|May the source be with you, but remember the KISS principle ;-)|
|Contents||Bulletin||Scripting in shell and Perl||Network troubleshooting||History||Humor|
|News||Neocolonialism as financial imperialism||Recommended Links||Greece debt enslavement||Ukraine debt enslavement||Harvard Mafia, Andrei Shleifer and the economic rape of Russia||Provisional government as an instrument for Ukraine's debt enslavement|
|The Iron Law of Oligarchy||Elite Theory||Two Party System as polyarchy||Economics of Energy||Predator state||Super Imperialism||New American Militarism|
|Neoliberalism||The Grand Chessboard||Disaster capitalism||Inside "democracy promotion" hypocrisy fair||Right to protect||Merkel as Soft Cop in Neocon Offensive on Eastern Europe and Russia||Neocons|
|American Exceptionalism||Media-Military-Industrial Complex||Mayberry Machiavellians||Neo Trotskyism aka Neoconservatism||War is Racket||Neoliberal Brainwashing -- Journalism in the Service of the Powerful Few||In Foreign Events Coverage The Guardian Presstitutes Slip Beyond the Reach of Embarrassment|
|Casino Capitalism||Financial Sector Induced Systemic Instability||Political skeptic||John Kenneth Galbraith||Financial Humor||Humor||Etc|
IMF is not the agency to help other countries with the economic development. Under neoliberalism (and that means since 80th) it became the major instrument for redistributing wealth up and enslaving countries with debt that can't be repaid. As a tool for the redistribution it works extremely efficiently both on local level (producing local oligarchs) and on international level -- ensuring prosperity of G7 and USA in particular.
The U.S. economy has benefited immensely from its ability to extract tribute from other nations, including the U.S. financial community's probable engineering of crises in developing nations in order to scoop up devalued assets on the cheap. One of the most important instruments of this extraction, plunder of weaker nations, is IMF.
The standard IMF policy is to approach countries in financial crises with the same rather crude recipies that favour large Wall Street banks. In this case IMF staff acts like like vulture fund managers rather than economists. They try to force a country with a fiscal deficit to reduce government spending, privatage industries and take on additional debt. Reducing government spending reduces aggregate demand, which in turn reduces government income, and make the deficit worse. So the country need to take more loads, inflicting more pain on the population. The reason that the IMF does this, is that it is meant to "restore confidence in the markets". But once a crisis starts, foreign investors tend to bail out anyway, so all it buys the country is a small breathing space before default. Country is better off introducing strict capital controls and accepting the fact that speculative foreign investors are gone. It should not allow them to enter the market in the first place and focus on growth.
The other thing is the immense level of hypocrisy of the US administrations that control IMF, which forced policies on emerging markets, which it would never accept itself.
In fact, the IMF more or less took instructions from the US Treasury during the 1990s, and certainly my sense at the time was that some IMF staffers were very frustrated at the policies that the US government forced them to follow. The point though, is that while the US government was battling the balanced budget amendment at home, on the reasonable grounds that it limited their freedom to manage demand, they were essentially enforcing a balanced budgets on the emerging markets via IMF condition for loans. They are forcing central banks to focus only on inflation. They are forcing emerging markets to open their markets, while protecting US farmers from imports.
The economic restructuring programs imposed on poor countries has benefited U.S. and other foreign investors while creating a small but powerful class of wealthy individuals (fifth column of neoliberalisation) in China, Mexico, South Korea, Ukraine, Russia, etc.
Unsustainable level of debt creates the potentially catastrophic financial situation for those countries that take IMF loads.
Debt that can't be paid back, won't be paid back. That simple idea is the key to debt enslavement of people and nations. One of the key mechanisms is ensuring that loads to state were looted by local oligarchy, turning being eye to money laundering or, as was the case in post 1991 Russia, actively supporting money laundering as the way to decimate former opponent and drive it into vassal status.
There is a strong alliance of Western governments and local oligarchs in this dirty game with IMF serving as an enforcer of debt slavery enabling buying countries assets by transnational for penny on a dollar. Corrupt officials burden taxpayers with unsustainable amounts of debt for unproductive, grossly overpriced projects.The TPP and TTIP are integral initiatives in this effort of extending financial obligations, debt, and control.
This is why these corporatists and statists hate gold and silver, by the way. And why it is at the focal point of a currency war. It provides a counterweight to their monetary power. It speaks unpleasant truths. It is a safe haven and alternative, along with other attempts to supplant the IMF and the World Bank, for the rest of the world. So when you say, the Philippines deserved it, Iceland deserved it, Ireland deserved it, Africa deserves it, Jefferson County deserved it, Detroit deserved it, and now Greece deserves it, just keep in mind that some day soon they will be saying that you deserve it, because you stood by and did nothing.
Because when they are done with all the others, for whom do you think they come next? If you wish to see injustice stopped, if you wish to live up to the pledge of 'never again,' then you must stand for your fellows who are vulnerable. The economic hitmen have honed their skills among the poor and relatively defenseless, and have been coming closer to home in search of new hunting grounds and fatter spoils.
You may also find some information about the contemporary applications of these methods in The IMF's 'Tough Choices' On Greece by Jamie Galbraith.
The whole mechanism of debt enslavement is polished to perfection on developing countries.
Here are some relevant Amazon reviews of the book Confessions of an Economic Hit Man that discusses IMF policies since 1980th.
gordon macgregoron May 2, 2015
IMF forced lending to poor countries of sums far in excess of their needs ...
Absolutely fascinating, pulling back the veil of the inner workings of the IMF as it does. Confirms a lot of things people have long suspected and been shouted down for voicing.
Shows the IMF as an organization bent on capturing the resources of countries around the world via various highly unethical means. e.g forced lending to poor countries of sums far in excess of their needs or means, for inappropriate purposes, leading to big profits for Western firms, the beggaring of the recipient nations, and forced capture of natural resources by large corporations. Surprising that the IMF has not been subject to deep investigation by the UN after this expose.
johnnyjohnnyon April 25, 2015
learn what's going on. read this book. gives a clue to MONSANTO's model of world domination
truly a remarkable book that has been proven with events and facts that have come out since the book was written back in the day.
the model of economic control, back in the good ole days when the International Monetary Fund & U.S. congressionally funded loans to third world countries was the way to pull the strings, and get our largest corporations huge projects that third worlders didn't need and couldn't pay for...but brought the bucks home.
if you ever had a suspicion about recent wars, the billion$ they brought to large contractors, and the reason for those interventions, go back to the early days of this model of international control from someone who was there. and yes, halliburton (aka Kellogg Brown and Root back then) was involved.
James Kenney on April 1, 2015
Should I simply take him at his own word, that he is a liar?
This is a very believable book on a topic of vital importance to the world today: the extent to which "economic development aid" is designed not to benefit the target country, but to ensnare it into the global culture as a debtor nation with assets never designed to be profitable, but merely to serve as an "economic gateway drug".
Somehow, though, while the book is eminently readable, and a bit unnerving, I just couldn't shake off a feeling that I was being "had", by Mr. John Perkins. Look at the number of reviews here! Clearly, this book touched a nerve...but if the author is as unscrupulous as he claims to be (or to have been, since he also claims to have experienced a remarkable conversion, like Paul on the road to Damascus), a fundamental question arises: why should we believe him?
This question is even more essential, since many of us who would even read such a book believe in our hearts that, yes, American capitalism, aided by the IMF, and the World Bank, is seeking to enslave the world. Of course! It's almost a given, an article of faith. No wonder the rest of the world hates us!
I too felt the lure of Perkins' mesmerizing description of an unspoken conspiracy to take over the world by bankrupting it. Certainly, the events of 2008 and 2009 showed the moral bankruptcy of the Big Banks and those who cynically packaged sliced and diced debt into impossible to understand financial instruments, then peddled them to school boards and public pension plans.
Now that I come to review the book, though, I almost feel as if I should wash my hands first. Just picking it up, seeing its jaunty cover, remembering its schmaltzy "spy coming in from the cold" ending, I feel...taken in. I don't know why I feel that way, but the feeling is definitely there. There is something exploitive about this book, as if the author had not changed his skin, only his target: as if now, instead of ensnaring struggling nations, he is ensnaring readers all too willing to believe the worst about ourselves and the economic system in which we too are ensnared.
Even the title sounds phony. Perkins may well be right, he may well be telling it like it is, he may have become a champion bravely taking on a system he helped create, a modern David fighting an economic Goliath. Heavens knows, after stories of regulators sniffing cocaine off a toaster oven with those they are supposed to be regulating, nothing seems unbelievable, and in a sense this book sounds almost inevitable, natural, and important.
It may be. But one of the things I was taught as a historian, is to consider your sources, and the chief question is, how credible are they? When a self-proclaimed liar, swindler and cheat tells me the "system is rigged", should I believe him? Or should I simply take him at his own word, that he is a liar?
I gave this ugly tale 4 stars simply for readability. Fact or fiction, it is certainly that: readable.
DH Koester on March 24, 2015
Well, well, well---another piece to the puzzle as to what constitutes the United States of America!
Besides the curse of blood-stained hands from endless wars of aggression there is another sinister side to this country's quest for empire and world domination--the enslavement of countries and peoples through cleverly devised debt imposition--the same method our government uses on its own people. This debt imposition on foreign countries serves to enrich foreign rulers and US corporations while impoverishing the common people.
Perkins was one of the people--a cog in the wheel --that made it all possible and when his conscience finally got the better of him he wrote a book about it.
Students will not read about these economic hit men ion any American textbook. Nor will they, as adults, read about it in any periodical or hear about it on any newscast. Politicians will not tell them about it nor will their religious leaders. Yet there is this book by John Perkins describing the process in detail. But those in power--those responsible for this immoral conduct--will allow it to be published and made available to the public without fear of reprisal or consequences--just as they have the countless other books that have spoken truth to power detailing corruption, war-making and deceit by those in the highest offices.
Why?? Because the average citizen in this country doesn't care one iota about anything that he perceives as not directly affecting the welfare of himself or his family. That plus the fact that very few people will ever hear of or read this book. People don't read any more--they are plugged into their machines of instant gratification and get the bulk of what they think is news from inane sources such as the Letterman show. Even if some do read it, they will soon forget and move on--continuing with their mundane lives completely oblivious to the world that is suffering and burning outside their doors.
And me?? I know the truth--but even those who know the truth, they are powerless. There is nothing that can be done to stop the insanity. It is like death---Death eventually smiles at us all and the best a man can do is smile back.
I give this book 5 Stars not because it was particularly well written but because it informs in a world desperately in need of being informed. Read it if you will but with the understanding and full knowledge that the truth shall not set you free.
"And There I Was" by DH Koester
David Lupo "David Lupo" on February 21, 2015
Do you wonder why the world hates us? Read this book.
When I was in college, I took another course after Sociology 101, called Social Issues. It was a great course, eye-opening, but sad, because I learned about how skewed the world really is today. There were discussions on the Ford Pinto death-trap story, and stories about how grocery stores sell third-rate products at high prices, to keep the poor poor. There were other stories about how the corporation wields great power over the average citizen. I went to college in the 80s, long after we were told lies about the Great Oil Shortage in the 70s, when oil companies made a killing.
The book by John Perkins gives the historical background of how our government, working with the corporation has done some nasty things in recent decades to places around the globe. Economic Hit Men, and those in league with them have played national leaders against their people for the great financial gain that the US reaps. The corporation not only wields great power over the US citizen; it seeks this same control in the world. John Perkins highlights how this has played out in his corporate life, to the people that he knew.
I also notice that despite the harm he caused as an EHM, he escapes any sort of punishment, since he is spilling the beans on how the game is played, and has been played across the globe. That was a drawback. But today he is trying to do better things for the good of humanity, and that has to count for something.
White Rabbiton January 7, 2015
soft-minded lola granola platitudes
This book can be summarized in one sentence: America "forces" loans on third world countries based on inflated projections of resulting economic growth, that we know the recipient country will never be able to repay.
we then leverage their debt to strong-arm collateral benefits such as construction and service contracts (for the industry they got loans to build) or use their land for military bases, thereby increasing and securing our growing empire.
Perkins says this on every page of his 220 page book.
there is NO analysis or explanation of why development is automatically bad, and preserving rain forests and shaman lifestyles is automatically good, and even if it is good, why it is our problem, as a sovereign nation, to devote our resources to preserving other peoples' lifestyles. i am not asserting that industrial development is automatically "good," but there is simply no thoughtful analysis of the issues at all. Nor is there any nuts-and-bolts explanations of how he structured the economic deals that are supposedly so wicked.
There is just a lot of soft-minded liberal clap-trap about "using less oil; reading a book instead of going shopping; "dreaming" the world into existence; and -- you guessed it -- "shapeshifting." While I doubt any reader of a non-fiction book without pictures with "economic" in the title thinks that industrial development is an unmitigated boon, there have always been significant discrepancies in wealth throughout history, in every culture, country, and time, and there has always been tension (& disruption) in "progress" in any form.
Perhaps there are reasons for this besides the greed and evil of white european males, especially since the "haves" have not always been white or European (and sometimes not even male). Even (or especially) in underdeveloped countries, there are LOTS of people who would prefer medicine and basic sanitation to relying on shamanistic rain dances when their children are sick.
There are compelling and undeniable reasons why manual workers get paid less than highly specialized ones, and simply reiterating Marx's Communist Manifesto is not convincing to any thinking person, or to anyone who clawed their way out of those countries that tried to implement his pipe dream. Reminds me of the rebels' kvetching in Monty Python's Life of Brian: "Well, except for the roads, and the aqueducts, and education, and bread, and medicine, and peace, and security, what else have the Romans done for us?"
A. Kumaron January 1, 2015
Read it to get a general idea of aid programs but discard personal anecdotes as fiction
The book is clearly a combination of fact and fiction. The facts are based on the well known criticisms of the IMF and World Bank and how they have destroyed various countries. The fiction part is where the author speaks of personal experiences.
Two points give away the fact that the book is semi-fiction. The first is that the author has only used criticisms that were already made on the internet at the time of publication of the book. The second is that the author subconsciously projects his political biases based on his country's Republican vs. Democrat politics and selectively attacks Republicans while letting off the Democrats. Thus, Nixon, Reagan and the Bushes are villains while Jimmy Carter is a hero and American interference in foreign economies during the Clinton era is completely missing from the book. This despite the fact that the era of globalization and the creation of WTO and foisting the American agenda through WTO happened during the Clinton regime and Jimmy Carter started the Iran-Iraq war. Clinton was also responsible for the war on Yugoslavia which lasted all through the 1990s.
The author's list of heroes is also selective and are Communists from Latin America. He is also selective in his list of villains. Bechtel and Halliburton come in for criticism just like on the internet. And just like on the internet, there is no criticism of defense contractors whose executives support the Democratic Party. So you won't see much criticism of Raytheon or Northrop Grumman.
Most of the criticism of the aid programs was well known especially in Latin America and India. In 2000, the combination of the Seattle protests against WTO and the fact that the internet was new made the information become popular. The author seems to have picked up on that data and written a book. There is also a touch of self-delusion that it is the White man's burden to save the world. Whether it is Indonesia or Panama, there is always a character in the book who appeals to the White hero and says he will show him a side of the country that only the locals have access to and that the Whites must somehow fix it. In no country do the locals lack self-respect that they will actually indulge in such behavior.
That said, writing a first person account is an innovative idea and the author is not wrong in highlighting the true nature of aid programs. The book is successful in conveying the general idea that aid programs exist to help the American corporations. The public needs to know this sort of information and the author has done a good job at it.
Margaret M. Pratton December 14, 2014
It's amazing he's still alive to tell his tale
It's amazing he's still alive to tell his tale! John Perkins is quite frank about how he became an 'economic hit man', producing inflated optimistic economic data to persuade leaders in foreign countries to invest in building up their infrastructure (think dams, etc.) through loans they will never be able to pay back, how US industries profit through this, and his own complicity for quite a few years.
And then his slow change of heart when he began to face the actual effect of his contribution to the downward spiral of these countries. It's a real eye-opener. And yes, it does matter who's President.
Malcolm McIntyre, on October 16, 2014
Groundbreaking, although naive on the role of conspiracy
BOOK REVIEW: Confessions of an Economic Hit Man, by John Perkins
“Economic hit men are highly paid professionals who cheat countries around the globe out of trillions of dollars [through the perversion of foreign aid funds … using] fraudulent financial reports, rigged elections, payoffs, extortion, sex, and murder. They play a game as old as empire, but one that has taken on new and terrifying dimensions during this time of globalisation.”
This book is a decade old and the activities that Perkins exposes have become widely known since 2004, for which his work shares much of the credit. It remains a valuable primer for anyone seeking to understand current international events; and will reward greatly even those already aware of the casual criminality of the U.S.’s political, financial and business elites.
Perkins’ career as an economic hit man (EHM) began in 1971 and ended in 1980, after his conscience prevailed. It was sandwiched between a Peace Corps stint in the jungles of South America and a post-EHM career which included establishing a successful alternative energy company. He wrote the passage at the head of this review in 1982, but was persuaded not to go ahead with the book at that time. Four more delays were occasioned by threats or bribes.
So, how does an Economic Hit Man operate? “We are an elite group of men and women who utilize international financial organisations to foment conditions that make other nations subservient to the corporatocracy running our biggest corporations, our government, and our banks. Like our counterparts in the Mafia, EHMs provide favors. These take the form of loans to develop infrastructure – electric generating plants, highways, ports, airports, or industrial parks.
“A condition of such loans is that engineering and construction companies from our own country must build all these projects. In essence, most of the money never leaves the United States; it is simply transferred from banking offices in Washington to engineering offices in New York, Houston, or San Francisco.
“Despite the fact that the money is returned almost immediately to corporations that are members of the corporatocracy (the creditor), the recipient country is required to pay it all back, principal plus interest. If an EHM is completely successful, the loans are so large that the debtor is forced to default on its payments after a few years. When this happens, then like the Mafia we demand our pound of flesh.
“This often includes one or more of the following: control over United Nations votes, the installation of military bases, or access to precious resources such as oil or the Panama Canal. Of course, the debtor still owes us the money – and another country is added to our global empire.”
Perkins is not anti-American, but rather one of the diminishing remnant of Americans who believe the U.S. Constitution still means something. “The longer version [of why he finally wrote the book] relates to my dedication to the country where I was raised, to my love of the ideals expressed by our Founding Fathers, to my deep commitment to the American republic that today promises ‘life, liberty, and the pursuit of happiness’ for all people, everywhere, and to my determination after 9/11 not to sit idly by any longer while EHMs turn that republic into a global empire.”
Having finally got around to reading Confessions of an Economic Hit Man, I will certainly be following up with his 2008 The Secret History of the American Empire: The Truth About Economic Hit Men, Jackals, and How to Change the World and 2011’s Hoodwinked: An Economic Hit Man reveals why the global economy imploded – and how to fix it. One area of interest will be whether his understanding of conspiracy – or, more accurately in terms of Confessions, lack of conspiracy – has changed.
“Some would blame our current problems on an organised conspiracy. I wish it were so simple. Members of a conspiracy can be rooted out and brought to justice,” he says in the preface. “This system, however, is fuelled by something far more dangerous than conspiracy. It is driven not by a small band of men but by a concept that has become accepted as gospel: the idea that all economic growth benefits humankind and that the greater the growth, the more widespread the benefits.”
This idea of the concept of benefit for humankind driving the agenda is a somewhat naïve construction. The reality is that there is a relatively small band of psychopathic men (more women in the gang these days and they are no prettier) driving the agenda. The “benefit for mankind” schtick is merely one of the concepts used in their propaganda.
“The corporatocracy is not a conspiracy, but its members do endorse common values and goals,” Perkins says, adding shortly after: “People like me are paid outrageously high salaries to do the system’s bidding. If we falter, a more malicious form of hit man, the jackal, steps to the plate. And if the jackal fails, then the job falls to the military.”
The United States has 40,000 troops in Germany and 50,000 in Japan – they are still occupied countries, more than half a century after World War 2. The U.S. has more than 600 overseas bases. Wikipedia can usually be relied upon in simple matters such as this http://en.wikipedia.org/wiki/United_States_military_deployments although not in more sensitive matters which attract hasbara and intelligence operatives to the editing function. Also worth a read are http://www.globalresearch.ca/the-worldwide-network-of-us-military-bases/5564 and http://www.politifact.com/truth-o-meter/statements/2011/sep/14/ron-paul/ron-paul-says-us-has-military-personnel-130-nation/
Other than the EHM books mentioned so far, Perkins has written several about spiritual/indigenous matters, based on his experiences before and after his Hit Man service. They are listed at his web site http://www.johnperkins.org/books/
I found out more than I really wanted to know.
CWOK: Ex-Navy, on October 15, 2014
Dubious " Confessions "...
I just finished reading, " Confessions of an Economic Hit Man ", by John Perkins, in which the author recounts his alleged career as an ` Economic Hit Man ` (He uses the abbreviation ` EHM `) for a major corporation, exploiting the resources and people of under-developed countries for the financial gain of his company, with the support, or at least acquiescence, of the US Government, from the early 1970's until after the SEP 11 2001, when he finally wrote a book which includes descriptions about alleged ' black 'operations that occurred all over the world, including: Iran, Iraq, Indonesia, Panama, Ecuador, Saudi Arabia, & Colombia.
To be clear, I am NOT making a judgment as to the ultimate truth regarding all of the historical events referenced in Perkins's book, or all the allegations surrounding them.
However, I myself have experience in Investigative and Intelligence Work, and so my focus is Perkins's representation that he has First-Hand Knowledge of these historical events himself, and how this representation affects his own credibility:
* Perkins asserts that the Central Intelligence Agency was responsible for the deaths of at least two Latin-American leaders, " ...in a series of CIA Assassinations... (p. 161), during the Reagan-Bush Administrations of the 1980's.
Yet his source for this claim is John Dean's 1973 Watergate testimony, despite the fact that this testimony occurred BEFORE either Reagan or Bush took office (George H.W. Bush did serve under then President Nixon, but did not become head of the CIA until after Nixon left office, and Perkins presents ZERO evidence that Bush himself was ever involved in any such plot.)
Moreover, Perkins does not state anywhere in " Confessions " that he ever had any direct contact with the CIA at any time at all, & so what First-Hand Knowledge of the CIA's activities could Perkins possibly have?
* Perkins repeatedly-and frustratingly-makes vague, unattributed, & unverifiable statements such as:
" ...The EHM presence was very strong in Baghdad during the 1980's... "
* Yet despite both the gravity, and the number, of Perkins's claims, he still provides ZERO documentation of his own to corroborate any of them (merely a copy of his professional resume from the 1970's).
Of the MANY books and accounts that I have read involving the topic of international intrigue, this is the ONLY one with such a glaring omission.
Perkins instead lists his sources as previously written books and articles from news magazines, which he appears to have had no personal involvement with himself.
* Perhaps most telling of all, Perkins states how early on in his career as an EHM, he felt guilty about the ` Corrupt ` system that he was a part of.
Yet despite this supposed guilt, he STAYED in that ` Corrupt ` system, AND accepted all the benefits that came with it; Money, Women, Perks, Etc., AND stayed silent about it, for 30 years!
Perkins states his reasons/justifications/rationalizations/excuses as to why he STAYED in that ` Corrupt ` system, AND accepted all the benefits that came with it; Money, Women, Perks, Etc., AND stayed silent about it, for 30 years.
But, regardless, he nevertheless STAYED in that ` Corrupt ` system, AND accepted all the benefits that came with it; Money, Women, Perks, Etc., AND stayed silent about it, for 30 years!
This becomes all the more troubling because, according to Perkins's own statistics, 24,000 people die each day due to hunger (P. 192)!
IF this is true, then Perkins himself took all that blood-money, for all those years, while knowingly and silently acquiescing to the deaths of BILLIONS of people!!!
Therefore, based on my own professional experience in Investigative and Intelligence Work, it is my opinion that Perkins has NOT established that he is credible.
Until he does so, I regard Perkins's book not as a true autobiography, but rather an historical novel, in which Perkins uses some actual events as the bare bones, on which he adds a LOT of fiction.
Amazon Customer, on September 11, 2014
Americorp and the dictatorship kept us illiterate and very poor. We also lost many young lives fighting this ...
I am from Nicaragua and breathed and lived the consequences of the acts of these Economic Hit Men. We had a dictatorship put in place by the US, Inc.on my country for more than 40 years.
'Americorp" had the full access to our resources, one of them gold, we never saw the benefits of this gold. Americorp and the dictatorship kept us illiterate and very poor. We also lost many young lives fighting this dictatorship because it refused to give us the choice of electing who we wanted to lead us. It was until 1979 when the USA finally gave up supporting the dictatorship, not because of our lost of lives but because the dictator became an embarrassment to US, Inc. just like Noriega, Saddam, etc.
Very true though is the fact that the opposition was mostly supported by the USSR and Cuba.
Also very true is that the Sandinistas did not believe in property rights and believe everything belongs to the State. we went from Satan's arms to the Devil's bed.
Sucks being a poor underdeveloped nation with vultures waiting to pounce around you and tear out your eyes. Love the American People, hate its foreign policy which they are mostly kept blinded by propaganda.
Prissyon July 7, 2014
The Ugly Truth of Corporate America and Government's incestuous plan for Globalization
I've meant to read this book for years...the irony is I downloaded on Kindle while in Latin America and read it all the way through. I always suspected (from my own experience spending time on the Hill, knowing journalists, bankers, etc) this stuff went on. But Perkins fills in all the missing pieces.
I'm literally sick that I have a degree in American criminal justice and this book goes against everything I was taught of how "this country" operates. It may have come as a shock to have the dirty details to me, but my Latin American friends have known these empire building ways all along, because they've lived with it all of their lives.
I hope one thing people take away from this book are Perkins suggestions to begin at the grass roots level (school boards, county commissioners, etc) to change the way we do business and speak out when you know the truth. This is the raw, ugly truth, dear readers. I'm still attempting to digest what I know in my heart of hearts is that I have been fighting corruption of those who sugar coat it and when its pointed out, will do everything they can to disparage your credibility, no matter how impeccable it is or how well you present it. Hiring a private company to get around government checks and balances (not that there are that many) only makes sense from a globalists point of view.
Don't sit there-DO something, anything...I know- I sat out of the fray for a long time, it IS easier. But that's the coward's way out and the founding father's were anything but that. Remember, we are supposed to be the home of the brave. Are you right or left? I'd rather be active, accurate and correct...
Greece story is another classic of neoliberal debt enslavement: first corrupt neoliberal government (in case of Greece successive governments) got loans that were partially stolen, partially wasted, enriching top 1% of the country and improving living conditions of the top 20%. Then those loans from private banks were converted into public debt by attempt to save insolvent banks. And when the next wave of crisis occurred due to Greece inability to service those (now state) loans without drastic reduction of standard of living of most of the population IMF acts as enforcer. It now essentially dictates what should be done in Greece economy. No matter if previous recommendation led to disastrous consequences.
European neoliberal elite headed by Merkel is threatening to expel Greece from the Euro zone, scaring voters. It is very important to understand that anti-crisis policies have two main approaches – cyclical and counter-cyclical. The neo-liberals response is always "only wellbeing of banks matters"
Neoliberals key postulate is that the "invisible hand" of the market works better than government regulation, then the government should allow the market to work independently. The only think government should do is to balance the budget by slashing spending synchronously with falling revenues. Which led in cas of Greece to 60% unemployment among young people.
In other word "the invisible hand" does not work and instead country is sliding in real debt slavery when load became permagreen and interest will be paid forever. Forecasts of neoliberal institutions such as IMF that austerity will allow Greece to pay debts, were not justified.
Countercyclical stabilization policy is based on the opposite basis: with the reduction of budget revenues not need to cut spending in order to reduce the current deficit, but rather to increase them, thereby increasing the tax base, and along with receiving political support from the population. This should be done considering all the risks carefully assessing the consequences. The trouble is that in specific Greek terms it also doesn't work very well.
Even of part of the debt was written off by the creditors, if you can't grow the real economy, the budget crisis will be renewed. But the Greek industry was killed by accession to the EU. It was decided by EU brass that the specialization of southern Europe within Europe United should be the services sector. If this was somehow forgotten that in services industries (primarily tourism) tax collection is much lower than in industry and agriculture. Demands of the "Troika" to increase taxes on the tourism industry will lead to the withdrawal of this sector into the shadows, or to the ruin of a vast number of small and medium enterprises. If you go with the demands of Brussels and reduce subsidies to agriculture (and this was one of the main requirements of the latest Memorandum of the Troika) the destruction of the economy will be complete.
And while the entire Greek economy is suffering from a terrible level of unemployment, and German Chancellor Angela Merkel said that the borders are open, so Greeks can compete for low paid jobs in Germany. In other words, Greece has to spend money on the education of engineers, scientists and other high-demand in the EU professionals, but to find word they need have to go to Germany and most end working as janitors and other low paid jobs. Greece which spend a lot of public money to train those professionals will be left our, and all the benefits from this get more developed countries. This is actually explicit policy of the EU, which consider Southern countries to be EU "village".
Increase of exports in the current circumstances is a very difficult undertaking. It is impossible to increase export to Russia where there is some space for Greek products, as the EU has declared sanctions. That means that he crisis is expanding, and within the framework imposed on Greece anti-crisis policy there is no light at the end of the tunnel.
Cuts in public expenditure will inevitably lead to a reduction in domestic demand for the products of national industry and national agriculture. Besides falling living standards, the reduction of pensions and salaries in the public sector will be a big hit for the most vulnerable part of the population: two-thirds of Greek pensioners are already living below the poverty line.
Five months of fruitless negotiations, a new government understood that Greek people will not forgive the capitulation to EU demands. Another "cannibalistic" austerity program. So it announced the referendum on the adoption of the requirements of the Troika, shifting the responsibility for making decisions to ordinary Greeks. Still not very clear whether the Cabinet is really to declare a default, or this is only a means of pressure on the Troika. In the end, in politics the most important things is to remain in power and if Greeks vote Yes to EU demands that the end of the current government. What will happen to the country next is unclear. Probably the parties that brought the country to the current collapse (PASOK and New democracy) will return to power helped by Brussels neoliberals, who can throw a bone to them in a form of some minor compromises, compromise to which they would never agree with the current government, which is considered to be "hostile" by neoliberal stooges which now want the regime change in Greece.
But the mere decision to go the referendum caused in shakeup and hysteria in all centers of neoliberal power such as Brussels, Berlin and Washington. However, we cannot exclude that such a reaction is a mean to increase the pressure on Tsipras.As Neil Irwin's in his at The Upshot column (NYT, June 28, 2015) noted
Greek leaders think the offer on the table from European governments and the International Monetary Fund is lousy, requiring still more pension cuts and tax increases in a depressed economy, and intend to throw to voters the question of whether to accept it.
spartacus, July 1, 2015 at 1:26 pm
I think things are a little more complicated than that. According to the preliminary report of the commission set up by the Greek government to look into the origins of this debt, it appears that a big chunk of it is a consequence of the government stepping in to recapitalize troubled banks. Then the report also mentions excessive and unjustified military spending, loss of tax revenues due to illicit capital outflows. The report can be accessed via this link:
The problem is that after so much austerity the debt now stands at 177% of GDP, higher than ever, because GDP took a little bit of a nosedive. The Troika recipe for success was crap.
The “lazy Greek” line is just that. A line peddled by the MSM in order to demonize the Greek people, as opposed to the “hard working” Germans. If you look at the OECD statistic provided by the following link, you will see that, in reality, the exact opposite is true.
This is not about lavish lifestyle. Is about starvation, homelessness and suicide.
July 1, 2015 at 2:28 pm
Greece was screwed over by foremost the Germans. The whole German shtick of pretending to have “fed Greece” is grotesque obscenity.
Greek government-debt crisis - Wikipedia, the free encyclopedia
Charges of hypocrisy
Hypocrisy has been alleged on multiple bases. "Germany is coming across like a know-it-all in the debate over aid for Greece", commented Der Spiegel, while its own government did not achieve a budget surplus during the era of 1970 to 2011, although a budget surplus indeed was achieved by Germany in all three subsequent years (2012–2014). A Bloomberg editorial, which also concluded that "Europe's taxpayers have provided as much financial support to Germany as they have to Greece", described the German role and posture in the Greek crisis thus:
In the millions of words written about Europe's debt crisis, Germany is typically cast as the responsible adult and Greece as the profligate child. Prudent Germany, the narrative goes, is loath to bail out freeloading Greece, which borrowed more than it could afford and now must suffer the consequences. [… But] irresponsible borrowers can't exist without irresponsible lenders. Germany's banks were Greece's enablers.
German economic historian Albrecht Ritschl describes his country as "king when it comes to debt. Calculated based on the amount of losses compared to economic performance, Germany was the biggest debt transgressor of the 20th century." Despite calling for the Greeks to adhere to fiscal responsibility, and although Germany's tax revenues are at a record high, with the interest it has to pay on new debt at close to zero, Germany still missed its own cost-cutting targets in 2011, and also fell behind on its goals for 2012.
There have been widespread accusations that Greeks are lazy, but analysis of OECD data shows that the average Greek worker puts in 50% more hours per year than a typical German counterpart, and the average retirement age of a Greek is, at 61.7 years, older than that of a German.
US economist Mark Weisbrot has also noted that while the eurozone giant's post-crisis recovery has been touted as an example of an economy of a country that "made the short-term sacrifices necessary for long-term success", Germany did not apply to its economy the harsh pro-cyclical austerity measures that are being imposed on countries like Greece, In addition, he noted that Germany did not lay off hundreds of thousands of its workers despite a decline in output in its economy but reduced the number of working hours to keep them employed, at the same time as Greece and other countries were pressured to adopt measures to make it easier for employers to lay off workers. Weisbrot concludes that the German recovery provides no evidence that the problems created by the use of a single currency in the eurozone can be solved by imposing "self-destructive" pro-cyclical policies as has been done in Greece and elsewhere.
Arms sales are another fountainhead for allegations of hypocrisy. Dimitris Papadimoulis, a Greek MP with the Coalition of the Radical Left party:
If there is one country that has benefited from the huge amounts Greece spends on defence it is Germany. Just under 15% of Germany's total arms exports are made to Greece, its biggest market in Europe. Greece has paid over €2bn for submarines that proved to be faulty and which it doesn't even need. It owes another €1bn as part of the deal. That's three times the amount Athens was asked to make in additional pension cuts to secure its latest EU aid package. […] Well after the economic crisis had begun, Germany and France were trying to seal lucrative weapons deals even as they were pushing us to make deep cuts in areas like health. […] There's a level of hypocrisy here that is hard to miss. Corruption in Greece is frequently singled out as a cause for waste but at the same time companies like Ferrostaal and Siemens are pioneers in the practice. A big part of our defence spending is bound up with bribes, black money that funds the [mainstream] political class in a nation where governments have got away with it by long playing on peoples' fears.
Thus allegations of hypocrisy could be made towards both sides: Germany complains of Greek corruption, yet the arms sales meant that the trade with Greece became synonymous with high-level bribery and corruption; former defence minister Akis Tsochadzopoulos was gaoled in April 2012 ahead of his trial on charges of accepting an €8m bribe from Germany company Ferrostaal. In 2000, the current German finance minister, Wolfgang Schäuble, was forced to resign after personally accepting a "donation" (100,000 Deutsche Mark, in cash) from a fugitive weapons dealer, Karlheinz Schreiber.
Another is German complaints about tax evasion by moneyed Greeks. "Germans stashing cash in Switzerland to avoid tax could sleep easy" after summer 2011, when "the German government […] initialled a beggar-thy-neighbour deal that undermine[d] years of diplomatic work to penetrate Switzerland's globally corrosive banking secrecy." Nevertheless, Germans with Swiss bank accounts were so worried, so intent on avoiding paying tax, that some took to cross-dressing, wearing incontinence diapers, and other ruses to try and smuggle their money over the Swiss–German border and so avoid paying their dues to the German taxman. Aside from these unusual tax-evasion techniques, Germany has a history of massive tax evasion: a 1993 ZEW estimate of levels of income-tax avoidance in West Germany in the early 1980s was forced to conclude that "tax loss [in the FDR] exceeds estimates for other countries by orders of magnitude." (The study even excluded the wealthiest 2% of the population, where tax evasion is at its worst). A 2011 study noted that, since the 1990s, the "effective average tax rates for the German super rich have fallen by about a third, with major reductions occurring in the wake of the personal income tax reform of 2001–2005."
Alleged pursuit of national self-interestListen to many European leaders—especially, but by no means only, the Germans—and you'd think that their continent's troubles are a simple morality tale of debt and punishment: Governments borrowed too much, now they're paying the price, and fiscal austerity is the only answer.
"An Impeccable Disaster"
Paul Krugman, 5 November 2013
Since the euro came into circulation in 2002—a time when the country was suffering slow growth and high unemployment—Germany's export performance, coupled with sustained pressure for moderate wage increases (German wages increased more slowly than those of any other eurozone nation) and rapidly rising wage increases elsewhere, provided its exporters with a competitive advantage that resulted in German domination of trade and capital flows within the currency bloc. As noted by Paul De Grauwe in his leading text on monetary union, however, one must "hav[e] homogenous preferences about inflation in order to have a smoothly functioning monetary union." Thus Germany broke what the Levy Economics Institute has called "the golden rule of a monetary union" when it jettisoned a common inflation rate.
The violation of this golden rule led to dire imbalances within the eurozone, though they suited Germany well: the country's total export trade value nearly tripled between 2000 and 2007, and though a significant proportion of this is accounted for by trade with China, Germany's trade surplus with the rest of the EU grew from €46.4 bn to €126.5 bn during those seven years. Germany's bilateral trade surpluses with the peripheral countries are especially revealing: between 2000 and 2007, Greece's annual trade deficit with Germany nearly doubled, from €3 bn to €5.5 bn; Italy's more than doubled, from €9.6 bn to €19.6 bn; Spain's well over doubled, from €11 bn to €27.2 bn; and Portugal's more than quadrupled, from €1 bn to €4.2 bn. German banks played an important role in supplying the credit that drove wage increases in peripheral eurozone countries like Greece, which in turn produced this divergence in competitiveness and trade surpluses between Germany and these same eurozone members.
Germans see their government finances and trade competitiveness as an example to be followed by Greece, Portugal and other troubled countries in Europe, but the problem is more than simply a question of southern European countries emulating Germany. Dealing with debt via domestic austerity and a move toward trade surpluses is very difficult without the option of devaluing your currency, and Greece cannot devalue because it is chained to the euro. Roberto Perotti of Bocconi University has also shown that on the rare occasions when austerity and expansion coincide, the coincidence is almost always attributable to rising exports associated with currency depreciation. As can be seen from the case of China and the US, however, where China has had the yuan pegged to the dollar, it is possible to have an effective devaluation in situations where formal devaluation cannot occur, and that is by having the inflation rates of two countries diverge. If inflation in Germany is higher than in Greece and other struggling countries, then the real effective exchange rate will move in the strugglers' favour despite the shared currency. Trade between the two can then rebalance, aiding recovery, as Greek products become cheaper. Paul Krugman estimated that Spain and other peripherals would need to reduce their 2012 price-levels relative to Germany by around 20 percent to become competitive again:
If Germany had 4 percent inflation, they could do that over 5 years with stable prices in the periphery—which would imply an overall eurozone inflation rate of something like 3 percent. But if Germany is going to have only 1 percent inflation, we're talking about massive deflation in the periphery, which is both hard (probably impossible) as a macroeconomic proposition, and would greatly magnify the debt burden. This is a recipe for failure, and collapse.
This view, that German deficits are a crucial factor in assisting eurozone recovery, is shared by leading economics commentators, by the OECD, the Carnegie Endowment for International Peace, Deutsche Bank, Credit Suisse, Standard & Poor's, the European Commission, and the IMF. The Americans, too, asked Germany, repeatedly and heatedly, to loosen fiscal policy, though without success. This failure led to the US taking a more high-powered tack: for the first time, the Treasury Department, in its semi-annual currency report for October 2013, singled out Germany as the leading obstacle to economic recovery in Europe.
Therefore, it is argued, the problem is Germany continuing to shut off this adjustment mechanism. "The counterpart to Germany living within its means is that others are living beyond their means", agreed Philip Whyte, senior research fellow at the Centre for European Reform. "So if Germany is worried about the fact that other countries are sinking further into debt, it should be worried about the size of its trade surpluses, but it isn't."
This chorus of criticism, however, germinates in the very poorest of soil because, in October 2012, Germany chose to legislate against the very possibility of stimulus spending, "by passing a balanced budget law that requires the government to run near-zero structural deficits indefinitely." OECD projections of relative export prices—a measure of competitiveness—showed Germany beating all euro zone members except for crisis-hit Spain and Ireland for 2012, with the lead only widening in subsequent years.
Even with such policies, Greece and other countries would have faced years of hard times, but at least there would be some hope of recovery. During 2012, it seemed as though the status quo was beginning to change as France began to challenge German policy, and even Christine Lagarde called for Greece to at least be given more time to meet bailout targets. Further criticism mounted in 2013: a leaked version of a text from French president Francois Hollande's Socialist Party openly attacked "German austerity" and the "egoistic intransigence of Mrs Merkel"; Manuel Barroso warned that austerity had "reached its limits"; EU employment chief Laszlo Andor called for a radical change in EU crisis strategy—"If there is no growth, I don't see how countries can cut their debt levels"—and criticised what he described as the German practice of "wage dumping" within the eurozone to gain larger export surpluses; and Heiner Flassbeck (a former German vice finance minister) and economist Costas Lapavitsas charged that the euro had "allowed Germany to 'beggar its neighbours', while also providing the mechanisms and the ideology for imposing austerity on the continent".
Battered by criticism, the European Commission finally decided that "something more" was needed in addition to austerity policies for peripheral countries like Greece. "Something more" was announced to be structural reforms—things like making it easier for companies to sack workers—but such reforms have been there from the very beginning, leading Dani Rodrik to dismiss the EC's idea as "merely old wine in a new bottle." Indeed, Rodrik noted that with demand gutted by austerity, all structural reforms have achieved, and would continue to achieve, is pumping up unemployment (further reducing demand), since fired workers are not going to be re-employed elsewhere. Rodrik suggested the ECB might like to try out a higher inflation target, and that Germany might like to allow increased demand, higher inflation, and to accept its banks taking losses on their reckless lending to Greece. That, however, "assumes that Germans can embrace a different narrative about the nature of the crisis. And that means that German leaders must portray the crisis not as a morality play pitting lazy, profligate southerners against hard-working, frugal northerners, but as a crisis of interdependence in an economic (and nascent political) union. Germans must play as big a role in resolving the crisis as they did in instigating it." Paul Krugman described talk of structural reform as "an excuse for not facing up to the reality of macroeconomic disaster, and a way to avoid discussing the responsibility of Germany and the ECB, in particular, to help end this disaster." Furthermore, as Financial Times analyst Wolfgang Munchau observed, "Austerity and reform are the opposite of each other. If you are serious about structural reform, it will cost you upfront money." Claims that Germany had, by mid-2012, given Greece the equivalent of 29 times the aid given to West Germany under the Marshall Plan after World War II completely ignores the fact that aid was just a small part of Marshall Plan assistance to Germany, with another crucial part of the assistance being the writing off of a majority of Germany's debt.
Artificially low exchange rate
Though Germany claims its public finances are "the envy of the world", the country is merely continuing what has been called its "free-riding" of the euro crisis, which "consists in using the euro as a mechanism for maintaining a weak exchange rate while shifting the costs of doing so to its neighbors." With eurozone adjustment locked out by Germany, economic hardship elsewhere in the currency block actually suited its export-oriented economy for an extended period, because it caused the euro to depreciate, making German exports cheaper and so more competitive. The weakness of the euro, caused by the economy misery of peripheral countries, has been providing Germany with a large and artificial export advantage to the extent that, if Germany left the euro, the concomitant surge in the value of the reintroduced Deutsche Mark, which would produce "disastrous" effects on German exports as they suddenly became dramatically more expensive, would play the lead role in imposing a cost on Germany of perhaps 20–25% GDP during the first year alone after its euro exit. November 2013 saw the European Commission open an in-depth inquiry into German's surplus, which hit a new record in spring 2015. As the German current accounts surplus looked set to smash all previous records again in Spring 2015, one commentator noted that Germany was "now the biggest single violator of the eurozone stability rules. It would face punitive sanctions if EU treaty law was enforced." 2015 is "the fifth consecutive year that Germany's surplus has been above 6pc of GDP," it was pointed out. "The EU's Macroeconomic Imbalance Procedure states that the Commission should launch infringement proceedings if this occurs for three years in a row, unless there is a clear reason not to."
Advocacy of internal devaluation for peripheral economies
The version of adjustment offered by Germany and its allies is that austerity will lead to an internal devaluation, i.e. deflation, which would enable Greece gradually to regain competitiveness. "Yet this proposed solution is a complete non-starter", in the opinion of one UK economist. "If austerity succeeds in delivering deflation, then the growth of nominal GDP will be depressed; most likely it will turn negative. In that case, the burden of debt will increase." A February 2013 research note by the Economics Research team at Goldman Sachs again noted that the years of recession being endured by Greece "exacerbate the fiscal difficulties as the denominator of the debt-to-GDP ratio diminishes", i.e. reducing the debt burden by imposing austerity is, aside from anything else, utterly futile. "Higher growth has always been the best way out the debt (absolute and relative) burden. However, growth prospects for the near and medium-term future are quite weak. During the Great Depression, Heinrich Brüning, the German Chancellor (1930–32), thought that a strong currency and a balanced budget were the ways out of crisis. Cruel austerity measures such as cuts in wages, pensions and social benefits followed. Over the years crises deepened". The austerity program applied to Greece has been "self-defeating", with the country's debt now expected to balloon to 192% of GDP by 2014. After years of the situation being pointed out, in June 2013, with the Greek debt burden galloping towards the "staggering" heights previously predicted by anyone who knew what they were talking about, and with her own organization admitting its program for Greece had failed seriously on multiple primary objectives and that it had bent its rules when "rescuing" Greece; and having claimed in the past that Greece's debt was sustainable—Christine Lagarde felt able to admit publicly that perhaps Greece just might, after all, need to have its debt written off in a meaningful way. In its Global Economic Outlook and Strategy of September 2013, Citi pointed out that Greece "lack[s] the ability to stabilise […] debt/GDP ratios in coming years by fiscal policy alone",:7 and that "large debt relief" is probably "the only viable option" if Greek fiscal sustainability is to re-materialise;:18 predicted no return to growth until 2016;:8 and predicted that the debt burden would soar to over 200% of GDP by 2015 and carry on rising through at least 2017.:9 Unfortunately, German Chancellor Merkel and Foreign Minister Guido Westerwelle had just a few months prior already spoken out again against any debt relief for Greece, claiming that "structural reforms" (i.e. "old wine in a new bottle", see Rodrik et al. above) were the way to go and—astonishingly—that "debt sustainability will continue to be assured".
Strictly in terms of reducing wages relative to Germany, Greece had been making 'progress': private-sector wages fell 5.4% in the third quarter of 2011 from a year earlier and 12% since their peak in the first quarter of 2010. The second economic adjustment programme for Greece called for a further labour cost reduction in the private sector of 15% during 2012–2014.
German views on inflation as a solution
The question then is whether Germany would accept the price of inflation for the benefit of keeping the eurozone together. On the upside, inflation, at least to start with, would make Germans happy as their wages rose in keeping with inflation. Regardless of these positives, as soon as the monetary policy of the ECB—which has been catering to German desires for low inflation so doggedly that Martin Wolf describes it as "a reincarnated Bundesbank"—began to look like it might stoke inflation in Germany, Merkel moved to counteract, cementing the impossibility of a recovery for struggling countries.
All of this has resulted in increased anti-German sentiment within peripheral countries like Greece and Spain. German historian Arnulf Baring, who opposed the euro, wrote in his 1997 book Scheitert Deutschland? (Does Germany fail?): "They (populistic media and politicians) will say that we finance lazy slackers, sitting in coffee shops on southern beaches", and "[t]he fiscal union will end in a giant blackmail manoeuvre […] When we Germans will demand fiscal discipline, other countries will blame this fiscal discipline and therefore us for their financial difficulties. Besides, although they initially agreed on the terms, they will consider us as some kind of economic police. Consequently, we risk again becoming the most hated people in Europe." Anti-German animus is perhaps inflamed by the fact that, as one German historian noted, "during much of the 20th century, the situation was radically different: after the first world war and again after the second world war, Germany was the world's largest debtor, and in both cases owed its economic recovery to large-scale debt relief." When Horst Reichenbach arrived in Athens towards the end of 2011 to head a new European Union task force, the Greek media instantly dubbed him "Third Reichenbach"; in Spain in May 2012, businessmen made unflattering comparisons with Berlin's domination of Europe in WWII, and top officials "mutter about how today's European Union consists of a 'German Union plus the rest'". Almost four million German tourists—more than any other EU country—visit Greece annually, but they comprised most of the 50,000 cancelled bookings in the ten days after the 6 May 2012 Greek elections, a figure The Observer called "extraordinary". The Association of Greek Tourism Enterprises estimates that German visits for 2012 will decrease by about 25%. Such is the ill-feeling, historic claims on Germany from WWII have been reopened, including "a huge, never-repaid loan the nation was forced to make under Nazi occupation from 1941 to 1945."
Analysis of the Greek rescue
The neutrality of this section is disputed. Relevant discussion may be found on the talk page. Please do not remove this message until the dispute is resolved. (June 2015)
One estimate is that Greece actually subscribed to €156bn worth of new debt in order to get €206bn worth of old debt to be written off, meaning the write-down of €110bn by the banks and others is more than double the true figure of €50bn that was truly written off. Taxpayers are now liable for more than 80% of Greece's debt. One journalist for Der Spiegel noted that the second bailout was not "geared to the requirements of the people of Greece but to the needs of the international financial markets, meaning the banks. How else can one explain the fact that around a quarter of the package won't even arrive in Athens but will flow directly to the country's international creditors?" He accused the banks of "cleverly manipulating the fear that a Greek bankruptcy would trigger a fatal chain reaction" in order to get paid. According to Robert Reich, in the background of the Greek bailouts and debt restructuring lurks Wall Street. While US banks are owed only about €5bn by Greece, they have more significant exposure to the situation via German and French banks, who were significantly exposed to Greek debt. Massively reducing the liabilities of German and French banks with regards to Greece thus also serves to protect US banks.
Creditors of Greece 2011 and 2015
According to Der Spiegel "more than 80 percent of the rescue package is going to creditors—that is to say, to banks outside of Greece and to the ECB. The billions of taxpayer euros are not saving Greece. They're saving the banks." One study found that the public debt of Greece to foreign governments, including debt to the EU/IMF loan facility and debt through the eurosystem, increased by €130 bn, from €47.8 bn to €180.5 billion, between January 2010 and September 2011. The combined exposure of foreign banks to Greek entities—public and private—was around 80bn euros by mid-February 2012. In 2009 they were in for well over 200bn. The Economist noted that, during 2012 alone, "private-sector bondholders reduced their nominal claims by more than 50%. But the deal did not include the hefty holdings of Greek bonds at the European Central Bank (ECB), and it was sweetened with funds borrowed from official rescuers. For two years those rescuers had pretended Greece was solvent, and provided official loans to pay off bondholders in full. So more than 70% of the debts are now owed to 'official' creditors", i.e. European taxpayers and the IMF. With regard to Germany in particular, a Bloomberg editorial noted that, before its banks reduced its exposure to Greece, "they stood to lose a ton of money if Greece left the euro. Now any losses will be shared with the taxpayers of the entire euro area."
Oct 20, 2017 | www.counterpunch.orgSocialism a century ago seemed to be the wave of the future. There were various schools of socialism, but the common ideal was to guarantee support for basic needs, and for state ownership to free society from landlords, predatory banking and monopolies. In the West these hopes are now much further away than they seemed in 1917. Land and natural resources, basic infrastructure monopolies, health care and pensions have been increasingly privatized and financialized.
Instead of Germany and other advanced industrial nations leading the way as expected, Russia's October 1917 Revolution made the greatest leap. But the failures of Stalinism became an argument against Marxism – guilt-by-association with Soviet bureaucracy. European parties calling themselves socialist or "labour" since the 1980s have supported neoliberal policies that are the opposite of socialist policy. Russia itself has chosen neoliberalism.
Few socialist parties or theorists have dealt with the rise of the Finance, Insurance and Real Estate (FIRE) sector that now accounts for most increase in wealth. Instead of evolving into socialism, Western capitalism is being overcome by predatory finance and rent extraction imposing debt deflation and austerity on industry as well as on labor.
Failure of Western economies to recover from the 2008 crisis is leading to a revival of Marxist advocacy. The alternative to socialist reform is stagnation and a relapse into neofeudal financial and monopoly privileges.
Socialism flowered in the 19 th century as a program to reform capitalism by raising labor's status and living standards, with a widening range of public services and subsidies to make economies more efficient. Reformers hoped to promote this evolution by extending voting rights to the working population at large.
Ricardo's discussion of land rent led early industrial capitalists to oppose Europe's hereditary landlord class. But despite democratic political reform, the world has un-taxed land rent and is still grappling with the problem of how to keep housing affordable instead of siphoning off rent to a landlord class – more recently transmuted into mortgage interest paid to banks by owners who pledge the rental value for loans. Most bank lending today is for real estate mortgages. The effect is to bid up land prices toward the point where the entire rental value is paid as interest. This threatens to be a problem for socialist China as well as for capitalist economies.
Landlords, banks and the cost of living
The classical economists sought to make their nations more competitive by keeping down the price of labor so as to undersell competitors. The main cost of living was food; today it is housing. Housing and food prices are determined not by the material costs of production, but by land rent – the rising market price for land.
In the era of the French Physiocrats, Adam Smith, David Ricardo and John Stuart Mill, this land rent accrued to Europe's hereditary landlord class. Today, the land's rent is paid mainly to bankers – because families need credit to buy a home. Or, if they rent, their landlords use the property rent to pay interest to the banks.
The land issue was central to Russia's October Revolution, as it was for European politics. But the discussion of land rent and taxation has lost much of the clarity (and passion) that guided the 19 th century when it dominated classical political economy, liberal reform, and indeed most early socialist politics.
In 1909/10 Britain experienced a constitutional crisis when the democratically elected House of Commons passed a land tax, only to be overridden by the House of Lords, governed by the old aristocracy. The ensuing political crisis was settled by a rule that the Lords never again could overrule a revenue bill passed by the House of Commons. But that was Britain's last real opportunity to tax away the economic rents of landlords and natural resource owners. The liberal drive to tax the land faltered, and never again would gain serious chance of passage.
The democratization of home ownership during the 20 th century led middle-class voters to oppose property taxes – including taxes on commercial sites and natural resources. Tax policy in general has become pro- rentier and anti-labor – the regressive opposite of 19 th -century liberalism as developed by "Ricardian socialists" such as John Stuart Mill and Henry George. Today's economic individualism has lost the early class consciousness that sought to tax economic rent and socialize banking.
The United States enacted an income tax in 1913, falling mainly on rentier income, not on the working population. Capital gains (the main source of rising wealth today) were taxed at the same rate as other income. But the vested interests campaigned to reverse this spirit, slashing capital gains taxes and making tax policy much more regressive. The result is that today, most wealth is not gained by capital investment for profits. Instead, asset-price gains have been financed by a debt-leveraged inflation of real estate, stock and bond prices.
Many middle-class families owe most of their net worth to rising prices for their homes. But by far the lion's share of the real estate and stock market gains have accrued to just One Percent of the population. And while bank credit has enabled buyers to bid up housing prices, the price has been to siphon off more and more of labor's income to pay mortgage loans or rents. As a result, finance today is what is has been throughout history: the main force polarizing economies between debtors and creditors.
Global oil and mining companies created flags of convenience to make themselves tax-exempt, by pretending to make all their production and distribution profits in tax-free trans-shipping havens such as Liberia and Panama (which use U.S. dollars instead of being real countries with their own currency and tax systems).
The fact that absentee-owned real estate and natural resource extraction are practically free of income taxation shows that democratic political reform has not been a sufficient guarantee of socialist success. Tax rules and public regulation have been captured by the rentiers , dashing the hopes of 19 th -century classical reformers that progressive tax policy would produce the same effect as direct public ownership of the means of production, while leaving "the market" as an individualistic alternative to government regulation or planning.
In practice, planning and resource allocation has passed to the banking and financial sector. Many observers hoped that this would evolve into state planning, or at least work in conjunction with it as in Germany. But liberal "Ricardian socialist" failed, as did German-style "state socialism" publicly financing transportation and other basic infrastructure, pensions and similar "external" costs of living and doing business that industrial employers otherwise would have to bear. Attempts at "half-way" socialism via tax and regulatory policy against monopolies and banking have faltered repeatedly. As long as major economic or political choke points are left in private hands, they will serve s springboards to subvert real reform policies. That is why Marxist policy went beyond these would-be socialist reforms.
To Marx, the historical task of capitalism was to prepare the way for socializing the means of production by clearing away feudalism's legacy: a hereditary landlord class, predatory banking, and the monopolies that financial interests had pried away from governments. The path of least resistance was to start by socializing land and basic infrastructure. This drive to free society from economic overhead in the form of hereditary privilege and unearned income by the "idle rich" was a step toward socialist management, by minimizing rentier costs (" faux frais of production").
Proto-socialist reform in the leading industrial nations
Marx was by no means alone in expecting a widening range of economic activity to be shifted away from the market to the public sector. State socialism (basically, state-sponsored capitalism) subsidized pensions and public health, education and other basic needs so as to save industrial enterprise from having to bear these charges.
In the United States, Simon Patten – the first economics professor at the new Wharton business school at the University of Pennsylvania – defined public infrastructure as a "fourth factor of production" alongside labor, capital and land. The aim of public investment was not to make a profit, but to lower the cost of living and doing business so as to minimize industry's wage and infrastructure bill. Public health, pensions, roads and other transportation, education, research and development were subsidized or provided freely. 
The most advanced industrial economies seemed to be evolving toward some kind of socialism. Marx shared a Progressive Era optimism that expected industrial capitalism to evolve in the most logical way, by freeing economies from the landlordship and predatory banking inherited from Europe's feudal era. That was above all the classical reform program of Adam Smith, John Stuart Mill and the intellectual mainstream.
But the aftermath of World War I saw the vested interests mount a Counter-Enlightenment. Banking throughout the Western world find its major market in real estate mortgage lending, natural resource extraction and monopolies – the Anglo-American model, not that of German industrial banking that had seemed to be capitalism's financial future in the late 19 th century.
Since 1980 the Western nations have reversed early optimistic hopes to reform market economies. Instead of the classical dream of taxing away the land rent that had supported Europe's hereditary landed aristocracies, commercial real estate has been made virtually exempt from income taxation. Absentee owners avoid tax by a combination of tax-deductibility for interest payments (as if it is a necessary business expense) and fictitious over-depreciation tax credits that pretend that buildings and properties are losing value even when market prices for their land are soaring.
These tax breaks have made real estate the largest bank customers. The effect has been to financialize property rents into interest payments. Likewise in the industrial sphere, regulatory capture by lobbyists for the major monopolies has disabled public attempts to keep prices in line with the cost of production and prevent fraud by breaking up or regulating monopolies. These too have become major bank clients.
The beginning and end of Russian socialism
Most Marxists expected socialism to emerge first in Germany as the most advanced capitalist economy. After its October 1917 Revolution, Russia seemed to jump ahead, the first nation to free itself from rent and interest charges inherited from feudalism. By taking land, industry and finance into state control, Soviet Russia's October Revolution created an economy without private landlords and bankers. Russian urban planning did not take account of the natural rent-of-location, nor did it charge for the use of money created by the state bank. The state bank created money and credit, so there was no need to rely on a wealthy financial class. And as property owner, the state did not seek to charge land rent or monopoly rent.
By freeing society from the post-feudal rentier class of landlords, bankers and predatory finance, the Soviet regime was much more than a bourgeois revolution. The Revolution's early leaders sought to free wage labor from exploitation by taking industry into the public domain. State companies provided labor with free lunches, education, sports and leisure activity, and modest housing.
Agricultural land tenure was a problem. Given its centralized marketing role, the state could have reallocated land to build up a rural peasantry and helped it invest in modernization. The state could have manipulated crop prices to siphon off agricultural gains, much like Cargill does in the United States. Instead, Stalin's collectivization program waged a war against the kulaks. This political shock led to famine. It was a steep price to pay for avoiding rent was paid to a landlord class or peasantry.
Marx had said nothing about the military dimension of the transition from progressive industrial capitalism to socialism. But Russia's Revolution – like that of China three decades later – showed that the attempt to create a socialist economy had a military dimension that absorbed the lion's share of the economic surplus. Military aggression by a half dozen leading capitalist nations seeking to overthrow the Bolshevik government obliged Russia to adopt War Communism. For over half a century the Soviet Union devoted most of capital to military investment, not provide sufficient housing or consumer goods for its population beyond spreading literacy, education and public health.
Despite this military overhead, the fact that the Soviet Union was free of a rentier class of financiers and absentee landlords should have made the Soviet Union the world's most competitive low-cost economy in theory. In 1945 the United States certainly feared the efficiency of socialist planning. Its diplomats opposed Soviet membership on the ground that state enterprise and pricing would enable such economies to undersell capitalist countries.  So socialist countries were kept out of the IMF, World Bank and the planned World Trade Organization, explicitly on the ground that they were free of land rent, natural resource rent, monopoly rent and financial charges.
Capitalist economies are now privatizing and financializing their basic needs and infrastructure. Every activity is being forced into "the market," at prices that need to cover not only the technological costs of production but also interest, ancillary financial fees and pension set-asides. The cost of living and doing business is further privatized as financial interests pry roads, health care, water, communications and other public utilities away from the public sector, while driving housing and commercial real estate deeply into debt.
The Cold War has shown that capitalist countries plan to continue fighting socialist economies, forcing them to militarize in self-defense. The resulting oppressive military overhead is then blamed on socialist bureaucracy and inefficiency.
The collapse of Russian Stalinism
Russia's Revolution ended after 74 years, leaving the Soviet Union so dispirited that it ended in collapse. The contrast between the low living standards of Russian consumers and what seemed to be Western success became increasingly pronounced. In contrast to China's housing construction policy, the Soviet regime insisted that families double up. Clothing and other consumer goods had only drab designs, needlessly suppressing variety. To cap matters, public opposition to Russia's military personnel losses in Afghanistan caused popular resentment.
When the Soviet Union dissolved itself in 1991, its leaders took neoliberal advice from its major adversary, the United States, in hope that this would set it on a capitalist road to prosperity. But turning its economies into viable industrial powers was the last thing U.S. advisors wanted to teach Russia.  Their aim was to turn it and its former satellites into raw-materials colonies of Wall Street, the City of London and Frankfurt – victims of capitalism, not rival producers.
Russia has gone to the furthest anti-socialist extreme by adopting a flat tax that fails to distinguish wages and profits of labor and capital from unearned rental income. By also having to pay a value-added tax (VAT) on consumer goods (with no tax on trading in financial assets), labor is taxed much higher than the wealthy.
Most Western "wealth creation" is achieved by debt-leveraged price increases for real estate, stocks and bonds, and by privatizing the public domain. The latter process has gained momentum since the early 1980s in Margaret Thatcher's Britain and Ronald Reagan's America, followed by Third World countries acting under World Bank tutelage. The pretense is that privatization will maximize technological efficiency and prosperity for the economy as a whole.
Following this advice, Russian leaders agreed that the major sources of economic rent – natural resource wealth, real estate and state companies – should be transferred to private owners (often to themselves and associated insiders). The "magic of the marketplace" was supposed to lead the new owners to make the economy more efficient as a byproduct of making money in the quickest way possible.
Each Russian worker got a "voucher" worth about $25. Most were sold off simply to obtain money to buy food and other needs as many companies stopped paying wages. Russia had wiped out domestic savings with hyperinflation after 1991.
It should not be surprising that banks became the economy's main control centers, as in the West's bubble economies. Instead of the promised prosperity, a new class of billionaires was endowed, headed by the notorious Seven Bankers who appropriated the formerly state-owned oil and gas, nickel and platinum, electricity and aluminum production, as well as real estate, electric utilities and other public enterprises. It was the largest giveaway in modern history. The Soviet nomenklatura became the new lords in outright seizure that Marx would have characterized as "primitive accumulation."
The American advisors knew the obvious: Russian savings had been wiped out by the polst-1991 hyperinflation, so the new owners could only cash out by selling shares to Western buyers. The kleptocrats cashed out as expected, by dumping their shares to foreign investors so quickly at such giveaway prices that Russia's stock market became the world's top performer for Western investors in 1994-96.
The Russian oligarchs kept most of their sales proceeds abroad in British and other banks, beyond the reach of Russian authorities to recapture. Much was spent on London real estate, sports teams and luxury estates in the world's flight-capital havens. Almost none was invested in Russian industry. Wage arrears often mounted up half a year behind. Living standards shrank, along with the population as birth rates plunged throughout the former Soviet economies. Skilled labor emigrated.
The basic neoliberal idea of prosperity is financial gain based on turning rent extraction into a flow of interest payments by buyers-on-credit. This policy favors financial engineering over industrial investment, reversing the Progressive Era's industrial capitalism that Marx anticipated would be a transition stage leading to socialism. Russia adopted the West's anti-socialist rollback toward neofeudalism.
Russian officials failed to understand the State Theory of money that is the basis of Modern Monetary Theory: States can create their own money, giving it value by accepting it in payment of taxes. The Soviet government financed its economy for seventy years without any need to back the ruble with foreign exchange. But Russia's central bank was persuaded that "sound money" required it to back its domestic ruble currency with U.S. Treasury bonds in order to prevent inflation. Russian leaders did not realize that dollars or other foreign currencies were only needed to finance balance-of-payments deficits, not domestic spending except as this money was spent on imports.
Russia joined the dollar standard. Buying Treasury bonds meant lending to the U.S. Government. The central bank bought U.S. Treasury securities to back its domestic currency. These purchases helped finance Cold War escalation in countries around Russia. Russia paid 100% annual interest in the mid-1990s, creating a bonanza for U.S. investors. On balance, this neoliberal policy lay Russia's economy open to looting by financial institutions seeking natural resource rent, land rent and monopoly rent for themselves. Instead of targeting such rents, Russia imposed taxes mainly on labor via a regressive flat tax – too right wing to be adopted even in the United States!
When the Soviet Union dissolved itself, its officials showed no apprehension of how quickly their economies would be de-industrialized as a result of accepting U.S. advice to privatize state enterprises, natural resources and basic infrastructure. Whatever knowledge of Marx's analysis of capitalism had existed (perhaps in Nicolai Bukharin's time) was long gone. It is as if no Russian official had read Volumes II and III of Marx's Capital (or Theories of Surplus Value ) where he reviewed the laws of economic rent and interest-bearing debt.
The inability of Russia, the Baltics and other post-Soviet countries to understand the FIRE sector and its financial dynamics provides an object lesson for other countries as to what to avoid. Reversing the principles of Russia's October 1917 Revolution, the post-Soviet kleptocracy was akin to the feudal epoch's "primitive accumulation" of the land and commons. They adopted the neoliberal business plan: to establish monopolies, first and most easily by privatizing the public infrastructure that had been built up, extracting economic rents and them paying out the resulting as interest and dividends.
This Western financial advice became a textbook example of how not to organize an economy.  Having rejoined the global economy free of debt in 1991, Russia's population, companies and government quickly ran up debts as a result of its man-made disaster. Families could have been given their homes freely, just as corporate managers were given their entire companies virtually for free. But Russian managers were as anti-labor as they were greedy to grab their own assets from the public domain. Soaring housing prices quickly plagued Russian's economy with one of the world's highest-priced living and business costs. That prevented any thought of industrial competitiveness with the United States or Europe. What passed for Soviet Marxism lacked an understanding of how economic rents and the ensuing high labor costs affected international prices, or how debt service and capital flight affected the currency's exchange rate.
Adversaries of socialism pronounced Marxist theory dead, as if the Soviet dissolution meant the end of Marxism. But today, less than three decades later, the leading Western economies are themselves succumbing to an overgrowth of debt and shrinking prosperity. Russia failed to recognize that just as its own economy was expiring, so was the West's. Industrial capitalism is succumbing to a predatory finance capitalism that is leaving Western economies debt-ridden.  The underlying causes were clear already a century ago: unchecked financial rentiers , absentee ownership and monopolies.
The post-Soviet collapse in the 1990s was not a failure of Marxism, but of the anti-socialist ideology that is plunging Western economies under domination by the Finance, Insurance and Real Estate (FIRE) sector's symbiosis of the three forms of rent extraction: land and natural resource rent, monopoly rent, and interest (financial rent). This is precisely the fate from which 19 th -century socialism, Marxism and even state capitalism sought to save the industrial economies.
A silver lining to the Soviet "final" stage has been to free Marxist analysis from Russian Marxology. Its focus of Soviet Marxology was not an analysis of how the capitalist nations were becoming financialized neo- rentier economies, but was mainly propagandistic, ossifying into a stereotyped identity politics appealing to labor and oppressed minorities. Today's revival of Marxist scholarship has begun to show how the U.S.-centered global economy is entering a period of chronic austerity, debt deflation, and polarization between creditors and debtors.
Financialization and privatization are submerging capitalism in debt deflation
By 1991, when the Soviet Union's leaders decided to take the "Western" path, the Western economies themselves were reaching a terminus. Appearances were saved by a wave of unproductive credit and debt creation to sustain the bubble economy that finally crashed in 2008.
The pitfalls of this financial dynamic were not apparent in the early years after World War II, largely because economies emerged with their private sectors free of debt. The ensuing boom endowed the middle class in the United States and other countries, but was debt financed, first for home ownership and commercial real estate, then by consumer credit to purchase of automobiles and appliances, and finally by credit-card debt just to meet living expenses.
The same debt overgrowth occurred in the industrial sector, where bank and bondholder credit since the 1980s has been increasingly for corporate takeovers and raiding, stock buybacks and even to pay dividends. Industry has become a vehicle for financial engineering to increase stock prices and strip assets, not to increase the means of production. The result is that capitalism has fallen prey to resurgent rentier interests instead of liberating economies from absentee landlords, predatory banking and monopolies. Banks and bondholders have found their most lucrative market not in the manufacturing sector but in real estate and natural resource extraction.
These vested interests have translated their takings into the political power to shed taxes and dismantle regulations on wealth. The resulting political Counter-Reformation has inverted the idea of "free market" to mean an economy free for rent extractors, not free from landlords, monopolists and financial exploitation as Adam Smith, John Stuart Mill and other classical economists had envisioned. The word "reform" as used by today's neoliberal media means undoing Progressive Era reforms, dismantling public regulation and government power – except for control by finance and its allied vested interests.
All this is the opposite of socialism, which has now sunk to its nadir through the Western World. The past four decades have seen most of the European and North American parties calling themselves "socialist" make an about-face to follow Tony Blair's New Labour, the French socialists-in-name and the Clinton's New Democrats. They support privatization, financialization and a shift away from progressive taxation to a value-added tax (VAT) falling on consumers, not on finance or real estate.
China's socialist diplomacy in today's hostile world
Now that Western finance capitalism is stagnating, it is fighting even harder to prevent the post-2008 crisis from leading to socialist reforms that would re-socialize infrastructure that has been privatized and put a public banking system in place. Depicting the contrast between socialist and finance-capitalist economies as a clash of civilizations, U.S.-centered "Western" diplomacy is using military and political subversion to prevent a transition from capitalism into socialism.
China is the leading example of socialist success in a mixed economy. Unlike the Soviet Union, it has not proselytized its economic system or sought to promote revolution abroad to emulate its economic doctrine. Just the opposite: To avert attack, China has given foreign investors a stake in its economic growth. The aim has been to mobilize U.S. and other foreign interests as allies, willing customers for China's exports, and suppliers of modern production facilities in China.
This is the opposite of the antagonism that confronted Russia. The risk is that it involves financial investment. But China has protected its autonomy by requiring majority Chinese ownership in most sectors. The main danger is domestic, in the form of financial dynamics and private rent extraction. The great economic choice facing China today concerns the degree to which land and natural resources should be taxed.
The state owns the land, but does fully tax its rising valuation or rent-of-location that has made many families rich. Letting the resulting real-estate and financialized wealth dominate its economic growth poses two dangers: First, it increases the price that new buyers must pay for their home. Second, rising housing prices force these families to borrow – at interest. This turns the rental value of land – value created by society and public infrastructure investment – into a flow of interest to the banks. They end up receiving more over time than the sellers, while increasing the cost of living and doing business. That is a fate which a socialist economy must avoid at all costs.
At issue is how China can best manage credit and natural resource rent in a way that best meets the needs of its population. Now that China has built up a prosperous industry and real estate, its main challenge is to avoid the financial dynamics that are subjecting the West to debt deflation and burying Western economies. To avoid these dynamics, China must curtail the proliferation of unproductive debt created merely to transfer property on credit, inflating asset prices in the process.
Socialism is incompatible with a rentier class of landlords, natural resource owners and monopolists – the preferred clients of banks hoping to turn economic rent into interest charges. As a vehicle to allocate resources "the market" reflects the status quo of property ownership and credit-creation privileges at any given moment of time, without consideration for what is fair and efficient or predatory. Vested interests claim that such a market is an immutable force of nature, whose course cannot be altered by government "interference." This rhetoric of political passivity aims to deter politicians and voters from regulating economies, leaving the wealthy free to extract as much economic rent and interest as markets can bear by privatizing real estate, natural resources, banking and other monopolies.
Such rent seeking is antithetical to socialism's aim to take these assets into the public domain. That is why the financial sector, oil and mineral extractors and monopolists fight so passionately to dismantle state regulatory power and public banking. That is the diplomacy of finance capital, aiming to consolidate American hegemony over a unipolar world. It backs this strategy with a neoliberal academic curriculum that depicts predatory financial and rentier gains as if they add to national income, not simply transfer it into the hands of the rentier classes. This misleading picture of economic reality poses a danger for China sending its students to study economics at American and European universities.
The century that has elapsed since Russia's October 1917 Revolution has produced a substantial Marxist literature describing how finance capitalism has overpowered industrial capitalism. Its dynamics occupied Marx in Volumes II and III of Capital (and also his Theories of Surplus Value ). Like most observers of his era, Marx expected capitalism to make a substantial step toward socialism by overcoming the dynamics of parasitic capital, above all the tendency for debt to keep on expanding at compound interest until it produces a financial crash.
The only way to control banks and their allied rentier sectors is outright socialization. The past century has shown that if society does not control the banks and financial sector, they will control society. Their strategy is to block government money creation so that economies will be forced to rely on banks and bondholders. Regulatory authority to limit such financial aggression and the monopoly pricing and rent extraction it supports has been crippled in the West by "regulatory capture" by the rentier oligarchy.
Attempts to tax away rental income (the liberal alternative to taking real estate and natural resources directly into the public domain) is prone to lobbying for loopholes and evasion, most notoriously via offshore banking centers in tax-avoidance enclaves and the "flags of convenience" sponsored by the global oil and mining companies. This leaves the only way to save society from the financial power to convert rent into interest to be a policy of nationalizing natural resources, fully taxing land rent (where land and minerals are not taken directly into the public domain), and de-privatizing infrastructure and other key sectors.
Markets have not recovered for the products of American industry and labor since 2008. Industrial capitalism has been sacrificed to a form of finance capitalism that is looking more pre-capitalist (or simply oligarchic and neofeudal) with each passing year. The resulting polarization forces every economy – including China – to choose between saving its bankers and other creditors or freeing debtors and lowering the economy's cost structure. Will the government enforce bank and bondholder claims, or will it give priority to the economy and its people? That is an eternal political question spanning pre-capitalist, capitalist and post-capitalist economies.
Marx described the mathematics of compound interest expanding to absorb the entire economy as age-old, long predating industrial capitalism. He characterized the ancient mode of production as dominated by slavery and usury, and medieval banking as predatory. These financial dynamics exist in socialist economies just as they did in medieval and ancient economies. The way in which governments manage the dynamics of credit and debt thus are the dominant force in every era, and should receive the most pressing attention today as China shapes its socialist future.
 I give the details in "Simon Patten on Public Infrastructure and Economic Rent Capture," American Journal of Economics and Sociology 70 (October 2011):873-903.
 My book Super-Imperialism (1972; new ed. 2002) reviews this discussion during 1944-46.
 I discuss the IMF and World Bank plan to wipe out Russian savings with hyperinflation and make manufacturing investment uneconomic in "How Neoliberal Tax and Financial Policy Impoverishes Russia – Needlessly," Mir Peremen (The World of Transformations), 2012 (3):49-64 (in Russian). МИР ПЕРЕМЕН 3/2012 (ISSN 2073-3038) Mir peremen М. ХАДСОН, Неолиберальная налоговая и финансовая политика приводит к обнищанию России, 49-64.
 I give details in "How Neoliberals Bankrupted 'New Europe': Latvia in the Global Credit Crisis," (with Jeffrey Sommers), in Martijn Konings, ed., The Great Credit Crash (Verso: London and New York, 2010), pp. 244-63, and "Stockholm Syndrome in the Baltics: Latvia's neoliberal war against labor and industry," in Jeffrey Sommers and Charles Woolfson , eds., The Contradictions of Austerity: The Socio-Economic Costs of the Neoliberal Baltic Model (Routledge 2014), pp. 44-63.
 For more analysis see Dirk Bezemer and Michael Hudson, " Finance is Not the Economy: Reviving the Conceptual Distinction ," Journal of Economic Issues , 50 (2016: #3), pp. 745-768.
Oct 10, 2017 | fish12a.livejournal.com
...The data were officially published on the website of the Ministry of Finance of Ukraine. http://index.minfin.com.ua/index/debt/
Before the revolution, Ukraine's external debt was more than now: 142 billion dollars. Now, as of July 1, 2017 it is slightly less than 114 billion. How this can happen during civil war it is not very clear...
But the country's GDP in three years fell exactly two times. That's what typically happens during civil war. It was 183 billion dollars, and now became 93 billion. That means $2186 per capita in 2016 year... With the average salary around $150 a month and the average pension less then $80 a month.
Sep 30, 2017 | www.unz.com
The current 17-year old US war in Afghanistan has uncanny resemblances to the Vietnam War. In Kabul and Saigon, the US installed puppet governments that command no loyalty except from minority groups. They were steeped in drugs and corruption, and kept in power by intensive use of American air power. As in Vietnam, the US military and civilian effort in Afghanistan is led by a toxic mixture of deep ignorance and imperial arrogance.
The US military understands it has long ago lost the Afghan War but cannot bear the humiliation of admitting it was defeated by lightly-armed mountain tribesmen fighting for their independence. In Vietnam, Washington could not admit that young Vietnamese guerillas and regulars had bested the US armed forces thanks to their indomitable courage and intelligent tactics. No one outside Vietnam cared about the 2-3 million civilians killed in the conflict
Unfortunately, the PBS program fails to convey this imperial arrogance and the ignorance that impelled Washington into the war – the same foolhardy behavior that sent US forces into Somalia, Afghanistan and Iraq and perhaps may do so in a second Korean War. The imperial spirit still burns hot in Washington among those who don't know or understand the outside world. The lessons of all these past conflicts have been forgotten: Washington's collective memory is only three years long.
Vietnam was not a 'tragedy,' as the PBS series asserts, but the product of imperial geopolitics. The same holds true for today's Mideast wars. To paraphrase a famous slogan from Vietnam, we destroyed Iraq, Afghanistan and Syria to make them safe for 'freedom.'
One of the craziest things about the Vietnam War has rarely been acknowledged: even at peak deployment, the 550,000 US soldiers in Vietnam were outnumbered by North Vietnamese fighting units.
That's because the huge US military had only about 50,000 real combat troops in the field. The other half million were support troops performing logistical and administrative functions behind the lines: a vast army of typists, cooks, truck drivers, psychologists, and pizza-makers.
Too much tail to teeth, as the army calls it. For Thanksgiving, everyone got turkey dinner with cranberry sauce, choppered into the remotest outposts. But there were simply not enough riflemen to take on the Viet Cong and tough North Vietnamese Army whose Soviet M1954 130mm howitzer with a 27 km range were far superior to the US Army's outdated WWII artillery.
Poor generalship, mediocre officers, and lack of discipline ensured that the US war effort in Vietnam would become and remain a mess. Stupid, pointless attacks against heavily defended hills inflicted huge casualties on US troops and eroded morale.
The monumentally stupid war mismanagement of Pentagon chief Robert McNamara, a know-it-all who knew nothing, turned the war into a macabre joke. This was the dumbest command decision since Louis XV put his girlfriend Madame de Pompadour in charge of his armies.
We soldiers, both in Vietnam and Stateside, scorned the war and mocked our officers. It didn't help that much of the US force in 'Nam' were often stoned and rebellious.
The January 30, 1968 Tet Offensive put the kibosh on US plans to pursue the war – and even take it into south-west China. Tet was a military victory of sorts for the US (and why not, with thousands of warplanes and B-52 heavy bombers) but a huge political/psychological victory for the Communists in spite of their heavy losses.
I vividly recall standing with a group of GI's reading a typed report on our company barracks advising that the Special Forces camp in the Central Highlands to which many of our company had been assigned for immediate duty had been overrun at Tet, and all its defenders killed. After that, the US Army's motto was 'stay alive, avoid combat, and smoke another reefer.'
The war became aimless and often surreal. We soldiers all knew our senior officers and political leaders were lying. Many soldiers were at the edge of mutiny, like the French Army in 1917. Back in those ancient days, we had expected our political leaders to be men of rectitude who told us the truth. Thanks to Vietnam, the politicians were exposed as liars and heartless cynics with no honor.
This same dark cloud hangs over our political landscape today. We have destroyed large parts of the Mideast, Afghanistan and northern Pakistan without a second thought – yet wonder why peoples from these ravaged nations hate us. Now, North Korea seems next.
Showing defiance to Washington brought B-52 bombers, toxic Agent Orange defoliants and endless storms of napalm and white phosphorus that would burn through one's body until it hit bone.
In spite of all, our imperial impulse till throbs. The nightmare Vietnam War in which over 58,000 American soldiers died for nothing has been largely forgotten. So we can now repeat the same fatal errors again without shame, remorse or understanding.
(Republished from EricMargolis.com by permission of author or representative)
anonymous, Disclaimer September 30, 2017 at 3:36 pm GMTanonymous, Disclaimer September 30, 2017 at 3:36 pm GMT
For both Vietnam and Afghanistan, as well as other places, the guiding principle is that they live there and we don't. These are all expeditionary wars for the US. Resistant peoples can't be controlled at a distance. Of course the morale of US soldiers ends up being bad when they realize there's nothing for them to fight for. No one wants to die to help some politician save face. Insofar as the current much publicized Vietnam documentary goes there doesn't seem to be anything that's new or original. All of it has been known for many years to anyone who would bother to brush up on the subject. The question is whether Americans are capable of learning from the past and the answer seems to be no for the vast majority.Cranky, September 30, 2017 at 3:37 pm GMT
For both Vietnam and Afghanistan, as well as other places, the guiding principle is that they live there and we don't. These are all expeditionary wars for the US. Resistant peoples can't be controlled at a distance. Of course the morale of US soldiers ends up being bad when they realize there's nothing for them to fight for. No one wants to die to help some politician save face. Insofar as the current much publicized Vietnam documentary goes there doesn't seem to be anything that's new or original. All of it has been known for many years to anyone who would bother to brush up on the subject. The question is whether Americans are capable of learning from the past and the answer seems to be no for the vast majority.nsa, September 30, 2017 at 5:55 pm GMT
So whose name gets to be the last American killed in Afghanistan, Iraq, Syria, etc? Dying for a place on the memorial, boys. "The war was being run by a bunch of four-star clowns who were going to end up giving the whole circus away."
Some things don't change- I wonder if Rand has a new copy of the Pentagon Papers regarding post 9/11. And a new Nixon in office .he vowed to get out too -- and yet pushed more into it simply amazing.Priss Factor, Website September 30, 2017 at 7:27 pm GMT
@Sam McGowan First, I was heavily involved in Vietnam from 1965 to 1970. Second, I have written extensively about the war and read the books. The fact is that the US didn't "lose" the war, the left-wing presidents that got us into it, JFK and LBJ, has no intention of defeating the communist insurgency, they just wanted "to contain it". Cam Ranh Bay and made a speech in which he commented to the troops present that he wanted them to "nail the coonskin to the wall." Richard Nixon began withdrawing troops immediately after his inauguration and gave Abrams an edict to "reduce American casualties" shortly afterwards. In fact, Vietnam as well as Korea - as well as other wars around the world - were continuations of World War II, which Americans thought ended when the Japanese surrendered. By the way, I am not watching Ken Burn's latest left-wing propaganda piece nor do I intend to. I don't need him to tell me what happened in Southeast Asia, I was there. Save your senile hot air for the other menopausal drunks drooling in the VFW lounge. The conscript US military completely collapsed fragging, rampant drug usage, desertion, abject morale, chain of command disintegration, and the usual commissioned officer cowardice. Any western country stupid enough to pursue a land war in Asia deserves what it gets .inevitable defeat and humiliation.Anon, Disclaimer October 1, 2017 at 4:37 am GMT
I don't think CucKen Burns is entirely wrong in empathizing with those who got involved. Sure, there were warmongers. Sure, they were profiteers. Sure, there were power-maniacs. Sure, there were paranoids.
But Eisenhower, Kennedy, Johnson, and Nixon were not particularly sadistic or cruel men. Eisenhower could be aloof and mean. Kennedy could be vain. Johnson was plenty corrupt. Nixon could be nasty. But were not psychos or radicals like Lenin, Stalin, Hitler, or Mao.
As for military men, well, whaddya expect? They were trained to think of the world in terms of military power. As for CIA, we are talking of more sinister elements, but let's keep in mind that Soviets had their intelligence organizations and methods of subversion. Let's remember Soviets had infiltrated FDR's government and pulled dirty trick. Even got the Bomb during Truman era.
Also, Soviets could be utterly ruthless in their own empire.
Now, would the US have intervened in Vietnam if the nation was to be united by a non-communist nationalist? Probably not. US didn't intervene in Indonesia when it gained independence under Sukarno. The only reason US got involved was because Ho was a Soviet-leaning communist. And even though Domino theory has been 'debunked', it made sense at the time. Even Soviets believed in it. Mao believed in it. Soviets believed that sign of US weakness could spread the revolution all around. Che Guevara believed in the Domino Theory. Communist victory over Cuba, he thought, would herald spread of communism all over Latin America, and then it would spread into US itself. Che really believed this, which is why he died in Bolivia trying to start an insurgency.
Also, in a way, Domino Theory did come true, at least for awhile. Not so much in Southeast Asia, though Laos and Cambodia also fell to communism. And keep in mind Indonesia almost could have become communist if the Peking-backed coup had succeeded. And keep in mind it took lots of British brutality and ruthlessness to stem the communist movement in Malaysia. Brits built huge hamlets and concentration camps. They took extreme measures.
At any rate, communism did continue to spread after the fall of Vietnam. US power seemed to be declining. And not only communists were emboldened by US defeat in Vietnam. Vietnam became a metaphor for anti-Americanism all over the world. May 68 movement that almost brought down the French government was fired up partly by Vietnam(though it began as some silly stuff about dorms and sex). Vietnam was bigger than Algeria because US was seen as the Great Power. French defeat wasn't all that surprising in Algeria. So, after US left from Vietnam, there was a sense that David could beat American Goliath. Iran regime fell and Islamists came to power. Afghanistan turned communist, and Soviets felt emboldened in rolling in tanks. Ethiopia, Mozambique, and Angola turned communist. Communists won in Nicaragua and almost won in El Salvador. There was a raging Maoist insurgency in Peru. Allende came to power through elections, and he was pro-Soviet and pro-Cuba. He was removed only by US-backed coup that did as much harm as good. It blackened US reputation around the world. So, in a way, the Domino Theory wasn't all wrong. Vietnam did signal a sea-change in world politics at least for awhile.
In the end, communism wasn't defeated by the US. It defeated itself. Soviet economics just couldn't sustain the empire. Its subsidies to Cuba were costly. Its support of Marxist regimes in Africa drained Soviet economy. USSR had to prop up Iron Curtain nations economically. And Vietnamese communism was a disaster. Maoism was hell on earth. Some might say communism failed cuz Capitalist West froze the communists out of world trade. But considering that the communist world encompassed resource-rich Soviet Empire, people-rich China, and lots of nations willing to do business with communist nations -- India and Arab nations had good relations with Soviets -- , the real reason for failure of communism was it was its own worst enemy.
And when we look at the aftermath of communist victory in Indochina -- brutal repression in Vietnam and Laos and psychotic democide in Cambodia -- and when we consider how even communist nations like China and Vietnam switched to market economics, it's clear that US was on the right side of history on many issues.
Also, the conflict was complicated because both sides were aggressors. US was the aggressor in working with the French to divide Vietnam in half, in occupying the southern half, and dropping bombs and using Viet women as whores. But the communists were also aggressors because they tried to impose a form of Stalinism on people in the South, most of whom didn't want communism. After all, many more people fled the north to the south than vice versa. Why? There is something prison-like about communism. The commissars never leave you alone. Also, North Vietnamese leaders, though inspired and patriotic, were utterly ruthless in their own way, willing to sacrifice any number of people for victory just like Japanese militarists were willing to Go All the Way instead of calling it quits to save lives.
Still, in retrospect, Ho Chi Minh was a genuine patriot, a legendary figure much beloved by many Viets. And for that reason, US shouldn't have intervened, and the whole mess could have been avoided.
CucKen Burns makes my skin crawl, but at his best, he can look at both sides of the issue instead of going for b/w version of history with good guys vs bad guys.
That said, maybe his position reflects globalism. As Proglobalists now control the US, the neo-Pax-Americana is about the spread of agendas favored by the likes of CucKen Burns, like homomania, Jewish Power, anti-nationalism, and Afromania. Today's progs want the world to become neo-Americanized.
And in Vietnam, as Linh Dinh reported, there is now homo parades and Afromania and Vietcuckery. So, considering that Viet commies stood for patriotism and national sovereignty, maybe the globalist viewpoint is more favorable to US efforts to turn Vietnam into globo-disneyland.
After all, where was CucKen Burns when Obama and Hillary were destroying Libya, Ukraine, Syria, and etc. Where were he and his ilk when Jews were cooking up New Cold War with Russia with hysteria that would make McCarthy blush?Jim Christian, October 1, 2017 at 6:03 am GMT
Is the view that JFK wanted out of Vietnam merely a conspiratorial fantasy?. The following articles are easy reads:
Exit Strategy: In 1963, JFK ordered a complete withdrawal from Vietnam
James K. Galbraith, BOSTON REVIEW
JFK's Vietnam Withdrawal Plan Is a Fact, Not Speculation
A response to Rick Perlstein.
By James K. Galbraith, THE NATIONJim Christian, October 1, 2017 at 6:22 am GMT
"The question is whether Americans are capable of learning from the past and the answer seems to be no for the vast majority."
Americans at-large have no power. A small cadre runs things now. Once Americans didn't have a draft to worry over, they vacated the streets and left the dying to the farmers' sons (metaphor for the poor). That's all it is. The damage done to the economy, the sheer quantities of cash vacuumed up from the rest of the country and showered over the Washington DC region escapes the imagination of us out here in the country with our local issues and problems. These, rooted in the sheer theft of our taxes and handed over to the war-mongers of DC because there simply isn't enough left over after feeding The Beast in Washington. We have aircraft carriers that can't launch aircraft, planes that won't fly, weapons that won't work and wrong strategies followed in war-fighting and procurement, yet still, the theft goes on.
War after war lost, yet the Generals are still revered, money to the pro-war think tanks is never ending and the revolving door between the Pentagon, White House and defense contractors (and their corporate boards) has never been richer. Doesn't matter the war industry doesn't win wars, the money is just so damned good they can't stop, won't stop. And who is to stop them? These are the folks that kill people, that have a file on each of us. Indeed, it is our only remaining industry, flawed and failed though it may be. It certainly is a rich one. And it IS unstoppable. Completely. Utterly.2/1Doc RVN 68-89, October 1, 2017 at 12:27 pm GMT
@Sam McGowan Concur all, McGowan, good takes. Yeah, my Pop was into Naval spook communications and messaging, he'd pick up the WashPost off the driveway and see various and sundry in the paper lying and white-washing the effort and just be wild by the time he left for work. He knew the carriers were having no success, he knew the air-war was a mess, he knew the Marines were getting killed all over the country. People that knew the truth from the inside hadda keep their traps shut.
By the time I joined up for a 6 year dose of USN carrier decks in 1976 I got the scoop from a few of our officers, almost all of whom had flown with VA35 over Vietnam in A-6′s. Clusterfuck, they could then acknowledge just those few years later, only the most junior officers hadn't served in the air war over Vietnam. And they had good stories that pointed out the folly throughout.
Now? The military is just a revenue-stream, nothing produced, much destroyed to the enrichment of a few insiders.The Alarmist, October 1, 2017 at 4:08 pm GMT
Recently came across some startling statistics about men who served in Vietnam like you and me. Of the 2.7 million who served only 850,000 are still alive at last census!!!!!! 700,500 died prematurely between 1995 census and 2000 census. No country for old men .The Alarmist, October 1, 2017 at 4:25 pm GMT
"And in Vietnam, as Linh Dinh reported, there is now homo parades and Afromania and Vietcuckery. So, considering that Viet commies stood for patriotism and national sovereignty, maybe the globalist viewpoint is more favorable to US efforts to turn Vietnam into globo-disneyland."
Bingo! The only problem is that the globalists are now using the opportunity to also wear down the populations of the home territories as well. The only reason our national economic imperialism wasn't enough of a raging success (don't get me wrong by any rational measure it was) was that it was kept in check by the opposing communist bloc, and still America managed to conquer the so-called free world with Coca Cola, McDonalds, Hollywood Inc., etc.
When the communists gave up and joined the party, our globalist masters realized that they could not only amass further wealth by spreading these things to the former communist bloc and under-exploited non-aligned nations, but they could now squeeze even more profit-margin out of the home territories by wearing down the power of the local workforce at all levels, except, of course, for the very pinnacle, by outsourcing production and even many services to the newly "developing world."
Ironically, fighting the communist threat probably kept our leadership more honest than they have been in the new world order since the fall of communism.KenH, October 1, 2017 at 11:00 pm GMT
"No one in Washington seemed to know that China and the Soviet Union had split and become bitter enemies. As ever, our foreign human intelligence was lousy."
They knew of the rift that had grown since 1960 or so, but they didn't believe it until the short border war in 1969. The same way that a number of indicators suggested as early as 1983 that the USSR was imploding, but the menace of the USSR was used to keep justifying a buildup and procurement of new systems until and even beyond its actual implosion a few years later.
Evil, stupid, or merely blind. You decide.DB Cooper, October 2, 2017 at 4:38 am GMT
I know opinions vary on Ken Burns/PBS's "Vietnam" documentary, but what struck me is that we're following the same script in Afghanistan and the Middle East as we were in Vietnam and expecting a different (i.e., more favorable) outcome. The script being "pacification" through providing medicine, foodstuffs, soccer balls and American smiles to the local populations combined with placing massive amounts of ordnance on targets deemed hostile. It didn't win hearts and minds then nor is it now.
The generals keep telling us that with just a few more antibiotics, soccer balls and troops victory is around the bend.
Hindsight's always 20/20, but to be fair a military force in Vietnam did seem like the right thing do at least in the early years. Any de-escalation and/or withdrawals would have been perceived by a rabidly anti-communist population as surrendering to communist aggression and political suicide for any president proposing it.
The monumentally stupid war mismanagement of Pentagon chief Robert McNamara, a know-it-all who knew nothing,
We have legions of McNamara's calling the shots today. They are called neoconservatives and liberal interventionists. The big brains of the Ivy league do seem to excel at steering us into icebergs time and again.
As it was former allies Vietnam and China briefly fought each other in 1979 and Vietnam didn't have the desire or the ability to project power much beyond Cambodia and Laos.Diversity Heretic, October 2, 2017 at 6:14 am GMT
"We really believed that if the US did not make a stand in Vietnam the Soviets and Chinese would overrun all of South Asia."
India played a big role in shaping this narrative. Just five years ago before 1967 China finally responded to India's creeping land grab after years of trying to warn New Delhi's to stop its 'Forward Policy' by launching a massive anticipatory strike into India. India was defeated militarily but India was able to fool the world that India was a hapless victim against an agressive China when in fact the reverse is true.Blowback, October 2, 2017 at 1:07 pm GMT
@Jim Christian A bit off topic, but, since I know that you had naval experience, any take on why Navy ships keep colliding with merchantmen? Is it reduced competence because of racial and sexual preferences, or overworked sailors because deployed ships are short-staffed as a result of pregnancies? Or is it just a run of bad luck? I've read some different theories but I've seen you post often enough to know that you'll have an informed opinion.Jim Christian, October 2, 2017 at 1:09 pm GMT
@Sam McGowan What don't you understand about Clausewitz's dictum "war is the mere continuation of politics with other means"? War is what you do when you can't achieve your political objectives by other means. The United States' political objective in Vietnam was to prevent the American satrapy in the south being re-united by the nationalists in the north. So, where the f ** k is South Vietnam? The United States might believe it won every battle (slight exaggeration) but it still lost the American war.Don Bacon, October 2, 2017 at 2:56 pm GMT
@Diversity Heretic The military is off-kilter all over. Navigation? Routine. Ought to be. Not anymore. Procurement? Driven by inertia and the corruption of planners that know a carrier's planes are useless if the ship has to stand off 500-1000 miles because of a cruise missile environment that they KNOW every third-world shitbox has been building for 30 years now, starting with the Norks. From aircraft to ships, a complete clusterfuck.
Personnel? Ya gotta be shitting me, right? Between the sexism, reverse-racism and the cultural kookiness from the top of a terrorized Central Command and throughout the military, right down to the pretty little Blonde Hispanic Black Dwarf tranny just dying to terrorize said command with a complaint, we really haven't much good to say about our staffing. It's not a meritocracy anymore, hasn't been since Reagan. The entire thing is sitting there waiting to be taken down and humiliated.
And still? We sprinkle the trillions onto the DC region, make the war planners rich, we still lionize Generals and Admirals that haven't won shit in 75 years and we cycle them through the think tanks and corporate boards of the defense contractors and make THEM rich too. Then we even put them in charge at the White House, having discarded the notion of Congressional approval for the wars they "fight" in our names. And they start wars. And finally, the notion that we have civilian control of our military is long gone. We are a Junta. There is a coup ongoing, two or more in our past and we're no more than a broke but dangerous and heavily armed danger to the rest of the world run by the thugs of the Pentagon, the think tanks, the defense contractors and the lazy sloth of Congress, who is supposed to keep this shit straight and Constitutional. Doom. Yes, the word doom comes to mind.Jim Christian, October 2, 2017 at 4:08 pm GMT
@anonymous re: "No one wants to die to help some politician save face."
I don't have a teevee, but I bet they didn't cover the mutiny in the ranks which is the main reason the US had to withdraw because of a "broken army." That included fragging, mission refusal, and an overall negative attitude as you suggest. Now we have a volunteer army, a warrior class, which changes that dynamic.Diversity Heretic, October 2, 2017 at 6:18 pm GMT
Thanks! Always appreciate your candor!
One man's opinion. I do wish someone would show me where I'm wrong, but I spent too many years down in DC doing their tech stuff after I left the Navy (too many women that couldn't, at that point in 82, go to sea) and so they only had more sea duty because the shore billets were all taken in their haste to "integrate" women into the Navy. Even instructor duty for Naval Air Maintenance was hosted by women that had never served a day in carrier air, training the young mice how to do business on a flight deck. They did offer me, for variety, another four year hitch in a WestPac squadron aboard one damned carrier deck or another. Already having done 5, I said no thanks and went back home to Virginia. And so I got familiar with the workings of the spooks, Booze, Allen, Heritage, Cato, Brookings, the Pentagon, NSA, FBI, Quantico, there were hundreds of them, most with two or three names in the chain of title. I did their phones for decades, they're psychos, they're paranoid, everything classified and spooky and ooga-booga. Worthless ants on a big log and they each think they're steering it down the river.
Bunch of fucking Frank Burns's is what they are..Cheers.anonymous, Disclaimer October 2, 2017 at 11:03 pm GMT
@Jim Christian Take care of yourself. People like you are a national asset, appreciated by at least some of us.Jack Spratt, October 3, 2017 at 4:57 am GMT
There never was a communist threat. Not since at least the 1920s, when Stalin defeated Trotsky. Trotsky wanted world revolution. Stalin, for all his bloodthirsty antics in Russia, realised this was all nonsense. He just wanted Socialism in One Country, developing the country economically. He wasn't really interested in the outside world.
In the 1930s he was willing to cooperate with right wing western governments till they did a deal with Hitler in 1938. He was never interested in invading countries to grab land and resources. Whenever he did so, Poland in 1939, or Eastern Europe post 1945, it was for security reasons. The part of Poland he occupied in 1939 had been taken from Russia by force in 1920. It was inhabited by 1o million White Russians and Ukrainians and no Poles.Capn Mike, October 3, 2017 at 5:20 am GMT
Wissing's book "Funding the enemy" details the totally corrupt Afghan government and is a compelling argument why we should pull out at once and needs to be read by anyone with half a brain. I served in Vietnam also, in 1967, and its deja vu all over again.Vidi, October 3, 2017 at 6:15 am GMT
@The Alarmist Having been on – site at the time (North Tonkin Gulf), I can tell you that China gave U.S.N. units free rein over those waters, including Chinese waters. The fix was in. In 1969 onwards. China and Viet Nam were NEVER friends. Did CIA realize this? I don't know.wayfarer, October 3, 2017 at 6:19 am GMT
Anyways, expect the US to keep on wasting money in Afghanistan (and Pakistan and Tajikistan) until it gets bankrupted by the next Big War!
Or until all the routes into Afghanistan are blocked. At the moment, the only route still open passes through Pakistan, and that may close at any time.Hibernian, October 3, 2017 at 10:57 am GMT
Of the 58,220 Americans who were sacrificed by the U.S. Government during the Vietnam War, 270 were Jewish. That's approximately 0.46 percent of the total number of American kids who died, or less than a half of one-percent.
"Statistical Information About Casualties of the Vietnam War"
" 9/11 Israel Did It! "
https://wikispooks.com/wiki/9-11/Israel_did_itHibernian, October 3, 2017 at 11:05 am GMT
@Grandpa Charlie The Japanese trained their naval cadets using a mock Pearl Harbor type exercise annually for a fair number of years prior to WW2. The Russo-Japanese War of 1905 began with a Japanese surprise attack. You have the unmitigated gall to attack Margolis as an establishment mouthpiece when you yourself are whitewashhing the "sainted" FDR. No prudent military planner would absolutely assume that the attack would come in one particular place, whether the Phillipines, Pearl, or elsewhere.Che Guava, October 3, 2017 at 12:13 pm GMT
@Don Bacon Too many of the volunteers are really economic draftees. You can have plenty of discipline problems with volunteers, I've seen it up close and personal, although never reaching the level of mutiny.Hu Mi Yu, October 3, 2017 at 12:52 pm GMT
@Capn Mike That is interesting to me. As is the Margolis artictle, never knew he had been a USA soldier, very interesting article. Thought he was a Canada person.
I have a question for you, Capn Mike.
If the PRC had allowed the USA free rein in Gulf of Tonkin, where were the supply lines to the Nth. Viet military and Viet Cong?
Must it not still have been overland from PRC at that time you say (1969)?Max Havelaar, October 3, 2017 at 1:41 pm GMT
I don't for a moment believe that the 'saintly' President John Kennedy planned to end the war but was assassinated by dark, rightwing forces, as is claimed. This is a charming legend. Richard Nixon, Kennedy and Lyndon Johnson all feared that a withdrawal from Vietnam would lose them the next election. Republicans were still snarling over 'who lost China'.
I didn't like Kennedy either, but go back and reread the newspapers from the early days of the Kennedy administration. The oval office was bugged, and the information leaked in ways to embarrass Kennedy and UN Ambassador Adelai Stevenson. There is only one way that could have happened. Eisenhower installed those bugs before he left. These same bugs brought down Nixon in the Watergate crisis. The swamp wanted war, and they pulled the rug out from under both presidents as soon as they brought peace.
And a new Nixon in office .he vowed to get out too- and yet pushed more into it simply amazing.
He promised to get out and he did get us out. The peace treaty was announced just before the election in 1972. He knew it was his only hope for re-election. The Vietnamese disputed some of the terms, and that resulted in the Christmas bombing that year. The American withdrawal began in January 1973.
Trump promised to get us out of the Middle East. We should give him some rope. Maybe he hangs himself, or just maybe he can pull it off. He will need to be re-elected in three years.jacques sheete, October 3, 2017 at 3:25 pm GMT
Nice personal account of Vietnam.
However, the US foreign policy keeps holocausting the 3-rd world and lately the 2 -cond world.
The holocausts keep coming from US foreign policy of "exceptionalism" = "Nazi Übermensch"="the chosen ones" over this planet, many executed by the CIA-Nazi's:
The Syrian holocaust
The Yemen holocaust
The Ukranïan holocaust (Euromaidan) by Poroshenko/Nuland neo-nazi"s.
The Libyan holocaust
The Irak holocaust
The Afghanistan holocaust
The Belgrad holocaust
The Indonesian holocaust (Kissiger e.a.)
The Vietnam/Laos/Cambodia/Thailand holocaust (Kissinger e.a)
The Korean holocaust
The Jewish/Polish/Russian holocaust by Nazi's funded by Wallstreet/London bankers
The German holocaust (Die Rheinweisen lager) by US army Morgenthau plan.
The Ukranian and Russain holocausts 1921-22, 1932-33 (holodomor) by Lenin, Trotsky, Stalin.
All these, were and are financed by the Wallstreet elite owners, the Billionaires who are mega-fascists, eugenic and satanic in character. Their credo is GREED.
(sources: Antony Sutton, Carrol Quickley, W.F. Engdahl)
Thanks to Vietnam, the politicians were exposed as liars and heartless cynics with no honor.
A couple of the biggest lies were exposed, but the myths still live that the US government is an effective and dependable force for peace and freedom, and that the US military is an institution of dignity worthy of honor.
And people still put their faith (or is it hope) in the heartless cynics ( eunichs, really) with no balls, fewer brains, no soul, and even less honor.
Jul 09, 2016 | therealnews.com
BACEVICH: Well, I think that's true. I mean, for the moment, we should take anything that Donald Trump or Hillary Clinton has to say with a grain of salt. They will say whatever they think will improve their chances of being elected in the fall. That said, I would not expect either of them, if elected, to bring about any serious rethinking of U.S. national security policy. As I suggested in that Harper's piece, they are different versions of hawks.
... ... ...
BACEVICH: Well, I think, I think that the meeting between FDR and the Saudi King that you cite is a very important waystation. That committed the United States to securing the monarchy, in return for expectations that we would have privileged access to oil in the Persian Gulf.
However, I think the real turning point happens in 1980. Prior to 1980, there certainly was a U.S. policy in the greater Middle East, but it was not a U.S. policy that found expression in any serious military commitment. That changes in 1980, when Jimmy Carter promulgates the Carter doctrine. If you recall, that's a statement that designates the Persian Gulf a vital U.S. national security interest, and explicitly a place that we're now willing to fight for. So prior to 1980, no major U.S. military involvement in the region. Beginning in 1980, a pattern of armed interventionism in the greater Middle East that continues down to the present day, and at least in my judgment has been unsuccessful, and indeed, counterproductive. So the military narrative really begins in 1980.
JAY: Yeah, it's interesting with a Democratic president, from the Democratic Party, certainly under the sway of Zbigniew Brzezinski, who was more or less the architect, I think, of the Carter doctrine, and leads to the war in Afghanistan. I guess--I hope most people know the basic story there, that the Americans funded jihadists in Afghanistan to suck the Russians in, and then successfully so, into a quagmire. And even though that led to the forming of the Taliban and Al-Qaeda and Bin Laden.
And I think you can probably draw a straight line from that Carter doctrine right to 9/11, in terms of--it's a good example, I think, of what you're talking about, how this foreign policy--.
BACEVICH: I don't, I don't know that I'd call it a straight line, but there's a line. I mean, there certainly are a whole bunch of dots that can be connected. And I think that the Afghanistan experience, we're supporting the jihadists, is a good example of the unexpected consequences of U.S. interventionism.
At our present moment, as you and I are speaking, the concern is about ISIS. Certainly it's a, it's reasonable to view ISIS as a threat. It's also true that ISIS would not exist had not the United States invaded Iraq back in 2003. We shattered Iraq, and out of the chaos of Iraq has emerged this new terrorist entity.
So both of these, Afghanistan in the '80s, Iraq beginning in 2003, illustrate the larger point that U.S. military interventionism in this region simply has not produced the positive outcomes that policymakers have, have expected.
... ... ....
BACEVICH: ...The foundation of our expectations of being the indispensable nation lie in the belief that we possess military might such as the world has never seen. And yet what we have found time and again in the greater Middle East is our military might is inadequate to the challenge. And we're not willing to admit that. Foreign policy establishment is not willing to admit that. And frankly, I think the majority of the American people are not willing to admit that. Not willing to admit that we are not history's agent.
Oct 01, 2017 | www.jacobinmag.com
BSR There have been numerous crises since 2007. How does the history and concept of neoliberalism help us understand them? DH There were very few crises between 1945 and 1973; there were some serious moments but no major crises. The turn to neoliberal politics occurred in the midst of a crisis in the 1970s , and the whole system has been a series of crises ever since. And of course crises produce the conditions of future crises.
In 1982–85 there was a debt crisis in Mexico, Brazil, Ecuador, and basically all the developing countries including Poland. In 1987–88 there was a big crisis in US savings and loan institutions. There was a wide crisis in Sweden in 1990, and all the banks had to be nationalized .
Then of course we have Indonesia and Southeast Asia in 1997–98, then the crisis moves to Russia, then to Brazil, and it hits Argentina in 2001–2.
And there were problems in the United States in 2001 which they got through by taking money out of the stock market and pouring it into the housing market. In 2007–8 the US housing market imploded, so you got a crisis here.
You can look at a map of the world and watch the crisis tendencies move around. Thinking about neoliberalism is helpful to understanding these tendencies.
One of big moves of neoliberalization was throwing out all the Keynesians from the World Bank and the International Monetary Fund in 1982 -- a total clean-out of all the economic advisers who held Keynesian views .
They were replaced by neoclassical supply-side theorists and the first thing they did was decide that from then on the IMF should follow a policy of structural adjustment whenever there's a crisis anywhere.
In 1982, sure enough, there was a debt crisis in Mexico. The IMF said, "We'll save you." Actually, what they were doing was saving the New York investment banks and implementing a politics of austerity.
The population of Mexico suffered something like a 25 percent loss of its standard of living in the four years after 1982 as a result of the structural adjustment politics of the IMF.
Since then Mexico has had about four structural adjustments. Many other countries have had more than one. This became standard practice.
What are they doing to Greece now ? It's almost a copy of what they did to Mexico back in 1982, only more savvy. This is also what happened in the United States in 2007–8. They bailed out the banks and made the people pay through a politics of austerity. BSR Is there anything about the recent crises and the ways in which they have been managed by the ruling classes that have made you rethink your theory of neoliberalism? DH Well, I don't think capitalist class solidarity today is what it was. Geopolitically, the United States is not in a position to call the shots globally as it was in the 1970s.
I think we're seeing a regionalization of global power structures within the state system -- regional hegemons like Germany in Europe, Brazil in Latin America, China in East Asia.
Obviously, the United States still has a global position, but times have changed. Obama can go to the G20 and say, "We should do this," and Angela Merkel can say, "We're not doing that." That would not have happened in the 1970s.
So the geopolitical situation has become more regionalized, there's more autonomy. I think that's partly a result of the end of the Cold War. Countries like Germany no longer rely on the United States for protection.
Furthermore, what has been called the "new capitalist class" of Bill Gates , Amazon , and Silicon Valley has a different politics than traditional oil and energy.
As a result they tend to go their own particular ways, so there's a lot of sectional rivalry between, say, energy and finance, and energy and the Silicon Valley crowd, and so on. There are serious divisions that are evident on something like climate change, for example.
The other thing I think is crucial is that the neoliberal push of the 1970s didn't pass without strong resistance. There was massive resistance from labor, from communist parties in Europe, and so on.
But I would say that by the end of the 1980s the battle was lost. So to the degree that resistance has disappeared, labor doesn't have the power it once had, solidarity among the ruling class is no longer necessary for it to work.
It doesn't have to get together and do something about struggle from below because there is no threat anymore. The ruling class is doing extremely well so it doesn't really have to change anything.
Yet while the capitalist class is doing very well, capitalism is doing rather badly. Profit rates have recovered but reinvestment rates are appallingly low, so a lot of money is not circulating back into production and is flowing into land-grabs and asset-procurement instead.
Sep 20, 2017 | www.unz.com
Last month I announced a new strategy for victory in the fight against this evil in Afghanistan. From now on, our security interests will dictate the length and scope of military operation, not arbitrary benchmarks and timetables set up by politicians. I have also totally changed the rules of engagement in our fight against the Taliban and other terrorist groups.
What we see here is undeniable evidence that far from being "real warriors" or "strategists" the military gang around Trump (Mattis, McMaster, Kelly, etc.) are either primitive grunts or folks who owe their rank to political protection. Why do I say that?
Because none of what Trump describes as a "strategy for victory" is, in fact, a strategy. In fact, the US has not had anything remotely resembling a strategy in Afghanistan for years already. If it wasn't so sad, it would be laughable, really. What he really see here is the total absence of any strategy and, again, a total reliance on magical thinking.
Ask yourself a basic question: have you ever heard from any Trump administration or any US General anything which would suggest to you that these guys have i) a clear goal in mind ii) an understanding of what it would take to achieve this goal and iii) a timeframe to achieve this goal and iv) an exit strategy once this goal is achieved? No? Well, that is not your fault, you did not miss anything. They really don't have it.
The amazing reality is that they don't have a goal even defined. How one achieves "victory" when no goal is even defined is anybody's guess.
[Sidebar: without going into a lengthy discussion of Afghanistan, I would say that the only chance to get anything done, any viable result at all, is to negotiate a deal with all the parties that matter: the various Afghan factions, of course, but also with the Taliban, Pakistan, Iran and even Russia.
Pakistan and Iran have a de-facto veto power over any outcome for Afghanistan. This may not be what the US would want, but this is the reality. Denying reality is just not a smart approach to these issues, especially if "victory" is the goal]
Apr 30, 2012 | www.monbiot.com
Colonialism never ended, it continues by different means.
By George Monbiot, published in the Guardian 1st May 2012
The conviction of Charles Taylor, the former president of Liberia, is said to have sent an unequivocal message to current leaders: that great office confers no immunity. In fact it sent two messages: if you run a small, weak nation, you may be subject to the full force of international law. If you run a powerful nation, you have nothing to fear.
While anyone with an interest in human rights should welcome the verdict, it reminds us that no one has faced legal consequences for launching the illegal war against Iraq. This fits the Nuremberg Tribunal's definition of a "crime of aggression", which it called "the supreme international crime"( 1 ). The charges on which, in an impartial system, George Bush, Tony Blair and their associates should have been investigated are far graver than those for which Taylor was found guilty.
The foreign secretary, William Hague, claims that Taylor's conviction "demonstrates that those who have committed the most serious of crimes can and will be held to account for their actions."( 2 ) But the International Criminal Court, though it was established ten years ago, and though the crime of aggression has been recognised in international law since 1945, still has no jurisdiction over "the most serious of crimes"( 3 ). This is because the powerful nations, for obvious reasons, are procrastinating. Nor have the United Kingdom, the United States and other western nations incorporated the crime of aggression into their own legislation. International law remains an imperial project, in which only the crimes committed by vassal states are punished.
In this respect it corresponds to other global powers. Despite its trumpeted reforms, the International Monetary Fund remains under the control of the United States and the former colonial powers. All constitutional matters still require an 85% share of the vote( 4 ). By an inexplicable oversight, the United States retains 16.7%, ensuring that it possesses a veto over subsequent reforms( 5 ). Belgium still has eight times the votes of Bangladesh( 6 ), Italy a bigger share than India and the United Kingdom and France between them more voting power than the 49 African members(7). The managing director remains, as imperial tradition insists, a European, her deputy an American.
The IMF, as a result, is still the means by which western financial markets project their power into the rest of the world. At the end of last year, for example, it published a paper pressing emerging economies to increase their "financial depth", which it defines as "the total financial claims and counterclaims of an economy"( 8 ). This, it claimed, would insulate them from crisis.
As the Bretton Woods Project points out, emerging nations with large real economies and small financial sectors were the countries which best weathered the economic crisis, which was caused by advanced economies with large financial sectors(9). Like the modern opium war it waged in the 1980s and 1990s – when it forced Asian countries to liberalise their currencies, permitting western financial speculators to attack them(10) – the IMF's prescriptions are incomprehensible until they are understood as instruments of financial power.
Decolonisation did not take place until the former colonial powers and the empires of capital on whose behalf they operated had established other means of retaining control. Some, like the IMF and World Bank, have remained almost unchanged. Others, like the programme of extraordinary rendition, evolved in response to new challenges to global hegemony.
As the kidnapping of Abdul Hakim Belhaj and his wife suggests, the UK's foreign and intelligence services see themselves as a global police force, minding the affairs of other nations. In 2004, after Tony Blair, with one eye on possible contracts for British oil companies, decided that Gaddafi was a useful asset, the alliance was sealed with the capture, packaging and delivery of the regime's dissenters( 11 ).
Like the colonial crimes the British government committed in Kenya and elsewhere( 12 ), whose concealment was sustained by the Foreign Office until its secret archives were revealed last month( 13 ), the rendition programme was hidden from public view. Just as the colonial secretary, Alan Lennox-Boyd, repeatedly lied to parliament about the detention and torture of the Kikuyu(14), in 2005 Jack Straw, then foreign secretary, told parliament that "there simply is no truth in the claims that the United Kingdom has been involved in rendition."( 15 )
Reading the emails passed between the offices of James Murdoch and Jeremy Hunt, it struck me that here too is a government which sees itself as an agent of empire – Murdoch's in this case – and which sees the electorate as ornamental. Working, against the public interest, for News Corporation, the financial sector and the billionaire donors to the Conservative party, its ministers act as capital's district commissioners, governing Britain as their forebears governed the colonies.
The bid for power, oil and spheres of influence that Bush and Blair launched in Mesopotamia, using the traditional camouflage of the civilising mission; the colonial war still being fought in Afghanistan, 199 years after the Great Game began; the global policing functions the great powers have arrogated to themselves; the one-sided justice dispensed by international law: all these suggest that imperialism never ended, but merely mutated into new forms. The virtual empire knows no boundaries. Until we begin to recognise and confront it, all of us, black and white, will remain its subjects.
Aug 25, 2017 | www.counterpunch.org
If it's Independence Day, then you can count on John McCain to be bunkered down in a remote outpost of the Empire growling for the Pentagon to unleash airstrikes on some unruly nation, tribe or gang. This July the Fourth found McCain making a return engagement to Kabul, an arrival that must have prompted many Afghans to scramble for the nearest air raid shelter.
From the press room at NATO command, McCain announced that "none of us could say we are on a course to success here in Afghanistan." The senator should have paused for a reflective moment and then called for an end to the war. Instead, McCain demanded that Trump send more US troops, more bombers and more drones to terrorize a population that has been riven by near constant war since the late 1970s.
McCain's martial drool is now as familiar as the opening notes to the "Law & Order" theme song. What may surprise some, however, is the composition of the delegation that signed up to travel on his frequent flier program, notably the presence of two Democratic Senators with soaring profiles: Sheldon Whitehouse and Elizabeth Warren. Whitehouse, the former prosecutor (aren't they all?) from Rhode Island, has lately taken a star turn in the role of chief inquisitor of suspected Russian witches in the Senate intelligence committee hearings. Perhaps he finally located one selling AK-47s to the Taliban to replace the guns they'd gotten from the CIA. (We now know that it's the Saudis –not the Russians–who have been covertly funneling money to the Taliban, though don't expect the Trump to impose any sanctions on the Kingdom of the Head-choppers.)
For her part, Warren largely echoed McCain's bellicose banter that Trump needs to double down militarily to finish off the Taliban, the impossible dream. No real surprise here. To the extent that she's advanced any foreign policy positions during her stint in the senate, Warren has been a dutiful supplicant to the demands of AIPAC and the Council on Foreign Relations, rarely diverging from the neocon playbook for the global war on Islam. Warren's Afghan junket is a sure sign of her swelling presidential ambitions. These days "national security" experience is measured almost exclusively by how much blood you are willing to spill in countries you know almost nothing about. It didn't take long for Warren to matriculate to the company position.
Most Americans have no idea why we are in Afghanistan; it's the longest running Fake War in American history. Some, as many as 20 percent according to a Gallup Poll, have no idea that we are still in Afghanistan. Osama Bin Laden and Mullah Omar are both long dead. The shattered remnants of Al Qaeda have fled to Pakistan and parts unknown. Hamid Karzai has come and gone. For the last six months, the US hasn't even troubled itself to send an ambassador to Kabul.
A kind of convenient cultural amnesia has set in, abetted by a compliant press corps that has largely decamped from the Hindu Kush and now treats Afghanistan as if it is some kind of interstellar region, where photographers are occasionally dispatched to snap eerie debris clouds from the detonation of MOAB bombs. It's no wonder that the few Americans who continue to support the war cling to the delusion that Afghanistan orchestrated the 9/11 attacks. It is the War that Time Forgot.
Nothing better illustrates the eclipse of US global power than the fact that Afghanistan refuses to be subjugated or even managed, despite 16 years of hard-core carnage. Since the first US airstrikes hit Kandahar in October 2001, more than 150,000 Afghan civilians have been killed. Still Afghanistan resists imperial dictates. Even after Obama's shameful troop surge in 2010, an escalation that went almost unopposed by the US antiwar movement, the Taliban now retains almost as much control of the country as it did in 2001. And for that Afghanistan must be punished. Eternally, it seems.
As for Trump, in his quest to privatize as much of the federal government as possible the president is still apparently entranced with the idea of turning over much of the Afghan operation to military contractors. As McCain and Warren were issuing their war cries from Kabul, Trump and Company huddled with Erik Prince, founder of Blackwater Security, and billionaire financier Stephen Feinberg, owner of DynCorp, on how to replace US troops with mercenaries from their training camps.
Give Trump some credit. His war plan is refreshingly vacant of moral posturing. Instead he views the war through a greedily focused economic lens: Afghanistan as commodity. Over the course of 16 years, the cratering American operation in Afghanistan has consumed more than $1 trillion, a huge and nearly unchallenged benefaction to military contractors. In 2016, the Pentagon spent $3.6 million for each US soldier stationed in Afghanistan. A surge of 4,000 to 10,000 additional troops, either as "private military units" or GIs, will come as a welcome new infusion of cash to the dozens of defense corporations that invested so heavily in his administration.
The New York Time's Maggie Haberman was thrilled by some most blood-curdling lines in Trump's big speech on the war, Tweeting: "We are not nation-building again. We are killing terrorists," says POTUS, in one of his more forceful/best lines of address." All you need to do to earn the love of the "failing New York Times, " Donald, is to kill-kill-kill and not re-build what you destroy. Trump's new Afghanistan plan replicates worst aspects of Obama's awful Af-Pak strategy, with India thrown into the mix just to increase risk of nuclear war. If Trump continues with this neocon drift, HRC may get a 3 AM call from "the creep" asking her to replace Rexxon as Secretary of State .
If that living monument to the Confederacy Jefferson B. Sessions was serious about confronting the rising scourge of opiate addiction in the US, he would start by calling for an immediate end to US military operations in Afghanistan.
Forget marijuana, the real gateway to heroin abuse is war. Since the start of Operation Enduring Freedom, opium production has swelled, now accounting for more than one-third of the wrecked Afghan economy. In the last two years alone, opium poppy yields have doubled, a narcotic blowback now hitting the streets of American cities from Amarillo to Pensacola. With every drone strike in the Helmond Province, a thousand more poppies bloom.
What I'm reading this week
- Storming the Wall: Climate Change, Migration and Homeland Security by Todd Miller
- Rebel Yell: the Violence, Passion and Redemption of Stonewall Jackson by SC Gwynne
- Buried in the Bitter Waters: the Hidden History of Racial Cleansing in America by Eliot Jaspin
RIP John Abercrombie
Aug 26, 2017 | marknesop.wordpress.com
moscowexile says: August 22, 2017 at 5:25 amDrutten says: August 22, 2017 at 6:49 am
The US has sent to the Ukraine its first consignment of coal
August 22, 11:28 UTC+3
The delivery price was $113 per ton
The beginning of the end for "Novorossiya"?
I am certain that is an interpretation that the resident troll will be eager to spout out.
Не секрет, что российский энергетический уголь Киев раньше закупал по 60-70 долларов за тонну. Донбасский обходился украинцам еще дешевле. Но затем официальный Киев под предлогом "войны с Москвой" отказался от дешевых энергоресурсов.
It is no secret that Kiev used to buy Russian power station coal at $60-70 per tonne. The Donbass made even cheaper deals with the Ukrainians . But then official Kiev, on the pretext of a "war with Moscow," refused cheap energy resources.
see: На Украину отправлена первая партия дорогого угля из СШАWho's paying for it? The IMF? So the money goes back to the U.S?moscowexile says: August 22, 2017 at 6:54 am
I've seen multiple instances of this occuring in Ukraine, i.e. the purchasing of unnecessarily expensive goods, with money they technically don't have. It's not always a "Russian substitution" thing either.
Somebody's laughing all the way to the bank, at least. Good on them.Somebody's laughing all the way to the bankmarknesop says: August 22, 2017 at 9:38 am
Swinish squeals of laughter coming from him above, that's for sure.
Furthermore, the pig is laughing all the way to the bank that he owns.That's their privilege. And they will be able to exercise it, in theory, for so long as the western taxpayer is prepared to see the IMF allot Ukraine money to buy energy at prices far higher than it could obtain it elsewhere. I daresay in the meantime someone else will buy Donbas coal. It's not like this is going to break them. Although the USA will pocket the taxpayers' money – again – which is one of its preferred ways of doing business.
Aug 25, 2017 | marknesop.wordpress.com
August 23, 2017
Lyttenburgh , August 23, 2017 at 9:51 pm" seem to be smart enough not to concentrate in one region. "
Uh-huh. Thanks for update, et Al! Just recently the Ukrian Foreign ministry revealed data pertaining to the "success" of the Sacred BezViz. They claim that 200 000 of the Ukrainians used it since its inception on 11 June this year. How much is it compared to other years – I have no data ATM. The №1 destination place of these tourists surprised me – it's Barcelona! Second place hold Rome, third one – Paris, 4 – Milan, 5 – Lissabon Not Poland and not Germany though.
Meanwhile rumours abound about "New Europeans" (mostly – from the Baltic states) illegally transporting Ukrainians to Ireland and Britain to work as literally slaves there. Also there was a general noise about the increase of the Ukrainian gasterbaiters in Poland.
The idea that Germany should pay is not a new one. PiS just tries to make Poland enter the elite club of the "suffering nations", browbeat the entire world into accepting their own unique "tragic history" and then beg for monies. Their mistake is twofold. First – they disperse their energy and attention at many "tragedies" at once. Look at Israel and the Ukraine! They get this martyrology business model right – focus on one event (Shoah/Holodomor) and proclaim it as unique and reparations worthy.
And what the PiS does? Kaczynski has suggested to have a monthly anniversary of the Smolensk crash to be hosted in April 2018; for a grand total of 96 months (the number of victims). He also expressed a hopeful notion that "we will learn the truth by then" (aka "Tusk/KGB did it!").
Each progressive monthly anniversary costs more to field and takes more policemen to act as security. It is siad, that the previous monthlyversary required 2000 policemen for about 2.5 thousand people and about 500 people from the countermanifestation. First monthlyversaries only had 50 or so policemen standing guard.
Aug 16, 2017 | www.unz.com
Interview with Vlado Plaga in the German magazine FAIRCONOMY, September 2017.
Originally, you didn't want to become an economist. How did it come that you changed your plans and digged so deep into economics?
I found economics aesthetic, as beautiful as astronomy. I came to New York expecting to become an orchestra conductor, but I met one of the leading Wall Street economists, who convinced me that economics and finance was beautiful.
I was intrigued by the concept of compound interest. and by the autumnal drain of money from the banking system to move the crops at harvest time. That is when most crashes occurred. The flow of funds was the key.
I saw that there economic cycles were mainly financial: the build-up of debt and its cancellation or wipe-out and bankruptcy occurring again and again throughout history. I wanted to study the rise and fall of financial economies.
But when you studied at the New York University you were not taught the things that really interested you, were you?
I got a PhD as a union card. In order to work on Wall Street, I needed a PhD. But what I found in the textbooks was the opposite of everything that I experienced on Wall Street in the real world. Academic textbooks describe a parallel universe. When I tried to be helpful and pointed out to my professors that the texbooks had little to do with how the economy and Wall Street actually work, that did not help me get good grades. I think I got a C+ in money and banking.
So I scraped by, got a PhD and lived happily ever after in the real world.
So you had to find out on your own Your first job was at the Savings Banks Trust Company, a trust established by the 127 savings banks that still existed in New York in the 1960s. And you somehow hit the bull's eye and were set on the right track, right from the start: you've been exploring the relationship between money and land. You had an interesting job there. What was it?
Savings banks were much like Germany's Landesbanks. They take local deposits and lend them out to home buyers. Savings and Loan Associations (S&Ls) did the same thing. They were restricted to lending to real estate, not personal loans or for corporate business loans. (Today, they have all been turned into commercial banks.)
I noticed two dynamics. One is that savings grew exponentially, almost entirely by depositors getting dividends every 3 months. So every three months I found a sudden jump in savings. This savings growth consisted mainly of the interest that accrued. So there was an exponential growth of savings simply by inertia.
The second dynamic was that all this exponential growth in savings was recycled into the real estate market. What has pushed up housing prices in the US is the availability of mortgage credit. In charting the growth of mortgage lending and savings in New York State, I found a recycling of savings into mortgages. That meant an exponential growth in savings to lend to buyers of real estate. So the cause of rising real estate prices wasn't population or infrastructure. It was simply that properties are worth whatever banks are able and willing to lend against them.
As the banks have more and more money, they have lowered their lending standards.
It's kind of automatic, it's just a mathematical law
Yes, a mathematical law that is independend of the economy. In other words, savings grow whether or not the economy is growing. The interest paid to bondholders, savers and other creditors continues to accrue. That turns out to be the key to understanding why today's economy is polarizing between creditors and debtors.
You wrote in " Killing the Host " that your graphs looked like Hokusai's "Great Wave off Konagawa" or even more like a cardiogram. Why?
Any rate of interest has a doubling time. One way or another any interest-bearing debt grows and grows. It usually grows whenever interest is paid. That's why it looks like a cardiogram: Every three months there's a jump. So it's like the Hokusai wave with a zigzag to reflect the timing of interest payments every three months.
The exponential growth of finance capital and interest-bearing debt grows much faster then the rest oft he economy, which tends to taper off in an S-curve. That's what causes the business cycle to turn down. It's not really a cycle, it's more like a slow buildup like a wave and then a sudden
This has been going on for a century. Repeated financial waves build up until the economy becomes so top-heavy with debt that it crashes. A crash used to occur every 11 years in the 19th century. But in the United States from 1945 to 2008, the exponential upswing was kept artificially long by creating more and more debt financing. So the crash was postponed until 2008.
Most crashes since the 19th century had a silver lining: They wiped out the bad debts. But this time the debts were left in place, leading to a masive wave of foreclosures. We are now suffering from debt deflation. Instead of a recovery, there's just a flat line for 99% of the economy.
The only layer of the economy that is growing is the wealthiest 5% layer – mainly the Finance, Insurance and Real Estate (FIRE) sector. That is, creditors living of interest and economic rent: monopoly rent, land rent and financial interest. The rest of the economy is slowly but steadily shrinking.
And the compound interest that was accumulated was issued by the banks as new mortgages. Isn't this only logical for the banks to do?
Savings banks and S&Ls were only allowed to lend for mortgages. Commercial banks now look for the largest parts of the economy as their customers. Despite the fact that most economic textbooks describe industry and manufacturing as being the main part of economy, real estate actually is the largest sector. So most bank lending is against real estate and, after that, oil, gas and mining.
That explains why the banking and financial interests have become the main lobbyists urging that real estate, mining and oil and gas be untaxed – so that there'll be more economic rent left to pay the banks. Most land rent and natural resource rent is paid out as interest to the banks instead of as taxes to the government.
So instead of housing becoming cheaper and cheaper it turns out to be much less affordable in our days than in the 1960s?
Credit creation has inflated asset prices. The resulting asset-price inflation is the distinguishing financial feature of our time. In a race tot he bottom, banks have steadily lowered the terms on which they make loans. This has made the eocnomy more risky.
In the 1960s, banks required a 25-30% down payment by the buyer, and limited the burden of mortgage debt service to only 25% of the borrower's income. But interest is now federally guaranteed up to 43% of the home buyer's income. And by 2008, banks were making loans no down payment at all. Finally, loans in the 1960s were self-amortizing over 30 years. Today we have interest-only loans that are never paid off.
So banks loan much more of the property's market price. That is why most of the rental value of land isn't paid to the homeowner or commercial landlord any more. It's paid to the banks as interest.
Was this the reason for the savings and loan crisis that hit the US in 1986 and that was responsible for the failure of 1,043 out of the 3,234 savings and loan associations in the United States from 1986 to 1995?
The problem with the savings and loan crisis was mainly fraud! The large California S&L's were run by crooks, topped by Charles Keating. Many were prosecuted for fraud and sent to jail. By the 1980s the financial sector as a whole had become basically a criminalized sector. My colleague Bill Black has documented most of that. He was a prosecutor of the S&L frauds in the 1980s, and wrote a book "The best way to rob a bank is to own one".
That's a famous quotation, I also heard that.
Fraud was the main financial problem, and remains so.
Since 2007 Americans were strangled by their mortgages in the sub-prime crisis
These were essentially junk mortgages, and once again it was fraud. Already in 2004 the FBI said that the American economy was suffering the worst wave of bank fraud in history. Yet there was no prosecution. Essentially in the United States today, financial fraud is de-criminalized. No banker has been sent to jail, despite banks paying hundreds of billions of dollars of fines for financial fraud. These fines are a small portion of what they took illegally. Such paymets are merely a cost of doing business. The English language was expanded to recognize junk loans. Before the financial crash the popular press was using the word "junk mortgages" and "Ninjas": "No Income, No Jobs, no Assets". So everybody knew that there was fraud, and the bankers knew they would not go to jail, because Wall Street had become the main campaign contributer to the leading politicians, especially in the Democratic party. The Obama Administration came in basically as representatives of the bank fraudsters. And the fraud continues today. The crooks have taken over the banking system. It is hard for Europeans to realize that that this really has happened in America. The banks have turned into gangsters, which is why already in the 1930s President Roosevelt coined the word "banksters".
I also heard the nice English sayings "Too big to fail" or "Too big to jail"
But what has become of those 10 million households that ended up losing their homes to foreclosure? How are their economic and living conditions today? What has become of their houses? The economy has recovered
Most of the houses that were foreclosed on have been bought out by hedge funds for all cash. In the wake of 2008, by 2009 and 2010 hedge funds were saying "If you have $5,000,000 to invest, we're going to buy these houses that are being sold at distress prices. We're going to buy foreclosed properties for all cash, because we can make a larger rate of return simply by renting them out." So there has been a transfer of property from homeowners to the financial sector. The rate of home-ownership in America is dropping.
The economy itself has not recovered. All economic growth since 2008 has accrued only to the top 5% of the economy. 95% of the economy has been shrinking by about 3% per year and continues to shrink, because the debts were kept in place. President Obama saved the banks and Wall Street instead of saving the economy.
That's why we live in an "age of deception" as the sub-title of your latest book suggests, I guess?
"People have the idea that when house prices go up, somehow everybody's getting richer. And it's true that the entry to the middle class for the last hundred years has been to be able to own your own home "
What is deceptive is the fact that attention is distracted away from how the real world works, and how unfair it is. Economics textbooks teach that the economy is in equilibrium and is balanced. But every economy in the world is polarizing between creditors and debtors. Wealth is being sucked up to the top of the economic pyramid mainly by bondholders and bankers. The textbooks act as if the economy operates on barter. Nobel prices for Paul Samuelson and his followers treat the economy as what they call the "real economy," which is a fictitious economy that in theory would work without money or debt. But that isn't the real economy at all. It is a parallel universe. So the textbooks talk about a parallel universe that might exist logically, but has very little to do with how the real economy works in today's world.
If you had a picture you'd see me nodding all the time, because that's what I also found out: if you look at the mathematics, it is polarizing all the time, it is de-stabilizing. Without government interference we'd have crash after crash It is not under control anymore.
But you also suggest that there's another factor that makes housing prices go up – and that's property tax cuts. Why?
"Taxes were shifted off the Donald Trumps of the world and onto homeowners ."
Whatever the tax collector relinquishes leaves more rental income available to be paid to the banks. Commercial real estate investors have a motto: "Rent is for paying interest." When buyers bid for an office building or a house, the buyer who wins is the one who is able to get the largest bank loan. And that person is the one who pays all the rent to the bank. The reason why commercial investors were willing to do this for so many decades is that they wanted to get the capital gain – which really was the inflation of real estate prices as a result of easier credit. But now that the economy is "loand up," prospects for further capital gains are gone. So the prices are not rising much anymore. There is no reason to be borrowing. So the system is imploding.
So, how could we change the situation and make land a public utility?
There are two ways to do this. One way is to fully tax the land's rental value. Public investment in infrastructure – roads, schools, parks, water and sewer systems – make a location more desirable. A subway line, like the Jubilee tube line in London, increases real estate prices all along the line. The resulting rise in rents increases prices for housing. This rental value could be taxed back by the community to pay for this infrastructure. Roads and subways, water and sewer systems could be financed by re-capturing the rental value of the land that this public investment creates. But that is not done. A free lunch is left in private hands.
The alternative is direct public ownership of the land, which would be leased out to whatever is deemed to be most socially desirable, keeping down the rental cost. In New York City, for instance, restaurants and small businesses are being forced out. They're closing down because of the rising rents. The character of the economy is changing. It is getting rid of the bookstores, restaurants and low-profit enterprises. Either there should be a land tax, or public ownership of the land. Those are the alternatives. If you tax away the land's rent, it would not be available to be paid to the banks. You could afford to cut taxes on labor. You could cut the income tax, and you could cut taxes on consumption. That would reduce the cost of living.
To me that's pretty close to the position of Georgists on how to handle land, isn't it?
I don't like to mention Henry George, because he didn't have a theory of land rent or of the role of the financial sector and debt creation. The idea of land tax came originally from the Physiocrats in France, François Quesnay, and then from Adam Smith, John Stuart Mill, and in America from Thorstein Veblen and Simon Patten . All of these economists clarified the analysis of land rent, who ended up with it, and how it should be taxed. In order to have a theory of how much land rent there is to tax, you need a value and price theory. Henry George's value theory was quite confused. Worst of all, he spent the last two decades of his life fighting against socialists and labor reformers. He was an irascible journalist, not an economist.
The classical economists wrote everything you need to know about land rent and tax policy. That was the emphasis of Adam Smith, John Stuart Mill all the classical economists. The purpose of their value and price theory was to isolate that part of the economy's income that was unearned: economic rent, land rent, monopoly rent, and financial interest. I think it is necessary to put the discussion of tax policy and rent policy back in this classical economic context. Henry George was not part of that. He was simply a right-wing journalist whom libertarians use to promote neoliberal Thatcherite deregulation and anti-government ideology. In Germany, his followers were among the first to support the Nazi Party already in the early 1920s, for instance, Adolf Damaschke. Anti-Semitism also marked George's leading American followers in the 1930s and ‚40s.
So I guess I have to go back a bit further in history, to read the original Physiocrats as well
John Stuart Mill is good, Simon Patten is good, Thorstein Veblen is wonderful. Veblen was writing about the financialization of real estate in the 1920s in his Absentee Ownership . I recently edited a volume on him: Absentee Ownership and its Discontents (ISLET, Dresden, 2016).
Germany's land tax reform seems to go in the wrong direction. Germany has to establish new rules for it's "Grundsteuer" that in fact is a mingled tax on land and the buildings standing on it, based on outdated rateable values of 1964 (in the West) and 1935 (in the East). The current reform proposals of the federal states will maintain this improper mingling and intend a revenue neutral reform of this already very low tax. It brings about 11 billion Euro to the municipal authorities, but this is only 2% of the total German tax revenue, whereas wage tax and sales tax make up for 25% each. We need a complete tax shift, don't we?
Germany is indeed suffering from rising housing prices. I think there are a number of reasons for this. One is that Germans have not had a real estate bubble like what occurred in the US or England. They did lose money in the stock market, and many decided simply to put their money in their own property. There is also a lot of foreign money coming into Germany to buy property, especially in Berlin.
The only way to keep housing prices down is to tax awat the rise in the land value. If this is done, speculators are not going to buy. Only homeowners or commercial users will buy for themselves. You don't want speculators or bank credit to push up prices. If Germany lets its housing prices rise, it is going to price its labor out of the market. It would lose its competitive advantage, because the largest expense in every wage-earner's budget is the cost of housing. In Ricardo's era it was food; today it is housing. So Germany should focus on how to keep its housing prices low.
I'd like to come back to the issue of interest once more. The English title of "Der Sektor" is " Killing the host – How Financial Parasites and Debt Bondage Destroy the Global Economy". It's much more coming to the point. It struck me that you mention John Brown. He wrote a book called "Parasitic wealth or Money Reform" in 1898. I came across his book some years ago and thought that he was somehow America's Helmut Creutz of the 19th century. He was a supporter of Henry George, but in addition John Brown analyzed and criticized the interest money system and its redistribution of wealth. He said that labour is robbed of 33% of its earnings by the parasitic wealth with subtle and insideous methods, so that it's not even suspected. Why does almost nobody know this John Brown?
John Brown's book is interesting. It is somewhat like that of his contemporary Michael Flürscheim . Brown's book was published by Charles Kerr, a Chicago cooperative that also published Marx's Capital . So Brown was a part of the group of American reformers who became increasingly became Marxist in the 19 th and early 20 th century. Most of the books published by Kerr discussed finance and the exponential growth of debt.
The economist who wrote most clearly about how debt grew by its own mathematics was Marx in Vol. III of Capital and his Theories of Surplus Value . Most of these monetary writers were associated with Marxists and focused on the tendency of debt and finance to grow exponentially by purely mathematical laws, independently of the economy, not simply as a by-product of the economy as mainstream economics pretends.
So you recommend reading his book?
Sure, it is a good book, although only on one topic. Also good is Michael Flürscheim's Clue to the Economic Labyrinth (1902). So is Vol. III of Capital .
Brown's plan of reforms included the nationalization of banks and the establishment of a bank service charge in lieu of interest. The latter sounds remarkably up-to-date. In Germany the banks are raising charges because of the decrease in their interest margins. How is your view on the matter of declining interest rates?
Well, today declining interest rates are the aim of central bank Quantitative Easing. It hasn't helped. The most important questio nto ask is: what are you going to make your loans for? Most lending at these declining interest rates has been parasitic and predatory. There's a lot of corporate take-over lending to companies that borrow to buy other companies. There is an enormous amount of stock market credit that has helped bid up stock prices with low-interest credit and arbitrage. This has inflated asset prices for stocks, bonds and real estate. If the result of low interest rates is simply to inflate asset prices, the only way this can work is to have a heavy tax on capital gains, that is asset price gains. But in the US, England, and other countries there are very low taxes on capital gains, and so low interest rates simply make housing more expensive, and make stocks and buying a flow retirement income (in the form of stocks or bonds that yield dividends and interest) much more expensive.
I guess Brown is getting to the positive aspects of low interest also.
What Brown was talking about were the problems of finance. In the final analysis there is only one ultimate solution: to write down the debts. Nobody really wants to talk about debt cancellation, because they try to find a way to save the system. But it can't be fixed so that debts can keep growing at compound rates ad infinitum . Any financial system tends to end in a crash. So the key question is how a society is NOT going not to pay debts that go bad. Will it let creditors foreclose, as has occurred in the US? Or are you going to write down the debts and wipe out this overgrowth of creditor claims? That's the ultimate policy that every society has to face.
Very topical, the German Bundesbank sees the combination of low interest rates and a booming housing market as a dangerous cocktail for the banking sector. "The traffic lights have jumped to yellow or even to dark yellow", Andreas Dombret said, after the Bundesbank had denied the problem in the last years by dismissing it as Germany's legitimate catch-up effects. The residential property prices have gone up by 30% since 2010, in the major cities even by more than 60%. The share of real estate loans in the total credit portfolio is significantly rising. The mortgage loans of the households have increased in absolute terms as well as relative to their income. It's only due to the low interest rates that the debt service has not increased yet. But the banks and savings companies are taking on the risk: the mortgages with terms of more than ten years have risen to more than 40% of the residential real estate loans. The interest-change risks lie with the banks. Don't we have to face up to the truth that interest rates shouldn't go up again?
What should be raised are taxes on the land, natural resource rent and monopoly rent. The aim should be to keep housing prices low instead of speculation. Land rent should serve as the tax base, as the classical economists said it should. Adam Smith, John Stuart Mill all urged that the basis of the tax system should be real-estate and natural resource rent, not income taxes (which add to the cost of labor), the cost of labor and not value-added taxes (which increase consumer prices). So tax policy and debt write-downs today are basically the key to economic survival.
Banking should be a public utility. If you leave banking in the present hands, you're leaving it in the hands of the kind of crooks that brought about the financial crisis of 2008.
Couldn't the subprime-crisis have been prevented if the Fed had introduced negative interest rates in the 1990s?
No. The reason there was the crash was fraud and speculation. It was junk mortgages and the financialization of the economy. Pension funds and people's savings were turned over to the financial sector, whose policy is short-term. It seeks gains mainly by speculation and asset price inflation. So the problem is the financial system. I think the Boeckler foundation has annual meetings in Berlin that focus on financialization and explain what the problem is.
Yes, that's a big topic. The financial sector is interested, as you said, in short-term gains, but people who want to save for their retirement are interested in long-term stability – that is contradictory. Do you know the " Natural Economic Order by Free Land and Free Money" by Silvio Gesell
It is not practical for today's world, it is very abstract. The solution to the financial problem really has to be ultimately a debt write-down, and a shift to the tax system, as the classical economists talked about.
Gesell was also advocating the taxing of land. I think he had something in mind with bidding for the land, letting the market fix the prices.
He did not go beneath the surface to ask what kind of market do you want. Today, the market for real estate is a financialized market. As I said, the basic principle is that most rent is paid out as interest. The value of real estate is whatever a bank will lend against it. Unless you have a theory of finance and the overall economy, you really don't have a theory of the market.
You are advocating a revival of classical economics. What did the classical economists understand by a free economy?
They all defined a free economy as one that is free from land rent, free from unearned income. Many also said that a free economy had to be free from private banking. They advocated full taxation of economic rent. Today's idea of free market economics is the diametric opposite. In an Orwellian doublethink language, a free market now means an economy free for rent extractors, free for predators to make money, and essentially free for financial and corporate crime. The Obama Administration de-criminalized fraud. This has attracted the biggest criminals – and the wealthiest families – to the banking sector, because that's where the money is. Crooks want to rob banks, and the best way to rob a bank is to own one. So criminals become bankers. You can look at Iceland, at HSBC, or at Citibank and Wells-Fargo in the news today. Their repeated lawbreaking and criminal activities have been shown tob e endemic in the US. But nobody goes to jail. You can steal as much money as you want, and you'll never go to jail if you're a banker and pay off the political parties with campaign contribution. It's much like drug dealers paying off crooked police forces. So crime is pouring into the financial system.
I think this is what's going to cause a return to classical economics – the realization that you need government banks. Of course, government banks also can be corrupted, so you need some kind of checks and balances. What you need is an honest legal system. If you don't have a legal system that throws crooks in jail, your economy is going to be transformed into something unpleasant. That's what is happening today. I think that most Europeans don't want to acknowledge that that's what happened in America (USA). There is such an admiration of America that there is a hesitancy to see that it has been taken over by financial predators (a.k.a. "the market").
We always hear that oligarchies are in the east, in Russia, but hardly anyone is calling America an oligarchy although alternative media says that it's just a few families that rule the country.
Michael Hudson is the author of Killing the Host (published in e-format by CounterPunch Books and in print by Islet ). His new book is J is For Junk Economics . He can be reached at email@example.com
War for Blair Mountain > , August 16, 2017 at 2:10 pm GMTAlbertde > , August 16, 2017 at 2:46 pm GMT
It is absolutely urgent that Richard Spencer and the Alt Right adopt the ideas and framework of Michael Hudson and and Ha Joon Chang(Kicking away the ladder.)
Support Socialism!!!=violation of free market principles
Pinochet=Neoliberal free market terrorism!!!Linda Green > , August 16, 2017 at 11:04 pm GMT
It is always a joy to read Michael Hudson but he is always discreetly incomplete as he never discusses the role of the privately owned US Federal Reserve, the other privately owned central banks and the BIS (Bank for International Settlements), which collectively force governments to borrow money from their central bank in order to create new money instead of these governments unilaterally creating the money themselves as they theoretically could.Si1ver1ock > , August 16, 2017 at 11:43 pm GMT
@Albertde It is always a joy to read Michael Hudson but he is always discreetly incomplete as he never discusses the role of the privately owned US Federal Reserve, the other privately owned central banks and the BIS (Bank for International Settlements), which collectively force governments to borrow money from their central bank in order to create new money instead of these governments unilaterally creating the money themselves as they theoretically could. This is a good point.
I believe Hitler made the same point, but due to our education consisting of largely being told what to think, rather than being taught how to think, we have had it pounded into our heads that such ideas as monetary sovereignty only come out of the minds of truly evil men. We are repeatedly told the only way to prevent Weimar style inflation is to run our economy as we presently do, no improvements are possible and to even consider such is a sign of sociopathology. Our betters for some reason want the children of the white stock that founded the country to hate themselves and become submissive to the advancing immigrant hordes while our politicians figure out ways to sell off large chunks of our infrastructure, like our roads for instance, so they can they can charge us and all the new immigrants they are letting in to drive on them.
Hell, just last week they taught a group of white men a good lesson when they tried to peaceably assemble to protest about their grievances. The media & leftist politicians (both Dem & Republican) teamed up on an alternative story of the event and allowed a group of paid communist thugs to come in and beat them while the media reported the white group to be the aggressor.
If I didn't know better, I would swear the United States has been taken over by a hostile globalist elite, that cares not one bit for the natives of our country.
Exciting times are ahead in our nation, this is for sure.
As to Michael Hudson's article, it is more gibberish from a lefty economist, he dances around facts but always in the end puts a disingenuous spin on it. The article is garbage and awfully loose with the facts.Linda Green > , August 17, 2017 at 12:11 am GMT
Mr. Hudson is interesting as usual. I almost always learn something new from one of his interviews. I'm not sure how "taxing the land" squares with MMT, unless he is suggesting that we should shift taxes off the middle class to free up money for circulation.
In other words, fiscal policy (taxing and spending) is part economic policy and part social policy. It's a political economy.
Here is a primer on MMT for people who haven't looked into it yet.another fred > , August 17, 2017 at 11:35 am GMT
I am familiar with MMT.
All that needs to be done at present is to change the FED's charter to allow infrastructure to be funded with some degree of monetary financing to prevent the selling off of the commons to global finance. I suggest this form of financing should only be used for maintenance of the commons, i.e. infrastructure.
All the rest will remain theoretical.
While not perfect the FED has all the tools and statistics to facilitate some level of monetary financing of infrastructure. I will take an independent federal reserve with a revised charter over selling off the commons to investors who will then charge us to use them. Funding our infrastructure the way it is presently done through congress is a joke, we need a better system, the economists at the FED are presently in a good position to speak to how best this might be accomplished. We need a plan, not a patchwork of resolutions and stop gap measures as to how the nations infrastructure will be funded.
It could be dollar matching to other funding sources, percentages, econometric models, etc. but unemployment levels and inflationary concerns would need to be considered.jacques sheete > , August 17, 2017 at 9:06 pm GMT
One does not have to project too far into the future to see that the future needs for "money" to "pay" the unfunded obligations of the Federal government are going to require some serious changes in the monetary system.
The US cannot politically survive, and therefore will not allow, a repeat of the Great Depression where economic activity collapses to the same extent it did in 1929-30 (roughly 40%).
It seems to me likely that something on the order of MMT will be followed where the government issues "money" directly rather than funding its creation through debt instruments.
I think it is naive, however, to believe that this will be some kind of panacea, a cure for all our ills. In order to institute MMT, or anything like it, the government will have to have far more power as it will have far more responsibility .
More power in the hands of fewer people – what could possibly go wrong?
https://en.wikipedia.org/wiki/Iron_law_of_oligarchyJim Bob Lassiter > , August 17, 2017 at 10:14 pm GMT
While the topic is dry one for me, Hudson makes it somewhat interesting and I like that he calls a fraud a fraud.
In fact pretty much the whole system, financial and political and all their appendages such as schools and the media, is a huge fraud. A pox on all the SOBs.
How could anyone argue against this, for instance?
Today's idea of free market economics is the diametric opposite. In an Orwellian doublethink language, a free market now means an economy free for rent extractors, free for predators to make money, and essentially free for financial and corporate crime.
I've long been impressed that what we have is not a free market, but a free-for-all market that excludes all but the richest from obtaining much by way of benefits.Brian Reilly > , August 17, 2017 at 11:50 pm GMT
I, along with many others wish we were renting an apartment instead of "owning" our house free and clear and unsellable for 50% of what I paid for it in 1993 due to my neighborhood being targeted by AFFH on steroids.
And set aside my abject racism to see how easy it is to understand why younger people (highly skilled and otherwise) with absolutely nothing resembling job security would not want to own a home when they are forced on a wholesale basis to move frequently hundreds or thousands of miles away to find another unstable replacement job.Linda Green > , August 17, 2017 at 11:53 pm GMT
An interesting but (alas ) incomplete and lop-sided view of the world. A couple comments:
The sheer size of the government apparatus (over 40% gdp in the US, more in most of the rest of the West) ensures rampant and intentional mis-allocation of capital, backed by the full police and judicial power of those various levels of government. This is an unavoidable aspect of human nature.
The fiscal and monetary fraud is no more than one aspect of many alluded to in the paragraph above. We have allowed charlatans masquerading as Utopian saviors and Paradigm Changers to capture police power to enforce laws and regulations obviously designed to shear the sheep, and reward the wolves. Too Big To Fail? More like Too Big To be Held to Account lest me and my friends and their children have to get real jobs instead of stealing from the rubes.
Last, it will be interesting to see how the debt is dealt with. It is a truly global issue, with too many people having to pledged to pay more money than can possibly be paid. It is so bad that the very accounting of the fiction has become near-impossible. Sooner or later, the accounting will become impossible, and some sort of reset (which will include a default and repudiation of most public and private debt instruments and their associated derivatives) will be agreed on? Implemented? Forced upon? By whom? Using what legal structure and in what currency denomination? Not any currency now in circulation, I think. Unclear to me, It will be fascinating to watch.Linda Green > , August 18, 2017 at 12:03 am GMT
If the options for infrastructure finance (maintenance and expansion of roads in particular) are basically:
- Soak the rich (taxes go up on the haves to pay)
- Some degree of monetary finance (money will be earned into existence rather than loaned into existence)
- Selling off the commons (the rich buy the infrastructure and charge the masses to use it)
- Continued patchwork of debt finance and can kicking
I would say monetary finance would make everyone short of the greedy asshole that wants to buy the highways happy.
I am fully aware that we have the appearance of a shortage of responsible enough parties to handle this sort of proposition. If it were widely known and the left got wind of it they would likely have brawndo water fountains on every corner. But Gary Cohn has not left the White House yet, and he is just the sort of guy that can pull something like this off through some acronym backed with hard facts and a near guarantee of success. We need to back away from socialism writ large and focus on long term sustained full employment with a gradual return to free market principles in all area of commerce.
In my economic utopia full employment and maintenance of infrastructure would be at the top of central bank or FED area of concern.
Medical care is expensive because it is subsidized and corrupted. Let the medical care bubble burst and let doctors compete for patients like other area of commerce. Until we figure out how to do that there will be no affordable medicine for the masses.Bayan > , August 18, 2017 at 1:17 pm GMT
Furthermore there is discussion in some circles of guaranteed minimum income. What a horrible idea. Let me guess, the people will drive to pick up their money on some pothole filled road, right? What a misguided notion. Can we please put off all that talk until all the roads are fixed, every tree is trimmed, every sidewalk fixed, every park glisteningly beautiful, etc until we even remotely consider it a possibility. The ghettos already give everyone free money and they line up in their own filth stepping over garbage to pick up their checks. Give me a break!in the middle > , August 18, 2017 at 4:10 pm GMT
Not every land owner is happy when roads or sewer systems are built close by. They may lose in terms of historical, cultural, and environmental values they attach to their surroundings. How are you going to compensate them? Nationalizing land does not solve this problem. One way of making people lose their attachment to a particular surrounding is to force them move every few years. But why do you want do that? To celebrate Bolshevist craziness? Why?myb6 > , August 18, 2017 at 5:45 pm GMT
@Linda Green Linda Green:
What is needed is to use a different approach when protesting. Why not call it, 'American pride parade?" Or, "love the USA parade?", others use different naming conventions when in reality its other objectives that they sought after. For example, the federal reserve act=taking over the economy of the USA. Patriot act=taking your rights away, etc. So whomever is trying to even the field in 'pride' such as the T-shirts that read: 'brown pride', 'black pride', etc. Whities should have 'American pride', and who will fight that? So then American pride=White pride, period. That will put an end to the rabid attacks from the fake news media, and all its dumb followers.TG > , August 18, 2017 at 9:50 pm GMT
Nationalizing all, or even most, land-rent only makes sense if the national government will take on the financial responsibility of funding local infrastructure, which seems like a disaster in the making.
Socializing all, or even most, land-rent even at the local level would completely destroy the balance sheets of millions of productive citizens. Cruel and arbitrary. As far as the response, "torches and pitchforks" would be understatement.
The only fair solution is to grandfather current land-rents and then tax the increment. Still discourages speculation. You could even phase-out the grandfather without destroying innocent families so long as it's gradual over a very long term, say 50 years.another fred > , August 18, 2017 at 11:08 pm GMT
A very interesting and intelligent commentary, as always from this source.
I would like to suggest that there is, in addition to what has been described here, another factor influencing rent, and that's demographics.
In the middle ages, Europe was essentially fully populated relative to its technology and infrastructure. All land was owned by a handful for wealthy families, and they could charge peasants rents so high that wages were hardly more than subsistence.
Then the Black Death came, and, unlike most plagues that quickly burned themselves out, it held the population low for generations. Suddenly the rich could not just coast on unearned interest from inherited land, because land was no longer a limiting factor. The rich tried reigning in wages via statute, but it's hard to beat supply and demand, and the rich failed. This caused the renaissance. It is little appreciated, but the physical standard of living of late medieval England was higher than many s0-called modern third-world countries
I suggest that, not in replacement of what has been mentioned here, but in addition, that demographics and population pressure also play a signficant role. When there is more land than people, it gets hard to collect rent (in the ante-bellum American South, the plantation owners had to resort to slavery. In the North, you had a lot of owner-operator farmers).
I would also think that, with a stable or slowly growing population, eventually every family pays off their mortgage, all the roads that need to get built are built, and then the children inherit, and debt goes away. A rapidly growing population means that big sums must constantly be borrowed to fund new construction and infrastructure, both public and private
And finally, I would posit that anything which reduces wages – such as too-rapid population growth – will also cause financialization, but for a different reason. I propose that in a low-wage society, where losing a job likely means a lifetime sentence of poverty, that people become wage-slaves, and beholden to their employers – and this includes economists and journalists etc. In this case only the occasional saint will take a stand on principle, and most of us are not saints. On the other hand, in a tight labor market, if an employee defies their boss (CNN, the University of Chicago, etc.), and is fired, it's not a big issue – they can easily find comparable well-paid work elsewhere.
@Si1ver1ock I would like to offer an observation about "taxing the land". In my home state property taxes are among the lowest in the nation and this is a significant political issue. I cannot offer a "correct balance," but since it is an issue that has been front and center in local politics I think I can offer some relevant observations.
Because property taxes are low in my state "persons" (including corporate) have been able to tie up large tracts for agricultural (including silvicultural) and mineral (including speculative) purposes. Most of it is in pine forest which offers very low returns and then there is the occasional mineral "jackpot" when somebody strikes oil or opens a mine (usually coal). The low tax cost means that it is not expensive to hold land for these purposes. Other beneficiaries are family farms where the land is actively worked, but does not yield a high rate of return.
While family farms are pretty bulletproof politically, there is strong opposition to the large corporate interests. The main argument against these interests has been that they inhibit "growth." Arguments "for" (besides the campaign contributions) are that we are better off with a more stable, steadily growing agricultural (silvicultural) economy as rapid "growth" creates instability, i.e. that "creative destruction" is not an unalloyed good, of which the rate should be maximized.
There IS a tendency towards old rich families, some of whom are degenerate, but some of whom are "pillars of the community" who support charitable organizations that benefit "everybody" if one thinks slower moving societies are a good thing.
My general impression is that Mr. Hudson thinks that lots of "growth" is a good thing, but he thinks he knows a better way to achieve it (better than Trump, e.g.). Obviously, since I put "growth" in scare quotes I am not sold on the idea no matter how it is achieved.
Outside the issue of "growth" there is the issue of how much a community benefits from having "pillars."
You makes your choice and you takes your chance. Personally, I don't think the universe gives a damn one way or the other – if it works, it works, if it doesn't, "batter up!"
Nature bats last.
Aug 23, 2017 | www.counterpunch.orgThe Lies on Afghanistan
by Matthew Hohby
Photo by DVIDSHUB | CC BY 2.0
There has never been progress by the U.S. military in Afghanistan, unless you are asking the U.S. military contractors or the Afghan drug barons, of whom an extremely large share are our allies in the Afghan government, militias and security forces, there has only been suffering and destruction. American politicians, pundits and generals will speak about "progress" made by the 70,000 American troops put into Afghanistan by President Obama beginning in 2009, along with an additional 30,000 European troops and 100,000 private contractors, however the hard and awful true reality is that the war in Afghanistan has only escalated since 2009, never stabilizing or deescalating; the Taliban has increased in strength by tens of thousands, despite tens of thousands of casualties and prisoners; and American and Afghan casualties have continued to grow every year of the conflict, with U.S. casualties declining only when U.S. forces began to withdraw in mass numbers from parts of Afghanistan in 2011, while Afghan security forces and civilians have experienced record casualties every year since those numbers began to be kept by the UN.
Similarly, any progress in reconstructing or developing Afghanistan has been found to be non existent despite the more than $100 billion spent by the United States on such efforts by the Special Inspector General for Afghan Reconstruction (SIGAR). $100 billion, by the way, is more money than was spent on the Marshall Plan when that post-WWII reconstruction plan is put into inflation adjusted dollars. Oft repeated claims, such as millions of Afghan school girls going to school, millions of Afghans having access to improved health care and Afghan life expectancy dramatically increasing, and the construction of an Afghan job building economy have been exposed as nothing more than public relations lies. Often displayed as modern Potemkin Villages to visiting journalists and congressional delegations and utilized to justify continued budgets for the Pentagon and USAID, and, so, to allow for more killing, like America's reconstruction program in Iraq, the reconstruction program in Afghanistan has proven to be a failure and its supposed achievements shown to be virtually non-existent, as documented by multiple investigations by SIGAR, as well as by investigators and researchers from organizations such as the UN, EU, IMF, World Bank, etc.
Tonight, the American people will hear again the great lie about the progress the American military once made in Afghanistan after "the Afghan Surge", just as we often hear the lie about how the American military had "won" in Iraq. In Iraq it was a political compromise that brought about a cessation of hostilities for a few short years and it was the collapse of the political balance that had been struck that led to the return to the violence of the last several years. In Afghanistan there has never even been an attempt at such a political solution and all the Afghan people have seen in the last eight years, every year, has been a worsening of the violence.
Americans will also hear tonight how the U.S. military has done great things for the Afghan people. You would be hard pressed to find many Afghans outside of the incredibly corrupt and illegitimate government, a better definition of a kleptocracy you will not find, that the U.S. keeps in power with its soldiers and $35 billion a year, who would agree with the statements of the American politicians, the American generals and the pundits, the latter of which are mostly funded, directly or indirectly, by the military companies. It is important to remember that for three straight elections in Afghanistan the United States government has supported shockingly fraudulent elections, allowing American soldiers to kill and die while presidential and parliamentary elections were brazenly stolen. It is also important to remember that many members of the Afghan government are themselves warlords and drug barons, many of them guilty of some of the worst human rights abuses and war crimes, the same abuses of which the Taliban are guilty, while the current Ghani government, and the previous Karzai government, have allowed egregious crimes to continue against women, including laws that allow men to legally rape their wives.
Whatever President Trump announces tonight about Afghanistan, a decision he teased on Twitter, as if the announcement were a new retail product launch or television show episode, as opposed to the somber and painful reality of war, we can be assured the lies about American progress in Afghanistan will continue, the lies about America's commitment to human rights and democratic values will continue, the profits of the military companies and drug barons will also continue, and of course the suffering of the Afghan people will surely continue.
Matthew Hoh is a member of the advisory boards of Expose Facts, Veterans For Peace and World Beyond War. In 2009 he resigned his position with the State Department in Afghanistan in protest of the escalation of the Afghan War by the Obama Administration. He previously had been in Iraq with a State Department team and with the U.S. Marines. He is a Senior Fellow with the Center for International Policy.
Aug 23, 2017 | www.theamericanconservative.com
MEOW , says: August 21, 2017 at 11:18 pmConflict Deaths and the song goes onAndrew Zook , says: August 22, 2017 at 6:02 am
American Revolutionary War 1775-1783 25,000
Northwest Indian War 1785-1795 ~1,056
Quasi-War 1798-1800 514
War of 1812 1812-1815 ~20,000
1st Seminole War 1817-1818 36
Black Hawk War 1832 305
2nd Seminole War 1835-1842 1,535
Mexican-American War 1846-1848 13,283
3rd Seminole War 1855-1858 26
American Civil War 1861-1865 ~625,000
Indian Wars 1865-1898 919
Great Sioux War 1875-1877 314
Spanish-American War 1898 2,446
Philippine-American War 1898-1913 4,196
Boxer Rebellion 1900-1901 131
Mexican Revolution 1914-1919 ~35
Haiti Occupation 1915-1934 148
World War 1 1917-1918 116,516
North Russia Campaign 1918-1920 424
American Expeditionary Force Siberia 1918-1920 328
Nicaragua Occupation 1927-1933 48
World War 2 1941-1945 405,399
Korean War 1950-1953 36,516
Vietnam War 1955-1975 58,209
El Salvador Civil War 1980-1992 37
Beirut 1982-1984 266
Grenada 1983 19
Panama 1989 40
Persian Gulf War 1990-1991 258
Operation Provide Comfort 1991-1996 19
Somalia Intervention 1992-1995 43
Bosnia 1995-2004 12
NATO Air Campaign Yugoslavia 1999 20
Operation Enduring Freedom (Afghanistan) 2001-2014 2,356
Operation Iraqi Freedom (Iraq) 2003-2012 4,489What if Trump's character and his supporters' character (lack thereof) made it easy for this to come about? I know here at TAC there was an effort to make Trumpism appear to be non-confrontational but Trump's a good con-man and those of us who were/are #neverTrump saw that years ago and now that he's in numerous bad spots, he'll do what humans like him (of such low character) have always done distract and posture and pick fights that kill other people in a quest to feel like a winner again God help us through this and maybe this time we'll learn our lesson.EliteCommInc. , says: August 22, 2017 at 7:22 amUhhhhhhhhhhhhhhh,Conservative American , says: August 22, 2017 at 10:11 am
" . . . accepted a stalemate and armistice with the Chinese-backed North Koreans, and it was true again in 1975, when the U.S. suffered an ignominious defeat and 58,000 dead at the hands of pajama-clad guerrillas and the North Vietnamese army."
Since the US military was not in Vietnam in 1975, I it's going to be very tough to read through the rest of this. One of these days the self flagellation about Vietnam will eventually cease. Our departure was premature, but a defeat it was not.
Good grief. Aside from the US Embassy, the military presence in Vietnam was minimal. We all but departed in 1973. Had we remained, it most likely would have modeled the situation between North and South Korea.
What is clear is that the US lacks any confidence in the Afghanistan military to defend whatever quasi-democracy we have established and we are not going to set about chasing terrorists, around the country. I would note that the Taliban are not terrorists. Though I suspect that is about to change.@George_Patton : "he [Trump] will let those Arabs in Afghanistan know whose boss. I thought this was the american CONSERVATIVE, not the American Pansy."Clifford Story , says: August 22, 2017 at 10:16 am
You borrowed the honorable name of Patton. But the real George Patton wouldn't fight a stupid, unnecessary war. The real George Patton was a military scholar who closely studied his enemy; you can bet your a** he would know that Afghans aren't Arabs.
Ignorance like this gives American conservatism a bad name. TAC's writers are trying to fix that. Get out of their way.Donnie was not ENTIRELY silent on Afghanistan's natural resources. Kevin Drum heard this tidbit, and confirmed it from the transcript:Sam , says: August 22, 2017 at 10:21 am
"In this struggle, the heaviest burden will continue to be borne by the good people of Afghanistan and their courageous armed forces. As the prime minister of Afghanistan has promised, we are going to participate in economic development to help defray the cost of this war to us."
I'm sure this will work almost as well as using Iraqi oil to pay for that warMy God this is demoralizing!Conewago , says: August 22, 2017 at 10:33 am"'Three yards and a cloud of dusty'" is a reference to a classic of American football, Woody Hayes. But any true college football enthusiast knows the sordid way in which Coach Hayes saw his great career end: https://www.youtube.com/watch?v=wEVJyf0ft3IHexexis , says: August 22, 2017 at 10:37 am
He was too stubborn for his own good. Americans of the post-Vietnam breed, like football fans, no longer take to three yards and a cloud of dust. Even if it was worth trying in Afghanistan, this country couldn't do it for long. More likely is that this crazy contractor idea takes over and we turn Afghanistan into a lackluster version of the East India Company. Where is our Edmund Burke?"how the US can get supplies to Afghanistan without Pakistan?"Mac61 , says: August 22, 2017 at 10:43 am
This has always been a Pakistan demand: in the main, not so much for Afghanistan but to retain so-called defenses against India. Pakistan has steadfastly subsidized interlopers in Afghanistan w/ the dear hope that they'll aid in any skirmish in the Hindu Kush.Three yards and a cloud of dust worked well for Ohio State in the 1970s. They don't play football like that anymore.George_Patton , says: August 22, 2017 at 10:48 am
We have strategies for containment or for mitigating greater damage not for winning. Like Donald Rumsfeld, we as a country mostly go about our business not caring and not even thinking about it because the toll is "an acceptable death rate."
I teach community college freshman who do not even know who was responsible for the 9/11 attacks, nor do they know why we are in Afghanistan. Their top three guesses for who was behind 9/11 were 1. Russia, 2. China, 3. North Korea.
Rebuild the USA.Conservative American,March Hare , says: August 22, 2017 at 10:53 am
I think you are in the minority both here and in the country. We who want to make America Great Again, can only do so if we show how strong we are. And I admire Patton, he studied the enemy to kill them, thats what military people do. Not Pansies. At least, EliteCommInc understands this. We think we lost Vietnam because it was pounded into us by the liberal media. We won that war, and left because it was time for us to leave.Former mining guy checking in here. This mineral resources argument is a fantasy, pure and simple. Mineral resources, with the possible exception of gold, require modern transportation. Get this through your heads, guys, rocks are heavy. Afghanistan is landlocked, extremely mountainous, with horrible roads, no railroads, and limited water resources.peterc , says: August 22, 2017 at 11:01 am
In the case of gold, artisanal mining (Joe and Bubba with a couple bulldozers and a heap leach pad) might be able to make a few bucks. Everything else requires either cheap bulk transportation (trains or ships) or requires the construction of concentrators and smelters nearby. Those facilities need water, and a local workforce.
None of that infrastructure exists now, and none will be constructed realistically within the next 16 years. And if it were, where would all the goodies go? West through Iran, northeast through to China, so who would be benefitting from all that expense?A few more stars for the brass, many more $ for the defense industry. At the cost of more dead and maimed – ours and theirs. Their dead and maimed will increase the number of those who "love" us. And we will foot the bill. I was hoping for something else.Dan Green , says: August 22, 2017 at 11:19 amNo surprises here. Trump is surrounded by military. When one thinks about it, we are typically a waring nation always involved in a war or some conflict we choose to stick our nose in. Obama had zero use for the military brass and therefore the brass had zero influence for 8 long years.Jon S , says: August 22, 2017 at 11:41 amThis is an unquestionable defeat for Trump's votersOne Man , says: August 22, 2017 at 12:28 pmTrump should declare victory and leave. It will fool his supporters, who have proven they are easily fooled.David Smith , says: August 22, 2017 at 12:53 pmThe problem with having an empire is that eventually the empire owns you. It must be preserved and defended at any cost. A few thousand troops will not make a difference. Thus the classic dilemma: we can't win and we can't leave.FreeOregon , says: August 22, 2017 at 1:54 pm
This is the definition of a defeat. We can send as many troops as we want, we can keep them there as long as we want, we can drop as many bombs as we want, we can kill as many people as we want, but we can't control the country.Robert E. Lee and Douglas McArthur are sorely missed. Maybe the generals have a limited mindset, one not geared to achieving resolution, and peace?Fabian , says: August 22, 2017 at 1:58 pmTwo things 1st) Trump needs the military's support if he wants to stay in power. He will obey the military. 2nd) You give these deadlines they can't keep so you get rid of the deadline. Typical mismanagement.Who Da Boss , says: August 22, 2017 at 2:25 pm@George_Patton – "We who want to make America Great Again, can only do so if we show how strong we are. "PR Doucette , says: August 22, 2017 at 3:52 pm
But Trump's not strong. He's weak! He can't even show his generals who's boss, like Truman did, or Lincoln. He can't even show Bibi Netanyahu who's boss! He lets Israel rip us off while we do all the fighting. Hell, Trump can't even show MITCH MCCONNELL who's boss! We need a strong, conservative American president, not a weak punk like Trump.Interesting that this article or any others on the same topic make any mention of the concerns the US government and/or military have regarding the warming relationship between Pakistan and China and the recent agreement between these countries to develop a road/rail link between China and the development of a new deep sea port on the coast of the Arabian Sea in Pakistan. My guess is that despite what Trump says career US military and diplomatic leaders were more interested in sending a signal to not just Pakistan but also China, Iran and to a lesser extent Russia and other Middle East countries that the US was not going to allow itself to be pushed out of South Asia.Someone in the crowd , says: August 22, 2017 at 4:33 pmThis is a huge victory for everyone who wants to see the U.S. continue bleeding itself to death while feeding a bloated 'defense' and imperial bureaucracy.Dieter Heymann , says: August 22, 2017 at 5:31 pm
One can blame Trump for caving. But the real engine behind this is the sheer inertia of money and career. It turns out to be an unstoppable force: unthinking, blind, and stupid. Welcome to Idiocracy.March Hare. When I consider the emergence of China since the death of Mao I would not rule out the possibility that its engineers and Afghan work force could create the infrastructure needed to make Afghanistan's mining profitable in less than 16 years.philadelphialawyer , says: August 22, 2017 at 8:54 pm"My guess is that despite what Trump says career US military and diplomatic leaders were more interested in sending a signal to not just Pakistan but also China, Iran and to a lesser extent Russia and other Middle East countries that the US was not going to allow itself to be pushed out of South Asia."john , says: August 22, 2017 at 8:55 pm
Trump is the President. Its his job and duty and responsibility to push back against those "leaders." Same as it was Obama's. Both failed.
Also, you have hit on the very reason why the US, even if one concedes that it must play the Great Game, can certainly afford to be "pushed out of South Asia." Russia and China and Pakistan and India and Iran and Turkey and the Arabs, and others, all have interests there. There is a natural balance of power in Mainland Asia. The US simply does not need to be a player there. Central Asia is far from any vital US interest, any US treaty ally, any important shipping lane, any important anything. If there is one place on Earth that the US can reasonably concede to others the task of policing and controlling it has got to be Central Asia.
Just let it go.I do object to the title of the article, this isn't a losing strategy, this is a not-winning strategy. You might ask yourself what you are doing playing a game where winning is impossible?Janwaar Bibi , says: August 22, 2017 at 9:41 pmThis has always been a Pakistan demand: in the main, not so much for Afghanistan but to retain so-called defenses against India. Pakistan has steadfastly subsidized interlopers in Afghanistan w/ the dear hope that they'll aid in any skirmish in the Hindu Kush.
To understand Pakistan's role in Afghanistan, you need to look at their border, which is called the Durand Line, after some Brit who drew it on the map.
The Durand Line cuts right through the Pashtun homelands, so you have Pashtuns on both sides. Afghanistan is dominated by Pashtuns, and they have never recognized the Durand Line – in fact, Afghanistan was the only country in the world that voted against admitting Pakistan to the UN in 1948 for this reason, and even the Taliban refused to recognize the Durand Line.
Pakistan is dominated by Punjabis, and their nightmare is that if a strong Afghan government were to emerge, their Pashtun province of Khyber-Pakhtunkwa might want to secede and join their fellow Pashtuns in Afghanistan. To prevent this, they have undermined every government in Afghanistan and kept it weak by funding rival tribes.
Since it is politically incorrect to say that they are undermining a fellow Muslim state, the Pakistani government puts out some BS about the need for "strategic depth" against India. India has fought numerous wars against Pakistan but they were border skirmishes – neither side advanced more than 20-30 km inside the other's territory (1971 is another story). We are already blessed with 200 million Muslims in India – no one in his right mind wants to occupy Pakistan and take in another 200 million, a lot of whom are fanatics and jihadis. If there was some way to saw Pakistan off and float it out into the Indian Ocean, we would do it in a heartbeat.
By the way, the Hindu Kush is part of the border between Afghanistan and Pakistan, not with India. No Hindus left alive there by the Religion of Peace for anyone to worry about.
Aug 21, 2017 | news.antiwar.com
Trump Declares Open-Ended War in Afghanistan Trump Abandons 'Instinct to Withdraw'
Jason Ditz Posted on August 21, 2017 Categories News Tags Afghanistan , Trump In his Monday night speech on the Afghan War, President Trump committed the US to an essentially open-ended escalation of the conflict without any specific limitations, while granting commanders broader authority to unilaterally target "the enemy."
What that outcome looks like, or how specifically he plans to get there are anyone's guess. Fox News reported that White House sources told them before the speech that Trump was going to announce 4,000 more troops for Afghanistan.
But President Trump said that the US strategy would be secret, saying the US is removing any timetables for ending the war in Afghanistan. He said that he will not talk publicly about troop numbers in Afghanistan or plans for ongoing military activity there. While arguing that "America's enemies must never know our plans."
Trump's secrecy also means the American public will have no idea how the Afghan War is being prosecuted.
This mirrors the decision to make troop levels in Iraq and Syria officially secret, but is also a much broader commitment. He set the stage for general escalation of an Afghan war that, over the past 16 years, has shown itself to endure through more or less any escalation conceivable. In committing to continue that war until victory, Trump effectively made the war permanent.
Trump presented continuation as both about 9/11, and about how opposed he is to the 2011 US withdrawal from Iraq, each presented as a reason not to withdraw, but seemingly each an excuse that's never going to not stand in the way of ending the war.
The broad message of Trump's speech seemed to be that the US wasn't aggressive enough in Afghanistan so far, criticizing President Obama for "micromanaging" the conflict. Trump said he believes that US military victories come from "judgement and expertise of wartime commanders."
Trump gave some lip-service to economic aid for Afghanistan, particularly pushing India to "do more." But he insisted that the US had abandoned nation-building, declaring "we are not nation-building again, we're killing terrorists."
This declaration also gives the impression of a permanent war, claiming 20 distinct terrorist organizations between Afghanistan and Pakistan, and vowing to lift restrictions on "our warfighters." He vowed that "no place is out of the reach of American might."
Ultimately, an escalation of 4,000 troops and a re-commitment to the status quo likely would've been much milder than what Trump appears to be proposing. Trump's determination to keep troop levels secret leaves the door open to a series of endless escalations down the road, which the American public are liable to never hear about.
Aug 21, 2017 | www.moonofalabama.orgAfghanistan - Trump To Announce Four More One-Year Wars
This evening Trump will announce a new " path forward " in the occupation of Afghanistan. According to the usual leaks it will be very same path the U.S. has taken for 16 years.
Several thousands soldiers from the U.S. and various NATO countries will (in vane) train the Afghan army. Special Forces and CIA goons will raid this or that family compound on someone's say-so. Bombs will be dropped on whatever is considered a target.
Trump will announce that 1,000 or so troops will be added to the current contingent. About 15,000 foreign troops will be in Afghanistan. About three contractors per each soldier will be additionally deployed.
Trump knows that this "path forward" is nonsense that leads nowhere, that the best option for all foreign troops in Afghanistan is to simply leave:Donald J. Trump @realDonaldTrump - 21 Nov 2013
We have wasted an enormous amount of blood and treasure in Afghanistan. Their government has zero appreciation. Let's get out!
But neither the military nor the CIA nor the local Afghan government will let the U.S. leave. Fear mongering is abound: "What happens if Afghanistan becomes a hotbed for international terrorists?" But few if any international terrorist incident in the "west" were ever organized in Afghanistan. In all recent incidents the culprits were locals.
For the military it is all about optics. The generals do not want to concede that they lost another war. The CIA wants to keep is militarized forces and drones which it justifies through its engagement in Afghanistan. The drug production in Afghanistan, which the U.S. never really tried to suppress, is rumored to finance "black" CIA operations just like it did during the Vietnam war and throughout various South American conflicts. The members of the Afghan government all live off U.S. largess. The war in Afghanistan is a racket paid for with the lives of countless Afghans and U.S. taxpayer money.
Now tightly under control of neo-conservative leaning generals Trump had little chance to make a different decision. He had asked his team for alternatives but none were given to him:The president told McMaster "to go back to the drawing board," the official said. "But he just kept coming back with the same thing."
Trump's former strategic advisor Steve Bannon promoted an idea of Eric Prince, a shady provider of international mercenaries. Afghanistan would be given to a private for-profit entity comparable to the Brutish East-India Company. That company, with its own large army, robbed India of all possible valuables and nearly became a state of its own. But Prince and Bannon forgot to tell the end of that company's story. It came down after a large mutiny in India defeated its armed forces and had to be bailed out by the government. The end state of an East India Company like entity in Afghanistan would the same as it is now.
Then there is the fairy tale of the mineral rich Afghanistan. $1 trillion of iron, copper, rare-metals and other nice stuff could be picked out of the ground. But in reality the costs of picking minerals in Afghanistan is, for various reasons, prohibitive.
The Bannon/Prince plan was lunatic but it was at least somewhat different than the never changing ideas of the military:The Defense Secretary [Mattis] has been using this line in meetings: "Mr. President, we haven't fought a 16-year war so much as we have fought a one-year war, 16 times."
That line has already been used five years ago to describe the war on Afghanistan. (It originally describes the 10 year war in Vietnam.) Mattis did not explain why or how that repetitive one year rhythm would now change.
A "new" part of the plan is to put pressure on Pakistan to stop the financing and supplying of Taliban groups. That is not in Pakistan's interest and is not going to happen. The Trump administration wants to hold back the yearly cash payment to the Pakistani military. This has been tried before and the Pakistani response was to close down the U.S. supply route to Afghanistan. An alternative supply route through Russia had been developed but has now been shut down over U.S. hostilities towards that country. The U.S. can not sustain a deployment in Afghanistan without a sea-land route into the country.
The Afghan army is, like the government, utterly corrupt and filled with people who do not want to engage in fighting. More "training" will not change that. The U.S. proxy government is limited to a few larger cities. It claims to control many districts but its forces are often constricted to central compounds while the Taliban rule the countryside. In total the Taliban and associated local war lords hold more than half of the country and continue to gain support. The alleged ISIS derivative in Afghanistan was originally formed out of Pakistani Taliban by the Afghan National Directorate of Security which is under the control of the CIA:In Nangarhar, over a year ago, the vanguard of the movement was a group of Pakistani militants who had lived there for years as 'guests' of the Afghan government and local people. While initially avoiding attacks on Afghan forces, they made their new allegiances known by attacking the Taleban and taking their territory.
ISIS in Afghanistan, founded as an anti-Taliban force, is just another form of the usual Afghan warlordism.
During 16 years the U.S. failed to set a realistic strategic aim for the occupation of Afghanistan. It still has none. Without political aim the military is deployed in tactical engagements that make no long lasting differences. Any attempts to negotiate some peace in Afghanistan requires extensive engagement with the Taliban, Pakistan, China, Russia and Iran. No one in Washington is willing to commit to that.
Trump's likely decision means that the story of the U.S. occupation of Afghanistan will continue throughout the next years exactly as it happened during the last 16 years. The decision, once made, is unlikely to change until the next presidential election. The 16 one-year-wars in Afghanistan will become 20 one-year-wars for no perceivable gain.
The only conceivable event that could change the situation is an incident with a large number of U.S. military casualties. That could lead to a groundswell of anti-war sentiment which could press Congress into legislating an end of the war. But are the Taliban interested in achieving that?
Posted by b on August 21, 2017 at 01:54 PM | Permalink
Permafrost | Aug 21, 2017 2:30:10 PM | 1Another possible ending could be the petro-dollar going south, and the US running low on diesel.Kalen | Aug 21, 2017 2:57:29 PM | 2All wars stop at the very moment when no more money could be made out of pain and suffering of the people.karlof1 | Aug 21, 2017 3:03:35 PM | 3Left unvoiced is the actual strategic reason for the Outlaw US Empire's occupation of Afghanistan: It puts Imperial Stormtroopers smack-dab in the middle of China and Russia's plans for Eurasian economic and eventual political integration while allowing the CIA to reap the benefits of its opium/heroin export program which is used to destabilize nations globally--including the homeland--which fits in quite well with the sole Neolibralcon policy goal of Full Spectrum Domination. As b mentioned, only dialog between regional actors--all of which now have some form of SCO membership--will finally solve the Afghan Problem. Of course, it would be of immense benefit if the pretext for the Outlaw US Empire presence there was proven to be the massive Big Lie that it is, but I don't expect the Truth to become known about until ??? Gpsychohistorian | Aug 21, 2017 3:13:34 PM | 4
Given the strategic reason above, I don't expect the Outlaw US Empire to retreat from Afghanistan until the Neoliberalcons are defeated domestically, which will require a massive Movement within the nation to regain control of the federal government and monetary policy--gaining just the Executive isn't nearly enough as Trump's proven.
Oh, and isn't it just delicious Karma that the USS John McCain was rammed by a tanker? Here's Finnian Cunningham on the current state of McKale's Navy, https://sputniknews.com/columnists/201708211056656667-us-navy-collision-korea/It is all about 4 more years of ongoing destabilization of the MEkarlof1 | Aug 21, 2017 3:14:24 PM | 5
The only solution that those in power want is for all to pledge fealty to the God of Mammon/global private finance.
The only solution for the rest of us if for nations to stop buying US Treasuries that continue to fund this sickness.OT: For those wondering what happened with Syrian Perspectives, it changed platforms and has a new URL, https://www.syrianperspective.com/@Madderhatter67 | Aug 21, 2017 3:24:06 PM | 6
On Topic: It appears Mercouris at the Duran decided to write something similar to b, but that site's new format is still plagued by very long running ad scripts making the content very difficult to read. Can't even copy/paste the URL. What a shame!Sending additional troops to the "graveyard of empires" is a dumb idea. Especially if the Pak supply route is closed.james | Aug 21, 2017 3:26:24 PM | 7thanks b.....JSonofa | Aug 21, 2017 3:34:37 PM | 8
make work project........... it never ends.................
"But neither the military nor the CIA nor the local Afghan government will let the U.S. leave. Fear mongering is abound: "What happens if Afghanistan becomes a hotbed for international terrorists?"
of course this is the rationale for it all - terrorism....
war on communism, war on drugs, war on terrorism....
not sure what they replace terrorism with, so for the time being it will have to be the rationale de jour........
@2 kalen.. propping up the us$, ensuring the continuation of the us$ is indeed paramount..
@5 karlof1... thanks.Defund the war machine and piss off the war party. Stop the printing press of paper "money."ben | Aug 21, 2017 3:38:11 PM | 9
Repeal the 16th amendment.
The US Fed thinks that it can manage the healthcare of 320 million Americans while simultaneously, it cannot manage the healthcare of 9 million Veterans.
Repeal the 16th. F*ck em.The "Corporate Empire" never leaves, until it extracts what it wants, from whom it wants.Laguerre | Aug 21, 2017 3:42:18 PM | 10Waste of time and effort. Nothing will change.Grieved | Aug 21, 2017 3:55:54 PM | 11@5 karlof1Christian Chuba | Aug 21, 2017 4:00:34 PM | 12
I'm not a great fan of the Duran new design, but I can read its stories okay. I think you may need to use Firefox browser and install the AdBlock Plus add-on. It's free and easy. The wonderful thing about Firefox is its built-in Reader View button, which strips all the excess media out of a page and formats just the story itself in a perfectly readable column width, with a nice size font. You can actually lean back and read. It's amazing how this helps comprehension. I often read b's articles and even a lot of the comments this way.
Here's the link for the Mercouris article, which I haven't read yet: 7 reasons why by comparison with the USSR the US is losing in AfghanistanThe alternative would be to find people in the U.S. govt who actually understand the Taliban. You would think that after 16yrs, that we would have developed some expertise on the true structure of Afghanistan.Curtis | Aug 21, 2017 4:07:36 PM | 13
The only beef we had with the Taliban was that they harbored Al Qaeda. Couldn't we bribe them and let them keep their own country as long as they don't host international terrorists? I don't know the answer to this question but that is the 'new' approach that I'd explore. I recall that the Taliban seemed a bit put off when Al Qaeda destroyed the WTC and asked to review the evidence. They made some reference to not wanting to violate some guest code. Perhaps we were too heavy handed with them.Doubling down on failure (or insanity by doing the same thing but expecting a different result).james | Aug 21, 2017 4:17:13 PM | 14
For some reason, our troop training skills are not working. The ones we trained in Iraq gave up Mosul. The ones we trained in Jordan joined al Nusra and ISIS in Syria. And the ones we've trained in Afghanistan still cannot secure the country.funny hit list.....Christian Chuba | Aug 21, 2017 4:20:20 PM | 15
The following members of the United Nations have made statements about their recognition of the Republic of Crimea and Sevastopol as federal subjects of Russia:
ZimbabwePerimetr | Aug 21, 2017 4:23:36 PM | 16'We haven't fought a 16 yr. war we have fought the same 1yr war 16 times'.
It is distressing that our core competence is selling each other BS. It reminds me of all of the slick arguments I hear about how woefully underfunded the U.S. military is.
We must have hired Consultants because I've read over a dozen articles with the same format ...
1. As a percent of GDP our military budget is at historic lows (creative accounting, it's closer to 5% of GDP, not the advertised 3%).
2. 50% of our aircraft are not operational, along with other readiness scare stories (so we should reward incompetence?)
3. The military is only 15% of the budget (flat out lie, it's 40% of discretionary spending and owns about that much of the annual debt service that they also don't count. If you eliminated Social Security, Medicare, Medicaid, our payroll taxes would disappear, not our deficit)
But the argument sounds good and never gets challenged on FOX/CNN.Agree with Karlofi, the US will not abandon the $1 trillion per annum heroin industry it has developed in Afghanistan.karlof1 | Aug 21, 2017 4:26:04 PM | 17
The banksters take a 20% cut for laundering the money, the rest goes to Langley to fund its many projects.Grieved @11--Lozion | Aug 21, 2017 5:31:40 PM | 18
Thanks for your help hints. I was finally able to read the entire article with almost no interruptions. As the title suggests, it's a compare/contrast essay detailing the two different experiences, goals and costs incurred. Mercouris points out that the USSR didn't lose in Afghanistan--it fulfilled its policy goal and left--which is contrary to the West's propaganda on the subject. It's a decent read, but Mercouris, like b, neglects to mention the actual strategic goal of the Outlaw US Empire's invasion and occupation.
Also Grieved, thanks for your thoughtful comments in your reply to me on a previous thread. Liked your comment at The Saker's latest Neocon thread.@16 Perimetr is spot on.. Projects like manufactured riots and race strife anyone?nmb | Aug 21, 2017 5:34:42 PM | 19
Trump-establishment common agenda confirmed again through cynically admitting the real reason behind the US invasion in Afghanistan!Stumpy | Aug 21, 2017 5:42:53 PM | 20
Condoleeza:Thirdeye | Aug 21, 2017 6:08:27 PM | 21
" former Secretary of State Condoleeza Rice said that it "made no sense" to expand the military's presence without a new strategy, while Democratic Sen. Dick Durbin put it this way:
"We've tried this before, we've tried to fortify our effort in Afghanistan under Republican and Democratic presidents, and the fact is we're still in a situation where the Taliban controls a massive part of the territory," Durbin told MSNBC in May. "We need to have an honest answer to the question: Will the Afghans ever be in a position where there is less corruption and there is less incompetence and they're able to stand up and defend their own nation? It's time for some honest answers." "
And Donald Trump has the answer tonight? When Durbin says "their own nation", I believe he is referring to the geographic boundaries assigned by Western commerce. That is the failure of understanding, that a central government imposed on the warlord/tribal mosaic that is the Afghan territories is doomed. Rather than troops, as Christian C. suggests @12, sending tons of cash might be more persuasive than arming one band against another. A complete waste of spec ops troops absent a true civil war against a hated tyrant.3 karlof1Krollchem | Aug 21, 2017 6:22:16 PM | 22
The US project in Afghanistan started before the Eurasian project got going. Afghanistan is is peripheral to the Eurasian project for the time being; it is currently economically unimportant and will remain so until considerable development of infrastructure in the region takes place. Having the resources is one thing. Having the infrastructure to develop those resources is quite another.Plan "B" for Afghanistan will be to let a corporation lead the war:Krollchem | Aug 21, 2017 6:39:54 PM | 23
The US proceeded with its war in Afghanistan despite warnings by knowledgeable Western soldiers familiar with the region:
This leads US to "THE FATE OF EMPIRES and SEARCH FOR SURVIVAL"
Sir John Glubb
http://people.uncw.edu/kozloffm/glubb.pdfThis sums up the US troop surge in Afghanistan:karlof1 | Aug 21, 2017 6:42:44 PM | 24
"In short, I was a racketeer, a gangster for capitalism. I suspected I was just a part of a racket at the time. Now I am sure of it. Like all members of the military profession I never had an original thought until I left the service. My mental faculties remained in suspended animation while I obeyed the orders of the higher ups. This is typical with everyone in the military service."*
~ Major General Smedley Butler, USMC, 1935
https://www.ratical.org/ratville/CAH/warisaracket.htmlThirdeye @21--dh | Aug 21, 2017 6:44:20 PM | 25
Total Vision 2010--the policy paper that announced the #1 policy goal of the Outlaw US Empire, nee New World Order--was published in 1996, and the plan to invade Afghanistan was put into motion about 5 months prior to the "justification event" on 911. Total Vision 2020 is the latest update to the initial policy goal and was published during Bu$hCo.
The Eurasian vision was begun during Deng's years as China's leader and has accelerated ever since.@21 Think of the vast amounts of equipment, weapons, fuel, food, bottled water etc. consumed daily. It all has to be flown in or moved across Russia by rail (do they still do that?) and the troops and contractors have to be rotated in and out. Afghanistan has considerable economic importance.PavewayIV | Aug 21, 2017 6:44:33 PM | 26I'll attempt to read between the lines for those outside the US trying to understand all this:Piotr Berman | Aug 21, 2017 6:47:21 PM | 27
DynCorp's annual military contractor revenue from the US Government is reportedly more than Germany's entire defense budget of around $42 billion (€36 billion). Only a few billion from Afghanistan, but business there could use a shot in the arm.
Billionaire psychopath Stephen Feinberg controls DynCorp, bathed in the river of blood/profits from Afghanistan (among others). He doesn't like the US military's performance there - it's hurting business. Feinberg wants to fire US Afghanistan commander Gen. John Nicholson (via his lapdog Trump, of course) but that alone will not help DynCorp much.
DynCorp is missing out on the lucrative combat merc market in Afghanistan. Most of the military contractors it supplies are support, and only a few 'security' types are armed. Feinberg knows supplying actual combat mercs is where DynCorpo will reap the real profits.
Problem for Feinberg is the US military hates mercs and won't use them much (mostly because mercs are homicidal psychopaths). Solution? Why stop at firing Nicholson? Fire ALL the US military commanders in Afghanistan and replace them with obedient, profitable dual-citizen DynCorp commanders. The Mini-Me US President Jared Kushner just loves this plan. Maybe he gets a few DynCorp stock options out of the deal.
Some other issues:
Outsourcing the US Military might wake up a few of the intellectual lepar military commanders to their duty to defend the US Constitution. US Military coup?
Solution: Mad Dog Mattis, of course: "Obey your Commander in Chief's unconstitutional orders, you insolent bastards! Constitutional law and critical thinking is way above a general's pay grade - leave that to CNN. Train your merc replacements in Afghanistan and shut the hell UP!
Title 10 of the US Legal Code on the military prohibits using mercs in combat
Solution: Screw the law - that's why DynCorp bribes Congress. Rather than using illegal Title 10 military contractors in Afghanistan, Congress and Trump will classify their activities from now on under Title 50: intelligence activities. See? Nothing at all to do with military operations.
The US military doesn't control the current CIA spooks and won't be able to control the new DynCorp mercs
Solution: If all Afghanistan mercs are reclassified as Title 50 spooks, then they report to the CIA and its chain of command. The US military in Afghanistan will not and doesn't need to control them - that's the point.
Who will command US troops if the military commanders are sent packing?
Solution: The Afghani slaughter will become a CIA operation, not a US military one. It will complement the CIA's booming opium 'fund-raising' business there. US combat troops will just be assigned to the CIA operation (combat, not poppy farming). Give all the US soldiers sent there some kind of special berets (anything but green) and call them Special Forces. Shhh! They're now involved in secret spook operations. Don't ask any questions.
How can the CIA possibly command so many mercs and US soldiers in Afghanistan?
Solution: That's where ex-Blackwater war criminal Eric Prince and his private UAE-based army and air force come in. The CIA will simply hire contractor commanders for 'their' command structure that will replace the current US military one. Whether Prince rebrands his current commanders as DynCorp or uses some other ruse, he can flesh out the line staff from his current merc army. The CIA will chose all the senior contractor commanders who will then be hired by whatever DynCorp names that business.
Who will be the overall commander of military ops in Afghanistan going forward if Gen. Nicholson is canned?
Soluton: Trump will choose an overall commander, reportedly with the title of viceroy . My jaw hit the floor at that one. Here's Wikipedia:"...A viceroy is a regal official who runs a country, colony, city, province, or sub-national state, in the name of and as the representative of the monarch of the territory. The term derives from the Latin prefix vice-, meaning "in the place of" and the French word roi, meaning "king"..."
Chief DynCorp psychopath and dual-US/Israeli citizen Stephen Feinberg himself is interested in the job according to Prince. An investment banker commanding psychopath mercs slaughtering Afghanis in the name of the US - imagine that. Plus, Afghanistan is right next door to Iran - convenient for US invasions and such. Oh, that's right. DynCorp is a business. They'll gladly invade Iran for anyone with a big enough bag of shekels.
"On your knees and bow your heads, Afghani peons! All hail the supreme commander of all Afghanistan, Viceroy Stephen Feinberg."
Surely Trump can't sell this plan to the US public. They're pretty dim, but this scheme is just over the top!
Solution: Think again. This will be spun as a mere 1000 US combat troop surge... oh, and a few contractors. Intelligence contractors, not mercs. The details of who they are and what they will be doing is classified. Just never mind them. And as soon as US military commanders and troops have their replacements trained up, they'll get to come home. Yay! Imagine the CNN video at the airport of a weary US soldier returning from Afghanistan to his loving family. JOY!
But what about the utter debasement of the US Constitution and myriad of war crimes the US government will commit by doing something so insane?
Solution: Buy DynCorp stock and shut the hell up about the American's dumb-assed Constitution. Besides, who are you to question the Viceroy?For some reason, our troop training skills are not working. The ones we trained in Iraq gave up Mosul. The ones we trained in Jordan joined al Nusra and ISIS in Syria. And the ones we've trained in Afghanistan still cannot secure the country.dh | Aug 21, 2017 6:52:57 PM | 28
Posted by: Curtis | Aug 21, 2017 4:07:36 PM | 13
There are also success stories. The training program in Mali had good students and bad students. Good students joined the rebellion of the Tuareg and clobbered the bad ones. Bad ones were pissed to be sent by civilian government to the scorching sands of Sahara and made a coup. The Tuareg had enough weapons from the fallen Libya to engage in infighting, temporarily won by the group that claimed ISIS affiliation. Each group had some degree of success.
Common theme is that USA offers no idea that would fire up troops under training. Did they try "Truth, Justice, and the American Way" (the catch-phrase of the comic-book character Superman). Or Here I come to save the day! I think that the crux is economic development and decrease in abject poverty, but does anyone in Administration have an idea how that could be done?@26 "Imagine the CNN video at the airport of a weary US soldier returning from Afghanistan to his loving family. JOY!"Perimetr | Aug 21, 2017 7:00:22 PM | 29
I can see it already. He will have his faithful dog with him that he rescued from a ruined Afghan village. His faithful translator unfortunately wasn't so lucky.RE: PavewayIV | Aug 21, 2017 6:44:33 PM | 26fast freddy | Aug 21, 2017 7:51:58 PM | 30
Thanks for the update, will pass this on to friends in D.C. A plan that Hillary would certainly approve of . . .Just as Obama was a fraud, Trump is likewise a fraud.Forest | Aug 21, 2017 8:12:17 PM | 31I think it just boils down to Trump just wanted to look behind the curtain.Willy2 | Aug 21, 2017 8:16:42 PM | 32
Get to see the program...- The warlords are NOT "on the same page" as the Taliban !!!! The afghan people are/were abused by the warlords, were suffering under the warlords. The warlords performed henous crimse against the afghan population.
- The afghan people were treated better by the Taliban than by the warlords. That allowed the Taliban to make a comeback in the 1990s. But it also meant that the afghans suffered under the religious islamic fanaticism of that same Taliban.
- With the US invasion the Taliban was defeated and allowed the warlords to make a comeback and now the afghan people were suffereing from/under the warlords again. The warlords were needed by the US military to protect the transports that bring in all the goods that the US military, other foreign troops and all mercenaries need to continue their "occupation" of Afghanistan. Without those supplies those military forces will be "left hanging out to dry".
- Generals like David Petraeus and Stanley McChrystal were both in command in Afghanistan and recognized this hopeless situation and left their afghan post early. McChrystal retired and Petraeus became director of the CIA.
Aug 21, 2017 | www.zerohedge.com
The Future Of The Third World Zero Hedge Tyler Durden Aug 20, 2017 9:00 PM 0 SHARES Authored by Jayant Bhandari via Acting-Man.com, Decolonization
The British Empire was the largest in history. At the end of World War II Britain had to start pulling out from its colonies. A major part of the reason was, ironically, the economic prosperity that had come through industrialization, massive improvements in transportation, and the advent of telecommunications, ethnic and religious respect, freedom of speech, and other liberties offered by the empire.
The colors represent the colonies of various nations in 1945, and the colonial borders of that time – click to enlarge.
After the departure of the British -- as well as the French, German, Belgians, and other European colonizers -- most of the newly "independent" countries suffered rapid decay in their institutions, stagnant economies, massive social strife, and a fall in standards of living. An age of anti-liberalism and tyranny descended on these former colonies. They rightly became known as third-world countries.
An armchair economist would have assumed that the economies of these former colonies, still very backward and at a very low base compared to Europe, would grow at a faster rate. Quite to the contrary, as time went on, their growth rates stayed lower than those of the West.
Socialism and the rise of dictators were typically blamed for this -- at least among those on the political Right. This is not incorrect, but it is a merely proximate cause. Clarity might have been reached if people had contemplated the reason why Marxism and socialism grew like weeds in the newly independent countries.Was There a Paradigm Shift in the 1980s?
According to conventional wisdom, the situation changed after the fall of the socialist ringleader, the USSR, in the late 1980s. Ex-colonized countries started to liberalize their economies and widely accepted democracy, leading to peace, the spread of education and equality, the establishment of liberal, independent institutions. Massive economic growth ensued and was sustained over the past three decades. The "third world" was soon renamed "emerging markets."
Alas, this is a faulty narrative. Economic growth did pick up in these poor countries, and the rate of growth did markedly exceed that of the West, but the conventional narrative confuses correlation with causality. It tries to fit events to ideological preferences, which assume that we are all the same, that if Europeans could progress, so should everyone else, and that all that matters are correct incentives and appropriate institutions.
The beginning and end of the Soviet communist era in newspaper headlines. The overthrow of Kerensky's interim government was the start of Bolshevik rule. To be precise, the Bolsheviks took over shortly thereafter, when they disbanded the constituent assembly in in early 1918 and subsequently gradually did the same to all non-Bolshevik Soviets that had been elected. A little more than seven decades later, the last Soviet Bolshevik leader resigned. It is worth noting that by splitting the Russian Federation from the Ukraine and Belorussia, Yeltsin effectively removed Gorbachev from power – the latter was suddenly president of a country that no longer existed and chairman of a party that was declared illegal in Russia. [PT] – click to enlarge.
The claimed liberalization in the "emerging markets" after the collapse of the USSR did not really happen. Progress was always one step forward and two steps back. In some ways, government regulations and repression of businesses in the "emerging markets" have actually gotten much worse. Financed by increased taxes, governments have grown by leaps and bounds -- not for the benefit of society but for that of the ruling class -- and are now addicted to their own growth.
The ultimate underpinnings of the so-called emerging markets haven't changed. Their rapid economic progress during the past three decades -- a one-off event -- happened for reasons completely different from those assumed by most economists. The question is: once the effect of the one-off event has worn off, will emerging markets revert to the stagnation, institutional degradation, and tyranny that they had leaped into soon after the European colonizers left?The One-Off Event: What Actually Changed in the 1980s
In the "emerging markets" (except for China) synchronized favorable economic changes were an anomaly. They resulted in large part from the new, extremely cheap telephony that came into existence (a result of massive cabling of the planet implemented in the 1980s) and the subsequent advent of the new technology of the internet. The internet enabled instantaneous transfer of technology from the West and as a consequence, unprecedented economic growth in "emerging markets."
Meanwhile, a real cultural, political, and economic renaissance started in China. It was an event so momentous that it changed the economic structure not just of China, but of the whole world. Because China is seen as a communist dictatorship, it fails to be fully appreciated and respected by intellectuals who are obsessed with the institution of democracy.
But now that the low-hanging fruit from the emergence of the internet and of China (which continues to progress) have been plucked, the "emerging markets" (except, again, for China) are regressing to their normal state: decay in their institutions, stagnant economies, and social strife. They should still be called the "third world."
There are those who hold China in contempt for copying Western technology, but they don't understand that if copying were so easy, Africa, the Middle East, Latin America, and South Asia would have done the same. They were, after all, prepared for progress by their colonial history.
European colonizers brought in the rule of law and significantly reduced the tribal warfare that was a matter of daily routine in many of the colonies -- in the Americas, Africa, the Middle East, and Asia. Britain and other European nations set up institutional structures that allowed for the accumulation of intellectual and financial capital. Western-style education and democracy were initiated. But this was helpful in a very marginal way.What is Wrong with the Third World
For those who have not traveled and immersed themselves in formerly colonized countries, it is hard to understand that although there was piping for water and sewage in Roman days, it still isn't available for a very large segment of the world's population. The wheel has existed for more than 5,000 years, but a very large number of people continue to carry water in pots on their heads.
Lead piping supplying water to homes already existed in Roman days, 2000 years ago.
The Ljubljana Marshes Wheel, which is more than 5,000 years old
There are easily a billion or more people today, who have no concept of either the pipe or the wheel, even if they went to school. It is not the absence of technology or money that is stopping these people from starting to use some basic forms of technology. It is something else.
Sir Winston Churchill, the war-time Prime Minister of Britain, talking about the future of Palestine said:
"I do not admit that a great wrong has been done to the Red Indians of America or the black people of Australia. I do not admit that a wrong has been done to these people by the fact that a stronger race, a higher-grade race, a more worldly wise race has come in and taken their place."
Cigar-puffing British war-time PM Winston Churchill was as politically incorrect as they come. If he were alive today, he would probably be labeled the newest Hitler by the press and spend 90% of his time apologizing. Perhaps we shouldn't mention this, but there are many Churchill monuments dotted across Europe and one can be found in Washington DC as well (alert readers will notice that a decidedly non-triggered Washington Post fondly remembered Churchill as an "elder statesman" a mere 10 months ago; rest assured that won't stop the social justice warrior brigade if they decide to airbrush him out of history). Just to make this clear, your editor is not exactly the biggest fan of the man who traded away half of Europe to Stalin because he felt he could "trust the Soviet communist government" and who was clearly a tad too enamored of war, a characteristic Robert Kaplan described in his strident, amoral pro-war screed Warrior Politics: Why Leadership Demands a Pagan Ethos as follows: "Churchill's unapologetic warmongering arose not from a preference for war, but from a breast-beating Victorian sense of imperial destiny " Neither the breast-beating nor the sense of imperial destiny are really our thing, but we tip our hat to the man's utter lack of political correctness and his associated willingness to offend all and sundry with a nigh Trumpian alacrity and determination. [PT]
On Islam, he said:
"How dreadful are the curses which Mohammedanism lays on its votaries! Besides the fanatical frenzy, which is as dangerous in a man as hydrophobia in a dog, there is this fearful fatalistic apathy. The effects are apparent in many countries. Improvident habits, slovenly systems of agriculture, sluggish methods of commerce, and insecurity of property exist "
Talking about India he famously said:
"I hate Indians. They are a beastly people with a beastly religion."
A remark often attributed to Churchill, although this remains unverified, has certainly stood the test of time so far:
"If independence is granted to India, power will go to the hands of rascals, rogues, freebooters; all Indian leaders will be of low caliber and men of straw. They will have sweet tongues and silly hearts. They will fight amongst themselves for power and India will be lost in political squabbles. A day will come when even air and water will be taxed in India."
Europeans of that time clearly knew that there was something fundamentally different between the West and the rest, and that the colonies would not survive without the pillars and the cement European management provided.
With the rise of political correctness this wisdom was erased from our common understanding – but it is something that may well return to haunt us in the near future, as the third world fails to fulfill expectations, while people who immigrate to Europe, Canada, Australia and the US from there fail to assimilate.The Missing Underpinnings: Reason And All That Depends On It
Until now, the hope among people in the World Bank, the IMF, and other armchair intellectuals was that once the correct incentives were in place and institutions were organized, these structures imposed from on high would put the third world on a path to perpetual growth. They couldn't have been more wrong.
The cart has been put in front of the horse. It is institutions that emerge from the underlying culture, not the other way around. And cultural change is a process taking millennia, perhaps even longer. As soon as Europeans quit their colonies, the institutional structures they left started to crumble.
Alas, it takes a Ph.D. from an Ivy League college and a quarter of a million dollar salary at the World Bank or the IMF to not understand what the key issue with development economics and institutional failures is: the missing ingredient in the third world was and is the concept of objective, impartial reason – the basis of laws and institutions that protect individual rights.
This concept of reason took 2,500 years to develop and get infused into the culture, memes, and genes of Europeans -- a difficult process that, even in Europe, was never fully completed. European institutions were at their root products of this concept.
A justly famous quote by Thomas Paine (a prolific writer with a side job as a founding father and revolutionary). Paine was deeply suspicious of self-anointed authorities, both of the secular and clerical variety, who in turn regarded him as dangerous. His writings inter alia provoked a so-called "pamphlet war" in Britain (it would be best if all wars were conducted via pamphlets). [PT]
Despite massive efforts by missionaries, religious and secular, and of institutions imposed on poor countries, reason failed to get transmitted. Whatever marginal improvement was achieved over 200 to 300 years of colonization is therefore slowly but surely undone.
Without reason, subsidiary concepts such as equality before the law, compassion and empathy won't operate. Irrational societies simply cannot maintain institutions representing the rule of law and fairness. The consequence is that they cannot evolve or even maintain institutions the European colonizers left behind.
Any institutions imposed on them -- schools, armies, elections, national executives, banking and taxation systems -- must mutate to cater to the underlying irrationality and tribalism of the third world.Western Institutions Have Mutated
Education has become a dogma in "emerging markets", not a tool; it floats non-assimilated in the minds of people lacking objective reason. Instead of leading to creativity and critical thinking, it is used for propaganda by demagogues.
Without impartial reason, democracy is a mere tribal, geographical concept, steeped in arrogance. All popular and "educated" rhetoric to the contrary, I can think of no country in the non-western world that did well after it adopted "democracy."
The spread of nationalism (which to a rational mind is about the commonality of values) has created crises by unifying people along tribal lines. The most visible example is provided by events in the Middle East, but the basic problem is the same in every South Asian and African country and in most of South America.
India, the geographical entity I grew up in, was rapidly collectivized under the flag and the national anthem. It has the potential to become the Middle East on steroids, once Hindutava (Hindu nationalism) has become deeply rooted in society.Assessing the Current Predicament
In Burma, a whiff of democracy does not seem to have inhibited a genocide perpetrated by Buddhists against the Muslim Rohingya. Thailand (which was not colonized in a strictly political sense) has gone silent, but its crisis continues.
Turkey and Malaysia, among the better of these backward societies, have embarked on a path of rapid regression to their medieval pasts. South Africa, which not too long ago was considered a first-world country, got rid of apartheid only to end up with something even worse.
The same happened with Venezuela, which was among the richer countries of the world in the not-too-distant past. It is ready to implode, a fate that may befall Brazil as well one day. Pakistan, Bangladesh, Nepal, and East Timor are widely acknowledged to be in a mess, and are getting worse by the day.
Indonesia took a breather for a few years and is now once again in the thrall of fanaticism. India is the biggest democracy, so its problems are actively ignored by the Western press, but they won't be for long, as India continues to evolve toward a police state.
Botswana was seen as one of the countries with the fastest and longest-lasting economic growth. What was ignored was the fact that this rather large country has a very small population, which benefited hugely from diamonds and other natural resources. The top political layer of Botswana is still a leftover from the British. The local culture continues to corrode what was left by them, and there are clear signs that Botswana is past its peak.
Part of the central business district in Gaborone, Botswana. Long time readers may recall an article we posted about 2.5 years ago: " Botswana – Getting it Right in Africa ". We are not sure if much has changed since then, but it is worth recalling that Botswana started out as the third-poorest country in Africa when it became independent in 1966 and is today one the richest. The very small population (by African standards) combined with the large income the country obtains from diamond mining no doubt played a role in this, but being rich in natural resources means very little per se . Botswana never fell for Marxism. When the country gained independence, its political leadership adopted democracy and free markets and never looked back. Botswana is a very homogenous society in terms of religious and tribal affiliations, which differentiates the country from most other former colonial territories in Africa. From our personal – admittedly by now a bit dated – experience, we can state that Botswana is the only African country in which one is unlikely to encounter any corruption – not even the lowliest government minion will ask for bribes as far as we could tell (in many African countries, officials begin demanding bribes the moment one wants to cross the border). Considering all that, we are slightly more hopeful about Botswana, but it is not an island. Deteriorating conditions in neighboring countries may well prove contagious at some point. [PT]
Papua New Guinea was another country that was doing reasonably well before the Australians left. It is now rapidly regressing to its tribal, irrational, and extremely violent norms, where for all practical purposes rape is not even considered a crime.Conclusion: A Vain Hope
The world may recognize most of the above, but it sees these countries' problems as isolated events that can be corrected by further impositions of Western institutions, under the guidance of the UN or some such international (and therefore "non-colonialist") organization.
Amusingly, our intellectual climate -- a product of political correctness -- is such that the third world is nowadays seen as the backbone of humanity's future economic growth. Unfortunately, so-called emerging markets are probably headed for a chaotic future. The likeliest prospect is that these countries will continue to cater to irrational forces, particularly tribalism, and that they will consequently cease to exist, disintegrating into much smaller entities.
As the tide of economic growth goes out with the final phase of plucking the free gift of internet technology nearing its end, their problems will resurface rapidly – precisely when the last of those who were trained under the colonial system are sent to the "dustbin of history".
doctor10 , Aug 20, 2017 9:06 PMOccident Mortal -> doctor10 , Aug 20, 2017 9:17 PM
Its all about ideas-and which ones are adopted by society.
The USA has a very poor prognosis-has yet to shed its 20th century Bolshevick Baggage.Oracle of Kypseli -> Occident Mortal , Aug 20, 2017 10:00 PM
It's mostly down to culture.
Some people are more culturally predisposed to exploring and trying new things.
If you believe the future will be better than the past then you will be prepared to work to improve things, if you believe the world is in terminal decline and that the glory days were some time ago, either when gods or prophets did all the important stuff or when your locale was more prosperous then you will not be as encouraged to work on improvements and you will thend to hoarde meagre resources and live by thrift with minimal expenditure.DjangoCat -> Oracle of Kypseli , Aug 20, 2017 10:15 PM
I think that colonialism is in play again as the advance societies are starving for resources and will invest in these countries in exchange. This will change the trend into better education, better jobs and everything that comes with it for the middle classes but perpetuate slave wages for the uneducated masses.
The world is not changing but morphing. It's the nomenclature that changes for the sake of political correcteness and feel good predisposition.Unknown User -> DjangoCat , Aug 20, 2017 10:54 PM
The history of western investment in third world resources does not make for a pretty read. Look now at what has happened just in the last months of a major silver mine being closed in a small Central American country, where the local manager has been accused of murdering protestors and objectors to the mines presence in their midst, destroying the countryside.
The CIA seems to have had, as it's primary objective, the job of clearing the way for US and British, and Canadian industrial, infrastructure and mining interests to come in and take the resources. A good payoff to the man in power greases the wheels, and the people get nothing but a degraded environment and mammoth debt.
The next step is to restructure the debt, in the process privatizing state infrastructure at cut rate prices. This is nothing but mass rape and pillage.
Wake up.Eeyores Enigma -> DjangoCat , Aug 21, 2017 12:38 AM
England never freed its colonies. It simply changed the means of enslavement from physical to financial.Ayreos -> Eeyores Enigma , Aug 21, 2017 3:57 AM
Too true DC but that truth doesn't work well with "American Exceptionalism" so we get articles like this one.Son of Thor -> Ayreos , Aug 21, 2017 6:43 AM
"American exceptionalism" is just a small-time ugly consequence of the actual phenomenon: good old imperialism, taught by the British. And there's nothing wrong with it. All European countries have accepted NATO and american influence on them willingly. They have all recognized and validated American exceptionalism themselves. As subjects of an empire they now complain that the Emperor is quickly losing its clothes,Diatom -> DjangoCat , Aug 21, 2017 8:53 AM
I'm making over $7k a month working part time. I kept hearing other people tell me how much money they can make online so I decided to look into it. Well, it was all true and has totally changed my life. This is what I do http://disq.us/url?url=http%3A%2F%2Fwww.jobproplan.com%3A68UoF1LgzM-Yo3S...Crazy Or Not -> Occident Mortal , Aug 21, 2017 5:38 AM
John Perkins books people...Omen IV -> Occident Mortal , Aug 21, 2017 9:10 AM
True you have to have "Ambition & Will" for change to stomach the difficult period of creating that change. (eg Gandhi, US independence etc).
...A major part of the reason was, ironically, the economic prosperity that had come through industrialization, massive improvements in transportation, and the advent of telecommunications, ethnic and religious respect, freedom of speech...
This however while a factor is also bias. Post WWII no weapons (other than US) were permitted in Pacific war region and a decisive factor in limiting the influence of the Brits in their pre war colonies. Post colonials also saw war as a way out of colonial rule, using US leverage to oust Brit influence.
edit - probably BritBob will go apoplectic with this? Cue "Rule Britania"
...and other jingoistic bollocks ;)Oh regional Indian -> doctor10 , Aug 20, 2017 9:19 PM
"institutions emerge from the underlying culture, not the other way around"
There is no solution to an average IQ of 70 and the culture that results from that fact.
The only solution is $1,000 in return for a tubal ligation or vasectomy - 1,000,000 per day until completedSethPoor -> Oh regional Indian , Aug 20, 2017 9:50 PM
That zionist bastard churchill was not prognosticating about india, he was merely telling the world what they were going to do, ie., leave the country in the hands of rouges and rascals.... who have ruled and looted and destroyed India for their city of london masters ever since.
It's the joos who hate indians and of course churchill wasa closet joo...
https://aadivaahan.wordpress.com/2010/07/13/whither-india/Koba the Dread -> SethPoor , Aug 21, 2017 1:41 AM
Are closet Jews circumcised?buttmint -> Oh regional Indian , Aug 21, 2017 12:41 AM
If they remain in the closet, they are certainly circumspect.Koba the Dread -> buttmint , Aug 21, 2017 1:45 AM
...all ZHers owe themselves trek to Mother India, quite a head turning experience. One comes to appreciate the West's "can-do philosophy."
This approach to problem solving is in small measure in India. India's fine burgeoning medical capital in Chennai (old Madraas) is a testament to talented Indians being schooled in Occidental universities and then returned to Mother India to set up shop. In many ways, India will lead the West OUT of their self-imposed medical nemesis. There is much progress in India. All Indians love to ORATE. You betcha, they stand on the corner and begin lecturing. A much better approach than USA's 535 idiots and grifters that make up the US Congress.
My own hunch is that India will eclipse the remarkable progress of China. Stay tuned as the world squirms.....Oh regional Indian -> Koba the Dread , Aug 21, 2017 2:54 AM
Hunches are like hunchbacks: I don't want either one of them to ring my bells. After over fifty years of visiting and doing business in India, I go no more. While I love the people there, the country has become an abyss I no longer wish to stare into.Ayreos -> Oh regional Indian , Aug 21, 2017 3:51 AM
Unfortunately, it has become quite the living hell....
Western model of development + rampant corruption + poor engineering standards have made this a hotch-potch of a rending screech of a marriage between east and west....Kobe Beef -> Ayreos , Aug 21, 2017 5:20 AM
Perhaps it's time to admit Indians got a chance to take their country back and move their society forward, seen through nationalist Gandhi, but Indians neither want nor understand the concept of moving forward.
Without the "western model of development" there would be no development in India for millennia.misnomer00 -> Kobe Beef , Aug 21, 2017 7:09 AM
Without the Aryan colonization/admixture of many millennia ago, there would never have been any civilization on the Indian Subcontinent.
The Second Aryan invasion (ie British colonialism) left barely enough behind to last more than the coming century.
The differing subspecies of hominids are neither fungible nor equal . But there is huge amount of paper profits to be derived from pretending otherwise. There is a lot of ruin to be extracted from the Commons. At home, The African Equality Racket has garnered trillions so far, with no sign of stopping. Abroad, The Afghan Equality Racket has garnered trillions so far, with no sign of stopping. No signs of progress with either hominid population. And yet, we still have people arguing that culture is somehow separate from biology.
But back to the topic at hand..
Prediction: India returns to barbarism and warring superstitions.Kobe Beef -> misnomer00 , Aug 21, 2017 10:17 AM
Aryan is a word found only in sanskrit and no other indo euro language so you can go and suck some aryan dickAnother regiona... -> Kobe Beef , Aug 21, 2017 1:05 PM
Yes, Sanskrit is an Aryan language. There are a whole host of others, owing to The White Man's far-ranging conquest of primitive hominids. Or homos, in your case, cocksucker. Maybe your great great 15 grandmother appeared human enough to serve as a concubine.
And the Buddha had blue eyes.
Yet here you are trying to insult a White Man,
on the White Man's tech,
in the White Man's language.
Bixnood, faggot. You don't matter, and never did.asstrix -> Ayreos , Aug 21, 2017 5:21 AM
Sanskrit is an aryan language? Then explain to me one thing. The rig veda (the oldest agreed upon text written in sanskrit) is centered around worshipping the river saraswati. And the river saraswati dried upon before/around 1900 B.C and aryans 'came' to india in 1700 B.C. Second....if sanskrit was foreign in origin, why havent we found anything equivalent to sanskrit in the 'aryan' nazi homelands? Indus valley civilisation had indoor plumbing, flush toilets, planned streets, sewage systems that took sewage away from individual homes out of the city. No civilisation that i am aware of had that at that time. Dont believe me? Read up about indus valley civilisation. They had it right until 'aryans' came. And then india went back to mud huts and shitting on streets.
As for buddha having blue eyes. turquoise was used to represent ancient famous people as it could be used to represent 'eyes' as it looked like 'eyes'. Thats why torqouise was used. And torqoise only comes in blue and white not in black and white even if it does its very rare. Blue and white is more easily available. That is why it was used. So it doesnt necessairly mean buddha or other famouse people's pictures or statues who had blue torqoise representing their eyers.....had blue eyes in real life.Another regiona... -> Oh regional Indian , Aug 21, 2017 4:16 AM
The western way of moving forward is about consuming, using up resources. Once the resources are gone, they have to find a new place to plunder, in order to again move forward.
The eastern culture is in general about living in a sustainable manner, in harmony with nature. Their way is more about trade and not war. This is why they got conquered so easily.
Now I can't say which is better. Plundering and moving forward or staying put and living in peace with nature. My only hope is that the easterners have enough of the western values already in them to not repeat the old mistakes again.Another regiona... -> Oh regional Indian , Aug 21, 2017 2:50 AM
Have you read the email i sent you?Tallest Skil -> doctor10 , Aug 20, 2017 9:40 PM
I sent a very important email to your email address 66zoltan, read it. Trust me its worth your time.Radical Marijuana -> doctor10 , Aug 21, 2017 12:08 AM
Reminder that Europe (((gave up))) the entire colored portion of the map above because Germany wanted a land corridor to East Prussia.Son of Captain Nemo , Aug 20, 2017 9:32 PM
The main obstacle to adopting superior memes is that those require Superior murder systems to back them up ...DemandSider -> Son of Captain Nemo , Aug 21, 2017 1:05 AM
"...the hope among people in the World Bank, the IMF, and other armchair intellectuals was that once the correct incentives were in place and institutions were organized, these structures imposed from on high would put the third world on a path to perpetual growth. They couldn't have been more wrong..."
Anyone who tracked the likes of Hans Adler a German/Brazilian Jew who worked for the World Bank in the 60s and 70s and who I studied under at George Mason University in the 80s knows that the "Latifundio/Minifundio" land tenure structure was the mechanism and means to exploit the gold fillings "literally" out of the mouths of the natives that owned and tended their lands throughout Latin America from the 40s through the 80s doing what the World Bank and IMF always has done it's best to get the multinationals in to take over the most important arable land for exploitation through "incentivized" loan deals that ended up robbing them of all their ownership for worthless "shit paper"!... Rinse and repeat for the "model" used everywhere else especially Middle Eastern oil.
John Perkins solidified it in his work "Confessions of an Economic Hit Man" 25 years later...
Too little too late I'm afraid. Only wish there were many more like him!The Cooler King , Aug 20, 2017 9:23 PM
I only wish Perkins had explained the role of the dollar. This book,
'The Hidden Hand of American Hegemony' 'Petrodollar Recycling and International Markets' explains that better. He does explain how The IMF and World Bank keep them in line with debt, though.Moe Hamhead -> The Cooler King , Aug 20, 2017 9:30 PM
"There are easily a billion or more people today, who have no concept of either the pipe or the wheel"
But they can balance a mean jug of water on their head, which makes make them perfect candidates to GET RICH buying cryptos!DjangoCat -> The Cooler King , Aug 20, 2017 10:06 PM
Obummer removed Churchill's bust from the Oval office! He was offended by his graven image. I recall that it has since been brought back.Advoc8tr -> The Cooler King , Aug 21, 2017 12:40 AM
Read em and weep.Rebelrebel7 , Aug 20, 2017 9:31 PM
Make that a billion + 1 ... cryptos are the new wheel, pipe, internet.Haitian Snackout -> Rebelrebel7 , Aug 20, 2017 10:34 PM
It looks like someone put the teachers in charge of Wikipedia! It used to be a very accurate source of information! I have recently been finding extreme errors on it and never have until about a month ago! I believe that universities feel threatened by It! This info please chart is correct and the Wikipedia chart is incorrect!
https://en.m.wikipedia.org/wiki/Party_divisions_of_United_States_CongressesRebelrebel7 -> Haitian Snackout , Aug 20, 2017 11:25 PM
It is and always has been a front. But like many other things, it contains the lie and the truth together. The lie at the top of the page and the truth at the bottom. See if you can take it from there. That's the only clue I will offer today. Best of luck!Koba the Dread -> Rebelrebel7 , Aug 21, 2017 1:50 AM
Well, it wasn't that way previously, however, the lie on top and truth on the bottom would be congruent with the way that the establishment and media operate, without question!Farmerz , Aug 20, 2017 9:30 PM
Pal, if you never found errors in Wikipedia until a month ago, I must presume that you started to learn to read about a month ago.
Question: If one is dead dumb stupid and ignorant, how would one know whether a Wikipedia article is true or false?Jason T , Aug 20, 2017 9:49 PM
I'm making over 7k a month selling new lead free head jugs to turd worlders.TuPhat -> Jason T , Aug 20, 2017 11:20 PM
WOW... excellent post!Koba the Dread -> TuPhat , Aug 21, 2017 1:53 AM
I agree, except for the part about the internet being responsible for wealth. That part is garbage. Internet wealth is non productive and eventually a drain on any economy.Entitled_TD , Aug 20, 2017 9:56 PM
How can you say that. Some toad earlier in the comments said he is making 7k a month from the internet. Doubting him is like doubting a Wikipedia article.armageddon addahere -> Entitled_TD , Aug 20, 2017 11:27 PM
Patronizing views on these "3rd world" areas or whatever you may call them...Whatever you say and no matter if you are 100% right about the differences in culture, there is no escaping the fact that these people were "fine" before europeans came along and fucked them up. Cultural relativism is 100% true in this case. Doesn't matter if they were raping babies or whatever, that is their culture and has nothing to do with ours. It was our bullshit christianity and culture that gave us the bullshit rationale to destroy whatever existing cultures we found. So what if they wouldn't have come up with the wheel, plumbing, or the internet - that gave europeans no right to do whatever they wanted wherever they wanted. Hard truth for you pos ZHers to swallow, but no way around it. And the funny thing is now you have the gall to say that these other cultures are destroying ours! HAHAHAHAHAHAHA! Payback is a Bitch!Advoc8tr -> Entitled_TD , Aug 21, 2017 12:49 AM
So you must be happy we corrected the error by leaving, more than 50 years ago. And now they have gone back to being "fine".Yen Cross , Aug 20, 2017 9:59 PM
How do you figure that conclusion ? In THEIR cultures 'might makes right' so by invading and subjugating "we" were playing by their rules. It is hypocritical on our part but only because we deny our history and the reality of superiority (in terms of industrialisation and military strength etc) in preference for politically correct feel-good lies.DjangoCat , Aug 20, 2017 10:02 PM
Hopefully Bill Gates fossilizes in his doomsday bunker.Koba the Dread -> DjangoCat , Aug 21, 2017 2:00 AM
Read "The Confessions of an Economic Hit Man". IMF, USAID and BIS have worked in unison to rape and pillage the "Third World"
This is not a problem of the colonies falling apart, it is a problem of deliberate overselling of debt with a side of mandated privatisation, followed by ruin and sale of government assets, followed by grinding povery and tax to pay the interest on the ever climbing debt.
This is a system of overt debt slavery disguised as aid.
I think this piece is white wash propaganda. Tylers??Scanderbeg , Aug 20, 2017 10:28 PM
Well said, Cat! The occupying nations left a cadre of native criminals behind to enslave their countrymen. The cadre of native criminals take their cut and pass the rest uphill to London, Paris or New York. They call it "Independence"! Sort of like what happened in the new United States of America where farmers and artisans fought for freedom from Great Britain and New York, Massachusetts and Virginia aristocrats took over the country.Oh regional Indian -> Scanderbeg , Aug 20, 2017 10:40 PM
Of course he omits the most important reason. It doesn't need to be this complicated.
They are simply dumber than whites and E. Asians. Inbreeding is common in ME countries and Pakistan for example has an average IQ of around 70. In Sub Saharan Africa it is only 65 which means they are effectively retarded.
I read a story recently that a tanker overturned on the road in Pakistan and several hundred people were blown up while trying to siphon the gas.
Now that's fucking stupid. Something like that would never happen in a Western country.
Every presumption of SJW's is based on insane lie that all groups and races are intrinsicly equal intellectually. This is clearly not the case though of course there are some exceptions.
The left wanted to crucify the geneticist James Watson merely for suggesting this was the case.Scanderbeg -> Oh regional Indian , Aug 20, 2017 11:08 PM
You need to read up on a litle history my friend..... your post is ignorant at so many levels, it's laughable. The number of highly advanced concepts that were stolen from the east over the centuries is legion. India and the ME were the root of all great kowledge, astrology, astronomy, metallurgy (Damascus steel came from India), mathematics (ZEro came from India)......
Whites were shitting on the streets and eating their dead not 300 years ago.
Jhonny come lately with a gun, get it? And all your scientific wonders are toxic to the world and humans. All of them, including your "medicine"....
We don't need any tips from people who are still figuring out how to poo in the loo dindu. Come back and complain about western medicine when you have a real problem and you'll be begging for it. The third world is lucky we humor them. The insane population growth is because of bleeding hearts supplying food and medicine to places like Africa. The west has been dominating the world and international trade since the late 1400's. Most technology is spread through diffusion and the west proved to be the best and most open society to synthesize new ideas. That being said western culture is based in the Greco Roman intellectual tradition and Christianity. It has nothing to do with the your barbaric country which the British defeated and colonized easily.
IQ differences by race and region are a scientific fact and that data is easily available. Even India which is considered "smart" by most laymen is around 80 where as the average on Western countries is around 100.
Aug 20, 2017 | www.moonofalabama.org
Posted by: From The Hague | Aug 20, 2017 3:55:12 AM | 96What's the purpose of the "escalation"? Why escalate in Afghanistan? What has happened recently to require such an escaltion?
The US doesn't like Russia. So it doesn't like the Shanghai Cooperation Organisation (SCO). India and Pakistan joined SCO as full members on 9 June 2017 in Astana, Kazakhstan.
Afghanistan is at the border of this giant Eurasian political, economic, and security organisation: https://en.wikipedia.org/wiki/Shanghai_Cooperation_Organisation#/media/File:SCO_(orthographic_projection).svg
Jul 28, 2017 | marknesop.wordpress.com
Cortes , July 22, 2017 at 12:21 pmAnother scandal is the deteriorating public health situation in Banderastan.yalensis , July 22, 2017 at 2:01 pm
Do none of the "leaders" have even a smidgeon of shame over the disgraceful dismantling of a system built on lessons learned over two hundred years of advances in measures to improve public health?
Disgusting doesn't come close to summing up the effects of the "reforms.""Unfortunately, experts say that Ukrainian-American health minister Ulana Suprun, who replaced Kvitashvili in April 2016, is too busy lobbying for the closure of hospitals and clinics to pay attention to the looming crisis."
Suprun is the one we talked about before, the offspring of a Canadian Banderite family.
Dubious that her conscious goal is to destroy the Ukrainian people; but in essence, that's what she is doing, brought on by a false ideology.
Jul 28, 2017 | marknesop.wordpress.com
cartman , July 23, 2017 at 11:38 amG7 Ambassadors Support Cutting of Pensions in the Ukrainemarknesop , July 23, 2017 at 12:13 pmSo when you cut through all the steam and the boilerplate, how do they plan to do it so it's fairer to poor Ukrainians, but the state spends less?Cortes , July 23, 2017 at 4:18 pm
Ah. They plan to raise the age at which you qualify for a pension , doubtless among other money-savers. If the state plays its cards right, the target demographic wil work all its adult life and then die before reaching pensionable age. But as usual, we must be subjected to the usual western sermonizing about how the whole initiative is all about helping people and doing good.
This is borne out in one of the other 'critical reforms' the IMF insisted upon before releasing its next tranche of 'aid' – a land reform act which would allow Ukraine to sell off its agricultural land in the interests of 'creating a market'. Sure: as if. Land-hungry western agricultural giants like Monsanto are drooling at the thought of getting their hands on Ukraine's rich black earth plus a chink in Europe's armor against GMO crops. Another possible weapon to use against Russia would be the growing of huge volumes of GMO grain so as to weaken the market for Russian grains.And pollution of areas of Russian soil from blown in GMO seeds. Creating facts on the ground.Patient Observer , July 24, 2017 at 4:18 amAnother element of the plan to reduce pension obligations is the dismantling of whatever health care system that remain in the Ukraine. That is a twofer – save money on providing medical services and shortening the life span. This would be another optimization of wealth generation for the oligarchs and for those holding Ukraine debt.Jen , July 24, 2017 at 5:03 amI can just see Ukrainian health authorities giving away free cigarettes to patients and their families next!yalensis , July 24, 2017 at 2:30 pm
That remark was partly facetious and partly serious: life these days in the Ukraine sounds so surreal that I wouldn't put it past the Ministry of Healthcare of Ukraine to come up with the most hare-brained "reform" initiatives.Nine out of ten doctors recommend Camels.Patient Observer , July 24, 2017 at 6:09 pm
The other one doctor is a woman, who smokes Virginia Slims.
I recall a news story about the adverse effects of a reduction in smoking on the US Social Security Trust Fund. Those actuaries make those calculations for a living. The trouble with shortening life spans via cancer is that end-of-life treatment tends to be very expensive unless people do not have or have very basic health insurance, then there is a likely net gain. Alcohol, murder and suicides are generally much more efficient economically. I just depressed myself.kirill , July 24, 2017 at 8:09 pmSomething does not add up. Any government expenditure is an economic stimulus. The only potentially negative aspect is taxation. Since taxation is not excessive and in fact too small on key layers (e.g. companies and the rich), there is no negative aspect to government spending on pensions. So we have here narrow-definition accounting BS.Jen , July 25, 2017 at 4:56 amAgree that in a world where the people, represented by their governments, are in charge of money creation and governments ran their financial systems independently of Wall Street and Washington, any government spending would be welcomed as stimulating economic production and development. The money later recirculates back to the government when the people who have jobs created by government spending pay the money back through purchases of various other government goods and services or through their taxes.marknesop , July 25, 2017 at 9:18 am
But in capitalist societies where increasingly banks are becoming the sole creators and suppliers of money, government spending incurs debts that have to be paid back with interest. In the past governments also raised money for major public projects by issuing treasury bonds and securities but that doesn't seem to happen much these days.
Unfortunately also Ukraine is surviving mainly on IMF loans and the IMF certainly doesn't want the money to go towards social welfare spending.In fact, the IMF specifically intervenes to prevent spending loan money on social welfare, as a condition of extending the loan. That might have been true since time out of mind for all I know, but it certainly was true after the first Greek bailout, when leaders blew the whole wad on pensions and social spending so as to ensure their re-election. They then went sheepishly back to the IMF for a second bailout. So there are good and substantial reasons for insisting the loan money not be wasted in this fashion, as that kind of spending customarily does not generate any meaningful follow-on spending by the recipients, and is usually absorbed by the cost of living.Patient Observer , July 25, 2017 at 7:07 pm
But as we are all aware, such IMF interventions have a definite political agenda as well. In Ukraine's case, the IMF with all its political inveigling is matched against a crafty oligarch who will lift the whole lot if he is not watched. Alternatively, he might well blow it all on social spending to ensure his re-election, thus presenting the IMF with a dilemma in which it must either continue to support him, or cause him to fall.In an economy based on looting, it makes perfect sense. Money flows only one way until its all gone.
Jul 28, 2017 | marknesop.wordpress.com
marknesop , July 25, 2017 at 9:59 amHa, ha, ha!!! "Russia seems to have corrupted rational conversation about foreign policy"!!! I couldn't believe it – that suety smug dick Tucker was doing so well, but he had to blame Russia for the fact that the United States made up so many things that Russia allegedly did, but in fact did not. The reflex was just too strong.
You could almost hear heads exploding in Washington, too, when she said "Our so-called allies like Saudi Arabia, Turkey and Qatar "
Jul 20, 2017 | "https://marknesop.wordpress.com/2017/07/03/the-credibility-gap-that-ought-to-be/comment-page-6/#comment-175430"> marknesop.wordpress.com
Moscow Exile says: July 19, 2017 at 3:35 am The United States has almost tripled the cost of metallurgical coal for the Ukraine compared to 2016 (report of U.S. Department of Energy). In January-March 2017 Kiev bought coal at $206 per tonne, and a year earlier the price was $71 dollars. The volume of supply has increased from 355 thousand to 865 thousand tons over the same period this year the value of American coal for some countries has declined. In particular, Norway has purchased the fuel at $125 per ton, a year, and earlier for $140.
Who can answer the question why the Junta pays nearly twice the price for the same coal pay.
See: ,a href="http://mikle1.livejournal.com/7700305.html">Межгосударственная угольная коррупция
Interstate coal corruption
Тлеющая дружба: США почти в три раза увеличили цены на уголь для Украины в 2017 году
Smouldering friendship: up to 2017 the United States has almost threefold increased the price of coal for the Ukraine
Jun 11, 2017 | economistsview.typepad.com
anne , June 09, 2017 at 03:38 PMhttp://voxeu.org/article/countering-mining-curseanne - , June 09, 2017 at 03:43 PM
June 9, 2017
Countering the mining curse
By Nicolas Berman, Mathieu Couttenier, Dominic Rohner, and Mathias Thoenig
Countries that are rich in natural resources do not always prosper economically. This column uses data on conflict and mineral extraction in Africa to argue that recent rises in mineral prices explain up to a quarter of local conflicts between 1997 and 2010. Mining-induced violence is associated with foreign ownership, although corporate social responsibility policies were associated with less violence. This is relevant to the US debate on whether to scrap the legal requirement to disclose whether products contain conflict minerals....
In particular, our results show that mining-induced violence was associated mainly with foreign ownership. Nevertheless, among foreign-owned companies, the ones that operated in the least corrupt countries, and the ones that had corporate social responsibility policies were associated with less violence....https://www.aeaweb.org/articles?id=10.1257/aer.20150774anne - , June 09, 2017 at 04:58 PM
This Mine Is Mine! How Minerals Fuel Conflicts in Africa
By Nicolas Berman, Mathieu Couttenier, Dominic Rohner, and Mathias Thoenig
We combine georeferenced data on mining extraction of 14 minerals with information on conflict events at spatial resolution of 0.5 degree x 0.5 degree for all of Africa between 1997 and 2010. Exploiting exogenous variations in world prices, we find a positive impact of mining on conflict at the local level. Quantitatively, our estimates suggest that the historical rise in mineral prices (commodity super-cycle) might explain up to one-fourth of the average level of violence across African countries over the period. We then document how a fighting group's control of a mining area contributes to escalation from local to global violence. Finally, we analyze the impact of corporate practices and transparency initiatives in the mining industry.The entire paper is available:anne - , June 09, 2017 at 05:27 PM
However, I have only read the abstract and conclusion so far. I will read the entire paper carefully. An assertion that surprised me and for which I have no intuitive explanation is made in the summary:
"In particular, our results show that mining-induced violence was associated mainly with foreign ownership...."Kofi Annan is right - the world's multinationals are abusing transfer pricing to shift the economic rents from these African mines to tax havens in places like Switzerland....Gibbon1 - , June 09, 2017 at 08:52 PM
[ Perfect, describe the process simply and with no judgmental language so that the process is made clear. No jargon. Understanding before any judgement. ]Leaders of African countries indeed can resist multinationals. All they have to do is refuse bribes and survive attempts by the CIA, the State Department, and thugs hired by the multinationals to have them killed. And after succeeding then can then try and manage their countries economy while cut off from the world banking system.Christopher H. - , June 09, 2017 at 11:46 PM
Jun 09, 2017 | www.amazon.com
It was during the spring of 2006 that I began this project. I wanted to investigate whether the growing volume of criticism toward Russia, sometimes by people who could hardly claim to be knowledgeable about the country, concealed a political agenda.
As I researched the subject, I discovered evidence of Russophobia shared by different circles within the American political class and promoted through programs and conferences at various think tanks, congressional testimonies, activities of NGOs, and the media. Russophobia is not merely a critique of Russia, but a critique beyond any sense of proportion, waged with the purpose of undermining the nation's political reputation.
... ... ....
Although a critical analysis of Russia and its political system is entirely legitimate, the issue is the balance of such analysis. Russia's role in the world is growing, yet many U.S. politicians feel that Russia doesn't matter in the global arena. Preoccupied with international issues, such as Iraq and Afghanistan, they find it difficult to accept that they now have to nego- tiate and coordinate their international policies with a nation that only yesterday seemed so weak, introspective, and dependent on the West. To these individuals, Russophobia is merely a means to pressure the Kremlin into submitting to the United States in the execution of its grand plans to control the world's most precious resources and geostrategic sites. In the meantime, Russia has grown increasingly resentful, and the war in the Caucasus in August 2008 has demonstrated that Russia is prepared to act unilaterally to stop what it views as US unilateralism in the former Soviet region.
And some in Moscow are tempted to provoke a much greater confrontation with Western states. The attitude of ignorance and self-righteousness toward Russia tells us volumes about the United States' lack of preparation for the twenty-first century's central challenges that include political instability, weapons proliferation, and energy insecurity. Despite the dislike of Russia by a considerable number of American elites, this attitude is far from universally shared. Many Americans understand that Russia has gone a long way from communism and that the overwhelming support for Putin's policies at home cannot be adequately explained by high oil prices and the Kremlin's manipulation of the public-despite the frequent assertions of Russophobic observers.
Balanced analysts are also aware that many Russian problems are typical difficulties that nations encounter with state-building, and should not be presented as indicative of Russia's "inherent drive" to autocracy or empire. As the United States and Russia move further to the twenty-first century, it will be increasingly important to redefine the relationship between the two nations in a mutually enriching way.
Political and cultural phobias are, of course, not limited to those of an anti-Russian nature. For instance, Russia has its share of America-phobia -- a phenomenon that I have partly researched in my book Whose World Order (Notre Dame, 2004) and in several articles. Anti-American attitudes are strongly present in Russian media and cultural products, as a response to the US policies of nuclear, energy, and military supremacy in the world. Extreme hegemonic policies tend to provoke an extreme response, and Russian nationalist movements and often commentators react harshly to what they view as unilateral encroachment on Russia's political system and foreign policy interests. Russia's reactions to these policies by the United States are highly negative and frequently inadequate, but hardly more extreme than the American hegemonic and imperial discourse.
The Anti-Russian LobbyWhen the facile optimism was disappointed, Western euphoria faded, and Russophobia returned ... The new Russophobia was expressed not by the governments, but in the statements of out-of-office politicians, the publications of academic experts, the sensational writings of jour- nalists, and the products of the entertainment industry. (Rodric Braithwaite, Across the Moscow River, 2002)1
....Russophobia is not a myth, not an invention of the Red-Brovvns, but a real phenomenon of political thought in the main political think tanks in the West . .. [T]he Yeltsin-Kozyrev's pro-U.S. "giveaway game" was approved across the ocean. There is reason to say that the period in ques- tion left the West with the illusion that Russia's role was to serve Washington's interests and that it would remain such in the future. (Sergei Mikoyati, International Affairs /October 2006j)2
This chapter formulates a theory of Russophobia and the anti-Russian lobby's influence on the U.S. Russia policy. 1 discuss the Lobby's objec- tives, its tactics to achieve them, the history of its formation and rise to prominence, and the conditions that preserved its influence in the after- math of 9/11.1 argue that Russophobia has been important to American hegemonic elites in pressuring Russia for economic and political conces- sions in the post-Cold War era.
1. Goals and Means
The central objective of the Lobby has been to preserve and strengthen America's power in the post-Cold War world through imperial or hegemonic policies. The Lobby has viewed Russia with its formidable nuclear power, energy reserves, and important geostrategic location as a major obstacle in achieving this objective. Even during the 1990s, when Russia looked more like a failing state3 than one capable of projecting power, some members of the American political class were worried about the future revival of the Eurasian giant as a revisionist power. In their percep- tion, it was essential to keep Russia in a state of military and economic weakness-not so much out of emotional hatred for the Russian people and their culture, but to preserve American security and promote its val- ues across the world. To many within the Lobby, Russophobia became a useful device for exerting pressures on Russia and controlling its policies. Although to some the idea of undermining and, possibly, dismembering Russia was personal, to others it was a necessity of power dictated by the realities of international politics.
According to this dominant vision, there was simply no place in this "New American Century" for power competitors, and America was destined eventually to assume control over potentially threatening military capabilities and energy reserves of others. As the two founders of the Project for the New' American Century (PNAC), William Kristol and Robert Kagan, asserted when referring to the large military forces of Russia and China, "American statesmen today ought to recognize that their charge is not to await the arrival of the next great threat, but rather to shape the international environment to prevent such a threat from arising in the first place."4
Russia was either to agree to assist the United States in preserving its world-power status or be forced to agree. It had to either follow the U.S. interpretation of world affairs and develop a political and economic system sufficiently open to American influences or live as a pariah state, smeared by accusations of pernicious behavior, and in constant fear for its survival in the America-centered world. As far as the U.S. hegemonic elites were concerned, no other choice was available.
This hegemonic mood was largely consistent with mainstream ideas within the American establishment immediately following the end of the Cold War. For example, 1989 saw the unification of Germany and the further meltdown of the Soviet Union, which some characterized as "the best period of U.S. foreign policy ever."5 President Jimmy Carter's former national security advisor Zbigniew Brzezinski envisioned the upcoming victory of the West by celebrating the Soviet Union's "grand failure."6
In his view, the Soviet "totalitarian" state was incapable of reform. Communism's decline was therefore irreversible and inevitable. It would have made the system's "practice and its dogma largely irrelevant to the human conditions," and communism would be remembered as the twentieth century's "political and intellectual aberration."7 Other com- mentators argued the case for a global spread of Western values. In 1990 Francis Fukuyama first formulated his triumphalist "end of history" thesis, arguing a global ascendancy of the Western-style market democracy.®
... ... ...
Marc Plattner declared the emergence of a "world with one dominant principle of legitimacy, democracy."9 When the Soviet system had indeed disintegrated, the leading establishment journal Foreign Affairs pronounced that "the Soviet system collapsed because of what it was, or more exactly, because of what it was not. The West 'won' because of what the democracies were-because they were free, prosperous and successful, because they did justice, or convincingly tried to do so."10 Still others, such as Charles Krauthammer, went as far as to proclaim the arrival of the United States' "unipolar moment," a period in which only one super- power, the United States, would stand above the rest of the world in its military, economic, and ideological capacity.11
In this context of U.S. triumphalism, at least some Russophobes expected Russia to follow the American agenda. Still, they were worried that Russia may still have surprises to offer and would recover as an enemy.12
Soon after the Soviet disintegration, Russia indeed surprised many, although not quite in the sense of presenting a power challenge to the United States. Rather, the surprise was the unexpectedly high degree of corruption, social and economic decay, and the rapid disappointment of pro-Western reforms inside Russia. By late 1992, the domestic economic situation was much worsened, as the failure of Western-style shock ther- apy reform put most of the population on the verge of poverty. Russia was preoccupied not with the projection of power but with survival, as poverty, crime, and corruption degraded it from the status of the indus- trialized country it once was. In the meantime, the economy was largely controlled by and divided among former high-ranking party and state officials and their associates. The so-called oligarchs, or a group of extremely wealthy individuals, played the role of the new post-Soviet nomenklatura; they influenced many key decisions of the state and suc- cessfully blocked the development of small- and medium-sized business in the country.13 Under these conditions, the Russophobes warned that the conditions in Russia may soon be ripe for the rise of an anti-Western nationalist regime and that Russia was not fit for any partnership with the United States.14
The mid-1990s saw the emergence of post-Soviet Russophobia. The Lobby's ideology was not principally new, as it still contained the three central myths of Sovietophobia left over from the Cold War era: Russia is inherently imperialist, autocratic, and anti-Western. This ideology now had to be modified to the new conditions and promoted politically, which required a tightening of the Lobby's unity, winning new allies within the establishment, and gaining public support.15
... ... ...
The impact of structural and institutional factors is further reinforced by policy factors, such as the divide within the policy community and the lack of presidential leadership. Not infrequently, politicians tend to defend their personal and corporate interests, and lobbying makes a difference in the absence of firm policy commitments.
Experts recognize that the community of Russia watchers is split and that the split, which goes all the way to the White House, has been responsible for the absence of a coherent policy toward the country. During the period of 2003-2008, Vice President Richard Dick Cheney formed a cohesive and bipartisan group of Russia critics, who pushed for a more confrontational approach with the Kremlin. The brain behind the invasion of Iraq, Cheney could not tolerate opposition to what he saw as a critical step in establishing worldwide US hegemony. He was also harboring the idea of controlling Russia's energy reserves.91
Since November 2004, when the administration launched a review of its policy on Russia,92 Cheney became a critically important voice in whom the Lobby found its advocate. Secretaries of State Condoleezza Rice and, until November 2004, Colin Powell opposed the vice president's approach, arguing for a softer and more accommodating style in relations with Moscow.
President Bush generally sided with Rice and Powell, but he proved unable to form a consistent Russia policy. Because of America's involvement in the Middle East, Bush failed to provide the leadership committed to devising mutually acceptable rules in relations with Russia that could have prevented the deterioration in their relationship. Since the end of 2003, he also became doubtful about the direction of Russia's domestic transformation.93 As a result, the promising post-9/11 cooperation never materialized. The new cold war and the American Sense of History
It's time we start thinking of Vladimir Putin's Russia as an enemy of the United States. (Bret Stephens, "Russia: The Enemy," The Wall Street Journal, November 28, 2006)
If today's reality of Russian politics continues ... then there is the real risk that Russia's leadership will be seen, externally and internally, as illegitimate. (John Edwards and Jack Kemp, "We Need to Be Tough with Russia," International Herald Tribune, July 12, 2006)
On Iran, Kosovo, U.S. missile defense, Iraq, the Caucasus and Caspian basin, Ukraine-the list goes on-Russia puts itself in conflict with the U.S. and its allies . . . here are worse models than the united Western stand that won the Cold War the first time around.
("Putin Institutionalized," The Wall Street Journal, November 19, 2007) In order to derail the U.S.-Russia partnership, the Lobby has sought to revive the image of Russias as an enemy of the United States. The Russophobic groups have exploited important differences between the two countries' historical self-perceptions, presenting those differences as incompatible.
1. Contested History
Two versions of history
The story of the Cold War as told from the U.S. perspective is about American ideas of Western-style democracy as rescued from the Soviet threat of totalitarian communism. Although scholars and politicians disagreed over the methods of responding to the Soviet threat, they rarely questioned their underlying assumptions about history and freedom.' It therefore should not come as surprise that many in the United States have interpreted the end of the Cold War as a victory of the Western freedom narrative. Celebrating the Soviet Union's "grand failure"-as Zbigniew Brzezinski put it2-the American discourse assumed that from now on there would be little resistance to freedom's worldwide progression. When Francis Fukuyama offered his bold summary of these optimistic feelings and asserted in a famous passage that "what we may be witnessing is not just the end of the Cold War... but the end of history as such,"3 he meant to convey the disappearance of an alternative to the familiar idea of free- dom, or "the universalization of Western liberal democracy as the final form of human government."4
In Russia, however, the Cold War story has been mainly about sovereignty and independence, rather than Western-style liberalism. To many Russians it is a story of freedom from colonization by the West and of preserving important attributes of sovereign statehood.
In a world where neocolonialism and cultural imperialism are potent forces, the idea of freedom as independence continues to have strong international appeal and remains a powerful alternative to the notion of liberal democracy. Russians formulated the narrative of independence centuries ago, as they successfully withstood external invasions from Napoleon to Hitler. The defeat of the Nazi regime was important to the Soviets because it legitimized their claims to continue with the tradition of freedom as independence.
The West's unwillingness to recognize the importance of this legitimizing myth in the role of communist ideology has served as a key reason for the Cold War.5 Like their Western counterparts, the Soviets were debating over methods but not the larger assumptions that defined their struggle.
This helps to understand why Russians could never agree with the Western interpretation of the end of the Cold War. What they find missing from the U.S. narrative is the tribute to Russia's ability to defend its freedom from expansionist ambitions of larger powers. The Cold War too is viewed by many Russians as a necessarily defensive response to the West's policies, and it is important that even while occupying Eastern Europe, the Soviets never celebrated the occupation, emphasizing instead the war vic- tory.6 The Russians officially admitted "moral responsibility" and apolo- gized for the Soviet invasions of Hungary and Czechoslovakia.7 They may be prepared to fully recognize the postwar occupation of Eastern Europe, but only in the context of the two sides' responsibility for the Cold War. Russians also find it offensive that Western VE Day celebrations ignore the crucial contribution of Soviet troops, even though none of the Allies, as one historian put it, "paid dearer than the Soviet Union for the victory. Forty Private Ivans fell in battle to every Private Ryan."8 Victory over Nazi Germany constitutes, as another Russian wrote, "the only undisputable foundation of the national myth."9
If the two sides are to build foundations for a future partnership, the two historical narratives must be bridged. First, it is important to recognize the difficulty of negotiating a common meaning of freedom and accept that the idea of freedom may vary greatly across nations. The urge for freedom may be universal, but its social content is a specific product of national his- tories and local circumstances. For instance, the American vision of democracy initially downplayed the role of elections and emphasized selection by merit or meritocracy. Under the influence of the Great Depression, the notion of democracy incorporated a strong egalitarian and poverty-fighting component, and it was not until the Cold War- and not without its influence-that democracy has become associated with elections and pluralistic institutions.10 Second, it is essential to acknowledge the two nations' mutual respon- sibility for the misunderstanding that has resulted in the Cold War. A historically sensitive account will recognize that both sides were thinking in terms of expanding a territorial space to protect their visions of security. While the Soviets wanted to create a buffer zone to prevent a future attack from Germany, the Americans believed in reconstructing the European continent in accordance with their ideas of security and democracy. A mutual mistrust of the two countries' leaders exacerbated the situation, making it ever more difficult to prevent a full-fledged political confronta- tion. Western leaders had reason to be suspicious of Stalin, who, in his turn, was driven by the perception of the West's greed and by betrayals from the dubious Treaty of Versailles to the appeasement of Hitler in Munich. Arrangements for the post-World War II world made by Britain, the USSR, and the United States proved insufficient to address these deep-seated suspicions.
In addition, most Eastern European states created as a result of the Versailles Treaty were neither free nor democratic and collaborated with Nazi Germany in its racist and expansionist policies. The European post-World War 1 security system was not working properly, and it was only a matter of time before it would have to be transformed.
Third, if an agreeable historical account is to emerge, it would have to accept that the end of the Cold War was a product of mutually beneficial a second Cold War, "it also does not want the reversal of the U.S. geopolitical gains that it made in the decade or so after the end of the Cold War."112 Another expert asked, "What possible explanation is there for the fact that today-at a moment when both the U.S. and Russia face the common enemy of Islamist terrorism-hard-liners within the Bush administration, and especially in the office of Vice President Dick Cheney, are arguing for a new tough line against Moscow along the lines of a scaled-down Cold War?"113
Yet another analyst wrote "at the Cold War's end, the United States was given one of the great opportunities of history: to embrace Russia, the largest nation on earth, as partner, friend, ally. Our mutual interests meshed almost perfectly. There was no ideological, territorial, his- toric or economic quarrel between us, once communist ideology was interred. We blew it. We moved NATO onto Russia's front porch, ignored her valid interests and concerns, and, with our 'indispensable-nation' arrogance, treated her as a defeated power, as France treated Weimar Germany after Versailles."114
Jun 03, 2017 | failedevolution.blogspot.gr... and how this is related mostly with the British, rather than with the German elections
Early this year we saw that Greece's creditors pushed the country to take measures even after the end of the "program", or, the Greek experiment if you like.
Latest developments led to the known scenery: Greece was pushed to take more measures for 2018 and 2019, the creditors promised a form of debt relief, but again, Alexis Tsipras didn't manage to take anything, except the usual hypocritical sympathy for Greece by some of the creditors in Europe. The roles are known: Wolfgang Schäuble has no problem to play the bad guy, and everyone else, including IMF, is hiding behind him.
We have repeatedly said that the representatives of the neoliberal Feudalism pretend that they have different positions concerning the unsolved puzzle of the Greek debt, while in reality, they do not care at all about "solving" it, but only to complete the neoliberal experiment in Greece to the last detail.
And, despite that only a few details are left for the completion of the Greek experiment, it is certain that the European Financial Dictatorship will keep the noose tight around Greece at least until the next national elections in 2019, where they hope that the neoliberal Right, New Democracy, will win.
Also, some Greek government officials expressed recently their optimism that Greece could return to the money markets during the summer with a viable interest rate, but our guess is that it won't happen, because this would give a certain degree of independence to Greece from the ECB and Draghi's liquidity injections.
The neoliberal priesthood knows that there is still a danger of a possible sudden interruption, and even reversal, of the Greek experiment, in case that Tsipras administration find an opportunity to make independent moves, away from the creditors' tight scrutiny, towards social policies and public investments. Then, their new 'model' for the whole eurozone, as they dream, could have been 'blown up'.
Many estimate that the German leadership deliberately postpones any discussion about the Greek debt issue until the German elections, hoping that the current political status quo won't change dramatically. In reality, we don't have to wait until then because it seems that the Left doesn't have any serious momentum that could break the sovereignty of the current political establishment. Therefore, not too many things are expected to change after the result of the German elections.
Instead, we should focus on the next crucial political event in Europe, the oncoming British elections. The rapid rise of Jeremy Corbyn brings additional heat the Brussels-Berlin axis. The Labour party under his leadership represents their worst nightmare. It would be a nightmare for them to see the motherland of neoliberalism start turning to social policies and massive nationalizations of key sectors.
A successful Britain under Jeremy Corbyn that would manage to give rebirth to the social state and hope to its citizens, could become an example for the Greek people (and others). A significant percentage of the Greek society already express quite negative feelings about the euro currency and even the EU itself. Imagine what would happen if the Greek people would realize that Britain (which is now out of the EU) under Corbyn is bringing back social policies at the same time when they experience the brutal neoliberal measures imposed by Greece's creditors.
That's why the European Financial Dictatorship will give nothing to Tsipras. He will be forced to take only further measures against the Greek society under tight scrutiny. The Brussels-Berlin axis will use him and throw him to the dustbin, hoping to replace him with a more secure puppet, like the neoliberal leader of New Democracy, Kyriakos Mitsotakis.
We can only hope for a miracle: that SYRIZA has realized that it's impossible to achieve a decent deal with the Troika (ECB, IMF, European Commission) mafia, and therefore, has built (at last) a plan for Grexit that will lead Greece to freedom.
May 19, 2017 | economistsview.typepad.com
JA, May 18, 2017 at 08:02 PMThe instrumental and transformation view of the benefits of imperialism is reflected in comments I once read by Charles deGaulle who, as I recall saw the massacre of the Gauls by Julius Caesar, and the integration of the Gauls into the Roman polity as an essential step towards the emergence of a modern Europe. [I wish I could find the reference].
An alternative and modern view is that imperialism and colonialism are unreservedly adverse for the "natives' in that it deprives them of the freedom to shape their own futures. So many of us from the old colonies would not agree that imperialism the best thing that happened to us. But this debate continues.
XXX, May 18, 2017 at 08:29 PMHe who pays the piper calls the tune.
I suspect that your citation is reasonably accurate, historically. What you are saying, sociologically, is that the Roman military conquests spread enabling technology. Well, it certainly is hard to suggest a counter-intuitive, except Jesus Christ.
May 18, 2017 | economistsview.typepad.com
Is "neo-imperialism" the only path to development? [ in the current circumstances]
libezkova, May 18, 2017 at 08:55 PMYes, in a sense, "the rise of Asia" was a side effect of global neoliberal revolution. So the key here not imperialism per ce, but neoliberalism. Unfortunately it is missing from "questions to be asked" list and that diminished the value of the article.
"(whence the origins of this transformation? the role of the nation-state and imperialism? the role of the bourgeois-led independence movements?)"
Neo-imperialism (or, more correctly, neocolonialism) is intrinsically connected with neoliberalism and, by extension, with "casino capitalism" -- oversized role of financial sector under neoliberalism as the rent extraction mechanism (via "debt slavery"). It uses instead of old-fashion occupation of the country, political and financial takeover the countries in crisis.
Installing compliant regime using the forces of internal "fifth column" of neoliberalism (which, is some cases, consists predominantly of former communists like happened in the USSR and China ;-). Actually, a step from communism to neoliberalism for Communist elite ("nomenklatura") was easy as neoliberalism is "Trotskyism for the rich." If necessary/possible it removes democratically elected governments from the power by claiming that election are falsified and the government is authoritarian (unlike the puppets they want to install).
After puppets came to power they mandate austerity, burden the country with debt most of which is stolen and repatriated to the West. The only new idea that neoliberals introduced in the old scenario of colonization is that the crisis for financial and political takeover can be manufactured and instead of psychical occupation of the colony you can use "comprador" regime and rule the country indirectly via financial mechanisms. This is the essence of Washington consensus.
That make neocolonialism more sustainable as the illusion of sovereignty is preserved. For example for all practical purposes Greece is now a colony. But armed struggle against occupation forces will not happen as there is no physical occupation forces in the country. They are all virtual ;-)
"Regime change" favorable to neoliberal globalization is what the idea of "color revolution" is about. It can occur even in the country that already has a brutal neocolonial neoliberal administration. Like was the case with Yanukovich regime in Ukraine. That means that we can't separate neocolonialism and neoliberal globalization. They are two sides of the same coin.
Also the development is not equivalent to the growth of GDP, even if we use purchase parity method of calculation of GDP. Standard of living of population and the growth of GDP can be detached under neoliberalism. Thay are not the same thing.
Simultaneously, like under classic imperialism, the population of the "host" county (the imperial power) suffers too, because it carries the increasing burden of maintaining and expanding of the empire. The current situation in the USA is clear example of this trend.
We also clearly see the attempts to lower the level of income to subsistence level in the USA (Wal-Mart), so this part of Marxism still have some validity. It looks like neoliberalism is not that interested in maintaining "worker aristocracy" in the "host" country. It might be replaced by upper strata of "guard labor" and "national security parasites".
Industrialization of China was an interesting historical event -- the result to three very improbable events.
1. Voluntarily conversion of China leadership of Communist Party to neoliberalism ( Deng Xiaoping theory "It doesn't matter whether a cat is white or black, as long as it catches mice." )
2. The USA successful attempt to play China against the USSR and Warsaw block.
3. The neoliberal revolution in the USA itself, which removed the idea of sharing profits with working class (New Deal Capitalism), and opened the path to outsourcing first manufacturing and then services to the low wage countries, making China a very lucrative target for the transfer of manufacturing and wage arbitrage. Timewise it corresponded with retirement of the managerial class which fought in WWII and replacement of this generation with more technocratic and more "neoliberally brainwashed" boomers.
Another interesting nuance is that out of "Asian tigers", only China can be viewed as nominally sovereign nation.
Other countries are to various degrees vassals of the USA. And that puts strict limits to their growth. Actually Trump election might be a signal to those nations: "know you place".
The idea that "Thus the seeds of the idea that imperialism may undermine class struggle in developed countries were sown and that had far reaching consequences." presuppose the working class, in classic Marxist tradition, has "revolutionary potential", the energy and the desire to overthrow the existing order.
This part of Marxism proved to be false. It was the social-democratic parties which were key to mobilizing workers.
This idea of the tremendous importance of the party for the modern society and that one party rule can stimulate economic development was actually inherited from Marxism by national socialism. Mussolini was a former prominent Italian social-democrat.
The "iron rule of oligarchy" also severely undermined the Marxist idea of "socialist state" and the possibility of the rule of working class (and democracy as a political system -- Göring: Oh, that is all well and good, but, voice or no voice, the people can always be brought to the bidding of the leaders. That is easy).
It is rumored that close to his death and seeing the emergence of "nomenklatura" as a new ruling class in the Soviet Russia Lenin exclaimed "My God, what we have done !".
May 19, 2017 | glineq.blogspot.comAs is well-known (or should be well-known) Marxism has gradually developed two approaches to imperialism. Marx's own position was (until the very last years of his life) essentially and unbendingly positive: imperialism, however brutal and disruptive, was the engine whereby more advanced social formation, namely capitalism, was introduced in and transformed more backward societies. Marx's own writings on the British conquest of India are fairly unambiguous in that respect. Engels' writings on the French conquest of Algeria are (as is usually the case when one compares Engels' and Marx's writing styles) even more "brutal". In that "classical" view, Western Europe, the United States and the "Third World" would all develop capitalistically, may relatively quickly come to the approximately same levels of development, and capitalism will then directly be replaced by socialism in all of them.
This view depended crucially on two assumptions: that (1) the Western working class remain at the low level of income (subsistence) which would then (2) assure its continued revolutionary fervor. Assumption (1) was common to all 19 th century economists, was supported until the mid-19 th century by the observed evidence, and Marx was not an exception. But towards the end of the century, Engels had noticed the emergence of "workers' aristocracy" which blunted the edge of class conflict in Britain, and possibly other advanced countries. The increase in wages was "fed", Engels argued, from colonial profits realized by British capitalists. Although the increases were mere "crumbs from capitalists' table" (Engels) they exploded the theory of the "iron law of wages" and, collaterally, the revolutionary potential of the working class in the West. Thus the seeds of the idea that imperialism may undermine class struggle in developed countries were sown and that had far reaching consequences.
Bill Warren's "Imperialism: Pioneer of Capitalism" (published in 1980; unfinished due to Warren's death) credits Lenin of the post-1914 vintage for the change (or rather criticizes him for it). In Lenin's "Imperialism " the monopoly capitalism having lost the vigor of free-market capitalism and having become "decrepit" was seen in need of foreign expansion (to maintain profits at earlier levels). This in turn led to imperialist struggle for territories that ended up in World War I. At the same time, working classes' relative material ease in developed countries made them abandon the revolutionary path and support "opportunistic" and nationalistic social-democratic parties (and their leaders, notably the "renegade" Kautsky). The struggle of the "peoples of the East" (as they were called in the first congress in Baku in 1920) against imperialism become integrated into an overall struggle against capitalism, and imperialism ceased to be seen as a dynamic precursor of the forthcoming socialism, but rather the extension of moribund capitalism. In Warren's words, "it is now not the character of capitalism that determines the progressiveness of imperialism, but the character of imperialism that determines the reactionary character of capitalism" (p. 47).
This change of position had far-reaching consequences for the thinking of the left that Warren excoriates. It led to the theories of "core" and "periphery", "structural dependency" etc. (Frank, Amin, Cardoso, Prebisch). These theories, Warren argues, were wrong because they predicted faster growth if countries were to disengage from the dominant global system (which all proved to have been illusions-Warren is less sanguine on that than we can be now), and they had nothing to do with workers' struggle in the emerging economies because they reflected the interests of nationalist Third World bourgeoisies.
Now, I wish I could write a very lengthy review of Warren's extremely stimulating book-which also contains many infuriating sections-but I will have to leave it for another time. (In the "infuriating area", Warren, for example, celebrates the increase of inequalities in developing countries such as the concentration of land ownership into the hands of latidundistas because he regards it as an indicator of adoption of more efficient capitalistic methods of production in agriculture, p. 207). His celebrations of inequality throughout the second part of the book-dealing with post-1945 developments-would make Friedman and Hayek blush!) But my point is not Warren's book as such but its very contemporary implications.
It is directly relevant for the understanding of the rise of new capitalist economies in Asia. Richard Baldwin's recent book (reviewed here ), even if Baldwin does not make any allusions to either the classical Marxist position or to the dependency theory, clearly shows that the economic success of Asia was based on the use of capitalistic relations of production and inclusion in the global supply chains, that is in active participation in globalization. Not passive-but a participation that was sought after, desired. It is thus no accident that China has become the main champion of globalization today. Therefore, Asian success directly disproves the dependency theories and is in full agreement with the classical Marxist position about the revolutionary impact of capitalism, and by extension of "neo-imperialism", in less developed societies.
This has enormous implications on how we view and try to explain dramatic shifts in economic power which have occurred in the past half-century (whence the origins of this transformation? the role of the nation-state and imperialism? the role of the bourgeois-led independence movements?) and how we see the developments ahead. I will not develop these issues now because my thinking is still evolving and I plan to lay it out in a book, but I think that, in trying to understand the changes in the modern world, the best we can do is to go to the literature and the debates from exactly one hundred years ago. (And Warren's book although of course much more recent has its roots in what was discussed then). Short of that I cannot see any broader narrative that makes sense of the epochal changes we are living through.
May 14, 2017 | failedevolution.blogspot.gr
The Pew Research Center, released a new study on the size of the middle class in the U.S. and in ten European countries. The study found that the middle class shrank significantly in the U.S. in the last two decades from 1991 to 2010. While it also shrank in several other Western European countries, it shrank far more in the U.S. than anywhere else. Meanwhile, another study also released last week, and published in the journal Science, shows that class mobility in the U.S. declined dramatically in the 1980s, relative to the generation before that.
A book released last March by MIT economist Peter Temin argues that the U.S. is increasingly becoming what economists call a dual economy; that is, where there are two economies in effect, and one of the populations lives in an economy that is prosperous and secure, and the other part of the population lives in an economy that resembles those of some third world countries.
MIT Economist Peter Temin spoke to Gregory Wilpert and the The Real News network.
As Temin states, among other things:
The middle class is shrinking in the United States and this is an effect of both the advance of technology and American policies . That is shown dramatically in the new study, because the United States is compared with many European countries. In some of them, the middle class is expanding in the last two decades, and in others it's decreasing. And while technology crosses national borders, national policies affect things within the country.
In the United States, our policies have divided us into two groups. Above the median income - above the middle class - is what I call the FTE sector, Finance, Technology and Electronics sector - of people who are doing well, and whose incomes are rising as our national product is growing. The middle class and below are losing shares of income, and their incomes are shrinking as the Pew studies, both of them, show.
The model shows that the FTE sector makes policy for itself, and really does not consider how well the low wage sector is doing. In fact, it wants to keep wages and earnings low in the low wage sector, to provide cheap labour for the industrial employment.
This model is similar to that pursued in eurozone through the Greek experiment. Yet, the establishment's decision centers still need the consent of the citizens to proceed. They got it in France with the election of their man to do the job, Emmanuel Macron.
As already described , the middle-class, which has not collapsed yet in France, still has the characteristics that fit to the neoliberal regime. However, it is obvious that this tank of voters has shrunk significantly, and the establishment is struggling to keep them inside the desirable 'status quo' with tricks like the supposedly 'fresh', apolitical image of Emmanuel Macron, the threat of Le Pen's 'evil' figure that comes from the Far-Right, or, the illusion that they have the right to participate equally to almost every economic activity.
For example, even in Greece, where the middle class suffered an unprecedented reduction because of Troika's (ECB, IMF, European Commission) policies, the last seven years, the propaganda of the establishment attempts to make young people believe that they can equally participate in innovative economic projects. The media promotes examples of young businessmen who have succeed to survive economically through start-up companies, yet, they avoid to tell that it is totally unrealistic to expect from most of the Greek youth to become innovative entrepreneurs. So, this illusion is promoted by the media because technology is automating production and factories need less and less workers, even in the public sector, which, moreover, is violently forced towards privatization.
As mentioned in previous article , the target of the middle class extinction in the West is to restrict the level of wages in developing economies and prevent current model to be expanded in those countries. The global economic elite is aiming now to create a more simple model which will be consisted basically of three main levels.
The 1% holding the biggest part of the global wealth, will lie, as always, at the top of the pyramid. In the current phase, frequent and successive economic crises, not only assist on the destruction of social state and uncontrolled massive privatizations, but also, on the elimination of the big competitors.
In the middle of the pyramid, a restructured class will serve and secure the domination of the top. Corporate executives, big journalists, scientific elites, suppression forces. It is characteristic that academic research is directed on the basis of the profits of big corporations. Funding is directed increasingly to practical applications in areas that can bring huge profits, like for example, the higher automation of production and therefore, the profit increase through the restriction of jobs.
The base of the pyramid will be consisted by the majority of workers in global level, with restricted wages, zero labor rights, and nearly zero opportunities for activities other than consumption.
This type of dual economy with the rapid extinction of middle class may bring dangerous instability because of the vast vacuum created between the elites and the masses. That's why the experiment is implemented in Greece, so that the new conditions to be tested. The last seven years, almost every practice was tested: psychological warfare, uninterrupted propaganda, financial coups, permanent threat for a sudden death of the economy, suppression measures, in order to keep the masses subservient, accepting the new conditions.
The establishment exploits the fact that the younger generations have no collective memories of big struggles. Their rights were taken for granted and now they accept that these must be taken away for the sake of the investors who will come to create jobs. These generations were built and raised according to the standards of the neoliberal regime 'Matrix'.
Yet, it is still not certain that people will accept this Dystopia so easily. The first signs can be seen already as recently, French workers seized factory and threatened to blow it up in protest over possible closure . Macron may discover soon that it will be very difficult to find the right balance in order to finish the job for the elites. And then, neither Brussels nor Berlin will be able to prevent the oncoming chaos in Europe and the West.
May 14, 2017 | www.unz.comSharmini Peries: The European Commission announced on May 2, that an agreement on Greek pension and income tax reforms would pave the way for further discussions on debt release for Greece. The European Commission described this as good news for Greece. The Greek government described the situation in similar terms. However, little attention has been given as to how the wider Greek population are experiencing the consequences of the policies of the Troika. On May Day thousands of Greeks marked International Workers Day with anti-austerity protests. One of the protester's a 32-year-old lawyer perhaps summed the mood, the best when he said"The current Greek government, like all the ones before it, have implemented measures that has only one goal, the crushing of the workers, the working class and everyone who works themselves to the bone. We are fighting for the survival of the poorest who need help the most."
To discuss the most recent negotiations underway between Greece and the TROIKA, which is a European Central Bank, the EU and the IMF, here's Michael Hudson. Michael is a distinguished research professor of Economics at the University of Missouri, Kansas City. He is the author of many books including, "Killing the Host: How Financial Parasites and Debt Bondage the Global Economy" and most recently "J is for Junk Economics: A Survivor's Guide to Economic Vocabulary in the Age of Deception" .Michael, let's start with what's being negotiated at the moment.
Michael Hudson: I wouldn't call it a negotiation. Greece is simply being dictated to. There is no negotiation at all. It's been told that its economy has shrunk so far by 20%, but has to shrink another 5% making it even worse than the depression. Its wages have fallen and must be cut by another 10%. Its pensions have to be cut back. Probably 5 to 10% of its population of working age will have to immigrate.
The intention is to cut the domestic tax revenues (not raise them), because labor won't be paying taxes and businesses are going out of business. So we have to assume that the deliberate intention is to lower the government's revenues by so much that Greece will have to sell off even more of its public domain to foreign creditors. Basically it's a smash and grab exercise, and the role of Tsipras is not to represent the Greeks because the Troika have said, "The election doesn't matter.
It doesn't matter what the people vote for. Either you do what we say or we will smash your banking system." Tsipras's job is to say, "Yes I will do whatever you want. I want to stay in power rather than falling in election."Sharmini Peries: Right. Michael you dedicated almost three chapters in your book "Killing the Host" to how the IMF economists actually knew that Greece will not be able to pay back its foreign debt, but yet it went ahead and made these huge loans to Greece. It's starting to sound like the mortgage fraud scandal where banks were lending people money to buy houses when they knew they couldn't pay it back. Is it similar?
Michael Hudson: The basic principle is indeed the same. If a creditor makes a loan to a country or a home buyer knowing that there's no way in which the person can pay, who should bear the responsibility for this? Should the bad lender or irresponsible bondholder have to pay, or should the Greek people have to pay?
IMF economists said that Greece can't pay, and under the IMF rules it is not allowed to make loans to countries that have no chance of repaying in the foreseeable future. The then-head of the IMF, Dominique Strauss-Kahn, introduced a new rule – the "systemic problem" rule. It said that if Greece doesn't repay, this will cause problems for the economic system – defined as the international bankers, bondholder's and European Union budget – then the IMF can make the loan.
This poses a question on international law. If the problem is systemic, not Greek, and if it's the system that's being rescued, why should Greek workers have to dismantle their economy? Why should Greece, a sovereign nation, have to dismantle its economy in order to rescue a banking system that is guaranteed to continue to cause more and more austerity, guaranteed to turn the Eurozone into a dead zone? Why should Greece be blamed for the bad malstructured European rules? That's the moral principle that's at stake in all this.
Sharmini Peries: Michael, The New York Times has recently published an article titled, "IMF torn over whether to bail out Greece again." It essentially describes the IMF as being sympathetic towards Greece in spite of the fact, as you say, they knew that Greece could not pay back this money when it first lent it the money with the Troika. Right now, the IMF sounds rational and thoughtful about the Greek people. Is this the case?
Michael Hudson: Well, Yanis Varoufakis, the finance minister under Syriza, said that every time he talked to the IMF's Christine Lagarde and others two years ago, they were sympathetic. They said, "I am terribly sorry we have to destroy your economy. I feel your pain, but we are indeed going to destroy your economy. There is nothing we can do about it. We are only following orders." The orders were coming from Wall Street, from the Eurozone and from investors who bought or guaranteed Greek bonds.
Being sympathetic, feeling their pain doesn't really mean anything if the IMF says, "Oh, we know it is a disaster. We are going to screw you anyway, because that's our job. We are the IMF, after all. Our job is to impose austerity. Our job is to shrink economies, not help them grow. Our constituency is the bondholders and banks."
Somebody's going to suffer. Should it the wealthy billionaires and the bankers, or should it be the Greek workers? Well, the Greek workers are not the IMF's constituency. It says: "We feel your pain, but we'd rather you suffer than our constituency."
So what you read is simply the usual New York Times hypocrisy, pretending that the IMF really is feeling bad about what it's doing. If its economists felt bad, they would have done what the IMF European staff did a few years ago after the first loan: They resigned in protest. They would write about it and go public and say, "This system is corrupt. The IMF is working for the bankers against the interest of its member countries." If they don't do that, they are not really sympathetic at all. They are just hypocritical.
Sharmini Peries: Right. I know that the European Commission is holding up Greece as an example in order to discourage other member nations in the periphery of Europe so that they won't default on their loans. Explain to me why Greece is being held up as an example.
Michael Hudson: It's being made an example for the same reason the United States went into Libya and bombed Syria: It's to show that we can destroy you if you don't do what we say. If Spain or Italy or Portugal seeks not to pay its debts, it will meet the same fate. Its banking system will be destroyed, and its currency system will be destroyed.
The basic principle at work is that finance is the new form of warfare. You can now destroy a country's economy not merely by invading it. You don't even have to bomb it, as you've done in the Near East. All you have to do is withdraw all credit to the banking system, isolate it economically from making payments to foreign countries so that you essentially put sanctions on it. You'll treat Greece like they've treated Iran or other countries.
"We have life and death power over you." The demonstration effect is not only to stop Greece, but to stop countries from doing what Marine Le Pen is trying to do in France: withdraw from the Eurozone.
The class war is back in business – the class war of finance against labor, imposing austerity and shrinking living standards, lowering wages and cutting back social spending. It's demonstrating who's the winner in this economic warfare that's taking place.
Sharmini Peries: Then why is the Greek population still supportive of Syriza in spite of all of this? I mean, literally not only have they, as a population, been cut to no social safety net, no social security, yet the Syriza government keeps getting supported, elected in referendums, and they seem to be able to maintain power in spite of these austerity measures. Why is that happening?
Michael Hudson: Well, that's the great tragedy. They initially supported Syriza because it promised not to surrender in this economic war. They said they would fight back. The plan was not pay the debts even if this led Europe to force Greece out of the European Union.
In order to do this, however, what Yanis Varoufakis and his advisors such as James Galbraith wanted to do was say, "If we are going not to pay the debt, we are going to be expelled from the Euro Zone. We have to have our own currency. We have to have our own banking system." But it takes almost a year to put in place your own physical currency, your own means of reprogramming the ATM machines so that people can use it, and reprogramming the banking system.
You also need a contingency plan for when the European Union wrecks the Greek banks, which basically have been the tool of the oligarchy in Greece. The government is going to have to take over these banks and socialize them, and use them for public purposes. Unfortunately, Tsipras never gave Varoufakis and his staff the go ahead. In effect, he ended up double crossing them after the referendum two years ago that said not to surrender. That lead to Varoufakis resigning from the government.
Tsipras decided that he wanted to be reelected, and turned out to be just a politician, realizing that in order to he had to represent the invader and act as a client politician. His clientele is now the European Union, the IMF and the bondholders, not the Greeks. What that means is that if there is an election in Greece, people are not going to vote for him again. He knows that. He is trying to prevent an election. But later this month the Greek parliament is going to have to vote on whether or not to shrink the economy further and cut pensions even more.
If there are defections from Tsipras's Syriza party, there will be an election and he will be voted out of office. I won't say out of power, because he has no power except to surrender to the Troika. But he'd be out of office. There will probably have to be a new party created if there's going to be hope of withstanding the threats that the European Union is making to destroy Greece's economy if it doesn't succumb to the austerity program and step up its privatization and sell off even more assets to the bondholders.
Sharmini Peries: Finally, Michael, why did the Greek government remove the option of Grexit from the table in order to move forward?
Michael Hudson: In order to accept the Eurozone. You're using its currency, but Greece needs to have its own currency. The reason it agreed to stay in was that it had made no preparation for withdrawing. Imagine if you are a state in the United States and you want to withdraw: you have to have your own currency. You have to have your own banking system. You have to have your own constitution. There was no attempt to put real thought behind what their political program was.
They were not prepared and still have not taken steps to prepare for what they are doing. They haven't made any attempt to justify non-payment of the debt under International Law: the law of odious debt, or give a reason why they are not paying.
The Greek government has not said that no country should be obliged to disregard its democratic voting, dismantle its public sector and give up its sovereignty to bondholders. No country should be obliged to pay foreign creditors if the price of that is shrinking and self destruction of that economy.
They haven't translated this political program of not paying into what this means in practice to cede sovereignty to the Brussels bureaucracy, meaning the European Central Bank on behalf of its bondholders.
Note: Wikipedia defines Odious Debt: "In international law, odious debt, also known as illegitimate debt, is a legal doctrine that holds that the national debt incurred by a regime for purposes that do not serve the best interests of the nation, should not be enforceable."
Michael Hudson is the author of Killing the Host (published in e-format by CounterPunch Books and in print by Islet ). His new book is J is For Junk Economics . He can be reached at firstname.lastname@example.org
Apr 27, 2017 | www.nytimes.com
Wells Fargo's board and management are scheduled to meet shareholders at the company's annual meeting Tuesday in Ponte Vedra Beach, Fla. With the phony account-opening scandal still making headlines, and the company's stock underperforming its peers, it's a good bet the bank's brass will have some explaining to do.
How could such pernicious practices at the bank be allowed for so long? Why didn't the board do more to stop the scheme or the incentive programs that encouraged it? And where, oh where, were the regulators?
Wells Fargo's management has conceded making multiple mistakes over many years; it also says it has learned from them. In a meeting this week with reporters at The New York Times, Timothy J. Sloan, Wells Fargo's chief executive, said the bank had made substantive changes to its structure and culture to ensure that dubious practices won't take hold again.
But there's a deeper explanation for why Wells Fargo's corrosive sales practices came about and continued for years. And it has everything to do with the bank-friendly regulatory regime in Washington and the immense sway that institutions like Wells Fargo have there. This poisonous combination contributes to a sense among giant banking institutions that they answer to no one.
"This Fight Is Our Fight" contains juicy but depressing anecdotes about how our most trusted institutions have let us down. It also shows why, years after the financial crisis, big banks are still large, in charge and, basically, unaccountable for their actions.
"In too many of these organizations, there are rewards for cheating and punishments for calling out the cheaters," Ms. Warren said in an interview Wednesday. "As long as that's the case, the biggest financial institutions will continue to put their customers and the economy at risk."
Ms. Warren's no-nonsense views are bracing. But they are also informed by a thorough understanding of how dysfunctional Washington now is. This failure has cost Main Street dearly, she said, but has benefited the powerful.
Wells Fargo got a lot of criticism from Ms. Warren, both in her book and in my interview - and on live television during the Senate Banking Committee hearing on the account-opening mess in September. She was among the harshest cross-examiners encountered by John G. Stumpf, who was Wells Fargo's chief executive at the time. "You should resign," she told him, "and you should be criminally investigated." (Mr. Stumpf retired the next month.)
This week, Ms. Warren called for the ouster of the company's directors and a criminal inquiry into the bank.
"Yes, the board should be removed, but that's not enough," she told me. "There still needs to be a criminal investigation. The expertise is in the regulatory agencies, but the power to prosecute lies mostly with the Justice Department, and if they don't have either the energy or the talent - or the backbone - to go after the big banks, then there will never be any real accountability."
Banks are not the only targets in Ms. Warren's book. Others include Wal-Mart, for its treatment of employees; for-profit education companies, for the way they pile debt on unsuspecting students; the Chamber of Commerce, for battling Main Street; and prestigious think tanks, for their undisclosed conflicts of interest.
My favorite moments in the book involve the phenomenon of regulatory capture: the pernicious condition in which institutions that are supposed to police the nation's financial behemoths actually come to view them as clients or pals.
One telling moment took place in 2005, when Ms. Warren, then a Harvard law professor, was invited to address the staff at the Office of the Comptroller of the Currency, a top regulator charged with monitoring the activities of big banks.
She was thrilled by the invitation, she recalled in the book. After years of tracking various problems consumers experienced with their banks - predatory lending, sky-high interest rates and dubious fees - Ms. Warren felt that, finally, she'd be able to persuade the regulators to crack down.
Her host for the meeting was Julie L. Williams, then the acting comptroller of the currency. In a conference room filled with economists and bank supervisors, Ms. Warren presented her findings: Banks were tricking and cheating their consumers.
After the meeting ended and Ms. Williams was escorting her guest to the elevator, she told Ms. Warren that she had made a "compelling case," Ms. Warren writes. When she pushed Ms. Williams to have her agency do something about the dubious practices, the regulator balked.
"No, we just can't do that," Ms. Williams said, according to the book. "The banks wouldn't like it."
Ms. Warren was not invited back.
Ms. Williams left the agency in 2012 and is a managing director at Promontory, a regulatory-compliance consulting firm specializing in the financial services industry. When I asked about her conversation with Ms. Warren, she said she had a different recollection.
"I told her I agreed with her concerns," Ms. Williams wrote in an email, "but when I said, 'We just can't do that,' I explained that was because the Comptroller's office did not have jurisdiction to adopt rules to ban the practice. I told her this was the Federal Reserve Board's purview."
Interestingly, though, Ms. Warren's take on regulatory capture at the agency was substantiated in a damning report on its supervision of Wells Fargo, published by a unit of the Office of the Comptroller of the Currency on Wednesday.
The report cited a raft of agency oversight breakdowns regarding Wells Fargo. Among them was its failure to follow up on a slew of consumer and employee complaints beginning in early 2010. There was no evidence, the report said, that agency examiners "required the bank to provide an analysis of the risks and controls, or investigated these issues further to identify the root cause and the appropriate supervisory actions needed."
Neither did the agency document the bank's resolution of whistle-blower complaints, the report said, or conduct in-depth reviews and tests of the bank's controls in this area "at least from 2011 through 2014." (The agency recently removed its top Wells Fargo examiner, Bradley Linskens, from his job running a staff of 60 overseeing the bank.)
"Regulatory failure has been built into the system," Ms. Warren said in our interview. "The regulators routinely hear from the banks. They hear from those who have billions of dollars at stake. But they don't hear from the millions of people across this country who will be deeply affected by the decisions they make."
This is why the Consumer Financial Protection Bureau plays such a crucial role, she said. The agency allows consumers to sound off about their financial experiences, and their complaints provide a heat map for regulators to identify and pursue wrongdoing.
But this setup has also made the bureau a target for evisceration by bank-centric politicians.
"There was a time when everything that went through Washington got measured by whether it created more opportunities for the middle class," Ms. Warren said. "Now, the people with money and power have figured out how to invest millions of dollars in Washington and get rules that yield billions of dollars for themselves."
"Government," she added, "increasingly works for those at the top."
Apr 25, 2017 | www.nakedcapitalism.comPosted on April 25, 2017 by Yves Smith Yves here. I wanted to emphhsize a factor to consider in the difficulties Latin American (and developing) countries have had in trying to manage their affairs, namely, the impact of advanced central bank monetary operations on them. Our guest writer Ignacio Portes mentions it in his post below, but it is worth discussing at greater length.
Remember how for at least 18 months before the 2014 Bernanke "taper tantrum" that markets around the world were following a "risk on/risk off" trade, with reactions based largely on the latest central bank oracle reading? And that emerging economies were the ones most whipsawed by these trades?
None other than that card-carrying Communist, former IMF chief economist Raghuram Rajan complained about it when he was the head of the Central Bank of India. From a 2014 post in which we first quote a Rajan interview with Bloomberg and then add further comments:
Rajan is blunt by the standards of official discourse Some of his key points:
Emerging markets were hurt both by the easy money which flowed into their economies and made it easier to forget about the necessary reforms, the necessary fiscal actions that had to be taken, on top of the fact that emerging markets tried to support global growth by huge fiscal and monetary stimulus across the emerging markets. This easy money, which overlaid already strong fiscal stimulus from these countries. The reason emerging markets were unhappy with this easy money is "This is going to make it difficult for us to do the necessary adjustment." And the industrial countries at this point said, "What do you want us to do, we have weak economies, we'll do whatever we need to do. Let the money flow."
Now when they are withdrawing that money, they are saying, "You complained when it went in. Why should you complain when it went out?" And we complain for the same reason when it goes out as when it goes in: it distorts our economies, and the money coming in made it more difficult for us to do the adjustment we need for the sustainable growth and to prepare for the money going out
International monetary cooperation has broken down. Industrial countries have to play a part in restoring that, and they can't at this point wash their hands off and say we'll do what we need to and you do the adjustment. .Fortunately the IMF has stopped giving this as its mantra, but you hear from the industrial countries: We'll do what we have to do, the markets will adjust and you can decide what you want to do . We need better cooperation and unfortunately that's not been forthcoming so far.
Narrowly, Rajan is correct, but the underlying problem is much bigger and most orthodox economists are unwilling to confront it because it conflicts with their free markets religion. Carmen Reinhart and Ken Rogoff, in an analysis that got much less attention that their work on debt levels and growth, looked at 800 years of history of crises and found a strong correlation between the level of international capital flows and the frequency and severity of financial crises. That's implicit in his discussion of the impact of hot money flowing in and out. The Reinhart/Rogoff finding was confirmed by a 2010 paper by Claudio Borio and Piti Disyatat of the BIS that argued that what drives financial crises is not net capital flows ("global imbalances") but gross capital flows (too much financial "elasticity" as they called it, or what most of us would describe as too much speculation). But Rajan may in fact be referring to remedies like capital controls when he says, basically, that the industrial economies may not like the remedies that emerging economies implement.
Back to the present post. Voters in countries in Latin America hold their officials accountable for economic performance. Yet the destabilizing impact of hot money in and outflows, brought to them by the tender ministrations of neoliberal orthodoxy, means that the degree of control is limited.
By Ignacio Portes, formerly the economy editor of the English-speaking daily Buenos Aires Herald. He has also published at Pando Daily and NSFWcorp
The world's attention over the last few months has been focused on the rise of right-wing movements across the first world, and the struggle of the previously-ruling liberal establishment to understand the nature of what hit them. Somewhat buried below those news, however, one can also read about what seem to be the last pangs of another regional alliance going haywire, though with somewhat different protagonists.
It wasn't long ago that South American governments were seen as the biggest political alternative in a world moving mostly to the right, as parties backed by unemployed and landless movements, trade unions, indigenous groups and socialist organizations took power and pushed for certain re-distributive policies.
Now, the continent's two biggest economies, Argentina and Brazil, are ruled by coalitions packed with center-right businessmen. And in Venezuela - the country which arguably started to turn the continental political tide to the left back in 1998 - Hugo Chávez's heir Nicolás Maduro is barely holding to the presidency, losing by a landslide in the last mid-term elections amid frightening levels of social disarray.
Unpacking what went wrong for them will be key for whoever ends up being the next leftist movement to have a shot at power. And much of what went wrong was about the economy.
The fact that those three collapses took place almost simultaneously had a lot to do with the end of the commodity price supercycle that made life so much easier for governments across Latin America throughout the 2000s. But it wasn't simply a stroke of bad luck with the region's primary exports.
Wherever you looked, voters also had the growing perception that the malaise was also explained by local policy. And that was much harder to accept both for officials and for their most ardent supporters, who preferred to focus on outside factors, be them the global economy or some kind of internal or external political conspiracy.
Not that some degree of conspiracy couldn't be a factor. Dilma Rousseff's ousting in Brazil was largely an exercise in hypocrisy from a political opposition mired in corruption scandals and with several past episodes of embellishing the budget's figures. Yet it accused the government of exactly those two things, first to switch sides from congressional allies to staunch enemies and then to impeach Rousseff.
But none of that would have worked hadn't Rousseff's government also been under growing popular pressure since the country fell into a recession in 2014. Rousseff had already lost most of the middle class before that. Her response of a Greek-style, slow austerity plan during the next two years only helped her lose a large part of her harder-core electoral base. With the recession deepening and unemployment soaring, Rousseff's approval ratings plunged below 20%. Her former allies turned on her and there was no way back from there.
Brazil's Workers' Party fell into the classic emerging market boom and bust. The capital that had flown into the country with the commodities at high prices made it easy for the government and the private sector to take on debt and finance a larger expansion. The hype made Brazil an easy sale. In 2009, The Economist famously printed Jesus' statue at the top of Rio de Janeiro's Corcovado mountain taking off from the ground as if it were a rocket, illustrating a story about the country's supposed transformation. The government seemed to believe it too, embarking into grandiose, costly projects to host the 2014 football World Cup and the 2016 summer Olympic Games announcing Brazil's arrival into the global center stage, while also playing up the significance of the massive (but hard to reach) oil deposits discovered off the Brazilian coast.
But the foundations of the boom weren't really solid. The country's currency, the real, appreciated beyond what many local industries could resist in the long run due to the sudden influx of foreign capital. Protectionism and subsidies to some of Brazil's top business owners tried to compensate for that, but the costs of doing so started to mount.
When commodity prices stopped helping, the underlying problems surfaced. By 2013, The Economist ran exactly the opposite cover than in 2009, with Jesus' statue crashing down after a failed launch. Short-term investors panicked and moved their cash elsewhere. Suddenly, re-financing public and private debt became much harder. Millions of Brazilians started struggling with defaulted loans for the consumer goods they had recently purchased, and repayments only got harder when the Central Bank also raised interest rates to try cut inflation. Subsidies to companies became hard to sustain too, while basic services and infrastructure, which never improved much, started suffering even more, with the tightening budgets focused on completing the billionaire Olympic and World Cup stadiums and luxury hotels. Even oil failed to deliver, both due to the plunge in international prices and the massive corruption schemes uncovered in the state-run Petrobras, which threw the company into disarray.
The question, then, is why did the Workers' Party go for policies that would end up destroying its popularity and its grip on power?
A tentative answer, unglamorous as it might be, is that they didn't know what else to do. Their problem could be seen as another manifestation of a general failing of the post Cold War left: the lack of a trusted economic programme of its own, which forced them to borrow from here and there as circumstances presented themselves.
They used a bit of orthodoxy to avoid "scaring" the markets when they first took office in 2003, tried to take advantage of those first moves by leveraging the credit they were given as a result, and added some re-distributive policies when there seemed to be room for them, all of that almost inevitably mixed with the endemic corruption schemes and inefficiency troubles that seem to mar all of the region's politics (but that hardly came to the surface during the boom times).
When the crises came, the government tried some countercyclical moves at first, but Brazilian laws made them less effective than normally expected, as private and public debt could not be diluted due to indexation clauses written into contracts, keeping the burden high despite some stimulus. So they resumed the international bond market appeasing as a (failed) last-ditch effort, with political scandals erupting in the background as capital flight and coalition disbanding made the end increasingly inevitable.
Brazil's elites decided for a transition behind the backs of the electorate, backing Rousseff's former VP Michel Temer, a man from the ideologically flexible PMDB party, to take her place after a largely ridiculous impeachment process where the charges against the President were barely even mentioned. Unconcerned about his lower-than-Dilma popularity, the possibility of re-election or the need to be loyal to his voting base, Temer is now enacting a much more thorough austerity program that has slightly turned markets around, but which has seen unemployment continue to skyrocket, now reaching 13% percent, up from 7% just a couple of years ago.
Could it have gone differently? In the most short-termist of views, it's hard to see how the Workers Party could have held on. Falling governments are the norm amid huge economic crises with no seemingly end in sight, and this was Brazil's largest recession on record. In a European-like parliamentary system, the situation would surely have led to a vote of no confidence, used in similar circumstances to oust Prime Ministers in more democratically-friendly fashion.
But as we'll see in parts II and III, the multiple roads taken by other left-of-centre coalitions in Latin America showed that the Workers Party's long-term approach was just one of many possibilities.0 0 37 0 0 This entry was posted in Banana republic , Commodities , Currencies , Economic fundamentals , Free markets and their discontents , Guest Post , Income disparity , Macroeconomic policy , Politics on April 25, 2017 by Yves Smith . Ed , April 25, 2017 at 9:12 amRabidGandhi , April 25, 2017 at 10:44 am
Actually I think the critical strategic mistake here was made by the Brazilian right, which had the option of just waiting until 2018 and then taking power in a normal election. They may have been spooked by the prospect of running against Lula again (though they have beaten Lula in the past several times). Or there may have been behind the scenes US pressure for a color revolution, due to Brazil's previous closeness to Russia.
But not just waiting until the election and then taking power on the normal pendulum swing will blow up in their faces.
The overall Workers' Party strategy was appropriate for the situation they were in. My only real criticism is political, they should have made winning statehouses more of a priority and less so the presidency, but you have to run a presidential candidate, and when you have a candidate like Lula you are going to try to capitalize.PKMKII , April 25, 2017 at 1:06 pm
I hope you're right that it was a mistake. Every poll I have seen shows Lula easily winning any election, and the Brazilian capitalist class was well aware of this. In fact there was the pathetic incident where Folha de São Paulo intentionally obfuscated poll data showing that 62 percent of Brazilians want new elections and they would have voted for Lula. The stunning speed and extent of the destruction wrought by Temer (and Macri) shows that the right wing is convinced that this may be their only shot at power, so they need to get in and obliterate as much of the welfare state as quickly as possible, like vandals who know the security guards will arrive any second.
That said, I agree that the impeachment debacle shows that PT needs a far bigger presence in congress and in the governorships, otherwise it is vulnerable to another constitutional coup. However, I disagree that "the overall Workers' Party strategy was appropriate": they were gravely wrong to implement austerity in an economic downturn.Harry , April 25, 2017 at 1:11 pm
My only real criticism is political, they should have made winning statehouses more of a priority and less so the presidency
Now that sounds like a familiar criticism.Left in Wisconsin , April 25, 2017 at 9:40 am
The Brazilian right had no choice. If Dilma had been left in charge she might have chosen to sacrifice a whole bunch of corrupt businessman and politicians to placate the middle class. Someone was going down. The only question was who.Ignacio Portes , April 25, 2017 at 1:42 pm
Well, I guess I will wait for parts 2 and 3. Thus far in the story, it is hard to see how Brazil, Argentina and Venezuela represent three cases of the same phenomenon.johnnygl , April 25, 2017 at 10:02 am
Nah, their approaches were different for sure, I think it will become clear in far more detail starting in the second post. Part of the point of the series is to show that the governments fell into different failure modes, despite some common themes such as international economics (commodity prices first helping a lot, then not so much) or the fact they were all part of a regional political alliance.RabidGandhi , April 25, 2017 at 10:49 am
I think this represents a clear example of the failure of 3rd way politics again. The jackals on the right in Latin America do not and will not respect parties of the left, no matter if they stick with orthodoxy. They must be confronted and beaten with deeper reforms and a well-organized base. Ecuador's recent election shows what can be done. Correa's party has achieved its best result ever and still won even though the opposition was united this election.JohnnyGL , April 25, 2017 at 10:53 am
But Rousseff did use the stick of orthodoxy, and she was overthrown nonetheless!
"'I know your works: you are neither cold nor hot. Would that you were cold or hot! So, because you are lukewarm, and neither cold nor hot, I will spew you out of my mouth.'"
Martin Finnucane , April 25, 2017 at 11:59 am
"But Rousseff did use the stick of orthodoxy, and she was overthrown nonetheless!" – Exactly! The lesson for parties of the left is not to trust the right. They are not your friends. They will stick the knife in your back at the first chance!Alejandro , April 25, 2017 at 10:25 am
Hence the term laodicean .
Perhaps the left needs a red hot response instead.RabidGandhi , April 25, 2017 at 10:25 am
As far as the question of "how", Yves intro and 2014 post was more insightful. Parsing relevant facts from irrelevant facts seems always a grind, and discerning facts from opinion seems even more so. Context always matters, and proportionality often seems distorted or missing, imO. I've gravitated towards the opinion that "capital" seems a euphemism for power, "capitalism" seems a euphemism for a network of unaccountable, unelected "Davos" insiders(aka tPtb) , and "capitalists" seem to be the gatekeepers that keep the outsiders outside the power to shape, re-shape, form, re-form, structure, re-structure, structurally adjust and re-adjust etc., a social order that willingly or unwittingly serves these insiders as the highest priority and loftiest of purposes, at the expense of anything and everything else. Which is why I've also gravitated towards the opinion that "capitalism" and "democracy" are not only antithetical to each other, but irreconcilable a neoliberal project that facilitates a virtual-parliament, where "governance" is done through "capital" flows, by and at the behest of unseen, unaccountable, unelected insiders.JohnnyGL , April 25, 2017 at 10:50 am
Anecdote: When I was in Brazil last December I asked everyone I could why Dilma was impeached. The near unanimous answer was "por corrupção" (the outliers were two responders who, interestingly, said it was because she was unpopular). While Ignacio's excellent post does hint at this, I think it's important to stress the battle for "hearts and minds" currently underway in LatAm that, in the case of Brazil, has led to Rousseff losing her base and the far right returning to power.
Yves and Ignacio look at two important aspects, with Yves focusing on deleterious capital flows and Ignacio on the resulting fiscal policy. Ignacio's point is particularly salient, and one that often gets lost among leftist pundits prone to ideological Manichaeism:
Her response of a Greek-style, slow austerity plan during the next two years only helped her lose a large part of her harder-core electoral base.
This, IMO, is the number one reason that led to Rousseff's overthrow: Dilma inflicted austerity on the working class and it abandoned her, leaving her vulnerable to a rightwing attack. But how can I say that when it goes against the findings of my (highly unscientific, anecdotal) survey? Let me answer that with yet more anecdotal evidence.
Here in Latin America there is an almost universal narrative as to why we have so much poverty, that goes as follows: "we live in a resource rich region, but we are plagued by 'corruption', which means politicians with their hands in the till. We wish we could have safe roads, sewers, transportation, hospitals but the state always ends up bankrupt because the politicians steal all the money". (At this point the narrative gets taken over by political allegiances and media memes: "what we need to do is throw these corrupt bums out of office and bring in [enter name of political party supported by the media]".
This narrative is, of course, total mierda de toro . First the state cannot go bankrupt, so that should be BS tell n° 1. When Rousseff's base saw their infrastructure, pensions and jobs cut, it was not because Rousseff is a corrupt politician with her hand in the till, bankrupting the state. Even in Brazil, which has a particularly corrupt political elite, they rob millions when the economy is a matter of hundreds of billions. Yet like so many revolutionaries of her generation, Rousseff is solid on socialist ideology when it comes to politics, but when it comes to economic understanding, not so much. So when the international economic crisis came to Brazil, she appointed the Finance Minister who seemed to know something about that economics stuff: Washington Consensus Superstar Joachim Levy. Levy sold her the usual neoliberal BS line that "the state is broke, TINA, we need to cut social programmes", yadda yadda. And austerity was suddenly on the menu.
Meanwhile, the monopolist media conglomerate O Globo broadcasted everywhere 24/7 that Dilma was corrupt with the usual narrative. If you're in a favela and you see your life getting worse because of budget cuts and you hear the non-stop "Corrupção!" narrative from the media, in the absence of a media and education system that tell the truth about economics, there is no way you stick your neck out to support Rousseff. Here the media and its oligarchical overlords ensure that people have a hard time differing between millions and trillions, between microeconomy and macroeconomy. The TV is full non-stop with caterwauling that this or that politician might have stolen $10m and they incorrectly associate that with the macroeconomic situation caused by the government's bad fiscal policy.
In sum, yes the QE/ZIRP capital flows play a role. Yes this was used to push the PT to make bad fiscal decisions. But there is also an ideological battle on in Latin America, where the oligarchic-dominated media are pushing a false 'corruption' narrative to take advantage of the fiscal missteps of ostensibly left-wing governments. While these economic own-goals are definitely the key, if it were not for this false narrative, the PT, Kirchnerism, Chavism even Lugo in Paraguay would still be in the drivers seat.RabidGandhi , April 25, 2017 at 11:42 am
RabidGandhi, always enjoy your comments.
Personally, yes, the media is rotten and that's a tremendous problem. The plunging economy (caused by int'l capital tidal flows + austerity) + media narrative of scapegoating is, of course, how the script goes to throw left-leaning govts out of power. However, I don't think that gets you ALL the way there.
Otherwise, how to explain Venezuela and Ecuador? The oligarchs ran the same playbook in all countries in LatAm. But it doesn't always work.
1) Venezuela is arguably MORE vulnerable to capital flows and commodity prices than in Brazil. The government has been handicapped by its own incompetence (especially with regard to the currency, as Comrade Haygood will tell you any chance he gets!). The Chavista government has also had plenty of corruption problems, at least somewhat linked to those bad currency policies. Yet, somehow, the government is still hanging in there. In fact, its popularity seems to be on the rebound as the population gets tired of the violent, extremist idiots that seem to be leading the opposition. In my view, they've kept a core of supporters, who have stayed loyal and haven't been sold out by their government. Those core supporters are organized and actively pushing back against the hard-right in the country. This seems to be enough to endure the turbulence.
2) Ecuador's example is also telling. Correa's party, Allianza Pais, just hauled in its largest ever vote total. They seem less corrupt and incompetent than the Chavista party in Venezuela, but face the same problems of tumultuous capital flows and rabidly hostile media with the constant accusations of corruption that are present in Venezuela and Brazil. Yet, in spite of this, they continue to increase their support and expand their base.
From where I stand the lessons seem clear for lefty parties of Lat Am:
No compromise with the right or with orthodoxy. They hate you and will slit your throat if you let them. Do not abandon your base (and they won't abandon you). Organize your base and be prepared for crisis. These things let you survive as a political force. If you show competence and reduce corruption (in reality, not according to the media narrative), then you'll get even stronger and do even better at the ballot box.JohnnyGL , April 25, 2017 at 2:08 pm
Thanks Johnny, likewise. With regard to "ALL the way there", I tried to be clear that the main reason for Rousseff's fall was her austerity policies, with the media playing a crucial role thereafter. With regard to Ecuador vs. Venezuela, BOTH made currency missteps, as Correa's biggest failure was that he was never able to wean Ecuador off the USD. The main difference I see between the two countries' leftist governments is that Correa was somewhat more successful at diversifying the economy whereas Venezuela is still far too dependent on oil rents. In all the South American economies, the key is developing an internal market by bringing the excluded masses into the economy and ditching the commodity exporter model. Nevertheless I agree with your point about the Venezuelan right: they are overplaying their hand and Maduro is gaining strength (eg, yesterday's poor turnout opposition march).
I'd also point out that the last elections in the countries in question (Ecu 2017, Bol 2016, Arg 2015, Bra 2014, Ven 2013) were all photo finishes (with ≈2% margins), where the slightest tweeks could have reversed the outcome completely, so it is hard to talk about mandates or "what the people want".
Lastly you discuss corruption as being a factor for the Maduro and Correa administrations. Does that mean you disagree with my point that "corruption!" is just a rightwing meme that has little to do with most people's household economies?JohnnyGL , April 25, 2017 at 2:13 pm
Sorry, squishing too many thoughts into my comments with limited time to write (at work).
To clarify my addition to your point about austerity being the real Rousseff killer, I'd say, "Yes, that's absolutely the proximate cause. However, there are underlying reasons that are just as important that shouldn't be left out of the story".
Perry Anderson's article in LRB is a real must read on what has happened in Brazil. He covers a wide range of issues, including why the PT has failed in a broader political context.
If you're interested, read the part that starts: "Half-hidden, the roots of this debacle lay in the soil of the PT's model of growth itself. From the outset, its success relied on two kinds of nutrient: a super-cycle of commodity prices, and a domestic consumption boom."
Anderson goes on to discuss how the PT failed to improve public services, only relying on the private sector. Finance Minister Mantega tried to stimulate private investment and also attempted to split off industrial interests away from big finance. That attempt failed spectacularly. Again, here's Anderson's money quote: "In the belief that this must rally manufacturers to its side, the government confronted the banks by forcing interest rates down to an unprecedented real level of 2 per cent by the end of 2012. In São Paulo the Employers Federation briefly expressed its appreciation of the change, before hanging out flags in support of the anti-statist marchers of June 2013."Ignacio Portes , April 25, 2017 at 3:48 pm
Re: Ecuador election, yes it was close. However, I think the margin of victory doesn't tell the full story. Allianza Pais keeps building its vote totals every election since 2006. Check wikipedia on this. Correa had a big breakthrough from 2009 to 2013, but Moreno didn't lose votes, he got more. I could be wrong, but that makes me thing they're building something more lasting than what PT did.
Just looking, Rousseff couldn't match Lula's vote totals, neither could Maduro match Chavez's. Somehow, Moreno beat Correa's numbers from previous elections. That might be a real sign, or might not.
Lastly, regarding this, "Does that mean you disagree with my point that "corruption!" is just a rightwing meme that has little to do with most people's household economies?" - No, I think you're right. But I do think corruption is more of a problem in Venezuela. Unless you've got some other explanation for why they won't fix the screwy currency policy that seems to magnify problems, rather than dampen them (as a well managed currency should do)?
I can only guess that someone fairly important is making a lot of money in cross-border smuggling to Colombia.
I think Ecuador seems to have done better on corruption, the best the media could do was drum up a scandal that sounded ridiculous on its face. I don't recall the details, but it seemed like they were really desperate to latch onto something.RabidGandhi , April 25, 2017 at 4:59 pm
Corruption is important, just not in the way of the simplistic media spin that you mentioned – obviously what a President might take home is irrelevant when compared to a national budget or a GDP. (and Dilma, by the way, doesn't seen to have been personally corrupt at all; even if there was obviously corruption at her party, I have never seen any hint that it might have help line up her pockets)
A topic that I have never read anyone write about in depth is how left political alternatives can finance their campaigns. Obviously, if you are a business candidate you'll find it easier to get donors, but if you want to build a working class or socialist party then it gets tougher. And in Latin America, this has often led to all kinds of shady deals with the underworld, with public works contracts and so on. And the problem is the economic distortions that this brings: to keep those dirty schemes that finance your party going, you have to create infrastructure programmes not where they are most needed but where it's easier to take a cut off without anyone noticing it (this happened a lot in Argentina), you have to take part in corruption schemes with the country's oligarchs (see Brazil), you have to make deals with murderous criminal cartels and so on. This can be incredibly damaging: it weakens the economy for starters, but it ultimately even derails the point of the political project completely, turning a political party into a bureaucracy whose main goal is just self-perpetuation. Venezuela's military trying to hang on to power and to its failed economic policies no matter how in order to keep its power over black market deals is part of the explanation for that country's crisis, for sure, and another example of this.Left in Wisconsin , April 25, 2017 at 11:15 am
Example 1: Upon assuming the presidency, the Macri administration immediately embarks on a plan to devalue the peso. Four of Macri's ministers, including éminence grise Marcos Peña buy dollar futures before the devaluation and make out like bandits when the peso plummets.
Example 2: Upon Macri taking office as Buenos Aires Mayor, his cousin's construction firm, IECSA, suddenly jumps from virtual anonymity to being the third largest recipient of public works contracts.
Are these examples of corruption the same? I would argue no. In example 2– which is the type you mention and which is the type most screamed about in the press– the damage is that favouritism may have led to not the best postulant winning the bid, thus providing the public with inferior infrastructure. But there is a general good that occurs: insofar as Calcaterra hires local workers and uses domestic materials, the economy will grow from the multiplier effect. (Of course insofar as the money is not used for construction and instead gets parked in Miami, there is a net loss.) While I agree infrastructure does not get well distributed– I burn with rage when I see stupid multi-million peso overpasses in Buenos Aires while my neighbourhood doesn't even have proper sewers– there is no reason why both can't be built; Argentina has plenty of people and materials just waiting to be employed.
Example 1 on the other hand is the type of corruption we should worry about. It involves politicians making decisions not based on the public good, but rather to benefit themselves and/or a small group of powerful people. The devaluation of the peso immediately went to the supply chain and inflation skyrocketed, resulting in a 12% loss in real wages. This less-publicised corruption affected the pocketbook of everyone in the country, whereas the eternally repeated infrastructure issue– be it Calcaterra or Baéz or whoever– is not even noticeable in the average citizen's economy. Nevertheless, when Globo shows the latest accused in Lava Joto, the public inevitably gets angry because they think that the suspect's alleged crime cost them money personally; that he is the reason why there is no money for housing or pensions. No, the reason why there are housing and pension cuts is because it was a political decision by the Dilma/Temer governments; Lava Joto has nothing to do with it.
Secondly, with regard to campaign financing here's my two cents: I think it is less of an issue here then it is up north. First because mandatory voting makes GOTV largely unnecessary, thus greatly reducing the amount of money needed. Secondly, because (for better or worse) all the Mercosur countries have very strong party apparatuses that perform much of the campaigning work. And thirdly because of (partially) public funded elections. In this regard, politics here is not as much about fundraising as it is about lining up all the unions and social movements. But this system giveth and taketh. On one hand it often involves mass mobilisations that are largely based on individuals' political motivation and organising efforts; but on the other hand it entails party patronage systems that often fund goons who carry out ratf*cking operations and small-scale political violence (the mafias you mentioned? eg, the AAA in the 70s; or more recently the thugs who stormed the Santa Cruz Governer's House, etc.). This is not to say that there is not a growing trend toward expensive marketing campaigns and black money, but for now at least it is more subdued. And lastly, in the case the left needs campaign money, I think the Sanders 2016 campaign provided an excellent, viable model.RabidGandhi , April 25, 2017 at 12:12 pm
While these economic own-goals are definitely the key,
Rabid G: could you expound on which own-goals were problematic, what could or should have been done differently? There seems to be an argument that:
1. Rousseff mis-steps led to lack of support among people who were, and apparently still are, Lula supporters. Presumably the argument is that she could have run large fiscal deficits and targeted spending to poor? Or canceled the Olympics?
2. This lack of support made possible soft coup.
From what I know of what happened, I am skeptical of both claims. And seems to completely absolve hot money of any responsibility, which I took as the main point of the post. But I claim no expertise.Susan the other , April 25, 2017 at 12:41 pm
Yes that is the argument: Rousseff implemented two rounds of austerity, cutting pensions and capping spending when Brazil's economy was already retracting. As readers here well know, these pro-cyclical measures always have the same result: throwing the country into deeper recession. Each round of austerity coincided with steep drops in Rousseff's top approval rating (Optimal/Good). Meanwhile, Lula– who never cut pensions and spending– remains the most popular politician in the country.
And as I made clear in my post (as Ignacio did in the OP), these factors are just part of what led to Rousseff's impeachment; no one is "completely absolving hot money" which is certainly another part of the equation. That said, given mainstream economists' monetarist bent, there is a tendency to see everything that happens in Latin America through a capital flow/commodity lens (cough *Haygood* cough). But this only holds true to the degree that these countries are dependent on finance and commodities. And the whole mantra of these leftist governments has been to supplant finance/commodity dependency with an internal market. So with all respect to Yves (and I think she might agree), to the degree to which they have been successful at creating this internal market, the hot money argument does not come into play.Kalen , April 25, 2017 at 2:49 pm
We never get ahead of the problem. In the early 70s Nixon was advised by Sec. Treas John Conally, of Dallas fame, that we could go off the gold standard bec we could basically do anything we wanted to generate growth in our own economy and that the imbalances that would follow for other countries "were their problem." This attitude preceded the free-market mania that followed, thinking that the market would balance it all out. So, starting with Breton Woods and an incomplete monetary system which did not address the real world, we have come to 2017 wherein candidates are running for office without a party and sovereign states don't understand the power of their own sovereignty. We need a "peg" – a new rational one. Gold has always been irrational, but the environment is as rational as you can get. And every sovereign country has an environment. The environment is everywhere! Whereas the nutty obsession with gold made it valuable and it was arbitrarily priced at some "standard" to which all else was valued (insane, right?) we could do it the rational way and price the environment at some value and thereby eliminate inflation altogether (because you can't inflate a currency that is both ubiquitous and invaluable already) and at the same time have a resourceful, healthy world. Everywhere. This would get rid of all the neoliberal money hoarding and all sorts of ills. But, I'm dreaming again.marku52 , April 25, 2017 at 3:21 pm
Another great discussion set up by Yves but the article, probably because of limited length, could only scratch the surface of what is and was brewing in Latin America in last decade or so and Obama's policies of global color revolutions having a lot to do with it.
Moreover, it is hard in English speaking media to figure out what is going on in Latin America especially recently in Venezuela, Ecuador, Bolivia even Brazil or Argentina but one thing in my opinion, is sure there is no socialism there, nor ever was.
Instead there were more or less social-democratic governments trying to elevate horrible poverty of the peoples due to extreme exploitation by local oligarchs, while in all cases leaving intact capitalist/neo-feudal system and social structures including reactionary religious organizations as it was there before. Now all those governments are under a direct attack from Global oligarchy.
It may sound harsh but the main problem is that Maduro and other "people's" leaders in Latin America were being heavily influenced or down right corrupted by western money. Yes, leftist leaders directly or due to their global policies withd USD dominated financial system are in Wall Street pockets already. Too many friends of Lula, Chavez and now Maduro revolution have bank accounts in New York to appropriately respond to this blatant aggression we are witnessing in a revolutionary manner, as they should if they did not betray their people.
Those South American springs we are witnessing in Argentina, Brazil, Venezuela, Bolivia, and Ecuador, and soon Cuba etc., are not due to lack of cooperation between popular South American leaders and US.gov and Wall Street but that they cooperate to little to win approval of Washington hegemons, namely they do not exploit and betray their people hard enough.
It is a world oligarch's quarrel and those who do not heed the warnings are expelled from the cushy country club of globalists, and that's why they are so polite, yes polite, facing Washington economic aggression. But there is deeper reason for it.
Former radicals, communists, worker trade unionists or native populists and other leftist such as Lula-Rousseff, Chavez,(Maduro), Corea, Morales etc., after being brought to power, via peoples popular movements spawned by catastrophe of raging neoliberalism in previous decades , not on their own merits as a true leftists since they later betrayed the true left, but on the wave of global capital instigated booms of commodity demand from China itself stimulated to the brink of orgasm via Wall Street money changers and now is awaiting eruption anytime and following by a long secular economic flaccidity which will turn this mockery of workers' led Chinese government into openly fascistic/regional imperial regime as it already is.
One must realize that those recent South American leftist revolutions, including Chavez revolution, were underwritten by Wall Street bubbles, one might have asserted wrongly, that they were being skillfully exploited by leftist leaders while in truth they fell into a trap that ultimately doomed and condemned truly leftist Marxian or even Maoist/Leninist revolutionary political movements in South America into political oblivion for decades to come.
And hence sweeping counterrevolutionary wind of Washington doing, blowing across the South American continent.
And that seems to be the plan to discredit any political left as a vital and even viable or effective political force in South America, Europe and elsewhere.
It took him eight years but Obama Mission was Accomplished. And that's his legacy few wants to talk about.Paulo A Franke , April 25, 2017 at 8:20 pm
Here's a similar take from Ian Welsh:
"Obey the Laws of Purges
"Let's not dance around. Your first steps will be breaking the power of current economic and political elites who are not willing to convincingly join you or at least let you rule without trying to sabotage you.
You must do this all at once. When it happens, it happens to everyone it is going to happen to. This is Machiavelli's dictum, and he was right. After it has happened, those who weren't broken know they're safe as long as they don't get in your way."
Break up the banks and the media, have competent administrators ready to step in, and insulate yourself from foreign cash flows as much as you can. Otherwise you will be sabotaged.
7 Rules for Running a Left wing Government.
http://www.ianwelsh.net/7-rules-for-running-a-real-left-wing-government/johnnygl , April 25, 2017 at 8:41 pm
I am transmitting from Brazil, having witnessed in situ the last 15 years of surreal economics.
The current 'crisis' has nothing to do with politics, ideology, government policy, corruption, etc.
In fact, there's no crisis at all happening in Brazil.
From 2003-2014, Brazil went through a surreal bubble of credit (and corresponding debt), equally divided amongst families and corporations.
The total debt stock went from 25% to 56% of GDP, in eleven years. That's roughly 3% of cocaine-like GDP injected into the veins of the economy, over quasi-eternal 11 years.
The debt bubble is now gloriously bursting. Two years of bubble deflation already checked, my guess is that the Brazilian economy should return to its natural size around 4Q 2017 / 1Q 2018.
From there on, there's slow growth in the works. We Brazilians do not know how to grow via investment and innovation. And everyone is vaxxed against diving into debt again.
Without digging into details of your numbers, I don't think what you wrote is factually incorrect. However, the tone of what you wrote gives no agency to any person or institution. Big debt bubbles don't just 'happpen' like bad weather. They happen because of policy decisions made by people, individually and as groups.
Why those decisions were made and how they succeeded or failed is the part worth discussing.
Apr 21, 2017 | www.nytimes.com
Wells Fargo 's board and management are scheduled to meet shareholders at the company's annual meeting Tuesday in Ponte Vedra Beach, Fla. With the phony account-opening scandal still making headlines , and the company's stock underperforming its peers, it's a good bet the bank's brass will have some explaining to do.
How could such pernicious practices at the bank be allowed for so long? Why didn't the board do more to stop the scheme or the incentive programs that encouraged it? And where, oh where, were the regulators?
Wells Fargo's management has conceded making multiple mistakes over many years; it also says it has learned from them. In a meeting this week with reporters at The New York Times, Timothy J. Sloan, Wells Fargo's chief executive, said the bank had made substantive changes to its structure and culture to ensure that dubious practices won't take hold again.
But there's a deeper explanation for why Wells Fargo's corrosive sales practices came about and continued for years. And it has everything to do with the bank-friendly regulatory regime in Washington and the immense sway that institutions like Wells Fargo have there. This poisonous combination contributes to a sense among giant banking institutions that they answer to no one.Continue reading the main story Advertisement Continue reading the main story
The capture of our regulatory and political system by big and powerful corporations is real. And it is a central and disturbing theme in the new book by Senator Elizabeth Warren , Democrat of Massachusetts.Advertisement Continue reading the main story
"This Fight Is Our Fight" contains juicy but depressing anecdotes about how our most trusted institutions have let us down. It also shows why, years after the financial crisis, big banks are still large, in charge and, basically, unaccountable for their actions.
"In too many of these organizations, there are rewards for cheating and punishments for calling out the cheaters," Ms. Warren said in an interview Wednesday. "As long as that's the case, the biggest financial institutions will continue to put their customers and the economy at risk."
Ms. Warren's no-nonsense views are bracing. But they are also informed by a thorough understanding of how dysfunctional Washington now is. This failure has cost Main Street dearly, she said, but has benefited the powerful.
Wells Fargo got a lot of criticism from Ms. Warren, both in her book and in my interview - and on live television during the Senate Banking Committee hearing on the account-opening mess in September. She was among the harshest cross-examiners encountered by John G. Stumpf, who was Wells Fargo's chief executive at the time. "You should resign," she told him , "and you should be criminally investigated." (Mr. Stumpf retired the next month.)
This week, Ms. Warren called for the ouster of the company's directors and a criminal inquiry into the bank.
"Yes, the board should be removed, but that's not enough," she told me. "There still needs to be a criminal investigation. The expertise is in the regulatory agencies, but the power to prosecute lies mostly with the Justice Department, and if they don't have either the energy or the talent - or the backbone - to go after the big banks, then there will never be any real accountability."
Banks are not the only targets in Ms. Warren's book. Others include Wal-Mart, for its treatment of employees; for-profit education companies, for the way they pile debt on unsuspecting students; the Chamber of Commerce, for battling Main Street; and prestigious think tanks, for their undisclosed conflicts of interest.
My favorite moments in the book involve the phenomenon of regulatory capture: the pernicious condition in which institutions that are supposed to police the nation's financial behemoths actually come to view them as clients or pals.
One telling moment took place in 2005, when Ms. Warren, then a Harvard law professor, was invited to address the staff at the Office of the Comptroller of the Currency, a top regulator charged with monitoring the activities of big banks.Advertisement Continue reading the main story
She was thrilled by the invitation, she recalled in the book. After years of tracking various problems consumers experienced with their banks - predatory lending, sky-high interest rates and dubious fees - Ms. Warren felt that, finally, she'd be able to persuade the regulators to crack down.
Her host for the meeting was Julie L. Williams, then the acting comptroller of the currency. In a conference room filled with economists and bank supervisors, Ms. Warren presented her findings: Banks were tricking and cheating their consumers.DealBook
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After the meeting ended and Ms. Williams was escorting her guest to the elevator, she told Ms. Warren that she had made a "compelling case," Ms. Warren writes. When she pushed Ms. Williams to have her agency do something about the dubious practices, the regulator balked.
"No, we just can't do that," Ms. Williams said, according to the book. "The banks wouldn't like it."
Ms. Warren was not invited back.
Ms. Williams left the agency in 2012 and is a managing director at Promontory , a regulatory-compliance consulting firm specializing in the financial services industry. When I asked about her conversation with Ms. Warren, she said she had a different recollection.
"I told her I agreed with her concerns," Ms. Williams wrote in an email, "but when I said, 'We just can't do that,' I explained that was because the Comptroller's office did not have jurisdiction to adopt rules to ban the practice. I told her this was the Federal Reserve Board's purview."
Interestingly, though, Ms. Warren's take on regulatory capture at the agency was substantiated in a damning report on its supervision of Wells Fargo, published by a unit of the Office of the Comptroller of the Currency on Wednesday.
The report cited a raft of agency oversight breakdowns regarding Wells Fargo. Among them was its failure to follow up on a slew of consumer and employee complaints beginning in early 2010. There was no evidence, the report said, that agency examiners "required the bank to provide an analysis of the risks and controls, or investigated these issues further to identify the root cause and the appropriate supervisory actions needed."Advertisement Continue reading the main story
Neither did the agency document the bank's resolution of whistle-blower complaints, the report said, or conduct in-depth reviews and tests of the bank's controls in this area "at least from 2011 through 2014." ( The agency recently removed its top Wells Fargo examiner, Bradley Linskens, from his job running a staff of 60 overseeing the bank.)
"Regulatory failure has been built into the system," Ms. Warren said in our interview. "The regulators routinely hear from the banks. They hear from those who have billions of dollars at stake. But they don't hear from the millions of people across this country who will be deeply affected by the decisions they make."
This is why the Consumer Financial Protection Bureau plays such a crucial role, she said. The agency allows consumers to sound off about their financial experiences, and their complaints provide a heat map for regulators to identify and pursue wrongdoing.
But this setup has also made the bureau a target for evisceration by bank-centric politicians.
"There was a time when everything that went through Washington got measured by whether it created more opportunities for the middle class," Ms. Warren said. "Now, the people with money and power have figured out how to invest millions of dollars in Washington and get rules that yield billions of dollars for themselves."
"Government," she added, "increasingly works for those at the top."
Apr 20, 2017 | www.nakedcapitalism.comMexico's Economy Is Being Plundered Dry Posted on April 20, 2017 by Yves Smith Yves here. Most Americans know on some level that Mexico has become an economic and political disaster, save for those at the very top of the food chain. This post gives vignettes that bring home how much of a failed state it has become. And needless to say, the US had no small role in that outcome.
By Don Quijones, Spain & Mexico, editor at Wolf Street. Originally published at Wolf Street
The government of Mexico has a new problem on its hands: what to do with the burgeoning ranks of state governors, current or former, that are facing prosecution for fraud or corruption. It's a particularly sensitive problem given that most of the suspects belong to the governing political party, the Institutional Revolutionary Party (PRI), which ruled Mexico uninterruptedly from 1929 to 2000. It returned to power in December 2012 with the election of Enrique Peña Nieto. And it clearly hasn't changed its ways.
Some of the accused governors were so compromised they went on the run. In the last few weeks, two of them, Tomás Yarrington, former state governor of Tamaulipas, and Javier Duarte, former governor of Veracruz, were tracked down. Yarrington, accused of laundering proceeds from drug trafficking as well as helping Mexico's Gulf Cartel export "large quantities" of cocaine to the United States, was ensnared by Italian Police in the Tuscan city of Florence. He faces possible extradition to the United States.
Yarrington's successor as governor of Tamaulipas, Eugenio Hernández, a fellow PRI member who is also accused of close ties with narcotraficantes and money laundering, has not been seen in public since last June .
As for Duarte, he was caught this week by police in Guatemala. Like Yarrington, he wasn't exactly laying low. Among the accusations he faces is that of buying fake chemotherapy drugs , which were then unknowingly administered by state-run hospitals to children suffering from cancer. He and his cohorts purportedly pocketed the difference. He is also alleged to have set up 34 shell companies with the intention of diverting 35 billion pesos (roughly $2 billion) of public funds into his and his friends' deep pockets.
In just about any jurisdiction on earth, $2 billion is a substantial amount of money, even by today's inflated standards. But in Mexico, where neither the super rich (accounting for a very large chunk of the country's wealth) nor the super poor (accounting for roughly half of the population) pay direct taxes of any kind, it's a veritable fortune.
And when the country's public debt is already growing at an unprecedented pace, rampant corruption becomes a serious problem.
In the year 2000, Mexico had a perfectly manageable debt load of roughly 20% of GDP. Today, it is almost two and a half times that size. Last year alone the Mexican state issued a grand total of $20.31 billion in new debt, the largest amount since 1995, the year immediately after the Tequila Crisis when the country received an international bailout to rescue its entire banking system from collapse and to make whole the Wall Street investment banks that had gone all in on Mexican assets.
To make matters worse, much of Mexico's new debt is in foreign-denominated currencies. Between 2015 and 2016 alone, the total amount of euro and dollar-denominated debt it issued rose by 46%. Unlike debt issued in pesos, Mexico's central bank cannot just print dollars and euros to bail out bond holders or inflate away the debt. This debt must be serviced the hard way.
In recent years, Mexico's public debt has mushroomed in order to make up for lackluster growth, a weakening peso, much lower global oil prices, and the dwindling contribution to government coffers of the country's erstwhile sugar daddy, Pemex. The state-owned oil giant has itself been systematically plundered dry by its burgeoning ranks of senior managers and administrators, the untouchable, unsackable leaders of the oil workers' union, all closely aligned to PRI, and legions of Pemex contractors.
Between 2008 and 2016 Pemex's contribution to the government's tax revenues shrank from 40% to 13%. During roughly the same period (2009-2016) its debt grew 187% , to nearly $100 billion. Its pension liabilities amount to $1.2 billion. The losses and debt keep growing in tandem, while its production and reserves are shrinking. The company was already bailed out once last year.
The more Pemex's financial health declines, the larger the shortfall in public finances and the faster Mexico's public debt will grow.
The really twisted part? The more the debt grows, the more opportunities the country's corrupt politicians will get to feather their nests. It's not like there's much deterrent. In recent years only 17 of 42 serving or former governors suspected of corruption have been investigated, according to a study by María Amparo Casar, executive president of the advocacy group Mexicans Against Corruption and Impunity. Before the latest rash of detentions, only three of them ended up in prison.
"The decades of impunity have generated a level of shamelessness we've never seen before in Mexico," Max Kaiser, anti-corruption director for the Mexican Institute of Competitiveness (IMCO), told the New York Times . The excesses are more public than ever and have brought Mexicans to the verge of bankruptcy.
Mexico's debt continues to grow at a much faster pace than its economy, whose growth is forecast to slow this year to 1.5%, compared to last year's 2.4%. In February Mexico's top auditor, the Federal Audit Office (ASF), warned that Mexico's debt situation was just a step away from becoming unsustainable. A number of states are already facing bankruptcy , including Duarte's Veracruz.
Last August, Standard & Poor's lowered the outlook for Mexico's sovereign bonds from stable to negative and saw "an at least one-in-three possibility of a downgrade over the next 24 months." Mexico's foreign currency sovereign credit rating, which is what matters with bonds denominated in a foreign currency, at BBB+, is just three notches above junk. A downgrade would raise the cost of borrowing, pushing Mexico's finances even closer to the brink. In the meantime, the plunder must go on. By Don Quijones .
When it comes to debt, everything is relative, especially if you don't have a reserve-currency-denominated printing press. Read Is Mexico Facing "Liquidity Problems?"0 0 9 0 0 This entry was posted in Banana republic , Free markets and their discontents , Globalization , Guest Post , Income disparity , Politics , The destruction of the middle class on April 20, 2017 by Yves Smith .
Subscribe to Post Comments 37 comments Loblolly , April 20, 2017 at 10:15 am
Trade now with TradeStation – Highest rated for frequent tradersJTMcPhee , April 20, 2017 at 10:42 am
And needless to say, the US had no small role in that outcome.
Can you elaborate on this? What responsibility do average US citizens bear for Mexico's crisis? Given the massive wealth transfer upwards in the last decade do we not have the same corruption issues in the US, regardless of it being under cover of law?jpj , April 20, 2017 at 10:44 am
Maybe the stuff in this article has something to do with explaining the role "our" government and corruptorations have had and continue to have in catalyzing an dexporting and importing immiseration in Mexico and here "at home" too? "The Political Economy of Mexico's Drug War," http://isreview.org/issue/90/political-economy-mexicos-drug-warArizona Slim , April 20, 2017 at 12:46 pm
I don't know if this is what was meant by that comment or not but, at the very least, it is the US' appetite for drugs that has allowed the cartels to flourish into practically nation states unto themselves.palamedes , April 20, 2017 at 1:59 pm
And, guess what, legalizing drugs that are currently illegal, will put quite the crimp in the cartels' business model.
If legalization is too big a leap, the US could try decriminalization. I believe that this was done in Portugal.Massinissa , April 20, 2017 at 11:40 am
The problem with either is that a) The Mexican drug cartels are moving toward producing more lethal, cheaper drugs in massive quantities as the profits from selling marijuana dry up, and b) there needs to be, in the USA, a much more rigorous process regulating (as opposed to banning) controlled substances and of assisting addicts towards recovery. We've made periodic moves in this direction, but none have had staying power and that needs to change.Harry , April 20, 2017 at 2:55 pm
Us having no small role in crisis =/= US citizens having role in crisis.
If you havn't noticed yet, the government in the US doesn't answer to the citizenry at all.Adam Eran , April 20, 2017 at 12:25 pm
Quite so --lyman alpha blob , April 20, 2017 at 2:11 pm
@Loblolly: The U.S.'s role south of its borders has been predation and looting for centuries now. I've read that between 1798 and 1994 the U.S. was responsible for 41 changes of government south of its borders.
When the Haitians, one of the two poorest nations in the hemisphere, had the temerity to elect Jean Bertrand Aristide, the candidate of the poor, the Clintons sent troops, and Bush 43 kidnapped him and took him to Central Africa.
The Reagan administration famously sold arms to Iran right after it had kidnapped U.S. embassy staff to fund a proxy war against the other poorest nation in the hemisphere, Nicaragua. Reagan asked the Mexican president to endorse his line that Nicaragua was a threat to the U.S. The Mexican president replied he would be happy to do that if there was any way he could say such a thing without being laughed out of office.
More recently, then secretary of state Hillary Clinton blessed the Honduran coup, installing a military junta to replace the democratically-elected government–a government which had the temerity to try to raise Honduras' minimum wage from 60¢ an hour. (The nerve of those people!). Meanwhile, 30,000 unaccompanied minors made their way to Gringolandia to avoid Honduran chaos. (I heard from WaPo's Ruben Navarette, deploring the treatment of these kids, but he uttered not a peep about what made them choose exile over their homes.)
For Mexico's current corruption and sad-and-sorry economy, we can at least take credit for NAFTA. Actually their president, Carlos Salinas Gotari, drank enough of the neoliberal koolaid with his Harvard education to propose "free trade" to Bush 41 whose administration authored the actual legislation. Clinton signed the treaty with environmental and labor provisions that just aren't enforced.
To demonstrate what a great idea was NAFTA, almost immediately the U.S. had to come up with a $20 billion loan to deal with the capital flight it permitted–and not incidentally to bail out U.S. banks that bet wrong on Mexico, and to rehearse the U.S. bank bailouts for any later financial scandal.
One might guess that shipping a bunch of subsidized Iowa corn south of the border would put some subsistence corn farmers in Mexico out of business and it did. Sure, corn is only arguably the most important food crop in the world, and those little farmers were keeping the diversity of the corn genome alive, but hey! They weren't making any money for Monsanto!
In the wake of NAFTA, Mexican real incomes declined 34% (says Ravi Batra in his Greenspan's Fraud )–really saying something in a country where half the population gets by on less than $4 a day. One has to return to the halcyon days of the Great Depression to find a decline like that in the U.S. economy.
Of course that U.S. decline provoked no great migration oh wait! The Okies! The only more recent comparable economic decline (besides the Greeks) that I can think of is when Cuba lost its oil and subsidies from the Soviets in the early '90s. In the U.S., Michael Pollan reports we get one calorie of food by burning 10 calories of petroleum. Without that Russian oil, I've read that the average Cuban lost 20 lbs.
So the constant attacks, political, economic and military, from the U.S. have had an effect. All those "illegal aliens" (no, not Martians with unpaid traffic tickets actually: "undocumented workers") came north for a reason. Ask one if he'd rather be back home, and you'll seldom hear them say "no."
We read daily in nakedcapitalism how we're sowing the wind, but we're surely going to reap the whirlwind for the way the U.S. has treated its southern neighbors.Ping , April 20, 2017 at 2:44 pm
It's widely known that NAFTA allowed US agriculture companies that are heavily subsidized by the government to dump their cheap corn in Mexico putting farmers there off their land and out of business. And yet people still wonder why so many are immigrating to the US.
Also, I'd keep an eye on that governor who is facing extradition to the US for facilitating the export of "large quantities" of cocaine. Speculation to be sure, but something tells me you don't do that without the knowledge and possible assistance of Uncle Sugar.
I'd say ask Gary Webb, but he's dead of course after exposing a similar scandal back in the 90s.Jim Haygood , April 20, 2017 at 10:43 am
NAFTA is directly responsible for increased cartel power. Besides corn dumping disrupting Mexico's rural economy and legitimate income, it generated the "maquiladora's" or Mexican factories along the US border for assembling tariff free imported materials for export.
The large population increase the factories attracted had no increase in public infrastructure like schools, housing etc and youth gangs proliferated. The cartels then began using the gangs as enforcers for smuggling routes and distribution into the US and many associated criminal tasks. A cascade of events ..carl , April 20, 2017 at 12:10 pm
Between 2008 and 2016 Pemex's contribution to the government's tax revenues shrank from 40% to 13%.
A radio journalist friend in Guadalajara has been expecting and writing about this scenario for at least a dozen years. Mexico is a petro-state, but production is declining in its big oilfields and isn't being replaced. He visited South America to check out alternate bolt holes, on the theory that when the oil runs out, it's gonna turn ugly in Mexico.
So far his worries proved to be early. We don't have enough data points, but it's worth noting that Mexico's 1982 debt crisis occurred after a spike in US interest rates, a US recession and an oil patch meltdown in 1981.
Similarly, the US Fed started hiking interest rates in early 1994, while the price of oil had been sliding toward $15/bbl ever since the late 1990 spike to $40/bbl in anticipation of the Gulf war. Here's a long term chart of crude oil:
Now J-Yel and her sidekick Stanley Mellon Fischer are once again "normalizing" interest rates, in a process they imagine to be smooth sailing. One should doubt this proposition. Among other things, recent extreme peso devaluation makes Mexico's dollar-denominated debt more onerous to service.
By next year, the question on everyone's lips in Vichy DC may be " Who lost Mexico? "Kalen , April 20, 2017 at 10:53 am
IIRC, Cantarell, the supergiant Mexican offshore field, peaked quite awhile ago. Maybe some new discoveries have made up for some of the decline, but I hadn't heard much about that.djrichard , April 20, 2017 at 12:30 pm
If US establishment would go after murderous Mexican oligarchy's Wall Street interests and support democratic movements in Mexico based of egalitarian principles, return of land to the people and establish social justice, we would have to build a wall to keep Mexicans in the US not the other way around.
It would also stop phony war on drugs in Mexico, a war that is nothing but a modern form, a sad reincarnation of popular insurrection against Mexican aristocracy happens to be at this time funded by drug trade, as a proud Mexican tradition of noble outlaws, a country founded on "Bandits" myth as national heroes bringers of independence from Spain.
If the US removed big Imperial foot of the throats of billions of peoples all over the world, and that includes Mexico nobody would want to go to America enjoying living in their own countries as everybody wants.
World immigration is an artifact of exploitative globalism and wars. Nothing natural or normal or desired is in emigration of people. Tourism yes but emigration is a sociopolitical tools of global oligarchy combined with chaos and violence.
If US let, as it were before in history (revolution of 1910-1930-ties, before PRI was corrupted to the bone) for political left to takeover the Mexican government then fate of Mexican people would have changed significantly for better.Ranger Rick , April 20, 2017 at 11:18 am
It would also stop phony war on drugs in Mexico
This is an extension of the phone war on drugs in the US. See A Narco History: How the United States and Mexico Jointly Created the "Mexican Drug War" .
My belief is that the US war on drugs is just another example of what I'm calling CJ Hopkin's law of propaganda ,
The primary aim of official propaganda is to generate an "official narrative" that can be mindlessly repeated by the ruling classes and those who support and identify with them. This official narrative does not have to make sense, or to stand up to any sort of serious scrutiny. Its factualness is not the point. The point is to draw a Maginot line, a defensive ideological boundary, between "the truth" as defined by the ruling classes and any other "truth" that contradicts their narrative.
Or to use your language, it's to keep in place the foot of US authority on its own people. The damage to Mexico in the war on drugs is collateral damage – a necessary cost of keeping people in the US disciplined. Nothing personal just bidness.Don Quijones , April 20, 2017 at 11:24 am
This article focuses on the oil, but where does Carlos Slim figure into this? I find it endlessly fascinating that one of the world's richest people hails from one of its poorest countries.RabidGandhi , April 20, 2017 at 11:36 am
Here's an article on that very subject from a few years ago:
http://www.nakedcapitalism.com/2014/09/slimlandia-the-land-of-mexican-oligarchs.htmlSeamus Padraig , April 20, 2017 at 1:09 pm
Point taken, but it should be noted that in terms of per capita GDP (PPP), Mexico is 68th out of 186 in the world, meaning it is not really one of the world's poorest countries. That said, there is rampant poverty in Mexico that makes Slim's hoarding all the more despicable.RabidGandhi , April 20, 2017 at 1:25 pm
Per capita GDP is just an average. Median income is what you should be considering here. There are a handful of Carlos Slims down there that bust the curve for everyone else. Oh, by the way, did I mention that Señor Slim now owns the New York Times?RabidGandhi , April 20, 2017 at 11:31 am
Agreed, median income is a much more telling stat. Mexican median annual household income is $11,680 vs. $9,733 worldwide.Mel , April 20, 2017 at 11:58 am
Far be it from me to defend the Peña Nieto administration, but I'm not sure from where Quijones gets this:
To make matters worse, much of Mexico's new debt is in foreign-denominated currencies. Between 2015 and 2016 alone, the total amount of euro and dollar-denominated debt it issued rose by 46%.
The figures I have from the Bank of México show the country ended 2015 with a gross external debt of USD $417bn, while it ended 2016 at USD $412 bn: ie not a 46% increase but rather the first decrease in Mexico's external debt since 2009.
What I do see is that the total external debt (in dollars) decreased but the peso lost 18% to the USD in 2016. Since GDP only grew 7% last year, Mexico's external debt as a percentage of GDP (denominated in pesos) would have grown by around 40%. But this goes against Quijones' correct point that " [u]nlike debt issued in pesos, Mexico's central bank cannot just print dollars and euros to bail out bond holders or inflate away the debt. ". Therefore shouldn't the question be the absolute external debt in dollars instead of the relative amount in pesos?djrichard , April 20, 2017 at 12:12 pm
I would guess that we want to answer the question "How much Mexican production would have to be diverted to pay off that debt?" So we either work out the value of Mexican GDP in dollars, or convert the value of the debt to pesos.RabidGandhi , April 20, 2017 at 1:58 pm
Therefore shouldn't the question be the absolute external debt in dollars instead of the relative amount in pesos?
Simpler to keep the currency conversions out, and just track changes on a per currency basis.
A perennial question I always ask when it comes to trade imbalances by the US is that we send our dollars to foreign countries for goods, and it only a subset of the US dollars come back to the US for goods what's happening to the rest of our US dollars? In the case of Mexico, an answer in theory could be that at least some of those US dollars are being used to pay US debt. But that would mean the Fed Gov of Mexico would have to implement a tax that is denominated in US dollars. Which would then fall on their exporters, as they're the ones hoovering up the US dollars. And they don't want that.
So instead they tax the losers. And they only have pesos. So the conversion rate is an issue.
What's interesting in all this is that while Mexico's Fed Gov is taking on debt in US dollars, their central bank owns US treasuries (that's how they manipulate their currency). But it begs the question, is there a way that Mexico's central bank and Mexico's Fed Gov could come to a deal to use the US treasuries that the central bank is holding to cancel out the US debt obligation by Mexico's Fed Gov? I'm guessing no – it's the principle of the matter, lol.
To make matters worse, much of Mexico's new debt is in foreign-denominated currencies.
Why do countries do this to themselves? Seems to be the very definition of insanity.Susan the other , April 20, 2017 at 11:54 am
"Why do countries do this to themselves?" They don't. They have an elite that does this to the country because it benefits them as a class, with most people in the country excluded from the decision-making process.Seamus Padraig , April 20, 2017 at 1:12 pm
I don't get what good it can possibly do to build a wall to keep those bad hombres out when the bad hombres are all the politicians in Mexico. This is not a cautionary tale, it's too late for that. We need entirely new thinking here. Look how complex Brexit is – which lets us know how detailed the union tried to be in order to protect its interests. Which is looking pretty futile. Victor Orban was the only leader in the EU to put up a wall to keep refugees/immigrants out and instead of sanctioning Hungary, Mutti has confessed her immigration policy was a mistake. Why on earth didn't she say the ME war was a mistake? It's practically genocide. Three years ago when Syrians started leaving in a panic they knew it was going to be annihilation. How did they know they were sitting on such unlucky ground? If free trade treaties had a way of maintaining decent wages and living standards as the prerequisite to that trade we could begin to set things right. And that is what we should be doing instead of going to war to kickstart the free market economy. Trump is acting like that wall is actually infrastructure. And I wonder if people are amused by the double meaning of "the war on poverty." Everything is such a mess we can't keep pretending that the basics we follow are right. It seems like one long and insane emergency. I'm so burned out with political failure.pretzelattack , April 20, 2017 at 2:04 pm
If free trade maintained "decent wages and living standards," the neo-liberal establishment would be against them.curlydan , April 20, 2017 at 12:10 pm
heard that.Don Quijones , April 20, 2017 at 12:50 pm
"[Pemex's] pension liabilities amount to $1.2 billion" this figure seemed a bit low in today's world of inflated pension return expectations–wondering about the source here. I saw the following study said Pemex's liabilities were closer to $90 billion although it is Wharton.
"Pemex's $90 billion in unfunded pension liabilities has been a major headache"
http://knowledge.wharton.upenn.edu/article/pemexs-pension-problem-oil-giant-slippery-ground/Don Quijones , April 20, 2017 at 12:19 pm
That is a terrible typo on my part and I hang my head in shame - it should read 1.8 trillion pesos (roughly $90 billion at today's exchange rate), though there's some controversy around the number since some of the liabilities were supposed to have been transferred to the government's books last year. I don't how how the $1.2 billion crept in but I apologize with complete sincerity to all readers (and Yves) for the cock up.
DQRabidGandhi , April 20, 2017 at 1:16 pm
Hi Rabid Gandhi,
That data point you mention was taken from an article (second paragraph down) published in EL Financiero, the third most read newspaper in Mexico and an affiliate of Bloomberg. Will look into the disparity.
As for Mexico's GDP, it grew by 2.3% last year, not 7%. The country hasn't experienced such buoyant growth for decades - and certainly not since joining NAFTA.
Thanks.Don Quijones , April 20, 2017 at 1:30 pm
Thanks DQ: sorry I wasn't clear about the 7% figure; the Bank of Mexico data I cited refer to nominal GDP growth in pesos. Since the peso devalued 18% to the dollar in 2016, real GDP in dollars shrank from USD 1.3 trillion to 1.15 trillion. Might this account for why EF calculated a 46% increase in external debt– because they are stating how many dollars Mexico borrowed but calculated in pesos? If so, this figure is misleading and detracts from your argument: those obligations are in foreign currencies, so their value in pesos is beside the point.
As I see it, the external debt is not (yet) a major issue in Mexico; more of a concern are the bonds issued by the states and semi-public companies that cannot print their own currencies and will leave the public on the hook. (Not to mention PRI whacking the public with spending cuts and utility/gas hikes, which are another story )River , April 20, 2017 at 12:38 pm
Thanks for clarifying, RG. And you're probably right: external debt is not the biggest issue here. More important are the out of control public spending at the regional level, the systemic corruption at both the state and federal level, which Peña Nieto's government has done nothing to address, and Pemex's worsening woes, and the risk they pose to Mexico's fiscal health.
If the peso once again begins to fall in value, the exposure of Mexico's corporate sector to foreign denominated debt is likely to be a much more immediate threat than the government's.Seamus Padraig , April 20, 2017 at 1:13 pm
Mexico has always been like this. Even prior to American meddling. Transferring all their mineral wealth i.e. silver to China for cheap, yet profitable, ceramics, and turning the Yucatan from growing food into the plants that were used to weave bags for storage containers in the 18th C., peonage and companies stores, on and on it goes.
What's happening now is just a continuation of the plundering that's been happening since the 16th C.Jeff N , April 20, 2017 at 12:44 pm
Quite correct. It all began with the Spaniards centuries ago.Sutter Cane , April 20, 2017 at 1:44 pm
this sounds like the standard bezzle:
run up debts
pocket the things
burn down the store
collect insurance $ on everything that was "inside" the store (even though it had actually been looted long ago)pretzelattack , April 20, 2017 at 2:05 pm
As for Duarte, he was caught this week by police in Guatemala. Like Yarrington, he wasn't exactly laying low. Among the accusations he faces is that of buying fake chemotherapy drugs, which were then unknowingly administered by state-run hospitals to children suffering from cancer. He and his cohorts purportedly pocketed the difference.
Shades of Harry Lime, no? The drug war has done to Mexico what it took WWII to do to Vienna.Phemfrog , April 20, 2017 at 2:37 pm
seems like the world is being plundered dry, at various rates of impoverishment.
Anecdote here, but an uncle on my husband's side who lives in Mexico City had mentioned big problems with his pension. (he works in media, and the family refers to it as a government pension). he said that pensions are being looted and they are paying out pennies on the dollar. so he withdrew what he could in lump sum and bought a small apartment near a beach somewhere. the only way to keep any of the value. they say what used to be hundreds of dollars a month to retire on is now less than $50 per month, and that no one can live off that little.
Apr 12, 2017 | marknesop.wordpress.comWarren , April 10, 2017 at 4:36 amUkraine's central bank chief resignsLyttenburgh , April 10, 2017 at 10:26 am
The governor of Ukraine's central bank, Valeriya Gontareva, has resigned the post after three years, following intense pressure from tycoons whose banks she shut down for conducting illegal transactions and loans.
http://www.bbc.co.uk/news/business-39551699Meanwhile her personal wealth after 3 years in chrage of Ukraine's finances (read: of the Western donors money) MYSTERIOUSLY increased to 7 blns of hryvnias and entire squadron of luxury cars (from 3.5 mln hryvnas upwards each). What can I say? Здобулы!cartman , April 10, 2017 at 11:15 am
http://vesti-ukr.com/svetskie-vesti/90064-gontareva-ezdit-na-pjati-avto-i-uzhinaet-u-bassejnaI wonder if Nabiullina has a pink Barbie car. Probably not to her taste.Jen , April 10, 2017 at 10:43 pmI think we've found Dave Cameron's soul mate.Moscow Exile , April 10, 2017 at 10:47 pmYou are not suggesting that she resembles Miss Piggy, are you?Jen , April 11, 2017 at 12:49 amShe looks the type to put Call-Me-Dave in his place, which is in a pig sty.et Al , April 10, 2017 at 11:18 amNeuters: Ukraine president's grip weakens as central bank chief quits
If Ukraine's central bank chief needed any more incentive to quit, last week she woke up to find the image of a pig draped in a Russian flag spray-painted onto the wall of her house and a gaggle of young protesters calling her a Russian stooge.
After a sustained hate campaign that also included a coffin laid at her door, Valeria Gontareva finally quit on Monday.
Her departure, with no obvious candidate for a successor, leaves President Petro Poroshenko with one fewer ally in power at a time when lenders keeping Ukraine afloat already question his ability to follow through on promised reforms .
Apr 06, 2017 | www.nakedcapitalism.comFrom a trading perspective, the big news was at the top: "The minutes will show it will be unlikely that the labor market improvement will be substantial enough to stave off new Treasury purchases into 2013." And in the sixth paragraph it describes how the Fed was likely to vote as early as December to stop the part of its MBS buying designed to counter the bonds being paid off (due to foreclosures, home sales, refis) and buy roughly $45 billion a month of Treasuries instead.
The amount of granular detail was stunning. For instance:
The committee will attach a predictive timetable outlining the duration of these purchases The monthly MBS purchases of around $40 billion will continue along side the new program Tomorrow's minutes will reference a staff paper The minutes will show the dovish majority was ready .[to make] open ended MBS and Treasury purchases as early as last month.
This is so specific that it comes of as if Medley either got its hands on an advance draft of the FOMC minutes or someone read it to her.
The report also describes, again in depth, how the decision process prior to the September meeting departed from established norms as well as voyeristic tidbits, such as that finalizing the text of the policy recommendations kept staffers up until after midnight.
Given how extraordinarily revealing this note was, Lacker's departure is unsatisfactory. Specifically:
Either Lacker lied or the investigators aren't even close to getting to the bottom of this . Lacker has admitted only to taking a call from the Medley analyst, supposedly having her run insider detail by him, and indirectly confirming it by not getting off the phone. From his resignation letter, which was released by law firm McGuireWoods, not the Richmond Fed:
During that October 2, 2012 discussion, the [Medley] Analyst introduced into the conversation an important non-public detail about one of the policy options considered by participants prior to the meeting. Due to the highly confidential and sensitive nature of this information, I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse or express my inability to comment and the interview continued. Additionally, after that phone call, I did not, as required by the Information Security Policy, report to any FOMC personnel that the Analyst was in possession of confidential FOMC information. When Medley published a report by the Analyst the following day, October 3, 2012, it contained this important detail about one of the policy options and I realized that my failure to decline comment on the information could have been taken by the Analyst, in the context of the conversation, as an acknowledgment or confirmation of the information.
This reads like the equivalent of a plea bargain, that Lacker and his lawyers negotiated him to 'fess up to the most minimal breach possible provided he resign.
Alternatively, if Lacker is being truthful, it means that one or more additional people provided the information to the Medley analyst, Regina Schleiger.
Apr 04, 2017 | jessescrossroadscafe.blogspot.com
The Richmond Fed's noted rate hawk and serial dissenter Jeffrey Lacker resigned today as a result of an investigation into a leak in 2012 of confidential information to an analyst that sells hard to get information to wealthy subscribers.
The guest commentators, talking heads, and spokesmodels were attributing this resignation, or faux pas if you will, to an inadvertent slip by one of their own who is burdened with managing the finances of the US.
They kept mentioning that they do not wish this incident to diminish the public's confidence in the FED. I guess fomenting serial asset bubbles and enabling historic financial inequality through hare-brained policies is not enough. LOL
Apr 04, 2017 | economistsview.typepad.comBenIsNotYoda April 04, 2017 at 10:25 AMhttps://www.bloomberg.com/news/articles/2017-04-04/fed-s-lacker-quits-today-after-improper-disclosure-ny-timesBenIsNotYoda , April 04, 2017 at 10:41 AM
Fed's Lacker Quits Today After Improper Disclosure: NY Times
Richmond Fed president, Jeff Lacker, says he is resigning effective today after improperly disclosing confidential Fed information, NY Times said in tweet.
Fed President involved in disclosing future QE to analyst at firm selling research to hedge funds.
In other places, this is called insider information. At the Fed? I am shocked there is gambling at this establishment.
We need to clean house at the Fed. Starting at the top.Statement Of Dr. Jeffrey Lackerlibezkova , April 04, 2017 at 11:26 AM
During the past 13 years it has been my privilege to serve as President of the Federal Reserve Bank of Richmond. It has also been an honor to contribute to the development of our nation's monetary policy as a member of the Federal Reserve's Federal Open Market Committee ("FOMC").
While transparency of the monetary policy process is important, equally important are the confidentiality policies that protect the internal deliberations of the FOMC and ensure the integrity of our financial markets. The Federal Reserve's confidentiality policies seek to guide participants in maintaining the balance between transparency and confidentiality. The FOMC has had in place for many years two specific policies relating to confidentiality. the FOMC Policy on External Communications of Committee Participants (the "External Communications Policy-) and the Program for Security of FOMC Information (the "Information Security Policy").
In 2012, my conduct was inconsistent with those important confidentiality policies. Specifically, on October 2, 2012, I spoke by phone with an analyst ("the Analyst") concerning the September 2012 meeting of the FOMC. The Analyst authors reports on Federal Reserve matters on behalf of Medley Global Advisors ("Medley'). Medley publishes macro-economic policy intelligence for institutions such as hedge funds and asset managers and is owned by the Financial Times Limited.
During that October 2, 2012 discussion, the Analyst introduced into the conversation an important non-public detail about one of the policy options considered by participants prior to the meeting. Due to the highly confidential and sensitive nature of this information, I should have declined to comment and perhaps have ended the phone call. Instead, I did not refuse or express my inability to comment and the interview continued. Additionally, after that phone call I did not, as required by the Information Security Policy, report to any FOMC personnel that the Analyst was in possession of confidential FOMC information. When Medley published a report by the Analyst the following day, October 3, 2012, it contained this important detail about one of the policy options and I realized that my failure to decline comment on the information could have been taken by the Analyst, in the context of the conversation, as an acknowledgment or confirmation of the information.
I deeply regret the role I may have played in confirming this confidential information and in its dissemination to Medley's subscribers. In this episode, as in all of my communications with analysts, journalists and the public, it was never my intention to reveal confidential information. I further acknowledge that through this and other conversations with the Analyst, I may have contravened the External Communications Policy, which prohibits providing any profit-making person or organization with a prestige advantage over its competitors.
Following these events, I was interviewed on December 10, 2012, as part of an internal review conducted by the General Counsel of the FOMC. In advance of that interview, on December 6, 2012, I provided written responses to a questionnaire issued by the General Counsel seeking, among other things, all relevant information regarding my communications with the Analyst. Althoug it was my intention to cooperate fully with the internal review, I regret that I did not disclose to the General Counsel, either in my December 6, 2012 questionnaire or the December 10, 2012 interview, that the Analyst was in possession of confidential information during my conversation with her on October 2,2012.
In 2015, I was interviewed again as part of a separate investigation conducted by the United States Attorney's Office for the Southern District of New York, the Office of the Inspector General of the Federal Reserve Board, the Federal Bureau of Investigation, and the U.S. Commodity Futures Trading Commission. In this subsequent 2015 interview with law enforcement officials, I did disclose that the Analyst was in possession of confidential information during my October 2. 2012 conversation with her.
I apologize to my colleagues and to the public I have been privileged to serve. I have always strived to maintain the appropriate balance between transparency and confidentiality, but I regret that in this instance I crossed the line to confirming information that should have remained confidential. I previously announced my intention to retire as President of the Federal Reserve Bank of Richmond in October 2017, and in light of these matters I have decided to make my departure from the Federal Reserve effective today."Fed President involved in disclosing future QE to analyst at firm selling research to hedge funds."
"I am shocked there is gambling at this establishment."
That's good -- Thank you --
Now let me wear Anne hat :-). The proper quote is "I'm shocked, shocked to find that gambling is going on in here! "
== quote ==
Rick: How can you close me up? On what grounds?
I'm shocked, shocked to find that gambling is going on in here!
[a croupier hands Renault a pile of money]
Croupier: Your winnings, sir.
Captain Renault: [sotto voce] Oh, thank you very much.
Captain Renault: Everybody out at once!
Jan 20, 2017 | economistsview.typepad.com
Peter K. : January 20, 2017 at 04:35 AMlibezkova -> Peter K.... , -1
Noah Smith: The Ways That Pop Economics Hurt America - Noah Smith
"So I wonder if economism was really as unrealistic and useless as Kwak seems to imply. Did countries that resisted economism -- Japan, for example, or France [Germany?] -- do better for their poor and middle classes than the U.S.? Wages have stagnated in those countries, and inequality has increased, even as those countries remain poorer than the U.S. Did the U.S.'s problems really all come from economism, or did forces such as globalization and technological change play a part? Cross-country comparisons suggest that the deregulation and tax cuts of the 1980s and 1990s, although ultimately excessive, probably increased economic output somewhat."
Ugh what an awful display of pop economism. Globalization and technology are "impersonal forces." No mention of the rise of inequality or the SecStags. No mention of monetary policy fail in Europe. The biggest lies of economism are the lies of omission.Thank you --
Looks like this concept of "Economism" introduced by James Kwak in his book Economism is very important conceptual tool for understanding the tremendous effectiveness of neoliberal propaganda.
I think it is proper to view Economism as a flavor of Lysenkoism. As such it is not very effective in acquiring the dominant position and suppressing of dissent, but it also can be very damaging.
== quote ==
...When competitive free markets and rational well-informed actors are the baseline assumption, the burden of proof shifts unfairly onto anyone proposing a government policy. For far too many years, free-marketers have gotten away with winning debates by just sitting back and saying "Oh yeah? Show me the market failure!" That deck-stacking has long forced public intellectuals on the left have to work twice as hard as those safely ensconced in think tanks on the free-market right, and given the latter a louder voice in public life than their ideas warrant.
It's also true that simple theories, especially those we learn in our formative years, can maintain an almost unshakeable grip on our thinking.
For example, the basic Econ 101 theory of supply and demand is fine for some products, but it doesn't work very well for labor markets. It is incapable of simultaneously explaining both the small effect of minimum wage increases and the small impact of low-skilled immigration. Some more complicated, advanced theory is called for.
But no matter how much evidence piles up, people keep talking about "the labor supply curve" and "the labor demand curve" as if these are real objects, and to analyze policies -- for example, overtime rules -- using the same old framework.
An idea that we believe in despite all evidence to the contrary isn't a scientific theory -- it's an infectious meme.
Academic economists are unsure about how to respond to the abuse of simplistic econ theories for political ends. On one hand, it gives them enormous prestige. The popularity of simplistic econ ideas has made economists the toast of America's intellectual classes.
It has sustained enormous demand for the undergraduate econ major, which serves, in the words of writer Michael Lewis, as a "standardized test of general intelligence" for future businesspeople. But as Kwak points out, the simple theories promulgated by politicians and on the Wall Street Journal editorial page often bear little resemblance to the sophisticated theories used by real economists.
And when things go wrong -- when the financial system crashes, or millions of workers displaced by Chinese imports fail to find new careers -- it's academic economists who often get blamed, not the blasé and misleading popularizers.
... ... ...
Russia and China have given up communism not because they stopped having working classes, but because it became obvious that their communist systems were keeping them in poverty. And Americans are now starting to question economism because of declining median income, spiraling inequality and a huge financial and economic crisis.
Mar 09, 2017 | profile.typepad.comsaid... The ProMarket piece is interesting, but really misses the point. "Regulation" in itself is not what matters, but rather what kinds of regulations and how they work. Some regulations, favored by the industries themselves (like taxi licensing in most metropolitan areas) tend to act to reduce competition and enhance company profits. Others, like the background checks mentioned in the article, serve to protect the public interest. Reply Thursday, March 09, 2017 at 07:42 AM Youarecorrect said in reply to DrDick ... You are correct to point out that a catchall phrase like regulation disguises many intentions. But there is a tension between motivations of regulation. A regulation that is supposed to increase reliability (e.g. vetting of entrants), can be essentially a rent seeking tool in disguise. That's the point of the ProMarket article. Reply Thursday, March 09, 2017 at 11:27 AM DrDick said in reply to Youarecorrect... This is really a question of looking at who is proposing or favoring the regulation and how it is structured and thus whose interests are being protected. If it is coming from established businesses, it is about rent seeking. Reply Thursday, March 09, 2017 at 01:53 PM
Mal Warwickon July 21, 2014
They shaped US foreign policy for decades to come
One of them was the most powerful US Secretary of State in modern times. The other built the CIA into a fearsome engine of covert war. Together, they shaped US foreign policy in the 1950s, with tragic consequences that came to light in the decades that followed. These were the Dulles brothers, Foster and Allen, born and reared in privilege, nephews of one Secretary of State and grandsons of another.
What they did in office
Allen Dulles masterminded the coup that turned Iranian prime minister Mohammad Mossadegh out of office and installed the Shah on the Peacock Throne. Less than a year later he presided over the operation that ousted Guatemalan president Jacobo Arbenz. He set in motion plots to assassinate Gamal Abdel Nasser in Egypt, Sukarno in Indonesia, Ho Chi Minh in Vietnam, Patrice Lumumba in the Congo, and Fidel Castro in Cuba. He delegated to his deputy, Richard Bissell, leadership of the Bay of Pigs invasion of Cuba. Later, out of office, he chaired the Warren Commission on the assassination of John F. Kennedy. "'From the start, before any evidence was reviewed, he pressed for the final verdict that Oswald had been a crazed gunman, not the agent of a national and international conspiracy.'"
Foster Dulles repeatedly replaced US ambassadors who resisted his brother's assassination plots in countries where they served. Pathologically fearful of Communism, he publicly snubbed Chinese foreign minister Chou En-Lai, exacerbating the already dangerous tension between our two countries following the Korean War. The active role he took in preventing Ho Chi Minh's election to lead a united Vietnam led inexorably to the protracted and costly US war there. He reflexively rejected peace feelers from the Soviet leaders who succeeded Josef Stalin, intensifying and prolonging the Cold War. Earlier in life, working as the managing partner of Sullivan & Cromwell, the leading US corporate law firm, Foster had engineered many of the corporate loans that made possible Adolf Hitler's rise to power and the growth of his war machine.
What does it mean now?
At half a century's remove from the reign of the formidable Dulles brothers, with critical documents finally coming into the light of day, we can begin to assess their true impact on US history and shake our heads in dismay. However, during their time in office that spanned the eight years of Dwight Eisenhower's presidency and, in Allen's case, extended into Kennedy's, little was known to the public about about Allen's activities (or the CIA itself, for that matter), and Foster's unimaginative and belligerent performance at State was simply seen as a fair expression of the national mood, reflecting the fear that permeated the country during the most dangerous years of the Cold War.
Diving deeply into recently unclassified documents and other contemporaneous primary sources, Stephen Kinzer, author of The Brothers, has produced a masterful assessment of the roles played at the highest levels of world leadership by these two very dissimilar men. Kinzer is respectful throughout, but, having gained enough information to evaluate the brothers' performance against even their own stated goals, he can find little good to say other than that they "exemplified the nation that produced them. A different kind of leader would require a different kind of United States."
Their unique leadership styles
To understand Foster's style of leadership, consider the assessments offered by his contemporaries: Winston Churchill said "'Foster Dulles is the only case I know of a bull who carries his own china shop around with him.'"
Celebrated New York Times columnist James Reston "wrote that [Foster] had become a 'supreme expert' in the art of diplomatic blundering. 'He doesn't just stumble into booby traps. He digs them to size, studies them carefully, and then jumps.'"
Senator William Fulbright, chair of the Senate Foreign Relations Committee, said Foster "misleads public opinion, confuses it, [and] feeds it pap." "A foreign ambassador once asked Foster how he knew that the Soviets were tied to land reform in Guatemala. He admitted that it was 'impossible to produce evidence' but said evidence was unnecessary because of 'our deep conviction that such a tie must exist.'" (Sounds similar to the attitude of a certain 21st-century President, doesn't it?)
Allen, too, comes up very, very short: "He was not the brilliant spymaster many believed him to be. In fact, the opposite is true. Nearly every one of his major covert operations failed or nearly failed . . . [Moreover,] under Allen's lackadaisical leadership, the agency endlessly tolerated misfits." He left the CIA riddled with "lazy, alcoholic, or simply incompetent" employees.
Stephen Kinzer was for many years a foreign correspondent for the New York Times, reporting from more than fifty countries. The Brothers is his eighth nonfiction book. It's brilliant.
W. J. Haufon June 27, 2014
Without John Foster Dulles There Would Have Been No Hitler and No Nazi Germany!
After the Treaty of Versailles mandated the imposition of incredibly severe monetary reparations on Germany, John Foster Dulles in the 1930s, as a partner in his law firm of Sullivan and Cromwell, assembled a coalition of banks to lend Germany over $1 trillion, (in today's dollars), supposedly for them to pay these reparations. Had Foster not organized these massive bank loans to Hitler's Germany and organized the sale of raw materials such as cobalt to fabricate armor plating to build Germany's war machine, there would have been no Nazi war machine or an Adolf Hitler to kill millions of Americans, ally troops and civilians in a war that would have never happened.
As a reward our government appointed John Foster Dulles as Secretary of State so he could continue his war against democracy by orchestrating the overthrow of democratically elected leaders such as the Prime Minister of Iran to restore the Shah, and then continuing his reign of terror against other democratically elected governments such the CIA overthrow of the President of Guatemala in 1954 by his brother Allen, Director of the CIA, and installing a US controlled puppet President so the United Fruit could continued its monopolistic hold on the banana industry in that country and eventually throughout Central and South America and the Caribbean.
Oh did I mention that JFD was a stockholder in United Fruit. Corporate greed is not new but for members of the US Congress and the Administartion to support corporate interests over Americans safety and put money ahead of the protection of the people of our country as well as the people of other nations is a violation of our US Constitution and these people should not be immune from prosecution. G.W. Bush destroyed the infrastructure of an entire country and he killed hundreds of thousand of innocent citizens just so Brown & Root and Halliburton, V.P. Cheney's company, could receive billions of dollars of US taxpayer monies to rebuild the very infrastructure that Bush destroyed that provided the life support for the people of Iraq.
Our Founding Fathers would never had fought to build a country of democratic principals if they knew that the political representatives in this country would worship money and support corporate greed over American human rights and freedoms.
G.W. Bush said that the attacks on 9-11 were because "they hate our freedoms". What a disgrace for a President to lie and not say it was because we have been interfering and overthrowing democratically elected governments for decades. Shame on you Mr. Bush, but you will meet your Maker one day and you can explain why you killed so many people just so you and your friends could receive billions of dollars in profits. "May God Have Mercy on Your Very Soul"
Mike Feder/Sirius XM and PRN.FM Radio on October 11, 2013
Best Political/Historical Book in Years
You know those reviews clips, headlines or ads that say "Must Read" or, "...if you only read one book this year..."
I have to say, with all the books I've read before and am reading currently, this one is absolutely the most eye-opening, informative and provocative one I've come across in many years.
And--after all I've read about American politics and culture--after all the experts I've interviewed on my radio show... I shouldn't be shocked any more. But the scope of insanity, corruption and hypocrisy revealed in this history of the Dulles brothers is, in fact, truly shocking.
Just when you thought you knew just how bad the United States has been in the world, you come across a history like this and you suddenly become aware of the real depths to which "our" government has sunk in subverting decency, freedom and democracy all over the world.
George W. Bush asked the question after 9/11-- "Why do they hate us?" The answer he came up with was, "Because of our Freedoms." When you read this book, you come face to face for the real reasons THEY (most of the rest of the world) hate us. It's because these Bush's "freedoms" are only for the United States, no other non-white, non-Christian, non-corporate cultures need apply.
The missionary Christian, Corporatism of the Dulles Brothers--John, the former head of the largest corporate law firm in the world, then Secretary of State, and his brother Allen, the head of the CIA all the way from Korea through Vietnam -- constitutes the true behavioral DNA of America-in-the-world. It's enough to make you weep for the billions of people this country has deprived of freedom and security for the last sixty years.
I grew up practically in love with America and the Declaration of Independence. When I was a kid the USA had just beaten the Nazis. I saw the picture of the marines raising the flag at Iwo Jima. I knew men in my neighborhood that had liberated concentration camps.
But they never taught us the real history of America in high school and barely at all in college. If they had given us a clear picture of our true history, there never would have been a Vietnam in the first place--and no Iraq or Afghanistan either; Global Banks wouldn't have gotten away with stealing all our money and crashing our economy and Christian fundamentalist and corporate puppets wouldn't have taken over our government.
Karma is real. You can't steal a whole country, kill and enslave tens of millions of human beings, assassinate democratically elected leaders of countries, bribe and corrupt foreign governments, train the secret police and arm the military of dictators for decades-- You cannot do all this and escape the judgment and the punishment of history.
This book is, in fact, a MUST READ... for anyone who wants to know what their taxes have paid for in the last half century--for anyone who wants to know just exactly why the rest of the world wants either to attack us or throw us out of their countries. And a must read for anyone who no longer wishes their "representatives" in Washington to keep facilitating the stealing and killing all over the world and call it American Exceptionalism.
I'll also add that Stephen Kinzer is also a terrific writer; clear, articulate, factual and dramatic. His inside the inner circle revelations of the Dulles brothers and their crimes is morbidly page-turning.
Chris on October 11, 2013
The Dark-side of American foreign policy
The American people and the world at large still feel the reverberations from the policies and adventures of the Dulles' brothers. They are in part to blame for our difficult relations with both Cuba and Iran. This history helps answer the question, "Why do they hate us?" The answer isn't our freedom, it's because we try to topple their governments.
The Dulles brother grew up in a privileged, religious environment. They were taught to see the world in strictly black and white. Both were well-educated at Groton and the Ivy League schools. Both worked on and off in the government, but spent a significant amount of time at the immensely powerful law firm, Sullivan & Cromwell. They had virtually identical world views but nearly opposite personalities. (John) Foster was dour, awkward, and straight-laced. Allen was outgoing, talkative, and had loose morals.
There's no need for a blow-by-blow of their lives in this review. The core of the book revolves around Foster Dulles as the Secretary of State under Eisenhower and Allen as the Director of the CIA. The center of the book is divided into six parts, each one dealing with a specific foreign intervention: Mossaddegh of Iran, Arbenz of Guatemala, Ho Chi Minh of Vietnam, Lumumba of the Congo, Sukarno of Indonesia and Castro of Cuba.
The Dulles view was that you were either behind the US 110% or a communist, with no room for neutrals. Neutrals were to be targeted for regime change. The author lays out explicitly all the dirty tricks our government tried on other world leaders, from poison to pornography. This dark side of American foreign policy can help Americans better understand our relationships with other countries.
My difficulty with this book is the final chapter. The author throws in some pop-psychology such as; people take in information that confirms their beliefs and reject contradictory information, we can be confident of our beliefs even when we're wrong, etc. The Dulles brothers are definite examples of these psychological aspects. Then the author says the faults of the Dulles brothers are the faults of American society, that we are the Dulles brothers. I felt like a juror in a murder trial during the closing statements, "It's not my client's fault, society is to blame!"
In most of America's foreign adventures, the American people have been tricked with half-truths and outright lies. Further more, these men received the best educations and were granted great responsibility. They should be held to a higher standard than "Oh well, everyone has their prejudices."
I agree with the author that the public should be more engaged in foreign policy and have a better understanding of our history with other nations. However, I think he goes too far in excusing their decisions because they supposedly had the same beliefs as many Americans.
Harry Glasson August 24, 2015
So Eisenhower wasn't really a "do nothing" president, but based on this book, I wish he had done less.
This is the most interesting and important book I have read in the past twenty or more years. Most Americans, myself included, considered John Foster Dulles a great Secretary of State, and few ordinary people knew Allen Dulles or had any idea how the CIA came to be what it is.
Learning the facts as they have been gradually made public by those who were witnesses, and others who researched and wrote about the behavior of the United States during the height of the Cold War has been an enlightening and saddening experience. I was in high school during Eisenhower's first term, in college during his 2nd term, in the Air Force during JFK's time in office and deployed to Key West during the 1962 Cuban Missile Crisis.
My view of America was the same as that of most Americans. I was patriotic. I bought into the fear of Communist world dominance and the domino theory. But there was much that was being done in the name of fighting Communist domination around the world that was monumentally counterproductive, and contrary what we consider to be some of our basic principles.
This book helps fill important gaps in my knowledge. I highly recommend it to anyone who would like to know what really was going on during the Cold War, its impact on where we are today, and Kinzer's take on why it happened that way.
Mcgivern Owen L on August 15, 2015
The Cold War at it Core
This reviewer generally takes careful notes while he reads-the better to compose a future review. In the case of "The Brothers", he was drawn right into the flow of the story.
"The Brothers" covers the period from the late 1940s to the mid -1960s when John Foster Dulles was the powerful Secretary of State and Allen Dulles was the Director of the Central Intelligence Agency. They fermented regime changes in Iran. Guatemala, Indonesia, the Belgian Congo and Iran. And, as many know by now, Cuba as well. The troubles they stirred up in Iran and Cuba persist to this day. The book jacket also states that the Dulles' "led the United States into the Vietnam War..." That statement is unproven within these pages. The Vietnam conflict was vastly too complicated to be reduced to one sentence.
"The Brothers" is sharply written and well documented. There are 55 pages of end notes in a 328 pages of text. Author Kinzer ostensibly turns on the brothers for all their regime changing activities. He then reverses course and arrives at a most sensible elucidation: The brothers Dulles were a product of their times and "exemplified the nation that produced them". A different kind of leader would require a different United States". This reviewer can live with that sentiment.
There was a deadly serious Cold War in session during this period the brothers Dulles were at the core. Author Kinzer deserves credit for capturing the essence of that era as well as he does.
Amazon Customer on August 10, 2015
Informative and entertaining while also scary. Author oversimplifies, omits much about diplomacy besides the Cold War.
This is my third Kinzer book (The Crescent and the Star and Reset), he is a master at spinning off new books from research collected while writing other books. This work peels back the cover on U.S. covert and overt foreign policy in the 1950s and what happens when two brothers have too much power within an Administration that has the public's trust and far too little of its scrutiny. It is a joint biography of John Foster Dulles and Allen Dulles who were Secretary of State (1953-1958) and CIA Director (1953-1961), respectively.
Some reviewers have pointed out that Kinzer tends to oversimplify his message. For example, Eisenhower and Dulles' overthrow of Mohammed Mosadegh, for example, may have had something to do with our needing Britain's support in SE Asia more than simply a crusade to eliminate anyone who was not clearly "for us" or "against the Communists." This book covers some of the territory of Trento's Prelude to Terror, Perkin's controversial Confessions of an Economic Hitman and the similar compilation A Game as Old as Empire. You may not believe what you read here as the facts certainly seem more like fiction. Did the U.S. really (clumsily) secretly spend blood and treasure to try and subvert governments on every continent? How many assassinations and overthrows did Eisenhower surreptitiously give the go-ahead on? Eisenhower essentially comes across as a monster from our 2015 vantage point. But is he any different than a President Obama who is given intelligence and orders drone strikes to assassinate enemies of U.S. foreign policy? You be the judge. This book speaks volumes about what is learned by declassification of documents over time. I will say that I read a great biography on George Kennan last year and there appears to be little overlap; Kennan's foreign policy may have been too dovish for the Dulles, but he had helped create the precursor to the CIA, the Office of Policy Creation, on which both Dulles brothers worked--this connection gets no attention from Kinzer. Much of the diplomatic effort during the Cold War-- which did exist-- at this time are left unmentioned by Kinzer, which is problematic.
The Dulles family grew up with an international mindset. One grandfather (John W. Foster) was an Ambassador (before that title was formalized) to several countries, including Russia, before becoming Secretary of State.The other was a missionary to India. They had other family connections working in diplomacy and such a career seemed just fine to them. Their father was a conservative Presbyterian minister who had an awkward relationship with his wayward children. Kinzer writes that the boys (and their younger sister) essentially saw America as the City on a Hill that was bringing light to the nations through democracy and capitalism.
Studying at Princeton hitched them to the rising star of Woodrow Wilson, who they adored.
Sister Eleanor deserves her own biography, she was a pioneer as a PhD female economist who did relief work in WWI, attended Bretton Woods after WWII, and made her own career in diplomatic service.
John Foster (Foster henceforth) attended the Paris peace conference with Wilson and was disappointed with the outcome, both he and Eleanor arguing along with J.M. Keynes that the German reparations were simply setting the stage for the next European war. At the time, Foster was working in international law for U.S. business interests, and even supposedly ghostwrote a rebuttle to Keynes' book to serve his own interests. Foster's law firm designed the legal arrangements by which U.S. firms could profit off the German reparations, which allowed him to be wealthy even during the Great Depression. He was the more religious of the bunch and was mostly faithful to his wife.
Meanwhile, Allen Dulles was serving in the newly-formed Foreign Service while sleeping with as many women as would have him. In a "What would have been?" moment of history Allen reportedly brushed off meeting Vladimir Lenin, after Lenin supposedly called him just before Lenin went to St. Petersburg for the Russian Revolution, in order to engage in a soiree with a couple of blonde Swiss females. His own sister recounts that he had "at least a hundred" affairs, and his wife approved of some and disapproved of others. A sign of the times, they remain married although she probably miserably. This continued on all through his CIA years and makes one wonder why recent CIA chief David Petraeus had to resign for anything.
Kinzer interestingly calls Wilson out for being a hypocrite, citing his inconsistent application of the doctrine of self-determination. While that doctrine stirred nationalist sentiment in Eastern Europe and the Middle East, Wilson obviously didn't apply it to the Philippines, Hawaii, or other U.S.-occupied territories. Nonetheless, the three sibling Wilson devotees attend the Paris peace talks together. Foster returns to his law firm where he's made a full partner while Allen remains in the Foreign Service until joining the firm himself in 1926.
The author ignores much of Foster's religious interest and involvement in these years. Foster changed his mind several times in life, whether in his religious devotions or from isolationist to interventionist. Interestingly, Foster was a German sympathizer and refused to believe any tales being produced about the Nazis as his firm had many German business interests. Allen disagreed strongly after touring Germany himself, and after Germany began defaulting on its debts the firm severed ties.
Allen Dulles built up his network through the law firm, the Council on Foreign Relations, and his old Foreign Service contacts and made a fortune molding business deals for European connections, including those in Nazi Germany. After the U.S. enters the war, Dulles is recruited by "Wild Bill" for the new OSS, becoming the first OSS officer behind enemy lines, sneaking into Switzerland to do so. He meets with all sorts of characters while feeding intelligence to the U.S., much of which was false, but enough was helpful enough to expand his reputation. Of course, he has many affairs, including a long one with a woman his wife approved of and shared with him. Interestingly, when the Valkyrie operation was launched by German traitors to kill Hitler and restore order, Dulles was the main contact with the U.S. relaying news back to Washington. The participants wanted to sue for peace, but FDR officially rejected the olive branch and Dulles was not allowed to negotiate on any such olive branch. After the War, Truman abolishes the OSS.
Foster helps draft the U.N. Charter and becomes an internationalist, seeing world peace as a Christian ideal. Foster apparently contributed to the "Six Pillars of Peace" outline by the Federal Council of Churches in 1942. He eventually reverses after the Iron Curtain falls, becoming a militant anti-Communist and seeing the USSR as truly and evil empire, the antithesis of everything American. Reinhold Niebuhr eventually pens critiques of Foster as he begins to promote a black-and-white vision of the world.
Both brothers backed the Dewey campaign in 1948, which left them disappointed. However, Dewey appoints Foster Dulles to fill a void in the Senate, which immediately elevates Foster into a higher realm, although he promptly loses the special election for the seat. Nonetheless, he is appointed to the State Department by Truman and impresses people in negotiating the final treaty with Japan in 1950. This makes him a good choice for Secretary of State when Eisenhower is elected in 1952, and Foster promptly works on a policy of "rollback" to replace the "containment" policy of Truman and Kennan.
However, Kinzer also writes that NSC-68, a top secret foreign policy strategy signed by Truman in 1950, was monumental in militarizing the response to the USSR and that the Dulles operated under an NSC-68 mindset. "A chilling decree" according to Kinzer, NSC-68 called for a tripling of defense spending in order to prevent Soviet influence from overtaking the West. Allen Dulles was appointed the first civilian director of the CIA and the die was cast.
The 1950s roll like the Wild West, with Eisenhower signing off on expensive operations, assassinations, and propaganda campaigns at home and abroad. Supposedly, more coups were attempted under Eisenhower than in any other administration, and recently declassified documents show that Dulles' CIA actively engaged in Eisenhower-warranted assassination plots in the Congo and elsewhere. Perhaps Richard Bissell, Eisenhower's enforcer is more to blame than Kinzer allows. The CIA-backed 1954 coup in Guatemala was actually initiated by Truman years earlier, but demonstrated Eisenhower's resolve. "Once you commit the flag, you've committed the country." Dulles' secret armies in Guatemala and the Philippines needed U.S. airpower for support. If the media went with a story exposing operations, or a pilot was shot down, it didn't matter-- the mission must succeed once the U.S. was committed. The CIA even used religious-based propaganda in Guatemala to foment political change, having priests on the CIA payroll publish editorials denouncing Communism.
Guatemala also showed the intersection of U.S. business interests and foreign policy. The coup was encouraged by the United Fruit Company, which had been a client of the Dulles' NY law firm and Allen Dulles had served on its Board of Directors; others in the Eisenhower Administration had ties. While Guatemala's president was democratically elected, he was a leftist, and anyone showing Leftist sympathies was to be eliminated, particularly in the Western hemisphere. The 1953 coup of democratically elected Mohammed Mosaddegh in Iran was similar in the sense that it was made more urgent by Mosaddegh's nationalization of British oil interests after the Brits refused to let Mosaddegh audit their books or negotiate a better deal. Kinzer writes, however, that Foster in particular was unable to see anyone as "neutral." Mosaddegh believed in democracy and capitalism and could have been an ally, but Mosaddegh and others like Egypt's Nasser were nationalists who favored neither the US nor the USSR, but courted deals from both. Kinzer writes that Foster saw a danger in a country like Iran becoming prosperous and inspiring others toward neutrality that might result in eventual creep toward the USSR, hence he and others like him had to be eliminated. How much the coup was driven to help the UK is unknown. The blowback from intervention in South America and Iran has since come back to haunt the US in the form of skepticism and greater Leftist angst against the US and the 1979 overthrow of the Shah.
Ho Chi Minh had initially offered the US an olive branch after WWII and was not opposed to working with US interests, but the more he was rebuffed the more he turned to harder Communism. John Foster Dulles apparently hated the French for abandoning Vietnam, and never forgave them. While Eisenhower did not want to replace the French in Vietnam, he eventually warmed to the idea as Foster promoted the "domino theory" that if one nation fell victim to Communism then others would soon follow and the eventual war would widen. Better to install brutal dictators as in Iran and South Vietnam than let a country fall. Another enemy was Sukarno in Indonesia who was trying to thread the needle between democracy, socialism, nationalism, and Islam. This type of neutrality was against the Dulles' worldview, and in his memoir, Sukarno lamented "America, why couldn't you be my friend?" after the CIA spent a lot of manpower trying to topple his regime in 1958. There was also the training of Tibetan rebels in Colorado in 1957 and the ongoing plot to assassinate Congo's Lumumba, given with Ike's consent.
Allen Dulles' reign at CIA reads like the nightmare everyone worried about "big government" warns you about. Experiments interrogating prisoners with LSD, the purchase to the movie rights of books like The Quiet American in order to sanitize them, planting stories in major newspapers, planting false documents in Joseph McCarthy's office to discredit him, along with the private armies and escapades. Dulles comes under official criticism by Doolittle, who wrote that he was a bad administrator, bad for morale, and had no accountability-- all of which was dismissed by Eisenhower who saw Allen as the indispensible man.
Eventually both John Foster Dulles and Eisenhower become old and unhealthy, Eisenhower suffering a heart attack in 1955 and Foster dying of cancer in 1959. Allen Dulles' libido slows slightly as age takes its toll and he becomes more detached from operations at the CIA, creating a more dangerous situation. When Castro seizes power in Cuba, the Eisenhower Administration made it official policy to depose him. While Dulles was officially in charge at the CIA, he was far detached from the details of the anti-Castro operations which the media had exposed and continued at great risk of failure.
Newly-elected JFK inherits the Bay of Pigs invasion plans and faces a political dilemma: Back off and be accused of sparing Castro since the government was invested in success, or go forward and risk a disaster. Unlike Eisenhower, Kennedy would not consent to air support or other official military measures to help the CIA's army once it landed, dooming the operation. Those closest to the operation begged Dulles and others to cancel the operation to no avail. Dulles was enjoying a speaking engagement elsewhere in the region, giving the appearance of attachment to the operation while being completely oblivious to its failure. The White House forced him to resign in 1961.
Dulles' last act was on the Warren Commission investigating JFK's assassination. This was problematic because Dulles' goal was to keep CIA assassination operations in Cuba a secret. Kinzer writes of Lyndon Johnson's desire to make Oswald a lone gunman with no political attachments, which brings us to a whole other story.
Kinzer concludes the book with armchair psychology, writing that the Dulles brothers succummed to cognitive biases, including confirmation bias. They saw everything in the world as they wanted to, and not as it was. They were driven by a missionary Calvinism and the ideal of American Exceptionalism that clouded their lenses. They also seemed to consider themselves infallible in their endeavors. Ultimately, "they are us," writes Kinzer, which is why it is important to learn from them. The parallels with recent American military and para-military endeavors is also clear, but Kinzer lets the reader make those comparisons.
I learned a great deal from the history of this book, studying the Dulles is an integral part in studying the execution of American foreign policy in the Cold War. Some of the omissions, simplifications, and psychoanalysis mar the book somewhat. 3.5 stars out of 5.
Doug Nort, on April 23, 2015
Too Much Passion;Too Few Facts
This book is marred by Kinzer's repeated overstatements and failures to marshal facts to support his theses about the Dulles brothers.
His failure to persuade me begins early: In the introduction Kinzler wrote of the naming of Washington's Dulles airport: "The new president, John F. Kennedy, did not want to name an ultra-modern piece of America's future after a crusty cold-war militant." He provides no documentation that Kennedy himself thought that. Given that JFK was proud of his own credentials as a cold warrior, it is unlikely that was his objection. It is much more likely his objection (or that of the staffer speaking for him in the matter) was that Foster Dulles was an iconic figure of the Eisenhower administration-which Kennedy and his New Frontiersmen viewed as having made a hash of things-or that he was a stalwart of the Republican Party, or that Dulles disapproved of a Catholic becoming president. Kinzler apparently thinks his sweeping statement is self-evident but it isn't to me.
A few pages later Kinzler gives us another hint that the pages to come will contain sweeping, unsupported generalizations. He wrote "The story of the Dulles brothers is the story of America." My goodness, didn't they share their times with FDR and Ralph Bunche and Dwight Eisenhower and Tom Watson and A. Phillip Randolph and George Marshall and a host of others who, although coming from backgrounds quite different from the brothers Dulles, are just as much the American story? The accomplishments and peccadillos of two brothers with an upper-class pedigree is hardly "the story of America."
Chapter eleven contains several such unsupported or historically blinkered generalizations. At one point (sorry-I'm a Kindle reader, no page numbers), after noting "the depth of fear that gripped many Americans during the 1950s." Kinzler asserts that "Foster and Allen were the chief promoters of that fear." Crowning the brothers as chief fear-mongers ignores some powerful other voices: Khrushchev, Joe McCarthy, General Curtis Lemay, Nixon, Churchill, Drew Pearson, Robert Welch and his John Birch Society-the list could continue.
At another point Kinzler says, "They [the brothers] never imagined that their intervention[s] . . . would have such devastating long-term effects." He cites Vietnam, Iran falling into violently anti-American leadership, and the Congo descending "into decades of horrific conflict." Regarding Vietnam, I think most historians would say that JFK, LBJ, and McNamara bear much, much more responsibility than do the Dulles brothers. As for their Iran and Congo sins, I believe those developments were much more due to unpredictable consequences than to the Dulles' blindness. Yogi is right: "Predictions are hard, especially about the future."
And on the same page (excuse me "location") Kinzler is quite certain that "Their lack of foresight led them to pursue reckless adventures that, over the course of decades, palpably weakened American security." The reader who already believes that will nod and read on while the reader who expects this ringing declaration to be followed by specifics that provide powerful support will read it and say, like the customer in the fast food ad, "where's the beef?"
OK, enough already. Kinzler's writing obviously pushed my buttons and I wouldn't have finished the book but for it being a selection of my book club. I am fine with criticism of people and policies when well-documented-for example Michael Oren's Power, Faith and Fantasy-but I lose patience with book-length op-ed pieces such as The Brothers.
Dale P. Henkenon, April 6, 2015
Cuba Si! Yankee No!
If a work based on Cold War history could construct a case against American (U.S.) exceptionalism, The Brothers by Stephen Kinzler would be a strong candidate. It illustrates the dangers of a coupling of foreign policy and covert operations involving what we now know as regime change.
It is a story of the Dulles brothers and coups arranged by the executive branch triad composed of the President (Ike) and the dynamic duo of the Dulles brothers as Secretary of State and Director of the CIA (without congressional oversight) in Guatemala, Iran, Cuba, Indonesia, the Congo and Vietnam.
It is a story that deserved to be told and it is told well. It is somewhat slow going at the start and one-dimensional but is a captivating read regardless. It is not a rigorous biography or history of the era and the events it depicts. It is driven by the thesis that our actions in the developing world even though driven by anti-communism or American idealism or Christian fundamentalist fervor (all were involved) can have baleful results.
The results can be so bad that Americans are now resented and even hated and have been for generations in large parts of the world. Highly recommended.
R. Spell VINE VOICE on March 28, 2015
Who We Are as Americans in the 50s
Engaging historical perspective that while dragging and repetitive at times, has so much information that frames our world now, and generally NOT in a positive way, that it should be required reading. Yes, I was aware of the name as a 61 yr old. But I was not aware of their roles. Not aware of brothers. Not aware of Allen's involvement in the CIA. Nor aware of their careers at the massive law firm of Cromwell and Sullivan.
But reading this was stunning and made me angry. George Dulles was more responsible for the Cold War than anyone. And documents after the war shows the Soviets were not near as devious as we give them credit for. But our fear painted a view of a hidden enemy bent on our destruction. We missed opportunities with Khrushchev. More importantly and totally unaware to me, these guys we responsible for government overthrows and were actively involved in the 1950s with alienating Vietnam leading eventually to a horrible loss of civilian lives and more importantly to me, American soldiers who were led in to the wrong war at the wrong time.
But let us not forget the documented CIA overthrows of Congo, Guatemala,Indonesia and Iran. Is this America? Well, in the post WWII world, we lost our values and stooped to such tactics.
There are stories here America doesn't study and they should. How the interface of commerce, politics and war can lead to disastrous results that haunt us today.
Read this book to learn. Not all of it will make you proud. Yes, I learned. And yes, I'm angry and ashamed.
Schnitzon February 25, 2015
Allen Dulles May have Inadvertently Saved the US from a Nuclear Holocaust
It is ironic that the Bay of Pigs debacle commissioned by Allen Dulles may have inadvertently prevented the incineration of millions of Americans in a nuclear holocaust. As the author points out when John F. Kennedy assumed the presidency he was told by his predecessor Dwight Eisenhower that the invasion of Cuba by Cuban refugees with support from the US should move forward. As a young, new President of the US, Kennedy did not want to appear weak so when Dulles presented him with the plan seeking his approval Kennedy found himself in a box.
On the one hand Kennedy had doubts regarding the chances for success. On the other hand he wanted to appear strong to the people of the US and the world. This was the first true test of his presidency and legacy. After the abject failure of the operation Kennedy to his credit took full responsibility in his address to the American people but he would never again trust the CIA or the military.
Fast forward tot he Cuban missile crisis. If Kennedy had not experienced the Bay of Pigs failure he probably would have placed more trust in the military and CIA who were vehemently urging him to bomb Cuba at various stages of the crisis. If he had taken the military's advice it would have likely resulted in escalation and possibly nuclear war with Russia. As it turned out Kennedy rejected the advice and negotiated a settlement which saved face for both sides. Kennedy's wisdom born of a past failure saved the day.
Compelling and informative about an era which had a darker ...
OLD1mIKEon February 17, 2015
The Dulles Brothers. They changed History.
Five Stars. Great book. Readable. Well researched, Informative. Highly recommended for someone interested in mid 20th century history or understanding the root cause of the anti-american animosity in certain parts of the world.
The Dulles brothers played pivotal roles in an incredible number of historic events that shaped the 20th century. They exemplified american attitudes and beliefs of their day and were placed in positions to act on these beliefs. The book not only presents their part in history, but also helps us understand the reasoning behind their actions.
I should leave the book review end with the above paragraphs, but I was originally unaware of how many key historical events of the 20th century the brothers participated in and influenced. I find it impossible not to casually speculate on their effect on history. John Foster helped write the Reparation portion of the WWI Treaty of Versailles. Some historians believe German anger over the unfairness of the reparations to be one element causing WWII. John Foster helped write the 1924 Dawes Plan that opened the door to American investment in Germany. Even in 1924 John Foster was obsessed with fighting communism. He saw a strong Germany as an effective stop gap against communistic expansion. Foster used his affiliation with Sullivan & Cromwell and his friendship with Hjalmar Schacht, Hitlers Minister of Economics, to increase American investment in Germany and its industry. Without international investment, Germany probably could not have supported it's military aspirations. Allen and the CIA was instrumental in the 1953 Iranian Coup that overthrew the democratically elected Iranian Government to install the Shaw of Iran. This action and the heavy handed governing style of the Shaw certainly led to some of the anti American resentment in the middle east today and the Iranian (Islamic) Rebellion in 1979. The Iranian Rebellion probably helped elect Ronald Reagan in 1980. In regard to Vietnam. Foster, acting as Eisenhower's Secretary of State, refused to sign the 1954 Geneva Accord. Over considerable objections, John Foster and Allen chose and installed Ngo Dinh Diem as the 1st president of the newly created Republic of South Vietnam. Diem had been a minor official in Vietnam and was Interior Minister for three months in 1933. He had not held a job since. Once in power, Allen's CIA helped keep him there. John Foster continued to support the escalation of our involvement in Vietnam until his death in 1959. Allen took a hands off approach to the Bay of Pigs operation (17 April 1961), but as the Director of the CIA, it was his responsibility. JFK fired him in November 1961. There are JFK Assassination Conspiracy Theory's that include CIA involvement. It is interesting that Lyndon Johnson personally chose Allen to be a member of the Warren Commission. Add U2 Spy Planes, Congo revolts, overthrow of South American leaders, Cuba and a host more. The policies and action of these two men changed global history and probably still effect the beliefs of many today.
Loves the View VINE VOICE on December 2, 2014
Attitude, Access, Ambition and US Foreign Policy
Stephen Kinzer shows how instrumental these brothers were in the design of US foreign policy in the post war years. He shows how their attitudes and personalities were formed, developed, and grew to influence the course of history.
The brothers' learned statecraft at their grandfather's side. John W. Foster, US ambassador to three countries, later served as President Harrison's trouble shooter and Secretary of State. He helped in the overthrow of Queen Liliuokalani in Hawaii and later used his State Department connections to engineer government policy to benefit his corporate clients. Kinzer shows how the brothers benefited from their grandfather's access and came to dual pinnacles of power in shaping US foreign policy: one heading the CIA, the other the Department of State.
The 1950's operations weren't as hidden as I expected. Allen Dulles, in the Saturday Evening Post, beamed with pride for removing Mohammad Mossadegh in Iran and Jacobo Arbenz in Guatemala. He even has copies made of Diego Rivera's critical mural where he is depicted taking money while his brother shakes hands with a local puppet and Eisenhower is pictured on a bomb. Many willingly joined in dirty tricks, for instance Cardinal Spellman wrote a pastoral letter to Guatemalan Catholics calling their President a dangerous communist.
I was surprised that President Eisenhower, whose administration is commonly thought to be one of tranquility, approved toppling governments and assassinating leaders. In some ways, he was the front man, for instance urging Congress to approve funds for "maintenance of national independence" but really for fomenting a coup in Syria and installing a king in Saudi Arabia to get US friendly governments to oppose Gamal Nasser (p. 225).
With today's internet and 24 hour news cycle, can large covert operations such as those against the President Sukarno (the first president of Indonesia who naively looked to the US for help in developing his nation's fledgling democracy) go under the radar? I presume the CIA budget can still hide items such as the $6 million a year paid to the Nazi General Reinhard Gehlen (who should have been tried at Nuremberg (p. 185)).
By preventing compromise when compromise was possible, the brothers and President Eisenhower, prolonged the Cold War into the Khruschev era and sowed the seeds of the Vietnam War. The lack of reflection or personal responsibility is clear in the quote on p. 283 when years later Allen Dulles coolly tells Eric Sevareid regarding the torture and murder of Patrice Lumumba, that " we may have overrated the danger.." How would the Congo be today if the US had left its fledgling democracy alone, and not have installed Mobutu in a leadership position?
The last coup attempt in the book is the Bay of Pigs. It was an Eisenhower approved intervention and there seemed that to be no turning back for Kennedy. Its fiasco signaled the end of Allen Dulles, but not the Cold War since its relic, Vietnam as a domino, was an image deeply ingrained in policy DNA.
In a side story, the brothers show little consideration to their sister, who had to push to have a career. She marginally benefits from the family name. They do not see that they have been born on third base and she on first. In fact, when it is convenient for them, they try to fire her, yet still go to her house for holiday dinners.
Kinzer concludes with recent work in psychology and personality profiling (" blind ourself to contrary positions prepared to pay a high price to preserve our most cherished ideas declarations of high confidence mainly tell you an individual has constructed a coherent story in his mind beliefs become how you prove your identity.." p. 322) that not only characterize the brothers, but a lot of the thinking in the Cold War.
These paradigms are with us today. Too many politicians and their appointees still their job as responding to lobbyists, not just for big business, but for foreign countries with interests contrary to those of the US. Similarly there are those who force their economic ideology on small and helpless countries. The book tells a sobering and troubling story. It is greatly at odds with what is taught in high schools. This book has been out for a year now, and it seems the story told is just more noise in political system. Unfortunately it will make a large event for insiders in Washington to reflect on what we now call "muscular" foreign policy and its results.
Regnal the Caretakeron November 13, 2014
Nasty lawyers and the rise of CIA
These two globo-corporate lawyers dictated USA foreign policy during governance of four presidents: Roosevelt, Truman (he signed CIA into the law in 1947), Eisenhower and Kennedy. They were called 'Cold Warriors' and built Cold War model which rested on the premise that any growing social influence in Third World countries must be resisted because socialist gains are always irreversible. Any nation that tried to stay 'neutral' had to face CIA interventions that did not bring anything positive for populations (notably we learn in details about Guatemala, Iran, Congo, Indonesia, Vietnam and Cuba). Eisenhower times were the worst, when covert capability of CIA grew massively.
Fascinating work by Stephen Kinzer can be easily extrapolated to help explain XXI century behavior of Washington. Not much has changed.
Craig N. Warrenon November 12, 2014Digital Rightson June 14, 2014
Making the World Safe for Democracy (and American Business).
I've learned more about the development of American foreign policy and international relations in the twentieth (and twenty-first) century, especially since WWII, in reading the story of these two scions of an American aristocratic family, who were fully steeped in Calvinistic Protestantism (and it's capitalist ethic) and unquestioningly convinced of American Exceptionalism and it's Manifest Destiny to lead the world and make it safe for democracy and American Business, than I have anywhere else.
This is more than a biography (or double biography) of two very influential actors in American history, politics and international relations. It is an exposition of the quintessential, archetypical American (WASP) mindset, worldview or psychology that has motivated our collective international behavior over the past six or seven decades.
A "How to Not Run Foreign Policy" Primer
Stephen Kinzer's new book offers a very focused and surgical condemnation of the Dulles brothers foreign policy collaboration in the 1950's that has resulted in a horrid and nightmarish chain of events ever since.
Allen Dulles at CIA, first as a lead operative for covert missions and then as it's second Director and John Foster Dulles as Secretary of State lead foreign policy during the Eisenhower Presidency. The book goes through six operations to overthrow or destabilize governments through that time; Iran, Guatemala, Indonesia, Cuba, Vietnam and the formerly Belgian Congo.
In each case Kinzer shows the limited lens of cold war anti communism that resulted in the Dulles' tunnel vision where grouping all non-Pro American groups as enemies and communists. He equally addresses their lack of personal curiosity and intellect and preference for slogans and absolutism over analysis or objective debate. All State employees that don't hew the line are regularly fired or transferred to obscure jobs or roles and in place are pro-CIA hardliners.
It is painful reading. The objective was to both create the world they wanted while limiting the use of US military personnel to achieve those ends. The short cuts and limited world vision have exacted a terrible price. Sadly there is not a place in the world where their activities resulted in any sustainable success and in fact have lead to perhaps millions of deaths and suspicions and misunderstandings for the next 50 to 60 years.
There is much here that further condemns Eisenhower. In many cases he fully supported and endorsed their plans while pretending not to, fully employing the most cynical of strategies; "plausible deniability".
Having read the 2012 Eisenhower biography by Jean Edward Smith I was surprised here by the wealth of information that ties Eisenhower more directly to clandestine activities and their purposes. Particularly disappointing is his continues build up for the Bay of Pigs invasion in Cuba after Kennedy's election but before he took office and will little effort to brief the incoming president. Similarly our Vietnam involvement in the 1950's was so deep already as to make a Kennedy pullout far more difficult.
There is much here about these issues and the corrupt relationships between the Dulles's prior careers at Sullivan and Cromwell and their support of private interests while working at State and the CIA.
It's grim but the writing is good and the story is well worth knowing.
C. Ellen Connally, May 22, 2014
An amazing tale of intrigue and deception
As we fly in or out of Dulles International Airport, no one gives much thought to the namesake, John Foster Dulles. Sure, he was Secretary of State and some Americans have a vague knowledge of his brother Allan Dulles, director of the CIA and long time super spy and intelligence person. Reading Stephen Kinzer's book, THE BROTHERS reveals the truth about the Dulles brothers and how they changed American and World History.
At the heart of the story is the unfortunate belief by the brothers that if a country was not totally in agreement with American philosophy they were against us. Any nationalist leaders of a former colonial nation that believed in land reform or neutrality on the international scene had to be evil and must be destroyed. If they were not with us, they had to be communist. This American foreign policy changed the history of the Middle East, Southeast Asia, Africa and Central America.
There is much blame put on President Johnson for the War in Viet Nam. But reading THE BROTHERS shows that the roots of the Viet Nam Conflict go back many years. Likewise, the situation in the Middle East. We have to go back and look at the foreign policy that created the tensions that now exist and the men that shaped that foreign policy.
Its interesting to note that Kinzer asserts that on the death of Chief Justice Fred Vinson in 1953, Eisenhower offered the position of Chief Justice to John Foster Dulles. According to Kinzer, Dulles turned it down because he wanted to stay at the State Department. The story has always been that Ike had promised Earl Warren the first seat on the Supreme Court in exchange for his support in the 1952 election - Warren had been out maneuvered by Richard Nixon to get the bid for the vice presidency. How different legal history would have been had John Foster Dulles become Chief Justice!
Kinzer is a masterful story teller. This book is extremely readable and a must read for understanding the history of American foreign policy and how individual people can change.
John Berryon March 13, 2014
What Our History Lessons Didn't Tell Us!
It has been a long time since an author has captured my interest so quickly and made me question everything I have been taught or have learned about our country. Churchill once said Democracy is the worst kind of government except all others. This comment keeps reverberating around in my mind as I read this book. I am one of those people that have flown into Dulles airport countless times, yet never gave a moments thought as to why, what or even if there was a who to the airports name. I grew up during the cold war and I vividly remember the fear of the Big Russian Bear overtaking us with their form of government and the possibility of nuclear war. It would have never crossed my mind that my very own government aided and abetted in promoting this fear in order for us to gain public moral outrage and support for our endeavors. I kept trying to tell myself this was different times, yet the author pointed out countless times where there were those in the known that were summarily dismissed for having counter opinions.Or leaders from our allies that would not support the Dulles brothers opinions and missions that so disagreed with who we told the world we were. Abraham Lincoln once said "Nearly all men can stand adversity, but if you want to test a man's character, give him power". I can think of no better example of failure in handling power than the two Dulles brothers. Not only was I continuously shocked by their gross misuse of power, but I found myself being angry at them as well because of the fear I remember my mother facing as a widower with three children to raise. She needed not to have been this afraid with all the other issues she had to deal with but because of President Eisenhower and the Dulles brothers she had to face this fear as well. Whether or not Mr. Kinzer took liberties with the political agenda's of the leaders we either overthrew or attempted to overthrown does not matter to me at all. The fact that we promoted our country as a free democracy yet we were willing to dance with any leader in the world as long as they did exactly what we wanted them to do is so counter to the way I was raised to believe still leaves me reeling.
Currently in the news President Putin has said in no uncertain terms that the U.S. is responsible for the revolution taking place in the Ukraine. In the past I would have said he is just another Russian bully trying to get his way. After reading The Brothers I now wonder what, if anything, my country had to do with promoting this revolution. I heard our Ukraine Ambassador say almost word for word what I read in this book our ambassador's under the power of The Brother's said back during the cold war. The author tells us that the U.S. with its secret prisons and torture's may have actually invented terrorism.
This author has opened my eyes to a whole new way of thinking and I am so disappointed in opportunities missed and I am so disappointed with our current leaders for having learned apparently nothing from history.
If you love reading history then please buy this book and ask your family to read it as well. Do I believe everything I read, no not usually, but in this case there are just too many facts that distort my view of who we are to dismiss.
James Gallen VINE VOICE on March 4, 2014
An Indepth Study Of American Covert Action
"The Brothers" tells the story of the brothers Dulles, John Foster and Allen, who drove American foreign policy through much of the 1950s. Grandsons of Secretary of State John Foster and nephews of Secretary of State Robert Lansing, the two grew up in an atmosphere mixing high diplomacy with the spirit of Christian Crusaders. Their path to power was linear. At the law firm of Sullivan and Cromwell they represented companies with interests around the world and came to see their clients' interests united with America's. As Foster moved into politics and government service he often brought Allen with him.
Although expected to be Secretary of State in a Dewey Administration, Foster came in with Dwight Eisenhower in 1953. With Allen as Director of Central Intelligence, they formed a team that searched the world for dragons to slay. Guided by a world view of us, American Christian capitalists, against them, Socialist Evil Doers, they identified their foes and went after them. Among their successes were Guatemalan President Árbenz, Iranian Prime Minister Mohammad Mosaddegh and Congolese leader Patrice Lumumba. TYhose who got away included Ho Chi Minh and Fidel Castro. This book is a study of American covert operations in Guatemala, Iran, Vietnam, Indonesia, the Congo and Cuba. Allen's Bay of Pigs operation is a case study of disaster.
Author Stephen Kinzer explores the unique situation in which the intelligence gathering agency is also an actor. Throughout he illustrates how the relationship of their leaders enabled two agencies that would normally question and check each other, to work in seamless harmony to carry out the covert operations that both saw as primary instruments of American power. Behind them was President Eisenhower who had used covert operations during World War II and who approved their actions. In the end the author posits that the policies were the President's and the brothers were more his servants than his masters.
Kinzer portrays the Brothers as men with rigid, narrow outlooks that saw enemies in independent nationalists and conspiracies in disorganized movements. He presents them as two sides of the coin, the molders and reflectors of public opinion. The book is not flattering. It depicts the Dulles brothers as men whose flawed expectations caused many problems for the U.S. and the world by destroying men who America need not have fought. Ultimately he concludes that they were representatives of the people they served and their successes, and failures, are our own. "The Brothers" forces the reader to confront a portion of America's past with its triumphs and shames. Although Kinzer gives his opinions, he provides the facts to permit the reader to form his own. Any serious student of history would do well to delve beneath the surface of our history and appreciate its deep currents and lasting effects.
Feb 25, 2017 | www.nakedcapitalism.comBy Arthur MacEwan. Originally published at Triple Crisis
The Issue Revisited
Around the time that the United States invaded Iraq, 14 years ago, I was in an auditorium at the University of Massachusetts Boston to hear then-Senator John Kerry try to justify the action. As he got into his speech, a loud, slow, calm voice came from the back of the room: "O – I – L." Kerry tried to ignore the comment. But, again and again, "O – I – L." Kerry simply went on with his prepared speech. The speaker from the back of the room did not continue long, but he had succeeded in determining the tenor of the day.
Looking back on U.S. involvement in the Iraq, it appears to have been largely a failure. Iraq, it turned out, had no "weapons of mass destruction," but this original rationalization for invasion offered by the U.S. government was soon replaced by the goal of "regime change" and the creation of a "democratic Iraq." The regime was changed, and Iraqi dictator Saddam Hussain was captured and executed. But it would be very had to claim that a democratic Iraq either exists or is in the making-to say nothing of the rise of the so-called Islamic State (ISIS) and the general destabilization in the Middle East, both of which the U.S. invasion of Iraq helped propel.
Yet, perhaps on another scale, the invasion would register as at least a partial success. This is the scale of O – I – LThe Profits from Oil
At the time of the U.S. invasion, I wrote an article for Dollars & Sense titled "Is It Oil?" (available online here ). I argued that, while the invasion may have had multiple motives, oil-or more precisely, profit from oil-was an important factor. Iraq, then and now, has huge proven oil reserves, not in the same league as Saudi Arabia, but in group of oil producing countries just behind the Saudis. It might appear, then, that the United States wanted access to Iraqi oil in order to meet the needs of our highly oil-dependent lifestyles in this country. After all, the United States today, with just over 4% of the world's population, accounts for 20% of the world's annual oil use; China, with around 20% of the world's population is a distant second in global oil use, at 13%. Even after opening new reserves in recent years, U.S. proven reserves amount to only 3% of the world total.
Except in extreme circumstances, however, access to oil is not a major problem for this county. And it was not in 2003. As I pointed out back then, the United States bought 284 million barrels of oil from Iraq in 2001, about 7% of U.S. imports, even while the two countries were in a virtual state of war. In 2015, only 30% as much oil came to the United States from Iraq, amounting to just 2.4% of total U.S. oil imports. Further, in 2015, while the United States has had extremely hostile relations with Venezuela, 24% of U.S. oil imports came from that country's nationalized oil industry. It would seem that, in the realm of commerce, bad political relations between buyers and sellers are not necessarily an obstacle.
For the U.S. government, the Iraq oil problem was not so much access, in the sense of meeting U.S. oil needs, as the fact that U.S. firms had been frozen out of Iraq since the country's oil industry was nationalized in 1972. They and the other oil "majors" based in U.S.-allied countries were not getting a share of the profits that were generated from the exploitation of Iraqi oil. Profits from oil exploitation come not only to the oil companies-ExxonMobil, Shell, Chevron, British Petroleum, and the other industry "majors"-but also to the companies that supply and operate equipment, drill wells, and provide other services that bring the oil out of the ground and to consumers around the world-for example, the U.S. firms Halliburton, Emerson, Baker Hughes, and others. They were also not getting a share of the Iraqi oil action. (Actually, when vice president to be Dick Cheney was running Halliburton, in the period before the invasion, the company managed to undertake some operations in Iraq through a subsidiary, in spite of federal restrictions preventing U.S. firms from doing business in Iraq.)
After the Troops
In the aftermath of the invasion and since most U.S. troops have been withdrawn, things have changed. "Prior to the 2003 invasion and occupation of Iraq, U.S. and other western oil companies were all but completely shut out of Iraq's oil market," oil industry analyst Antonia Juhasz told Al Jazeera in 2012. "But thanks to the invasion and occupation, the companies are now back inside Iraq and producing oil there for the first time since being forced out of the country in 1973."
From the perspective of U.S. firms the picture is mixed. Firms based in Russia and China have developed operations in Iraq, and even an Indonesian-based firm is involved. Still, ExxonMobil (see box) has established a significant stake in Iraq, having obtained leases on approximately 900,000 onshore acres and by the end of 2013 had developed several wells in Iraq's West Qurna field. Exxon also has agreements with the Kurdistan Regional Government in northern Iraq to explore for oil. Chevron holds an 80% stake and is the operator of the Qara Dagh block in the Kurdistan region of Iraq, but as of mid-2014 the project was still in the exploratory phase and there was no production. No other U.S. oil companies have developed operations in Iraq. The UK-headquartered BP (formerly British Petroleum) and the Netherlands-headquartered Shell, however, are also significantly engaged in Iraq.
While data are limited on the operations of U.S. and other oil service firms in Iraq, they seem to have done well. For example, according to a 2011 New York Times article:
The oil services companies Halliburton, Baker Hughes, Weatherford International [founded in Texas, now incorporated in Switzerland] and Schlumberger [based in France] already won lucrative drilling subcontracts and are likely to bid on many more. "Iraq is a huge opportunity for contractors," Alex Munton, a Middle East analyst for Wood Mackenzie, a research and consulting firm based in Edinburgh, said by telephone. "There will be an enormous scale of investment."
The Right to Access
While U.S. oil companies and oil service firms-as well as firms from other countries-are engaged in Iraq, they and their U.S. government supporters have not gained the full legal rights they would desire. In 2007, the U.S. government pressed the Iraqi government to pass the "Iraq Hydrocarbons Law." The law would, among other things, take the majority of Iraqi oil out of the hands of the Iraqi government and assure the right of foreign firms to control much of the oil for decades to come. The law, however, has never been enacted, first due to general opposition to a reversal the 1972 nationalization of the industry, and recently due to continuing disputes between the government in Baghdad and the government of the Kurdistan Region in northern Iraq.
U.S. foreign policy, as I elaborated in the 2003 article, has long been designed not simply to protect U.S.-based firms in their international operations, but to establish the right of the firms to access and security wherever around the world. Oil firms have been especially important in promoting and gaining from this right, but firms from finance to pharmaceuticals and many others have been beneficiaries and promoters of the policy.
Whatever else, as the Iraq and Middle East experience has demonstrated, this right comes at a high cost. The best estimate of the financial cost to the United States of the war in Iraq is $3 trillion. Between the 2003 invasion and early 2017, U.S. military forces suffered 4,505 fatalities in the war, and allied forces another 321. And, of course, most of all Iraqi deaths: estimates of the number of Iraqis killed range between 200,000 and 500,000.
Altandmain , February 25, 2017 at 1:03 amMike , February 25, 2017 at 1:06 am
Basically the US seems to have invaded for the enrichment of the multinational corporations at the expense of the rest of the world. Americans will pay a monetary price, but worse many have died and many more have lost their lives.
Even if it had gone to plan, the average American would not have benefited. They would have paid the costs for war. Let us face the reality. There was no noble intent in invading Iraq. It was all a lie.
The ridiculousness of Paul Wolfowitz and his claim that invading Iraq could be paid for through its oil revenue has become apparent. It has destroyed the stability of the area. We should nor idealize Saddam, who was a horrible dictator, but the idea that the US is going to be able to invade and impose its will was foolish.
There was never any need to invade Iraq. If oil was the goal, Washington DC could easily have lifted the sanctions around Iraq. I doubt that the neoconservatives believed that Saddam was developing nuclear weapons of destruction or had anything to do with the 9-11-2001 attacks, which is why they claimed they invaded.
If this madness does not stop, it will do much more damage, and like the Soviet Union, bankrupt the US.
Great overview of the real tragedy of Iraq-US companies having to share the spoils.
It reminds me of Russia: the US seethes because Putin is the one looting the country and not them.
Back in the 90s President Clinton issued countless demands to Yeltsin about oil pipelines and output increases, showing great impatience when the Russians dared to suggest environmental impact studies. (See the linked UPI article.) If only Putin would have let us frack the Kremlin he'd be our best friend!
Aug 15, 2015 | Jesse's Café Américain"We are imperial, and we are in decline... People are losing confidence in the Empire."This is the key theme of Larry Wilkerson's presentation. He never really questions whether empire is good or bad, sustainable or not, and at what costs. At least he does not so in the same manner as that great analyst of empire Chalmers Johnson.
It is important to understand what people who are in and near positions of power are thinking if you wish to understand what they are doing, and what they are likely to do. What ought to be done is another matter.
Wilkerson is a Republican establishment insider who has served for many years in the military and the State Department. Here he is giving about a 40 minute presentation to the Centre For International Governance in Canada in 2014.
I find his point of view of things interesting and revealing, even on those points where I may not agree with his perspective. There also seem to be some internal inconsistencies in this thinking.
But what makes his perspective important is that it represents a mainstream view of many professional politicians and 'the Establishment' in America. Not the hard right of the Republican party, but much of what constitutes the recurring political establishment of the US.
As I have discussed here before, I do not particularly care so much if a trading indicator has a fundamental basis in reality, as long as enough people believe in and act on it. Then it is worth watching as self-fulfilling prophecy. And the same can be said of political and economic memes.
At minute 48:00 Wilkerson gives a response to a question about the growing US debt and of the role of the petrodollar in the Empire, and the efforts by others to 'undermine it' by replacing it. This is his 'greatest fear.'
He speaks about 'a principal advisor to the CIA Futures project' and the National Intelligence Council (NIC), whose views and veracity of claims are being examined closely by sophisticated assets. He believes that both Beijing and Moscow are complicit in an attempt to weaken the dollar.
This includes the observation that "gold is being moved in sort of unique ways, concentrated in secret in unique ways, and capitals are slowly but surely divesting themselves of US Treasuries. So what you are seeing right now in the supposed strengthening of the dollar is a false impression."
The BRICS want to use oil to "force the US to lose its incredibly powerful role in owning the world's transactional reserve currency." It gives the US a great deal of power of empire that it would not ordinarily have, since the ability to add debt without consequence enables the expenditures to sustain it.
Later, after listening to this again, the thought crossed my mind that this advisor might be a double agent using the paranoia of the military to achieve the ends of another. Not for the BRICS, but for the Banks. The greatest beneficiary of a strong dollar, which is a terrible burden to the real economy, is the financial sector. This is why most countries seek to weaken or devalue their currencies to improve their domestic economies as a primary objective. This is not so far-fetched as military efforts to provoke 'regime change' have too often been undertaken to support powerful commercial interests.
Here is just that particular excerpt of the Q&A and the question of increasing US debt.
I am not sure how much the policy makers and strategists agree with this theory about gold. But there is no doubt in my mind that they believe and are acting on the theory that oil, and the dollar control of oil, the so-called petrodollar, is the key to maintaining the empire.
Wilkerson reminds me very much of a political theoretician who I knew at Georgetown University. He talks about strategic necessities, the many occasions in which the US has used its imperial power covertly to overthrow or attempt to overthrow governments in Iran, Venezuela, Syria, and the Ukraine. He tends to ascribe all these actions to selflessness, and American service to the world in maintaining a balance of power where 'all we ask is a plot of ground to bury our dead.'
A typical observation is that the US did indeed overthrow the democratically elected government of Mossadegh in 1953 in Iran. But 'the British needed the money' from the Anglo-Iranian oil company in order to rebuild after WW II. Truman had rejected the notion, but Eisenhower the military veteran and Republic agreed to it. Wilkerson says specifically that Ike was 'the last expert' to hold the office of the Presidency.
This is what is meant by realpolitik. It is all about organizing the world under a 'balance of power' that is favorable to the Empire and the corporations that have sprung up around it.
As someone with a long background and interest in strategy I am not completely unsympathetic to these lines of thinking. But like most broadly developed human beings and students of history and philosophy one can see that the allure of such thinking, without recourse to questions of restraint and morality and the fig leaf of exceptionalist thinking, is a terrible trap, a Faustian bargain. It is the rationalization of every nascent tyranny. It is the precursor to the will to pure power for its own sake.
The challenges of empire now according to Wilkerson are:
This presentation ends about minute 40, and then it is open to questions which is also very interesting.
- Disequilibrium of wealth - 1/1000th of the US owns 50% of its total wealth. The current economic system implies long term stagnation (I would say stagflation. The situation in the US is 1929, and in France, 1789. All the gains are going to the top.
- BRIC nations are rising and the Empire is in decline, largely because of US strategic miscalculations. The US is therefore pressing harder towards war in its desperation and desire to maintain the status quo. And it is dragging a lot of good and honest people into it with our NATO allies who are dependent on the US for their defense.
- There is a strong push towards regional government in the US that may intensify as global warming and economic developments present new challenges to specific areas. For example, the water has left the Southwest, and it will not be coming back anytime soon.Lawrence Wilkerson, Distinguished Visiting Professor of Government and Public Policy at the College of William Mary, and former Chief of Staff to U.S. Secretary of State Colin Powell.Related: Chalmers Johnson: Decline of Empire and the Signs of Decay
Feb 20, 2017 | economistsview.typepad.com
Richard H. Serlin : February 18, 2017 at 07:51 PM"Mr. Friedman underscored problems of asymmetry in regulation: People who especially benefit from a particular regulation will be inclined to lobby or bribe government officials for it. On the other hand, members of the general public, who might suffer from such regulations, will not be attentive to the many rules that affect them, each in a small way." -- Shiller article
This is the same Milton Friedman who assumed people had perfect information and expertise on everything in the market. They were all electrical engineers who knew the exact schematics of every toaster and refrigerator to know if it would burn down their house, but they had no idea what any government regulations or policies were -- Hey, it's ok, and so scientific, to just assume anything you want about human beings, as long as there's lots of math and internal consistency and microfoundations -- And, of course, it makes libertarianism look better.
Feb 20, 2017 | economistsview.typepad.comanne : , February 19, 2017 at 08:32 AMhttp://cepr.net/publications/op-eds-columns/ecuador-s-decade-of-reformanne -> anne... , February 19, 2017 at 08:35 AM
February 14, 2017
Ecuador's Decade of Reform
By Mark Weisbrot
In a shift supported and welcomed in Washington, Latin America has been moving to the right in the last year or so. Three of South America's largest economies - Brazil, Argentina, and Peru - now have right-wing presidents with close ties to Washington and its foreign policy. The standard "Washington Consensus" narrative, while ignoring any US role in the region, sees the left governments that were elected in South America over the past couple decades as having ridden a commodities boom to populist victories, with handouts to the poor and unsustainable spending. When that boom collapsed, the story goes, so did the finances of left governments and therefore their political fortunes.
But this is a highly exaggerated and self-serving narrative. Ecuador is a good example of how a left government achieved success over the past decade through positive and creative changes in economic policy, as well as financial, institutional, and regulatory reform.
The details are also worth looking at because Ecuador's experience shows that much of the rhetoric about how "globalization" restricts the choices of governments to those that please international investors is also exaggerated. It turns out that even a relatively small, middle-income developing country can adopt workable alternative policy options - if people can elect a government that is independent and responsible enough to use them.
The results for the decade-plus of left government in Ecuador (2007–16) include a 38 percent reduction in poverty and a 47 percent reduction in extreme poverty. Social spending as a percentage of GDP doubled, including large increases in spending on education and healthcare. Educational enrollment increased sharply for ages 17 and under, and spending on higher education as a percent of GDP became the highest in Latin America. Average annual growth of income per capita was much higher than in the prior 26 years (1.5 versus 0.6 percent), and inequality was considerably reduced.
Public investment as a percent of GDP more than doubled, and the results were widely appreciated in new roads, hospitals, schools, and access to electricity.
Rafael Correa was elected president of Ecuador in 2006 and took office in January of 2007. A former economy minister who was trained in the United States, he set out to fix some of the structural and institutional problems that had kept Ecuador from advancing. Policy was handicapped by the fact that Ecuador had adopted the US dollar as its currency in 2000. This meant that the government couldn't influence its exchange rate and was limited in how much it could use monetary policy. And it reduced the Central Bank's ability to act as a lender of last resort to the banking system.
This meant that the government had to be more efficient and creative, and exert more control over the financial system. In 2008, a new constitution was approved in a referendum, and the central bank - which was previously "independent" and mandated to focus on low inflation - was now made part of the government's economic team. This was very important in coordinating economic policy. The conventional wisdom among most economists-and a pillar of neoliberalism - is that central banks should be independent of elected officials. In practice, this usually means that they are unaccountable to the public, but not so independent of powerful financial interests.
A new law in 2009 required that banks in Ecuador bring 45 percent of their liquid assets back into the country; this requirement increased to 60 percent in 2012, and the actual level was more than 80 percent by 2015. These and other reforms that kept dollars in the country were essential to overcoming the new government's first serious challenge: the world financial crisis of 2008 and world recession of 2009. Ecuador was one of the hardest-hit countries in the hemisphere, since oil prices collapsed and the government depended on oil for the majority of its revenue. Another major source of dollars, remittances - mostly money sent home by Ecuadorians working abroad - also collapsed during the recession. This double shock could have caused a prolonged recession or depression, but it didn't, thanks to large increases in government spending and a large stimulus in 2009. The recession lasted just three quarters, costing about 1.3 percent of GDP.
The next big economic shock was the much more prolonged collapse in oil prices that began in the third quarter of 2014. This time, the government was even more creative: In addition to some expansionary fiscal policy (i.e., running bigger budget deficits), the central bank actually engaged in quantitative easing, much as the US Federal Reserve did in response to the recession. Ecuador's central bank created billions of dollars that it lent to the government for spending (and also to state-owned banks). This was unexpected for a government that did not even have its own currency, but it proved to be very helpful in the recovery.
The most important decision in bringing about Ecuador's current economic recovery was also perhaps the most unorthodox: The government imposed a variety of tariffs on imports under the World Trade Organization's provision for emergency balance-of-payments safeguards. This reduction of imports in 2015–16 added about 7.6 percentage points to GDP during those years. This counteracted spending cuts that the government had to make as revenues crashed.
The government of Correa and his party (Alianza PAIS) was thus able to achieve considerable economic and social progress, despite two recessions caused by serious external shocks. Contrary to the Washington narrative, this depended on major institutional reforms, financial regulation, and smart policy choices, many of which went against the conventional neoliberal wisdom.
Of course it helped that the president himself has a PhD in economics and knew what he was doing, and that he had a serious commitment to progressive governance from the beginning. Still, Correa's government had to fight powerful entrenched interests, including the bankers who owned most of the television media when he took office. A referendum in 2011 prohibited banks from owning media (and vice versa), and that helped to reduce their stranglehold on public debate. But the media have remained a powerful and politicized right-wing force, as in other countries with left governments - e.g. Brazil, where the major media led a successful effort last year to remove Workers' Party President Dilma Rousseff from office - despite the lack of any impeachable offense.
The government's legacy will be tested in an election this Sunday for president and national assembly....https://fred.stlouisfed.org/graph/?g=cKAw
August 4, 2014
Real per capita Gross Domestic Product for United States, Ecuador and Bolivia, 2000-2014
August 4, 2014
Real per capita Gross Domestic Product for United States, Ecuador and Bolivia, 2000-2014
(Indexed to 2000)
Feb 19, 2017 | www.zerohedge.comby Squid Viscous , Feb 18, 2017 10:30 PMxythras -> Squid Viscous , Feb 18, 2017 10:30 PM
becoming clearer by the day... the battle lines have been drawnGUS100CORRINA ->
PATRIOTIC SPRING HAS STARTED --
Geert Wilders was Hailed like a Rock Star in Spijkenisse, Rotterdam