should be taken as axiomatic. Like two points determine a single line. When you start out from an unequal position (not like at the start of a foot race) it is unclear who to blame, for the one person who crosses the finish line first vs the losers. And much of life is "first across the finish line". Also since in this case, the winner of the last race, gets an advantage on the next starting line the unequal advantage tends to accumulate. Life is unfair. The point is to maintain the status quo, statically and dynamically. Those who have advantages today, continue to have them, as white collar US workers and even blue collar US workers used to. The previous winners continue to win these unequal contests, but the number of happy workers gets fewer and fewer. This is why Trump voters the benefits of inequality are now being shared less equally ;-) The purpose of government is to benefit the status quo. Therefore policy doesn't offer substantive way out. Change will occur but only when the current status quo maintenance system fails. Conclusion: like the game of Musical Chairs there is no change until the music stops, and someone different can't find a chair to sit in. But it is less fun in real life.

Moneta , February 4, 2017 at 7:16 am

Funny how kids' games are there to show how luck works in life and how people work around it, yet many never seem to see the link.

Disturbed Voter , February 4, 2017 at 8:08 am

Unfortunately many in the current generation are content to play the little pig, in Charlotte's Web. They forget where McDonald's McRib comes from. Again, children's culture is illustrative and simplified.

MP , February 4, 2017 at 10:14 am

I wouldn't underestimate "many in the current generation" – especially among those who don't have the "divided baggage" of the generations that preceded them. Due to purposely recirculated historical circumstances aligned with modern "evolution," it may not be as easy for power to continue to "manipulate and control."

Kris Alman , February 4, 2017 at 2:11 pm

Speaking of generations
In 2010, Steve Bannon directed and wrote this film: Generation Zero
http://generationzeromovie.com/trailers.html

You can watch the full length movie here:
http://www.snagfilms.com/films/title/generation_zero

In this fear-mongering film, conservatives like Gingrich put a spin on the power of the "elite" destroying the middle class in a revisionist approach (although they are quick to point out that both parties are captured by global corporations). The future: austerity, deregulation and 20 years of chaos (with probable war) ahead of us.

The film revolves around the Strauss-Howe generational theory.
https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generational_theory
Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'."

David Kaiser has distanced himself from Bannon's extreme views.
http://time.com/4575780/stephen-bannon-fourth-turning/

When I was first exposed to Strauss and Howe I began thinking how their ideas explained the histories of other countries as well, and during our interview, I mentioned that crises in countries like France in the 1790s and Russia after 1917 had led to reigns of terror. Bannon included those remarks in the final cut of Generation Zero.
A second, more alarming, interaction did not show up in the film. Bannon had clearly thought a long time both about the domestic potential and the foreign policy implications of Strauss and Howe. More than once during our interview, he pointed out that each of the three preceding crises had involved a great war, and those conflicts had increased in scope from the American Revolution through the Civil War to the Second World War. He expected a new and even bigger war as part of the current crisis, and he did not seem at all fazed by the prospect.
I did not agree, and said so. But, knowing that the history of international conflict was my own specialty, he repeatedly pressed me to say we could expect a conflict at least as big as the Second World War in the near or medium term. I refused.
Apocalyptic rhetoric and apocalyptic thinking flourish during crisis periods. This represents perhaps the biggest danger of the Trump presidency, and one that will bear watching from all concerned citizens in the months and years ahead.

That's why we should all be concerned about Bannon being added to the National Security Council. http://www.cnn.com/2017/01/29/politics/susan-rice-steve-bannon/index.html

Bannon's Islamaphobia portends a 'global war' between 'the Judeo-Christian west' and 'jihadist Islamic fascism.'
https://www.theguardian.com/us-news/2017/feb/03/steve-bannon-islamophobia-film-script-muslims-islam

MP , February 4, 2017 at 3:01 pm

Thanks for the information. I'm aware of the madman's "movie" and his authoritarian ideology. He and his commander-of-thieves will continue to unravel right before our eyes. Many lives will continue to be severely impacted by these hateful, selfish, abusive throwbacks from "central casting."

DWD , February 4, 2017 at 10:10 am

The Race

Every day there is a race you have to run. For the sake of discussion, let's call it a 100 yard race.

The participants are called and then evaluated by the judges. Starting points for the race are then determined. If you are particularly comely, you are given an advantage: that is, your starting point is moved up depending on the judges. If you have a personality that people find attractive, you are given further yards. If you happen to have had great success in school, you are awarded so many yards because of your academic record. If you happen to be good looking and personable, the academic success yards are added onto your already determined starting point.

Then the quality and reputation of your educational institution is evaluated and you are given further yards to determine starting points with certain schools worth a better starting position. And even the type of training at the institution is evaluated and further yards given.

Finally the judges add your total experiences – including your finishing position in previous races – advanced degrees, and connections and further yards are added.

So when the gun sounds, the person without the advantages strives as hard as they can but they cannot win the race because some people only have to simply step over the finish line.

And even more troubling some people are moved behind the starting line because they could not even muster the necessary accomplishments to reach the starting line: drop outs from school, people who have been convicted of crimes and the rest. The worse the offense, the further you are moved behind the starting line.

Every day this continues and those striving to win – even running faster and harder than their competitors – are simply unable to do so because the rules are such that winning is not even a consideration when the race is rigged.

Jazz Paw , February 4, 2017 at 4:30 pm

The factors are certainly at work in inequality. Some of those factors can either be mitigated or compensated for by the individual and/or the social system.

There are other structural factors that influence inequality. Family connections, inherited wealth, and other forms of social capital that can make advancement easier is one. Savings and investment patterns that can be engaged in to varying degrees depending on just how much surplus income one has is another.

The social and political system in the US generally favors vigorous competition, private self-dealing, and asymmetric information. Individuals who learn to navigate these factors can prosper, while those who either can't or don't want to can suffer significant disadvantages in outcomes. The influence of these structural factors in any social system influences the degree of income/wealth stratification.

In my own family, many of the starting social factors are fairly equal among the individuals. Even though my various relatives have not necessarily made "bad" choices in the moral sense, their outcomes have been vastly different. The degree to which they have chosen to engagein income/wealth maximization has generally been a large factor. In that sense, the game is rigged away from living what many consider a humane life.

David , February 4, 2017 at 7:19 am

You mean people actually got paid to research and write stuff like this? You simply have to look at the (re)distribution policies of the countries concerned – and there are substantial differences between the three of them, by the way.
Wouldn't a much more interesting question be "By what mechanism does globalization necessarily increase inequality, and how does it work precisely in a number of contrasted cases"? But then you might get the wrong answer.

lyman alpha blob , February 4, 2017 at 9:38 am

No kidding – kind of amazing that people get paid good money to restate the obvious, but using sesquipedalian language just to make it more difficult to understand.

Inequality is caused by one group not having as much money as another. Money is simply a tool created by human beings. Much like a hammer, human beings could use it to build houses for everyone or to bash others about the head. We humans seem to prefer the latter use.

Grebo , February 4, 2017 at 1:43 pm

The people paid to prove the obvious are far outnumbered by those paid to disprove it. We need the former because of the latter.
On the other hand, there are many cases where the obvious turned out to be wrong when it was looked at carefully. More research needed!

Knute Rife , February 4, 2017 at 1:49 pm

We're in a world where politicians get paid to lie about these obvious things and legislate based on those lies, and businesses make their profits off the lies, so I can't get too exercised when someone gets paid to point out the lies.

Fred Grosso , February 4, 2017 at 7:52 am

Yes. I decided I wasn't going to be Fred Trump's son.

Disturbed Voter , February 4, 2017 at 8:06 am

Bravo. Who can tolerate the virtue signaling of the plutocracy?

Carla , February 4, 2017 at 10:20 am

+10

funemployed , February 4, 2017 at 8:36 am

"Forces." Really? "Globalization" and "technological change" are things humans do for human reasons. To treat them as "forces" somehow exogenous to human choices is self-evidently fallacious. It's precisely the same logic that says the King is the King cause God likes him best.

They're not "forces." They are heuristics. And as heuristics, they are pretty lousy unless you parse them quite a bit. Obama's 1 trillion dollar investment in nukes creates "technological change." The destruction of local agricultural techniques and knowledge is "technological change." A kindle is "technological change." Keyword searches readily available to academic researchers was a big "technological change."

I'm assuming what they mean by "technological change" here is the sort that allows us to collectively make more stuff with less work. God forbid anyone spell that out though. Because "hey, guess what: you have to work more for less because we can now make more stuff with less work," would quickly lead to the violent demise of economists and rich people. (more to say on "globalization" but this post is already way longer than intended.)

Sound of the Suburbs , February 4, 2017 at 9:21 am

Redistributive Keynesian capitalism produces the lowest levels of inequality within the developed world from the 1950s to the 1970s.

1980s – Let's get rid of redistributive Keynesian capitalism.

Inequality soars.

What was supposed to happen?

nowhere , February 4, 2017 at 6:31 pm

A rising tide of lifting boats

Pelham , February 4, 2017 at 10:06 am

Germany should have been included in the study. German manufacturing is far more technologically advanced than manufacturing in the US, yet Germany manages to maintain high employment in that sector, probably because the companies invest in worker training and feel some obligation toward labor.

There's a structural reason for this, with labor having powerful representation on German corporate boards and smaller companies being owned by families instead of faceless shareholders, with the families' long-term interests naturally more in alignment with those of their employees.

David , February 4, 2017 at 11:22 am

Actually, I thought the inclusion of France and the UK was a bit strange, as well. Inequality in both countries has been increasingly massively in recent years. One Thomas Piketty even wrote something on the topic, if I'm not mistaken. Japan would have been a much better example.

jrs , February 4, 2017 at 12:22 pm

I think it kind of makes the point, if even a country that isn't exactly known for egalitarianism, like the UK, is doing better than the U.S. it kind of shows how extreme on the scale the U.S. is.

nowhere , February 4, 2017 at 6:33 pm

We are exceptional in every way!

Barni , February 4, 2017 at 1:42 pm

Contrary to elite owned and serving mass media claims, the trick that created the German economic miracle is no mystery; it was, and IS, their banking system.
In Germany more than 70% of all banking is done by "municipally owned banks"!!!
A situation that the elites – masters of the universe -have been working day and night to drastically alter so that their "too big to fail" minion zombie banks can take complete AND total control of the economy, as they have in most of the developed world except North Dakota, Canada (Canada owns the Bank of Canada – the Finance Minister holds all the shares on behalf of all Canadians), and Switzerland (Switzerland has Cantonal {municipally or provincially} owned banks) – all three countries, like the German municipally owned banks, are under attack by the elite serving bureaucrats in the IMF and the U.S. Federal Reserve; all of whom are owned by, and minions of, Wall Street; and most importantly the corporate bought and sold world's university economics departments – co-opted to right agenda faux economic B.S.
The U.S. Federal Reserve now donates more money to universities worldwide than all of the rest of the donors combined!?! The proviso on these donations is that they only hire economics profs who have been published in one of the 37 journals published by the U.S. Federal Reserve – and we know what kind of right agenda 'fascist' mumbo-jumbo these minion economists are dedicated to serving up in order to get published by the U.S. Fed!!!
So what you say!! Well here's so what!
If you are in any other developed country than Germany and you have a great idea/product and require a one million dollar loan to build a factory and set up production – here's what happens to you. Your local banks will never lend you that money, so you have to go to the criminal Big Banks which will also never lend you the money you need, which means you will have to sell your idea/product at pennies on the dollar to one of their huge corporate clients, who will offshore production to a corrupted third world country where workers get paid pennies an hour and unions are considered a criminal enterprise. Leaving you, the creator of the product or service with pennies on the dollar; and leaving your local economy with zero economic growth and no well paid local employment opportunities. The corporate buyer of your technology/product/idea may well just kill your product because it is better than the (inferior) one they are currently making bags of money selling – for which they have just eliminated your innovative and superior competitive product.
If you are in Germany however the story is far different. In Germany you would go to your local municipally owned bank which is only too happy to give you the one million dollars you need to set up production (locally providing employment and contributing to local economic prosperity).
This is the basis for the strength of the German economy and the reason for the so called ":German economic miracle?"!
It is described as a "miracle" not because we have no idea how it happened, rather because the elites who own more than 80% of all corporate shares need to confuse us plebs they want to economically and politically crush!

Sluggeaux , February 4, 2017 at 11:01 am

American wealth inequality is a political problem? Well, no sh*t, Sherlock .

Kevin Phillips wrote about this phenomenon a decade ago in his wonderful book Wealth and Democracy . Between 1920 and 1980, American plutocrats had been placed in fear by the Bolshevik revolution, humbled by the Great Depression, and shamed by the Second World War. Greed was in check. Then they died-off and left their wealth to a new generation more interested in emulating Mick Jagger than Dwight D. Eisenhower. Ronnie Reagan was their Hollywood pal, who cut estate and coupon-clipping taxes so that they could party like rock stars.

Crass punks like Donald Trump and the Kochs are the scions of inherited wealth and Studio 54. They could never have made it on their own, on their own talents, and it is in their class interest to destroy any sort of meritocracy. They have used materialism and greed to buy the political class.

Advance , February 4, 2017 at 11:21 am

Look up Geert Hofstede's work on "power distance," which is the extent to which a nation accepts inequality.

According to Hofstede, countries have different "tastes" or preferences for inequality. For example, the Middle East, parts of S America, India, and other parts of Asia have a much bigger "taste" for inequality compared to, say, the Scandinavian countries, which have the lowest.

I would guess that differences in preferences for inequality between countries go back to a nation's history, and maybe other hard-to-pin down forces and factors.

The US, according to Hofstede's work, is at the middle point, or a little lower, as to taste for inequality. However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. In other words, we may be getting more inequality than we like.

By the way, Hofstede assumes that power distance preference is a fairly durable characteristic of a nation.

UserFriendly , February 4, 2017 at 2:45 pm

Preference?? Yes, I'm sure the mid east loves inequality, which is why they are known for choosing dictators who quash uprisings as their leaders. And how exactly would I choose egalitarianism here in the US? I can vote for Wall Street and Holly Wood or Wall Street and Exxon Mobil. Which one is the egalitarian one?

Ignacio , February 4, 2017 at 2:58 pm

"

However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences.

"

What about "power distance" (extent to which a nation accepts inequality) interactions with "distance to power" extent to which a nation influences the powerful.

Sam , February 4, 2017 at 12:40 pm

According to Ha-Joon Chang, markets are political creations.

So, yes.

Bernard , February 4, 2017 at 12:45 pm

"To serve Humans." The cookbook from " the Outer Limits/Twilight Zone" TV series had aliens come to "devour" humans. such a farce!! lol

when the reality all along has been that's it the Rich who wrote the "Cookbook". Bernay's sauce, once again.

who would have thunk it! Inequality is the major ingredient.

Anonymous , February 4, 2017 at 2:17 pm

I've been reading Robert J. Gordon's book, 'The Rise and Fall of American Growth.' Gordon would say that American labor did well from 1870-1970 because of the innovations that drove the economy increased everyone's productivity and the value of their work. Since 1970, productivity has slowed down. It rose again during the decade of the '90s but mostly for knowledge workers, thanks to the internet, spreadsheets, etcetera, but now has continued to slow. That was a recipe for income inequality, and for wealth inequality as well, since the rise of digital industries has increased property values on the coasts and in select inland cities.

Slowing productivity also increased wealth inequality by facilitating the decline of interest rates. This helps the haves, since their assets are suddenly more valuable.

pretzelattack , February 4, 2017 at 3:23 pm

http://www.huffingtonpost.com/martin-ford/is-american-economic-grow_b_9096698.html

this guy argues that productivity has been decoupled from compensation, and that has driven the rise of inequality.

off topic, but the krugman review of the book contained the interesting fact that, during the 1880's, wall street was 7 feet deep in manure in some places.

UserFriendly , February 4, 2017 at 2:53 pm

Of course inequality is a political choice. Chosen by the oligarchs who buy the politicians.

Just like every mainstream economist is choosing to make millions suffer and die every day because excepting MMT would bruise their ego's. That is a choice too.

Ignacio , February 4, 2017 at 3:01 pm

I think that inequality is not a political choice directly but a consequence of deregulation or "do nothing" policy. Reducing inequality is a policy choice.

marblex , February 4, 2017 at 3:32 pm

To quote the very astute Batman11 from ZH:

𝐀𝐥𝐥 𝐟𝐨𝐫 𝐨𝐮𝐫𝐬𝐞𝐥𝐯𝐞𝐬, 𝐚𝐧𝐝 𝐧𝐨𝐭𝐡𝐢𝐧𝐠 𝐟𝐨𝐫 𝐨𝐭𝐡𝐞𝐫 𝐩𝐞𝐨𝐩𝐥𝐞 𝐬𝐞𝐞𝐦𝐬, 𝐢𝐧 𝐞𝐯𝐞𝐫𝐲 𝐚𝐠𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝, 𝐭𝐨 𝐡𝐚𝐯𝐞 𝐛𝐞𝐞𝐧 𝐭𝐡𝐞 𝐯𝐢𝐥𝐞 𝐦𝐚𝐱𝐢𝐦 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐚𝐬𝐭𝐞𝐫𝐬 𝐨𝐟 𝐦𝐚𝐧𝐤𝐢𝐧𝐝." 𝐀𝐝𝐚𝐦 𝐒𝐦𝐢𝐭𝐡, 𝐓𝐡𝐞 𝐖𝐞𝐚𝐥𝐭𝐡 𝐨𝐟 𝐍𝐚𝐭𝐢𝐨𝐧𝐬

𝐌𝐚𝐧𝐤𝐢𝐧𝐝 𝐟𝐢𝐫𝐬𝐭 𝐬𝐭𝐚𝐫𝐭𝐞𝐝 𝐭𝐨 𝐩𝐫𝐨𝐝𝐮𝐜𝐞 𝐚 𝐬𝐮𝐫𝐩𝐥𝐮𝐬 𝐰𝐢𝐭𝐡 𝐞𝐚𝐫𝐥𝐲 𝐚𝐠𝐫𝐢𝐜𝐮𝐥𝐭𝐮𝐫𝐞.

𝐈𝐭 𝐰𝐚𝐬𝐧'𝐭 𝐥𝐨𝐧𝐠 𝐛𝐞𝐟𝐨𝐫𝐞 𝐭𝐡𝐞 𝐞𝐥𝐢𝐭𝐞𝐬 𝐥𝐞𝐚𝐫𝐧𝐭 𝐡𝐨𝐰 𝐭𝐨 𝐫𝐞𝐚𝐝 𝐭𝐡𝐞 𝐬𝐤𝐢𝐞𝐬, 𝐭𝐡𝐞 𝐬𝐮𝐧 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐬𝐭𝐚𝐫𝐬, 𝐭𝐨 𝐩𝐫𝐞𝐝𝐢𝐜𝐭 𝐭𝐡𝐞 𝐜𝐨𝐦𝐢𝐧𝐠 𝐬𝐞𝐚𝐬𝐨𝐧𝐬 𝐭𝐨 𝐭𝐡𝐞 𝐚𝐦𝐚𝐳𝐞𝐝 𝐦𝐚𝐬𝐬𝐞𝐬 𝐚𝐧𝐝 𝐜𝐨𝐥𝐥𝐞𝐜𝐭 𝐭𝐫𝐢𝐛𝐮𝐭𝐞.

They soon made the most of the opportunity and removed themselves from any hard work to concentrate on "spiritual matters", i.e. any hocus-pocus they could come up with to elevate them from the masses, e.g. rituals, fertility rights, offering to the gods . etc and to turn the initially small tributes, into extracting all the surplus created by the hard work of the rest.

The elites became the representatives of the gods
and they were responsible for the bounty of the earth and the harvests. As long as all the surplus was handed over, all would be well.
Later they came up with money.

We pay you to do the work and you give it back to us when you buy things, you live a bare subsistence existence and we take the rest.

"𝐌𝐨𝐧𝐞𝐲 𝐢𝐬 𝐚 𝐧𝐞𝐰 𝐟𝐨𝐫𝐦 𝐨𝐟 𝐬𝐥𝐚𝐯𝐞𝐫𝐲, 𝐚𝐧𝐝 𝐝𝐢𝐬𝐭𝐢𝐧𝐠𝐮𝐢𝐬𝐡𝐚𝐛𝐥𝐞 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐨𝐥𝐝 𝐬𝐢𝐦𝐩𝐥𝐲 𝐛𝐲 𝐭𝐡𝐞 𝐟𝐚𝐜𝐭 𝐭𝐡𝐚𝐭 𝐢𝐭 𝐢𝐬 𝐢𝐦𝐩𝐞𝐫𝐬𝐨𝐧𝐚𝐥 – 𝐭𝐡𝐚𝐭 𝐭𝐡𝐞𝐫𝐞 𝐢𝐬 𝐧𝐨 𝐡𝐮𝐦𝐚𝐧 𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐦𝐚𝐬𝐭𝐞𝐫 𝐚𝐧𝐝 𝐬𝐥𝐚𝐯𝐞." 𝐋𝐞𝐨 𝐓𝐨𝐥𝐬𝐭𝐨𝐲

𝐓𝐡𝐞 𝐬𝐮𝐫𝐩𝐥𝐮𝐬 𝐩𝐫𝐨𝐝𝐮𝐜𝐞𝐝 𝐬𝐢𝐧𝐜𝐞 𝐭𝐡𝐞 𝐞𝐚𝐫𝐥𝐢𝐞𝐬𝐭 𝐚𝐠𝐫𝐢𝐜𝐮𝐥𝐭𝐮𝐫𝐚𝐥 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐢𝐞𝐬 𝐰𝐚𝐬 𝐭𝐡𝐮𝐬 𝐞𝐱𝐭𝐫𝐚𝐜𝐭𝐞𝐝 𝐛𝐲 𝐭𝐡𝐞 𝐞𝐥𝐢𝐭𝐞.

A bare subsistence existence ensured the workers didn't die and could reproduce, why give them anymore? The vile maxim of the masters of mankind.

Basic capitalism was how it all started in the 18th and 19th Centuries, the poor lived in squalor and the rich lived in luxury, the same as it had always been.

Only organised labour movements got those at the bottom a larger slice of the pie, basic capitalism gives nothing to the people who do the work apart from a bare subsistence existence.

The wealthy decided they needed to do away with organised labour movements and the welfare state; it was interfering with the natural order where they extract all the surplus.

2017 – World's eight richest people have same wealth as poorest 50%

Nearly there.

They need a bit more fine tuning at Davos.

Some of the world's workers are not living a bare subsistence existence.

𝐀 𝐛𝐚𝐫𝐞 𝐬𝐮𝐛𝐬𝐢𝐬𝐭𝐞𝐧𝐜𝐞 𝐞𝐱𝐢𝐬𝐭𝐞𝐧𝐜𝐞 𝐞𝐧𝐬𝐮𝐫𝐞𝐬 𝐭𝐡𝐞 𝐰𝐨𝐫𝐤𝐞𝐫𝐬 𝐝𝐨𝐧'𝐭 𝐝𝐢𝐞 𝐚𝐧𝐝 𝐜𝐚𝐧 𝐫𝐞𝐩𝐫𝐨𝐝𝐮𝐜𝐞, 𝐰𝐡𝐲 𝐠𝐢𝐯𝐞 𝐭𝐡𝐞𝐦 𝐚𝐧𝐲𝐦𝐨𝐫𝐞? 𝐓𝐡𝐞 𝐯𝐢𝐥𝐞 𝐦𝐚𝐱𝐢𝐦 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐚𝐬𝐭𝐞𝐫𝐬 𝐨𝐟 𝐦𝐚𝐧𝐤𝐢𝐧𝐝, 𝐜𝐮𝐫𝐫𝐞𝐧𝐭𝐥𝐲 𝐤𝐧𝐨𝐰𝐧 𝐚𝐬 𝐧𝐞𝐨-𝐥𝐢𝐛𝐞𝐫𝐚𝐥𝐢𝐬𝐦.

𝐁𝐚𝐬𝐢𝐜 𝐜𝐚𝐩𝐢𝐭𝐚𝐥𝐢𝐬𝐦, 𝐬𝐭𝐫𝐢𝐩𝐩𝐞𝐝 𝐨𝐟 𝐚 𝐰𝐞𝐥𝐟𝐚𝐫𝐞 𝐬𝐭𝐚𝐭𝐞 𝐚𝐧𝐝 𝐨𝐫𝐠𝐚𝐧𝐢𝐬𝐞𝐝 𝐥𝐚𝐛𝐨𝐮𝐫 𝐦𝐨𝐯𝐞𝐦𝐞𝐧𝐭𝐬, 𝐰𝐢𝐭𝐡 𝐚 𝐠𝐥𝐨𝐛𝐚𝐥 𝐰𝐨𝐫𝐤𝐟𝐨𝐫𝐜𝐞 𝐞𝐧𝐬𝐮𝐫𝐢𝐧𝐠 𝐚𝐧 𝐞𝐱𝐜𝐞𝐬𝐬 𝐬𝐮𝐩𝐩𝐥𝐲 𝐨𝐟 𝐥𝐚𝐛𝐨𝐮𝐫 𝐝𝐫𝐢𝐯𝐢𝐧𝐠 𝐰𝐚𝐠𝐞𝐬 𝐝𝐨𝐰𝐧 𝐭𝐨 𝐭𝐡𝐞 𝐦𝐢𝐧𝐢𝐦𝐮𝐦.

𝐏𝐞𝐫𝐟𝐞𝐜𝐭, 𝐢𝐭'𝐬 𝐠𝐨𝐢𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐣𝐮𝐬𝐭 𝐥𝐢𝐤𝐞 𝐭𝐡𝐞 𝐠𝐨𝐨𝐝 𝐨𝐥𝐝 𝐝𝐚𝐲𝐬.

𝐓𝐡𝐞 𝐢𝐦𝐩𝐨𝐯𝐞𝐫𝐬𝐢𝐡𝐞𝐝 𝐦𝐢𝐝𝐝𝐥𝐞 𝐜𝐥𝐚𝐬𝐬, 𝐡𝐨𝐰 𝐝𝐢𝐝 𝐭𝐡𝐚𝐭 𝐡𝐚𝐩𝐩𝐞𝐧?

𝐈𝐭 𝐰𝐚𝐬 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐩𝐥𝐚𝐧.

Francis Fukuyama talked of the "end of history" and "liberal democracy".

Liberal democracy was the bringing together of two mutually exclusive ideas.

Economic liberalism – that enriches the few and impoverishes the many.

Democracy – that requires the support of the majority.

Trying to bring two mutually exclusive ideas together just doesn't work.

The ideas of "Economic Liberalism" came from Milton Freidman and the University of Chicago. It was so radical they first tried it in a military dictatorship in Chile, it wouldn't be compatible with democracy. It took death squads, torture and terror to keep it in place, there was an ethnic cleansing of anyone who still showed signs of any left wing thinking.

It was tried in a few other places in South America using similar techniques. It then did succeed in a democracy but only by tricking the people into thinking they were voting for something else, severe oppression was needed when they found out what they were getting.

It brings extreme inequality and widespread poverty everywhere it's tested, they decide it's a system that should be rolled out globally. It's just what they are looking for.

𝐆𝐨𝐨𝐝 𝐧𝐞𝐰𝐬 𝐢𝐭 𝐰𝐨𝐫𝐤𝐬 𝐚𝐬 𝐩𝐥𝐚𝐧𝐧𝐞𝐝.

𝟐𝟎𝟏𝟒 – "𝟖𝟓 𝐫𝐢𝐜𝐡𝐞𝐬𝐭 𝐩𝐞𝐨𝐩𝐥𝐞 𝐚𝐬 𝐰𝐞𝐚𝐥𝐭𝐡𝐲 𝐚𝐬 𝐩𝐨𝐨𝐫𝐞𝐬𝐭 𝐡𝐚𝐥𝐟 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝"

𝟐𝟎𝟏𝟔 – "𝐑𝐢𝐜𝐡𝐞𝐬𝐭 𝟔𝟐 𝐩𝐞𝐨𝐩𝐥𝐞 𝐚𝐬 𝐰𝐞𝐚𝐥𝐭𝐡𝐲 𝐚𝐬 𝐡𝐚𝐥𝐟 𝐨𝐟 𝐰𝐨𝐫𝐥𝐝'𝐬 𝐩𝐨𝐩𝐮𝐥𝐚𝐭𝐢𝐨𝐧"

𝟐𝟎𝟏𝟕 – 𝐖𝐨𝐫𝐥𝐝'𝐬 𝐞𝐢𝐠𝐡𝐭 𝐫𝐢𝐜𝐡𝐞𝐬𝐭 𝐩𝐞𝐨𝐩𝐥𝐞 𝐡𝐚𝐯𝐞 𝐬𝐚𝐦𝐞 𝐰𝐞𝐚𝐥𝐭𝐡 𝐚𝐬 𝐩𝐨𝐨𝐫𝐞𝐬𝐭 𝟓𝟎%

𝐓𝐡𝐞 𝐠𝐥𝐨𝐛𝐚𝐥 𝐞𝐥𝐢𝐭𝐞 𝐚𝐫𝐞 𝐮𝐧𝐬𝐮𝐫𝐩𝐚𝐬𝐬𝐞𝐝 𝐢𝐧 𝐥𝐨𝐨𝐤𝐢𝐧𝐠 𝐚𝐟𝐭𝐞𝐫 𝐭𝐡𝐞𝐢𝐫 𝐨𝐰𝐧 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐬.

𝐖𝐡𝐚𝐭 𝐡𝐚𝐯𝐞 𝐭𝐡𝐨𝐬𝐞 𝐩𝐨𝐩𝐮𝐥𝐢𝐬𝐭𝐬 𝐠𝐨𝐭 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐚𝐢𝐧 𝐚𝐛𝐨𝐮𝐭?

𝐍𝐚𝐨𝐦𝐢 𝐊𝐥𝐞𝐢𝐧'𝐬 "𝐒𝐡𝐨𝐜𝐤 𝐃𝐨𝐜𝐭𝐫𝐢𝐧𝐞" 𝐜𝐨𝐯𝐞𝐫𝐬 𝐭𝐡𝐢𝐬 𝐢𝐝𝐞𝐨𝐥𝐨𝐠𝐲 𝐢𝐧 𝐚𝐥𝐥 𝐢𝐭𝐬 𝐧𝐚𝐬𝐭𝐢𝐧𝐞𝐬𝐬."
Post by Batman11@ZH

Mitch Ritter , February 4, 2017 at 4:14 pm

Would a for-profit chain of local newspapers whose business model and advertising is built on serving the Portland Business Alliance and Chamber of Commerce interests hire or keep on staff any kind of investigative journalistic team or even an individual columnist\calumnist like recently deceased VILLAGE VOICE early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)?
https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html

What socio-econ OU

Is Inequality a Political Choice? Posted on February 4, 2017 by Yves Smith
Yves here. Both economists and the press do such a good job of selling the idea that inequality is the fault of those who come out on the short end of the stick that academics need to develop empirical evidence to prove what ought to be intuitively obvious.

Cross posted from the Institute for New Economic Thinking website

The fact that most of the fruits of US economic growth have not been shared with the lower-middle and working class is accepted across the political spectrum in America. But that inequality is often treated as a somehow inevitable consequence of globalization and technological change. That view is contradicted by the comparison of income growth and distribution statistics between the US and three others rich countries, France, Norway and the UK - according to new research by Max Roser and Stefan Thewissen of the Institute for New Economic Thinking at Oxford. Writing in Vox on the database they've constructed, Roser and Thewissen note:

"We compare the evolution of the income an individual needs to be right at the 10th percentile of the income distribution to the evolution of the income of an individual at the 90th percentile. We call these two groups the 'poor' and the 'rich.' We can then look at how much incomes grew for the poor and the rich in absolute terms as well as relative to each other - and thereby assess the extent to which growth was widely shared. We measure income after taxes and transfers, and adjust for differences in prices over time and across countries using inflation and purchasing power information. Our database can be accessed online, with more information on our exact measure and data for other countries."

The US performs poorly by comparison to these countries, for reasons that may have more to do with structure, institutions and policy. Roser and Thewissen conclude:

"The differences we have identified across countries and time imply that increased globalization and technological change cannot be blamed as sole causes for rising inequality. Those forces work across borders and should affect all countries. The fact that other developed countries have been able to share the benefits of these market forces suggests that policy choices on the national level play a central role for boosting living standards. Policies can make a difference not just in growth levels, but also in who gets the benefits of that growth."

8 0 16 3 1 This entry was posted in Banana republic , Free markets and their discontents , Global warming , Guest Post , Income disparity , Politics , Regulations and regulators , The destruction of the middle class on February 4, 2017 by Yves Smith . Subscribe to Post Comments 36 comments
Disturbed Voter , February 4, 2017 at 7:03 am

The intuitively obvious, should be taken as axiomatic. Like two points determine a single line. When you start out from an unequal position (not like at the start of a foot race) it is unclear who to blame, for the one person who crosses the finish line first vs the losers. And much of life is "first across the finish line". Also since in this case, the winner of the last race, gets an advantage on the next starting line the unequal advantage tends to accumulate. Life is unfair. The point is to maintain the status quo, statically and dynamically. Those who have advantages today, continue to have them, as white collar US workers and even blue collar US workers used to. The previous winners continue to win these unequal contests, but the number of happy workers gets fewer and fewer. This is why Trump voters the benefits of inequality are now being shared less equally ;-) The purpose of government is to benefit the status quo. Therefore policy doesn't offer substantive way out. Change will occur but only when the current status quo maintenance system fails. Conclusion: like the game of Musical Chairs there is no change until the music stops, and someone different can't find a chair to sit in. But it is less fun in real life.

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Moneta , February 4, 2017 at 7:16 am

Funny how kids' games are there to show how luck works in life and how people work around it, yet many never seem to see the link.

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Disturbed Voter , February 4, 2017 at 8:08 am

Unfortunately many in the current generation are content to play the little pig, in Charlotte's Web. They forget where McDonald's McRib comes from. Again, children's culture is illustrative and simplified.

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MP , February 4, 2017 at 10:14 am

I wouldn't underestimate "many in the current generation" – especially among those who don't have the "divided baggage" of the generations that preceded them. Due to purposely recirculated historical circumstances aligned with modern "evolution," it may not be as easy for power to continue to "manipulate and control."

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Kris Alman , February 4, 2017 at 2:11 pm

Speaking of generations
In 2010, Steve Bannon directed and wrote this film: Generation Zero
http://generationzeromovie.com/trailers.html

You can watch the full length movie here:
http://www.snagfilms.com/films/title/generation_zero

In this fear-mongering film, conservatives like Gingrich put a spin on the power of the "elite" destroying the middle class in a revisionist approach (although they are quick to point out that both parties are captured by global corporations). The future: austerity, deregulation and 20 years of chaos (with probable war) ahead of us.

The film revolves around the Strauss-Howe generational theory.
https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generational_theory
Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'."

David Kaiser has distanced himself from Bannon's extreme views.
http://time.com/4575780/stephen-bannon-fourth-turning/

When I was first exposed to Strauss and Howe I began thinking how their ideas explained the histories of other countries as well, and during our interview, I mentioned that crises in countries like France in the 1790s and Russia after 1917 had led to reigns of terror. Bannon included those remarks in the final cut of Generation Zero.
A second, more alarming, interaction did not show up in the film. Bannon had clearly thought a long time both about the domestic potential and the foreign policy implications of Strauss and Howe. More than once during our interview, he pointed out that each of the three preceding crises had involved a great war, and those conflicts had increased in scope from the American Revolution through the Civil War to the Second World War. He expected a new and even bigger war as part of the current crisis, and he did not seem at all fazed by the prospect.
I did not agree, and said so. But, knowing that the history of international conflict was my own specialty, he repeatedly pressed me to say we could expect a conflict at least as big as the Second World War in the near or medium term. I refused.
Apocalyptic rhetoric and apocalyptic thinking flourish during crisis periods. This represents perhaps the biggest danger of the Trump presidency, and one that will bear watching from all concerned citizens in the months and years ahead.

That's why we should all be concerned about Bannon being added to the National Security Council. http://www.cnn.com/2017/01/29/politics/susan-rice-steve-bannon/index.html

Bannon's Islamaphobia portends a 'global war' between 'the Judeo-Christian west' and 'jihadist Islamic fascism.'
https://www.theguardian.com/us-news/2017/feb/03/steve-bannon-islamophobia-film-script-muslims-islam

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MP , February 4, 2017 at 3:01 pm

Thanks for the information. I'm aware of the madman's "movie" and his authoritarian ideology. He and his commander-of-thieves will continue to unravel right before our eyes. Many lives will continue to be severely impacted by these hateful, selfish, abusive throwbacks from "central casting."

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DWD , February 4, 2017 at 10:10 am

The Race

Every day there is a race you have to run. For the sake of discussion, let's call it a 100 yard race.

The participants are called and then evaluated by the judges. Starting points for the race are then determined. If you are particularly comely, you are given an advantage: that is, your starting point is moved up depending on the judges. If you have a personality that people find attractive, you are given further yards. If you happen to have had great success in school, you are awarded so many yards because of your academic record. If you happen to be good looking and personable, the academic success yards are added onto your already determined starting point.

Then the quality and reputation of your educational institution is evaluated and you are given further yards to determine starting points with certain schools worth a better starting position. And even the type of training at the institution is evaluated and further yards given.

Finally the judges add your total experiences – including your finishing position in previous races – advanced degrees, and connections and further yards are added.

So when the gun sounds, the person without the advantages strives as hard as they can but they cannot win the race because some people only have to simply step over the finish line.

And even more troubling some people are moved behind the starting line because they could not even muster the necessary accomplishments to reach the starting line: drop outs from school, people who have been convicted of crimes and the rest. The worse the offense, the further you are moved behind the starting line.

Every day this continues and those striving to win – even running faster and harder than their competitors – are simply unable to do so because the rules are such that winning is not even a consideration when the race is rigged.

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Jazz Paw , February 4, 2017 at 4:30 pm

The factors are certainly at work in inequality. Some of those factors can either be mitigated or compensated for by the individual and/or the social system.

There are other structural factors that influence inequality. Family connections, inherited wealth, and other forms of social capital that can make advancement easier is one. Savings and investment patterns that can be engaged in to varying degrees depending on just how much surplus income one has is another.

The social and political system in the US generally favors vigorous competition, private self-dealing, and asymmetric information. Individuals who learn to navigate these factors can prosper, while those who either can't or don't want to can suffer significant disadvantages in outcomes. The influence of these structural factors in any social system influences the degree of income/wealth stratification.

In my own family, many of the starting social factors are fairly equal among the individuals. Even though my various relatives have not necessarily made "bad" choices in the moral sense, their outcomes have been vastly different. The degree to which they have chosen to engagein income/wealth maximization has generally been a large factor. In that sense, the game is rigged away from living what many consider a humane life.

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David , February 4, 2017 at 7:19 am

You mean people actually got paid to research and write stuff like this? You simply have to look at the (re)distribution policies of the countries concerned – and there are substantial differences between the three of them, by the way.
Wouldn't a much more interesting question be "By what mechanism does globalization necessarily increase inequality, and how does it work precisely in a number of contrasted cases"? But then you might get the wrong answer.

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lyman alpha blob , February 4, 2017 at 9:38 am

No kidding – kind of amazing that people get paid good money to restate the obvious, but using sesquipedalian language just to make it more difficult to understand.

Inequality is caused by one group not having as much money as another. Money is simply a tool created by human beings. Much like a hammer, human beings could use it to build houses for everyone or to bash others about the head. We humans seem to prefer the latter use.

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Grebo , February 4, 2017 at 1:43 pm

The people paid to prove the obvious are far outnumbered by those paid to disprove it. We need the former because of the latter.
On the other hand, there are many cases where the obvious turned out to be wrong when it was looked at carefully. More research needed!

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Knute Rife , February 4, 2017 at 1:49 pm

We're in a world where politicians get paid to lie about these obvious things and legislate based on those lies, and businesses make their profits off the lies, so I can't get too exercised when someone gets paid to point out the lies.

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Fred Grosso , February 4, 2017 at 7:52 am

Yes. I decided I wasn't going to be Fred Trump's son.

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Disturbed Voter , February 4, 2017 at 8:06 am

Bravo. Who can tolerate the virtue signaling of the plutocracy?

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Carla , February 4, 2017 at 10:20 am

+10

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funemployed , February 4, 2017 at 8:36 am

"Forces." Really? "Globalization" and "technological change" are things humans do for human reasons. To treat them as "forces" somehow exogenous to human choices is self-evidently fallacious. It's precisely the same logic that says the King is the King cause God likes him best.

They're not "forces." They are heuristics. And as heuristics, they are pretty lousy unless you parse them quite a bit. Obama's 1 trillion dollar investment in nukes creates "technological change." The destruction of local agricultural techniques and knowledge is "technological change." A kindle is "technological change." Keyword searches readily available to academic researchers was a big "technological change."

I'm assuming what they mean by "technological change" here is the sort that allows us to collectively make more stuff with less work. God forbid anyone spell that out though. Because "hey, guess what: you have to work more for less because we can now make more stuff with less work," would quickly lead to the violent demise of economists and rich people. (more to say on "globalization" but this post is already way longer than intended.)

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Sound of the Suburbs , February 4, 2017 at 9:21 am

Redistributive Keynesian capitalism produces the lowest levels of inequality within the developed world from the 1950s to the 1970s.

1980s – Let's get rid of redistributive Keynesian capitalism.

Inequality soars.

What was supposed to happen?

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nowhere , February 4, 2017 at 6:31 pm

A rising tide of lifting boats

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Pelham , February 4, 2017 at 10:06 am

Germany should have been included in the study. German manufacturing is far more technologically advanced than manufacturing in the US, yet Germany manages to maintain high employment in that sector, probably because the companies invest in worker training and feel some obligation toward labor.

There's a structural reason for this, with labor having powerful representation on German corporate boards and smaller companies being owned by families instead of faceless shareholders, with the families' long-term interests naturally more in alignment with those of their employees.

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David , February 4, 2017 at 11:22 am

Actually, I thought the inclusion of France and the UK was a bit strange, as well. Inequality in both countries has been increasingly massively in recent years. One Thomas Piketty even wrote something on the topic, if I'm not mistaken. Japan would have been a much better example.

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jrs , February 4, 2017 at 12:22 pm

I think it kind of makes the point, if even a country that isn't exactly known for egalitarianism, like the UK, is doing better than the U.S. it kind of shows how extreme on the scale the U.S. is.

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nowhere , February 4, 2017 at 6:33 pm

We are exceptional in every way!

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Barni , February 4, 2017 at 1:42 pm

Contrary to elite owned and serving mass media claims, the trick that created the German economic miracle is no mystery; it was, and IS, their banking system.
In Germany more than 70% of all banking is done by "municipally owned banks"!!!
A situation that the elites – masters of the universe -have been working day and night to drastically alter so that their "too big to fail" minion zombie banks can take complete AND total control of the economy, as they have in most of the developed world except North Dakota, Canada (Canada owns the Bank of Canada – the Finance Minister holds all the shares on behalf of all Canadians), and Switzerland (Switzerland has Cantonal {municipally or provincially} owned banks) – all three countries, like the German municipally owned banks, are under attack by the elite serving bureaucrats in the IMF and the U.S. Federal Reserve; all of whom are owned by, and minions of, Wall Street; and most importantly the corporate bought and sold world's university economics departments – co-opted to right agenda faux economic B.S.
The U.S. Federal Reserve now donates more money to universities worldwide than all of the rest of the donors combined!?! The proviso on these donations is that they only hire economics profs who have been published in one of the 37 journals published by the U.S. Federal Reserve – and we know what kind of right agenda 'fascist' mumbo-jumbo these minion economists are dedicated to serving up in order to get published by the U.S. Fed!!!
So what you say!! Well here's so what!
If you are in any other developed country than Germany and you have a great idea/product and require a one million dollar loan to build a factory and set up production – here's what happens to you. Your local banks will never lend you that money, so you have to go to the criminal Big Banks which will also never lend you the money you need, which means you will have to sell your idea/product at pennies on the dollar to one of their huge corporate clients, who will offshore production to a corrupted third world country where workers get paid pennies an hour and unions are considered a criminal enterprise. Leaving you, the creator of the product or service with pennies on the dollar; and leaving your local economy with zero economic growth and no well paid local employment opportunities. The corporate buyer of your technology/product/idea may well just kill your product because it is better than the (inferior) one they are currently making bags of money selling – for which they have just eliminated your innovative and superior competitive product.
If you are in Germany however the story is far different. In Germany you would go to your local municipally owned bank which is only too happy to give you the one million dollars you need to set up production (locally providing employment and contributing to local economic prosperity).
This is the basis for the strength of the German economy and the reason for the so called ":German economic miracle?"!
It is described as a "miracle" not because we have no idea how it happened, rather because the elites who own more than 80% of all corporate shares need to confuse us plebs they want to economically and politically crush!

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Sluggeaux , February 4, 2017 at 11:01 am

American wealth inequality is a political problem? Well, no sh*t, Sherlock .

Kevin Phillips wrote about this phenomenon a decade ago in his wonderful book Wealth and Democracy . Between 1920 and 1980, American plutocrats had been placed in fear by the Bolshevik revolution, humbled by the Great Depression, and shamed by the Second World War. Greed was in check. Then they died-off and left their wealth to a new generation more interested in emulating Mick Jagger than Dwight D. Eisenhower. Ronnie Reagan was their Hollywood pal, who cut estate and coupon-clipping taxes so that they could party like rock stars.

Crass punks like Donald Trump and the Kochs are the scions of inherited wealth and Studio 54. They could never have made it on their own, on their own talents, and it is in their class interest to destroy any sort of meritocracy. They have used materialism and greed to buy the political class.

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Advance , February 4, 2017 at 11:21 am

Look up Geert Hofstede's work on "power distance," which is the extent to which a nation accepts inequality.

According to Hofstede, countries have different "tastes" or preferences for inequality. For example, the Middle East, parts of S America, India, and other parts of Asia have a much bigger "taste" for inequality compared to, say, the Scandinavian countries, which have the lowest.

I would guess that differences in preferences for inequality between countries go back to a nation's history, and maybe other hard-to-pin down forces and factors.

The US, according to Hofstede's work, is at the middle point, or a little lower, as to taste for inequality. However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. In other words, we may be getting more inequality than we like.

By the way, Hofstede assumes that power distance preference is a fairly durable characteristic of a nation.

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UserFriendly , February 4, 2017 at 2:45 pm

Preference?? Yes, I'm sure the mid east loves inequality, which is why they are known for choosing dictators who quash uprisings as their leaders. And how exactly would I choose egalitarianism here in the US? I can vote for Wall Street and Holly Wood or Wall Street and Exxon Mobil. Which one is the egalitarian one?

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Ignacio , February 4, 2017 at 2:58 pm

"

However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences.

"

What about "power distance" (extent to which a nation accepts inequality) interactions with "distance to power" extent to which a nation influences the powerful.

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Sam , February 4, 2017 at 12:40 pm

According to Ha-Joon Chang, markets are political creations.

So, yes.

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Bernard , February 4, 2017 at 12:45 pm

"To serve Humans." The cookbook from " the Outer Limits/Twilight Zone" TV series had aliens come to "devour" humans. such a farce!! lol

when the reality all along has been that's it the Rich who wrote the "Cookbook". Bernay's sauce, once again.

who would have thunk it! Inequality is the major ingredient.

Reply
Anonymous , February 4, 2017 at 2:17 pm

I've been reading Robert J. Gordon's book, 'The Rise and Fall of American Growth.' Gordon would say that American labor did well from 1870-1970 because of the innovations that drove the economy increased everyone's productivity and the value of their work. Since 1970, productivity has slowed down. It rose again during the decade of the '90s but mostly for knowledge workers, thanks to the internet, spreadsheets, etcetera, but now has continued to slow. That was a recipe for income inequality, and for wealth inequality as well, since the rise of digital industries has increased property values on the coasts and in select inland cities.

Slowing productivity also increased wealth inequality by facilitating the decline of interest rates. This helps the haves, since their assets are suddenly more valuable.

Reply
pretzelattack , February 4, 2017 at 3:23 pm

http://www.huffingtonpost.com/martin-ford/is-american-economic-grow_b_9096698.html

this guy argues that productivity has been decoupled from compensation, and that has driven the rise of inequality.

off topic, but the krugman review of the book contained the interesting fact that, during the 1880's, wall street was 7 feet deep in manure in some places.

Reply
UserFriendly , February 4, 2017 at 2:53 pm

Of course inequality is a political choice. Chosen by the oligarchs who buy the politicians.

Just like every mainstream economist is choosing to make millions suffer and die every day because excepting MMT would bruise their ego's. That is a choice too.

Reply
Ignacio , February 4, 2017 at 3:01 pm

I think that inequality is not a political choice directly but a consequence of deregulation or "do nothing" policy. Reducing inequality is a policy choice.

Reply
marblex , February 4, 2017 at 3:32 pm

To quote the very astute Batman11 from ZH:

𝐀𝐥𝐥 𝐟𝐨𝐫 𝐨𝐮𝐫𝐬𝐞𝐥𝐯𝐞𝐬, 𝐚𝐧𝐝 𝐧𝐨𝐭𝐡𝐢𝐧𝐠 𝐟𝐨𝐫 𝐨𝐭𝐡𝐞𝐫 𝐩𝐞𝐨𝐩𝐥𝐞 𝐬𝐞𝐞𝐦𝐬, 𝐢𝐧 𝐞𝐯𝐞𝐫𝐲 𝐚𝐠𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝, 𝐭𝐨 𝐡𝐚𝐯𝐞 𝐛𝐞𝐞𝐧 𝐭𝐡𝐞 𝐯𝐢𝐥𝐞 𝐦𝐚𝐱𝐢𝐦 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐚𝐬𝐭𝐞𝐫𝐬 𝐨𝐟 𝐦𝐚𝐧𝐤𝐢𝐧𝐝." 𝐀𝐝𝐚𝐦 𝐒𝐦𝐢𝐭𝐡, 𝐓𝐡𝐞 𝐖𝐞𝐚𝐥𝐭𝐡 𝐨𝐟 𝐍𝐚𝐭𝐢𝐨𝐧𝐬

𝐌𝐚𝐧𝐤𝐢𝐧𝐝 𝐟𝐢𝐫𝐬𝐭 𝐬𝐭𝐚𝐫𝐭𝐞𝐝 𝐭𝐨 𝐩𝐫𝐨𝐝𝐮𝐜𝐞 𝐚 𝐬𝐮𝐫𝐩𝐥𝐮𝐬 𝐰𝐢𝐭𝐡 𝐞𝐚𝐫𝐥𝐲 𝐚𝐠𝐫𝐢𝐜𝐮𝐥𝐭𝐮𝐫𝐞.

𝐈𝐭 𝐰𝐚𝐬𝐧'𝐭 𝐥𝐨𝐧𝐠 𝐛𝐞𝐟𝐨𝐫𝐞 𝐭𝐡𝐞 𝐞𝐥𝐢𝐭𝐞𝐬 𝐥𝐞𝐚𝐫𝐧𝐭 𝐡𝐨𝐰 𝐭𝐨 𝐫𝐞𝐚𝐝 𝐭𝐡𝐞 𝐬𝐤𝐢𝐞𝐬, 𝐭𝐡𝐞 𝐬𝐮𝐧 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐬𝐭𝐚𝐫𝐬, 𝐭𝐨 𝐩𝐫𝐞𝐝𝐢𝐜𝐭 𝐭𝐡𝐞 𝐜𝐨𝐦𝐢𝐧𝐠 𝐬𝐞𝐚𝐬𝐨𝐧𝐬 𝐭𝐨 𝐭𝐡𝐞 𝐚𝐦𝐚𝐳𝐞𝐝 𝐦𝐚𝐬𝐬𝐞𝐬 𝐚𝐧𝐝 𝐜𝐨𝐥𝐥𝐞𝐜𝐭 𝐭𝐫𝐢𝐛𝐮𝐭𝐞.

They soon made the most of the opportunity and removed themselves from any hard work to concentrate on "spiritual matters", i.e. any hocus-pocus they could come up with to elevate them from the masses, e.g. rituals, fertility rights, offering to the gods . etc and to turn the initially small tributes, into extracting all the surplus created by the hard work of the rest.

The elites became the representatives of the gods
and they were responsible for the bounty of the earth and the harvests. As long as all the surplus was handed over, all would be well.
Later they came up with money.

We pay you to do the work and you give it back to us when you buy things, you live a bare subsistence existence and we take the rest.

"𝐌𝐨𝐧𝐞𝐲 𝐢𝐬 𝐚 𝐧𝐞𝐰 𝐟𝐨𝐫𝐦 𝐨𝐟 𝐬𝐥𝐚𝐯𝐞𝐫𝐲, 𝐚𝐧𝐝 𝐝𝐢𝐬𝐭𝐢𝐧𝐠𝐮𝐢𝐬𝐡𝐚𝐛𝐥𝐞 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐨𝐥𝐝 𝐬𝐢𝐦𝐩𝐥𝐲 𝐛𝐲 𝐭𝐡𝐞 𝐟𝐚𝐜𝐭 𝐭𝐡𝐚𝐭 𝐢𝐭 𝐢𝐬 𝐢𝐦𝐩𝐞𝐫𝐬𝐨𝐧𝐚𝐥 – 𝐭𝐡𝐚𝐭 𝐭𝐡𝐞𝐫𝐞 𝐢𝐬 𝐧𝐨 𝐡𝐮𝐦𝐚𝐧 𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐦𝐚𝐬𝐭𝐞𝐫 𝐚𝐧𝐝 𝐬𝐥𝐚𝐯𝐞." 𝐋𝐞𝐨 𝐓𝐨𝐥𝐬𝐭𝐨𝐲

𝐓𝐡𝐞 𝐬𝐮𝐫𝐩𝐥𝐮𝐬 𝐩𝐫𝐨𝐝𝐮𝐜𝐞𝐝 𝐬𝐢𝐧𝐜𝐞 𝐭𝐡𝐞 𝐞𝐚𝐫𝐥𝐢𝐞𝐬𝐭 𝐚𝐠𝐫𝐢𝐜𝐮𝐥𝐭𝐮𝐫𝐚𝐥 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐢𝐞𝐬 𝐰𝐚𝐬 𝐭𝐡𝐮𝐬 𝐞𝐱𝐭𝐫𝐚𝐜𝐭𝐞𝐝 𝐛𝐲 𝐭𝐡𝐞 𝐞𝐥𝐢𝐭𝐞.

A bare subsistence existence ensured the workers didn't die and could reproduce, why give them anymore? The vile maxim of the masters of mankind.

Basic capitalism was how it all started in the 18th and 19th Centuries, the poor lived in squalor and the rich lived in luxury, the same as it had always been.

Only organised labour movements got those at the bottom a larger slice of the pie, basic capitalism gives nothing to the people who do the work apart from a bare subsistence existence.

The wealthy decided they needed to do away with organised labour movements and the welfare state; it was interfering with the natural order where they extract all the surplus.

2017 – World's eight richest people have same wealth as poorest 50%

Nearly there.

They need a bit more fine tuning at Davos.

Some of the world's workers are not living a bare subsistence existence.

𝐀 𝐛𝐚𝐫𝐞 𝐬𝐮𝐛𝐬𝐢𝐬𝐭𝐞𝐧𝐜𝐞 𝐞𝐱𝐢𝐬𝐭𝐞𝐧𝐜𝐞 𝐞𝐧𝐬𝐮𝐫𝐞𝐬 𝐭𝐡𝐞 𝐰𝐨𝐫𝐤𝐞𝐫𝐬 𝐝𝐨𝐧'𝐭 𝐝𝐢𝐞 𝐚𝐧𝐝 𝐜𝐚𝐧 𝐫𝐞𝐩𝐫𝐨𝐝𝐮𝐜𝐞, 𝐰𝐡𝐲 𝐠𝐢𝐯𝐞 𝐭𝐡𝐞𝐦 𝐚𝐧𝐲𝐦𝐨𝐫𝐞? 𝐓𝐡𝐞 𝐯𝐢𝐥𝐞 𝐦𝐚𝐱𝐢𝐦 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐚𝐬𝐭𝐞𝐫𝐬 𝐨𝐟 𝐦𝐚𝐧𝐤𝐢𝐧𝐝, 𝐜𝐮𝐫𝐫𝐞𝐧𝐭𝐥𝐲 𝐤𝐧𝐨𝐰𝐧 𝐚𝐬 𝐧𝐞𝐨-𝐥𝐢𝐛𝐞𝐫𝐚𝐥𝐢𝐬𝐦.

𝐁𝐚𝐬𝐢𝐜 𝐜𝐚𝐩𝐢𝐭𝐚𝐥𝐢𝐬𝐦, 𝐬𝐭𝐫𝐢𝐩𝐩𝐞𝐝 𝐨𝐟 𝐚 𝐰𝐞𝐥𝐟𝐚𝐫𝐞 𝐬𝐭𝐚𝐭𝐞 𝐚𝐧𝐝 𝐨𝐫𝐠𝐚𝐧𝐢𝐬𝐞𝐝 𝐥𝐚𝐛𝐨𝐮𝐫 𝐦𝐨𝐯𝐞𝐦𝐞𝐧𝐭𝐬, 𝐰𝐢𝐭𝐡 𝐚 𝐠𝐥𝐨𝐛𝐚𝐥 𝐰𝐨𝐫𝐤𝐟𝐨𝐫𝐜𝐞 𝐞𝐧𝐬𝐮𝐫𝐢𝐧𝐠 𝐚𝐧 𝐞𝐱𝐜𝐞𝐬𝐬 𝐬𝐮𝐩𝐩𝐥𝐲 𝐨𝐟 𝐥𝐚𝐛𝐨𝐮𝐫 𝐝𝐫𝐢𝐯𝐢𝐧𝐠 𝐰𝐚𝐠𝐞𝐬 𝐝𝐨𝐰𝐧 𝐭𝐨 𝐭𝐡𝐞 𝐦𝐢𝐧𝐢𝐦𝐮𝐦.

𝐏𝐞𝐫𝐟𝐞𝐜𝐭, 𝐢𝐭'𝐬 𝐠𝐨𝐢𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐣𝐮𝐬𝐭 𝐥𝐢𝐤𝐞 𝐭𝐡𝐞 𝐠𝐨𝐨𝐝 𝐨𝐥𝐝 𝐝𝐚𝐲𝐬.

𝐓𝐡𝐞 𝐢𝐦𝐩𝐨𝐯𝐞𝐫𝐬𝐢𝐡𝐞𝐝 𝐦𝐢𝐝𝐝𝐥𝐞 𝐜𝐥𝐚𝐬𝐬, 𝐡𝐨𝐰 𝐝𝐢𝐝 𝐭𝐡𝐚𝐭 𝐡𝐚𝐩𝐩𝐞𝐧?

𝐈𝐭 𝐰𝐚𝐬 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐩𝐥𝐚𝐧.

Francis Fukuyama talked of the "end of history" and "liberal democracy".

Liberal democracy was the bringing together of two mutually exclusive ideas.

Economic liberalism – that enriches the few and impoverishes the many.

Democracy – that requires the support of the majority.

Trying to bring two mutually exclusive ideas together just doesn't work.

The ideas of "Economic Liberalism" came from Milton Freidman and the University of Chicago. It was so radical they first tried it in a military dictatorship in Chile, it wouldn't be compatible with democracy. It took death squads, torture and terror to keep it in place, there was an ethnic cleansing of anyone who still showed signs of any left wing thinking.

It was tried in a few other places in South America using similar techniques. It then did succeed in a democracy but only by tricking the people into thinking they were voting for something else, severe oppression was needed when they found out what they were getting.

It brings extreme inequality and widespread poverty everywhere it's tested, they decide it's a system that should be rolled out globally. It's just what they are looking for.

𝐆𝐨𝐨𝐝 𝐧𝐞𝐰𝐬 𝐢𝐭 𝐰𝐨𝐫𝐤𝐬 𝐚𝐬 𝐩𝐥𝐚𝐧𝐧𝐞𝐝.

𝟐𝟎𝟏𝟒 – "𝟖𝟓 𝐫𝐢𝐜𝐡𝐞𝐬𝐭 𝐩𝐞𝐨𝐩𝐥𝐞 𝐚𝐬 𝐰𝐞𝐚𝐥𝐭𝐡𝐲 𝐚𝐬 𝐩𝐨𝐨𝐫𝐞𝐬𝐭 𝐡𝐚𝐥𝐟 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝"

𝟐𝟎𝟏𝟔 – "𝐑𝐢𝐜𝐡𝐞𝐬𝐭 𝟔𝟐 𝐩𝐞𝐨𝐩𝐥𝐞 𝐚𝐬 𝐰𝐞𝐚𝐥𝐭𝐡𝐲 𝐚𝐬 𝐡𝐚𝐥𝐟 𝐨𝐟 𝐰𝐨𝐫𝐥𝐝'𝐬 𝐩𝐨𝐩𝐮𝐥𝐚𝐭𝐢𝐨𝐧"

𝟐𝟎𝟏𝟕 – 𝐖𝐨𝐫𝐥𝐝'𝐬 𝐞𝐢𝐠𝐡𝐭 𝐫𝐢𝐜𝐡𝐞𝐬𝐭 𝐩𝐞𝐨𝐩𝐥𝐞 𝐡𝐚𝐯𝐞 𝐬𝐚𝐦𝐞 𝐰𝐞𝐚𝐥𝐭𝐡 𝐚𝐬 𝐩𝐨𝐨𝐫𝐞𝐬𝐭 𝟓𝟎%

𝐓𝐡𝐞 𝐠𝐥𝐨𝐛𝐚𝐥 𝐞𝐥𝐢𝐭𝐞 𝐚𝐫𝐞 𝐮𝐧𝐬𝐮𝐫𝐩𝐚𝐬𝐬𝐞𝐝 𝐢𝐧 𝐥𝐨𝐨𝐤𝐢𝐧𝐠 𝐚𝐟𝐭𝐞𝐫 𝐭𝐡𝐞𝐢𝐫 𝐨𝐰𝐧 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐬.

𝐖𝐡𝐚𝐭 𝐡𝐚𝐯𝐞 𝐭𝐡𝐨𝐬𝐞 𝐩𝐨𝐩𝐮𝐥𝐢𝐬𝐭𝐬 𝐠𝐨𝐭 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐚𝐢𝐧 𝐚𝐛𝐨𝐮𝐭?

𝐍𝐚𝐨𝐦𝐢 𝐊𝐥𝐞𝐢𝐧'𝐬 "𝐒𝐡𝐨𝐜𝐤 𝐃𝐨𝐜𝐭𝐫𝐢𝐧𝐞" 𝐜𝐨𝐯𝐞𝐫𝐬 𝐭𝐡𝐢𝐬 𝐢𝐝𝐞𝐨𝐥𝐨𝐠𝐲 𝐢𝐧 𝐚𝐥𝐥 𝐢𝐭𝐬 𝐧𝐚𝐬𝐭𝐢𝐧𝐞𝐬𝐬."
Post by Batman11@ZH

Reply
Mitch Ritter , February 4, 2017 at 4:14 pm

Would a for-profit chain of local newspapers whose business model and advertising is built on serving the Portland Business Alliance and Chamber of Commerce interests hire or keep on staff any kind of investigative journalistic team or even an individual columnist\calumnist like recently deceased VILLAGE VOICE early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)?
https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html

What socio-econ OUTCOMES have resulted in even PAMPLIN MEDIA GROUP 's outsourcing to a non-profit InvestigateWest journalistic venture and beginning a series that seems historic in these parts as the SAN JOSE MERCURY NEWS series by dead investigative journalist GARY WEBB in the years after Iran-Contra Scandal to uncover the bid-net of BUSINESS and that was shortly thereafter taken down off the web under pressure by the SAN JOSE MERCURY NEWS .

Here's our story, for this twice-a-week Business Serving newspaper group anyway. Get yer Huzzahs in fast before all trace of the findings of this Moonlighting Civil Servant who got the docs via PUBLIC RECORDS REQUEST SEARCHES on her own dime and has embarrased the 1-Party so-called PROGRESSIVE DEMOCRATIC BLUE PARTY MACHINE in OREGON beginning with ORACLE LLC Lawsuit-Surrendering ATTORNEY GENERAL Ellen Rosenblum and up to the Governor Kate Brown neither of whom in long careers in State Government in jobs tasked with auditing ever reviewed these findings:

http://portlandtribune.com/uej/343021-222631-moonlighting-ex-reporters-work-aids-investigation

http://portlandtribune.com/pt/9-news/343183-222766-the-high-cost-of-being-black-in-multnomah-county

http://portlandtribune.com/politics/unequal-justice/342537

Keep on doing,
Punching way above your weight PAMPLIN PAPERS
making a mockery of outside money-owned OREGONIAN
and the so-called alternative weeklies who only make news hole
available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or Booze\Gourmet venture

Mitch Ritter\Paradigm Shifters
Lay-Low Studios, Ore-Wa
Media Discussion Group

Reply
Freda Miller , February 4, 2017 at 10:01 pm

Thanks for the links, Mitch. For an economically disadvantaged group to be assessed so much more in penalties for minor infractions makes inequality even worse.

Reply

TCOMES have resulted in even PAMPLIN MEDIA GROUP 's outsourcing to a non-profit InvestigateWest journalistic venture and beginning a series that seems historic in these parts as the SAN JOSE MERCURY NEWS series by dead investigative journalist GARY WEBB in the years after Iran-Contra Scandal to uncover the bid-net of BUSINESS and that was shortly thereafter taken down off the web under pressure by the SAN JOSE MERCURY NEWS .

Here's our story, for this twice-a-week Business Serving newspaper group anyway. Get yer Huzzahs in fast before all trace of the findings of this Moonlighting Civil Servant who got the docs via PUBLIC RECORDS REQUEST SEARCHES on her own dime and has embarrased the 1-Party so-called PROGRESSIVE DEMOCRATIC BLUE PARTY MACHINE in OREGON beginning with ORACLE LLC Lawsuit-Surrendering ATTORNEY GENERAL Ellen Rosenblum and up to the Governor Kate Brown neither of whom in long careers in State Government in jobs tasked with auditing ever reviewed these findings:

http://portlandtribune.com/uej/343021-222631-moonlighting-ex-reporters-work-aids-investigation

http://portlandtribune.com/pt/9-news/343183-222766-the-high-cost-of-being-black-in-multnomah-county

http://portlandtribune.com/politics/unequal-justice/342537

Keep on doing,
Punching way above your weight PAMPLIN PAPERS
making a mockery of outside money-owned OREGONIAN
and the so-called alternative weeklies who only make news hole
available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or Booze\Gourmet venture

Mitch Ritter\Paradigm Shifters
Lay-Low Studios, Ore-Wa
Media Discussion Group

Freda Miller , February 4, 2017 at 10:01 pm

Thanks for the links, Mitch. For an economically disadvantaged group to be assessed so much more in penalties for minor infractions makes inequality even worse.

[Feb 01, 2017] If enacted, the the Destination-Based Cash Flow Tax would likely lead to lengthy litigation at the World Trade Organization

Feb 01, 2017 | economistsview.typepad.com
anne : January 22, 2017 at 08:09 PM , 2017 at 08:09 PM
http://econospeak.blogspot.com/2017/01/auerbachs-tax-and-clone-wars.html

January 22, 2017

Auerbach's Tax and the Clone Wars

Menzie Chinn * introduces a new asset to economist blogging. Joel Trachtman ** provides an excellent discussion of whether the Destination-Based Cash Flow Tax violates WTO rules concluding that it does. He adds:

"If enacted, the plan would likely lead to lengthy litigation at the World Trade Organization. A (likely) ruling that the tax is an income tax, and is applied in a discriminatory manner, would mean that exempting exports would be considered an illegal subsidy and taxes on imports an illegal tariff. This could lead to trade sanctions against the U.S. and open the door to counter sanctions and the start of a trade war."

President Trump strikes me as someone who could care less about WTO rules. And starting a trade war fits his grand design of governance. As Yoda noted:

"Begun the clone war has"

President Trump is Lord Palpatine.

* http://econbrowser.com/archives/2017/01/econofact-bringing-facts-and-data-to-policy-debates

** http://econofact.org/house-gop-tax-plan-aims-to-boost-competitiveness-might-also-violate-trade-law

-- PGL

[Feb 01, 2017] Is Global Equality the Enemy of National Equality?

Feb 01, 2017 | economistsview.typepad.com
Dani Rodrik:

Is Global Equality the Enemy of National Equality? : The question in the title is perhaps the most important question we confront, and will continue to confront in the years ahead. I discuss my take in this paper .
Many economists tend to be global-egalitarians and believe borders have little significance in evaluations of justice and equity. From this perspective, policies must focus on enhancing income opportunities for the global poor. Political systems, however, are organized around nation states, and create a bias towards domestic-egalitarianism.
How significant is the tension between these two perspectives? Consider the China "trade shock." Expanding trade with China has aggravated inequality in the United States, while ameliorating global inequality. This is the consequence of the fact that the bulk of global inequality is accounted for by income differences across countries rather than within countries.
But the China shock is receding and other low-income countries are unlikely to replicate China's export-oriented industrialization experience. So perhaps the tension is going away?
Not so fast. The tension is even greater somewhere else: Relaxing restrictions on cross-border labor mobility would have an even stronger positive effect on global inequality, at the cost of adverse effects at the lower end of labor markets in rich economies. On the other hand, international labor mobility has some advantages compared to further liberalizing international trade in goods.
I discuss these issues and more here .


Mr. Bill : , January 22, 2017 at 12:39 PM

Well said, Dani.

Adam Smith never sited poverty, environmental intransigents, and malliable governments as a desireable " comparative advantage". Quite the opposite.

TrumpisaJew : , January 22, 2017 at 12:43 PM
The export model was a credit bubble illusion. It just wasn't sustainable, it was a lie. Now China has massive capital flight.
anne : , January 22, 2017 at 01:56 PM
http://rodrik.typepad.com/Is%20Global%20Equality%20the%20Enemy%20of%20National%20Equality.pdf

January, 2017

Is Global Equality the Enemy of National Equality?
By Dani Rodrik

Abstract

The bulk of global inequality is accounted for by income differences across countries rather than within countries. Expanding trade with China has aggravated inequality in some advanced economies, while ameliorating global inequality. But the "China shock" is receding and other low-income countries are unlikely to replicate China's export-oriented industrialization experience. Relaxing restrictions on cross-border labor mobility might have an even stronger positive effect on global inequality. However it also raises a similar tension. While there would likely be adverse effects on low-skill workers in the advanced economies, international labor mobility has some advantages compared to further liberalizing international trade in goods. I argue that none of the contending perspectives -- national-egalitarian, cosmopolitan, utilitarian -- provides on its own an adequate frame for evaluating the consequences.

[ An excellent and necessary paper for which I am grateful. Now for another reading. ]

Mr. Bill -> anne... , January 22, 2017 at 03:56 PM
What is excellent about it ? Please explain.
anne -> Mr. Bill... , January 22, 2017 at 04:09 PM
http://rodrik.typepad.com/Is%20Global%20Equality%20the%20Enemy%20of%20National%20Equality.pdf

January, 2017

Is Global Equality the Enemy of National Equality?
By Dani Rodrik

Whether one thinks the last quarter century has been good or bad for equity depends critically on whether one takes a national or global perspective. Within nations, inequality has typically risen in rich and poor nations alike. (Latin American countries, where we observe the highest levels of inequality in the world, were the only ones that significantly bucked the trend.) When commentators talk about inequality, this is usually what they have in mind. But there is another way of looking at inequality, which is to disregard national borders and focus on the distribution of income across all households in the world. Analyzed in this way global inequality actually fell sharply over the same period, thanks in large part to the very rapid growth of China and India, the world's two largest developing economies. In fact, this transformation has been so momentous that the contours of the global distribution of income have changed drastically. The two humps in the distribution – reflecting the all-too recent reality of a world divided into two clear segments, one small and rich, the other large and poor – have disappeared, with an emergent global "middle class" filling out the valley between the two humps (Figure 1).

The bulk of global income equality today is accounted for by income gaps between countries, rather than within them. This explains why economic growth in countries like China and India has a significant positive effect on global equality, even when inequality rises domestically in those countries, as it has done substantially in China's case.

To drive home the importance of between-country gaps, I sometimes ask my audience the following question: would you rather be rich in a poor country, or poor in a rich country? I tell them to assume they care only about their own income and purchasing power....

anne -> Mr. Bill... , January 22, 2017 at 04:22 PM
Among the excellent aspects, the question is raised as to what development means for relatively poor countries in which growth even when significant for a time shuts out much of a population; what has to be sacrificed by the fortunate for growth to be inclusive and as such sustainable; after all among the poorer countries growth has been decidedly subject to disruption for decades now; supposing trade is to be limited as a driver of growth, what then?

Add then to these questions in reading.

Think -> anne... , January 22, 2017 at 05:21 PM
Thank you, Anne. You seem to adhere to a reality that says that the US is an illegitimate society.
Think -> Think... , January 22, 2017 at 05:32 PM
Personally, I love the USA. Especially being able to shoot my mouth off.

Hell. i don't know if its right or wrong.

JohnH -> anne... , January 22, 2017 at 06:32 PM
Eight billionaires have as much wealth as half the world's population.
http://events.tbo.com/news/world/these-8-billionaires-are-as-rich-as-half-the-worlds-population-oxfam-says/2309727

I would have to conclude that the bulk of global inequality is accounted for by income differences between the 0.1% and the bottom 95%.

Ashok Hegde -> JohnH... , January 24, 2017 at 07:59 PM
Ridiculous.

If people with no wealth continue to procreate at high rates, of course inequality will only grow. The real issue here is population growth. The poor are replicating at high rates, and the wealthy do not. This accounts for the growth of so much of this 'natural' inequality.

DrDick : , January 22, 2017 at 04:31 PM
There is a major problem with Rodrik's piece. Between country inequality has been declining steadily since the 1990s, while within country inequality has been increasing since the 1980s. As I keep saying, the only real beneficiaries of globalization have been the wealthy of the world.

http://www.un.org/en/development/desa/policy/wess/wess_bg_papers/bp_wess2013_svieira1.pdf

https://www.postkeynesian.net/downloads/working-papers/PKWP1303.pdf

https://unu.edu/media-relations/releases/global-income-inequality-unu-wider-press-release.html#info

Think -> DrDick... , January 22, 2017 at 04:40 PM
Well, I agree with you, singing to the choir. My Dad raised seven on the union wage. How can I convince the folks of this simple fact ?
anne -> Think... , January 22, 2017 at 06:06 PM
My Dad raised seven on the union wage. How can I convince the folks of this simple fact?

[ By carefully explaining how this came to pass, the history of family told in context of the times is important. ]

Think -> anne... , January 23, 2017 at 01:23 AM
Well, my dear, the truth is so simple that it eludes us. If American families have enough money, they will succeed.

My Dad was part of the cohort from WW2. They came back and were not about to succumb to those who did so little.I remember, during a strike, him going out with a bat to put an end to the company running scabs. They beat the hell out of them.

Some things are worth fighting for.

DrDick -> Think... , January 23, 2017 at 07:25 AM
Bull. We are of the same generation and the 1950s was a period of almost unprecedented prosperity and upward mobility. Several factors drove this. First was the GI Bill, with free college and low cost home loans for vets. Second was the emergence or expansion of several industries which created a high demand for skilled labor and technical professionals (electronics, aerospace, petrochemicals, etc.). Third was massive government infrastructure investment, like the interstate highway system. Finally, strong unions fighting for the interests of the workers. Violence and bigotry help no one and the Tangerine Turd in the White House will do nothing good for working people.
Kaleberg : , January 22, 2017 at 05:00 PM
The problem is that every nation that has ever developed in terms of productive capacity and increased living standards on this here earth of ours has done so by erecting some type of barrier. There really is no other way, at least not one that has been demonstrated to work. The barriers may take different forms and be more or less penetrable, but they remain. Before the turbine and diesel engines, transportation could be considered a barrier, but it is not much of a barrier today.

One of the big problems we have nowadays is trying to solve problems that are basically too big to be solved, let alone solved simplistically. The nation state, for all its myriad faults, was a driving force for development and our current level of wealth. It was a powerful counter to the multi-nationalism of the feudal era which had an international upper class that was favored over the actually productive urban and trading classes. Encouraging multi-national corporations and coddling world-wide elites by trying to provide them the benefits of development without its political costs has been a formula for disaster.

realpc : , January 22, 2017 at 06:39 PM
Nationalism is natural. You either have nations or you have one big all-powerful world government.

Caring about your own nation first is common sense. Incredible that Trump even has to say it. But in this crazy political environment, it has to be said.

If you don't put yourself first, you will stop existing. If you don't put your nation first, it will stop existing.

All software developers understand modular design. Nature is designed modularly, and human society is part of nature.

We have nations because we are part of nature.

Sure you can love the whole world if you want. But if you care more about the rest of the world than your own nation, you are nuts. And yes, it is normal to be nuts these days.

DrDick -> realpc... , January 23, 2017 at 07:27 AM
"Nationalism is natural"

Proving once again that you are an idiot who knows nothing. Nationalism is an artificial construct which only emerges in the late 18th-early 19th centuries, and does not spread widely until the late 19th-early 20th centuries.

river -> DrDick... , January 23, 2017 at 12:34 PM
I don't know the history between you two, and realpc may in fact be an idiot, but what he said above hardly proves that he is an idiot.

"nationalism is an artificial construct?" What does that even mean? I presume it means something like what is talked about here: http://ostrovletania.blogspot.com/2010/01/are-nations-artificial-or-natural.html

http://www.nebraskastudies.org/0500/frameset_reset.html?http://www.nebraskastudies.org/0500/stories/0503_0106.html

So here is some quick google information about native american tribes who fought over limited resources. I wonder if that was an artificial construct as well? Or if one tribe fought other tribes to help their own families out. I wonder if a starving neanderthal would share the meat off of a recent kill with a neanderthal not part of his tribe? Would that be an artificial construct? Surely Germany came into existence in the late 18th and early 19th centuries, but before that, the groups that became Germany were just as nationalistic as they were after they became Germany . . . they just defined their nation in more limited terms.

DrDick -> river... , January 23, 2017 at 01:02 PM
*sigh*
People pay me good money to teach them about this stuff, but I do not think either of you could pass the entrance exam. Read Benedict Anderson, "Imagined Communities", or the works of E. J. Hobsbawm and T. O. Ranger on nationalism to start with. The truth is that mobile foragers(what all humans were until about 20,000 years ago) are not really very territorial. See the work of Brian Ferguson on the anthropology of warfare.

https://books.google.com/books?id=CDAWBQAAQBAJ&pg=PA152&lpg=PA152&dq=hunter+gatherers+not+very+territorial&source=bl&ots=uqmsMIK3Jb&sig=HlrZ1Wr6nPGzsGId__be2XfR9Z4&hl=en&sa=X&ved=0ahUKEwj_j625k9nRAhUY0mMKHU0cDggQ6AEIGjAA#v=onepage&q=hunter%20gatherers%20not%20very%20territorial&f=false

river -> DrDick... , January 23, 2017 at 01:41 PM
Sorry, I am just a stupid engineer, and make sure that the building that you live and work in will stand up in an earthquake, yet, I am probably too stupid to ever know what you know. But that said, I didn't know that I am stupid, so I will probably ask a question that will make a genius like yourself roll their eyes in disgust that I was ever awarded a degree from an american university . . . but I don't have time to read four different authors on the subject of a simple blog post, so I am going to ask it anyways . . . you said that nationalism is an artificial construct that only came around about 200 years ago, and I came back with some ideas about, if that were the case, then why did different indian tribes battle over scarce resources (and also simply assumed that ancient humans behaved very similar to native american tribes). You rebutted that by insulting my intelligence, pointing me to four obscure academic authors (if I was as cool and as smart as Good Will Hunting, I am sure I would have read and remembered all the authors that you are pointing me to already, but alas, I am not), and then said that up until 20,000 years ago, there was surprisingly little conflict among people. So, what is it, was nationalism something that came about 20,000 years ago, or was it something that came about 200 years ago. And did indian tribes wage wars against each other? If they did, is that a form of nationalism, or is it different? If it is different, explain how.

IF you are not smart enough to be able to answer these simple questions that support what you have asserted, then I would suggest that you don't go on message boards and insult the intelligence of others!

anne : , January 22, 2017 at 08:09 PM
http://econospeak.blogspot.com/2017/01/auerbachs-tax-and-clone-wars.html

January 22, 2017

Auerbach's Tax and the Clone Wars

Menzie Chinn * introduces a new asset to economist blogging. Joel Trachtman ** provides an excellent discussion of whether the Destination-Based Cash Flow Tax violates WTO rules concluding that it does. He adds:

"If enacted, the plan would likely lead to lengthy litigation at the World Trade Organization. A (likely) ruling that the tax is an income tax, and is applied in a discriminatory manner, would mean that exempting exports would be considered an illegal subsidy and taxes on imports an illegal tariff. This could lead to trade sanctions against the U.S. and open the door to counter sanctions and the start of a trade war."

President Trump strikes me as someone who could care less about WTO rules. And starting a trade war fits his grand design of governance. As Yoda noted:

"Begun the clone war has"

President Trump is Lord Palpatine.

* http://econbrowser.com/archives/2017/01/econofact-bringing-facts-and-data-to-policy-debates

** http://econofact.org/house-gop-tax-plan-aims-to-boost-competitiveness-might-also-violate-trade-law

-- PGL

anne -> anne... , January 22, 2017 at 08:10 PM
Nicely done.
Tom aka Rusty : , January 23, 2017 at 07:09 AM
Rodrik seems to spend less time with math models and more time engaging with reality.

Perhaps a model for other economists?

Robert C Shelburne : , January 23, 2017 at 09:10 AM
Another good article by Rodrik but a weakness of his analysis is that welfare is assumed to be based upon real income and not relative income with ones "group". Most analyses of welfare find that relative income is quite important. Obviously if one assumes that one's reference group is the world, then the problem goes away; but empirically this is not the case. Assuming that welfare is strongly affected by relative income with a group which is smaller than the world, then global equality is no longer welfare maximizing. Those interested in these issues might be interested in Robert Shelburne, A Utilitarian Analysis of Trade Liberalization, available as a UN working paper.
river : , January 23, 2017 at 11:05 AM
Much like how the biggest environmentalist is the one who already has her house built, the economists safely in their ivory tower and comfortable with their tenured positions in academia were more than happy to volunteer the American working class to give up some of their wealth so that people living in extreme property in the developing world could have slightly better positions. I am glad to see that this is what you guys argued for with all of your "free trade" agreements that you pushed for over the last several decades. Sadly, this is exactly what led us to Trump as president.
reason -> river... , January 24, 2017 at 01:48 AM
Their models told them precisely that some people would suffer and others gain, but also that with appropriate redistribution everybody could gain. But appropriate redistribution was never forthcoming. Time for a national dividend.
river -> reason ... , January 24, 2017 at 01:20 PM
Appropriate redistribution will NEVER be forthcoming. It is so easily demonized, and people don't want redistributed income. They want jobs!

This is why the Democrats lost. And frankly, this is the whole point of democracy.

[Feb 01, 2017] WTO is very clear that income taxes cannot discriminate to favour exports

Notable quotes:
"... While the WTO process would grind on, protectionist acts by other nations would be licensed immediately. ..."
Feb 01, 2017 | economistsview.typepad.com

Peter K. -> Peter K.... February 01, 2017 at 11:33 AM , 2017 at 11:33 AM

Larry Summers:

"Third, the tax change will harm the global economy in ways that reverberate back to America. It will be seen by other countries and the World Trade Organisation as a protectionist act that violates US treaty obligations.

Proponents may argue that it should be legal because it is like a value added tax, but the WTO is very clear that income taxes cannot discriminate to favour exports.

While the WTO process would grind on, protectionist acts by other nations would be licensed immediately."

http://larrysummers.com/2017/01/08/us-tax-reform-is-vital-but-trumps-plan-is-flawed/

[Jan 30, 2017] Trivializing problems that comfortable people call attention to is just a variation of Be thankful you have anything at all. which, at the risk of overusing the phrase, is bullshit.

Notable quotes:
"... I agree with much of what James F writes but one thing that doesn't sit right with me about him commentary is his implication that if your complaint isn't about an immediate threat to life and limb then your complaint is frivolous. That's bullshit. Immediate threats to life and limb require immediate attention but once those threats are dealt with then what? ..."
Jan 30, 2017 | economistsview.typepad.com
Dan Kervick : , January 28, 2017 at 06:38 AM
Two items for your reading pleasure:
Chris G -> Dan Kervick... , January 28, 2017 at 07:08 AM
+1 for Frank's piece. "Meh." to James F's. His crankiness, while justifiable, doesn't go anywhere.

Also, to say "Obama was defeated in the Massachusetts senatorial campaign [in 2009, the special election to replace Kennedy]." is to fundamentally misunderstand that race.

Coakley was a decent AG but utterly inept at connecting with voters. Brown couldn't win a battle of wits with a golden retriever but he was perceived as a nice guy. (Whether he actually is a nice guy is open to debate.)

Brown's victory wasn't a repudiation of Obama; it was a repudiation of Coakley.

Chris G -> Chris G ... , January 28, 2017 at 08:21 AM
I agree with much of what James F writes but one thing that doesn't sit right with me about him commentary is his implication that if your complaint isn't about an immediate threat to life and limb then your complaint is frivolous. That's bullshit. Immediate threats to life and limb require immediate attention but once those threats are dealt with then what?

Trivializing problems that "comfortable people" call attention to is just a variation of "Be thankful you have anything at all." which, at the risk of overusing the phrase, is bullshit. Comfort the afflicted and afflict the comforted but be self-aware enough to realize that whatever your position it is it may change.

PS James F writes:

"We [people in flyover country] provide commodities like food and coal and oil and metals."

Providing coal and oil may be a near-term necessity but it's not doing anyone - "comfortable people", "deplorables" or otherwise - any long-term favors. That you have acute concerns which you need to deal with is not an excuse to turn a blind eye to your impact on the world. It may be a reason but it is not an excuse.

Julio -> Chris G ... , January 28, 2017 at 11:41 PM
I agree with your take on both articles.

On the Mass race, i think the failure of Democrats to fight with all their guns for the 60th Senate seat was a major failure. They were not willing to send their big guns to say "we cannot afford a 40th Republican, no matter how nice he is".

[Jan 23, 2017] Give Trump a Chance

From amazon review of his book In the Jaws of the Dragon "Anyone who has read "The World is Flat" should also read "In The Jaws Of The Dragon" to understand both sides of the issues involved in offshoring. Eamon Fingleton clearly defines the differences between the economic systems in play in China and Japan and the United States and how those differences have damaged the United States economy. The naive position taken by both the Republicans and the Democrats that offshoring is good for America is shown to be wrong because of a fundamental lack of knowledge about who we are dealing with. Every member of Congress and the executive branch should read this book before ratifying any more trade agreements. The old saying of the marketplace applies: Take advantage of me once, shame on you. Take advantage of me twice, shame on me."
Notable quotes:
"... Similar miscommunication probably helps explain the European media's unreflective scorn for Donald Trump. Most European commentators have little or no access to the story. They have allowed their views to be shaped largely by the American press. ..."
"... That's a big mistake. Contrary to their carefully burnished self-image of impartiality and reliability, American journalists are not averse to consciously peddling outright lies. This applies even in the case of the biggest issues of the day, as witness, for instance, the American press's almost unanimous validation of George Bush's transparently mendacious case for the Iraq war in 2003. ..."
"... Most of the more damning charges against Trump are either without foundation or at least are viciously unfair distortions. Take, for instance, suggestions in the run-up to the election that he is anti-Semitic. In some accounts it was even suggested he was a closet neo-Nazi. Yet for anyone remotely familiar with the Trump story, this always rang false. After all he had thrived for decades in New York's overwhelmingly Jewish real estate industry. Then there was the fact that his daughter Ivanka, to whom he is evidently devoted, had converted to Judaism. ..."
"... In appointing Jared Kushner his chief adviser, he has chosen an orthodox Jew (Kushner is Ivanka's husband). Then there is David Friedman, Trump's choice for ambassador to Israel. Friedman is an outspoken partisan of the Israeli right and he is among other things an apologist for the Netanyahu administration's highly controversial settlement of the West Bank. ..."
"... As is often the case with Trumpian controversies, the facts are a lot more complicated than the press makes out. ..."
"... So far, so normal for the 2016 election campaign. But it turned out that Kovaleski was no ordinary Trump-hating journalist. He suffers from arthrogryposis, a malady in which the joints are malformed. For Trump's critics, this was manna from heaven. Instead of merely accusing the New York real estate magnate of exaggerating a minor, if troubling, sideshow in U.S.-Arab relations, they could now arraign him on the vastly more damaging charge of mocking someone's disability. ..."
"... In any case in responding directly to the charge of mocking Kovaleski's disability, Trump offered a convincing denial. "I would never do that," he said. "Number one, I have a good heart; number two, I'm a smart person." ..."
"... other much discussed Trumpian controversies such as his disparaging remarks about Mexicans and Muslims. In the case of both Mexican and Muslims, an effort to cut back immigration is a central pillar of Trump's program and his remarks, though offensive, were clearly intended to garner votes from fed-up middle Americans. ..."
"... In reality, as the Catholics 4 Trump website has documented, the media have suppressed vital evidence in the Kovaleski affair. ..."
Jan 23, 2017 | www.unz.com
Battlefield communications in World War I sometimes left something to be desired. Hence a famous British anecdote of a garbled word-of-mouth message. As transmitted, the message ran, "Send reinforcements, we are going to advance." Superior officers at the other end, however, were puzzled to be told: "Send three and four-pence [three shillings and four-pence], we are going to a dance!"

Similar miscommunication probably helps explain the European media's unreflective scorn for Donald Trump. Most European commentators have little or no access to the story. They have allowed their views to be shaped largely by the American press.

That's a big mistake. Contrary to their carefully burnished self-image of impartiality and reliability, American journalists are not averse to consciously peddling outright lies. This applies even in the case of the biggest issues of the day, as witness, for instance, the American press's almost unanimous validation of George Bush's transparently mendacious case for the Iraq war in 2003.

Most of the more damning charges against Trump are either without foundation or at least are viciously unfair distortions. Take, for instance, suggestions in the run-up to the election that he is anti-Semitic. In some accounts it was even suggested he was a closet neo-Nazi. Yet for anyone remotely familiar with the Trump story, this always rang false. After all he had thrived for decades in New York's overwhelmingly Jewish real estate industry. Then there was the fact that his daughter Ivanka, to whom he is evidently devoted, had converted to Judaism.

Now as Trump emba