Brexit as the start of the reversal of neoliberal globalization

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Pope Francis on danger of neoliberalism Friedman --founder of Chicago school of deification of market Neoliberalism Bookshelf   Greenspan humor Etc

"Happiness lies not in the mere possession of money; it lies in the joy of achievement, in the thrill of creative effort. The joy, the moral stimulation of work no longer must be forgotten in the mad chase of evanescent profits. These dark days, my friends, will be worth all they cost us if they teach us that our true destiny is not to be ministered unto but to minister to ourselves, to our fellow men.

Recognition of that falsity of material wealth as the standard of success goes hand in hand with the abandonment of the false belief that public office and high political position are to be valued only by the standards of pride of place and personal profit; and there must be an end to a conduct in banking and in business which too often has given to a sacred trust the likeness of callous and selfish wrongdoing.

Small wonder that confidence languishes, for it thrives only on honesty, on honor, on the sacredness of obligations, on faithful protection, and on unselfish performance; without them it cannot live."

Franklin D. Roosevelt, First Inaugural Address, March 4, 1933

Globalization and free trade are fast becoming dirty words. That’s because they are   culprits for major  shocks—like the 2008 financial crisis. In the United States alone, median household income has been practically stagnant for about three decades, the labor market continues to be anemic, manufacturing jobs have been lost, and many have experienced a significant deterioration in living standards.

Much of the post-Brexit and primary election conventional wisdom seems to be stuck in a political narrative in which the Brexit vote and the rise of Trump_vs_deep_state in the United States are seen as symbols of the populist revolution. These symbols are combined with a nationalist tide has been sweeping not only the United Kingdom and the United States, but also many other parts of Europe, including Poland, Hungary, France, The Netherlands and Scandinavia, not to mention, Russia, Turkey, India and Israel.

According to this narrative, economic insecurity and cultural anxiety that reflect sociodemographic trends have given momentum to ethnonationalism and religious separatism in both the United States and the United Kingdom. The Rust Belt is pitted against New York City, and the Midlands against London.

All this means that the crisis of neoliberalism, which started in 2008 now obtained political dimension, when the institutions created by neoliberalism are under attacks from the disgruntled population. The power of neoliberal propaganda, the power of brainwashing and indoctrination of population via MSM, schools and universities to push forward neoliberal globalization started to evaporate.

This is about the crisis of neoliberal ideology and especially Trotskyism part of it (neoliberalism can be viewed as Trotskyism for the rich). The following integral elements of this ideology no longer work well and are starting to cause the backlash:

  1. High level of inequality as the explicit, desirable goal (which raises the productivity). "Greed is good" or "Trickle down economics" -- redistribution of wealth up will create (via higher productivity) enough scrapes for the lower classes, lifting all boats.
  2. "Neoliberal rationality" when everything is a commodity that should be traded at specific market. Human beings also are viewed as market actors with every field of activity seen as a specialized market. Every entity (public or private, person, business, state) should be governed as a firm. "Neoliberalism construes even non-wealth generating spheres-such as learning, dating, or exercising-in market terms, submits them to market metrics, and governs them with market techniques and practices." People are just " human capital" who must constantly tend to their own present and future market value.
  3. Extreme financialization or converting the economy into "casino capitalism" (under neoliberalism everything is a marketable good, that is traded on explicit or implicit exchanges.)
  4. The idea of the global, USA dominated neoliberal empire and related "Permanent war for permanent peace" -- wars for enlarging global neoliberal empire via crushing non-compliant regimes either via color revolutions or via open military intervention.
  5. Downgrading ordinary people to the role of commodity and creating three classes of citizens (moochers, or Untermensch, "creative class" and top 0.1%), with the upper class (0.1% or "Masters of the Universe") being above the law like the top level of "nomenklatura" was in the USSR.
  6. "Downsizing" sovereignty of nations via international treaties like TPP, and making transnational corporations the key political players, "the deciders" as W aptly said. Who decide about the level of immigration flows, minimal wages, tariffs, and other matters that previously were prerogative of the state.

So after 36 (or more) years of dominance (which started with triumphal march of neoliberalism in early 90th) the ideology entered "zombie state". That does not make it less dangerous but its power over minds of the population started to evaporate. Far right ideologies now are filling the vacuum, as with the discreditation of socialist ideology and decimation of "enlightened corporatism" of the New Deal in the USA there is no other viable alternatives.

The same happened in late 1960th with the Communist ideology. It took 20 years for the USSR to crash after that with the resulting splash of nationalism (which was the force that blow up the USSR) and far right ideologies.

It remains to be seen whether the neoliberal US elite will fare better then Soviet nomenklatura as challenges facing the USA are now far greater then challenges which the USSR faced at the time. Among them is oil depletion which might be the final nail into the coffin of neoliberalism and, specifically, the neoliberal globalization.

Advocates of the neoliberalism constantly repeat the refrain that "there is no alternative" (TINA). Brexit is a powerful demonstration that this is not true (Back to (our) Future)

A major crack has appeared in the edifice of globalization, and the neoliberal order that has dominated the world’s economy since the end of World War II is now in danger.

That’s not necessarily a bad thing, by any means. But poisonous weeds are just as likely as green shoots to grow up through those cracks. To paraphrase John F. Kennedy: Those who make constructive evolution impossible may be making destructive devolution inevitable.

We now know that Great Britain, itself an amalgam of older nations, is divided. England and Wales voted to leave Europe, while Scotland, Northern Ireland, and ethnically diverse London voted to remain.

This vote was a stunning rejection of Great Britain’s political establishment. “Leave” prevailed despite opposition from all three major political parties. Prime Minister David Cameron, who will now step down, called on voters to “Remain.” So did socialist Jeremy Corbin, the most left-wing Labor leader in a generation. Barack Obama crossed the Atlantic to stand beside Cameron and offer his support.

Voters rejected all of them.

The uprising has begun. The question now is, who will lead it going forward?

Globalism’s Shadow Self

The world’s financial and political elites must now face the fact that resistance to their economic order, which has shaped the world since the Bretton Woods conference of 1944, is a major phenomenon. These elites are apparently more out of touch with the citizens of the industrialized world than at any time in modern memory.

Make no mistake: The “Leave” vote was a rejection of globalization, at least as it’s currently structured. This was a revolt of working class Britons who have seen their postwar prosperity erode around them and their social contract eviscerated by the corporate and financial oligarchy.

But it was also the sign of a darker and more sinister worldwide phenomenon: the resurgence of global nativism and xenophobia. This worldwide turn toward fear of the Other is globalization’s shadow self.

Revolt of the Powerless

That’s not to say that there wasn’t a legitimate left-wing case to be made for leaving the European Union. The “Left Leave” movement, or #Lexit, had its own advocates. “Why cling to this reactionary institution?” asked one.

But this near-victory wasn’t won with leftist arguments about resisting the global oligarchy. The left was too divided to make that case clearly or forcefully. It was largely won by stirring up bigotry against immigrants, cloaked in flimsy arguments about excessive regulation. Legitimate economic grievances were channeled into nationalist hostility.

Many “Leave” voters felt powerless, that they no longer had much of a say in their own destinies. They weren’t wrong. The European Union was largely a creation of transnational financial forces driven by a self-serving neoliberal ideology of “free” markets, privatization, and corporate economic governance.

But ,even at its worst, the EU is a symptom and not a cause. Great Britain’s citizens haven’t been losing control over their fate to the EU. They’ve been losing it because their own country’s leaders – as well as those of most other Western democracies – are increasingly in thrall to corporate and financial interests.

The British people have lost more sovereignty to trade deals like NAFTA and the TPP then they could have ever surrendered to the European Union. Their democratic rights are trampled daily, not by faceless EU bureaucrats, but by the powerful financial interests that dominate their politics and their economy.

Low Information Voters

This vote won’t help the middle class. British workers will no longer be guaranteed the worker rights that come with EU membership. British corporations will be less regulated, which means more environmental damage and more mistreatment of employees and customers. They will not, in the words of William Blake, “build Jerusalem in England’s green and pleasant land.”

Most “Leave” voters probably don’t know that, because the media failed them too. Instead of being given a balanced understanding of EU membership’s advantages and disadvantages, the British people were fed a constant diet of terror fears and trivial anti-government anecdotes meant to reinforce the notion that EU was needlessly and absurdly bureaucratic.

As Martin Fletcher explains, Boris Johnson played a key role in degrading the performance of Britain’s corporate press back in his days as a journalist. Other outlets were all to eager to mimic his anti-government and anti-Europe stereotypes. And now? It’s as if Sean Hannity’s deceptive sensationalism had made him a top presidential prospect.

Johnson and UKIP leader Nigel Farage played the same role in the Leave campaign that Donald Trump is playing in US politics. Like Trump, they have used economic fears to stoke the anti-immigrant fear and hatred that is their real stock in trade. Their slogan might just as well have been “Make England Great Again.”

The campaign’s fearmongering and hate has already claimed a victim in Jo Cox, the Labor MP who was violently martyred by a white British racist. Tellingly, her murder was not described as an act of terrorism, which it clearly was. The decision to restrict the “terrorist” label to Muslims, in Great Britain as in the United States, feeds precisely the kind of hatred that fuels movements like these.

Great Britain’s immigrant population grew by 4.5 million under EU membership. But in a just economy, that would lead to growth for the existing middle class. Britain’s immigrants didn’t wound that country’s middle class. They’re scapegoats for rising inequality and the punishing austerity of the conservative regime.

Aftershock

What happens next? Markets are already reacting, retrenching in anticipation of new trade barriers and political uncertainty.

Before the voting, estimates of a Leave vote’s effect on Britain’s economy ranged from “negative” to outright “calamitous.” The outcome will probably fall somewhere between the two.

Will the reprehensible Mr. Johnson, who pushed aggressively for Brexit, now lead his party -perhaps even his country? How much will this boost UKIP? By rejecting the EU, will Great Britain soon experience even harsher economic austerity measures than Cameron’s?

Scotland may once again pursue independence so that it can rejoin Europe. Sinn Fein is calling again for the reunification of Ireland. Suddenly anything seems possible.

There are already calls for a similar referendum in France.

British workers are likely to be worse off without EU protections, especially if the far right prevails in future elections as the result of this vote.

Trade deals will need to be negotiated between Britain and the EU, along with the terms of separation. Judging by its behavior toward Greece, Germany prefers to punish any nation impertinent enough to try guiding its own economic destiny. These negotiations won’t be pleasant.

The New Resistance

The current order is unstable. The uprising has begun. But who will lead it?

All over the world there are Boris Johnsons and Nigel Farages poised to capitalize on the chaos. The US has Trump, who was quick to tie himself to the vote. Greece has Golden Dawn. Germany has the far-right, anti-immigrant AfD party. Scandinavia has the Sweden Democrat Party and the Danish People’s Party. Hungary’s ruling Fidesz party, itself nationalistic and totalitarian by nature, is in danger of being outdone by the racist and anti-Semitic Jobbik party.

Hungary is already building a Trump-like wall, in fact, a barb-wired fence meant to keep Syrian refugees out of the country and Jobbik out of political power.

There is also also a growing democratic counterforce, poised to resist both the global elites and the nationalist bigots. It includes Syriza in Greece, Podemos in Spain, and the Corbin movement in Great Britain (although Corbin’s fate is unclear in the wake of this vote). In the US it has been seen in both the Occupy movement and, more recently, in the newly resurgent left inspired by Bernie Sanders’ campaign.

The global financial order is fracturing. But will it fall? It’s powerful and well organized. Even if it does, what will replace it: a more humane global order, or a world torn by nationalism and hate? Should these new progressive parties and factions form a transnational movement?

That’s the goal of economist Yanis Varoufakis, among others. Varoufakis confronted the EU’s economic leadership directly when he negotiated with them as Greece’s first Finance Minister under Syriza. They prevailed, and Varoufakis is now a private citizen.

The Greeks chose economic autonomy when they voted for Syriza. They didn’t get it. The British aren’t likely to get what they want from this vote either. No matter what happens, British citizens will still be in thrall to corporate financial forces – forces that can rewrite the rules they go along.

Greece’s fate has been a cautionary tale for the world, a powerful illustration of the need for worldwide coordinated resistance to today’s economic and political elites. We can vote. But without economic autonomy, we aren’t truly free. In the months and years to come, the people of Great Britain are likely to learn the truth: We are all Greece now.

The question is, where do we go from here?


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[Jul 19, 2018] This is the end of classic neoliberalism, no question about it, and the collapse of neoliberal globalization is just one aspect of it

Jul 19, 2018 | www.nakedcapitalism.com

likbez , July 19, 2018 at 4:44 am

Globalization is not a one-dimensional phenomenon, and some of its aspects are still intact. Hollywood dominance, Internet, English language dominance, West technological dominance, will not reverse any time soon.

What is under attack by Trump, Brexit, etc. is neoliberal globalization, and, especially financial globalization, free movement of labor and outsourcing of manufacturing and services (offshoring).

Neoliberal globalization was also based on the dollar as world reserve currency (and oil trading in dollars exclusively). But this role of dollar recently is under attack due to the rise of China. Several "anti-dollar" blocks emerged.

Trump tariffs are also anathema for "classic neoliberalism" and essentially convert "classic neoliberalism" into "national neoliberalism" on the state level. BTW it looks like Russia switched to "national neoliberalism" earlier than the USA. No surprise that Trump feels some affinity to Putin ;-)

Attacks against free labor movement also on the rise and this is another nail in the coffin of classic neoliberalism. In several countries, including the USA the neoliberal elite (especially financial elite after 2008, despite that no banksters were killed by crowds) does not feel safe given animosity caused by the promotion of immigration and resorts of conversion of the state into national security state and neo-McCarthyism to suppress dissent.

I think those attacks will continue, immigration will be curtailed, and "classic neoliberalism" will be transformed into something different. Not necessarily better.

Several trends are also connected with the gradual slipping of the power of the USA as the chief enforcer of the neoliberal globalization. Which is partially happened due to the stupidity and arrogance of the USA neoliberal elite and neocons.

Another factor in play is the total, catastrophic loss of power of neoliberal propaganda -- people started asking questions, and neoliberal myths no longer hold any spell on population (or at least much less spell). The success of Bernie Sanders during the last election (DNC was forced to resort to dirty tricks to derail him) is one indication of this trend. This "collapse of ideology" spells great troubles for the USA, as previously it spells great troubles for the USSR.

"Trumpism" as I understand it tried to patch the situation by two major strategies:

(1) splitting Russia from China

(2) Attempt to acquire dominant position in regions rick in hydrocarbons (Iraq, Iran, Libya, Venezuela, etc)

But so far the decline of neoliberalism looks like Irreversible. It never fully recovered from the deep crisis of 2008 and there is no light at the end of the tunnel.

Another powerful factor that works against neoliberal globalization is the end of cheap oil. How it will play out is unclear, Much depends whether we will have a Seneca cliff in oil production or not. And if yes, how soon.

This is the end of classic neoliberalism, no question about it, and the collapse of neoliberal globalization is just one aspect of it

[Jul 16, 2018] The West Is Past

Notable quotes:
"... Two U.S. 'realists', Henry Kissinger and Zbigniew Brzezinski, had always warned that the 'west' must keep China and Russia apart if it wants to keep its leading global position. Nixon went to China to achieve that. ..."
"... Years later the U.S. fell for the myth that it had 'won' the Cold War. It felt invincible, the 'sole superpower' and sought to 'rule them all'. It woke up from that dream after it invaded Iraq. The mighty U.S. military was beaten to pulp by the 'sand niggers' it despised. A few years later U.S. financial markets were in shambles. ..."
"... Crude attempts to further encircle Russia led to the Chinese-Russian alliance that now leads the SCO and soon, one might argue, the world. There will be no photo like the above from the SCO summit. The Chinese President Xi calls Russia's President Putin 'my best friend'. ..."
"... Agreed! But what will the US psychopaths do to maintain their grip when they realize they are really losing it? Nuclear war? ..."
"... Watching the two meetings play out has really been interesting, that the West is dead is not in question. And once it started it seems to be gaining momentum. I don't know how many readers here watch CGTN but it is amazing. My IQ goes up every time I watch. Astonishing how much more valuable information you get from a "heavily censored" Chinese news compared to MSM. The website is a little slow at times but it is well worth the wait. ..."
Jun 10, 2018 | www.moonofalabama.org

G-7 summits are supposed to symbolize "the west", its unity and its power. The summits pretended to set policy directions for the world. We are happy to see that they are dead.

Trump was obviously not inclined to compromise.

Before attending the summit Trump trolled his colleagues by inviting Russia to rejoin the G-7/G-8 format without conditions. Russia had been kicked out after Crimea voted to join its motherland. Merkel, who had negotiated the Minsk agreement with Russia, was furious. She wants to use such an invitation as an element of future negotiations. (It is stupid talk. Russia is not interested in rejoining the G-7/G-8 format.)

There are now many fields where the U.S. and its allies disagree: climate change, the Iran deal, trade are only the major ones.

Before leaving the summit Trump again used Mafia language against everyone else:

As he prepared to depart early from the G-7 summit in Charlevoix, Canada, to head to Singapore ahead of his planned meeting with North Korean leader Kim Jong Un, Trump delivered an ultimatum to foreign leaders, demanding that their countries reduce trade barriers for the U.S. or risk losing market access to the world's largest economy.

"They have no choice. I'll be honest with you, they have no choice," Trump told reporters at a news conference, adding that companies and jobs had left the U.S. to escape trade barriers abroad. "We're going to fix that situation. And if it's not fixed, then we're not going to deal with these countries. "

The row at the G-7 meeting was in stark contrast to the more important other meeting that happened today, the 18th Shanghai Cooperation Organization (SCO) summit in Qingdao, China:

Dazzling against the city skyline of Qingdao, fireworks lit up the faces of guests who traveled across the vast Eurasian continent to the coast of the Yellow Sea for the 18th Shanghai Cooperation Organization (SCO) summit, on Saturday night.

It is the first such summit since the organization's expansion in June 2017 when India and Pakistan joined as full members.

...

The Shanghai Spirit of mutual trust, mutual benefit, equality, consultation, respect for diverse civilizations and pursuit of common development , was stated in the Charter of the SCO, a comprehensive regional organization founded in 2001 by China, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan and later expanded to eight member states.

This weekend Xi will chair the summit for the first time as Chinese president, which is attended by leaders of other SCO member states and four observer states, as well as chiefs of various international organizations.

...

The SCO has grown to be an organization covering over 60 percent of the Eurasian landmass, nearly half the world's population and over 20 percent of global GDP.

Two U.S. 'realists', Henry Kissinger and Zbigniew Brzezinski, had always warned that the 'west' must keep China and Russia apart if it wants to keep its leading global position. Nixon went to China to achieve that.

Years later the U.S. fell for the myth that it had 'won' the Cold War. It felt invincible, the 'sole superpower' and sought to 'rule them all'. It woke up from that dream after it invaded Iraq. The mighty U.S. military was beaten to pulp by the 'sand niggers' it despised. A few years later U.S. financial markets were in shambles.

Crude attempts to further encircle Russia led to the Chinese-Russian alliance that now leads the SCO and soon, one might argue, the world. There will be no photo like the above from the SCO summit. The Chinese President Xi calls Russia's President Putin 'my best friend'.

The 'west' has lost in Eurasia.

The U.S. is reduced to a schoolyard bully who beats up his gang members because their former victims have grown too big. Trump is off to Singapore to meet Kim Yong-un. Unlike Trump North Korea's supreme leader will be well prepared. It is likely that he will run rings around Trump during the negotiations. If Trump tries to bully him like he bullies his 'allies', Kim will pack up and leave. Unlike the U.S. 'allies' he has no need to bow to Trump. China and Russia have his back. They are now the powers that can lead the world.

The 'west' is past. The future is in the east.

Posted by b on June 9, 2018 at 03:14 PM | Permalink


Kelli , Jun 9, 2018 3:37:22 PM | 1

Agreed! But what will the US psychopaths do to maintain their grip when they realize they are really losing it? Nuclear war?
Laguerre , Jun 9, 2018 3:44:17 PM | 2
Yeah, I was just thinking that. Trump is running full-speed into isolation. It's an ancient policy, which recalls the 1920s. What does America need of the outside world? Good question.

I would think we will hear in the not too distant future of a European replacement of the US exchange systems, such as VISA. The Americans have become too unreliable. Obviously the Russians and Chinese do have their own systems, but that won't do for the EU.

Independence is going to be forced, and the consequences will be permanent.

Babyl-on , Jun 9, 2018 3:53:27 PM | 5

Watching the two meetings play out has really been interesting, that the West is dead is not in question. And once it started it seems to be gaining momentum. I don't know how many readers here watch CGTN but it is amazing. My IQ goes up every time I watch. Astonishing how much more valuable information you get from a "heavily censored" Chinese news compared to MSM. The website is a little slow at times but it is well worth the wait.

Last year during the border standoff with India they had on strident Indian voices arguing the Indian position every day. Imagine if CNN had on Mexican reps regarding the wall - never happen.

Harry Law , Jun 9, 2018 3:59:37 PM | 6
Because Iran was under sanctions levied by the United Nations earlier, it was blocked from admission as a new member of the Shanghai Cooperation Council [SCO]. The SCO stated that any country under UN sanctions could not be admitted. After the UN sanctions were lifted, Chinese president Xi Jinping announced its support for Iran's full membership in SCO during a state visit to Iran in January 2016.Iran must join the SCO ASAP it is also a military alliance and should prepare itself for a big effort at regime change by the US and lackeys. The moral of the story unless they hang together, the US will hang them separately.
ashley albanese , Jun 9, 2018 4:01:15 PM | 7
Well, China as the text books say was always ' half the human story' - only eclipsed by Western connivance in the 1860's .I remember my father argueing with high ranking Australian government and commercial figures in 1970.

My father argued Australia needed to find its own voice with China and Chinese policy . They replied sneeringly '' Ralph , their just red communists and will never amount to anything ' . Shortly thereafter Nixon flew to Beijing and my father sat back in his living room with a sardonic look on his face !

Scotch Bingeington , Jun 9, 2018 4:05:14 PM | 8
Interesting picture! Judging by his posture, Japan's Prime Minister Abe seems to back Trump's position.

By the way, Mr. Abe doesn't look Japanese to me, he rather has a striking resemblance to a certain Bavarian actor - one Max Griesser .

Laguerre , Jun 9, 2018 4:13:18 PM | 9
You may like Freedland's article yesterday, which unusually I agreed with, that in fact Trump is a poor negotiator, and gives away tricks he doesn't have to. Why no concession from Israel, over the move of the US embassy to Jerusalem? Why give away the honour to NK of a one-to-one with the US president? I'd be surprised if NK surrenders, when they know what will happen if they do.

https://www.theguardian.com/commentisfree/2018/jun/08/trump-master-negotiator-meeting-kim-jong-un-art-of-deal

Madderhatter67 , Jun 9, 2018 4:18:15 PM | 10
They did win the Cold War. That's how they became the'sole superpower'.
Red Ryder , Jun 9, 2018 4:25:57 PM | 11
"President Putin is the leader of a great country who is influential around the world," Xi said. "He is my best, most intimate friend." Xi promised Russia and China would increase their coordination in the international arena.

Putin expressed his thanks for the honor and said he saw it as an "evaluation" of his nation's efforts to strengthen its relationship with its southern neighbor.

"This is an indication of the special attention and respect on which our mutual national interests are based, the interests of our peoples and, of course, our personal friendship," Putin said.

http://www.newsweek.com/putin-my-best-most-intimate-friend-chinese-president-xi-says-967531

This is not going missed by the West.

But it is unstoppable. The range of integrating projects the Chinese and Russians are working on is more than strategic.

They are forcing a massive shift in economics that is impossible for the US and EU to maintain as competitors.

https://sputniknews.com/analysis/201806091065269583-putin-xi-summit-takeaways/

The Double Helix is ascending.

Peter AU 1 , Jun 9, 2018 4:34:45 PM | 12
Interesting that Trump has said Russia should be invited back into the west's G7/G8 at this time. In cold war 1.0, Soviet Union was the main enemy of the US and China was split away from the Soviet Union. In this war, Trump sees China's economy as the main threat to the US and is trying but failing to pull Russia away from China.
Lea , Jun 9, 2018 4:45:07 PM | 13
Posted by: Madderhatter67 | Jun 9, 2018 4:18:15 PM | 10
They did win the Cold War. That's how they became the'sole superpower'.

If winning the Cold War is about vanquishing communism, they flat out lost. Because, while they were concentrating on the end of the USSR and celebrating, China was going up and up and up. They never saw her coming, yet to this day and for the foreseeable future, China is a socialist, Marxist country.

So the new, desperate Western spin is to try to argue that China has "succumbed" to capitalism. Yeah, right, a country where all the private companies have to have members of the CPC on their board and hand over enough shares to the state to grant it veto powers, not to mention the Central bank and all its major companies are state-owned... Lol.

les7 , Jun 9, 2018 4:49:57 PM | 14
"The 'west' is past. The future is in the east."

Wow... such grandiose conclusions...

After the collapse of the USSR the consensus - even of the alt-media (what little of it existed) was that a new American century was on the way and the whole world would be better off for it. A decade later in 2003 the consensus (post 'shock & awe' Gulf War 2) was that America had the ability to re-structure the Asian /African world and that it would all be for good.

15 years later we are all sick of the fruit of that delusion. So we look to another power to save us... Do we understand nothing?

Without the accountability of multi-polarity, Western supreme power all became security-obsessed privilege, self-aggrandizement, blatant plunder and total disregard for moral value and life. Power corrupts - it knows no exceptions.

If the West is truly dead, the East will be no different.

Laguerre , Jun 9, 2018 4:55:53 PM | 15
re 12
Interesting that Trump has said Russia should be invited back into the west's G7/G8 at this time.
Thought of a moment to annoy the Europeans. It is obvious that Trump was pissed off about having to attend, and left at the earliest opportunity. The Europeans heard that, and will draw the inevitable conclusions.
Quentin , Jun 9, 2018 4:57:21 PM | 16
Lea @ 13 Socialist, Marxist, Capitalist, what does it matter: it seems to work for China, at least for the time being. It's success makes me think that a bit more government control of corporations might not be such a bad thing.
Grieved , Jun 9, 2018 5:00:44 PM | 17
The summit with Kim will be fascinating to observe. In my view, NK has finessed the US and the Trump administration to a degree I would not have thought possible, even from native US insiders. To do it long range from the other side of the world speaks to me a lot about the power of Asia, and the clarity of view from there.

I agree with Laguerre @9 that Trump is a terrible negotiator (forgive that I didn't read the Guardian piece). I would take this much further and say that all the US institutions themselves are culturally crippled in terms of understanding what's happening in the ascendancy of Asia. All of their negotiation is feeble, because their grasp on their own true position is based on yesterday's view of their power. You cannot go into negotiation without knowing what you hold.

Every day, I become more confident in the ability of the elder nations to put the young western empires to rest without their being triggered into death spasms.

Red Ryder @11 - I see China's full-on drive for the one Road as its way of waging total war, its strategic masterstroke to render the enemy powerless without the enemy's realizing that it is being attacked. Russia as the other half of the Double Helix mesmerizes the west with weaponry while China undercuts the ground. Both countries are fully at war, and winning, while unseeing commenters complain that it's time for them to "do something." How superb the silk rope drawn so softly around the throat.

It's a beautiful play. I very much hope - and truly expect - that we can all survive to be able to sit back and admire it as the years unfold.

psychohistorian , Jun 9, 2018 5:05:30 PM | 18
I have a small quibble with b's wording but thank him for following and reporting on our evolving world.

b's words:"

The U.S. is reduced to a schoolyard bully who beats up his gang members because their former victims have grown too big.

"

My rewording:

The global elite have their US puppet acting like a schoolyard bully who beat up his gang members because their former victims have grown too big.

The West is trying to consolidate power and control while they still have some ghost of a chance. How they hold countries after this global divorce will be interesting.

At his time the West has little to offer humanistically except its vice grip on most economic interaction and the tools including banking underpinning the "system". The elite have deluded the public in the West for centuries about private finance behind the scenes of all/most conflict......pointing to other religions but never their own.

It sure is getting interesting. IMO, the two Koreas are going to announce a reconciliation that requires the removal of America military forces/bases et al, which fits in with the fake nationalism efforts of Trump.

Jen , Jun 9, 2018 5:09:16 PM | 19
That the US and the EU and their respective camps are at loggerheads over trade and perhaps other economic issues should not (I hope) lead readers to assume that one side has the interests of the public it represents uppermost in mind. As the US and the Anglosphere is dominated by one set of neoliberals, so Germany and the lackey EU nations following Berlin are dominated by another set of neoliberals in thrall to an export-led mercantilist ideology. Just as the elites in charge of US power structures are only interested in enriching themselves, the same can be said for those in charge of power structures in Europe. Whether under the US or the EU, the public suffers.

Notice that Germany benefits from being the major economic power in the EU while its fellow EU nations around the Atlantic and Mediterranean rim flail under a huge debt (and Greece is being punished back into the impoverished colonial status it held under Nazi German occupation) and eastern European EU members are following suit running their economies into the ground and having to beg NATO into setting up bases in their territories to attract money. At the same time German workers are becoming poorer, they are not benefiting from Berlin's economic policies, they are not reproducing fast enough so Berlin needs to bring in more foreign workers in the guise of "refugees" to prop up factories and keep wages low.

@ Madderhatter67: The US did not win the Cold War because the Cold War was only ever a propaganda front for the secret war waged by US / UK elites against Russia and China to dominate and rob these nations and their neighbours of their natural resources.

Grieved , Jun 9, 2018 5:12:25 PM | 20
@5 Babyl-on

Thanks for the nod to CGTN. For any who care, I searched out its YouTube channel and it produces a huge daily output in English:

https://www.youtube.com/user/CCTVNEWSbeijing/videos

I've recently added Vesti News to my news for the same reason, a large daily feed of short clips of the Russian view, in English:

https://www.youtube.com/channel/UCa8MaD6gQscto_Nq1i49iew/videos

I've never been a TV watcher, especially not for news, but I'm enjoying these tastes and flavors of this burgeoning century.

james , Jun 9, 2018 5:20:12 PM | 21
thanks b - and for the laugh with the marjorie and homer pic for comparison!

i think this parallel you draw is a good one.. the west is certainly floundering... i am not sure how global finance responds here... i can't imagine the 1% being on the wrong side of a bet on the direction of things here either..

@6 harry law.. did iran make it into the sco? it sounds like it did.. good!

@14 les7.. regarding your last line - i tend to agree with that viewpoint..

@19 jen... do you think it will be somehow different if the power shifts to russia/china? i guess i am not so sanguine over power, regardless of who holds it.

Wess County , Jun 9, 2018 5:23:01 PM | 22
Very well put, only issue that as to be dealt with is all those Stan Countries, they are a hibernating and breeding ground for Terrorists and Arms dealers , who don't care who they sell arms to and how they get them to rogue regimes.
Zanon , Jun 9, 2018 5:28:02 PM | 23
Its quite funny how Trump wrecked that meeting.

Trump could talk about Russia but who cares, he cant be trusted, hes totally unreliable and hopefully Russia sees that.

Zanon , Jun 9, 2018 5:29:13 PM | 24
at the same time Trump is a king, just look at how the pathetic western states STAND AROUND HIM begging him basically on all kinds of things!
Laguerre , Jun 9, 2018 5:57:10 PM | 25
re Grieved 17
I see China's full-on drive for the one Road as its way of waging total war, its strategic masterstroke to render the enemy powerless without the enemy's realizing that it is being attacked.
I do think you're exaggerating there.

China's past history has been one of a country very contented with itself, much like the US, because defended geographically by vast deserts. A longer history, so some foreigners did traverse the deserts.

The Chinese exported their products by foreign ships (Arabo-Persian) arriving at Canton, and buying cargoes, or camel caravans arriving in the north and buying silk. The Chinese themselves did not travel abroad very much, and so didn't know very much about surrounding countries, or the rest of the world. There was a fleet of Chinese junks which arrived in the Gulf in the 14th century, but it was the only one.

Today's situation is not so different. There are Chinese interventions in Africa, but their diplomacy is pretty ham-fisted. The Belt-and-Road initiative is in fact intended to bring up to speed Central Asian countries like Tajikistan. Fine, Tajikistan needs it, but it's not world-changing.

The rail freight from Beijing to Frankfurt works better as an intermediate between sea and air freight, but essentially it is what has always happened - foreigners export Chinese products. The Chinese don't know how to run a foreign policy.

bjd , Jun 9, 2018 5:58:01 PM | 26
I am surprised nobody here remarked on the pontifically present John Bolton.

This was about Iran, I am pretty sure.

bjd , Jun 9, 2018 6:02:20 PM | 27
I note, by the way, that in the second photo, the two persons holding a paper are not on the same page .

Talk about symbolism.

bjd , Jun 9, 2018 6:07:30 PM | 28
Have a closer look and you'll see that in the first photo, John Bolton is talking (Trump is silent and sitting there like 'Il Duce').

Bolton is talking to Macron, who is looking straight at Bolton.

In the second photo, Merkel is looking at Bolton, who is probably speaking at that moment.

Tell me this is not about Iran.

michaelj72 , Jun 9, 2018 6:26:40 PM | 29
hopehely at @4

"OK, so, is Japan 'east' or 'west'?"

from their body language, I would say that Japan is surely 'with' Trump and the US, but that's only because that arch-reactionary Abe is in power.....and when he goes, and go he will, there will be a big period of adjustment...some day.

Villainesse , Jun 9, 2018 6:26:46 PM | 30
The scambastic Trump could be inclined to make a slightly more fair deal in Singapore just to make a deal, but he is going extra early (no jet lag) and will be controlled by Pompeo with his 'Grim Reaper' CIA-dog/warhawk/translator/born & raised S. Korean with multiple relations in their South KCIA (NIS) and cabinet leadership, Andrew Kim (born Kim Sung-hyun). Kim's purpose will be to control Trump's spontaneaous decision making, inform him on what he reads as N. Korea's intent, and give baseline hawkish color to the translations for his own hawkish viewpoint.
annie , Jun 9, 2018 6:29:13 PM | 31
bjd, bolton is trump's overseer, making sure he doesn't step out of line.

Trump is a poor negotiator, and gives away tricks he doesn't have to. Why no concession from Israel, over the move of the US embassy to Jerusalem?

Laguerre, you have it backwards. the embassy move, the iran deal, and the appointment of bolton are all concessions trump made, as payback for adelson's millions to both the gop and his campaign. possibly also has a little something to do cambridge analytica, honey traps or whatever.

Adelson: the casino mogul driving Trump's Middle East policy

The imprint of the 84-year-old's political passions is seen in an array of Donald Trump's more controversial decisions, including violating the Iran nuclear deal, moving the American embassy in Israel to Jerusalem, and appointing the ultra-hawkish John Bolton as national security adviser.

......The New York Times reported that Adelson is a member of a "shadow National Security Council" advising Bolton

Jen , Jun 9, 2018 6:36:52 PM | 32
James @ 21: I think one should always be a bit suspicious of those who hold power, especially those who find themselves holding the uppermost hand in power as a result of victory in war (whether in the form of actual military combat, trade war or other wars in soft power).

Russia under Vladimir Putin and China under Xi Jinping may be fine but will their successors know not to abuse the power they may gain from the New Silk Road projects encompassing Eurasia and Africa?

hopehely , Jun 9, 2018 6:38:17 PM | 33
Posted by: bjd | Jun 9, 2018 6:02:20 PM | 27
I note, by the way, that in the second photo, the two persons holding a paper are not on the same page.

Talk about symbolism.

In that pic, is that Miller lurking from behind?

Red Ryder , Jun 9, 2018 6:42:03 PM | 34
@29, bjd,

Of course, it is about Iran. It's the Iranian deal that the EU needs to continue. They benefit as the biggest vendors to Iran. They want to get inside that developing 70 million person market, also.

Bolton wants regime change. The EU knows that will be worse than Iraq. And economically, the EU will be in the dumps for 2 decades if there's another war they are forced to join. And they will be forced to join. They cannot say No to the Hegemon.

The EU 2, Germany and France, are at a historic moment of truth.

They could have a great future with Russia, China, Iran, the BRICS, SCO, OBOR and EAEU or they could be crippled by the Empire.

John Gilberts , Jun 9, 2018 7:01:17 PM | 35
Excellent analysis as always. Here's the muck CBC is reporting on the summit.

Canada Rejects Trump's Call to Let Russia Back Into G-7

http://www.cbc.ca/news/politics/trump-russia-g7-canada-1.4697655

"...But Canada, which pushed for Russia to get the boot in 2014, is not onside. 'Russia was invited to be part of this club and I think that was a very wise initiation, and an invitation full of goodwill,'[FM Chrystia Freeland] she told reporters at the summit. 'Russia, however, made clear that it had no interest in behaving according to the rules of Western democracies..."

Glad to hear it...

michaelj72 , Jun 9, 2018 7:15:43 PM | 36
it's kind of wonderful to see all these imperialist and former neo-colonial powers fighting among themselves.

unfortunately, like the old African proverb goes, when the elephants fight it's the grass and small animals that suffer.

I see no reason for optimism for the peoples of europe at this point, as the stranglehold of the Trioka is perhaps as strong as ever, and hundreds of millions of people are suffering; the people simply have to get organized at all levels and take back their sovereignty at least as a start

WorldBLee , Jun 9, 2018 7:17:31 PM | 37
The US still has the power of the dollar in its arsenal. The UK and EU, and any nation that deals with Wall Street, are addicted to US investment in dollars. Since the EU is run by the banks, and western banks can't function with the dollar, any statements by the EU that they're going to avoid US sanctions over Iran are meaningless.

The equation is essentially this: you can have your sovereignty or you can have the benefits of the dollar that make your 1% very rich. You can't have both. Since the EU is ruled by the 1% banker/investor class they will forestall any attempts to regain sovereignty by the people. In a sense, Europe is like Russia 10-15 years ago, thinking that the US is the key to the golden calf. Russia learned the hard way they needed to establish some independence (although to this day Russia doesn't have nearly the financial independence one might hope), and China saw from Russia's example they needed to do so as well. This led them to team up on many economic initiatives while seeking to reduce the dominance of the dollar.

Perhaps someday Europe will learn this lesson. But as long as the EU exists, I kind of doubt it. The EU-crats will cry and criticize Trump but the bankers love US money too much to let them actually do anything serious.

Ghost Ship , Jun 9, 2018 7:20:38 PM | 38
Paul Krugman is tweeting that this is all happening because Trump doesn't understand Value-Added Tax !

This is not an endorsement of Krugman who is trying to blame it on Putin.

rexl , Jun 9, 2018 7:56:05 PM | 39
If the West is dead and the East is the future, then why are so many Chinese buying houses and living part time in Canada, Australia, and the USA? Why is there so much emphasis put on Western education facilities by Asians?
Winston , Jun 9, 2018 8:02:05 PM | 40
I'm sure Trump doesn't understand VAT.

Most Americans don't no matter how much explanation I go into.

They insist its a tariff or duty,which its not.

I've given up trying to explain its a sales tax on all,paying at customs is merely a cash flow issue for the importer.A reclaimable input on his VAT return,did it many times myself.

Sabine , Jun 9, 2018 8:11:53 PM | 41
there is no west nor east.

there is only a bunch of paid of administrators running the countries and the corporations that pay them.

Trumps quid pro quo is deals that benefit his family. I don't thinks he cares one bit about the GOP and how the party fundraises. He cares about advancing his family and keeping the loot.

maybe we should realize that the concepts of east and west, as much as neo liberalism or neo conservatism or any other moniker that we could apply to loot and steal - legally and without shame under the guise of trade - are concepts of the past.

the future is for the strongest, irrespective of their origins or philosophy. we are burning this planet down with a vengeance and we - the people - are to numerous and too expensive to keep.

while we debate and some even chuckle with delight as to how the west is treated by trump, or how much the west deserves to be made redundant and all hail the Russians and the Chinese - the king is dead, long live the king - it is us who dies in the wars, it is our children that are being kidnapped and locked up in prison when arriving on the border seeking asylum, it is us who will watch the women in our live die in childbirth because of lack of medical care, it is us who will die of black lung, hunger, thirst and general malice.

and while we gossip, they laugh all the way to the bank.

NemesisCalling , Jun 9, 2018 8:24:56 PM | 42
b, we have no doubt that the North Korean leadership is ready for the Americans and know the score with a rising Eurasia and a sinking NATO. However, your last assumption of Kim being more than ready to go toe-to-toe with DJT smacks of some of the worst tendencies of many posters here who are ready to venerate Kim without him ever even making formal address of more than a few words to a) his people, 2) his allies, or D) even the world. This is a laughable assumption from you and it would be like having the most beautifully-made garment handy for a long while, desperate for anyone to come along so you could fling it on them to prove they were the most amazing supreme leader in all the world!

This is not to say I do not want the NoKos to succeed in their endeavors of getting a fair deal...hardly: I think they will succeed eventually because they are shrewd. But this is an attempt to squash the unbelievably propagandistic (or naive) attempts to place the mantle of imperviousness, all-knowingness, utterly-innocentness, and insurmountably-cleverousness onto the boy that would be king. DJT could eat a boy like Kim for breakfast if left alone from their advisors.

CE , Jun 9, 2018 8:26:35 PM | 43
Interesting that this happens in June. Because it reminds me of this classic little fun ditty:

Death in June - Death of the West

ben , Jun 9, 2018 8:33:09 PM | 44
Sabine @ 41 said:"there is no west nor east.

"there is only a bunch of paid of administrators running the countries and the corporations that pay them"

And this"and while we gossip, they laugh all the way to the bank."

I would tend to agree, but I'm hoping b's right in his assessment, the empire and her minions very badly need a comeuppance..

dh , Jun 9, 2018 8:45:10 PM | 45
Trump is very dependent on his base. He knows them well. At risk of hitting a discordant note I suspect a lot of his fans are happy seeing him sock it to the goddamn ch*nks and euro faggots.
Daniel , Jun 9, 2018 8:46:57 PM | 46
It's a big weekend. G7, SCO, Bilderberg, NATO Defence Ministers meeting in Brussels and the huge NATO "Drills" including the Baltic States and for the first time, Israel.

Oh, and the US called on NATO to add 30 land battalions, 30 air fighter squadrons, and 30 naval ships to "counter Russian aggression."

The AZW Empire is not giving up its plans.

karlof1 , Jun 9, 2018 8:47:27 PM | 47
I predicted it would become the G6+1 and so it has. Trump told his staffers NOT to sign the Joint Communique, which I believe is a first.

On the issue of power and the BRI , the linked item is a trove of info as it focuses on perhaps the most problematic region of the SCO/BRI.

If Europe is to break free from the Outlaw US Empire, Merkel must be jettisoned and independent-minded leaders must take control of Germany and EU. I'm not at all surprised with how events went in Canada. However, I see the Policy as the Bully, not Trump, the policy still being the attempt to gain Full Spectrum Domination. What's most important, IMO, is this spectacle will not go unnoticed by the rest of the world. The Outlaw US Empire cannot make it any plainer that it's the primary enemy state of all except the Zionist Abomination. I think Abe wonders why he's there and not in Qingdao.

Although this item focuses on Kashmir , it should be read after the longer article linked above. There's little news as of yet coming from Qingdao other than who's cooking what and sideline meets. I expect more coming out beginning Monday. Of course, Kim-Trump begins now, it being the 10th in Singapore already.

bevin , Jun 9, 2018 10:26:24 PM | 48
The difference between the two projects- the western Empire and the Eurasian schemes exemplified by OBOR- is that the former, as 500 years of experience teaches us, relies on ethnic divisions, wars and competition while the latter requires peace and co-operation.

In a sense that answers Jen @ 32. It really doesn't matter who runs the governments of China and Russia, provided that they can prevent the imperialists from distracting them into rivalry. It was that which, thanks to plenty of stupidity on both sides, gave rise to the tensions of which Nixon and Kissinger took advantage.

Had the USSR and China ironed out their small differences on the sixties- and Vietnam gave them a perfect excuse to do so, history would have been very different and probably much less bloody.

The truth is that, as b asserts, the SCO is already much more important than the G7- America and the Six Dwarfs. How much more important is shown by the role of Freeland (the neo-Nazi Ukrainian apologist) in insisting on holding the line against Russia's re-admission to a club that it almost certainly does not want to rejoin.

Trump may not be a 'good negotiator' but he has a position of relative strength vis a vis the rest of the G7 who cannot negotiate because they do as they are told. If they won't do what Trump tells them to do they will be on the lookout for someone else to give them orders-they have no idea of independence or sovereignty. Just watch most of them scuttle back to Brussels for ideas, or set up back channels to Moscow- once a puppet always a puppet.

karlof1 , Jun 9, 2018 11:57:39 PM | 49
The Sino-Soviet Split occurred while Stalin was still alive--he refused to allow the Chinese to develop "Communism with Chinese Characteristics" just like any other European Orientalist. And as the Monthly Review article I linked, the Chinese must beware of becoming/being seen as Imperialistic in their zeal to push BRI--Imperialist behavior will kill the Win-Win concept as it will revert to just another Zero-sum Game.
Hoarsewhisperer , Jun 10, 2018 12:20:55 AM | 50
One of the factors which has been killing the 'Democratic' West is that its bribed & blackmailed leaders have alienated themselves from The People whose views they were elected to represent.

No-one living in a so-called democracy is prepared to tolerate a leader who spends too much time praising, and making excuses for, the crimes of the racist-supremacist Zionist Abomination (h/t karlof1) and its Piece Process in Palestine. It can be persuasively argued that embrace of and fealty to the Z.A. is the only factor which Western Leaders have in common. And it's neither a coincidence nor happenstance.

ben , Jun 10, 2018 12:40:15 AM | 51
Hoarsewhisperer @ 50 said:" Piece Process in Palestine."

Nice word play. I'm assuming the "piece" word is referring to the Israelis taking the Palestinian's lands one piece at a time..

Debsisdead , Jun 10, 2018 12:51:14 AM | 52
Grrr! I still don't get why so many humans believe anything good comes from chucking aside one greedy oppressive arsehole then replacing it with another. Sure the SCO has a founding document laden with flowery words and seemingly wonderful concepts but I say "So what" check out the UN charter or the amerikan constitution and you'll find the same.

These issues of justice & equity cannot be fixed by swapping bosses because every society has its share of pathologically fucked up greedies who have the means and lack of empathy to destroy anything and everyone in their lust for whatever it is they imagine they need.

We have to accept that will never change and that trying to purge the planet of those types just creates more of them from within the structure most successful in effecting the swap.

I know I sound like a scratched disc but the only fix that could hope to work is one that smashes the conglomerations into tiny shards, reducing the world to thousands of small self governing entities; sure some places will still end up being taken over by low self esteem motivated arseholes, but not only will they not be able to do as much damage, arseholes stand out in a small society where more 'normal' humans interact with them - currently all the pr1cks coagulate in spots such as the G7 and few non-pr1cks ever get close enough to see them for what they are. A low count on the old degrees of seperation register makes it much more difficult for the scum to rise. Making sure that no chunk is sufficiently big to force its will on another would also be vital.

That won't fix everything, but who outside some totally screwed up anal regressive would want that anyway? I just want to live in a world where no one cops it like the entire Yemeni population currently is. I see no benefit in moving the horror from Yemen to Uigar-land or whatever place the new bosses decide should be their fun palace of hate, murder and misery.

The Congo and/or Nigeria another coupla sites of misery for money. Timor Leste aka East Timor, now that the Portuguese expats in the form of the man with the Nobel stamp of obeisance to the monied Jose Ramos Horta have done over the locals, something Xanana Gusmão always said could happen. Horta's arseholeness made the wealthiest nation in the world (divide resources by population) riven by poverty, lack of health and education services plus of course old favourite, racist oppression. Check out these kids here untroubled by issues like getting a decent phone signal or their ranking on Twitch - wondering where their next decent feed is coming from is prolly their most pressing issue.

Swapping SCO for G7 will do SFA for them or anyone else unlucky enough to be living on top of whatever the current 'must have' is deemed to be.

Anyone who imagines that it could is delusional.

karlof1 , Jun 10, 2018 12:55:44 AM | 53
Official SCO Conference site .

Humanity either learns how to live with itself on an equal basis or it will perish; it's really that simple. The likes of the Outlaw US Empire, its NATO vassals and the Zionist Abomination are shining examples of what MUST be exorcised for ever more.

[Jul 16, 2018] Donald Trump s Trade Wars Could Lead to the Next Great Depression by Nomi Prins

Jun 22, 2018 | thenation.com

EDITOR'S NOTE: This article originally appeared at TomDispatch.com .

Leaders are routinely confronted with philosophical dilemmas. Here's a classic one for our Trumptopian times: If you make enemies out of your friends and friends out of your enemies, where does that leave you? What does winning (or losing) really look like? Is a world in which walls of every sort encircle America's borders a goal worth seeking? And what would be left in a future fragmented international economic system marked by tit-for-tat tariffs, travel restrictions, and hyper-nationalism? Ultimately, how will such a world affect regular people? Let's cut through all of this for the moment and ask one crucial question about our present cult-of-personality era in American politics: Other than accumulating more wealth and influence for himself, his children , and the Trump family empire , what's Donald J. Trump's end game as president? If his goal is to keep this country from being, as he likes to complain, " the world's piggy bank ," then his words, threats, and actions are concerning. However bombastic and disdainful of a history he appears to know little about, he is already making the world a less stable, less affordable, and more fear-driven place. In the end, it's even possible that, despite the upbeat economic news of the moment, he could almost single-handedly smash that piggy bank himself, as he has many of his own business ventures . Still, give him credit for one thing: Donald Trump has lent remarkable new meaning to the old phrase "the imperial presidency." The members of his administration, largely a set of aging white men, either conform to his erratic wishes or get fired. In other words, he's running domestic politics in much the same fashion as he oversaw the boardroom on his reality-TV show The Apprentice . Now, he's begun running the country's foreign policy in the same personalized, take-no-prisoners, you're-fired style. From the moment he hit the Oval Office, he's made it clear at home and abroad that it's his way or the highway. If only, of course, it really was that simple. What he will learn, if "learning process" and "President Trump" can even occupy the same sentence, is that "firing" Canada, the European Union (EU), or for that matter China has a cost. What the American working and the middle classes will see (sooner than anyone imagines) is that actions of his sort have unexpected global consequences. They could cost the United States and the rest of the world big-time. If he were indeed emperor and his subjects (that would be us) grasped where his policies might be leading, they would be preparing a revolt. In the end, they -- again, that's us -- will be the ones paying the price in this global chess match.

The Art of Trump's Deals

So far, President Trump has only taken America out of trade deals or threatened to do so if other countries don't behave in a way that satisfies him. On his third day in the White House, he honored his campaign promise to remove the United States from the Trans-Pacific Partnership, a decision that opened space for our allies and competitors, China in particular, to negotiate deals without us. Since that grand exit, there has, in fact, been a boom in side deals involving China and other Pacific Rim countries that has weakened, not strengthened, Washington's global bargaining position. Meanwhile, closer to home, the Trump administration has engaged in a barrage of NAFTA-baiting that is isolating us from our regional partners, Canada and Mexico.

Conversely, the art-of-the-deal aficionado has yet to sign a single new bilateral trade deal. Despite steadfast claims that he would serve up the best deals ever, we have been left with little so far but various tariffs and an onslaught against American trading partners. His one claim to bilateral-trade-deal fame was the renegotiation of a six-year-old deal with South Korea in March that doubled the number of cars each US manufacturer could export to South Korea (without having to pass as many safety standards).

As White House Press Secretary Sarah Sanders put it , when speaking of Kim Jong-un's North Korea, "The President is, I think, the ultimate negotiator and dealmaker when it comes to any type of conversation." She left out the obvious footnote, however: any type that doesn't involve international trade.

In the past four months, Trump has imposed tariffs, exempting certain countries, only to reimpose them at his whim. If trust were a coveted commodity, when it came to the present White House, it would now be trading at zero. His supporters undoubtedly see this approach as the fulfillment of his many campaign promises and part of his classic method of keeping both friends and enemies guessing until he's ready to go in for the kill. At the heart of this approach, however, lies a certain global madness, for he now is sparking a set of trade wars that could, in the end, cost millions of American jobs.

The Allies

On May 31st, Commerce Secretary Wilbur Ross confirmed that Canada, Mexico, and the EU would all be hit with 10 percent aluminum and 25 percent steel tariffs that had first made headlines in March. When it came to those two products, at least, the new tariffs bore no relation to the previous average 3 percent tariff on US-EU traded goods.

In that way, Trump's tariffs, initially supposed to be aimed at China (a country whose president he's praised to the skies and whose trade policies he's lashed out at endlessly), went global. And not surprisingly, America's closest allies weren't taking his maneuver lightly. As the verbal-abuse level rose and what looked like a possible race to the bottom of international etiquette intensified, they threatened to strike back.

In June, President Trump ordered that a promised 25 percent tariff on $50 billion worth of imported goods from China also be imposed. In response, the Chinese, like the Europeans, the Canadians, and the Mexicans, immediately promised a massive response in kind. Trump countered by threatening another $200 billion in tariffs against China. In the meantime, the White House is targeting its initial moves largely against products related to that country's " Made in China 2025 " initiative, the Chinese government's strategic plan aimed at making the country a major competitor in advanced industries and manufacturing.

Meanwhile, Mexico began adopting retaliatory tariffs on American imports. Although it has a far smaller economy than the United States, it's still the second-largest importer of US products, buying a whopping $277 billion of them last year. Only Canada buys more. In a mood of defiance stoked by the president's hostility to its people, Mexico executed its own trade gambit, imposing $3 billion in 15 percent–25 percent tariffs against US exports, including pork, apples, potatoes, bourbon, and cheese.

While those Mexican revenge tariffs still remain limited, covering just 1 percent of all exports from north of the border, they do target particular industries hard, especially ones that seem connected to President Trump's voting "base." Mexico, for instance, is by far the largest buyer of US pork exports, 25 percent of which were sold there last year. What its 20 percent tariff on pork means, then, is that many US producers will now find themselves unable to compete in the Mexican market. Other countries may follow suit. The result: a possible loss of up to 110,000 jobs in the pork industry.

Our second North American Free Trade Agreement (NAFTA) partner (for whose prime minister, Justin Trudeau, there is " a special place in hell ," according to a key Trumpian trade negotiator) plans to invoke tariffs of up to 25 percent on about $13 billion in US products beginning on July 1st. Items impacted range "from ballpoint pens and dishwasher detergent to toilet paper and playing cards sailboats, washing machines, dish washers, and lawn mowers." Across the Atlantic, the EU has similarly announced retaliatory tariffs of 25 percent on 200 US products, including such American-made classics as Harley-Davidson motorcycles, blue jeans, and bourbon.

Trump Disses the Former G7

As the explosive Group of Seven, or G7, summit in Quebec showed, the Trump administration is increasingly isolating itself from its allies in palpable ways and, in the process, significantly impairing the country's negotiating power. If you combine the economies of what might now be thought of as the G6 and add in the rest of the EU, its economic power is collectively larger than that of the United States. Under the circumstances, even a small diversion of trade thanks to Trump-induced tariff wars could have costly consequences.

President Trump did try one "all-in" poker move at that summit. With his game face on, he first suggested the possibility of wiping out all tariffs and trade restrictions between the United States and the rest of the G7, a bluff met with a healthy dose of skepticism. Before he left for his meeting with North Korean leader Kim Jong-un in Singapore, he even suggested that the G7 leaders "consider removing every single tariff or trade barrier on American goods." In return, he claimed he would do the same "for products from their countries." As it turned out, however, that wasn't actually a venture into economic diplomacy, just the carrot before the stick, and even it was tied to lingering threats of severe penalties.

The current incipient trade war was actually launched by the Trump administration in March in the name of American " national security ." What should have been highlighted, however, was the possible "national insecurity" in which it placed the country's (and the world's) future. After all, a similar isolationist stance in the 1920s and the subsequent market crash of 1929 sparked the global Great Depression, opening the way for the utter devastation of World War II.

European Union countries were incredulous when Trump insisted, as he had many times before, that the "U.S. is a victim of unfair trade practices," citing the country's trade deficits, especially with Germany and China. At the G7 summit, European leaders did their best to explain to him that his country isn't actually being treated unfairly. As French President Emmanuel Macron explained , "France runs trade deficits with Germany and the United Kingdom on manufactured goods, even though all three countries are part of the EU single market and have zero tariffs between them."

[Jul 15, 2018] Trump doctrine: "Permanent destabilization creates American advantage"

Notable quotes:
"... The official who described this to me said Trump believes that keeping allies and adversaries alike perpetually off-balance necessarily benefits the United States, which is still the most powerful country on Earth. ..."
"... "No," the official said. "There's definitely a Trump Doctrine." "What is it?" I asked. Here is the answer I received: "The Trump Doctrine is 'We're America, Bitch.' That's the Trump Doctrine." ..."
Jul 15, 2018 | www.moonofalabama.org

Trump today added to turmoil he caused in Europe:

In an interview with "CBS Evening News" anchor Jeff Glor in Scotland on Saturday, President Trump named the European Union -- comprising some of America's oldest allies -- when asked to identify his "biggest foe globally right now."
"Well, I think we have a lot of foes. I think the European Union is a foe, what they do to us in trade. Now, you wouldn't think of the European Union, but they're a foe. ..."

Bashing allies is an essential component of the Trump doctrine :

The second-best self-description of the Trump Doctrine I heard was this, from a senior national-security official: "Permanent destabilization creates American advantage." The official who described this to me said Trump believes that keeping allies and adversaries alike perpetually off-balance necessarily benefits the United States, which is still the most powerful country on Earth.

...

The best distillation of the Trump Doctrine I heard, though, came from a senior White House official with direct access to the president and his thinking. I was talking to this person several weeks ago, and I said, by way of introduction, that I thought it might perhaps be too early to discern a definitive Trump Doctrine. "No," the official said. "There's definitely a Trump Doctrine." "What is it?" I asked. Here is the answer I received: "The Trump Doctrine is 'We're America, Bitch.' That's the Trump Doctrine."


vk , Jul 15, 2018 1:23:01 PM | 6

I think Trump simply has a very prosaic, very sincere even, view about the world: he treats his equals equally (e.g. Putin, Xi, Kim) and his unequals unequally (NATO countries' leaders, Abe etc.).

That is, he simply views his allies for what they really are: clients. And when you go visit clients, you expect them to stop, lower their heads, listen and obey you: that's why he probably found strange the fact that the Europeans were insulted by his behavior during the NATO summit and the individual countries official visits. He must have been particularly thunderstruck over the popular protests in Scotland: from his point of view, Scotland owes everything they have now to the USA (NATO), so he, as chief of State of the USA, has every right to go there and play golf whenever he pleases to do so. And the fact is he's right to think so: the European peninsula is an American protectorate, a "subState", inhabited by second-class citizens (like the peoples of Latin status of the Roman Republic).

As for the destabilization doctrine (Trump Doctrine), it's absolutely correct: peace, right now, is nocive to the USA. That's why Russia and China are trying to descalate: peace (and time) is on their side. If the USA doesn't manage to trigger WWIII soon, it will start to eat itself up, because the world didn't recover from the 2008 meltdown. The clock is ticking for the Americans (and, by extension, for the Europeans and the Japanese).

Last, I agree completely with the theory that May is a remainer who's trying to implode brexit without appearing to do so. She was a remainer during the camapaign, that's the reason she was elected as Cameron's successor (it was she or Leadsom or Johnson, both hardcore brexiters). The British elite is holding her while it can, and she is only in office right now because she has the elite's full weight behind her: if it was a Labour MP, he/she would've already fallen.

Bart Hansen , Jul 15, 2018 1:26:12 PM | 7
Re: Haass - It says a lot that a member of the Deep State can through out such a statement without embarrassment.

His Twitter feed is getting some sass, but he knows none of that will be included when the stenos quote him.

Hoarsewhisperer , Jul 15, 2018 1:48:15 PM | 11
There is one significant weakness to Putin's patient, restrained and reasonable response to US/NATO aggression and intimidation...
...
Posted by: les7 | Jul 15, 2018 12:17:17 PM | 2

Huh?!
If you watch the last 8 minutes of Episode 3 of Oliver Stone's Putin Interviews it'll cure you of the habit of confusing Putin's "Our Partners" diplo-speak with the hair-raising reality experienced by the crew of the Donald Cook in the Black Sea a couple of years ago. It'll also dissuade you from imagining that Putin/Russia has a 'weak' or 'reasonable' attitude toward NATO military provocations.

Imo Trump would have either watched them himself or been briefed on their contents by someone who has.

There are many links to the series on the www. Here's one to Ep 3...
https://www.sbs.com.au/ondemand/video/965043267630/the-putin-interviews

Zanon , Jul 15, 2018 1:53:20 PM | 12
Even if I get Moscow as 'retribution,' critics will say it's not good enough - Trump
https://www.rt.com/usa/433263-trump-putin-summit-expectations/
dltravers , Jul 15, 2018 2:51:52 PM | 14
Trump is acting out the good cop bad cop role all in one. He comes in with slashing attacks and praise. The media only prints the slashing attacks. By placing his adversaries off balance he seeks to gain something. I would say that he is operating like a corporate raider. The weak kneed euro leaders just do not know how to handle this stuff.

He will not try that with Putin because he respects him. Putin is operating with a weak hand and he cannot and will not take on the Europe on his borders conventionally when he can possibly get what he wants in time with no bloodshed. Libya is his next target.

Putin and his family are from Stalingrad and Putin will cut off the head of the Snake (US) before he lets that happen again. How? Think bright glowing mushroom clouds. It is that serious.

Trump wants to bring Russia back into Europe. The Anglo Europeans want more control over Russia's vast resources and companies that control them. Offering then a role in NATO would be genius.

Putin is being conflated into an enemy of the world by a mass propaganda campaign. Crimea and Ukraine was NATO pushing to hard to make Putin act with aggression. Crimea fell without a shot being fired. As an independent republic full of Russians it can choose who it wants to affiliate with.

All in all this can be solved diplomatically but not by the current crop of deep state diplomats.

[Jul 15, 2018] Donald Trump told Theresa May how to do Brexit 'but she wrecked it' and says the US trade deal is off

Jul 15, 2018 | thesun.co.uk

THERESA May's new soft Brexit blueprint would "kill" any future trade deal with the United States, Donald Trump warns today.

Mounting an extraordinary attack on the PM's exit negotiation, the President also reveals she has ignored his advice on how to toughen up the troubled talks.

Instead he believes Mrs May has gone "the opposite way", and he thinks the results have been "very unfortunate".

His fiercest criticism came over the centrepiece of the PM's new Brexit plan -- which was unveiled in full yesterday.

It would stick to a common ­rulebook with Brussels on goods and agricultural produce in a bid to keep customs borders open with the EU.

But Mr Trump told The Sun: "If they do a deal like that, we would be dealing with the European Union instead of dealing with the UK, so it will probably kill the deal.

[Jul 13, 2018] Opinion How to Lose a Trade War

Jul 13, 2018 | www.nytimes.com

Trump's declaration that "trade wars are good, and easy to win" is an instant classic, right up there with Herbert Hoover's "prosperity is just around the corner."

Trump obviously believes that trade is a game in which he who runs the biggest surplus wins, and that America, which imports more than it exports, therefore has the upper hand in any conflict. That's also why Peter Navarro predicted that nobody would retaliate against Trump's tariffs. Since that's actually not how trade works, we're already facing plenty of retaliation and the strong prospect of escalation.

But here's the thing: Trump's tariffs are badly designed even from the point of view of someone who shares his crude mercantilist view of trade. In fact, the structure of his tariffs so far is designed to inflict maximum damage on the U.S. economy, for minimal gain. Foreign retaliation, by contrast, is far more sophisticated: unlike Trump, the Chinese and other targets of his trade wrath seem to have a clear idea of what they're trying to accomplish.

The key point is that the Navarro/Trump view, aside from its fixation on trade balances, also seems to imagine that the world still looks the way it did in the 1960s, when trade was overwhelmingly in final goods like wheat and cars. In that world, putting a tariff on imported cars would cause consumers to switch to domestic cars, adding auto industry jobs, end of story (except for the foreign retaliation.)

In the modern world economy, however, a large part of trade is in intermediate goods – not cars but car parts. Put a tariff on car parts, and even the first-round effect on jobs is uncertain: maybe domestic parts producers will add workers, but you've raised costs and reduced competitiveness for downstream producers, who will shrink their operations.

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Subscribe to The Times

So in today's world, smart trade warriors – if such people exist – would focus their tariffs on final goods, so as to avoid raising costs for downstream producers of domestic goods. True, this would amount to a more or less direct tax on consumers; but if you're afraid to impose any burden on consumers, you really shouldn't be getting into a trade war in the first place.

But almost none of the Trump tariffs are on consumer goods. Chad Bown and colleagues have a remarkable chart showing the distribution of the Trump China tariffs: an amazing 95 percent are either on intermediate goods or on capital goods like machinery that are also used in domestic production: KS

Is there a strategy here? It's hard to see one. There's certainly no hint that the tariffs were designed to pressure China into accepting U.S. demands, since nobody can even figure out what, exactly, Trump wants from China in the first place.

China's retaliation looks very different. It doesn't completely eschew tariffs on intermediate goods, but it's mostly on final goods. And it's also driven by a clear political strategy of hurting Trump voters; the Chinese, unlike the Trumpies, know what they're trying to accomplish:

Image

What about others? Canada's picture is complicated by its direct response to aluminum and steel tariffs, but those industries aside it, too, is following a far more sophisticated strategy than the U.S.:

Except for steel and aluminum, Canada's retaliation seemingly attempts to avoid messing up its engagement in North American supply chains. In broad terms, Canada is not targeting imports of American capital equipment or intermediate inputs, focusing instead on final goods.

And like China, Canada is clearly trying to inflict maximum political damage.

Trade wars aren't good or easy to win even if you know what you're trying to accomplish and have a clear strategy for getting there. What's notable about the Trump tariffs, however, is that they're so self-destructive.

And we can already see hints of the economic fallout. From the Fed's most recent minutes :

[M]any District contacts expressed concern about the possible adverse effects of tariffs and other proposed trade restrictions, both domestically and abroad, on future investment activity; contacts in some Districts indicated that plans for capital spending had been scaled back or postponed as a result of uncertainty over trade policy. Contacts in the steel and aluminum industries expected higher prices as a result of the tariffs on these products but had not planned any new investments to increase capacity.

So Trump and company don't actually have a plan to win this trade war. They may, however, have stumbled onto a strategy that will lose it even more decisively than one might have expected.

[Jul 13, 2018] Trump Regime 10% Tariffs on $200 Billion Worth of Chinese Goods Global Research - Centre for Research on Globalization

Notable quotes:
"... On Tuesday, his trade representative Robert Lighthizer released a list of $10% tariffs to be imposed on $200 billion worth of Chinese goods. ..."
"... A senior Trump regime official falsely said it's "roughly equal to their exports to" the US. It's around 40% of the 2017 total. ..."
"... Stephen Lendman is a Research Associate of the CRG, Correspondent of Global Research based in Chicago. ..."
Jul 13, 2018 | www.globalresearch.ca

Trump Regime 10% Tariffs on $200 Billion Worth of Chinese Goods By Stephen Lendman Global Research, July 13, 2018 Region: Asia , USA Theme: Global Economy , Law and Justice

Note to readers: please click the share buttons above

On Tuesday, his trade representative Robert Lighthizer released a list of $10% tariffs to be imposed on $200 billion worth of Chinese goods.

A senior Trump regime official falsely said it's "roughly equal to their exports to" the US. It's around 40% of the 2017 total.

Newly announced tariffs won't take effect before completion of a two-month review process, concluding at end of August. Trump warned he may order tariffs on $500 billion worth of Chinese goods.

In 2017, imports from China were $506 billion, US exports to the country $130 billion. The trade deficit was $375 billion last year.

It's because so much of industrial America was offshored to China and other low-wage countries, millions of US jobs lost, Washington under Republicans and undemocratic Dems permitting what demands opposition.

The Investment-State Dispute Settlement (ISDS) system incorporated into US trade deals like NAFTA and others, letting a corporate controlled extrajudicial tribunal resolve disputes, promotes offshoring of US jobs.

China called the latest announced tariffs "totally unacceptable" bullying, urging other countries to unite against Trump's trade policy, promising to retaliate in kind.

Along with earlier duties on $50 billion worth of Chinese goods, newly announced ones raise the total to half of Chinese imports – maybe all of them to be targeted ahead if China retaliates in kind as expected.

China Association of International Trade senior fellow Li Yong believes one Beijing retaliatory measure may be a greater push to attract foreign investment other than from the US, adding:

Trump "closed the door for negotiations. It's up to (him) to open the door again."

Trade policy expert Eswar Prasad believes

"(t)he internal political dynamics in both countries make it unlikely that either side will stand down and offer conciliatory measures that could deescalate tensions and lead to a resumption of negotiations."

Economist Stephen Roach called trade wars "not easy to win easy to lose, and the US is on track to lose (its) trade war" with China, adding:

"This is live ammunition. This is not just rhetorical discussion anymore. We're in the early stages of fighting skirmishes in a real, live trade war."

"The question is, how far does it go? And how significant will the ammunition be in the future?"

Roach believe China has lots of ammunition to hold firm and fight back with.

"The US is hugely dependent on China as a source for low-cost goods to make ends meet for American consumers. We're hugely dependent on China to buy our Treasuries to fund our budget deficits," he explained.

Beijing has lots of ways to retaliate against Washington besides imposing duties on US goods.

On Thursday, China's People's Daily slammed the Trump regime, saying

Beijing "will never back down when faced with threats and blackmail, neither will it waver its resolution in safeguarding the global free trade and multilateral trade system," adding:

"The US is undermining global trade rules and causing problems for the global economy. (Its) mentality not only brings negative impacts to both parties directly involved, but also to every country on the global industrial chain."

China's Global Times called Trump's trade policy "extortion," stressing "countermeasures" will be taken.

Markets believe both sides eventually will show restraint. There's no sign of it so far – just the opposite.

*

Stephen Lendman is a Research Associate of the CRG, Correspondent of Global Research based in Chicago.

[Jul 11, 2018] Opinion How to Lose a Trade War - The New York Times

Jul 11, 2018 | www.nytimes.com

Trump's declaration that "trade wars are good, and easy to win" is an instant classic, right up there with Herbert Hoover's "prosperity is just around the corner."

Trump obviously believes that trade is a game in which he who runs the biggest surplus wins, and that America, which imports more than it exports, therefore has the upper hand in any conflict. That's also why Peter Navarro predicted that nobody would retaliate against Trump's tariffs. Since that's actually not how trade works, we're already facing plenty of retaliation and the strong prospect of escalation.

But here's the thing: Trump's tariffs are badly designed even from the point of view of someone who shares his crude mercantilist view of trade. In fact, the structure of his tariffs so far is designed to inflict maximum damage on the U.S. economy, for minimal gain. Foreign retaliation, by contrast, is far more sophisticated: unlike Trump, the Chinese and other targets of his trade wrath seem to have a clear idea of what they're trying to accomplish.

The key point is that the Navarro/Trump view, aside from its fixation on trade balances, also seems to imagine that the world still looks the way it did in the 1960s, when trade was overwhelmingly in final goods like wheat and cars. In that world, putting a tariff on imported cars would cause consumers to switch to domestic cars, adding auto industry jobs, end of story (except for the foreign retaliation.)

In the modern world economy, however, a large part of trade is in intermediate goods – not cars but car parts. Put a tariff on car parts, and even the first-round effect on jobs is uncertain: maybe domestic parts producers will add workers, but you've raised costs and reduced competitiveness for downstream producers, who will shrink their operations.

You have 4 free articles remaining.

Subscribe to The Times

So in today's world, smart trade warriors – if such people exist – would focus their tariffs on final goods, so as to avoid raising costs for downstream producers of domestic goods. True, this would amount to a more or less direct tax on consumers; but if you're afraid to impose any burden on consumers, you really shouldn't be getting into a trade war in the first place.

But almost none of the Trump tariffs are on consumer goods. Chad Bown and colleagues have a remarkable chart showing the distribution of the Trump China tariffs: an amazing 95 percent are either on intermediate goods or on capital goods like machinery that are also used in domestic production:

Image

Is there a strategy here? It's hard to see one. There's certainly no hint that the tariffs were designed to pressure China into accepting U.S. demands, since nobody can even figure out what, exactly, Trump wants from China in the first place.

Advertisement

China's retaliation looks very different. It doesn't completely eschew tariffs on intermediate goods, but it's mostly on final goods. And it's also driven by a clear political strategy of hurting Trump voters; the Chinese, unlike the Trumpies, know what they're trying to accomplish:

Image

What about others? Canada's picture is complicated by its direct response to aluminum and steel tariffs, but those industries aside it, too, is following a far more sophisticated strategy than the U.S.:

Except for steel and aluminum, Canada's retaliation seemingly attempts to avoid messing up its engagement in North American supply chains. In broad terms, Canada is not targeting imports of American capital equipment or intermediate inputs, focusing instead on final goods.

And like China, Canada is clearly trying to inflict maximum political damage.

Trade wars aren't good or easy to win even if you know what you're trying to accomplish and have a clear strategy for getting there. What's notable about the Trump tariffs, however, is that they're so self-destructive.

And we can already see hints of the economic fallout. From the Fed's most recent minutes :

[M]any District contacts expressed concern about the possible adverse effects of tariffs and other proposed trade restrictions, both domestically and abroad, on future investment activity; contacts in some Districts indicated that plans for capital spending had been scaled back or postponed as a result of uncertainty over trade policy. Contacts in the steel and aluminum industries expected higher prices as a result of the tariffs on these products but had not planned any new investments to increase capacity.

So Trump and company don't actually have a plan to win this trade war. They may, however, have stumbled onto a strategy that will lose it even more decisively than one might have expected.

[Jul 10, 2018] MoA - BREXIT - Still Not Gonna Happen

The trend is definitely against EU. But Britain may be crushed, like Brazil and Argentina into accepting neoliberal world order for longer.
Notable quotes:
"... Maybe Johnson the Brexiter can now launch an inner party coup and push Theresa May out. According to a YouGov poll she lost significant support within her conservative party. Besides the Brexit row she botched a snap election, lost her party's majority in parliament and seems to have no clear concept for anything. It would not be a loss for mankind to see her go. ..."
"... Boris the clown, who wins within his party on 'likability' and 'shares my political outlook', would then run the UK. A quite amusing thought. Johnson is a man of no principles. While he is currently pretending to hold a pro-Brexit position he would probably run the same plan that May seems to execute: Delay as long as possible, then panic the people into a re-vote, then stay within the EU. ..."
"... There is an excellent piece in the Boston Review on the EU- https://bostonreview.net/class-inequality/j-w-mason-market-police ..."
"... Iy makes the point that "The European Union offers the fullest realization of the neoliberal political vision. Its incomplete integration -- with its confusing mix of powers -- is precisely the goal." ..."
"... It traces the neo-liberal project, designed to prevent democracy from controlling economic policy, back to von Mises and Hayek. Nothing is more mistaken for critics of imperialism than to buy the line that the EU represents internationalism in any sense. The fact that some racists oppose the EU-just as others support it as a 'white" bastion -- is no reason to give an institution which is profoundly and purposefully undemocratic the benefit of the doubt. ..."
"... It is a wondrous sight to see Western [neo]Liberal Democracy crumbling before our eyes. Have a look at the very founders and protectors of "freedom" corrupt to the very marrow of their bones. ..."
"... Anything bad that can happen to the UK is well-deserved. The home, the womb of Russophobia, lies and illegal wars, as well as the hub of spying against American citizens, is exposed as thoroughly bankrupt politically. ..."
"... EU is bound to collapse but Britain might be tempted to wait it out, and maybe it is the game in London: not to be the first. The most dynamic destructive work in progress is the Euro that benefit to none of its 18 members (the euro-zones) but Geramny and Nederland. Italy has understood it but is using the refugees crisis to enlarge the contestation to non-euro zone countries (Visegrad group and more). ..."
"... As Nato is the real and only cement in this enlarged un-united Europe, in an epoch of accelerating change (collapse maybe) the famous Wait and see of the Brits has just muted in a slow fox-trot. ..."
"... But the puffed up Brits do not even see this danger and would blithely fall into the arms of the mafiosi from across the pond. ..."
"... Brexit is rebellion against the US imposed world order. London money has gone along and profited from the US imposed order, but the ordinary Brits may not have. They may not know where they are going, but they do know where they do not want to be. ..."
"... ditto... status of colony... isn't that what the globalists, corporations, neo liberals and etc want? get rid of any national identity as it gets in the way of corporations having the freedom to rape and pillage as needed.. ..."
"... Trump has reversed some 70 years of US strategy to gain nothing. It is quite remarkable. Strategic vandalism is a good description. ..."
"... The thing about UK and the EU is the UK is basically the US 51st state and the US is a defacto commonwealth nation. The colonization of Europe by the US was never meant to encompass the UK and the City. As they are basically one and the same. ..."
"... EU could not possibly have been a US/CIA idea as it actually works. Yes it is undemocratic, usurps national aspirations, perverts local economies, coddles oligarchs, and all that. But that does not mean it is a US idea. ..."
"... Single union political aspirations have been around for centuries and in many countries. Dare I suggest that it is actually based on the Soviet Union of peoples and most likely a Leninist or Trotskyist plot!! :)))) ..."
"... What do the City of London, the Vatican and Washington DC have in common? Actually, Jerusalem shares many of the same traits. Bonus points for the most creative euphemism for "usurious bank." ..."
"... From my perspective, Nation-States have not been the loci of power for some time (if they ever really were). The US, with its awesome military might and (former) industrial capabilities has served as the enforcement arm of that usurious supra-national cabal throughout "the American Century." ..."
"... Obtainimg strong mandate Cameron went to Brussels to supposedly negotiate better deal with EU ESPECIALLY for security while in fact he went there trying to bully the shape future EU integration especially in political realm and even more in realm of banking Union and integration and coordination of banking rules, laws and unified controlling authorities, via threatening Brexit which would be a deadly blow to EU propaganda glue that holds together this melting pot of divided as never before nations and never since medieval times united national elites integrated in EU ruling bureaucracy. ..."
"... First it was devastating impact of further EU integration on UK banking as London has become legal under U.K. law illegal in EU, money laundering capital of the world and criminal income is huge part of the revenue of the City , US is second. ..."
"... At the passage of Brexit I believed the purpose to be to allow the City of London (the bankers) unlimited financial freedom, perhaps especially in their entering into agreements with the Chinese. This could not be the case under the original EU rules. It will be interesting to see how this works out. ..."
"... The reality of the brexit which the Tory government is determined to raiload through has been designed by elites to better oppress the hoi polloi and to sell it to the masses it has been marketed as a means of restoring 'white power'. ..."
"... That is really saying something because the current version of the UK is one of the sickest, greed is good and devil take the hindmost societies I have ever experienced -- up there with contemporary israel and the US, 1980's South Africa and by the sound of it (didn't experience it firsthand like the other examples, all down to not existing at the time) 1940's Germany. ..."
"... Brexit is nether the problem or the solution, it was just another distraction to keep the mass occupied, whilst they assist stripped the uk and a large part of the world! ..."
"... Every brexiteer I've asked why they voted for out, begins by saying "For once they had to listen to us" and that's usually followed by "there's too many people here" or "it's the E.Europeans". (My response to the europhiles is that you knew the EU was finished a dozen years ago, when all the Big Issue sellers turned into Romanian women.) UK cities are thick with destitute E.Europeans. ..."
Jul 10, 2018 | www.moonofalabama.org
...Hours before Boris Johnson quit his position, Brexit Secretary David Davis resigned from Prime Minister May's cabinet.

On July 6 the British government held a cabinet meeting at Chequers, the private seat of the prime minister. Following the meeting it published a paper (pdf) that took a weird position towards exiting the European Union. If it would be followed, Britain would practically end up with staying in the EU, accepting nearly all its regulations and court decisions, but without any say over what the EU decides. The paper was clearly written by the 'Remain' side. The two top Brexiters in May's cabinet felt cheated and resigned. More are likely to follow.

The majority of the British people who voted to leave the EU must feel duped.

My hunch is that Prime Minister Theresa May was tasked with 'running out the clock' in negotiations with the EU. Then, shortly before the March 2019 date of a 'hard Brexit' would arrive without any agreement with the EU, the powers that be would launch a panic campaign to push the population into a new vote. That vote would end with a victory for the 'Remain' side. The UK would continue to be a member of the European Union.

Shortly before the original Brexit vote in June 2016 MoA headlined: BREXIT - Not Gonna Happen

No matter how the Brexit vote will go, the powers that are will not allow Britain to exit the European Union.
Is that claim still justified?

Maybe Johnson the Brexiter can now launch an inner party coup and push Theresa May out. According to a YouGov poll she lost significant support within her conservative party. Besides the Brexit row she botched a snap election, lost her party's majority in parliament and seems to have no clear concept for anything. It would not be a loss for mankind to see her go.

Boris the clown, who wins within his party on 'likability' and 'shares my political outlook', would then run the UK. A quite amusing thought. Johnson is a man of no principles. While he is currently pretending to hold a pro-Brexit position he would probably run the same plan that May seems to execute: Delay as long as possible, then panic the people into a re-vote, then stay within the EU.

Then again - Boris may do the unexpected.

How do the British people feel about this?

Posted by b on July 9, 2018 at 11:43 AM | Permalink


Mark2 , Jul 9, 2018 12:07:09 PM | 2

Did you notice how quickly th E U sided with the U K over Salisbury ? That was the deal.
Remain in EU and we're back you!
Then again could have been we'l create a false flag you back us and we'll stay , a suttle nuonce.
bevin , Jul 9, 2018 12:21:17 PM | 3
The likelihood is that the blairite faction in the Parliamentary Labour Party-which has no real political differences with the Tories and is fanatically pro EU, as all neo-liberals are- will prop up the May government. Or a Tory government headed by another Remainer, with Blairites in the Cabinet.
This will prevent the General Election which Tories of all parties fear.


There is an excellent piece in the Boston Review on the EU- https://bostonreview.net/class-inequality/j-w-mason-market-police

Iy makes the point that "The European Union offers the fullest realization of the neoliberal political vision. Its incomplete integration -- with its confusing mix of powers -- is precisely the goal."

It traces the neo-liberal project, designed to prevent democracy from controlling economic policy, back to von Mises and Hayek. Nothing is more mistaken for critics of imperialism than to buy the line that the EU represents internationalism in any sense. The fact that some racists oppose the EU-just as others support it as a 'white" bastion -- is no reason to give an institution which is profoundly and purposefully undemocratic the benefit of the doubt.

John Zelnicker , Jul 9, 2018 12:23:35 PM | 4
@Jeff - #1 - You are correct. There will not be another referendum.

I would add that there is some chance, however small, that on March 29th the British government will tell the EU that they just have no way to meet the requirements of Article 50 and would the EU please allow them to continue as a member of the EU and forget about all the shenanigans of the past 2 years. The EU has said previously that they will accept such a result and allow the UK to continue as a member. The Brexiteers will have a total meltdown, and May will most likely be thrown out of office, but most businesses and many individuals will be quite happy for this whole thing to just go away.

For those interested see https://www.nakedcapitalism.com/category/brexit which has been following the Brexit chaos since the beginning.

Babyl-on , Jul 9, 2018 12:24:52 PM | 5
Britain - PATHETIC

It is a wondrous sight to see Western [neo]Liberal Democracy crumbling before our eyes. Have a look at the very founders and protectors of "freedom" corrupt to the very marrow of their bones.

In the US Trump, in the UK the Torys the democracies are now openly imperial and openly corrupt. Rule of law - ask the Skripals. Brexit, Russia, Skripals, Russia, junkies and poisons Russians - minority government - ministers resigning right and left deadlines looming no solutions in sight.

Western civilization is based on the Enlightenment and the Enlightenment and all its ideas of "democracy" are failing. Democracy is not a religion, it is not the end of history, it is not sacred and immutable - checks and balances have failed utterly. This sweetly written little essay says it all.

http://www.counterpunch.org/2016/01/14/the-end-of-the-enlightenment-a-fable-for-our-times-2/

erik , Jul 9, 2018 12:58:47 PM | 13
Look for countries to unilaterally bail from the EU with little or no advance notice. They will simply abrogate and that will trigger an avalanche of others joining in. There are various good economic reasons why they would do that, but I think the groundswell of populism fueled by anger over the open borders cataclysm will be the prime driver.
Red Ryder , Jul 9, 2018 1:12:35 PM | 14
Anything bad that can happen to the UK is well-deserved. The home, the womb of Russophobia, lies and illegal wars, as well as the hub of spying against American citizens, is exposed as thoroughly bankrupt politically.

The current path to chaos is well-trod. Now, we can expect national attention is on the team in Russia in the semi-finals, while the government crumbles and tumbles. But afterward, especially if Kane fails to bring the Cup home? Oh, the chaos. Of course, it will all be Putin and Russia's fault.

UK. Despicable. How long it has taken for folks to realize Theresa May always has been a stalking horse. Highly Likely the UK will stew in its own piss. Put that in their White Hall dossiers, and stamp it "Kremlin Plot".

Al-Pol , Jul 9, 2018 1:19:11 PM | 15
Britain won't be staying in the EU and nor will the EU be accepting May's fantasy ideas for a future relationship giving the UK free trade on everything it needs. There's a remote possibility that a new UK government could begin working on re-joining the EU (Article 49), but there are plenty in Europe who would not let the UK re-join, at least not in the near future.

Friday the 13th is coming soon, scary stuff ?

The "Don't take No for an answer" is rather misleading. Made to vote again ..only after changes to the Treaty. France's vote against the EU Constitution was accepted and when the Dutch also rejected it, it didn't happen.

Charles Michael , Jul 9, 2018 1:41:25 PM | 16
EU is bound to collapse but Britain might be tempted to wait it out, and maybe it is the game in London: not to be the first. The most dynamic destructive work in progress is the Euro that benefit to none of its 18 members (the euro-zones) but Geramny and Nederland. Italy has understood it but is using the refugees crisis to enlarge the contestation to non-euro zone countries (Visegrad group and more).

Now we have this Nato meeting coming and the abomination of Donald meeting Vlad that scares the whole neo-lberals, borgists, russian haters, warmongers.

As Nato is the real and only cement in this enlarged un-united Europe, in an epoch of accelerating change (collapse maybe) the famous Wait and see of the Brits has just muted in a slow fox-trot.

Daniel Good , Jul 9, 2018 1:45:23 PM | 18
Brits, especially the Leave voters, have no real idea what the consequences of leaving the EU are, nor do they care that much. What is uppermost in their minds is they do not want is to be in a union with "losers". Every single country on the Continent is a loser and thus the object of contempt. The only country in Europe that is not a loser (meaning they have never lost a war) is the United Kingdom of Roast Beef and God Save The Queen.

This British loser-phobia also explains the island nation's guttural hatred of Russia, which has bailed out Europe, and so by definition the Brits as well, twice, thereby taking away some of the British luster. (OK the last time around they got a bit of help from their old colonies, the Yanks, but its all the same. Yanks and Brits are the same stock.) As far as EU goes the Brits can leave, no problem. Except that what the Continent would then be faced with was an American armed camp a few miles off shore, not an appealing prospect to say the least. But the puffed up Brits do not even see this danger and would blithely fall into the arms of the mafiosi from across the pond.

b , Jul 9, 2018 2:08:45 PM | 19
Boris Johnson's resignation letter. Well written. Makes the same argument over the Checkers paper that I made above. If Johnson gets 48 back benchers on his side he could launch a vote on no-confidence against May and possibly become PM. The Conservatives in Parliament seem quite upset over all of this.
Peter AU 1 , Jul 9, 2018 2:10:07 PM | 20
@18

Brexit is rebellion against the US imposed world order. London money has gone along and profited from the US imposed order, but the ordinary Brits may not have. They may not know where they are going, but they do know where they do not want to be.

dh , Jul 9, 2018 2:44:44 PM | 22
@20 Not sure who qualifies as an 'ordinary Brit' these days. They come in all shapes and colours. I think the ones who moved to Spain are fairly happy with the EU status quo.
psychohistorian , Jul 9, 2018 2:48:42 PM | 23
Thanks for the posting b

I liked the "We are headed for the status of a colony" comment in the Johnson resignation letter

Getting the puppets to talk about the machinations of empire is a good thing for us but probably not good long term for empire.

No one ever said that evolving to a multi-polar world would be easy. All the ugly that kept the unipolar world together must be exposed as it dies.

ninel , Jul 9, 2018 3:11:03 PM | 29
Allow me to enlighten.

Dominic Raab is the new UK Brexit point-man. The previous guy, Davies, just resigned. But Raab's appointment, I think, points to what Brexit has been about all along -- namely, labour market reform beyond the rest of Europe, and to do this the UK must be free of the European Human Rights council and other protections it provides for workers in the member states.

Here is Raab's 2011 paper on employment standards and Brexit. https://leftfootforward.org/2011/11/dominic-raab-attack-on-workers-rights-based-on-no-evidence/ Have a look.

james , Jul 9, 2018 3:12:22 PM | 30
@23 psychohistorian... ditto... status of colony... isn't that what the globalists, corporations, neo liberals and etc want? get rid of any national identity as it gets in the way of corporations having the freedom to rape and pillage as needed..

it was interesting reading near the end of bjs comments "Over the last few months they have shown how many friends this country has around the world, as 28 governments expelled Russian spies in an unprecedented protest at the attempted assassination of the Skripals." Guilty first - we will prove it later... maybe he really ought to consider rule from Brussels or where ever, if he can't fathom the concept of innocent until proven guilty...

NotBob , Jul 9, 2018 3:42:22 PM | 35
Al-Pol @ 15

The French populace rejected the EU Constitution in 2005 during the Chirac years, and you are correct that after some changes it was accepted under the Sarkozy government.But that happened because it was the Assembly (the parliament, i.e., the political class) that voted on it, not the people. Can't have those deplorable citizens deciding important matters like that, now can we?

Pft , Jul 9, 2018 5:48:32 PM | 51
According to this the EU was a US/CIA creation. Lol? https://www.zerohedge.com/news/2016-03-03/european-union-was-american-idea
james , Jul 9, 2018 5:59:35 PM | 52
@51 pft... in so far as the cia work for the financial complex - yeah, probably.. how to create a currency - the eu - that no one has any real control over, to compete with the us$ and yen... makes sense on that level..
Piotr Berman , Jul 9, 2018 6:37:17 PM | 53
@Babyl-on | Jul 9, 2018 12:24:52 PM | 5

Western civilization is based on the Enlightenment and the Enlightenment and all its ideas ...

When we discuss ALL ideas of the Enlightenment, we must remember this:

Wikipedia: "Enlightened absolutism is the theme of an essay by Frederick the Great, who ruled Prussia from 1740 to 1786, defending this system of government.[1]

When the prominent French Enlightenment philosopher Voltaire fell out of favor in France, he eagerly accepted Frederick's invitation to live at his palace. He believed that an enlightened monarchy was the only real way for society to advance.

Frederick the Great was an enthusiast of French ideas. Frederick explained: "My principal occupation is to combat ignorance and prejudice ..."

In relatively short time, the List of enlightened despots included almost all absolute monarchs in Europe.

Piotr Berman , Jul 9, 2018 6:37:17 PM | 53 somebody , Jul 9, 2018 6:38:22 PM | 54
51 Much better summary on the CIA and the EU here .

From 2016

The awful truth for the Leave campaign is that the governing establishment of the entire Western world views Brexit as strategic vandalism. Whether fair or not, Brexiteers must answer this reproach. A few such as Lord Owen grasp the scale of the problem. Most seemed blithely unaware until Mr Obama blew into town last week.

And then came Trump - pro Brexit

Donald Trump, the presumptive Republican nominee for president, has come out in support of Brexit, saying the UK would be "better off" outside of the European Union and lamenting the consequences of migration in the continent.

The billionaire, who secured the backing of Republican voters on a staunchly anti-immigration platform, said that his support for the UK leaving the EU was a personal belief and not a "recommendation".

"I think the migration has been a horrible thing for Europe," Trump told Fox News late on Thursday. "A lot of that was pushed by the EU. I would say that they're better off without it, personally, but I'm not making that as a recommendation. Just my feeling."

And very anti-Merkel

Donald Trump accuses Angela Merkel of making 'catastrophic mistake' on refugees. President-elect tells The Times and Bild that EU has become 'a vehicle for Germany'.

US President-elect Donald Trump said in a newspaper interview published on Sunday that German Chancellor Angela Merkel had made a "catastrophic mistake" with a policy that let a wave of more than one million migrants into her country.

In a joint interview with The Times and the German newspaper Bild, Trump also said the European Union had become "a vehicle for Germany" and predicted that more EU member states would vote to leave the bloc as Britain did last June.

"I think she made one very catastrophic mistake, and that was taking all of these illegals," Trump said of Merkel, who in August 2015 decided to keep Germany's borders open for refugees, mostly Muslims, fleeing war zones in the Middle East.

Trump has reversed some 70 years of US strategy to gain nothing. It is quite remarkable. Strategic vandalism is a good description.

Ninel , Jul 9, 2018 6:47:54 PM | 55
Even when the 'light' (read truth about Brexit) is revealed, many here choose to ignore it out of sheer ignorance. For a good description of the MOA comment section, one should consult Plato's Allegory of the Cave. And the 'left' blames external elements for its inaptitude and demise when many it has only itself to blame.
Pft , Jul 9, 2018 7:27:36 PM | 56
Somebody@54

Good link, thanks

The thing about UK and the EU is the UK is basically the US 51st state and the US is a defacto commonwealth nation. The colonization of Europe by the US was never meant to encompass the UK and the City. As they are basically one and the same. Its presence in the EU was never really a problem though and was useful in terms of providing a guiding hand, so long as it remained free of the Eurozone. So I am not really sure its a change in strategy. Just another fork in the road.

It remains to be seen how it all works out. Perhaps the UK Brexit is meant to send a message to the other EU states as to the consequences of leaving. One benefit to the US neoliberals might be that UK scraps or at least scales back its NHS due to the economic consequences of a hard Brexit. The 0.1% will be fine at the end of the day and they are the only group that matters . The rest are just pawns on the board.

As for Germany. Immigration in the EU was all about divide and rule and leaving fewer Euros for social programs. All part of the neoliberal blueprint. Divide and rule is an age old tactic perfected by the British to rule the colonies. The EU and Germany being controlled by the Anglo-American ruling elite , and basically occipied by US controlled NATO opened the doors. Reversing this immigration can provide a plausible reason for more terrorism in Europe to empower the EU to become more of a security-police state like US and UK.

On a side note its interesting the head of the ECB and BOE are both former Goldman Sachs employees.

Another related link suggesting the EU also serves a purpose of isolating Russia economically.

https://www.globalresearch.ca/video-the-european-union-part-of-americas-imperial-project/5536396

uncle tungsten , Jul 9, 2018 7:48:18 PM | 57
@Pft 51

EU could not possibly have been a US/CIA idea as it actually works. Yes it is undemocratic, usurps national aspirations, perverts local economies, coddles oligarchs, and all that. But that does not mean it is a US idea.

Zero Hedge is polishing turds now it seems.

Single union political aspirations have been around for centuries and in many countries. Dare I suggest that it is actually based on the Soviet Union of peoples and most likely a Leninist or Trotskyist plot!! :))))

Peter AU 1 , Jul 9, 2018 7:57:17 PM | 59
The Marshal Plan Copy and past from the linked page.

"The Marshall Plan also established the creation of the Organization for European economic cooperation. It did this in a number of ways:

  • promote co-operation between participating countries and their national production programmes for the reconstruction of Europe,
  • develop intra-European trade by reducing tariffs and other barriers to the expansion of trade,
  • study the feasibility of creating a customs union or free trade area,
  • study multi-lateralisation of payments, and
  • Achieve conditions for better utilisation of labour.

It was arguably through this persistent interlinking of many European countries economic affairs that to not cooperate would simply be too risky.

This provided the basis for European cooperation and this was favoured by many people because cooperation was seen as a fundamental building block in the establishment of long term European Peace."

bevin , Jul 9, 2018 9:25:30 PM | 61

@Piotr Berman@53

"In relatively short time, the List of enlightened despots included almost all absolute monarchs in Europe."

You are right, and that included Catherine the Great for whom Samuel Bentham worked for some years. His brother Jeremy spent some time with him there and was a great admirer of Catherine and Potemkin. He was a key figure in the development of liberal ideology and political economy.

'The Enlightenment' is an historical concept which obscures more than it explains. To suggest that representative democracy's origins lie in this nebulous thing is completely misleading -- the truth is that democracy is as old as community. If anything 'The Enlightenment' movements are the beginning of the current system whereby the trappings of popular government are hung on the reality of a kleptocrats' oligarchy.

Daniel , Jul 9, 2018 9:33:58 PM | 62
Re. Australia: Have you read JOHN PILGER ON A HIDDEN HISTORY OF WOMEN WHO ROSE UP "?" I love that guy even more now.
Daniel , Jul 9, 2018 9:37:25 PM | 63
Just in time for Emperor Trump's arrival in Britain! I do not understand Great Britain's "democracy," (the very concept of an aristocratic House of Lords Peerage makes my head explode... and what's this about the Monarch having the authority to appoint a Prime Minister if he/she doesn't like the one selected?). But doesn't the party with the majority get to anoint the Prime Minister? Wouldn't that be Labour right now if Missy May is shown the door?
Bevin Kacon , Jul 9, 2018 9:45:25 PM | 64
Furthermore, the assertion that the UK will stay in the EU is entirely plausible. I heard, early in the days after the vote, that the govt had not expected it to go the way it did. Plans were made for a show of Brexit but that 'the idea is that everything stays the same' , i.e., no change. Sadly for the UK, the EU will not allow that to happen. In all probability, another vote will indeed be called. Otherwise, it's going to be a disaster for an already divided UK for many, many years to come!

The main problem with Brexit is that it is so complex that neither the officials who were set the task of drafting it knew little more than the Ministers themselves! NOBODY knew what the fuck to do! And they still don't!

There is every chance a Vote of No Confidence is going to be called on May's government and she will finally fall, as she must as she is the most inept PM there has probably ever been!

Bevin Kacon , Jul 9, 2018 9:48:27 PM | 65
@63 Daniel

No, the Tories will still stay in power. A General Election would have to be called and I cannot see May's successor being that brave. Or stupid!

Daniel , Jul 9, 2018 9:54:28 PM | 66
What do the City of London, the Vatican and Washington DC have in common? Actually, Jerusalem shares many of the same traits. Bonus points for the most creative euphemism for "usurious bank."

Are terms such as "The Five Eyes" and "The AZ Empire" 'trumped' by all this nationalistic furor?

From my perspective, Nation-States have not been the loci of power for some time (if they ever really were). The US, with its awesome military might and (former) industrial capabilities has served as the enforcement arm of that usurious supra-national cabal throughout "the American Century."

But really, does anyone here really believe that a New York City conman or the latest British "mophead" is more powerful than the dynastic power of the Rothschilds, Warburgs or Morgans... or even the nouveau riche like the Rockefellers or Carnegies?

These are dynasties so wealthy and powerful that they don't even appear on Forbes lists of "The Richest" and no one dare mention their names when plotting the next global conflagration.

Daniel , Jul 9, 2018 10:20:56 PM | 67
Since David Cameron used Jimmy Cliff's " You Can Get It If You Really Want " for his campaign, Afshin Rattansi's interview with that truly revolutionary artist is not so off topic. And it's well worth 12 minutes to enter a worldview we Westerners rarely live.

I and I say "Ja Mon!"

OK. I can't post Jimmy without " The Harder They Come, " especially as that seems to be the root of most of the comments here.

imo , Jul 9, 2018 10:28:10 PM | 68
@33 -- "...and Western Australia were separate British colonies that all began as penal settlement."

Not entirely correct. Western Australia started as a capitalist investment venture (c. 1828) but suffered chronic labor shortages as slavery was closed down (c. 1833). The colony then resorted to convict imports for a time. Much of the myth about 'criminal' can be re-framed as political prisoners such as the Welsh Chartists (see Chartism in Wales).

Kalen , Jul 9, 2018 11:49:40 PM | 69
One can only be confused if one ignores public and secret reasons while Cameron threatened Brexit vote already in 2015 and went through it in 2016. Officially it was about antiterrorism, security and hence controlling immigration flagship of Tory political campaign that brought them overwhelming electoral win as well as some noises that EU rules and laws stifle economic development and the British lose more in EU payments than they gain.

Obtainimg strong mandate Cameron went to Brussels to supposedly negotiate better deal with EU ESPECIALLY for security while in fact he went there trying to bully the shape future EU integration especially in political realm and even more in realm of banking Union and integration and coordination of banking rules, laws and unified controlling authorities, via threatening Brexit which would be a deadly blow to EU propaganda glue that holds together this melting pot of divided as never before nations and never since medieval times united national elites integrated in EU ruling bureaucracy.

What Cameron was scared of as far as direction of future of EU?

First it was devastating impact of further EU integration on UK banking as London has become legal under U.K. law illegal in EU, money laundering capital of the world and criminal income is huge part of the revenue of the City , US is second.

And second point is future of British monarchy which further integration of EU into superstate would require to be abandoned in UK as elsewhere as states were to loose all even symbolic sovereignty and turn into regions and provinces as in Roman Empire . Needles to say that UK still powerful landed aristocracy want nothing of that sort.

Hence Cameron went to Brussels make special deal for UK and was essentially, with some meaningless cosmetic changes, rebuked into binary decision in EU or out of it no special deal and hence he escalated with calling Brexit vote as a negotiating tool only to increase political pressure to rig elections toward remain if deal reached . In fact as latest scandal revealed results of exit polls were released to stock market betting hedge funds just minutes before polls were closed concluding guess what, that remain campaign won while electoral data in hours showed Brexiters wining simply because to the last moment before closing polls they expected EU to cave in, they did not so they continued pressure by closing openly pro Brexit win.

The pressure continues now while Cameron had to pay political price as he openly advocated staying in EU under phony deal even Tory did not buy, and hence this seeming chaos now fooling people that there is other way but hard Brexit to keep monarchy sovereignty and profits from global money laundering or surrender and humiliation degradation U.K. into EU colony as BJ just said.

Of course which way it goes ordinary Brits will pay but also big crack will widen in EU as national movements will have impact of shattering dreams of quit ascending to EU superstate.

Penelope , Jul 10, 2018 12:35:31 AM | 70
At the passage of Brexit I believed the purpose to be to allow the City of London (the bankers) unlimited financial freedom, perhaps especially in their entering into agreements with the Chinese. This could not be the case under the original EU rules. It will be interesting to see how this works out.

The Chinese, as they are intended to be the regional governor of Asia under the evolving global governance are key to the entire tyrannical plan. The AGW hoax, paid for by Western oligarchs, is the public relations for the UN's Agenda 21, currently being enforced at the local level in many parts of the US.

The Chinese oligarchs are so delighted with its tyrannical land-use provisions that they are actually calling their projects "China's Agenda 21". You may search for it.

http://osnetdaily.com/2014/03/agenda-21-rockefeller-builds-human-settlement-zones-in-connecticut/ Exc introductory summary.

Corbett Report interview of Rosa Koire https://www.youtube.com/watch?v=L7T7ulzNG7o

ben , Jul 10, 2018 1:02:19 AM | 71
@ 62: Thanks for the Pilger article, a good read. There are many today, who would return us all to those days.
Herman J Kweeblefezer , Jul 10, 2018 1:05:09 AM | 72
The reality of the brexit which the Tory government is determined to raiload through has been designed by elites to better oppress the hoi polloi and to sell it to the masses it has been marketed as a means of restoring 'white power'. Bevin & co can whine on about the injustices of the eu for as long as their theoretical view of the world sustains them, but the brexit which will be delivered is based on 'pragmatic realism' developed by a really nasty gang of avaricious lying c**tfaces and will create a society far more unjust, divided and impoverished than the one that currently exists.

That is really saying something because the current version of the UK is one of the sickest, greed is good and devil take the hindmost societies I have ever experienced -- up there with contemporary israel and the US, 1980's South Africa and by the sound of it (didn't experience it firsthand like the other examples, all down to not existing at the time) 1940's Germany.

Jezza was great in the house last night but he didn't call for an immediate general election which would be pretty much SOP for any opposition facing as tattered a government (Seven cabinet 'resignations') as bereft of ideas as the Maybot machine.

The reason he didn't - couldn't in fact, is that the UK left is as divided and dug into their positions as that tory bunch of bastards. Far too many opposition politicians insist that a 'deal' on brexit comes first ahead of sorting out poverty and homelessness, woeful education outcomes (unless you believe wildly juked stats) and the horror show that has been created by three decades of relentless attacks on the health service.

We see it here from the brexiters so convinced of the rightness of their cause they ignore the institutionalised racism that will certainly follow a tory brexit. Or the remoaners who also ignore the unsavory aspects of eu policy to try and render the labour left impotent. Those latter types simply don't give a damn about anything which flows from this debate and division other than killing momentum, they consider even losing the next 5 elections to tories an agreeable sacrifice for ridding the party of Corbyn and co.

Corbyn has recognized the destructive divisiveness of Brexit and tries to ignore it because he holds with fixing the mess so many people are in as being much more important than theoretical arguments which will change nothing for the better regardless of impassioned exhortations by ninnies on both sides of the argument.

The thing which really pisses me off about the lefty brexiters, is that they behave as if it is a now or never situation, when it is anything but. There is nothing to prevent a more united Labour Party who have got their mandate by actually delivering a better life for people rather than irrelevant concepts, returning to sorting out the UK's position in the EU at a later date, ideally at a time when the EU's intransigent support for corporate welfare has run bang smack into a leftist UK Labour government's determination to restore public ownership of natural monopolies (rail, water, power, mail delivery etc).

The lefty brexiters claim the lefty remainers won't allow it, while the lefty remainers claim it is the lefty brexiters clogging the works. In fact it is both gangs of selfish egotistical assholes.

Al-Pol , Jul 10, 2018 1:54:09 AM | 73
NotBob @ 35.
The EU Constitution never happened. The Lisbon Treaty came along a couple of years later and this time round the Irish people voted against it. It got amended and the Irish people accepted it. The French and Dutch (and every other EU) country chose not to "ask the people" and left the decision to the peoples' chosen represtentatives.

The Irish Constitution has a bit in it making it necessary to ask the people before any changes can be made to that Constitution, so every time the EU adds some bits to the EU Treaty that require the Irish to change their own Constitution there's trouble, as those 3 million or so Irish people have the power to scupper anything and everything for the other 500 million EU citizens. Holding a national referendum to make decisions affecting the entire Union doesn't seem to be either fair or democratic. A single EU-wide referendum could be held when there's a major change to the Treaties.

Peter AU 1 , Jul 10, 2018 3:31:38 AM | 75
imo 68

Political correctness is a social disease very similar to syphilis - it fucks with the brain. You really should take precautions if socializing in those circles. Precautionary measures are available at all chemists and most public toilets.

Peter AU 1 , Jul 10, 2018 4:24:50 AM | 76
Correction to my post @75
Should have read - Political/ideological correctness is....
Peter AU 1 , Jul 10, 2018 4:50:46 AM | 77
I click on MoA now and see a pic of Boris the clown hanging from a rope. If the Brits were smart, they would connect that rope to a weather balloon and allow Boris to ascend to the stratosphere and cruise the jet stream.
paul , Jul 10, 2018 4:55:55 AM | 79
The EU is first and foremost a massive attack on democracy. At the same time it attempts to establish technocracy as the mode of government of the future. But right only racists and overly idealistic assholes oppose the EU...
somebody , Jul 10, 2018 5:24:13 AM | 80
Posted by: paul | Jul 10, 2018 4:55:55 AM | 79

"Democracy" only being possible locally? Numbers I posted on another thread:

Members of the Shanghai Cooperation Organisation - population of 3 Billion+

You think EU countries have got a competitive chance if on their own? Or - democracy in Switzerland enables them to decide on their relations with the outside world? Like not being part of the "single market" - they are -including free movement of people - yes you can live and work in Switzerland if you are a EU citizen.

But right only racists and overly idealistic assholes oppose the EU

Maybe because it is a stupid idea?

Mark2 , Jul 10, 2018 5:32:30 AM | 81
Brexit is nether the problem or the solution, it was just another distraction to keep the mass occupied, whilst they assist stripped the uk and a large part of the world! The people we are scared to mention are the true people killing and oppressing us. I thank Daniel@66 for naming them ! Rothchild family ect ect I would add the Rothermere family and Murdoch ! Politics are debated, but history is made on the streets. We need to regain our sense of moral outrage (where did that go ?) there are 70 million displaced people in the world ! It could be. You or I next !
ADKC , Jul 10, 2018 5:33:44 AM | 82
Peter AU 1 @75

I don't read imo@68 as politically/ideologically correct but as a statement of fact. As far as I can see, imo didn't deserve your response.

Peter AU 1 , Jul 10, 2018 5:37:18 AM | 83
ADKC
Well that's tough shit isn't it.
ADKC , Jul 10, 2018 5:46:23 AM | 84
Peter AU 1 @83

Ignoring imo's 'feelings' what is wrong/objectionable about his posting @68?

Jen , Jul 10, 2018 5:56:25 AM | 85
Peter AU 1 @ 83: I agree with ADKC and IMO. There were convicts transported to the Australian colonies whose crimes can be considered political crimes. The Tolpuddle Martyrs who came to the Sydney colony in the 1830s are one example: they were transported for the crime of demanding an extension of voting rights to all men, among other demands. Such convicts were a small minority though.
Alan , Jul 10, 2018 6:37:23 AM | 88
@b

Boris Johnson is no clown. You should look beyond the (carefully crafted) popular image and see the dangerous fascist lurking in plain sight.

somebody , Jul 10, 2018 6:41:49 AM | 89
Posted by: Pft | Jul 9, 2018 7:27:36 PM | 56

As for Germany. Immigration in the EU was all about divide and rule and leaving fewer Euros for social programs.

"The demonization of Muslim immigration to the EU ...." - fixed it for you.

The stuff about leaving fewer euros for social programmes is propaganda. Social programmes are designed to force people to work - they are pegged below the minimum wage.

In the case of Germany costs for refugees were accounted to the 0.7 percent of GDP Germany is supposed to spend for development aid by the UN, thereby effectively developing Germany instead.

Mark2 , Jul 10, 2018 7:23:05 AM | 90
Alan @ 88
I am in total agreement with you on your comment regarding Boris Johnson ! His childish buffoonery, is a commen system / tactic of a psychopath . It hides a callous disregard for human life , wins gullible friends which the psychopath manipulates to exploit there power and influence! They are very good at scheming there own self interested plan. But (and here's the crunch ) are totally useless at for seeing the consequences of there actions . And no regard for the victim of there actions!!! Do we want that in charge of the nuclear button ?
Mark2 , Jul 10, 2018 7:49:20 AM | 92
Google ---Boris Johnson grenfail tower
ADKC , Jul 10, 2018 8:19:01 AM | 97
Somebody @65

There is nothing wrong/inconsistent with the idea of an interconnected world of sovereign (independent) states. The idea that a treaty or a trade agreement means that a state is no-longer independent is ridiculous. As ridiculous as believing that an individual who purchases a pack of polo mints is no longer free because of the need of a local shop and a manufacturer.

You are basically pushing the idea that there should be no nation states, no borders and all trade free and therefore no need for treaties. From this comes no regulation, a poisoned environment, uncontrolled and rapacious capitalism, no rights for people, no benefits, no protection, just work til' you die and polished off sharpish if you are no longer productive.

I don't object to an EU as a grouping of independent states acting collectively. I do object to an EU that erodes and undermines the nation state, that seeks to remove state leaders and interfere in state elections/policies. The EU that we have is the latter and there is no practical way to reform it to the former.

Stubbs , Jul 10, 2018 8:22:30 AM | 98
@ B. You have too high an opinion of the competence of the main political figures in the UK Governing Party.

Boris Johnson has never been a serious contender for PM. He's good at giving a rousing speech to the Party faithful but that's it. The blue rinses enjoy the titillation of his infidelities but they don't want someone so amoral coming anywhere near their daughters, or representing their principles.

You knew Theresa May had no judgment the first day of her premiership, when she made BoJo her Foreign Secretary. A selection that could kindly be described as risible. He indicated no suitability for the role before his appointment nor has since. Quite the opposite. It was at that decision you knew all was hopeless. Brexit was going to be hopeless. Everything she was going to be involved in was hopeless.

And so it has proved.

The vox pop that I encounter ..... the Remainers are reconciled to Brexit and just want to get on with it. The Brexiteers are sick to death with hearing about it but not seeing anything done. Everyone had made their minds up before the election in 2015. The Referendum campaign was a few weeks of premium entertainment watching the most reviled political figures in the land trying to tear each others' throats out.

Every brexiteer I've asked why they voted for out, begins by saying "For once they had to listen to us" and that's usually followed by "there's too many people here" or "it's the E.Europeans". (My response to the europhiles is that you knew the EU was finished a dozen years ago, when all the Big Issue sellers turned into Romanian women.) UK cities are thick with destitute E.Europeans.

There's a huge disconnect between Parliament (+ media) and the people. A further example of this is the official narrative on the Salisbury poisonings. Ask people in the street and they say "yeah, it was Vlad with the doorknob" and then they crease up laughing. The Govt has no credibility with its "only plausible explanation".

My prediction, since the day BoJo was appointed minister for the exterior, is that the situation is so catastrophic the EU will have to lead us by the hand through the process of brexit. The EU's priority will be the stability of the Euro. They won't want us beggared on their doorstep and as they export 15% of their stuff to us they'll want to keep on doing that. We'll have to have what we're given and be grateful.

The political situation in the UK is so far beyond surreal that a man dragging a piano with a dead horse on it would appear mundane.

Willy2 , Jul 10, 2018 8:28:30 AM | 99
- It doesn't matter who the prime minister is. The UK has already adopted A LOT OF EU regulations/laws and that will make it nearly impossible to perform a "Hard Brexit". The UK still exports A LOT OF stuff to the Eurozone and then it simply has to follow EU regulations, no matter what the opinion of the government is. In that regard, the current EU regulation simply provides a good framework, even for the UK. No matter what one Mrs. May or Mr. Johnson.

- As time goes by the UK can change parts of the EU regulations to what the UK thinks those regulations should be.

- And do I think that Mrs. May and her ministers have drawn that same conclusion.

[Jul 09, 2018] We Are Headed For The Status Of A Colony Boris Johnson's Full Resignation Letter Zero Hedge

Jul 09, 2018 | www.zerohedge.com

"We Are Headed For The Status Of A Colony": Boris Johnson's Full Resignation Letter

by Tyler Durden Mon, 07/09/2018 - 17:01 89 SHARES

The much anticipated resignation letter penned by the former UK Foreign Minister Boris Johnson has been released, and in as expected, he does not mince his words in unleashing a brutal attack on Thersa May, warning that "we have postponed crucial decisions -- including the preparations for no deal, as I argued in my letter to you of last November -- with the result that we appear to be heading for a semi-Brexit, with large parts of the economy still locked in the EU system, but with no UK control over that system ."

He then adds that while "Brexit should be about opportunity and hope" and "a chance to do things differently, to be more nimble and dynamic, and to maximise the particular advantages of the UK as an open, outward-looking global economy", he warns that the " dream is dying, suffocated by needless self-doubt. "

He then compares May's proposal to a submission even before it has been received by the EU, noting that "what is even more disturbing is that this is our opening bid. This is already how we see the end state for the UK -- before the other side has made its counter-offer . It is as though we are sending our vanguard into battle with the white flags fluttering above them."

And his punchline: the UK is headed for the status of a colony:

In that respect we are truly headed for the status of colony -- and many will struggle to see the economic or political advantages of that particular arrangement

Explaining his decision to resing, he then says that "we must have collective responsibility. Since I cannot in all conscience champion these proposals, I have sadly concluded that I must go."

It remains to be seen if his passionate defense of Brexit will stir enough MPs to indicate they are willing to back a vote of no confidence, and overthrow Theresa May in what would be effectively a coup, resulting in new elections and chaos for the Brexit process going forward.

Meanwhile, as Bloomberg adds, the fact that Boris Johnson, or those around him, made sure his resignation statement came out in time for the evening news - before it was formally issued in the traditional way by May's office, hints at his continued interest in leading the Conservative Party.

His full letter is below (highlights ours):

Dear Theresa,

It is more than two years since the British people voted to leave the European Union on an unambiguous and categorical promise that if they did so they would be taking back control of their democracy.

They were told that they would be able to manage their own immigration policy, repatriate the sums of UK cash currently spent by the EU, and, above all, that they would be able to pass laws independently and in the interests of the people of this country.

Brexit should be about opportunity and hope. It should be a chance to do things differently, to be more nimble and dynamic, and to maximise the particular advantages of the UK as an open, outward-looking global economy.

That dream is dying, suffocated by needless self-doubt.

We have postponed crucial decisions -- including the preparations for no deal, as I argued in my letter to you of last November -- with the result that we appear to be heading for a semi-Brexit, with large parts of the economy still locked in the EU system, but with no UK control over that system.

It now seems that the opening bid of our negotiations involves accepting that we are not actually going to be able to make our own laws. Indeed we seem to have gone backwards since the last Chequers meeting in February, when I described my frustrations, as Mayor of London, in trying to protect cyclists from juggernauts. We had wanted to lower the cabin windows to improve visibility; and even though such designs were already on the market, and even though there had been a horrific spate of deaths, mainly of female cyclists, we were told that we had to wait for the EU to legislate on the matter.

So at the previous Chequers session we thrashed out an elaborate procedure for divergence from EU rules. But even that now seems to have been taken off the table, and there is in fact no easy UK right of initiative. Yet if Brexit is to mean anything, it must surely give Ministers and Parliament the chance to do things differently to protect the public. If a country cannot pass a law to save the lives of female cyclists -- when that proposal is supported at every level of UK Government -- then I don't see how that country can truly be called independent.

Conversely, the British Government has spent decades arguing against this or that EU directive, on the grounds that it was too burdensome or ill-thought out. We are now in the ludicrous position of asserting that we must accept huge amounts of precisely such EU law, without changing an iota, because it is essential for our economic health -- and when we no longer have any ability to influence these laws as they are made.

In that respect we are truly headed for the status of colony -- and many will struggle to see the economic or political advantages of that particular arrangement.

It is also clear that by surrendering control over our rulebook for goods and agrifoods (and much else besides) we will make it much more difficult to do free trade deals. And then there is the further impediment of having to argue for an impractical and undeliverable customs arrangement unlike any other in existence.

What is even more disturbing is that this is our opening bid. This is already how we see the end state for the UK -- before the other side has made its counter-offer. It is as though we are sending our vanguard into battle with the white flags fluttering above them. Indeed, I was concerned, looking at Friday's document, that there might be further concessions on immigration, or that we might end up effectively paying for access to the single market.

On Friday I acknowledged that my side of the argument were too few to prevail, and congratulated you on at least reaching a Cabinet decision on the way forward. As I said then, the Government now has a song to sing. The trouble is that I have practised the words over the weekend and find that they stick in the throat.

We must have collective responsibility. Since I cannot in all conscience champion these proposals, I have sadly concluded that I must go.

I am proud to have served as Foreign Secretary in your Government. As I step down, I would like first to thank the patient officers of the Metropolitan Police who have looked after me and my family, at times in demanding circumstances.
I am proud too of the extraordinary men and women of our diplomatic service. Over the last few months they have shown how many friends this country has around the world, as 28 governments expelled Russian spies in an unprecedented protest at the attempted assassination of the Skripals. They have organised a highly successful Commonwealth summit and secured record international support for this Government's campaign for 12 years of quality education for every girl, and much more besides. As I leave office, the FCO now has the largest and by far the most effective diplomatic network of any country in Europe -- a continent which we will never leave.

[Jul 08, 2018] Europe Isolates China Trade Cheat naked capitalism

Notable quotes:
"... By David Llewellyn-Smith, founding publisher and former editor-in-chief of The Diplomat magazine, now the Asia Pacific's leading geo-politics website. Cross posted from MacroBusiness ..."
"... Captains of the German auto industry kowtowing to US ambassador Grenell make a remarkable scene, not unlike the Chinese capitulating to the British and handing over Hong Kong in the opium wars. ..."
"... circle the wagons ..."
"... tempered expectations ..."
Jul 08, 2018 | www.nakedcapitalism.com

Europe Isolates China Trade Cheat Posted on July 7, 2018 by Yves Smith Yves here. I'm faithfully replicating the MacroBusiness headline as an indicator of unhappiness in some circles in Australia about the degree to which the government has opened the floodgates since I was there to investment from China, particularly in real estate. When I lived in Sydney in 2002 to 2004, property struck me as awfully fully priced by global standards, and it's been on a moon shot trajectory since then, in part due to Australia also liberalizing immigration. When I was there, the intent of policy was to have immigration in certain skilled categories, and then with an eye to maintaining population levels, not goosing them. Since then, the population in Australia has grown from 20 million to over 24 million.

But in addition, even though imposing tariffs on cars and car parts would hurt quite a few US employers, it would also hurt European multinationals (many of whom happen to be US employers), to the degree that they've pushed the European officialdom to see if they can cut a deal with Trump. If that happens, Trump gets a win he can brandish for the midterms and the tariff brinksmanship presumably eases off a bit, potentially a lot.

By David Llewellyn-Smith, founding publisher and former editor-in-chief of The Diplomat magazine, now the Asia Pacific's leading geo-politics website. Cross posted from MacroBusiness

Recall that China has tried to play Europe for the chump, via Reuters :

China is putting pressure on the European Union to issue a strong joint statement against President Donald Trump's trade policies at a summit later this month but is facing resistance, European officials said.

In meetings in Brussels, Berlin and Beijing, senior Chinese officials, including Vice Premier Liu He and the Chinese government's top diplomat, State Councillor Wang Yi, have proposed an alliance between the two economic powers and offered to open more of the Chinese market in a gesture of goodwill.

One proposal has been for China and the European Union to launch joint action against the United States at the World Trade Organization.

But the European Union, the world's largest trading bloc, has rejected the idea of allying with Beijing against Washington, five EU officials and diplomats told Reuters, ahead of a Sino-European summit in Beijing on July 16-17.

Instead, the summit is expected to produce a modest communique, which affirms the commitment of both sides to the multilateral trading system and promises to set up a working group on modernizing the WTO, EU officials said.

"China wants the European Union to stand with Beijing against Washington, to take sides," said one European diplomat. "We won't do it and we have told them that."

Despite Trump's tariffs on European metals exports and threats to hit the EU's automobile industry, Brussels shares Washington's concern about China's closed markets and what Western governments say is Beijing's manipulation of trade to dominate global markets.

"We agree with almost all the complaints the U.S. has against China, it's just we don't agree with how the United States is handling it," another diplomat said.

But it's China that looking more isolated today, via Quartz :

The US may have been accused by China of "opening fire on the world" with its punitive trade tariffs, but it looks like officials may be making more progress in Europe's largest economy Germany.

Richard Grenell, the US ambassador to Germany, has caused quite a stir since he arrived in Berlin in May, lecturing German companies to stop trading with Iran, and saying he planned to "empower" anti-establishment conservatives in Europe. However, with the threat of punitive US tariffs on its cars looming, Grenell certainly has the attention of Germany's powerful car bosses.

German business daily Handelsblatt reports (link in German) that Grenell met Daimler CEO Dieter Zetsche, BMW CEO Harald Krüger, and VW CEO Herbert Diess on Wednesday evening to discuss both sides abolishing all tariffs on each others car imports. Right now, the European Union adds a 10% tax on imported US cars, and the US puts 2.5% on EU car imports, and is threatening to ramp that up to 25%. As part of the deal, president Donald Trump would reportedly want German carmakers to invest more in the US.

Last night's meeting was not the first time the carmakers and Grenell have talked about abolishing two-way tariffs. The Wall Street Journal (paywall) reported on June 20 that the ambassador had been meeting with all Germany's most important car companies, and that they were already behind the idea.

Chancellor Angela Merkel is worried about the damage a car trade war could do to one of Germany's core industries. "We now have tariffs on aluminum and steel and we have a discussion that is far more serious," she told parliament, referring to auto tariffs. "It's worth every effort to try to defuse this conflict so it doesn't turn into a war."

More from Yahoo :

German Chancellor Angela Merkel said Thursday she would back opening talks with trading partners on lowering automobile tariffs, in what appeared to be an olive branch to US President Donald Trump as the EU battles to dissuade him from imposing hefty levies on European cars.

But Merkel said that any negotiations on lowering tariffs in one area could only be conducted with "all the countries with which we have trade in cars," rather than just with the United States.

A deal with the US alone "would not conform with WTO" rules, she said.

"We can either have negotiations about a wide range of tariffs, for 90 percent of goods," Merkel said in a reference to the stalled talks for a transatlantic free-trade deal known as TTIP.

"Or we can talk about one type of goods, but then we must accord the same treatment to all trading partners of the world. That's an option I could imagine," she added.

Interestingly, Nomura sees it all as deflationary:

US pursuit of beggar thy neighbor policies: is it leading to a whole new world for global automakers?

Automakers have set up an intricate web of suppliers and assembly plants globally to leverage the benefits of trade agreements, while keeping FX risks at acceptable levels. The pursuit of beggar thy neighbour policies by a large, connected, and heretofore open Now 3 mths 12 mths US Europe Japan Korea Brazil Russia India China Thailand Indonesia Nomura | Global Autos Outlook 4 June 2018 4 economy such as the US threatens to upend this structure.

In this edition of the Global Autos Outlook, we therefore look at trade-related challenges (and opportunities) facing global automakers, possible strategies they could adopt to cope, and potential winners and losers over the near-to-medium term. Risk of "No NAFTA" has risen, although our base case remains NAFTA 2.0 Trump's openly protectionist policies have increased the risk of a "No NAFTA" outcome, although our base case still remains that NAFTA will be renegotiated.

Nearly 25 years of NAFTA have integrated the North American auto industry very tightly. If NAFTA is dissolved, it will impact all automakers operating in North America. In particular, we think GM and FCA could be hit the hardest (higher import tariffs cut 40% of GM's FY2018E EBIT, 23% of that for FCA). In our opinion, it increasingly appears that the US President's decision-making is centered on autoworkers, even if that is to the detriment of the automakers. Thus, US automakers getting hurt might not hold back Trump from making such a move.

Auto industry staring at global excess capacity, no matter what the outcome of the Section 232 drama

The US Department of Commerce has started a Section 232 investigation into US imports of autos and auto parts. Under the worst case scenario, this may result in broadbased import tariffs slapped on US automotive imports after the investigation concludes and reports back to the President in several months. US imports of new passenger vehicles and auto parts totaled $333bn in 2017. Import duties on such a large volume of goods would be highly disruptive and impact all the major car exporting countries/regions such as Mexico, Canada, Japan, the EU, and South Korea.

While we think that the threat of tariffs is largely Trump's negotiation tactic to get a better NAFTA deal, we caution investors to pay attention, as the tail risk (of import tariffs materializing) is not negligible. Furthermore, no matter whether new auto tariffs are imposed or not, global carmakers, irrespective of nationality, are feeling pressured to build plants and increase employment in the US. This is likely to lead to increased capacity in the US, where car demand is no longer growing.

On the other hand, non-US carmakers are unlikely to cut capacity at home or elsewhere, leading to excess capacity globally. This will impact most markets except for relatively closed ones such as China, India, and Southeast Asia, due to their existing high import tariffs. For global automakers, we therefore see a binary outcome from a growing list of protectionist measures being deployed by the US. Neither outcome is good news, with automakers staring at excess global capacity in either case:

 If Section 232 tariffs are imposed, it (largely) cuts off imports into the domestic US market. However, that would mean that there is excess capacity outside the US, as existing foreign plants supplying to the US (7.88mn/$192bn new PVs, 8.2% of global volume, and $141bn auto parts in 2017) have to find markets elsewhere.

 If new tariffs are not imposed, we still have additional capacity coming up in the US as automakers are goaded into doing so to avoid political pressure. This also leads to a global supply-demand imbalance in the auto industry.

Silver linings: China's import tariff cut, forthcoming JEEPA

Although US protectionism is a real threat, we see a couple of silver linings. China announced an import tariff cut for autos, from 25% currently to 15% beginning 1st July 2018. The Japan-EU Economic Partnership Agreement (JEEPA) was agreed upon last December and is likely to become effective in spring 2019, benefiting Japanese car exporters. One of the biggest beneficiaries from both China and the EU's tariff cuts would be Toyota Motor.

Full report here .


EMHO , July 7, 2018 at 2:35 am

"US lure carmakers with tariff offer – but the proposal is illegal"

That's the title in WirtschaftsWoche. A premier german language trade and economics magazine. It had an interview(in German) with Ewald Pum attorney at internal law firm Wirtschaftskanzlei Rödl & Partner.

He states that what Ambassador Grenell proposed is illegal under international WTO law, and the EU could therefore not support it. Also, the EU had historically supported rules based free trade, and this could only be accomplished via an bilateral trade deal in goods, what he called TTIP on a diet.

Here is the article(in German):

https://www.wiwo.de/politik/ausland/wirtschaftsanwalt-erklaert-usa-locken-autobauer-mit-zollangebot-doch-der-vorschlag-ist-rechtswidrig/22771780.html

Jim Haygood , July 7, 2018 at 3:02 am

' Nomura sees it all as deflationary: the pursuit of beggar thy neighbour policies by a large, connected, and heretofore open economy such as the US threatens to upend this structure. '

So does UK-based Russell Napier, who sees the US obsession with shrinking its trade deficit provoking a seismic shift in China:

Investors need to prepare for a formal widening of the trading bands for the RMB relative to its basket and the problems such a move will create for all emerging markets. That first move in the RMB is inherently deflationary. This is no counter-punch in a trade war; it is the beginning of the creation of a new global monetary system.

The ability of China to extend the cycle has come to an end as its current account surplus has all but evaporated. It has also come to an end because Jay Powell has warned China, and other emerging markets, that he will not alter the course of US monetary policy to assist with any credit disturbances outside his own jurisdiction.

Who can run the current account deficits necessary to make their currency an attractive anchor for smaller countries seeking to run current account surpluses?

It seems well nigh impossible to believe, following almost 40 years of mercantilism, that China would opt to become a country running large current account deficits. Such a change in mindset may seem revolutionary, but it is just another necessary shift in the long game in the attempt to make China the pre-eminent global economy.

The initial shift to a more flexible Chinese exchange rate is deflationary and dangerous. The USD selling price of Chinese exports will likely fall, putting pressure on all those who compete with China – EMs [Emerging Markets] but also Japan. The USD will rise, putting pressure on all those, particularly EMs, who have borrowed USD without having USD cash flows to service those debts. With world debt-to-GDP at a record high, such a major deflationary dislocation can easily trigger another credit crisis.

Following the great dislocation, China will be free to reflate the world.

https://tinyurl.com/y8yfyqwx

' Free to reflate the world ' much as the US did post-WW II with its Great Inflation that flooded the world with dollars.

But getting from here to there is the tricky bit. As Napier insists, a deflationary ditch lies between. Combine Llewellyn-Smith's comments on the auto industry's overcapacity and supply-chain disruption with a deflationary break in the global economy, and you've got the recipe for a nasty little crisis and perhaps a second bankruptcy in GM, whose long-term debt is rising rapidly.

Flake-o-nomics may be creative destruction, but folks are not going to like the interim results. The purblind Hoover-Trump will be blamed, rightly.

The Rev Kev , July 7, 2018 at 4:19 am

This whole tariff fight really seems to be about derailing China's plans to be a world leader with its 'Made in China 2025' plan. Maybe Trump and his advisers reckon that if this fight is not carried to the Chinese soon, then it will be too late. Europe, though under attack by Trump, is also seeing the dangers where the EU will be eclipsed by a single country.

It may be that Europe is giving Trump a message that if he plays nice with Europe's tariffs, then the EU will cooperate with the US against China. I hope that the calculation is not to push China into financial chaos as serving Europe's and Trump's interests. Supply chains are far too meshed to make that a good option and I can easily see a recession in the making which will hit the world hard.

China may have a long term advantage in that it has invested in infrastructure, transport, education and training whereas the west has been devaluing these things due to neoliberal policies for decades now. They may start pulling their money back which will hit places like Australia, Canada and the US hard as to my eye Chinese money keeps things like property values high in those places. We'll find out soon enough.

Damson , July 7, 2018 at 5:52 am

Exactly.

I've been following CGTN on the tariff war, and it looks like China is going to go the 'proportional reciprocity' route, just as Russia has with sanctions.

The latter has benefited from sanctions, while Europe has lost billions in trade.

As for the 'five EU officials' – all anonymous – cited in Reuters' report, I would take their statements with a large dose of salt.

EU is in ferment, and Merkel is not doing well in the polls.

There is strong anti-US sentiment in Germany, albeit not reported in the media. A combination of Trump's policies and the perpetual wars – now implicated in the greatest mass migrantion crisis since WWII – has led to a disenchantment with US.

Then there is OBOR, with various interest groups – particularly in European industry – beginning to look East rather than West.

Thus there is no real unified resolve at EU level to warrant such claims.

Dedollarization is continuing apace too, and new alliances are emerging like the SCO and the reported deals between the major oil producing countries like Russia and Saudi.

China plays a much longer game than the US, so it is hard to estimate what the consequence will be within the short – tern assessment models used by the Western powers.

Thuto , July 7, 2018 at 8:51 am

I've gotten into the habit of rolling my eyes whenever an establishment media outlet quotes "anonymous sources". Looking at the prospects in the global automotive sector, surely the smart money is on the east (and other emerging markets) being where the long term growth is going to emerge, so why the EU would bet on a jockey riding a horse that's falling behind the pace would be rather difficult to fathom. One assumes that CEOs of the big three German automakers play as long a game as anyone, so being brow beaten into an anti-china stance by a US ambassador would be incredibly shortsighted, to say nothing of raising investor ire

Jim Haygood , July 7, 2018 at 12:38 pm

Captains of the German auto industry kowtowing to US ambassador Grenell make a remarkable scene, not unlike the Chinese capitulating to the British and handing over Hong Kong in the opium wars.

But Germany is an occupied and humbled nation, with tens of thousands of US troops garrisoned on its soil for three generations now. And Grenell, a product of the John F Kennedy School of Gubmint at Hahhhhhvid, was born to rule.

It's good to be king ambassador.

*summons his liveried steward to fetch oysters and mimosas for brunch*

Susan the other , July 7, 2018 at 10:28 am

I agree that this is looking like creative destruction -- but more like intentional creative destruction. Bringing down the dinosaur auto industry – now that's definitely a step in the right direction, imo. So it's curious that Trump has such a strategic focus, no? And he just started Space Force.

So clearly that is where the technology is. I do not agree that this is hyper-nationalism (that's just the cover) and it seems absurd for anyone to suggest that Trump is actually doing anything to benefit domestic auto workers he's just not that dumb. And of course Merkel is in a tizzy. She's going to do everything she can to soften the impact of the inevitable.

Ignacio , July 7, 2018 at 11:01 am

So, is the EU, particularly Germany, accusing China for market manipulation? The hypocritie game is in gaining track.

ChrisAtRU , July 7, 2018 at 12:50 pm

Ha! As discussed and promised 'round the table at D4 last night ;-) #ChicagoNCMeetup

Thanks again Yves!

Part of me wants to believe that the capitalist nations were always destined to circle the wagons against communist China, despite all the hand wringing about Trump. The political aspect of this is more interesting to me at the moment. Given all we know about the loyalty Trump still enjoys from those who put him in office, a yuge trade "win" this year will play to the theme of tempered expectations of a "Blue Wave".

[Jul 04, 2018] The Coming Trade War and Global Depression

Jul 04, 2018 | www.henryckliu.com
The Coming Trade War and Global Depression

By
Henry C.K. Liu


First appeared in Asia Times on Line on June 18 2005

Many historians have suggested that the 1929 stock market crash was not the cause of the Great Depression. If anything, the 1929 crash was the technical reflection of the inevitable fate of an overblown bubble economy. Yet, stock market crashes can recover within a relatively short time with the help of effective government monetary measures, as demonstrated by the crashes of 1987 (23% drop, recovered in 9 months), 1998 (36% drop, recovered in 3 months) and 2000-2 (37% drop, recovered in 2 months). Structurally, the real cause of the Great Depression, which lasted more than a decade, from 1929 till the beginning of the Second World War in 1941, was the 1930 Smoot-Hawley tariffs that put world trade into a tailspin from which it did not recover until World War II began. While the US economy finally recovered from war mobilization after the Japanese attack on Pearl Harbor on December 7, 1940, most of the world's market economies sunk deeper into war-torn distress and never fully recovered until the Korea War boom in 1951.

Barely five years into the 21st century, with a globlaized neo-liberal trade regime firmly in place in a world where market economy has become the norm, trade protectionism appears to be fast re-emerging and developing into a new global trade war of complex dimensions. The irony is that this new trade war is being launched not by the poor economies that have been receiving the short end of the trade stick, but by the US which has been winning more than it has been losing on all counts from globalized neo-liberal trade, with the EU following suit in locked steps. Japan of course has never let up on protectionism and never taken competition policy seriously. The rich nations needs to recognize that in their effort to squeeze every last drop of advantage out of already unfair trade will only plunge the world into deep depression. History has shown that while the poor suffer more in economic depressions, the rich, even as they are fianancially cushioned by their wealth, are hurt by political repercussions in the form of either war or revolution or both.

During the Cold War, there was no international free trade. The economies of the two contending ideology blocks were completely disconnected. Within each block, economies interact through foreign aid and memorandum trade from their respective superpowers. The competition was not for profit but for the hearts and minds of the people in the two opposing blocks as well as those in the non-aligned nations in the Third World. The competition between the two superpowers was to give rather than to take from their separate fraternal economies.

The population of the superpowers worked hard to help the poorer people within their separate blocks and convergence toward equality was the policy aim even if not always the practice. The Cold War era of foreign aid and memorandum trade had a better record of poverty reduction in either camps than post-Cold War globalized neo-liberal trade dominated by one single superpower. The aim was not only to raise income and increase wealth, but also to close income and wealth disparity between and within economies. Today, income and wealth disparity is rationalized as a necessity for capital formation. The New York Time reports that from 1980 to 2002, the total income earned by the top 0.1% of earners in the US more than doubled, while the share earned by everyone else in the top 10% rose far less and the share of the bottom 90% declined.

For all its ill effects, the Cold War achieved two formidable ends: it prevented nuclear war and it introduced development as a moral imperative into superpower geo-political competition with rising economic equality within each block. In the years since the end of the Cold War, nuclear terrorism has emerged as a serious threat and domestic development is pre-empted by global trade even in the rich economies while income and wealth disparity has widened everywhere.

Since the end of the Cold War some fifteen years ago, world economic growth has shifted to rely exclusively on globalized neo-liberal trade engineered and led by the US as the sole remaining superpower, financed with the US dollar as the main reserve currency for trade and anchored by the huge US consumer market made possible by the high wages of US workers. This growth has been sustained by knocking down national tariffs everywhere around the world through supranational institutions such as the World Trade Organization (WTO), and financed by a deregulated foreign exchange market working in concert with a global central banking regime independent of local political pressure, lorded over by the supranational Bank of International Settlement (BIS) and the International Monetary Fund (IMF).

Redefining humanist morality, the US asserts that world trade is a moral imperative and as such trade promotes democracy, political freedom and respect for human rights in trade participating nations. Unfortunately, income and wealth equality are not among the benefits promoted by trade. Even if the validity of this twisted ideological assertion is not questioned, it clearly contradicts US practice of trade embargo against countries the US deems undemocratic, lacking in political freedom and deficient in respect for human rights. If trade promotes such desirable conditions, such practice of linking trade to freedom is tantamount to denying medicine to the sick.

President George W Bush defended his free trade agenda in moralistic terms. "Open trade is not just an economic opportunity, it is a moral imperative," he declared in a May 7, 2001 speech. "Trade creates jobs for the unemployed. When we negotiate for open markets, we're providing new hope for the world's poor. And when we promote open trade, we are promoting political freedom." Such claims remain highly controversial when tested by actual data.

Phyllis Schlafly, syndicated conservative columnist, responded three weeks later in an article: Free Trade is an Economic Issue, Not a Moral One . In it, she notes while conservatives should be happy to finally have a president who adds a moral dimension to his actions, "the Bible does not instruct us on free trade and it's not one of the Ten Commandments. Jesus did not tell us to follow Him along the road to free trade. Nor is there anything in the U.S. Constitution that requires us to support free trade and to abhor protectionism. In fact, protectionism was the economic system believed in and practiced by the framers of our Constitution. Protective tariffs were the principal source of revenue for our federal government from its beginning in 1789 until the passage of the 16th Amendment, which created the federal income tax, in 1913. Were all those public officials during those hundred-plus years remiss in not adhering to a "moral obligation" of free trade?" Hardly, argues Schlafly whose views are noteworthy because US politics is currently enmeshed in a struggle between strict-constructionist paleo-conservatives and moral-imperialist neo-conservatives. Despite the ascendance of neo-imperialism in US foreign policy, protectionism remains strong in US political culture, particularly among conservatives and in the labor movement.

Bush also said China, which reached a trade agreement with the US at the close of the Clinton administration, and became a member of the WTO in late 2001, would benefit from political changes as a result of liberalized trade policies. This pronouncement gives clear evidence to those in China who see foreign trade as part of an anti-China "peaceful evolution" strategy first envisioned by John Forster Dulles, US Secretary of State under Eisenhower in the 1950s. It is a strategy of inducing through peaceful trade the Communist Party of China (CPC) to reform itself out of power and to eliminate the dictatorship of the proletariat in favor of bourgeois liberalization. Almost four decades later, Deng Xiaoping criticized CPC Chairman Hu Yaobang and Premier Zhao Ziyang for having failed to contain bourgeois liberalization in their implementation of China's modernization policy. Deng warned in November 1989, five months after the Tiananmen incident: "The Western imperialist countries are staging a third world war without guns. They want to bring about the peaceful evolution of socialist countries towards capitalism." Deng's handling of the Tiananmen incident prevented China from going the catastrophic route of the USSR which dissolved in 1991.

Yet it is clear that political freedom is often the first casualty of a garrison state mentality and such mentality inevitably results from hostile US economic and security policy toward any country the US deems as not free. Whenever the US pronounces a nation to be not free, that nation will become less free as a result of US policy. This has been repeatedly evident in China and elsewhere in the Third World. Whenever US policy toward China turns hostile, as it currently appears to be heading, political and press freedom inevitably face stricter curbs. For trade to mutually and truly benefit the trading economies, three conditions are necessary: 1) the de-linking of trade from ideological/political objectives, 2) equality must be maintained in the terms of trade and 3) recognition that global full employment at rising, living wages is the prerequisite for true comparative advantage in global trade.

The developing rupture between the sole superpower and its traditionally deferential allies lies in mounting trade conflicts. The US has benefited from an international financial architecture that gives the US economy a structural monetary advantage over those of the EU and Japan, not to mention the rest of the world. Trade issues range from government subsidies disputes between Airbus and Boeing, banana, sugar, beef, oranges, steel, as well as disputes over fair competition associated with mergers and acquisition and financial services. If either government is found to be in breach of WTO rules when these disputes wind through long processes of judgment, the other will be authorized to retaliate. The US could put tariffs on other European goods if the WTO rules against Airbus and vice versa. So if both governments are found in breach, both could retaliate, leading to a cycle of offensive protectionism. When the US was ruled to have unfairly supported its steel industry, tariffs were slapped by the EU on Florida oranges to make a political point in a politically important state in US politics.

Trade competition between the EU and the US is spilling over into security areas, allowing economic interests to conflict with ideological sympathy. Both of these production engines, saddled with serious overcapacity, are desperately seeking new markets, which inevitably leads them to Asia in general and China in particular, with its phenomenal growth rate and its 1.2 billion eager consumers bulging with rapidly rising disposable income. The growth of the Chinese economy will lift all other economies in Asia, including Australia which has only recently begun to understand that its future cannot be separated from its geographic location and that its prosperity is interdependent with those of other Asian economies. Australian iron ores, beef and dairy products are destined for China, not the British Isles. The EU is eager to lift its 15-year-old arms embargo on China, much to the displeasure of the US. Israel faces similar dilemma in its close relations with the US on military sales to China. Even the US defense establishment has largely come around to the view that US arms industry must export, even to China, to remain on top. The Bangkok Post reported on June 7 that Rumsfeld tried to sell to Thailand F-16 warplanes capable of firing advanced medium-range air-to-air missiles (AMRAAMs) two days after he lashed out in Singapore at China for upgrading its own military when no neighboring nations are threatening it. The sales pitch was in competition with Russian-made Sukhoi SU-30s and Swedish JAS-39s. The open competition in arms export had been spelled out for Congress years earlier by Donald Hicks, a leading Pentagon technologist in the Reagan administration. "Globalization is not a policy option, but a fact to which policymakers must adapt," he said. "The emerging reality is that all nations' militaries are sharing essentially the same global commercial-defense industrial base." The boots and uniforms worn by US soldiers in Afghanistan and Iraq were made in China.

The WTO is the only global international organization dealing with the rules of trade between its 148 member nations. At its heart are the WTO agreements, known as the multilateral trading system, negotiated and signed by the majority of the world's trading nations and ratified in their parliaments. The stated goal is to help producers of goods and services, exporters, and importers conduct their business, with the dubious assumption that trade automatically brings equal benefits to all participants. The welfare of the people is viewed only as a collateral aim based on the doctrinal fantasy that "balanced" trade inevitably brings prosperity equally to all, a claim that has been contradicted by facts produced by the very terms of trade promoted by the WTO itself.

Two decades of neo-liberal globalized trade have widened income and wealth disparity within and between nations. Free trade has turned out not to be the win-win game promised by neo-liberals. It is very much a win-lose game, with heads, the rich economies win, and tails, the poor economies lose. Domestic development has been marginalized as a hapless victim of foreign trade, dependent on trade surplus for capital. Foreign trade and foreign investment have become the prerequisite engines for domestic development. This trade model condemns those economies with trade deficits to perpetual underdevelopment. Because of dollar hegemony, all foreign investment goes only to the export sector where dollars can be earned. Even the economies with trade surpluses cannot use their dollar trade earnings for domestic development, as they are forced to hold huge dollar reserves to support the exchange rate of their currencies.

In the fifth WTO Ministerial Conference held in Cancun in September 2003, the richer countries rejected the demands of poorer nations for radical reform of agricultural subsidies that have decimated Third World agriculture. Failure to get the Doha round back on track after the collapse of Cancun runs the danger of a global resurgence of protectionism, with the US leading the way. Larry Elliott reported on October 13, 2003 in The Guardian on the failed 2003 Cancun Ministerial meeting: "The language of globalization is all about democracy, free trade and sharing the benefits of technological advance. The reality is about rule by elites, mercantilism and selfishness." Elliot noted that the process is full of paradoxes: why is it that in a world where human capital is supposed to be the new wealth of nations, labor is treated with such contempt?

Sam Mpasu, Malawi's commerce and industry minister, asked at Cancun for his comments about the benefits of trade liberalization, replied dryly: "We have opened our economy. That's why we are flat on our back." Mpasu's comments summarize the wide chasm that divides the perspectives of those who write the rules of globalization and those who are powerless to resist them.

Exports of manufactures by low-wage developing countries have increased rapidly over the last 3 decades due in part to falling tariffs and declining transport costs that enable outsourcing based on wage arbitrage. It grew from 25% in 1965 to nearly 75% over three decades, while agriculture's share of developing country exports has fallen from 50% to under 10%. Many developing countries have gained relatively little from increased manufactures trade, with most of the profit going to foreign capital. Market access for their most competitive manufactured export, such as textile and apparel, remains highly restricted and recent trade disputes threaten further restrictions. Still, the key cause of unemployment in all developing economies is the trade-related collapse of agriculture, exacerbated by the massive government subsidies provided to farmers in rich economies. Many poor economies are predominantly agriculturally based and a collapse of agriculture means a general collapse of the whole economy.

The Doha Development Agenda (DDA) negotiations, sponsored by the WTO, collapsed in Cancun, Mexico over the question of government support for agriculture in rich economies and its potential impacts on causing more poverty in developing countries. The Doha negotiations since Cancun are focused on the need to better understand the linkages between trade policies, particularly those of the rich economies, and poverty in the developing world. While poverty reduction is now more widely accepted by establishment economists as a necessary central focus for development efforts and has become the main mission of the World Bank and other development institutions, very little effective measures have been forthcoming. The UN Millennium Development Goals (UNMDG) commits the international community to halve world poverty by 2015, a decade from now. With current trends, that goal is likely to be achievable only through death of half of the poor by starvation, disease and local conflicts. The UN Development Program warns that 3 million children will die in sub-Saharan Africa alone by 2015 if the world continues on its current path of failing to meet the UNMDG agreed to in 2000 . Several key venues to this goal are located in international trade where the record of poverty reduction has been exceedingly poor, if not outright negative. The fundamental question whether trade can replace or even augment socio-economic development remains unasked, let alone answered. Until such issues are earnestly addressed, protectionism will re-emerge in the poor countries. Under such conditions, if democracy expresses the will of the people, democracy will demand protectionism more than government by elite.

While tariffs in the past decade have been coming down like leaves in autumn, flexible exchange rates have become a form of virtual countervailing tariff. In the current globalized neo-liberal trade regime operating in a deregulated global foreign exchange market, the exchanged value of a currency is regularly used to balance trade through government intervention in currency market fluctuations against the world's main reserve currency – the dollar, as the head of the international monetary snake.

Purchasing power parity (PPP) measures the disconnection between exchange rates and local prices. PPP contrasts with the interest rate parity (IRP) theory which assumes that the actions of investors, whose transactions are recorded on the capital account, induces changes in the exchange rate. For a dollar investor to earn the same interest rate in a foreign economy with a PPP of four times, such as the purchasing power parity between the US dollar and the Chinese yuan, local wages would have to be at least 4 time lower than US wages.

<>PPP theory is based on an extension and variation of the "law of one price" as applied to the aggregate economy. The law of one price says that identical goods should sell for the same price in two separate markets when there are no transportation costs and no differential taxes applied in the two markets. But the law of one price does not apply to the price of labor. Price arbitrage is the opposite of wage arbitrage in that producers seek to make their goods in the lowest wage locations and to sell their goods in the highest price markets. This is the incentive for outsourcing which never seeks to sell products locally at prices that reflect PPP differentials.

What is not generally noticed is that price deflation in an economy increases its PPP, in that the same local currency buys more. But the cross-border one price phenomenon applies only to certain products, such as oil, thus for a PPP of 4 times, a rise in oil prices will cost the Chinese economy 4 times the equivalent in other goods, or wages than in the US. The larger the purchasing power parity between a local currency and the dollar, the more severe is the tyranny of dollar hegemony on forcing down wage differentials.

Ever since 1971, when US president Richard Nixon, under pressure from persistent fiscal and trade deficits that drained US gold reserves, took the dollar off the gold standard (at $35 per ounce), the dollar has been a fiat currency of a country of little fiscal or monetary discipline. The Bretton Woods Conference at the end of World War II established the dollar, a solid currency backed by gold, as a benchmark currency for financing international trade, with all other currencies pegged to it at fixed rates that changed only infrequently. The fixed exchange rate regime was designed to keep trading nations honest and prevent them from running perpetual trade deficits. It was not expected to dictate the living standards of trading economies, which were measured by many other factors besides exchange rates.

Bretton Woods was conceived when conventional wisdom in international economics did not consider cross-border flow of funds necessary or desirable for financing world trade precise for this reason. Since 1971, the dollar has changed from a gold-back currency to a global reserve monetary instrument that the US, and only the US, can produce by fiat. At the same time, the US continued to incur both current account and fiscal deficits. That was the beginning of dollar hegemony.

With deregulation of foreign exchange and financial markets, many currencies began to free float against the dollar not in response to market forces but to maintain export competitiveness. Government interventions in foreign exchange markets became a regular last resort option for many trading economies for their preserving export competitiveness and for resisting the effect of dollar hegemony on domestic living standards.

World trade under dollar hegemony is a game in which the US produces paper dollars and the rest of the world produce real things that paper dollars can buy. The world's interlinked economies no longer trade to capture comparative advantage; they compete in exports to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves to sustain the exchange value of their domestic currencies in foreign exchange markets. To prevent speculative and manipulative attacks on their currencies in deregulated markets, the world's central banks must acquire and hold dollar reserves in corresponding amounts to market pressure on their currencies in circulation. The higher the market pressure to devalue a particular currency, the more dollar reserves its central bank must hold. This creates a built-in support for a strong dollar that in turn forces all central banks to acquire and hold more dollar reserves, making it stronger. This anomalous phenomenon is known as dollar hegemony, which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil. The denomination of oil in dollars and the recycling of petro-dollars is the price the US has extracted from oil-producing countries for US tolerance of the oil-exporting cartel since 1973.

By definition, dollar reserves must be invested in dollar-denominated assets, creating a capital-accounts surplus for the US economy. A strong-dollar policy is in the US national interest because it keeps US inflation low through low-cost imports and it makes US assets denominated in dollars expensive for foreign investors. This arrangement, which Federal Reserve Board chairman Alan Greenspan proudly calls US financial hegemony in congressional testimony, has kept the US economy booming in the face of recurrent financial crises in the rest of the world. It has distorted globalization into a "race to the bottom" process of exploiting the lowest labor costs and the highest environmental abuse worldwide to produce items and produce for export to US markets in a quest for the almighty dollar, which has not been backed by gold since 1971, nor by economic fundamentals for more than a decade. The adverse effects of this type of globalization on the developing economies are obvious. It robs them of the meager fruits of their exports and keeps their domestic economies starved for capital, as all surplus dollars must be reinvested in US treasuries to prevent the collapse of their own domestic currencies.

The adverse effect of this type of globalization on the US economy is also becoming clear. In order to act as consumer of last resort for the whole world, the US economy has been pushed into a debt bubble that thrives on conspicuous consumption and fraudulent accounting. The unsustainable and irrational rise of US equity and real estate prices, unsupported by revenue or profit, had merely been a de facto devaluation of the dollar. Ironically, the recent fall in US equity prices from its 2004 peak and the anticipated fall in real estate prices reflect a trend to an even stronger dollar, as it can buy more deflated shares and properties for the same amount of dollars. The rise in the purchasing power of the dollar inside the US impacts its purchasing power disparity with other currencies unevenly, causing sharp price instability in the economies with freely exchangeable currencies and fixed exchange rates, such as Hong Kong and until recently Argentina. For the US, falling exchange rate of the dollar actually causes asset prices to rise. Thus with a debt bubble in the US economy, a strong dollar is not in the US national interest. Debt has turned US policy on the dollar on its head.

The setting of exchange values of currencies is practiced not only by sovereign governments on their own currencies as a sovereign right. The US, exploiting dollar hegemony, usurps the privilege of dictating the exchange value of all foreign currencies to support its own economic nationalism in the name of global free trade. And US position on exchange rates has not been consistent. When the dollar was rising, as it did in the 1980s, the US, to protect its export trade, hailed the stabilizing wisdom of fixed exchange rates. When the dollar falls as it has been in recent years, the US, to deflect the blame of its trade deficit, attacks fixed exchange rates as currency manipulation, as it targets China's currency now which has been pegged to the dollar for over a decade, since the dollar was lower. How can a nation manipulate the exchange value of its currency when it is pegged to the dollar at the same rate over long periods? Any manipulation came from the dollar, not the yuan.

The recent rise of the euro against the dollar, the first appreciation wave since its introduction on January 1, 2002, is the result of an EU version of the 1985 Plaza Accord on the Japanese yen, albeit without a formal accord. The strategic purpose is more than merely moderating the US trade deficit. The record shows that even with the 30% drop of the dollar against the euro, the US trade deficit has continued to climb. The strategic purpose of driving up the euro is to reduce the euro to the status of the yen, as a subordinated currency to dollar hegemony. The real effect of the Plaza Accord was to shift the cost of support for the dollar-denominated US trade deficit, and the socio-economic pain associated with that support, from the US to Japan.

What is happening to the euro now is far from being the beginning of the demise of the dollar. Rather, it is the beginning of the reduction of the euro into a subservient currency to the dollar to support the US debt bubble. Six and a half years since the launch of European Monetary Union, the eurozone is trapped in an environment in which monetary policy of sound money has in effect become destructive and supply-side fiscal policy unsustainable. National economies are beginning to refuse to bear the pain needed for adjustment to globalization or the EU's ambitious enlargement. The European nations are beginning to resist the US strategy to make the euro economy a captive supporter of a rising or falling dollar as such movements fit the shifting needs of US economic nationalism.

It is the modern-day monetary equivalent of the brilliant Roman strategy of making a dissident Jew a Christian god, to pre-empt Judaism's rising cultural domination over Roman civilization. Roman law, the foundation of the Roman Empire, gained in sophistication from being influenced by if not directly derived from Jewish Talmudic law, particularly on the concept of equity - an eye for an eye. The Jews had devised a legal system based on the dignity of the individual and equality before the law four century before Christ. There was no written Roman law until two centuries B.C. The Roman law of obligatio was not conducive to finance as it held that all indebtedness was personal, without institutional status. A creditor could not sell a note of indebtedness to another party and a debtor did not have to pay anyone except the original creditor. Talmudic law, on the other hand, recognized impersonal credit and a debt had to be paid to whoever presented the demand note. This was a key development of modern finance. With the Talmud, the Jews under the Diaspora had an international law that spans three continents and many cultures.<>

The Romans were faced with a dilemma. Secular Jewish ideas and values were permeating Roman society, but Judaism was an exclusive religion that the Romans were not permitted to join. The Romans could not assimilate the Jews as they did the more civilized Greeks. Early Christianity also kept its exclusionary trait until Paul who opened Christianity to all. Historian Edward Gibbon (1737-94) noted that the Rome recognized the Jews as a nation and as such were entitled to religious peculiarities. The Christians on the other hand were a sect, and being without a nation, subverted other nations. The Roman Jews were active in government and when not resisting Rome against social injustice, fought side by side with Roman legionnaires to preserve the empire. Roman Jews were good Roman citizens. By contrast, the early Christians were social dropouts, refused responsibility in government and civic affairs and were conscientious objectors and pacifists in a militant culture. Gibbon noted that Rome felt that the crime of a Christian was not in what he did, but in being who he was. Christianity gained control of Roman culture and society long before Constantine who in 324 A.D. sanctioned it with political legitimacy and power after recognizing its power in helping to win wars against pagans, the way Pope Urban II in 1095 used the crusade to keep Papal temporal power longer. When early Christianity, a secular Jewish dissident sect, began to move up from the lower strata of Roman society and began to find converts in the upper echelons, the Roman polity adopted Christianity, the least objectionable of all Jewish sects, as a state religion. Gibbons estimated that Christians killed more of their own members over religious disputes in the three centuries after coming to secular power than did the Romans in three previous centuries. Persecution of the Jews began in Christianized Rome. The disdain held by early Christianity on centralized government gave rise to monasticism and contributed to the fall of the Roman Empire.

By allowing a trade surplus denominated in dollars to be accumulated by non-dollar economies, such as yen, euro, or now the Chinese yuan, the cost of supporting the appropriate value of the dollar to sustain perpetual economic growth in the dollar economy is then shifted to these non-dollar economies, which manifests themselves in perpetual relative low wages and weak domestic consumption. For already high-wage EU and Japan, the penalty is the reduction of social welfare benefits and job security traditional to these economies. For China, now the world's second largest creditor nation, it is reduced to having to ask the US, the world's largest debtor nation, for capital denominated in dollars the US can print at will to finance its export trade to a US running recurring trade deficits.<>

The IMF, which has been ferocious in imposing draconian fiscal and monetary "conditionalities" on all debtor nations everywhere in the decade after the Cold War, is nowhere to be seen on the scene in the world's most fragrantly irresponsible debtor nation. This is because the US can print dollars at will and with immunity. The dollar is a fiat currency not backed by gold, not backed by US productivity, not back by US export prowess, but by US military power. The US military budget request for Fiscal Year 2005 is $420.7 billion. For Fiscal Year 2004, it was $399.1 billion; for 2003, $396.1 billion; for 2002, $343.2 billion and for 2001, $310 billion. In the first term of the Bush presidency, the US spent $1.5 trillion on its military. That is bigger than the entire GDP of China in 2004. The US trade deficit is around 6% of its GDP while it military budget is around 4%. In other words, the trading partners of the US are paying for one and a half times of the cost of a military that can someday be used against any one of them for any number of reasons, including trade disputes. The anti-dollar crowd has nothing to celebrate about the recurring US trade deficit.

It is pathetic that US Secretary of Defense Donald H Rumsfeld tries to persuade the world that China's military budget, which is less that one tenth of that of the US, is a threat to Asia, even when he is forced to acknowledge that Chinese military modernization is mostly focused on defending its coastal territories, not on force projection for distant conflicts, as is US military doctrine. While Rumsfeld urges more political freedom in China, his militant posture toward China is directly counterproductive towards that goal. Ironically, Rumsfeld chose to make his case about political freedom in Singapore, the bastion of Confucian authoritarianism.

Normally, according to free trade theory, trade can only stay unbalanced temporarily before equilibrium is re-established or free trade would simply stop. When bilateral trade is temporarily unbalanced, it is generally because one trade partner has become temporarily uncompetitive, inefficient or unproductive. The partner with the trade deficit receives more goods and services from the partner with the trade surplus than it can offer in return and thus pays the difference with its currency that someday can buy foods produced by the deficit trade partner to re-established balance of payments. This temporary trade imbalance is due to a number of socio-economic factors, such as terms of trade, wage levels, return on investment, regulatory regimes, shortages in labor or material or energy, trade-supporting infrastructure adequacy, purchasing power disparity, etc. A trading partner that runs a recurring trade deficit earns the reputation of being what banks call a habitual borrower, i.e. a bad credit risk, one who habitually lives beyond his/her means. If the trade deficit is paid with its currency, a downward pressure results in the exchange rate. A flexible exchange rate seeks to remove or moderate a temporary trade imbalance while the productivity disparities between trading partners are being addressed fundamentally.

Dollar hegemony prevents US trade imbalance from returning to equilibrium through market forces. It allows a US trade deficit to persist based on monetary prowess. This translates over time into a falling exchange rate for the dollar even as dollar hegemony keeps the fall at a slow pace. But a below-par exchange rate over a long period can run the risk of turning the temporary imbalance in productivity into a permanent one. A continuously weakening currency condemns the issuing economy into a downward economic spiral. This has happened to the US in the last decade. To make matters worse, with globalization of deregulated markets, the recurring US trade deficit is accompanied by an escalating loss of jobs in sectors sensitive to cross-border wage arbitrage, with the job-loss escalation climbing up the skill ladder. Discriminatory US immigration policies also prevent the retention of low-paying jobs within the US and exacerbate the illegal immigration problem.

Regional wage arbitrage within the US in past decades kept the US economy lean and productive internationally. Labor-intensive US industries relocated to the low-wage South through regional wage arbitrage and despite temporary adjustment pains from the loss of textile mills, the Northern economies managed to upgrade their productivity, technology level, financial sophistication and output quality. The Southern economies in the US also managed to upgrade these factors of production and in time managed to narrow the wage disparity within the national economy. This happened because the jobs stay within the nation. With globalization, it is another story. Jobs are leaving the nation mercilessly. According to free trade theory, the US trade deficit is supposed to cause the dollar to fall temporarily against the currencies of its trading partners, causing export competitiveness to rebalance to remove or reduce the US trade deficit or face the collapse of its currency. Either case, jobs that have been lost temporarily are then supposed to return to the US.

But the persistent US trade deficit defies trade theory because of dollar hegemony. The current international finance architecture is based on dollar hegemony which is the peculiar arrangement in which the US dollar, a fiat currency, remains as the dominant reserve currency for international trade. The broad trade-weighted dollar index stays in an upward trend, despite selective appreciation of some strong currencies, as highly-indebted emerging market economies attempt to extricate themselves from dollar-denominated debt through the devaluation of their currencies. While the aim is to subsidize exports, it ironically makes dollar debts more expensive in local currency terms. The moderating impact on US price inflation also amplifies the upward trend of the trade-weighted dollar index despite persistent US expansion of monetary aggregates, also known as monetary easing or money printing.

Adjusting for this debt-driven increase in the exchange value of dollars, the import volume into the US can be estimated in relationship to expanding monetary aggregates. The annual growth of the volume of goods shipped to the US has remained around 15% for most of the 1990s, more than 5 times the average annual GDP growth. The US enjoyed a booming economy when the dollar was gaining ground, and this occurred at a time when interest rates in the US were higher than those in its creditor nations. This led to the odd effect that raising US interest rates actually prolonged the boom in the US rather than threatened it, because it caused massive inflows of liquidity into the US financial system, lowered import price inflation, increased apparent productivity and prompted further spending by US consumers enriched by the wealth effect despite a slowing of wage increases. Returns on dollar assets stayed high in foreign currency terms.

This was precisely what Federal Reserve Board chairman Alan Greenspan did in the 1990s in the name of pre-emptive measures against inflation. Dollar hegemony enabled the US to print money to fight inflation, causing a debt bubble of asset appreciation. This data substantiated the view of the US as Rome in a New Roman Empire with an unending stream of imports as the free tribune from conquered lands. This was what Greenspan meant by US "financial hegemony."

The Fed Funds rate (ffr) target has been lifted eight times in steps of 25 basis points from 1% in mid 2004 to 3% on May 3, 2005. If the same pattern of "measured pace" continues, the ffr target would be at 4.25% by the end of 2005. Despite Fed rhetoric, the lifting of dollar interest rate has more to do with preventing foreign central banks from selling dollar-denominated assets, such as US Treasuries, than with fighting inflation. In a debt-driven economy, high interest rates are themselves inflationary. Rising interest rate to fight inflation could become the monetary dog chasing its own interest rate tail, with rising rate adding to rising inflation which then requires more interest rate hikes. Still, interest rate policy is a double edged sword: it keeps funds from leaving the debt bubble, but it can also puncture the debt bubble by making the servicing of debt prohibitively expensive.

To prevent this last adverse effect, the Fed adds to the money supply, creating an unnatural condition of abundant liquidity with rising short-term interest rate, resulting in a narrowing of interest spread between short-term and long-term debts, a leading indication for inevitable recession down the road. The problem of adding to the money supply is what Keynes called the liquidity trap, that is, an absolute preference for liquidity even at near zero interest-rate levels. Keynes argued that either a liquidity trap or interest-insensitive investment draught could render monetary expansion ineffective in a recession. It is what is popularly called pushing on a credit string, where ample money cannot find credit-worthy willing borrowers. Much of the new low cost money tends to go to refinancing of existing debt take out at previously higher interest rates. Rising short-term interest rates, particularly at a measured pace, would not remove the liquidity trap when long term rates stay flat because of excess liguidity.

The debt bubble in the US is clearly having problems, as evident in the bond market. With just 14 deals worth $2.9 billion, May 2005 was the slowest month for high-yield bond issuance since October 2002. The late-April downgrades of the debt of General Motors and Ford Motor to junk status roiled the bond markets. The number of high-yield, or junk bond deals fell 55% in the March-to-May 2005 period, compared with the same three months in 2004. They were also down 45% from the December-through-February period. In dollar value, junk bond deals totaled $17.6 billion in the March-to-May 2005 period, compared with $39.5 billion during the same three months in 2004 and $36 billion from December through February 2005. There were 407 deals of investment-grade bond underwriting during the March-to-May 2005 period, compared with 522 in the same period 2004 - a decline of 22%. In dollar volume, some $153.9 billion of high-grade bonds were underwritten from March to May 2005, compared with $165.5 billion in the same period in 2004 - a 7% decline. Oil at $50, along with astronomical asset price appreciation, particularly in real estate, is giving the debt bubble additional borrowed time. But this game cannot go on forever and the end will likely be triggered by a new trade war's effect on reduced trade volume. The price of a reduced US trade deficit is the bursting of the US debt bubble which can plunge the world economy into a new depression. Given such options, the US has no choice except to ride the trade deficit train for as long as the traffic will bear, which may not be too long, particularly if protectionism begins to gather force.

The transition to offshore outsourced production has been the source of the productivity boom of the "New Economy" in the US in the last decade. The productivity increase not attributable to the importing of other nations' productivity is much less impressive. While published government figures of the productivity index show a rise of nearly 70% since 1974, the actual rise is between zero and 10% in many sectors if the effect of imports is removed from the equation. The lower productivity values are consistent with the real-life experience of members of the blue-collar working class and the white collar middle class who have been spending the equity cash-outs from the appreciated market value of their homes. World trade has become a network of cross-border arbitrage on differentials in labor availability, wages, interest rates, exchange rates, prices, saving rates, productive capacities, liquidity conditions and debt levels. In some of these areas, the US is becoming an underdeveloped economy.

The Bush Administration continues to assure the public that the state of the economy is sound while in reality the US has been losing entire sectors of its economy, such as manufacturing and information technology, to foreign producers, while at the same time selling off the part of the nation to finance its rising and unending trade deficit. Usually, when unjustified confidence crosses over to fantasized hubris on the part of policymakers, disaster is not far ahead.

To be fair, the problems of the US economy started before the second Bush Administration. The Clinton Administration's annual economic report for 2000 claimed that the longest economic expansion in US history could continue "indefinitely" as long as "we stick to sound policy", according to Chairman Martin Baily of the Council of Economic Advisors (CEA) as reported in the Wall Street Journal . The New York Times report differed somewhat by quoting Baily as saying: "stick to fiscal policy." Putting the two newspaper reports together, one got the sense that the Clinton Administration thought that its fiscal policy was the sound policy needed to put an end to the business cycle. Economics high priests in government, unlike the rest of us mortals who are unfortunate enough to have to float in the daily turbulence of the market, can afford to aloofly focus on long-term trends and their structural congruence to macro-economic theories. Yet, outside of macro-economics, long-term is increasingly being re-defined in the real world. In the technology and communication sectors, long-term evokes periods lasting less than 5 years. For hedge funds and quant shops, long-term can mean a matter of weeks.

Two factors were identified by the Clinton CEA Year 2000 economic report as contributing to the "good" news: technology-driven productivity and neo-liberal trade globalization. Even with somewhat slower productivity and spending growth, the CEA believed the economy could continue to expand perpetually. As for the huge and growing trade deficit, the CEA expected global recovery to boost demand for US exports, not withstanding the fact that most US exports are increasingly composed of imported parts. Yet the US has long officially pursued a strong dollar policy which weakens world demand for US exports. The high expectation on e-commerce was a big part of optimism, which had yet to be substantiated by data. In 2000, the CEA expected the business to business (B2B) portion of e-commerce to rise to $1.3 trillion by 2003 from $43 billion in 1998. Goldman Sachs claimed in 1999 that B2B e-commerce would reach $1.5 trillion by 2004, twice the size of the combined 1998 revenues of the US auto industry and the US telecom sector. Others were more cautious. Jupiter Research projected that companies around the globe would increase their spending on B2B e-marketplaces from US$2.6 billion in 2000 to only $137.2 billion by 2005 and spending in North America alone would grow from $2.1 billion to only $80.9 billion. North American companies accounted for 81% of the total spending in 1998, but by 2005, that figure was expected to drop to 60% of the total. The fact of the matter is that Asia and Europe are now faster growth market for communication and technology.

Reality proved disappointing. A 2004 UN Conference on Trade and Development (UNCTAD) report said: In the United States, e-commerce between enterprises (B2B), which in 2002 represented almost 93% of all e-commerce, accounted for 16.28% of all commercial transactions between enterprises. While overall transactions between enterprises (e-commerce and non e-commerce) fell in 2002, e-commerce B2B grew at an annual rate of 6.1%. As for business-to-consumer (B2C) e-commerce, UNCTAD reported that sales in the first quarter of 2004 amounted to 1.9 per cent of total retail sales, a proportion that is nearly twice as large as that recorded in 2001. The annual rate of growth of retail e-commerce in the US in the year to the end of the first quarter of 2004 was 28.1%, while the growth of total retail in the same period was only 8.8%. Dow Jones reported on May 20, 2005 that first-quarter retail e-commerce sales in the U.S. rose 23.8% compared with the year-ago period to $19.8 billion from $16 billion, according to preliminary numbers released by the Department of Commerce. E-commerce sales during the first quarter rose 6.4% from the fourth quarter, when they were $18.6 billion. Sales for all periods are on an adjusted basis, meaning the Commerce Department adjusts them for seasonal variations and holiday and trading-day differences but not for price changes.

E-commerce sales accounted for 2.2% of total retail sales in the first quarter of 2005, when those sales were an estimated $916.9 billion, according to the Commerce Department. Walmart, the low-priced retailer that imports outsourced goods from overseas, grew only 2%, indicating spending fatigue on the part of low-income US consumers, while Target Stores, the upscale retailer that also imports outsourced goods, continues to grow at 7%, indicating the effects of rising income disparity.

The CEA 2000 report did not address the question whether e-commerce was merely a shift of commerce or a real growth. The possibility exists for the new technology to generate negative growth. It happened to IBM – the increased efficiency (lower unit cost of calculation power) of IBM big frames actually reduced overall IBM sales, and most of the profit and growth in personal computers went to Microsoft, the software company that grew on business that IBM, a self-professed hardware manufacturer, did not consider worthy of keeping for itself. The same thing happened to Intel where Moore's Law declared in 1965 an exponential growth in the number of transistors per integrated circuit and predicted that this trend would continue the doubling of transistors every couple of years. But what Moore's Law did not predict was that this growth of computing power per dollar would cut into company profitability. As the market price of computer power continues to fall, the cost to producers to achieve Moore's Law has followed the opposite trend: R&D, manufacturing, and test costs have increased steadily with each new generation of chips. As the fixed cost of semiconductor production continues to increase, manufacturers must sell larger and larger quantities of chips to remain profitable. In recent years, analysts have observed a decline in the number of "design starts" at advanced process nodes. While these observations were made in the period after the year 2000 economic downturn, the decline may be evidence that the long-term global market cannot economically sustain Moore's Law. Is the Google Bubble a replay of the AOL fiasco?

Schumpeter's creative destruction theory, while revitalizing the macro-economy with technological obsolescence in the long run, leaves real corporate bodies in its path, not just obsolete theoretical concepts. Financial intermediaries and stock exchanges face challenges from Electronic Communication Networks (ECNs) which may well turn the likes of NYSE into sunset industries. ECNs are electronic marketplaces which bring buy/sell orders together and match them in virtual space. Today, ECNs handle roughly 25% of the volume in NASDAQ stocks. The NYSE and the Archipelago Exchange (ArcaEx) announced on April 20, 2005 that they have entered a definitive merger agreement that will lead to a combined entity, NYSE Group, Inc., becoming a publicly-held company. If approved by regulators, NYSE members and Archipelago shareholders, the merger will represent the largest-ever among securities exchanges and combine the world's leading equities market with the most successful totally open, fully electronic exchange. Through Archipelago, the NYSE will compete for the first time in the trading of NASDAQ-listed stocks; it will be able to indirectly capture listings business that otherwise would not qualify to list on the NYSE. Archipelago lists stocks of companies that do not meet the NYSE's listing standards.

On fiscal policy, US government spending, including social programs and defense, declined as a share of the economy during the eight years of the Clinton watch. This in no small way contributed to a polarization of both income and wealth, with visible distortions in both the demand and supply sides of the economy. This was the opposite of the FDR record of increasing income and wealth equality by policy. The wealth effect tied to bloated equity and real estate markets could reverse suddenly and did in 2000, bailed out only by the Bush tax cut and the deficit spending on the War on Terrorism after 2001. Private debt kept making all time highs throughout the 1990s and was celebrated by neo-liberal economists as a positive factor. Household spending was heavily based on expected rising future earnings or paper profits, both of which might and did vanished on short notice. By election time in November 1999, the Clinton economic miracle was fizzling. The business cycle had not ended after all, and certainly not by self-aggrandizing government policies. It merely got postponed for a more severe crash later. The idea of ending the business cycle in a market economy was as much a fantasy as Vice President Cheney's assertion in a speech before the Veterans of Foreign Wars in August 26, 2002 that "the Middle East expert Professor Fouad Ajami predicts that after liberation, the streets in Basra and Baghdad are sure to erupt in joy ."

In their 1991 populist campaign for the White House, Bill Clinton and Al Gore repeatedly pointed out the obscenity of the top 1% of Americans owning 40% of the country's wealth. They also said that if you eliminated home ownership and only counted businesses, factories and offices, then the top 1% owned 90% of all commercial wealth. And the top 10%, they said, owned 99%. It was a situation they pledged to change if elected. But once in office, Clinton and Gore did nothing to redistribute wealth more equally - despite the fact that their two terms in office spanned the economic joyride of the 1990s that would eventually hurt the poor much more severely than the rich. On the contrary, economic inequality only continued to grow under the Democrats. Reagan spread the national debt equally among the people while Clinton gave all the wealth to the rich.

Geopolitically, trade globalization was beginning to face complex resistance worldwide by the second term of the Clinton presidency. The momentum of resistance after Clinton would either slow further globalization or force the terms of trade to be revised. The Asian financial crises of 1997 revived economic nationalism around the world against US-led neo-liberal globalization, while the North Atlantic Treaty Organization (NATO) attack on Yugoslavia in 1999 revived militarism in the EU. Market fundamentalism as espoused by the US, far from being a valid science universally, was increasingly viewed by the rest of the world as merely US national ideology, unsupported even by US historical conditions. Just as anti-Napoleonic internationalism was essentially anti-French, anti-globalization and anti-moral-imperialism are essentially anti-US. US unilateralism and exceptionism became the midwife for a new revival of political and economic nationalism everywhere. The Bush Doctrine of monopolistic nuclear posture, pre-emptive wars, "either with us or against us" extremism, and no compromise with states that allegedly support terrorism, pours gasoline on the smoldering fire of defensive nationalism everywhere.

Alan Greenspan in his October 29, 1997 Congressional testimony on Turbulence in World Financial Markets before the Joint Economic Committee said that "it is quite conceivable that a few years hence we will look back at this episode [Asian financial crisis of 1997] . as a salutary event in terms of its implications for the macro-economy." When one is focused only on the big picture, details do not make much of a difference: the earth always appears more or less round from space, despite that some people on it spend their whole lives starving and cities get destroyed by war or natural disasters. That is the problem with macroeconomics. As Greenspan spoke, many around the world were waking up to the realization that the turbulence in their own financial markets was viewed by the US central banker as having a "salutary effect" on the US macro-economy. Greenspan gave anti-US sentiments and monetary trade protectionism held by participants in these financial markets a solid basis and they were no longer accused of being mere paranoia.

Ironically, after the end of the Cold War, market capitalism has emerged as the most fervent force for revolutionary change. Finance capitalism became inherently democratic once the bulk of capital began to come from the pension assets of workers, despite widening income and wealth disparity. The monetary value of US pension funds is over $15 trillion, the bulk of which belong to average workers. A new form of social capitalism has emerged which would gladly eliminate the worker's job in order to give him/her a higher return on his/her pension account. The capitalist in the individual is exploiting the worker in same individual. A conflict of interest arises between a worker's savings and his/her earnings. As Pogo used to say: "The enemy: they are us." This social capitalism, by favoring return on capital over compensation for labor, produces overinvestment, resulting in overcapacity. But the problem of overcapacity can only be solved by high income consumers. Unemployment and underemployment in an economy of overcapacity decrease demand, leading to financial collapse. The world economy needs low wages the way the cattle business need foot and mouth disease.

The nomenclature of neo-classical economics reflects, and in turn dictates, the warped logic of the economic system it produces. Terms such as money, capital, labor, debt, interest, profits, employment, market, etc, have been conceptualized to describe synthetic components of an artificial material system created by the power politics of greed. It is the capitalist greed in the worker that causes the loss of his/her job to lower wage earners overseas. The concept of the economic man who presumably always acts in his self-interest is a gross abstraction based on the flawed assumption of market participants acting with perfect and equal information and clear understanding of the implication of his actions. The pervasive use of these terms over time disguises the artificial system as the logical product of natural laws, rather than the conceptual components of the power politics of greed.

Just as monarchism first emerged as a progressive force against feudalism by rationalizing itself as a natural law of politics and eventually brought about its own demise by betraying its progressive mandate, social capitalism today places return on capital above not only the worker but also the welfare of the owner of capital. The class struggle has been internalized within each worker. As people facing the hard choice of survival in the present versus wellbeing in the future, they will always choose survival, social capitalism will inevitably go the way of absolute monarchism, and make way for humanist socialism.

The Coming Trade War By
Henry C.K. Liu

Part I: Coming Trade War and Global Depression

Part II: Dollar Hegemony Against Sovereign Credit

This article appeared in AToL on June 24, 2005


Global trade has forced all countries to adopt market economy. Yet the market is not the economy. It is only one aspect of the economy. A market economy can be viewed as an aberration of human civilization, as economist Karl Polanyi (1886-1964) pointed out. The principal theme of Polanyi's Origins of Our Time: The Great Transformation (1945) was that market economy was of very recent origin and had emerged fully formed only as recently as the 19th century, in conjunction with capitalistic industrialization. The current globalization of markets following the fall of the Soviet bloc is also of recent post-Cold War origin, in conjunction with the advent of the electronic information age and deregulated finance capitalism. A severe and prolonged depression can trigger the end of the market economy, when intelligent human beings are finally faced with the realization that the business cycle inherent in the market economy cannot be regulated sufficiently to prevent its innate destructiveness to human welfare and are forced to seek new economic arrangements for human development. The principle of diminishing returns will lead people to reject the market economy, however sophisticatedly regulated.


Prior to the coming of capitalistic industrialization, the market played only a minor part in the economic life of societies. Even where market places could be seen to be operating, they were peripheral to the main economic organization and activities of society. In many pre-industrial economies, markets met only twice a month. Polanyi argued that in modern market economies, the needs of the market determined social behavior, whereas in pre-industrial and primitive economies the needs of society determined market behavior. Polanyi reintroduced to economics the concepts of reciprocity and redistribution in human interaction, which were the original aims of trade.

Reciprocity implies that people produce the goods and services they are best at and enjoy most in producing, and share them with others with joy. This is reciprocated by others who are good at and enjoy producing other goods and services. There is an unspoken agreement that all would produce that which they could do best and mutually share and share alike, not just sold to the highest bidder, or worse to produce what they despise to meet the demands of the market. The idea of sweatshops is totally unnatural to human dignity and uneconomic to human welfare. With reciprocity, there is no need for layers of management, because workers happily practice their livelihoods and need no coercive supervision. Labor is not forced and workers do not merely sell their time in jobs they hate, unrelated to their inner callings. Prices are not fixed but vary according to what different buyers with different circumstances can afford or what the seller needs in return from different buyers. The law of one price is inhumane, unnatural, inflexible and unfair. All workers find their separate personal fulfillment in different productive livelihoods of their choosing, without distortion by the need for money. The motivation to produce and share is not personal profit, but personal fulfillment, and avoidance of public contempt, communal ostracism, and loss of social prestige and moral standing.

This motivation, albeit distorted today by the dominance of money, is still fundamental in societies operating under finance capitalism. But in a money society, the emphasis is on accumulating the most financial wealth, which is accorded the highest social prestige. The annual report on the world's richest 100 as celebrities by Forbes is a clear evidence of this anomaly. The opinion of figures such as Bill Gates and Warren Buffet are regularly sought by the media on matters beyond finance, as if the possession of money itself represents a diploma of wisdom. In the 1960s, wealth was an embarrassment among the flower children in the US. It was only in the 1980s that the age of greed emerged to embrace commercialism. In a speech on June 3 at the Take Back America conference in Washington, D.C, Bill Moyers drew attention to the conclusion by the editors of The Economist , all friends of business and advocates of capitalism and free markets, that "the United States risks calcifying into a European-style class-based society." A front-page leader in the May 13, 2005 Wall Street Journal concluded that "as the gap between rich and poor has widened since 1970, the odds that a child born in poverty will climb to wealth - or that a rich child will fall into middle class - remain stuck....Despite the widespread belief that the U.S. remains a more mobile society than Europe, economists and sociologists say that in recent decades the typical child starting out in poverty in continental Europe (or in Canada) has had a better chance at prosperity." The New York Times ran a 12-day series in June 2005 under the heading of "Class Matters" which observed that class is closely tied to money in the US and that " the movement of families up and down the economic ladder is the promise that lies at the heart of the American dream. But it does not seem to be happening quite as often as it used to." The myth that free markets spread equality seems to be facing challenge in the heart of market fundamentalism.

People trade to compensate for deficiencies in their current state of development. Free trade is not a license for exploitation. Exploitation is slavery, not trade. Imperialism is exploitation by systemic coercion on an international level. Neo-imperialism after the end of the Cold War takes the form of neo-liberal globalization of systemic coercion. Free trade is hampered by systemic coercion. Resistance to systemic coercion is not to be confused with protectionism. To participate in free trade, a trader must have something with which to trade voluntarily in a market free of systemic coercion. All free trade participants need to have basic pricing power which requires that no one else commands monopolistic pricing power. That tradable something comes from development, which is a process of self-betterment. Just as equality before the law is a prerequisite for justice, equality in pricing power in the market is a prerequisite for free trade. Traders need basic pricing power for trade to be free. Workers need pricing power for the value of their labor to participate in free trade.

Yet trade in a market economy by definition is a game to acquire overwhelming pricing power over one's trading partners. Wal-Mart for example has enormous pricing power both as a bulk buyer and a mass retailer. But it uses its overwhelming pricing power not to pay the highest wages to workers in factories and in its store, but to deliver the lowest price to its customers. The business model of Wal-Mart, whose sales volume is greater than the GDP and trade volume of many small countries, is anti-development. The trade off between low income and low retail price follows a downward spiral. This downward spiral has been the main defect of trade de-regulation when low prices are achieved through the lowering of wages. The economic purpose of development is to raise income, not merely to lower wages to reduce expenses by lowering quality. International trade cannot be a substitute for domestic development, or even international development, although it can contribute to both domestic and international development if it is conducted on an equal basis for the mutual benefit of both trading partners. And the chief benefit is higher income.

The terms of international trade needs to take into consideration local conditions not as a reluctant tolerance but with respect for diversity. Former Japanese Vice Finance Minister for International Affairs, Eisuke Sakakibara, in a speech "The End of Market Fundamentalism" before the Foreign Correspondent's Club, Tokyo, Jan. 22, 1999, presented a coherent and wide ranging critique of global macro orthodoxy. His view, that each national economic system must conform to agreed international trade rules and regulations but needs not assimilate the domestic rules and regulations of another country, is heresy to US-led one-size-fits-all globalization. In a computerized world where output standardization has become unnecessary, where the mass production of customized one-of-a-kind products is routine, one-size-fit all hegemony is nothing more than cultural imperialism. In a world of sovereign states, domestic development must take precedence over international trade, which is a system of external transactions made supposedly to augment domestic development. And domestic development means every nation is free to choose its own development path most appropriate to its historical conditions and is not required to adopt the US development model. But neo-liberal international trade since the end of the Cold War has increasingly preempted domestic development in both the center and the periphery of the world system. Quality of life is regularly compromised in the name of efficiency.

This is the reason the French and the Dutch voted against the EU constitution, as a resistance to the US model of globalization. Britain has suspended its own vote on the constitution to avoid a likely voter rejection. In Italy, cabinet ministers suggested abandoning the euro to return to an independent currency in order to regain monetary sovereignty. Bitter battles have erupted between member nations in the EU over national government budgets and subsidies. In that sense, neo-liberal trade is being increasingly identified as an obstacle, even a threat, to diversified domestic development and national culture. Global trade has become a vehicle for exploitation of the weak to strengthen the strong both domestically and internationally. Culturally, US-style globalization is turning the world into a dull market for unhealthy MacDonald fast food, dreary Walt-Mart stores, and automated Coca Cola and ATM machines. Every airport around the world is a replica of a giant US department store with familiar brand names, making it hard to know which city one is in. Aside from being unjust and culturally destructive, neo-liberal global trade as it currently exists is unsustainable, because the perpetual transfer of wealth from the poor to the rich is unsustainable anymore than drawing from a dry well is sustainable in a drought, nor can a stagnant consumer income sustain a consumer economy. Neo-liberal claims of fair benefits of free trade to the poor of the world, both in the center and the periphery, are simply not supported by facts. Everywhere, people who produce the goods cannot afford to buy the same goods for themselves and the profit is siphoned off to invisible investors continents away.

Trade and Money

Trade is facilitated by money. Mainstream monetary economists view government-issued money as a sovereign debt instrument with zero maturity, historically derived from the bill of exchange in free banking. This view is valid only for specie money, which is a debt certificate that entitles the holder to claim on demand a prescribed amount of gold or other specie of value. Government-issued fiat money, on the other hand, is not a sovereign debt but a sovereign credit instrument, backed by government acceptance of it for payment of taxes. This view of money is known as the State Theory of Money, or Chartalism. The dollar, a fiat currency, entitles the holder to exchange for another dollar at any Federal Reserve Bank, no more, no less. Sovereign government bonds are sovereign debts denominated in money. Sovereign bonds denominated in fiat money need never default since sovereign government can print fiat money at will. Local government bonds are not sovereign debt and are subject to default because local governments do not have the authority to print money. When fiat money buys bonds, the transaction represents credit canceling debt. The relationship is rather straightforward, but of fundamental importance.

Credit drives the economy, not debt. Debt is the mirror reflection of credit. Even the most accurate mirror does violence to the symmetry of its reflection. Why does a mirror turn an image right to left and not upside down as the lens of a camera does? The scientific answer is that a mirror image transforms front to back rather than left to right as commonly assumed. Yet we often accept this aberrant mirror distortion as uncolored truth and we unthinkingly consider the distorted reflection in the mirror as a perfect representation. Mirror, mirror on the wall, who is the fairest of them all? The answer is: your backside.

In the language of monetary economics, credit and debt are opposites but not identical. In fact, credit and debt operate in reverse relations. Credit requires a positive net worth and debt does not. One can have good credit and no debt. High debt lowers credit rating. When one understands credit, one understands the main force behind the modern finance economy, which is driven by credit and stalled by debt. Behaviorally, debt distorts marginal utility calculations and rearranges disposable income. Debt turns corporate shares into Giffen goods, demand for which increases when their prices go up, and creates what Federal Reserve Board Chairman Alan Greenspan calls "irrational exuberance", the economic man gone mad. <> If fiat money is not sovereign debt, then the entire financial architecture of fiat money capitalism is subject to reordering, just as physics was subject to reordering when man's world view changed with the realization that the earth is not stationary nor is it the center of the universe. For one thing, the need for capital formation to finance socially useful development will be exposed as a cruel hoax. With sovereign credit, there is no need for capital formation for socially useful development in a sovereign nation. For another, savings are not necessary to finance domestic development, since savings are not required for the supply of sovereign credit. And since capital formation through savings is the key systemic rationale for income inequality, the proper use of sovereign credit will lead to economic democracy.

Sovereign Credit and Unemployment

In an economy financed by sovereign credit, labor should be in perpetual shortage, and the price of labor should constantly rise. A vibrant economy is one in which there is a persistent labor shortage and labor enjoys basic, though not monopolistic, pricing power. An economy should expand until a labor shortage emerges and keep expanding through productivity rise to maintain a slight labor shortage. Unemployment is an indisputable sign that the economy is underperforming and should be avoid as an economic plague.

The Phillips curve, formulated in 1958, describes the systemic relationship between unemployment and wage-pushed inflation in the business cycle. It represented a milestone in the development of macroeconomics . British economist A. W. H. Phillips observed that there was a consistent inverse relationship between the rate of wage inflation and the rate of unemployment in the United Kingdom from 1861 to 1957. Whenever unemployment was low, inflation tended to be high. Whenever unemployment was high, inflation tended to be low. What Phillips did was to accept a defective labor market in a typical business cycle as natural law and to use the tautological data of the flawed regime to prove its validity, and made unemployment respectable in macroeconomic policymaking, in order to obscure the irrationality of the business cycle. That is like observing that the sick are found in hospitals and concluding that hospitals cause sickness and that a reduction in the number of hospitals will reduce the number of the sick. This theory will be validated by data if only hospital patients are counted as being sick and the sick outside of hospitals are viewed as "externalities" to the system. This is precisely what has happened in the US where an oversupply of hospital beds has resulted from changes in the economics of medical insurance, rather than a reduction of people needing hospital care. Part of the economic argument against illegal immigration is based on the overload of non-paying patients in a health care system plagued with overcapacity.

Nevertheless, Nobel laureates Paul Samuelson and Robert Solow led an army of government economists in the 1960s in using the Phillips curve as a guide for macro-policy trade-offs between inflation and unemployment in market economies. Later, Edmund Phelps and Milton Friedman independently challenged the theoretical underpinnings by pointing out separate effects between the "short-run" and "long-run" Phillips curves, arguing that the inflation-adjusted purchasing power of money wages, or real wages, would adjust to make the supply of labor equal to the demand for labor, and the unemployment rate would rest at the real wage level to moderate the business cycle. This level of unemployment they called the "natural rate" of unemployment. The definitions of the natural rate of unemployment and its associated rate of inflation are circularly self-validating. The natural rate of unemployment is that at which inflation is equal to its associated inflation. The associated rate of inflation rate is that which prevails when unemployment is equal to its natural rate.

A monetary purist, Friedman correctly concluded that money is all important, but as a social conservative, he left the path to truth half traveled, by not having much to say about the importance of the fair distribution of money in the market economy, the flow of which is largely determined by the terms of trade. Contrary to the theoretical relationship described by Phillips curve, higher inflation was associated with higher, not lower, unemployment in the US in the 1970s and contrary to Friedman's claim, deflation was associated also with high unemployment in Japan in the 1990s. The fact that both inflation and deflation accompanied high unemployment ought to discredit the Phillips curve and Friedman's notion of a natural unemployment rate. Yet most mainstream economists continue to accept a central tenet of the Friedman-Phelps analysis that there is some rate of unemployment that, if maintained, would be compatible with a constant rate of inflation. This they call the "non-accelerating inflation rate of unemployment" (NAIRU), which over the years has crept up from 4% to 6%.

NAIRU means that the price of sound money for the US is 6% unemployment. The US Labor Department reported the "good news" that in May 2005, 7.6 million persons, or 5.1% of the workforce, were unemployed in the US, well within NAIRU range. Since the low income tend to have more children than the national norm, that translates to households with more than 20 million children with unemployed parents. On the shoulders of these unfortunate, innocent souls rests the systemic cost of sound money, defined as having a non-accelerating inflation rate, paying for highly irresponsible government fiscal policies of deficits and a flawed monetary policy that leads to sky-rocketing trade deficits and debts. That is equivalent to saying that if 6% of the world population dies from starvation, the price of food can be stabilized. And unfortunately, such is the terms of global agricultural trade. No government economist has bothered to find out what would be the natural inflation rate for real full employment.

It is hard to see how sound money can ever lead to full employment when unemployment is necessary to keep money sound. Within limits and within reason, unemployment hurts people and inflation hurts money. And if money exists to serve people, then the choice between inflation and unemployment becomes obvious. The theory of comparative advantage in world trade is merely Say's Law internationalized. It requires full employment to be operative.

Wages and Profit

And neoclassical economics does not allow the prospect of employers having an objective of raising wages, as Henry Ford did, instead of minimizing wages as current corporate management, such as General Motors, routinely practices. Henry Ford raised wages to increase profits by selling more cars to workers, while Ford Motors today cuts wages to maximize profit while adding to overcapacity. Therein resides the cancer of market capitalism: falling wages will lead to the collapse of an overcapacity economy. This is why global wage arbitrage is economically destructive unless and until it is structured to raise wages everywhere rather than to keep prices low in the developed economies. That is done by not chasing after the lowest price made possible by the lowest wages, but by chasing after a bigger market made possible by rising wages. The terms of global trade need to be restructured to reward companies that aim at raising wages and benefits globally through internationally coordinated transitional government subsidies, rather than the regressive approach of protective tariffs to cut off trade that exploits wage arbitrage. This will enable the low-wage economies to begin to be able to afford the products they produce and to import more products from the high wage economies to move towards balanced trade. Eventually, certainly within a decade, wage arbitrage would cease to be the driving force in global trade as wage levels around the world equalize. When the population of the developing economies achieves per capita income that matches that in developed economies, the world economy will be rid of the modern curse of overcapacity caused by the flawed neoclassical economics of scarcity. When top executives are paid tens of million of dollars in bonuses to cut wages and worker benefits, it is not fair reward for good management; it is legalized theft. Executives should only receive bonuses if both profit and wages in their companies rise as a result of their management strategies.

Sovereign Credit and Dollar Hegemony

In an economy that can operate on sovereign credit, free from dollar hegemony, private savings are needed only for private investment that has no clear socially redeeming purpose or value. Savings are deflationary without full employment, as savings reduces current consumption to provide investment to increase future supply. Savings for capital formation serve only the purpose of bridging the gap between new investment and new revenue from rising productivity and increased capacity from the new investment. With sovereign credit, private savings are not needed for this bridge financing. Private savings are also not needed for rainy days or future retirement in an economy that has freed itself from the tyranny of the business cycle through planning. Say's Law of supply creating its own demand is a very special situation that is operative only under full employment, as eminent post-Keynesian economist Paul Davidson has pointed out. Say's Law ignores a critical time lag between supply and demand that can be fatal to a fast-moving modern economy without demand management. Savings require interest payments, the compounding of which will regressively make any financial system unsustainable by tilting it toward overcapacity caused by overinvestment. The religions forbade usury also for very practical reasons. Yet interest on money is the very foundation of finance capitalism, held up by the neoclassical economic notion that money is more valuable when it is scarce. Aggregate poverty then is necessary for sound money. This was what President Reagan meant when he said that there is always going to be poor people.

The Bank of International Finance (BIS) estimated that as of the end of 2004, the notional value of global OTC interest rate derivatives is around $185 trillion, with a market risk exposure of over $5 trillion, which is almost half of US 2004 GDP. Interest rate derivatives are by far the largest category of structured finance contracts, taking up $185 trillion of the total $250 trillion of notional values. The $185 trillion notional value of interest rate derivatives is 41 times the outstanding value of US Treasury bonds. This means that interest rate volatility will have a disproportioned impact of the global financial system in ways that historical data cannot project.

Fiat money issued by government is now legal tender in all modern national economies since the 1971 collapse of the Bretton Woods regime of fixed exchange rates linked to a gold-backed dollar. The State Theory of Money (Chartalism) holds that the general acceptance of government-issued fiat currency rests fundamentally on government's authority to tax. Government's willingness to accept the currency it issues for payment of taxes gives the issuance currency within a national economy. That currency is sovereign credit for tax liabilities, which are dischargeable by credit instruments issued by government, known as fiat money. When issuing fiat money, the government owes no one anything except to make good a promise to accept its money for tax payment.

A central banking regime operates on the notion of government-issued fiat money as sovereign credit. That is the essential difference between central banking with government-issued fiat money, which is a sovereign credit instrument, and free banking with privately issued specie money, which is a bank IOU that allows the holder to claim the gold behind it.

With the fall of the USSR, US attitude toward the rest of the world changed. It no longer needs to compete for the hearts and minds of the masses of the Third /Fourth Worlds. So trade has replaced aid. The US has embarked on a strategy to use Third/Fourth-World cheap labor and non-existent environmental regulation to compete with its former Cold War Allies, now industrialized rivals in trade, taking advantage of traditional US anti-labor ideology to outsource low-pay jobs, playing against the strong pro-labor tradition of social welfare in Europe and Japan. In the meantime, the US pushed for global financial deregulation based on dollar hegemony and emerged as a 500-lb gorilla in the globalized financial market that left the Japanese and Europeans in the dust, playing catch up in an un-winnable game. In the game of finance capitalism, those with capital in the form of fiat money they can print freely will win hands down.

The tool of this US strategy is the privileged role of the dollar as the key reserve currency for world trade, otherwise known as dollar hegemony. Out of this emerges an international financial architecture that does real damage to the actual producer economies for the benefit of the financier economies. The dollar, instead of being a neutral agent of exchange, has become a weapon of massive economic destruction (WMED) more lethal than nuclear bombs and with more blackmail power, which is exercised ruthlessly by the IMF on behalf of the Washington Consensus. Trade wars are fought through volatile currency valuations. Dollar hegemony enables the US to use its trade deficits as the bait for its capital account surplus.

Foreign direct investment (FDI) under dollar hegemony has changed the face of the international economy. Since the early 1970s, FDI has grown along with global merchandise trade and is the single most important source of capital for developing countries, not net savings or sovereign credit. FDI is mostly denominated in dollars, a fiat currency that the US can produce at will since 1971, or in dollar derivatives such as the yen or the euro, which are not really independent currencies. Thus FDI is by necessity concentrated in exports related development, mainly destined for US markets or markets that also sell to US markets for dollars with which to provide the return on dollar-denominated FDI. US economic policy is shifting from trade promotion to FDI promotion. The US trade deficit is financed by the US capital account surplus which in turn provides the dollars for FDI in the exporting economies. A trade spat with the EU over beef and bananas, for example, risks large US investment stakes in Europe. And the suggestion to devalue the dollar to promote US exports is misleading for it would only make it more expensive for US affiliates to do business abroad while making it cheaper for foreign companies to buy dollar assets. An attempt to improve the trade balance, then, would actually end up hurting the FDI balance. This is the rationale behind the slogan: a strong dollar is in the US national interest.

Between 1996 and 2003, the monetary value of US equities rose around 80% compared with 60% for European and a decline of 30% for Japanese. The 1997 Asian financial crisis cut Asia equities values by more than half, some as much as 80% in dollar terms even after drastic devaluation of local currencies. Even though the US has been a net debtor since 1986, its net income on the international investment position has remained positive, as the rate of return on US investments abroad continues to exceed that on foreign investments in the US. This reflects the overall strength of the US economy, and that strength is derived from the US being the only nation that can enjoy the benefits of sovereign credit utilization while amassing external debt, largely due to dollar hegemony.

In the US, and now also increasingly so in Europe and Asia, capital markets are rapidly displacing banks as both savings venues and sources of funds for corporate finance. This shift, along with the growing global integration of financial markets, is supposed to create promising new opportunities for investors around the globe. Neo-liberals even claim that these changes could help head off the looming pension crises facing many nations. But so far it has only created sudden and recurring financial crises like those that started in Mexico in 1982, then in the UK in 1992, again in Mexico in 1994, in Asia in 1997, and Russia, Brazil, Argentina and Turkey subsequently.

The introduction of the euro has accelerated the growth of the EU financial markets. For the current 25 members of the European Union, the common currency nullified national requirements for pension and insurance assets to be invested in the same currencies as their local liabilities, a restriction that had long locked the bulk of Europe's long-term savings into domestic assets. Freed from foreign-exchange transaction costs and risks of currency fluctuations, these savings fueled the rise of larger, more liquid European stock and bond markets, including the recent emergence of a substantial euro junk bond market. These more dynamic capital markets, in turn, have placed increased competitive pressure on banks by giving corporations new financing options and thus lowering the cost of capital within euroland. How this will interact with the euro-dollar market is still indeterminate. Euro-dollars are dollars outside of US borders everywhere and not necessarily Europe, generally pre-taxed and subject to US taxes if they return to US soil or accounts. The term also applies to euro-yens and euro-euros. But the idea of French retirement accounts investing in non-French assets is both distasteful and irrational for the average French worker, particularly if such investment leads to decreased job security in France and jeopardizes the jealously guarded 35-hour work-week with 30 days of paid annual vacation which has been part of French life.

Take the Japanese economy as an example, the world's largest creditor economy. It holds over $800 billion in dollar reserves in 2005. The Bank of Japan (BoJ), the central bank, has bought over 300 billion dollars with yen from currency markets in the last two years in an effort to stabilize the exchange value of the yen, which continued to appreciate against the dollar. Now, BoJ is faced with a dilemma: continue buying dollars in a futile effort to keep the yen from rising, or sell dollars to try to recoup yen losses on its dollar reserves. Japan has officially pledged not to diversify its dollar reserves into other currencies, so as not to roil currency markets, but many hedge funds expect Japan to soon run out of options.

Now if the BoJ sells dollars at the rate of $4 billion a day, it will take some 200 trading days to get out of its dollar reserves. After the initial 2 days of sale, the remaining unsold $792 billion reserves would have a market value of 20% less than before the sales program began. So the BoJ will suffer a substantial net yen paper loss of $160 billion. If the BoJ continues its sell-dollar program, everyday Y400 billion will leave the yen money supply to return to the BoJ if it sells dollars for yen, or the equivalent in euro if it sells dollars for euro. This will push the dollar further down against the yen or euro, in which case the value of its remaining dollar reserves will fall even further, not to mention a sharp contraction in the yen money supply which will push the Japanese economy into a deeper recession.

If the BoJ sells dollars for gold, two things may happen. There would be not enough sellers because no one has enough gold to sell to absorb the dollars at current gold prices. Instead, while price of gold will rise, the gold market may simply freezes with no transactions. Gold holders will not have to sell their gold; they can profit from gold derivatives on notional values. Also, the reverse market effect that faces the dollar would hit gold. After two days of Japanese gold buying, everyone would hold on to their gold in anticipation for still higher gold prices. There would be no market makers. Part of the reason central banks have been leasing out their gold in recent years is to provide liquidity to the gold market. The second thing that may happen is that price of gold will sky rocket in currency terms, causing a great deflation in gold terms. The US national debt as of June 1, 2005 was $7.787 trillion. US government gold holding is about 261,000,000 ounces. Price of gold required to pay back the national debt with US-held gold is $29,835 per ounce. At that price, an ounce of gold will buy a car. Meanwhile, market price of gold as of June 4, 2005 was $423.50 per ounce. Gold peaked at $850 per ounce in 1980 and bottom at $252 in 1999 when oil was below $10 a barrel. At $30,000 per ounce, governments then will have to made gold trading illegal, as FDR did in 1930 and we are back to square one. It is much easier for a government to outlaw the trading of gold within its borders than it is for it to outlaw the trading of its currency in world markets. It does not take much to conclude that anyone who advices any strategy of long-term holding of gold will not get to the top of the class.

Heavily indebted poor countries need debt relief to get out of virtual financial slavery. Some African governments spend three times as much on debt service as they do on health care. Britain has proposed a half measure that would have the IMF sell about $12 billion worth of its gold reserves, which have a total current market value of about $43 billion to finance debt relief. The US has veto power over gold decisions in the IMF. Thus Congress holds the key. However, the mining industry lobby has blocked a vote. In January, a letter opposing the sale of IMF gold was signed by 12 US senators from Western mining states, arguing that the sale could drive down the price of gold. A similar letter was signed in March by 30 members of the House of Representatives. Lobbyists from the National Mining Association and gold mining companies, such as Newmont Mining and Barrick Gold Corp, persuaded the Congressional leadership that the gold proposal would not pass in Congress, even before it came up for debate. The BIS reports that gold derivatives took up 26% of the world's commodity derivatives market yet gold only composes 1% of the world's annual commodity production value, with 26 times more derivatives structured against gold than against other commodities, including oil. The Bush administration, at first apparently unwilling to take on a congressional fight, began in April to oppose gold sales outright. But President Bush and UK Prime Minister Tony Blair announced on June 7 that the US and UK are "well on their way" to a deal which would provide 100% debt cancellation for some poor nations to the World Bank and African Development Fund as a sign of progress in the G-8 debate over debt cancellation.

Jude Wanniski, a former editor of the Wall Street Journal, commenting in his Memo on the Margin on the Internet on June 15, 2005, on the headline of Pat Buchanan's syndicated column of the same date: Reviving the Foreign-Aid Racket, wrote: "This not a bailout of Africa's poor or Latin American peasants. This is a bailout of the IMF, the World Bank and the African Development Bank . The second part of the racket is that in exchange for getting debt relief, the poor countries will have to spend the money they save on debt service on "infrastructure projects," to directly help their poor people with water and sewer line, etc., which will be constructed by contractors from the wealthiest nations What comes next? One of the worst economists in the world, Jeffrey Sachs, is in charge of the United Nations scheme to raise mega-billions from western taxpayers for the second leg of this scheme. He wants $25 billion A YEAR for the indefinite future, as I recall, and he has the fervent backing of The New York Times , which always weeps crocodile tears for the racketeers. It was Jeffrey Sachs, in case you forgot, who, with the backing of the NYTimes persuaded Moscow under Mikhail Gorbachev to engage in "shock therapy" to convert from communism to capitalism. It produced the worst inflation in the history of Russia, caused the collapse of the Soviet federation, and sank the Russian people into a poverty they had never experienced under communism."

The dollar cannot go up or down more than 20% against any other major currencies within a short time without causing a major global financial crisis. Yet, against the US equity markets the dollar appreciated about 40% in purchasing power in the 2000-02 market crash, so had gold. And against real estate prices between 2002 and 2005, the dollar has depreciated 60% or more. According to Greenspan's figures, the Fed can print $8 trillion more fiat dollars without causing inflation. The problem is not the money printing. The problem is where that $8 trillion is injected. If it is injected into the banking system, then the Fed will have to print $3 trillion every subsequent year just to keep running in place. If the $8 trillion is injected into the real economy in the form of full employment and higher wages, the US will have a very good economy, and much less need for paranoia against Asia or the EU. But US wages cannot rise as long as global wage arbitrage is operative. This is one of the arguments behind protectionism. It led Federal Reserve Chairman Alan Greenspan to say on May 5 he feared what appeared to be a growing move toward trade protectionism, saying it could lessen the US and the world's economy ability to withstand shock. Yet if democracy works in the US, protectionism will be unstoppable as long as free trade benefits the elite at the expense of the voting masses.

Fiat Money is Sovereign Credit

Money is like power: use it or lose it. Money unused (not circulated) is defunct wealth. Fiat money not circulated is not wealth but merely pieces of printed paper sitting in a safe. Gold unused as money is merely a shiny metal good only as ornamental gifts for weddings and birthdays. The usefulness of money to the economy is dependent on its circulation, like the circulation of blood to bring oxygen and nutrient to the living organism. The rate of money circulation is called velocity by monetary economists. A vibrant economy requires a high velocity of money. Money, like most representational instruments, is subject to declaratory definition. In semantics, a declaratory statement is self validating. For example: "I am King" is a statement that makes the declarer king, albeit in a kingdom of one citizen. What gives weight to the declaration is the number of others accepting that declaration. When sufficient people within a jurisdiction accept the kingship declaration, the declarer becomes king of that jurisdiction instead of just his own house. When an issuer of money declares it to be credit it will be credit, or when he declares it to be debt it will be debt. But the social validity of the declaration depends on the acceptance of others.

Anyone can issue money, but only sovereign government can issue legal tender for all debts, public and private, universally accepted with the force of law within the sovereign domain. The issuer of private money must back that money with some substance of value, such as gold, or the commitment for future service, etc. Others who accept that money have provided something of value for that money, and have received that money instead of something of similar value in return. So the issuer of that money has given an instrument of credit to the holder in the form of that money, redeemable with something of value on a later date.

When the state issues fiat money under the principle of Chartalism, the something of value behind it is the fulfillment of tax obligations. Thus the state issues a credit instrument, called (fiat) money, good for the cancellation of tax liabilities. By issuing fiat money, the state is not borrowing from anyone. It is issuing tax credit to the economy.

Even if money is declared as debt assumed by an issuer who is not a sovereign who has the power to tax, anyone accepting that money expects to collect what is owed him as a creditor. When that money is used in a subsequent transaction, the spender is parting with his creditor right to buy something of similar value from a third party, thus passing the "debt" of the issuer to the third party. Thus no matter what money is declared to be, its functions is a credit instrument in transactions. When one gives money to another, the giver is giving credit and the receiver is incurring a debt unless value is received immediately for that money. When debt is repaid with money, money acts as a credit instrument. When government buys back government bonds, which is sovereign debt, it cannot do so with fiat money it issues unless fiat money is sovereign credit.

When money changes hands, there is always a creditor and a debtor. Otherwise there is no need for money, which stands for value rather than being value intrinsically. When a cow is exchanged for another cow, that is bartering, but when a cow is bought with money, the buyer parts with money (an instrument of value) while the seller parts with the cow (the substance of value). The seller puts himself in the position of being a new creditor for receiving the money in exchange for his cow. The buyer exchanges his creditor position for possession of the cow. In this transaction, money is an instrument of credit, not a debt.

When private money is issued, the only way it will be accepted generally is that the money is redeemable for the substance of value behind it based on the strong credit of the issuer. The issuer of private money is a custodian of the substance of value, not a debtor. All that is logic, and it does not matter how many mainstream monetary economists say money is debt.

Economist Hyman P Minsky (1919-1996) observed correctly that money is created whenever credit is issued. He did not say money is created when debt is incurred. Only entities with good credit can issue credit or create money. Debtors cannot create money, or they would not have to borrow. However, a creditor can only be created by the existence of a debtor. So both a creditor and a debtor are needed to create money. But only the creditor can issue money, the debtor accepts the money so created which puts him in debt.

The difference with the state is that its power to levy taxes exempts it from having to back its creation of fiat money with any other assets of value. The state when issuing fiat money is acting as a sovereign creditor. Those who took the fiat money without exchanging it with things of value is indebted to the state; and because taxes are not always based only on income, a tax payer is a recurring debtor to the state by virtue of his citizenship, even those with no income. When the state provides transfer payments in the form of fiat money, it relieves the recipient of his tax liabilities or transfers the exemption from others to the recipient to put the recipient in a position of a creditor to the economy through the possession of fiat money. The holder of fiat money is then entitled to claim goods and services from the economy. For things that are not for sale, such as political office, money is useless, at least in theory. The exercise of the fiat money's claim on goods and services is known as buying something that is for sa <> le.

There is a difference between buying a cow with fiat money and buying a cow with private IOUs (notes). The transaction with fiat money is complete. There is no further obligation on either side after the transaction. With notes, the buyer must either eventually pay with money, which cancels the notes (debt) or return the cow. The correct way to look at sovereign government-issued fiat money is that it is not a sovereign debt, but a sovereign credit good for canceling tax obligations. When the government redeems sovereign bonds (debt) with fiat money (sovereign credit), it is not paying off old debt with new debt, which would be a Ponzi scheme.

Government does not become a debtor by issuing fiat money, which in the US is a Federal Reserve note, not an ordinary bank note. The word "bank" does not appear on US dollars. Zero maturity money (ZMM), which grew from $550 billion in 1971 when Nixon took the dollar off gold, to $6.63 trillion as of May 30, 2005 is not a Federal debt. It is a Federal credit to the economy acceptable for payment of taxes and as legal tender for all debts, public and private. Anyone refusing to accept dollars within US jurisdiction is in violation of US law. One is free to set market prices that determine the value, or purchasing power of the dollar, but it is illegal on US soil to refuse to accept dollars for the settlement of debts. Instruments used for settling debts are credit instruments. When fiat money is used to buy sovereign bonds (debt), money cannot be anything but an instrument of sovereign credit. If fiat money is sovereign debt, there is no need to sell government bonds for fiat money. When a sovereign government sells a sovereign bond for fiat money issues, it is withdrawing sovereign credit from the economy. And if the government then spends the money, the money supply remains unchanged. But if the government allows a fiscal surplus by spending less than its tax revenue, the money supply shrinks and the economy slows. That was the effect of the Clinton surplus which produce the recession of 2000. While run-away fiscal deficits are inflationary, fiscal surpluses lead to recessions. Conservatives who are fixated on fiscal surpluses are simply uninformed on monetary economics. <>

For euro-dollars, meaning fiat dollars outside of the US, the reason those who are not required to pay US taxes accept them is because of dollar hegemony, not because dollars are IOUs of the US government. Everyone accept dollars because dollars can buy oil and all other key commodities. When the Fed injects money into the US banking system, it is not issuing government debt; it is expanding sovereign credit which would require higher government tax revenue to redeem. But if expanding sovereign credit expands the economy, tax revenue will increase without changing the tax rate. Dollar hegemony exempts the dollar, and only the dollar, from foreign exchange implication on the State Theory of Money. To issue sovereign debt, the Treasury issues treasury bonds. Thus under dollar hegemony, the US is the only nation that can practice and benefit from sovereign credit under the principle of Chartalism .<>

Money and bonds are opposite instruments that cancel each other. That is how the Fed Open Market Committee (FOMC) controls the money supply, by buying or selling government securities with fiat dollars to set a fed funds rate target. The fed funds rate is the interest rate at which banks lend to each other overnight. As such, it is a market interest rate that influences market interest rates throughout the world in all currencies through exchange rates. Holders of a government bond can claim its face value in fiat money at maturity, but holder of a fiat dollar can only claim a fiat dollar replacement at the Fed. Holders of fiat dollars can buy new sovereign bonds at the Treasury, or outstanding sovereign bond in the bond market, but not at the Fed. The Fed does not issue debts, only credit in the form of fiat money. When the Fed FOMC buys or sells government securities, it does on behalf of the Treasury. When the Fed increases the money supply, it is not adding to the national debt. It is increasing sovereign credit in the economy. That is why monetary easing is not deficit financing.

Money and Inflation

It is sometimes said that war's legitimate child is revolution and war's bastard child is inflation. World War I was no exception. The US national debt multiplied 27 times to finance the nation's participation in that war, from US$1 billion to $27 billion. Far from ruining the United States, the war catapulted the country into the front ranks of the world's leading economic and financial powers. The national debt turned out to be a blessing, for government securities are indispensable as anchors for a vibrant credit market. <>

Inflation was a different story. By the end of World War I, in 1919, US prices were rising at the rate of 15% annually, but the economy roared ahead. In response, the Federal Reserve Board raised the discount rate in quick succession, from 4 to 7%, and kept it there for 18 months to try to rein in inflation. The discount rate is the interest rate charged to commercial banks and other depository institutions on loans they receive from their regional Federal Reserve Bank's lending facility--the discount window. The result was that in 1921, 506 banks failed. Deflation descended on the economy like a perfect storm, with commodity prices falling 50% from their 1920 peak, throwing farmers into mass bankruptcies. Business activity fell by one-third; manufacturing output fell by 42%; unemployment rose fivefold to 11.9%, adding 4 million to the jobless count. The economy came to a screeching halt. From the Fed's perspective, declining prices were the goal, not the problem; unemployment was necessary to restore US industry to a sound footing, freeing it from wage-pushed inflation. Potent medicine always came with a bitter taste, the central bankers explained.

At this point, a technical process inadvertently gave the New York Federal Reserve Bank, which was closely allied with internationalist banking interest, preeminent influence over the Federal Reserve Board in Washington, the composition of which represented a more balanced national interest. The initial operation of the Fed did not use the open-market operation of purchasing or selling government securities to set interest rate policy as a method of managing the money supply. The Fed could not simply print money to buy government securities to inject money into the money supply because the dollar was based on gold and the amount of gold held by the government was relatively fixed. Money in the banking system was created entirely through the discount window at the regional Federal Reserve Banks. Instead of buying or selling government bonds, the regional Feds accepted "real bills" of trade, which when paid off would extinguish money in the banking system, making the money supply self-regulating in accordance with the "real bills" doctrine to maintain the gold standard. The regional Feds bought government securities not to adjust money supply, but to enhance their separate operating profit by parking idle funds in interest-bearing yet super-safe government securities, the way institutional money managers do today.

Bank economists at that time did not understand that when the regional Feds independently bought government securities, the aggregate effect would result in macro-economic implications of injecting "high power" money into the banking system, with which commercial banks could create more money in multiple by lending recycles based on the partial reserve principle. When the government sold bonds, the reverse would happen. When the Fed made open market transactions, interest rates would rise or fall accordingly in financial markets. And when the regional Feds did not act in unison, the credit market could become confused or become disaggregated, as one regional Fed might buy while another might sell government securities in its open market operations.

Benjamin Strong, first president of the New York Federal Reserve Bank, saw the problem and persuaded the other 11 regional Feds to let the New York Fed handle all their transactions in a coordinated manner. The regional Feds formed an Open Market Investment Committee, to be run by the New York Fed for the purpose of maximizing overall profit for the whole system. This committee became dominated by the New York Fed, which was closely linked to big-money center bank interests which in turn were closely tied to international financial markets. The Federal Reserve Board approved the arrangement without full understanding of its full implication: that the Fed was falling under the undue influence of the New York internationalist bankers. For the US, this was the beginning of financial globalization. This fatal flaw would reveal itself in the Fed's role in causing and its impotence in dealing with the 1929 crash.

The deep 1920-21 depression eventually recovered by the lowering of the Fed discount rate into the Roaring Twenties, which, like the New Economy bubble of the 1990s, left some segments of economy and the population in them lingering in a depressed state. Farmers remained victimized by depressed commodity prices and factory workers shared in the prosperity only by working longer hours and assuming debt with the easy money that the banks provided. Unions lost 30% of their membership because of high unemployment in boom time. The prosperity was entirely fueled by the wealth effect of a speculative boom in the stock market that by the end of the decade would face the 1929 crash and land the nation and the world in the Great Depression. Historical data showed that when New York Fed president Strong leaned on the regional Feds to ease the discount rate on an already overheated economy in 1927, the Fed lost its last window of opportunity to prevent the 1929 crash. Some historians claimed that Strong did so to fulfill his internationalist vision at the risk of endangering the national interest. It is an issue of debate that continues in Congress today. Like Greenspan, Strong argued that it was preferable to deal with post-crash crisis management by adding liquidity than to pop a bubble prematurely with preventive measures of tight money. It is a strategy that requires letting a bubble to pop only inside a bigger bubble.

The speculative boom of easy credit in the 1920s attracted many to buy stocks with borrowed money and used the rising price of stocks as new collateral for borrowing more to buy more stocks. Broker's loans went from under $5 million in mid 1928 to $850 million in September of 1929. The market capitalization of the 846 listed companies of the New York Stock Exchange was $89.7 billion, at 1.24 times 1929 GDP. By current standards, a case could be built that stocks in 1929 were in fact technically undervalued. The 2,750 companies listed in the New York Stock Exchange had total global market capitalization exceeding $18 trillion in 2004, 1.53 times 2004 GDP of $11.75 trillion. <>

On January 14, 2001, the DJIA reached its all time high to date at 11,723, not withstanding Greenspan's warning of "irrational exuberance" on December 6, 1996 when the DJIA was at 6,381. From its August 12, 1982 low of 777, the DJIA began its most spectacular bull market in history. It was interrupted briefly only by the abrupt and frightening crash on October 19, 1987 when the DJIA lost 22.6% on Black Monday, falling to 1,739. It represented a 1,020-point drop from its previous peak of 2,760 reached less than two months earlier on August 21. But Greenspan's easy money policy lifted the DJIA to 11,723 in 13 years, a 674% increase. In 1929 the top came on September 4, with the DJIA at 386. A headline in The New York Times on October 22, 1929, reported highly-respected economist Irving Fisher as saying: "Prices of Stocks Are Low." Two days later, the stock market crashed, and by the end of November, the New York Stock Exchange shares index was down 30%. The index did not return to the 9/3/29 level until November, 1954. At its worst level, the index dropped to 40.56 in July 1932, a drop of 89%. Fisher had based his statement on strong earnings reports, few industrial disputes, and evidence of high investment in research and development (R&D) and in other intangible capital. Theory and supportive data not withstanding, the reality was that the stock market boom was based on borrowed money and false optimism. In hindsight, many economists have since concluded that stock prices were overvalued by 30% in 1929. But when the crash came, the overshoot dropped the index by 89% in less than three years <> .

Money and Gold

When money is not backed by gold, its exchange value must be managed by government, more specifically by the monetary policies of the central bank. No responsible government will voluntarily let the market set the exchange value of its currency, market fundamentalism notwithstanding. Yet central bankers tend to be attracted to the gold standard because it can relieve them of the unpleasant and thankless responsibility of unpopular monetary policies to sustain the value of money. Central bankers have been caricatured as party spoilers who take away the punch bowl just when the party gets going.

Yet even a gold standard is based on a fixed value of money to gold, set by someone to reflect the underlying economical conditions at the time of its setting. Therein lies the inescapable need for human judgment. Instead of focusing on the appropriateness of the level of money valuation under changing economic conditions, central banks often become fixated on merely maintaining a previously set exchange rate between money and gold, doing serious damage in the process to any economy temporarily out of sync with that fixed rate. It seldom occurs to central bankers that the fixed rate was the problem, not the dynamic economy. When the exchange value of a currency falls, central bankers often feel a personal sense of failure, while they merely shrug their shoulders to refer to natural laws of finance when the economy collapses from an overvalued currency.

The return to the gold standard in war-torn Europe in the 1920s was engineered by a coalition of internationalist central bankers on both sides of the Atlantic as a prerequisite for postwar economic reconstruction. Lenders wanted to make sure that their loans would be repaid in money equally valuable as the money they lent out, pretty much the way the IMF deals with the debt problem today. President Strong of the New York Fed and his former partners at the House of Morgan were closely associated with the Bank of England, the Banque de France, the Reichsbank, and the central banks of Austria, the Netherlands, Italy, and Belgium, as well as with leading internationalist private bankers in those countries. Montagu Norman, governor of the Bank of England from 1920-44, enjoyed a long and close personal friendship with Strong as well as ideological alliance. Their joint commitment to restore the gold standard in Europe and so to bring about a return to the "international financial normalcy" of the prewar years was well documented. Norman recognized that the impairment of British financial hegemony meant that, to accomplish postwar economic reconstruction that would preserve pre-war British interests, Europe would "need the active cooperation of our friends in the United States."

Like other New York bankers, Strong perceived World War I as an opportunity to expand US participation in international finance, allowing New York to move toward coveted international-finance-center status to rival London's historical preeminence, through the development of a commercial paper market, or bankers' acceptances in British finance parlance, breaking London's long monopoly. The Federal Reserve Act of 1913 permitted the Federal Reserve Banks to buy, or rediscount, such paper. This allowed US banks in New York to play an increasingly central role in international finance in competition with the London market.

Herbert Hoover, after losing his second-term US presidential election to Franklin D Roosevelt as a result of the 1929 crash, criticized Strong as "a mental annex to Europe", and blamed Strong's internationalist commitment to facilitating Europe's postwar economic recovery for the US stock-market crash of 1929 and the subsequent Great Depression that robbed Hoover of a second term. Europe's return to the gold standard, with Britain's insistence on what Hoover termed a "fictitious rate" of US$4.86 to the pound sterling, required Strong to expand US credit by keeping the discount rate unrealistically low and to manipulate the Fed's open market operations to keep US interest rate low to ease market pressures on the overvalued pound sterling. Hoover, with justification, ascribed Strong's internationalist policies to what he viewed as the malign persuasions of Norman and other European central bankers, especially Hjalmar Schacht of the Reichsbank and Charles Rist of the Bank of France. From the mid-1920s onward, the US experienced credit-pushed inflation, which fueled the stock-market bubble that finally collapsed in 1929.

Within the Federal Reserve System, Strong's low-rate policies of the mid-1920s also provoked substantial regional opposition, particularly from Midwestern and agricultural elements, who generally endorsed Hoover's subsequent critical analysis. Throughout the 1920s, two of the Federal Reserve Board's directors, Adolph C Miller, a professional economist, and Charles S Hamlin, perennially disapproved of the degree to which they believed Strong subordinated domestic to international considerations.

The fairness of Hoover's allegation is subject to debate, but the fact that there was a divergence of priority between the White House and the Fed is beyond dispute, as is the fact that what is good for the international financial system may not always be good for a national economy. This is evidenced today by the collapse of one economy after another under the current international finance architecture that all central banks support instinctively out of a sense of institutional solidarity. The same issue has surfaced in today's China where regional financial centers such as Hong Kong and Shanghai are vying for the role of world financial center. To do this, they must play by the rules of the international financial system which imposes a cost on the national economy. The nationalist vs. internationalist conflict, as exemplified by the Hoover vs. Strong conflict of the 1930s, is also threatening the further integration of the European Union. Behind the fundamental rationale of protectionism is the rejection of the claim that internationalist finance places national development as its priority. The Richardian theory of comparative advantage of free trade is not the issue.

The issue of government control over foreign loans also brought the Fed, dominated by Strong, into direct conflict with Hoover when the latter was Secretary of Commerce. Hoover believed that the US government should have right of approval on foreign loans based on national-interest considerations and that the proceeds of US loans should be spent on US goods and services. Strong opposed all such restrictions as undesirable government intervention in free trade and international finance and counterproductively protectionist. Businesses should be not only allowed, but encouraged to buy when it is cheapest anywhere in the world, including shopping for funds to borrow, a refrain that is heard tirelessly from free traders also today. Of course, the expanding application of the law of one price to more and more commodities, including the price of money, i.e. interest rates adjusted by exchange rates, makes such dispute academic. The only commodity exempt from the law of one price is labor. This exemption makes the trade theory of comparative advantage a fantasy.

In July and August 1927, Strong, despite ominous data on mounting market speculation and inflation, pushed the Fed to lower the discount rate from 4 to 3 percent to relieve market pressures again on the overvalued British pound. In July 1927, the central bankers of Great Britain, the United States, France, and Weimar Germany met on Long Island in the US to discuss means of increasing Britain's gold reserves and stabilizing the European currency situation. Strong's reduction of the discount rate and purchase of 12 million pound sterling, for which he paid the Bank of England in gold, appeared to come directly from that meeting. One of the French bankers in attendance, Charles Rist, reported that Strong said that US authorities would reduce the discount rate as "un petit coup de whisky for the stock exchange". Strong pushed this reduction through the Fed despite strong opposition from Miller and fellow board member James McDougal of the Chicago Fed, who represented Midwestern bankers, who generally did not share New York's internationalist preoccupation.

Frank Altschul, partner in the New York branch of the transnational investment bank Lazard Freres, told Emile Moreau, the governor of the Bank of France, that "the reasons given by Mr Strong as justification for the reduction in the discount rate are being taken seriously by no one, and that everyone in the United States is convinced that Mr Strong wanted to aid Mr Norman by supporting the pound." Other correspondence in Strong's own files suggests that he was giving priority to international monetary conditions rather than to US export needs, contrary to his public arguments. Writing to Norman, who praised his handling of the affair as "masterly", Strong described the US discount rate reduction as "our year's contribution to reconstruction." The Fed's ease in 1927 forced money to flow not into the overheated real economy, which was unable to absorb further investment, but into the speculative financial market, which led to the crash of 1929. Strong died in October 1928, one year before the crash, and was spared the pain of having to see the devastating results of his internationalist policies.

Scholarly debate still continues as to whether Strong's effort to facilitate European economic reconstruction compromised the US domestic economy and, in particular, led him to subordinate US monetary policies to internationalist demands. In 1930, the US economy had yet to dominate the world economy as it does now. There is, however, little disagreement that the overall monetary strategy of European central banks had been misguided in its reliance on the restoration of the gold standard. Critics suggest that the ambitious but misguided commitment of Strong, Norman, and other internationalist bankers to returning the pound, the mark, and other major European currencies to the gold standard at overly-high parities to gold, which they were then forced to maintain at all costs, including indifference to deflation, had the effect of undercutting Europe's postwar economic recovery. Not only did Strong and his fellow central bankers through their monetary policies contribute to the Great Depression, but their continuing fixation on gold also acted as a straitjacket that in effect precluded expansionist counter-cyclical measures.

The inflexibility of the gold standard and the central bankers' determination to defend their national currencies' convertibility into gold at almost any cost drastically limited the policy options available to them when responding to the global financial crisis. This picture fits the situation of the fixed-exchange-rates regime based on the fiat dollar that produced recurring financial crises in the 1990s and that has yet to run its full course by 2005. In 1927, Strong's unconditional support of the gold standard, with the objective of bringing about the rising financial predominance of the US which had the largest holdings of gold in the world, exacerbated nascent international financial problems. In similar ways, dollar hegemony does the same damage to the global economy today. Just as the international gold standard itself was one of the major factors underlying and exacerbating the Great Depression that followed the 1929 crash, since the conditions that had sustained it before the war no longer existed, the breakdown of the fixed-exchange-rates system based on a gold-backed dollar set up by the Bretton Woods regime after World War II, without the removal of the fiat dollar as a key reserve currency for trade and finance, will cause a total collapse of the current international financial architecture with equally tragic outcomes. Stripped of its gold backing, the fiat dollar has to rely on geopolitical factors for its value, which push US foreign policy towards increasing militaristic and belligerent unilateralism. With dollar hegemony today, as it was with the gold standard of 1930, the trade war is fought through currencies valuations on top of traditional tariffs.

The nature of and constraints on US internationalism after World War I had parallels in US internationalism after World War II and in US-led globalization after the Cold War. Hoover bitterly charged Strong with reckless placement of the interests of the international financial system ahead of US national interest and domestic development needs. Strong sincerely believed his support for European currency stabilization also promoted the best interests of the United States, as post-Cold War neo-liberal market fundamentalists sincerely believe its promotion enhances the US national interest. Unfortunately, sincerity is not a vaccine against falsehood.

Strong argued relentlessly that exchange rate volatility, especially when the dollar was at a premium against other currencies, made it difficult for US exporters to price their goods competitively. As he had done during the war, on numerous later occasions, Strong also stressed the need to prevent an influx of gold into the US and the consequent domestic inflation, by the US making loans to Europe, pursuing lenient debt policies, and accepting European imports on generous terms. Strong never questioned the gold parities set for the mark and the pound sterling. He merely accepted that returning the pound to gold at prewar exchange rates required British deflation and US efforts to use lower dollar interest rates to alleviate market pressures on sterling. Like Fed chairman Paul Volcker in the 1980s, but unlike Treasury Secretary Robert Rubin in the 1990s, Strong mistook a cheap dollar as serving the national interest, while Rubin understood correctly that a strong dollar is in the national interest by sustaining dollar hegemony. In either case, the price for either an over-valued or under-valued dollar is the same: global depression. Dollar hegemony in the 1990s pushed Japan and Germany into prolonged depression. <>

The US position in 2005 is that a strong dollar is still in the US national interest, but a strong dollar requires an even stronger Chinese yuan in the 21 st century. Just as Strong saw the need for a strong British pound paid for by deflation in Britain in exchange for the carrot of continuing British/European imports to the US, Bush and Greenspan now want a stronger Chinese yuan, paid for with deflation in China in exchange for curbing US protectionism against Chinese imports. The 1985 Plaza Accord to force the appreciation of the Japanese yen marked the downward spiral of the Japanese economy via currency-induced deflation. Another virtual Plaza Accord forced the rise of the euro that left Europe with a stagnant economy. A new virtual Plaza Accord against China will also condemn the Chinese economy into a protracted period of deflation. Deflation in China at this time will cause the collapse of the Chinese banking system which is weighted down by the BIS regulatory regime that turned national banking subsidies to state-own-enterprises into massive non-performing loans. A collapse of the Chinese banking system will have dire consequences for the global financial system since the robust Chinese economy is the only engine of growth in the world economy at this time.

When Norman sent Strong a copy of John Maynard Keynes' Tract on Monetary Reform (1923), Strong commented "that some of his [Keynes'] conclusions are thoroughly unwarranted and show a great lack of knowledge of American affairs and of the Federal Reserve System." Within a decade, Keynes, with his advocacy of demand management via deficit financing, became the most influential economist in post-war history.

The major flaw in the European effort for post-World War I economic reconstruction was its attempt to reconstruct the past through its attachment to the gold standard, with little vision of a new future. The democratic governments of the moneyed class that inherited power from the fall of monarchies did not fully comprehend the implication of the disappearance of the monarch as a ruler, whose financial architecture they tried to continue for the benefit of their bourgeois class. The broadening of the political franchise in most European countries after the war had made it far more difficult for governments and central bankers to resist electoral pressures for increased social spending and the demand for ample liquidity with low interest rates, as well as high tolerance for moderate inflation to combat unemployment, regardless of the impact of national policies on the international financial architecture. The Fed, despite its claim of independence from politics, has never been free of US presidential-election politics since its founding. Shortly before his untimely death, Strong took comfort in his belief that the reconstruction of Europe was virtually completed and his internationalist policies had been successful in preserving world peace. Within a decade of his death, the whole world was aflame with World War II. <>

But in 1929, the dollar was still gold-backed. The government fixed the dollar at 23.22 grains of gold, at $20.67 per troy ounce. When stock prices rose faster than real economic growth, the dollar in effect depreciated. It took more dollars to buy the same shares as prices rose. But the price of gold remained fixed at $20.67 per ounce. Thus gold was cheap and the dollar was overvalued and the trading public rushed to buy gold, injecting cash into the economy which fueled more stock buying on margin. Price of gold mining shares rose by 600%. But with a gold standard, the Fed could not print money beyond its holding of gold without revaluing the dollar against gold. The Quantity Theory of Money caught up with the financial bubble as prices for equity rose but the quantity of money remained constant and it came into play with a vengeance. Because of the gold standard, there reached a time when there was no more money available to buy without someone first selling. When the selling began, the debt bubble burst, and panic took over. When the stock market collapsed, panic selling quickly wiped out most investors who bought shares instead of gold. As gold price was fixed, it could not fall with the general deflation and owners of gold did exceptionally well by comparison to share owners.

What Strong did not figure was that when the Fed lowered the discount rate to relieve market pressure on the overvalued British pound sterling after its gold convertibility had been restored in 1925, the world economy could not expand because money tied to gold was inelastic, leaving the US economy with a financial bubble that was not supported by any rise in earnings. The British-controlled gold standard proved to be a straightjacket for world economic growth, not unlike the deflationary Maastricht "convergence criteria" based on the strong German mark of the late 1990's. The speculation of the Coolidge-Hoover era was encouraged by Norman and Strong to fight gold-induced deflation. The accommodative monetary policy of the US Federal Reserve led to a bubble economy in the US, similar to Greenspan's bubble economy since 1987. There were two differences: the dollar was gold-backed in 1930 while in 1987 it was a fiat currency; and in 1930, the world monetary system was based on sterling pound hegemony while today it is based on dollar hegemony. When the Wall Street bubble was approaching unsustainable proportions in the autumn of 1929, giving the false impression that the US economy was booming, Norman sharply cut the British bank rate to try to stimulate the British economy in unison. When short-term rates fell, it created serious problems for British transnational banks which were stuck with funds borrowed long-term at high interest rates that now could only be lent out short-term at low rates. They had to repatriating British hot money from New York to cover this ruinous interest rate gap, leaving New York speculators up the creek without an interest rate paddle. This was the first case of hot money contagion, albeit what hit the Asian banks in 1997 was the opposite: they borrowed short-term at low interest rates to lend out long-term at high rates. And when interest rates rose because of falling exchange rate of local currencies, borrowers defaulted and the credit system collapsed. <>

The contagion in the 1997 Asian financial crisis devastated all Asian economies. The financial collapse in Thailand and Indonesia in July 1997 caused the strong markets of high liquidity such as Hong Kong and Singapore to collapse when investors sold in these liquid markets to raise funds to rescue their positions in illiquid markets that were wrongly diagnosed by the IMF as mere passing storms that could be weathered with a temporary shift of liquidity. Following badly flawed IMF advice, investors threw good money after bad and brought down the whole regional economy while failing to contain the problem within Thailand. <>

The financial crises that began in Thailand in July 1997 caused sell-downs in other robust and liquid markets in the region such as Hong Kong and Singapore that impacted even Wall Street in October. But prices fell in Thailand not because domestic potential buyers had no money. The fact was that equity prices in Thailand were holding in local currency terms but falling fast in foreign exchange terms when the peg of the baht to the dollar began to break. Then as the baht devalued in a free fall, stocks of Thai companies with local currency revenue, including healthy export firms that contracted local currency payments, logically collapsed while those with hard currency revenue actually appreciated in local currency terms. The margin calls were met as a result of investors trying not to sell, rather than trying to liquidate at a loss. The incentive for holding on with additional margin payments was based on IMF pronouncements that the crisis was only temporary and imminent help was on the way and that the problem would stabilize within months. But the promised help never come. What came was an IMF program of imposed "conditionalities" that pushed the troubled Asian economies off the cliff, designed only to save the foreign creditors. The "temporary" financial crisis was pushed into a multi-year economic crisis. <>

Geopolitics played a large role. US Treasury Secretary Robert Rubin decided very early the Thai crisis was a minor Asian problem and told the IMF to solve it with an Asian solution but not to let Japan take the lead. Hong Kong contributed US$1 billion and China contributed US$1 billion on blind faith on Rubin's assurance that the problem would be contained within Thai borders (after all, Thailand was a faithful US ally in the Cold War). Then Korea was hit in December 1997. Rubin again thought it was another temporary Asian problem. The Korean Central Bank was bleeding dollar reserves trying to support an overvalued won pegged to the dollar, and by late December had only several days left before its dollar reserves would run dry. Rubin was holding on to his moral hazard posture until his aides in the Department of Treasury told him one Sunday morning that the Brazilians were holding a lot of Korean bonds. If Korea were to default, Brazil would collapse and land the US banks in big trouble. Only then did Rubin get Citibank to work out a restructuring the following Tuesday in Korea by getting the Fed to allow the American banks to roll over the short-term Korean debts into non-interest paying long-term debts without having to register them as non-performing, thus exempting the US banks from the adverse impacts of the required capital injection that would drag down their profits. <>

The Great Depression that started in 1929 was made more severe and protracted by the British default on gold payment in September, 1931 and subsequent British competitive devaluations as a national strategy for a new international trade war. British policy involved a deliberate use of pound sterling hegemony, the only world monetary regime at that time, as a national monetary weapon in an international trade war, causing an irreversible collapse of world trade. In response to British monetary moves, alternative currency blocs emerged in rising economies such as the German Third Reich and Imperial Japan. It did not take these governments long to realize that they had to go to war to obtain the oil and other natural resources needed to sustain their growing economies that collapsed world trade could no longer deliver in peace. For Britain and the US, a quick war was exactly what was needed to bring their own economies out of depression. No one anticipated that WWII would be so destructive. German invasion of Poland on September 1, 1939 caused Britain and France to declared war on Germany on September 3, but the British and French stayed behind the Maginot Line all winter, content with a blockade of Germany by sea. The inactive period of the "phony war" lasted 7 months until April 9, 1940 when Germany invaded Demark and Norway. On May 10, German forces overrun Luxemburg and invaded the Netherlands and Belgium. On March 13, they outflanked the Maginot Line and German panzer divisions raced towards the British Channel, cut off Flanders and trapped the entire British Expeditionary Force of 220,000 and 120,000 French troops at Dunkirk. The trapped Allied forces had to be evacuated by civilian small crafts from May 26 to June 4. On June 22, France capitulated. If Britain had failed to evacuate its troops from Dunkirk, it would have to sue for peace as many had expected, the war would have been over with German control of Europe. Unable to use Britain as a base, US forces would never be able to land in Europe. Without a two-front war, Germany might have been able to prevail over the USSR. Germany might have then emerged as the hegemon.

Franklin D. Roosevelt was inaugurated as president on March 4, 1933. In his first fireside chat radio address, Roosevelt told a panicky public that "the confidence of the people themselves" was "more important than gold." On March 9, the Senate quickly passed the Emergency Banking Act giving the Secretary of the Treasury the power to compel every person and business in the country to relinquish their gold and accept paper currency in exchange. The next day, Friday March 10, Roosevelt issued Executive Order No. 6073, forbidding the public from sending gold overseas and forbidding banks from paying out gold for dollar. On April 5, Roosevelt issued Executive Order No. 6102 to confiscate the public's gold, by commanding all to deliver their gold and gold certificates to a Federal Reserve Bank, where they would be paid in paper money. Citizens could keep up to $100 in gold, but anything above that was illegal. Gold had become a controlled substance by law in the US. Possession was punishable by a fine of up to $10,000 and imprisonment for up to 10 years. On January 31, 1934, Roosevelt issued another Executive Order to devalue the dollar by 59.06% of its former gold quantum of 23.22 grains, pushing the dollar down to be worth only13.71 grains of gold, at $35 per ounce, which lasted until 1971.

1929 Revisited and More

Shortsighted government monetary policies were the main factors that led to the market collapse but the subsequent Great Depression was caused by the collapse of world trade. US policymakers in the 1920s believed that business was the purpose of society, just as policymakers today believe that free trade is the purpose of civilization. Thus, the government took no action against unconstructive speculation believing that the market knew best and would be self-correcting. People who took risks should bear the consequences of their own actions. The flaw in this view was that the consequences of speculation were largely borne not by professional speculators, but by the unsophisticated public who were unqualified to understand how they were being manipulated to buy high and sell low. The economy had been based on speculation but the risks were unevenly carried mostly by the innocent. National wealth from speculation was not spread evenly. Instead, most money was in the hands of a rich few who quickly passed on the risk and kept the profit. They saved or invested rather than spent their money on goods and services. Thus, supply soon became greater than demand. Some people profited, but the majority did not. Prices went up faster than income and the public could afford things only by going into debt while their disposable income went into mindless speculation in hope of magically bailing borrowers out from such debts. Farmers and factory/office workers did not profit at all. Unevenness of prosperity made recovery difficult because income was concentrated on those who did not have to spend it. The situation today is very similar.

After the 1929 crash, Congress tried to solve the high unemployment problem by passing high tariffs that protected US industries but hurt US farmers. International trade came to a stand still both because of protectionism and the freezing up of trade finance. <>
This time, world trade may also collapse, and high tariffs will again be the effect rather than the cause. The pending collapse of world trade will again come as a result of protracted US exploitation of the advantages of dollar hegemony, as the British did in 1930 regarding sterling pound hegemony. The dollar is undeservedly the main trade currency without either the backing of gold or US fiscal and monetary discipline. Most of the things people want to buy are no longer made in the US, so the dollar has become an unnatural trade currency. The system will collapse because despite huge US trade deficits, there is no global recycling of money outside of the dollar economy. All money circulates only within the dollar money supply, overheating the US economy, financing its domestic joyrides and globalization tentacles, not to mention military adventurism, milking the rest of the global economy dry and depriving the non-dollar economies of needed purchasing power independent of the US trade deficit. World trade will collapse this time not because of trade restricting tariffs, which are merely temporary distractions, but because of a global mal-distribution of purchasing power created by dollar hegemony.

Central banking was adopted in the US in 1913 to provide elasticity to the money supply to accommodate the ebb and flow of the business cycle. Yet the mortal enemy of elasticity is structural fatigue which is what makes the rubber band snap. Today, dollar hegemony cuts off monetary recirculation to all non-dollar economies, forcing all exporting nations with mounting trade surpluses into the position of Samuel Taylor Coleridge's Ancient Mariner: "Water, water, everywhere, nor any drop to drink."


Next: Trade in the Age of Overcapacity

[Jul 03, 2018] The squealing and consternation coming from the UK indicates that the empire changed course as for neoliberal globalization, and the UK is left out

The USA elite might now want abandoning of GATT and even WTO as it does not like the results. That single fraud on the west has had catastrophically perverse consequences for the coterie of killer's future and all because the designers of GATT had never thought outside the square of economics and failed utterly to grasp the gift of scientific and manufacturing politics.
Notable quotes:
"... The US still depends heavily on oil importation -- it is not "independent" in any manner whatsoever. Here's the most current data while this chart shows importation history since 1980. ..."
"... the only time a biological or economic entity can become energy independent is upon its death when it no longer requires energy for its existence. ..."
"... A big part of the US move into the middle east post WWII was that they needed a strategic reserve for time of war and also they could see US consumption growing far larger than US production. ..."
"... The USA of WAR may have oil independence, but it is temporary. The race is on for release from oil dependency and China intends to win in my view. It is setting ambitious targets to move to electric vehicles and mass transit. That will give it a technology dominance, and perhaps a resource dominance in the EV sphere. We are in the decade of major corporate struggles and defensive maneuverings around China investments in key EV sectors. ..."
"... In ten to twenty years' time the energy story could well be significantly different. The USA and its coterie of killers are still fighting yesterday's war, yesterday's hatred of all things Russian, yesterday's energy monopoly. ..."
"... I don't believe that the USA of WAR has changed or even intends to change the way they play their 'game'. The General Agreement on Tariffs and Trade set the trajectory for technology transfer, fabrication skills transfer, growth of academic and scientific achievement in 'other' countries (China, Russia etc). Their thoughts in the GATT deal were trade = economics = oligarchy = good. ..."
"... That single fraud on the west has had catastrophically perverse consequences for the coterie of killer's future and all because the designers of GATT had never thought outside the square of economics and failed utterly to grasp the gift of scientific and manufacturing politics. ..."
"... Canada and the gulf monarchies are the only countries with large reserves that are not hostile as yet to the US. As the US no longer is totally reliant on imports to meet its consumption, Saudi's, Bahrain and co are now expendable assets. ..."
Jul 03, 2018 | www.moonofalabama.org

karlof1 | Jun 29, 2018 5:51:08 PM | 32

Peter AU 1 @28--

The US still depends heavily on oil importation -- it is not "independent" in any manner whatsoever. Here's the most current data while this chart shows importation history since 1980.

As I've said before, the only time a biological or economic entity can become energy independent is upon its death when it no longer requires energy for its existence.

Peter AU 1 , Jun 29, 2018 6:11:54 PM | 33

karlof1 32

What I am looking at are strategic reserves, not how much oil is currently produced. With shale it now has those reserves and shale oil I think is now at the point where production could quickly ramp up to full self sufficiency if required. Even if the US were producing as much oil as they consumed, they would still be importing crude and exporting refined products.

A big part of the US move into the middle east post WWII was that they needed a strategic reserve for time of war and also they could see US consumption growing far larger than US production.

uncle tungsten , Jun 29, 2018 9:25:02 PM | 41
@Peter AU 1 #28 Thank you for that stimulating post. I just have to respond. And thanks to b and all the commenters here, it is my daily goto post.

The USA of WAR may have oil independence, but it is temporary. The race is on for release from oil dependency and China intends to win in my view. It is setting ambitious targets to move to electric vehicles and mass transit. That will give it a technology dominance, and perhaps a resource dominance in the EV sphere. We are in the decade of major corporate struggles and defensive maneuverings around China investments in key EV sectors.

In ten to twenty years' time the energy story could well be significantly different. The USA and its coterie of killers are still fighting yesterday's war, yesterday's hatred of all things Russian, yesterday's energy monopoly.

I don't believe that the USA of WAR has changed or even intends to change the way they play their 'game'. The General Agreement on Tariffs and Trade set the trajectory for technology transfer, fabrication skills transfer, growth of academic and scientific achievement in 'other' countries (China, Russia etc). Their thoughts in the GATT deal were trade = economics = oligarchy = good.

That single fraud on the west has had catastrophically perverse consequences for the coterie of killer's future and all because the designers of GATT had never thought outside the square of economics and failed utterly to grasp the gift of scientific and manufacturing politics.

By gross ignorance and foolish under-investment, the USA of WAR and its coterie of killers have eaten their future at their people's expense.

Peter AU 1 , Jun 29, 2018 9:25:04 PM | 42
karlof1 32

This is the chart for US exports of crude and petroleum products.
https://www.eia.gov/dnav/pet/hist/LeafHandler.ashx?n=PET&s=MTTEXUS2&f=M

Peter AU 1 , Jun 30, 2018 4:07:22 AM | 65
61

Light sweet vs heavy sour. Light means it contains a lot of diesel/petrol. Sweet means low sulphur. Many oils are heavy sour. Canada sand. the stuff they get from that is thick bitumen with high sulpher. The sulpher needs to be removed and the bitumen broken down into light fuels like diesel and petrol.

Canada and the gulf monarchies are the only countries with large reserves that are not hostile as yet to the US. As the US no longer is totally reliant on imports to meet its consumption, Saudi's, Bahrain and co are now expendable assets.

The great game for the US now is control or denial. Access to oil as a strategically critical resource is no longer a factor for the US.

Peter AU 1 , Jun 30, 2018 4:30:22 AM | 67
"We're an empire now, and when we act, we create our own reality. And while you're studying that reality – judiciously, as you will – we'll act again, creating other new realities, which you can study too, and that's how things will sort out. We're history's actors . . . and you, all of you, will be left to just study what we do." Karl Rove.

The squealing and consternation coming from the UK indicates that the empire has changed course and the UK is left sitting on its own shit pile.

[Jul 03, 2018] It seems that the political trend in central Europe is away from multi-culturalism. Hungary wants to maintain its culture.

Jul 03, 2018 | www.moonofalabama.org

ab initio , Jul 1, 2018 6:24:20 PM | 7

What is happening in Germany? Is "open borders" that Merkel has championed on its last legs? It seems that the CSU is worried about the coming elections in Bavaria where AfD might do much better than expected. Just as the outcome of the Italian elections was for a government coalition opposed to illegal economic immigration under the guise of asylum for political persecution.

Hungarian foreign minister in an interview with a snowflake BBC reporter. It seems that the political trend in central Europe is away from multi-culturalism. Hungary wants to maintain its culture.

https://youtu.be/q8itF62yIJg

This seems like the same contention between the Democrats who want "open borders" and "catch & release" while Trump wants to deport all illegals.

[Jun 28, 2018] Paul Craig Roberts How Long Can The Federal Reserve Stave Off The Inevitable by Paul Craig Roberts

Notable quotes:
"... The loss of middle class jobs has had a dire effect on the hopes and expectations of Americans, on the American economy, on the finances of cities and states and, thereby, on their ability to meet pension obligations and provide public services, and on the tax base for Social Security and Medicare, thus threatening these important elements of the American consensus. In short, the greedy corporate elite have benefitted themselves at enormous cost to the American people and to the economic and social stability of the United States. ..."
"... With the decline in income growth, the US economy stalled. The Federal Reserve under Alan Greenspan substituted an expansion in consumer credit for the missing growth in consumer income in order to maintain aggregate consumer demand. Instead of wage increases, Greenspan relied on an increase in consumer debt to fuel the economy. ..."
"... As a member of the Plunge Protection Team known officially as the Working Group on Financial Markets, the Federal Reserve has an open mandate to prevent another 1987 "Black Monday." In my opinion, the Federal Reserve would interpret this mandate as authority to directly intervene. ..."
"... As Washington's international power comes from the US dollar as world reserve currency, protecting the value of the dollar is essential to American power. Foreign inflows into US equities are part of the dollar's strength. Thus, the Plunge Protection Team seeks to prevent a market crash that would cause flight from US dollar assets. ..."
Jun 28, 2018 | www.zerohedge.com

Authored by Paul Craig Roberts,

When are America's global corporations and Wall Street going to sit down with President Trump and explain to him that his trade war is not with China but with them? The biggest chunk of America's trade deficit with China is the offshored production of America's global corporations. When the corporations bring the products that they produce in China to the US consumer market, the products are classified as imports from China.

Six years ago when I was writing The Failure of Laissez Faire Capitalism , I concluded on the evidence that half of US imports from China consist of the offshored production of US corporations. Offshoring is a substantial benefit to US corporations because of much lower labor and compliance costs. Profits, executive bonuses, and shareholders' capital gains receive a large boost from offshoring. The costs of these benefits for a few fall on the many - the former American employees who formerly had a middle class income and expectations for their children.

In my book, I cited evidence that during the first decade of the 21st century "the US lost 54,621 factories, and manufacturing employment fell by 5 million employees. Over the decade, the number of larger factories (those employing 1,000 or more employees) declined by 40 percent. US factories employing 500-1,000 workers declined by 44 percent; those employing between 250-500 workers declined by 37 percent, and those employing between 100-250 workers shrunk by 30 percent. These losses are net of new start-ups. Not all the losses are due to offshoring. Some are the result of business failures" (p. 100).

In other words, to put it in the most simple and clear terms, millions of Americans lost their middle class jobs not because China played unfairly, but because American corporations betrayed the American people and exported their jobs. "Making America great again" means dealing with these corporations, not with China. When Trump learns this, assuming anyone will tell him, will he back off China and take on the American global corporations?

The loss of middle class jobs has had a dire effect on the hopes and expectations of Americans, on the American economy, on the finances of cities and states and, thereby, on their ability to meet pension obligations and provide public services, and on the tax base for Social Security and Medicare, thus threatening these important elements of the American consensus. In short, the greedy corporate elite have benefitted themselves at enormous cost to the American people and to the economic and social stability of the United States.

The job loss from offshoring also has had a huge and dire impact on Federal Reserve policy.

With the decline in income growth, the US economy stalled. The Federal Reserve under Alan Greenspan substituted an expansion in consumer credit for the missing growth in consumer income in order to maintain aggregate consumer demand. Instead of wage increases, Greenspan relied on an increase in consumer debt to fuel the economy.

The credit expansion and consequent rise in real estate prices, together with the deregulation of the banking system, especially the repeal of the Glass-Steagall Act, produced the real estate bubble and the fraud and mortgage-backed derivatives that gave us the 2007-08 financial crash.

The Federal Reserve responded to the crash not by bailing out consumer debt but by bailing out the debt of its only constituency -- the big banks. The Federal Reserve let little banks fail and be bought up by the big ones, thus further increasing financial concentration. The multi-trillion dollar increase in the Federal Reserve's balance sheet was entirely for the benefit of a handful of large banks. Never before in history had an agency of the US government acted so decisively in behalf only of the ownership class.

The way the Federal Reserve saved the irresponsible large banks, which should have failed and have been broken up, was to raise the prices of troubled assets on the banks' books by lowering interest rates. To be clear, interest rates and bond prices move in opposite directions. When interest rates are lowered by the Federal Reserve, which it achieves by purchasing debt instruments, the prices of bonds rise. As the various debt risks move together, lower interest rates raise the prices of all debt instruments, even troubled ones. Raising the prices of debt instruments produced solvent balance sheets for the big banks.

To achieve its aim, the Federal Reserve had to lower the interest rates to zero, which even the low reported inflation reduced to negative interest rates. These low rates had disastrous consequences. On the one hand low interest rates caused all sorts of speculations. On the other low interest rates deprived retirees of interest income on their retirement savings, forcing them to draw down capital, thus reducing accumulated wealth among the 90 percent. The under-reported inflation rate also denied retirees Social Security cost-of-living adjustments, forcing them to spend retirement capital.

The low interest rates also encouraged corporate boards to borrow money in order to buy back the corporation's stock, thus raising its price and, thereby, the bonuses and stock options of executives and board members and the capital gains of shareholders. In other words, corporations indebted themselves for the short-term benefit of executives and owners. Companies that refused to participate in this scam were threatened by Wall Street with takeovers.

Consequently today the combination of offshoring and Federal Reserve policy has left us a situation in which every aspect of the economy is indebted - consumers, government at all levels, and businesses. A recent Federal Reserve study concluded that Americans are so indebted and so poor that 41 percent of the American population cannot raise $400 without borrowing from family and friends or selling personal possessions.

A country whose population is this indebted has no consumer market. Without a consumer market there is no economic growth, other than the false orchestrated figures produced by the US government by under counting the inflation rate and the unemployment rate.

Without economic growth, consumers, businesses, state, local, and federal governments cannot service their debts and meet their obligations.

The Federal Reserve has learned that it can keep afloat the Ponzi scheme that is the US economy by printing money with which to support financial asset prices. The alleged rises in interest rates by the Federal Reserve are not real interest rates rises. Even the under-reported inflation rate is higher than the interest rate increases, with the result that the real interest rate falls.

It is no secret that the Federal Reserve controls the price of bonds by openly buying and selling US Treasuries. Since 1987 the Federal Reserve can also support the price of US equities. If the stock market tries to sell off, before much damage can be done the Federal Reserve steps in and purchases S&P futures, thus driving up stock prices. In recent years, when corrections begin they are quickly interrupted and the fall is arrested.

As a member of the Plunge Protection Team known officially as the Working Group on Financial Markets, the Federal Reserve has an open mandate to prevent another 1987 "Black Monday." In my opinion, the Federal Reserve would interpret this mandate as authority to directly intervene.

However, just as the Fed can use the big banks as agents for its control over the price of gold, it can use the Wall Street banks dark pools to manipulate the equity markets. In this way the manipulation can be disguised as banks making trades for clients. The Plunge Protection Team consists of the Federal Reserve, the Treasury, the SEC, and the Commodity Futures Trading Corporation. As Washington's international power comes from the US dollar as world reserve currency, protecting the value of the dollar is essential to American power. Foreign inflows into US equities are part of the dollar's strength. Thus, the Plunge Protection Team seeks to prevent a market crash that would cause flight from US dollar assets.

Normally so much money creation by the Federal Reserve, especially in conjunction with such a high debt level of the US government and also state and local governments, consumers, and businesses, would cause a falling US dollar exchange rate. Why hasn't this happened? For three reasons.

One is that the central banks of the other three reserve currencies -- the Japanese central bank, the European central bank, and the Bank of England -- also print money. Their Quantitative Easing, which still continues, offsets the dollars created by the Federal Reserve and keeps the US dollar from depreciating.

A second reason is that when suspicion of the dollar's worth sends up the gold price, the Federal Reserve or its bullion banks short gold futures with naked contracts. This drives down the gold price. There are numerous columns on my website by myself and Dave Kranzler proving this to be the case. There is no doubt about it.

The third reason is that money managers, individuals, pension funds, everyone and all the rest had rather make money than not. Therefore, they go along with the Ponzi scheme. The people who did not benefit from the Ponzi scheme of the past decade are those who understood it was a Ponzi scheme but did not realize the corruption that has beset the Federal Reserve and the central bank's ability and willingness to continue to feed the Ponzi scheme.

As I have explained previously, the Ponzi scheme falls apart when it becomes impossible to continue to support the dollar as burdened as the dollar is by debt levels and abundance of dollars that could be dumped on the exchange markets.

This is why Washington is determined to retain its hegemony. It is Washington's hegemony over Japan, Europe, and the UK that protects the American Ponzi scheme. The moment one of these central banks ceases to support the dollar, the others would follow, and the Ponzi scheme would unravel. If the prices of US debt and stocks were reduced to their real values, the United States would no longer have a place in the ranks of world powers.

The implication is that war, and not economic reform, is America's most likely future.

In a subsequent column I hope to explain why neither US political party has the awareness and capability to deal with real problems.


Baron von Bud -> TheEndIsNear Wed, 06/27/2018 - 19:34 Permalink

Roberts is totally correct that Trump's trade war is with US corporations and their offshoring. I think Trump knows this and that's why he's cutting regulations and red tape at home. We've gone too far left on regs. As for labor costs, most factories are highly automated here but labor cost includes disability, pensions, 'diversity' harassment lawsuits, etc. This overhead doesn't exist in China or Vietnam where my LL Bean t-shirts are made.

Trump's war is with the a corporate ideology that says profit is primary to nationality or normal morality. He gave the biggest corporations a huge tax cut. Now they need to play ball with America's workers.

They need to acknowledge that we're all Americans and our legal system, which protects their solvency, will not survive if today's angry politics continues for two more years.

The S&P500 needs to think about their future and getting Bernie or worse in 2020. There's all these trade tirades going on - good time to give Trump a win and then another to let him feel some support. Then let the wise men of government policy step in for a sit-down and determine the best policy for America's survival. Is it either becoming fascist or a pleading for a negotiated bankruptcy with all the geopolitical implications? It can't be either extreme so plan and do it. Otherwise, Mr. Roberts will be remembered as a sage.

TheEndIsNear -> FreeMoney Wed, 06/27/2018 - 18:14 Permalink

"To continue allowing these products into our country will ultimately bring their standard of living here also."

This is the most incisive comment I've seen on ZH in quite awhile. It's like a balance beam scale that swings back and forth as weight is added to or subtracted from one side or the other. Ultimately, the scale will balance out as everyone attains the same standard of living . Our government and economy has been surviving on borrowed money (ie; paper fiat currency) since at least 1971, and now even common people are living on borrowed paper fiat currency. Most of the common people in China that I have known live in small rented apartments and mostly eat the cheapest foods they can find; ie, rice, vegetables, tofu, pumpkin, etc. At least the downward trajectory of our economy will cure the obesity epidemic, but many will likely starve. The big question is when? We are on the downward slope already, but how steep it will be is a question no one seems to be able to answer.

Gatto -> Cryptopithicus Homme Wed, 06/27/2018 - 17:58 Permalink

"when I was writing The Failure of Laissez Faire Capitalism , I concluded on the evidence that half of US imports from China consist of the offshored production of US corporations"

Escaping government taxes and regulations has NOTHING to do with Laissez Faire Capitalism, it's not even capitalism at that point!

el buitre -> GoldmanSax Wed, 06/27/2018 - 19:23 Permalink

Most of the people on this site already know what Roberts just summarized. Other than referring to the Fed as a government agency rather than a private corporation, he was mainly correct in what he wrote. Most of the American sheeple do not. They do know that they were sold out, but they don't know the details; how, why, by whom. It's common knowledge that the people's gold was stolen by the Bush and Clinton crime families along with Robert Rubin. There is a persistent rumor out that Trump is in the process of successfully recovering it. If China and Russia force the world back on a real gold standard and Trump's recovery is unsuccessful, the USA will be swimming naked when the tide goes out.

As to how long can the Fed keep their Ponzi going. The answer would be a lot longer if they still controlled the planet. But they no longer do and their bluff is being called right now by Putin, Xi and others. As Göring wrote at his Nuremberg trial, "Truth is the enemy of the State."

Ron_Mexico -> rejected Wed, 06/27/2018 - 17:27 Permalink

Roberts should be the one explaining. He makes sweeping assertions like: " With the decline in income growth, the US economy stalled." When exactly? What year are you talking about? And he seemingly leaves out demographics completely in his analysis. He's just looking at everything through the lens of central banking, and when all you have is a hammer, everything tends to look like a nail. I'm thinking that, like Rudy Giuliani, he lost his fastball a while back and maybe should just stick to writing about 1987.

Giant Meteor -> Ron_Mexico Wed, 06/27/2018 - 17:31 Permalink

"When exactly?"

Roughly 1973 .. although could walk this train wreck back a bit further ..

Rubicon727 -> rejected Wed, 06/27/2018 - 18:05 Permalink

Thank you, PCR, for returning to your expertise!

Finally, we have an economist who reveals the ugly truth behind what the criminal corporate class has done and is doing to America. See also Dr. Michael Hudson and his work.

As for Trump, I suspect he understands what's really going on, but a lot of his pals are billionaires involved in this corruption. Obviously, he can't name names otherwise, the 1% elite would eliminate his administration.

It may be that Trump is using the only "out" left in causing these tariff wars. If you read other online reports in China, Russia, a seldom few from the EU, you see enormous amounts of trade between China, Russia, Iran, Germany, and other Asian nations. This American senses we are being left in the dust by all this vitality.

It's recognized many multi-millionaire/billionaires in both the US & other parts of the world are making lots of money from the system.

However, I'm beginning to sense that ALL these US elites recognize the US financial system is deteriorating and there's no way to turn back.

It happens to every "empire" throughout history, but, other than about 10% of population who are informed, the real tragedy is about 80% of the American public who haven't a clue.

Giant Meteor -> GoldmanSax Wed, 06/27/2018 - 17:21 Permalink

"With the decline in income growth, the US economy stalled. The Federal Reserve under Alan Greenspan substituted an expansion in consumer credit for the missing growth in consumer income in order to maintain aggregate consumer demand. Instead of wage increases, Greenspan relied on an increase in consumer debt to fuel the economy."

"The credit expansion and consequent rise in real estate prices, together with the deregulation of the banking system, especially the repeal of the Glass-Steagall Act, produced the real estate bubble and the fraud and mortgage-backed derivatives that gave us the 2007-08 financial crash."

"The Federal Reserve responded to the crash not by bailing out consumer debt but by bailing out the debt of its only constituency -- the big banks."

Wash, rinse, repeat ...

GoldmanSax -> Giant Meteor Wed, 06/27/2018 - 17:33 Permalink

Yes, It is wash, rinse, repeat but Glass Steagal is irrelevant. The criminaliy is the actual issue. Rules and regs are meaningless when the bankers are also in charge of the regulation. Another layer is the multinational corporations / banks that operate in between nations. What may be illegal in one jurisdiction is protected in another. Without a will to enforce, the crime is unstoppable.

Giant Meteor -> GoldmanSax Wed, 06/27/2018 - 17:37 Permalink

God damn. Looks like I was wrong about ya ..

Good comment ..

The bankers did the end run round Glass Steagal long before Clinton and his banking pals killed it officially. Killing it was simply the formality, making things all legal like.

Criminality is indeed the issue ..

We need a better class of criminals ..

Son of Captain Nemo Wed, 06/27/2018 - 17:25 Permalink

"De-nial" ( https://www.zerohedge.com/news/2018-06-26/ford-bets-billions-detroit-co ) ain't just a river in Michigan!...

To PCR's point...

I had to laugh when I read it given all the irreversible mistakes that have been made for decades in that city given how vital it once was to the U.S. economy. But it makes you want to cry given the delusion on display of it's leadership that could have made Ford embarrass itself like this with that announcement so late in our "game"!

deepelemblues Wed, 06/27/2018 - 17:26 Permalink

PCR of course does not explain how a nation of 320 million people with bountiful natural resources and extensive industrial, services, and education infrastructure would *not* be a world power, save for the fact that he really really wishes America wasn't.

Typical nonsense assertions from PCR.

Iskiab -> moman Wed, 06/27/2018 - 20:31 Permalink

I bet what happened was these same multinationals stoked the fire about China because they were concerned about the China 2030 plan. They wanted China for production and a market, not for competition. They poured lots of money into lobbying.

When Trump was elected instead of acting how they predicted he's off script now and could hurt them. The nuisance of being a democracy.

LawsofPhysics -> 1 Alabama Wed, 06/27/2018 - 18:11 Permalink

Barter. Happens all the time. There is NO alternative so long as we are going to continue to believe in fantasy. Specifically, the fantasy that economies can grow exponentially and forever in a biosphere with finite resources. The only solution is a monetary system that remains attached to reality, period. Keeping in mind that no system will ever be perfect, but a system that insures bad behavior and bad management suffer real consequences would be a good start! Remind me, how many bankers/financiers went to prison for those MBS that almost destroyed the world?

Let it Go Wed, 06/27/2018 - 19:12 Permalink

A great deal of the BS is being hidden away in an explosion of large Public-Private Partnerships projects. Over the years we have been hearing a lot of good things about "Public-Private Partnerships" and how they can propel forward needed projects by adding an incentive for the private sector to undertake projects they might choose not to do alone. Often this is because the numbers often simply don't work. The truth is that history is littered with these failed projects.

Often their announcements are accompanied by promises and hype but sadly the synergy these projects are intended to create never occurs. These so-called, "bridges to nowhere" and boondoggles tend to be forgotten and brushed aside each time public servants and their cronies get together. The article below delves into this tool often used to line the pockets of those with influence.

http://Public-Private Partnerships Tend To Create Boondoggles.html

exartizo Wed, 06/27/2018 - 20:38 Permalink

Very nice Mr. Roberts,

You've well penned an Excellent Summation Piece of not so well known behind the scenes economic conditions and factors.

As I've said many times:

UNFORESEEN WAR IS THE ONLY THING THAT DISRUPTS THE AMERICAN PONZI KNOWN AS THE COLLUSIVE BIG BANKSTERS AKA THE FEDERAL RESERVE.

There is one point, however, where you are mistaken:

"The way the Federal Reserve saved the irresponsible large banks, which should have failed and have been broken up, was to raise the prices of troubled assets on the banks' books by lowering interest rates"

Wrong.

Instead, this was accomplished by the Banksters paying off the American Congress to suspend the accounting rule called "mark to market". It was very simple. The banks went to the government and said:

"you can print $2 trillion to bail us out, OR you can suspend mark to market and we can show that we have NO losses on our books."

The FASB under pressure from Congress chose the prudent (at that time) but dishonest approach and allowed the banks to suspend the mark to market accounting rule, which is a basic rule of financial accounting. The sacrifice was in banking transparency, which of course, is an oxymoron in 2018.

But that action essentially robbed an entire group of market speculators in risky securities like FAZ (a 3x inverse ETF play on the banks, essentially shorting the big banks) who bet that the US Government would not break the law and suspend mark to market for the banks.

They were wrong and a lot of those honest speculators lost a lot of money very quickly.

It was an "Aha!" Epiphanous moment on Thursday, April 2, 2009 for many American equities speculators as they quickly realized that the American government was indeed provably in the pocket of the Banksters Cartel and likely had been for a very long time.

Reference:

https://www.independent.co.uk/news/business/news/us-suspends-mark-to-ma

hotrod Wed, 06/27/2018 - 20:45 Permalink

Interest rates way up or the dollar is toast if not for the Euro and Yen. I have always felt the Euro was established as a shield for the USD and not so much some European union of countries. The union of those countries will always be difficult but controlling the currency of all those countries is very important to the USA. Imagine all the dollar sellers today if the Euro was not established.

Give me control of a nation's money and I care not who makes it's laws" Roth

[Jun 27, 2018] Globalists are plum tired of American middle class population, and their main purpose in the world is over

Jun 27, 2018 | www.unz.com

edNels


- more trade with Russia, and the railway connections with China, threaten to turn the USA into an economic backwater
This is only a surmise I guess but Globalists are plum tired of American middle class population, and their main purpose in the world is over, and the horses of manufacturing and technology ''have got out of the barn'' and successfully transplanted to... greener pastures so that, it's time to make fallow and put the stops to the further exploitation of North American resources that are too much used up by the damned American population on their gaddamed consumer needs, and time to put that back in store for a future where there won't be so many hungry overfed mouths to worry about, so that is the possible purpose to isolate and crush America at this time.

An induced torpor of complacency will make it seem impossible until the last moment, then it's too late. (''Have you noticed the exsorbitance high cost of... Latties lately?.puffpuff... // Hey! they ain't nuthin' on da shelves in da supermarket!!'')

Mean while there's time for the development of Russia and China to have their time in the sun , for a while, then they get the axe later, and so it goes.

Well, I didn't want to say it but, part of the plan will be a pretty big reduction in pops which isn't all bad... depends on how the cookie crumbles, (who's ox gets gored.) (Good for biosphere mainly.)

But if your "In the Club'' and a member in standing which is a only a few you get a ticket to ride.

The creeps are running America down every way, bread and circuses for a while then Austerity for real.

Beckow ,

June 6, 2018 at 5:18 pm GMT

Globalists are plum tired of American middle class population, and their main purpose in the world is over

Bull's eye. That is an under-appreciated dynamic driving everything from economic policies to the hatred of Trump and populists in general. The narcissistic Western elites cannot stand their own people. One sees it in the culture, academia, economic policies, and the insane attempt to dilute native population and replace them with new migrants. (It is amusing that sophisticated Westerners often boringly allude to the evil 'commies' who 'wanted to elect new people', and of course never did, but they are unwilling to see it happening at home.)

The purpose for creating the Western middle class after WWII was to prevent a revolution. That is no longer a threat, so why coddle the deplorables?

[Jun 27, 2018] An induced torpor of complacency will make it seem impossible for neoliberal globalists to accesp the new reality until the last moment, then it's too late

Jun 27, 2018 | www.unz.com

edNels , June 5, 2018 at 8:10 pm GMT

@jilles dykstra

- more trade with Russia, and the railway connections with China, threaten to turn the USA into an economic backwater

This is only a surmise I guess but Globalists are plum tired of American middle class population, and their main purpose in the world is over, and the horses of manufacturing and technology "have got out of the barn" and successfully transplanted to greener pastures so that, it's time to make fallow and put the stops to the further exploitation of North American resources that are too much used up by the damned American population on their gaddamed consumer needs, and time to put that back in store for a future where there won't be so many hungry overfed mouths to worry about, so that is the possible purpose to isolate and crush America at this time.

An induced torpor of complacency will make it seem impossible until the last moment, then it's too late. ("Have you noticed the exsorbitance high cost of Latties lately?.puffpuff // Hey! they ain't nuthin' on da shelves in da supermarket!!")

Mean while there's time for the development of Russia and China to have their time in the sun , for a while, then they get the axe later, and so it goes.

Well, I didn't want to say it but, part of the plan will be a pretty big reduction in pops which isn't all bad depends on how the cookie crumbles, (who's ox gets gored.) (Good for biosphere mainly.)

But if your "In the Club" and a member in standing which is a only a few you get a ticket to ride.

The creeps are running America down every way, bread and circuses for a while then Austerity for real.

[Jun 26, 2018] Italy bans freemasons from cabinet minister positions

Jun 26, 2018 | www.unz.com

Anon [416] Disclaimer , June 25, 2018 at 10:00 pm GMT

@utu

OT, but learnt about this:

http://www.investmentwatchblog.com/italy-bans-freemasons-from-cabinet-minister-positions/

Much better articles in italian or spanish. They basically say that's because of 'recent' events of P2 sect fraud in 1981. More sensible to think they don't want globalist with hidden loyalties infiltrating a new inexperienced government, but I don't follow italian developments closely. Any thoughts?

On the bright side, "the axis of the willing" against immigration seems to include this new Italy. https://global.handelsblatt.com/politics/axis-merkel-csu-cdu-seehofer-kurz-salvini-asylum-934938
( A geographically Hasburgian axis, almost) Globalist vs nationalist. Now those are identity groups one can identify with.

[Jun 21, 2018] Russia to impose countermeasures to Trump s metals tariffs

Jun 21, 2018 | theduran.com

Russia to impose countermeasures to Trump's metals tariffs Meanwhile, Trump thinks he's bolstering America's national security

by Frank Sellers June 20, 2018, 11:45 645 Views

[Jun 21, 2018] Some Notes on Trump s Trade War Threat by Yves Smith

Trump's "national neoliberalism" has some interesting side effects...
Notable quotes:
"... All it takes is for confidence to falter, and the whole house of cards comes tumbling down ..."
"... I have felt for a long time that our consumption based economy is a way to keep people so self absorbed that they don't ask too many questions . ..."
"... As tempting as it is to attribute this to personality failings, I don't believe that Mr. Trump's China tantrum is geopolitical one-upmanship. It is more likely a reaction to the annual Industrial Capabilities Report released on May 17 by the Pentagon's Office of Manufacturing and Industrial Base Policy, in parallel to a similar review being conducted internally by the White House. ..."
"... The Pentagon has concluded that two decades of financially-engineered corporate concentration and out-sourcing of skilled work to China has stripped the U.S. Military-Industrial Complex of its "organic industrial base." It appears evident that the White House has decided that tariff barriers on China are the only way to rebuild a population of of "qualified workers to meet current demands as well as needing to integrate a younger workforce with the 'right skills, aptitude, experience, and interest to step into the jobs vacated by senior-level engineers and skilled technicians' as they exit the workforce." ..."
"... I find myself confused and in a quandary. Is it not neoliberalism and global trade that over the past 25 years or so has led to corporate mega-wealth and the beginning of the end of the US middle class, and the further impoverishment of the working class? If so, then as a good progressive, should I not welcome a trade war or whatever economic change will end this global economic tyranny? Is the skepticism or outright opposition to a trade war of so many progressives simply based on the fact taht t's being initiated by the colossal idiot in the White House who may inadvertently be doing something beneficial? ..."
Jun 21, 2018 | www.nakedcapitalism.com

The trade war-mongers are in the driver's seat . From the Wall Street Journal :

The White House's tough stance represents the ascendancy, for now, of trade hawks in the administration, particularly White House senior trade adviser Peter Navarro and U.S. trade representative Robert Lighthizer

"It's clear that China has much more to lose" than the U.S. from a trade fight, said Mr. Navarro.

Mr. Lighthizer said additional tariffs wouldn't be imposed until the U.S. picked the products, and received industry comment, a process that will take months and leaves open the possibility of additional negotiations. But so far there is no indication that such talks are on the horizon, and the Trump administration is signaling that it is increasingly confident of achieving goals through a dramatically more confrontational approach to China

Next up from the administration is a plan to halt Chinese investment in U.S. technology, due to be released by the Treasury Department by June 30 .

Mr. Trump has backed away from threats before .In April, Mr. Trump threatened a dramatic increase in tariffs on Chinese goods, but didn't follow through. Instead, he approved negotiations Mr. Mnuchin led to get China to buy more U.S. goods and make changes to its tariffs and other trade barriers. That led to a temporary reprieve in the tensions as the two sides sought to negotiate a truce.

The White House has since judged those efforts a failure, especially after Mr. Mnuchin and Mr. Trump were criticized by cable TV hosts and some lawmakers of being weak on China. During a June trade mission to China by Commerce Secretary Wilbur Ross, Beijing offered to buy nearly $70 billion in U.S. farm, manufacturing and energy products if the Trump administration abandoned tariff threats. Mr. Trump rejected that offer as another empty promise.

Trump's negotiating strategy, if you can call it that, appears unlikely to work with China . If one were to try to ascribe logic to Trump picking and then escalating a fight with China, it is presumably in the end to bring them to the negotiating table. But China is not North Korea, where the US threatened the Hermit Kingdom with nuclear devastation and Kim Jong Un with being the next Gaddafi and then dialed the bluster way down as China pushed and South Korea pulled North Korea to the negotiating table. And the good luck of the Olympics being in South Korea facilitated the process.

One could argue that all of the theatrics was to enable Trump to talk with Kim Jong Un and not look like a wus.

With China, Trump's escalation to threatening another $200 billion of Chinese goods after his initial $50 billion shot is a reaction to China going into tit for tat mode as opposed to negotiating. This should not be a surprise. The more detailed press reports were making clear that China was initially not engaging with the US (as in making clear that they weren't receptive to US demands and accordingly weren't deploying meaningful resources to talks).

Even if China incurs meaningful economic costs in hitting back at the US, politically it's a no brainer. China's sense of itself as the power that will displace the US means it's unacceptable to be bullied. China has been bizarrely sensitive to slights, for instance, lashing out during the 2007 IPCC negotiations and getting testy when the US put countervailing duties on a mere $224 million of goods . Recall that when the US put sanctions on Russia, its strategists seemed to genuinely believe that Russians would rise up and turf Putin out. Instead, his popularity ratings rose and even the Moscow intelligentsia rallied to support him.

Oh, and while we are speaking about North Korea, Kim Jong Un is in Beijing . It's not hard to get the message: there's no reason for China to play nicely in the face of US trade brinksmanship.

Trump appears to be relying on the idea that since the US imports more than China exports, we can do more damage to them in a tariff game of chicken . On the one hand, as Marshall Auerback has pointed out, in trade wars, the creditor nation, which would be China, typically fares worse than the debtor nation. However, China can do a lot a damage to US companies in China. The US has long had a policy of promoting the interests of US multinationals based on the claim that deeper trade relations would reduce the odds of war and make countries more disposed towards democracy. And when "free trade" ideology got a life of its own, economists and pundits regularly treated the idea of trying to protect domestic jobs as retrograde, even when many of our trade partners negotiated their deals with that consideration in mind.

As Bloomberg points out :

American businesses from Apple Inc. and Walmart Inc. to Boeing Co. and General Motors Co. all operate in China and are keen to expand. That hands Xi room to impose penalties such as customs delays, tax audits and increased regulatory scrutiny if Trump delivers on his threat of bigger duties on Chinese trade. U.S. shares slumped Tuesday as part of a broad sell-off in global markets in response to Trump's threat.

The total amount of U.S. goods exports to China only amounted to $130 billion last year, meaning Trump's potential tariffs on $250 billion or more of Chinese imports can't be matched, at least directly. But if you measure both exports and sales of U.S. companies inside China, the U.S. has a surplus of $20 billion with China, according to Deutsche Bank AG .

One advantage of this tactic for Xi is that this time the numbers are on his side, as U.S. investment in China is far larger than the reverse. American companies had $627 billion in assets and $482 billion in sales in China in 2015, compared to just $167 billion in U.S. assets and $26 billion in U.S. sales for Chinese companies .

A change in trade priorities to focus on domestic employment isn't nuts . It's hard to know what Trump is trying to achieve as he calls for China to reduce its trade deficit by $200 billion. Given that the Administration said it will focus on the sectors depicted as priorities in China's "Made-in-China 2025" plans in next round to tariff targets, China has good reason to think Trump's real aim is to check its rise as a superpower.

Even though Trump is giving trade negotiations a bad name, there's every reason to give domestic employment higher priority in trade negotiation. The reason Trump is so fond of tariffs is that they are a weapon he can deploy quickly and unilaterally, while negotiations and WTO cases take time. And even though the pundit class likes to decry manufacturing as oh-so-20th century, Ford's Rouge plant employed more people than Apple does in the entire US. Restoring infrastructure would create a lot of employment, as would increasing domestic manufacturing.

But the US has eliminated the supervisor and middle managers that once ran operations like these. If we were to seek to build some areas of manufacturing, the US would have to engage in industrial policy, which is something we do now, but only by default, with the defense industry, financial services, health care, housing, and higher education among the favored sectors. So given our political constraints, it's hard to see how we get there from here.

Mr. Market is anxious . Anxious is well short of panicked. Chinese stocks took the worst hit, but the latest round of threats took 4% off the Shanghai composite, taking it back to its level of 20 months ago. Chinese indexes were mixed today . By contrast, the Dow was down 1.15% and the S&P 500, 0.4%.

Having said that, the Fed is in a tightening cycle and stock valuations already looked pretty attenuated. Trade tensions and the uncertainty over how the threat to global supply chains will play out may lead investors to curb their enthusiasm, particularly if the Trump initiative starts looking less like another fit of pique and more like a change in the rules of the game that looks unlikely to work out well.


PlutoniumKun , June 20, 2018 at 3:57 am

I think the Chinese response depends on the great unknown of the Chinese Communist Parties long term strategy. One line of thought is that the 'Asian model' of trade surpluses is for them just the means to an end for China to reach 'high development' status, from which point they would seek a much more balanced internal economy. The other, sees Chinas trade surplus – in particular the deliberate over production of strategic products such as microprocessors and pharmaceuticals as an end itself – warfare by means of trade. Both aspects are variations on the Japanese Yoshida Doctrine , something the Chinese have studied in detail.

If the former, then its entirely possible that the Chinese see Trump's threat not as a challenge, but an opportunity to carry out the necessary deep structural changes to balance their economy. A populist trade war would be the cover the government needs to dramatically cut over-production and focus instead on ensuring China has all the strategic products it needs (the most crucial of course is food). The CCP's fear is always inflation in food prices – this is historically the trigger for urban unrest, as in the 1980's. But if they have a foreign scapegoat for that, they may see it as a risk worth taking. Urban riots where people attack CCP buildings terrifies the leadership. Urban riots where people burn Trump effigies, less so.

If the true strategy is the second, then Trumps attacks are an obvious threat. The Chinese are aware now of the growing awareness in the US of just how vulnerable the US has become to shortages of products which are now almost entirely Chinese made or controlled – many processed metals, pharmaceuticals, key electronic components, etc. If it is indeed Chinese strategy to use these for leverage at some future date, then they won't want to risk undermining this in a tit for tat war. In this situation, they will tread much more carefully and won't be worried about a minor loss of face if they stand down and give Trump the victory headlines he craves.

In a broader sense, Trump believes that the biggest stick always wins a war like this, and he and his advisor clearly believe the US has the biggest stick. But in military terms, the winner in a war is not the country who has the biggest army, but the country that can bring the biggest army to the right field of battle. The Chinese (along perhaps with the Europeans and Mexicans) may believe that if they fight smart and focus on specific battles – such as US farm goods or key US aerospace and consumer electronics companies – they can make Trump and the Republicans really hurt. They know the electoral cycle in the US, which gives them a big advantage. It will be interesting to see if Trump forces all sorts of new and unlikely alliances in opposition.

Loneprotester , June 20, 2018 at 6:58 am

Interesting analysis. Do you think Trump's aim could be to throw a spanner into their works, whatever the plan is, thereby buying more time to re-industrialize and wean US industries off of China? Also, it strikes me that Trump is consciously disciplining US-based businesses like Apple every bit as much as he is China.

Left in Wisconsin , June 20, 2018 at 1:35 pm

It would also require companies like Apple to show some interest in U.S. manufacturing, which is not the case at this time.

I'm all for whatever barriers are necessary to re-invigorate and modernize U.S. manufacturing. But it will be impossible to make progress if U.S. multi-nationals refuse to go along. Trump doesn't play the long game and there is really no evidence that he is willing to challenge/threaten U.S. firms in substantive ways. Remember the campaign threats against Ford? Since then, Ford has not upped its U.S. investment but instead chosen to get completely out of the small car business. And that is a company that still has an extensive U.S. manufacturing presence, unlike, say, Apple.

I think this is what the Chinese understand (maybe Trump does too and this is all just theater for 2020). They can play hardball with Trump as long as US MNC's are on the side of China against the U.S. In the last 6 months, have you heard a single large U.S. manufacturer voice support for Trump's trade policies? I haven't.

MyLessThanPrimeBeef , June 20, 2018 at 10:02 am

If the Chinese focus on key areas that can 'make Trump and the Republicans really hurt. They know the electoral cycle in the US ,' wouldn't that be outright election meddling?

Clive , June 20, 2018 at 4:16 am

There is the same logic, possibility, at work in Trump's thinking (and thinking may be too generous a term for it but we do I suppose have to assign some sort of plan being pushed through here) to that of the U.K.'s Brexit Ultras.

For the Ultras, reestablishing political and sovereignty independence is conflated and intertwined with economic independence which all -- through a mechanism which is never adequately explained -- will result in domestic economic revitalisation that doesn't require government direct intervention.

No, it doesn't stack up or make a great deal of sense, but having been around many hard-core Brexit'eers in the Brexit heartland (and the Conservative party's local association in a Brexit stronghold) the people who hold this worldview do make it work within the confines of their own minds. It goes something like: if you neutralise or at least weaken the power blocks which are winning out politically and you'll reap a reward economically. The fallacy assumes that you can give Johnny Foreigner a good kicking at the sovereignty and international power-broker level and because you're a geopolitical shaker and mover, that'll pay off in trade terms. All without consequences.

But of course there are always consequences. Other countries can decide to endure downsides (not least because the various ruling elites don't end up on the receiving end of these, usually) -- this was the same gamble the U.K. government made, unsuccessfully, with the EU ("we're in the unassailable position because we import from them more than we export"). And so also with China. If Beijing is prepared to play a long game, it can tough it out with the US, potentially longer than the US is prepared to tolerate.

This has always been the case with the US (and the U.K. too, for that matter) -- they never expect anyone else to tolerate any downside which is imposed. They're astonished when Cuba, the DPRK, Iran, Russia, China and even to a lesser extent the EU don't simply fall into line when they click their fingers.

John B , June 20, 2018 at 4:57 am

There are different power centers operating in the Trump administration's trade policy. Trump himself may be motivated by no more than a desire to appear tough -- and as Yves notes, tariffs are one of the few ways a US president can act swiftly and unilaterally to do so.

His advisers are another matter. They would like to pressure China to have more open and fair policies, but are OK with the consequences if China refuses -- i.e., an extremely large decrease in US trade volumes with China, and, indeed, the entire world. They have probably performed a calculation similar to the one outlined by Paul Krugman in his June 17 column on trade wars . Basically, a global trade war would not have a giant impact on global GDP -- perhaps 2-3 percent assuming tariffs on everything in the neighborhood of 30 percent. There would be displacement of jobs and workers while everyone readjusted, but that's a price the Trump administration would probably be willing to pay. And, what Krugman does not mention, the United States as a very large economy would in fact do less badly in a trade war than most others countries. By losing less, it would "win" in the zero-sum universe Trump seems to inhabit.

That's a difference between Trumpers and Brexiters. Britain is an island that has always depended on trade. The US has two oceans around it, still the world's largest economy (more or less), adequate natural resources, and a whole hemisphere to pick on.

PlutoniumKun , June 20, 2018 at 7:17 am

I think you are right in suggesting that the calculation is that even an all out trade war would not be catastrophic, and the US would come out best.

I think the problem with this thinking is that it assumes symmetric actions by all the major parties, but in this sort of trade war it will be more targeted and asymmetric. By which I mean that the Chinese and Europeans in particular have immediately targetted more obvious, vulnerable US sectors. At first, these are just rather obvious ones, like Harley Davidson bikes or Levi Jeans, but its not hard to see that if it gets serious there might be co-operation to target what they see as Trumps heartlands. As I suggested above, a targeted attempt to hit key US food exports at the strategically right time could be devastating for US farmers, and domestically China and other countries may accept the 'hit' domestically as they have a convenient scapegoat.

I should say though that whatever the outcome, the uncertainty created by Trumps action is likely to make all investors much more wary of businesses which depend on widespread global supply chain networks, which can only be a good thing for people trying to keep jobs local and to reduce emissions. Its unfortunate that when these come about through trade wars the impacts (as usual) will hit ordinary people first, at least in the initial stage

Clive , June 20, 2018 at 7:50 am

I do agree that the zenith of long, complex and ultimately not especially resilient global supply chains has passed. For at least 20, possibly 30 years these have received and been able to rely on unstinting political aircover and hidden subsidies.

Not any more. There's some minor tremors already being felt with the distinct possibility of some bigger systemic shocks in store.

el_tel , June 20, 2018 at 8:24 am

I do agree that the zenith of long, complex and ultimately not especially resilient global supply chains has passed.

Indeed – anecdotally and slightly tangentially – the days of outsourcing call-centres etc are numbered. Whilst many knowledgable people have shown that the cost savings have not turned out to be anything like as large as the corporations predicted, consumer hatred cannot be understated. I have gone through several weeks of arguing with Three over their service, being bounced around various call-centres offshore. Finally, an email to the CEO, pointing out (in a measured way) how my business calls and those of other businesses who use them will very quickly be affected, it was amazing how quickly things progressed, with my complaint being escalated to the CEO executive group. I phrased it in terms of the fact their business model now actively encouraged (and in many cases only supported) people to use phones known to be vulnerable to hackers and companies are really not going to like that, even if they're cheap. Furthermore Three are immensely vulnerable come the next 5G spectrum auction (they are significantly in trouble spectrum-wise) and I was about to be escalated to the Ombudsman, and told the CEO I'd be highlighting their security vulnerabilities – something they really don't want, even though they'd done it to save a bob or two in outsourcing.

Things were sorted ASAP; it was obvious that a UK programmer redid the whole Three app and web interface over a weekend (I used to program in Fortran in my PhD and diagnosed their problem straightaway). Three used to be innovative in carving out a niche segment regarding its roaming plans – but has not kept innovating, and EU laws on roaming now mean its advantage is largely gone whilst Vodafone staff in stores gleefully tell customers that you'll talk to a British call-centre – they have calculated that the price premium is worth it, if people don't have to go through what I did, particularly high-value customers.

The days of long supply chains are numbered, most definitely. Systemic breakdowns would simply kill a company that operated as they did. Now rapid changes seem to be in motion to make supply chains more robust and acceptable .

PlutoniumKun , June 20, 2018 at 9:29 am

I hope its true – the fascinating shipping stats that Lambert posts in WaterCooler most days shows that transport is still a huge and growing business, and seems to have recovered from the changes made 5 years ago when the oil price peak made a lot of companies think twice about long supply chains. But there do seem to be a converging set of factors which must surely make companies think twice. If you combine energy price risks, political risks, increasing tarrifs, consumer resistence, etc., there are more and more incentives for companies to tighten and simplify supply chains. But I think it will be quite a while before we see the impacts (and I'd never underestimate the power of inertia behind globilisation either).

Its often forgotten of course – mostly by economists who never study history – that we've been here before, most notably in the late 19th Century when the trade was highly globilised, thanks to the major empires. That unravelled with startling speed.

el_tel , June 20, 2018 at 11:14 am

Indeed, I see his statistics and agree regarding interia. But, as you say, economists are rubbish at history – and coupled with their fascination with models that are ergodic (when the climate models suggest we are entering new territory with complete "breaks" in the relationships and possible sudden shifts to new equilibria with associated huge, fast, cyclical changes) I can't help but wonder if the supply chain models simply must collapse if the climate scientists are right and the economists are wrong. But only time will tell .

Jim Haygood , June 20, 2018 at 9:11 am

Speaking of 'bigger systemic shocks,' Doug Kass puts a finer point on it [lifted from the Z site this morning]:

[Trump's] policy and negotiating tactics hold the risk that business confidence could be jeopardized and supply chains may be disrupted.

I have long argued that the "Orange Swan" would ultimately be market unfriendly – that an untethered Trump would "Make Uncertainty and Volatility (in the markets) Great Again." (#MUVGA)

And, I have recently argued over the last few months that the president's behavior is now beginning to impact the capital markets.

Acting upon his impulses, growing more isolated and becoming more unhinged -- the Supreme Tweeter is now an Orange Swan headwind.

" Rex, eat your salad " – President Trump

What numerical analyses such as Kurgman's miss is confidence. Popular mood has propelled Bubble III to stratospheric heights, with equities and property dear worldwide.

All it takes is for confidence to falter, and the whole house of cards comes tumbling down with a crash far out of proportion to the minor changes in economic stats that will be visible at the time. ' No one could have foreseen ' etc

Bubbles, and their aftermaths, are self-reinforcing both on the way up and the way down. A manly square jaw and a glorious orange helmet will take you only so far when you haven't a clue what you're doing. :-(

MyLessThanPrimeBeef , June 20, 2018 at 9:58 am

Since Kass mentioned 'negotiating tactics,' presumably many now also are aware that factor.

Judging by how the bubble is holding up, can we say that, so far, the key market players are receiving that message and remain (again, so far the Nasdaq dropped just a bit yesterday after the additional $200 billion tariffs news) confident on this front (but whose confidence can be shaken on other fronts for example, perhaps by others who worry openly and warn that the sky is, at this moment, falling).

False Solace , June 20, 2018 at 12:57 pm

Who needs confidence when the Fed has proved it will just step in and buy whatever's necessary to prop up the market. Loot on the way up, loot on the way down. Fearing volatility is for smallfolk.

Left in Wisconsin , June 20, 2018 at 1:42 pm

All it takes is for confidence to falter, and the whole house of cards comes tumbling down

But U.S. MNCs have had no confidence in U.S. manufacturing for decades. Which is why we need to never anger the bubble-driven "confidence fairy." On the fundamentals that affect most people, the house blew down long ago.

liam , June 20, 2018 at 10:01 am

What's amazing, is that right at the time when being part of a large trading block would seem to be an imperative and not just an advantage, Britain decides to leave the EU. Even the very timing is wrong.

Left in Wisconsin , June 20, 2018 at 1:46 pm

Much as I would like one, I am quite confident there will not be a global trade war. Trump has no long game and in any event no stomach for taking on the entire U.S. business class. There will negotiations, flip-flops, photo-ops, some marginal claimed "wins," no real change, and on to 2020.

Jim Haygood , June 20, 2018 at 8:42 am

'Basically, a global trade war would not have a giant impact on global GDP -- perhaps 2-3 percent assuming tariffs on everything in the neighborhood of 30 percent.'

Kurgman seems to assume that the radical adjustment to supply chains is nearly frictionless. But it's not. Vast capital investment will be needed, at a time when corporations are already highly leveraged by piling up debt to buy back shares.

A trade war is just the pin we need to pop Bubble III and send it crashing to earth like the Hindenburg -- oh the humanity!

It's a heavy price to pay, just to turf out Herbert Hoover Trump after one term and highlight Peter Rabbit Navarro as the PhD Econ know nothing who wrecked the global economy. Even the benighted Kurgman sees that Navarro is a total charlatan.

MyLessThanPrimeBeef , June 20, 2018 at 9:51 am

Is it the trade war (this week) or raising rates (last week) that will actually be the pin we need to pop Bubble III?

jsn , June 20, 2018 at 11:07 am

It has been interesting for the last few years watching the pigs cotillion that passes for a "western elite" pull pin after pin after pin on what have been assumed to be grenades thus far without any detonation.

Jim Haygood , June 20, 2018 at 11:50 am

Though we'll never know for sure, the Fed's bond dumping is a financial pin, while trade wars are a confidence smasher.

Once a stampede starts, it acquires a momentum of its own: you're obliged to run, not because you were scared, but because a thundering herd is coming at you.

PlutoniumKun , June 20, 2018 at 7:23 am

I'd agree very much with this, Clive. I would add that this sort of delusion seems largely restricted to major powers who haven't suffered a major loss (or at least not one that couldn't be quietly forgotten) in a century or so. Those of us who live in smaller countries always know that true absolute 'sovereignty' in the real world is a chimera. What matters is what areas you maintain control, and which ones you let go – and its always better to let some go than have them ripped from your hands. And those countries who have suffered humiliations in the recent past (Germany, France, China, Japan) have fewer delusions about the dangers of arrogance and powerplay, although the French in particular are prone to forget.

The Rev Kev , June 20, 2018 at 5:31 am

An overly dynamic situation is one thing so long as it does not end up in a 'kinetic' situation. I am going to go out on a limb here and say that Trump's threats against China are a gamble but will have to explain it a bit. For about two decades after the collapse of the USSR we lived in a unipolar world with the axis located in Washington DC. You had people like McCain, Rubio, Navarro, Lighthizer and Graham working through their careers in this 'golden age' but those times are now definitely over. The world is once more reverting to its normal state of a multipolar world and people like the aforementioned people cannot tolerate this.
To push back against this reversion, they have been trying on a wide front to use American military and economic power to make countries bend to their will. Threatening allies if they purchase Russian weapons, blackmailing the EU to abandon Iran in preparation for a cruel embargo, threatening Turkey by withholding sales of the F35 fighter, etc. have all been tried. For several reasons, this approach is not working so well anymore. So at this point, after wrestling some time with countries like Russia and Iran, the US has decided that they need to attack the center of gravity in this new multipolar world and that means China.
The US demanded that China reconfigure their entire economy to enable US corporations to have more power and say in China while demanding that China curtail their advancing their technological development program. China balked at this but did offer compromises to no effect. With the lunatic policy of pushing China and Russia together, a massive political and economic federation is slowly forming on the mass of lands from Vladivosok all the way through to Europe. If that happens, then the US definitely becomes a second rate power. The clock is ticking on this development hence the attempt to cower China which is the linchpin for this.
Trump has been convinced that the US holds the upper hand and decided on a gamble, a doubling down if you will, so that a decisive victory will be achieved on the cusp of the 2018 US midterm elections. The trouble with all this is that the US is hemorrhaging both soft and hard power and is in a weaker position now. There is more and more countries seeking to bypass use of the US dollar as being too dangerous to use for some countries and working with an American company and buying America products is also being seen as risky. An example is when the US forbid Airbus selling its own aircraft to Iran due to the presence of US parts. I am willing to bet that a lot of other companies sat up and took notice of this. So now for Trump he is going all in to try to overturn these developments but as we say in Australia, he has two chances – his and Buckleys

liam , June 20, 2018 at 7:22 am

They do seem to be caught in something of a chinese finger puzzle alright. Everything they do seems to make their opponents stronger in some fashion or another. As per PK above, I wonder if Trump is not, unwittingly, doing the Chinese a favour?

False Solace , June 20, 2018 at 1:07 pm

There's a reason historical trade routes followed the Silk Road, a reason horsemen swept out of the Mongolian plains to conquer the world time and again. The axis of human trade runs through Europe/Asia. It has never run through North America and never will. The US can't be the axis of the world because it quite simply isn't located in the right place along the right population vectors. This is a fact the US military is well aware of. If the US tries to maintain its position in the long run it will fail. That's just the way it is, and the sooner US stops propagandizing its own citizens to the contrary, the better.

Steve H , June 20, 2018 at 7:23 am

Gen. Qiao Liang: " One Belt, One Road "

Louis Fyne , June 20, 2018 at 8:02 am

to throw out an unconventional thought: if you're an environmentalist/anti-climate change, you should want a trade war. I guess per the media and Democratic pundits it's: Reduce, reuse, recycle–Unless your goals align with a Trump policy on a discrete issue. you should want to stop the government-subsidized 5/10,000-mile supply chain. Government-subsidized as in: favorable taxation for fuel oil, government subsidized port facilities/roads, lax emissions regulations, lax labor laws, etc.

el_tel , June 20, 2018 at 9:11 am

to throw out an unconventional thought: if you're an environmentalist/anti-climate change, you should want a trade war

That thought occurred to me too. Of course this is one of those situations in which the supply conditions support this but the demands of the population ? Nasty situation ..People are going to have to learn (maybe the hard way via the oft-quoted "war-like BREXIT economy on here") that lots of foodstuffs currently grown between the Tropics of Cancer and Capricorn are simply going to become unavailable. A 2-5 degree increase in average temperature in many of the countries there – particularly those with high humidity – means that unless they have a LOT of energy to air condition people for large parts of the day, then human life will be impossible – the body can't sweat enough to eliminate excess body heat if not cooled and death is inevitable. Nasty times ahead for lots of countries in the "middle" of the planet ..and besides the (obviously) huge human cost to them, the days of producing nice vegetables out of season for us at higher latitudes will soon be over.

cnchal , June 20, 2018 at 8:12 am

But the US has eliminated the supervisor and middle managers that once ran operations like these. If we were to seek to build some areas of manufacturing, the US would have to engage in industrial policy, which is something we do now, but only by default, with the defense industry, financial services , health care, housing, and higher education among the favored sectors. So given our political constraints, it's hard to see how we get there from here.

Perhaps, Trump is using the method of obliquity to get what is important to the powers that be, the fraudsters of Wall Street.

For instance, three nano seconds after the billionaire's tax cut was passed his top economic advisor, Gary Cohn resigned , and the reason given was his opposition to the direction trade policy was going, but really, who is dumb enough to believe that?

Quoting Trump:

"Gary has been my chief economic adviser and did a superb job in driving our agenda, helping to deliver historic tax cuts and reforms and unleashing the American economy once again," Trump said in a statement to Times. "He is a rare talent, and I thank him for his dedicated service to the American people."

Substitute "billionaire class" for "American people" to get closer to the truth. Gary is a venal mercenary that went to Washington to get a jawb done.

Two of the "demands" by the US when it comes to "trade" is that intellectual property be respected and that US "companies" operating in China be permitted to do so without the requirement to form partnerships with Chinese (CCP offshoots really) companies, and to get there, my cynical self suspects that all peasants are nothing more than cannon fodder in this trade war so that the fraudsters of Wall Street can go into China unfettered and loot the Chinese as much as they have looted Americans, and without sharing a cut with Chinese "partners".

a different chris , June 20, 2018 at 9:19 am

Sadly, the Europeans are key to preventing this. Only they have the purchasing power to offload China's current surplus, and eventually proceed to an even trade relationship as the other terminus of the Belt.

I say sadly because they are the wimps of all time, and they will simply not let go of Mother America's apron strings. So at least for my lifetime (another 20-30 years I'm expecting) things aren't going to change -- well, they will actually get worse for the 90% in the US as well as everywhere else, but the overall state-level power dynamics will remain.

Funny also because the F35 sucks, you can barely tell where they detonated the MOAB, Elon Musk is building strange, badly-thought out tunnels, our military is just tired, tired tired . yet still everybody cowers. What are they afraid of?

EoH , June 20, 2018 at 10:10 am

You make a good point in deriding Trump's vacillating positions as not a policy. (For comparison, Kirstjen Nielsen's consistent behavior in having her dept. separate would be immigrant adults from children – without tracking who belongs to whom – is a policy.)

Trump's focus on domestic jobs would be an excellent, indeed, a necessary policy. Successful economic competitors in Asia and Europe do exactly that. For Trump, however, it's not a policy, it's a talking point.

As you say, American mythology is that it has no industrial policy. The reality is that it has one, but it's written, implemented and policed by the private sector. It does not want government to make a priority of domestic employment because it has largely abandoned the idea as impossibly unprofitable.

In that, Elon Musk's reduction of at least 9% of his manufacturing workforce is the standard antediluvian response to management's inability to meet its self-imposed objectives. He has decided, all evidence to the contrary, that his line workers and the processes they are implementing are adequate to meet his objectives. They just need someone to crack the whip a tad harder.

But which jobs is Musk cutting? Largely middle management supervisors and technical staff. These are the people with manufacturing know-how, the very people most likely to fix Musk's manufacturing-cum-quality process defects.

Musk is throwing out the people who could most help him meet his objectives. Adopting policies to which Detroit has long been addicted will produce the consequences they always have before.

bronco , June 20, 2018 at 10:11 am

Krugman is not to be taken seriously on anything. He may actually know economic theory but he sold out so long ago that anything he writes I dismiss out of hand as propaganda . I don't think he even has the potential to be stopped clock right about anything . Every column is econo-babble designed to support whatever message his handlers need put out there. I think of him as the Baghdad Bob of the economics bloggers.

As far as trade wars go I say bring it on. We have gotten so soft here in the US that everyone seems to walk around wringing their hands and moaning all the time. My parents grew up during WW2 they had ration coupons and no passenger cars , no gasoline , full on recycling of everything. I'd like to see some belt tightening of that sort in the here and now. I grew up in the 70's I remember the energy crisis clearly, and people under 45 or 40 maybe literally have no clue what it means to have limitations on basic necessities , not I can't afford the new Iphone but that it just can't be bought period.

Where ever one is in the golbal warming spectrum or the environmental spectrum personally , we just can not go on the way we are . We need to put pressure on people to think about how they live and how they spend and what our government is doing in our name.

Synoia , June 20, 2018 at 1:00 pm

and what our government is doing in our name.

many, many thing of which I do not approve, and wish to have no part of. However, in some manner I feel responsible as this is a democracy, and I should have some influence (minuscule as it is).

Isotope_C14 , June 20, 2018 at 1:23 pm

The US is an oligarchy, even Princeton academics agree. Part of the way to end that problem, is seize control back from the tyrants. My suggestion is to join the poor people's campaign, and do whatever you can do for them, whether it is protest, make signs, or send small donations.

Don't let the oligarchs make you believe that what they do is in your name. It is not, and the only way to stop them is to make them fear the population.

Elections won't do it – not as long as black-box voting machines and interstate cross-check ensure that the poor voice is as quiet as possible.

bronco , June 20, 2018 at 2:32 pm

I have felt for a long time that our consumption based economy is a way to keep people so self absorbed that they don't ask too many questions .

WHEEE I got a new Iphone , instead of why are we bombing these people. Looking back I was a happier person when I had less possessions. I don't know when the cut off point was though. I mean as a young man I did without and wanted things and then there was a period of fuzziness and now my house is full of shit that I don't even care about.

I can remember waiting in line at a gas pump with my dad so we could go to nantasket beach. I didn't mind waiting in a hot car for an hour because I was excited to go. Now you see a family out in a car everyone has their device and do they even care where they are going?

In a world of plenty everything seems cheap and tawdry . Bring on the trade war , lets see people start to do without and then realize the garbage they can't get isn't even important.

False Solace , June 20, 2018 at 12:12 pm

> One advantage of this tactic for Xi is that this time the numbers are on his side, as U.S. investment in China is far larger than the reverse.

That's a really weird definition of the word "advantage". The factories and plants US companies built in China employ Chinese workers and consist of infrastructure that exists in China. If China cracks down on those plants it's basically punching itself in the face. Share prices for those US companies would fall, but as a working class American I honestly DGAF.

cbu , June 20, 2018 at 2:54 pm

The American companies get far more revenue from their Chinese operations than their Chinese workers can get from their salaries. So China's retaliation will disproportionately affect the revenue of these companies instead of the income of their Chinese workers.

David in Santa Cruz , June 20, 2018 at 12:35 pm

As tempting as it is to attribute this to personality failings, I don't believe that Mr. Trump's China tantrum is geopolitical one-upmanship. It is more likely a reaction to the annual Industrial Capabilities Report released on May 17 by the Pentagon's Office of Manufacturing and Industrial Base Policy, in parallel to a similar review being conducted internally by the White House.

The Pentagon has concluded that two decades of financially-engineered corporate concentration and out-sourcing of skilled work to China has stripped the U.S. Military-Industrial Complex of its "organic industrial base." It appears evident that the White House has decided that tariff barriers on China are the only way to rebuild a population of of "qualified workers to meet current demands as well as needing to integrate a younger workforce with the 'right skills, aptitude, experience, and interest to step into the jobs vacated by senior-level engineers and skilled technicians' as they exit the workforce."

In short, the U.S. MIC is running out of bombs. https://www.defensenews.com/pentagon/2018/05/22/americas-industrial-base-is-at-risk-and-the-military-may-feel-the-consequences/

MyLessThanPrimeBeef , June 20, 2018 at 2:46 pm

It's good to have an 'organic industrial base.' And Chins is well aware of the Japanese Judo, which advocates using someone's energy to do the work for you. Here, workers in the US can take advantage of the energy of the MIC to achieve the goal of making American manufacturing and employment great again.

Synoia , June 20, 2018 at 12:57 pm

Form the headline:

Mr. Market is anxious. Anxious is well short of panicked.

When was "the market" not anxious? It appears to me that fear, anxiety, is paramount. They, the market participants, are anxious where they are making money, they are anxious when not making money, they are anxious when they have money, and they are anxious when they don't have money.

Fiddler Hill , June 20, 2018 at 2:19 pm

I find myself confused and in a quandary. Is it not neoliberalism and global trade that over the past 25 years or so has led to corporate mega-wealth and the beginning of the end of the US middle class, and the further impoverishment of the working class? If so, then as a good progressive, should I not welcome a trade war or whatever economic change will end this global economic tyranny? Is the skepticism or outright opposition to a trade war of so many progressives simply based on the fact taht t's being initiated by the colossal idiot in the White House who may inadvertently be doing something beneficial?

[Jun 17, 2018] The Necessity of a Trump-Putin Summit by Stephen F. Cohen

Highly recommended!
Decimation of anti-war forces and flourishing of Russophobia are two immanent features of the US neoliberalism. As long as the maintinace fo the US global neoliberal empire depends of weakening and, possibly, dismembering Russia it is naive to expect any change. Russian version of soft "national neoliberalism" is not that different, in principle form Trump version of hard "netional neoliberalism" so those leaders might have something to talk about. In other words as soon as the USA denounce neoliberal globalization that might be some openings.
Notable quotes:
"... The New York Times ..."
Jun 06, 2018 | www.thenation.com

Ten ways the new US-Russian Cold War is increasingly becoming more dangerous than the one we survived.

  1. The political epicenter of the new Cold War is not in far-away Berlin, as it was from the late 1940s on, but directly on Russia's borders, from the Baltic states and Ukraine to the former Soviet republic of Georgia. Each of these new Cold War fronts is, or has recently been, fraught with the possibly of hot war. US-Russian military relations are especially tense today in the Baltic region, where a large-scale NATO buildup is under way, and in Ukraine, where a US-Russian proxy war is intensifying. The "Soviet Bloc" that once served as a buffer between NATO and Russia no longer exists. And many imaginable incidents on the West's new Eastern Front, intentional or unintentional, could easily trigger actual war between the United States and Russia. What brought about this unprecedented situation on Russia's borders -- at least since the Nazi German invasion in 1941 -- was, of course, the exceedingly unwise decision, in the late 1990s, to expand NATO eastward. Done in the name of "security," it has made all the states involved only more insecure.

  2. Proxy wars were a feature of the old Cold War, but usually small ones in what was called the "Third World" -- in Africa, for example -- and they rarely involved many, if any, Soviet or American personnel, mostly only money and weapons. Today's US-Russian proxy wars are different, located in the center of geopolitics and accompanied by too many American and Russian trainers, minders, and possibly fighters. Two have already erupted: in Georgia in 2008, where Russian forces fought a Georgian army financed, trained, and minded by American funds and personnel; and in Syria, where in February scores of Russians were killed by US-backed anti-Assad forces . Moscow did not retaliate, but it has pledged to do so if there is "a next time," as there very well may be. If so, this would in effect be war directly between Russia and America. Meanwhile, the risk of such a direct conflict continues to grow in Ukraine, where the country's US-backed but politically failing President Petro Poroshenko seems increasingly tempted to launch another all-out military assault on rebel-controlled Donbass, backed by Moscow. If he does so, and the assault does not quickly fail as previous ones have, Russia will certainly intervene in eastern Ukraine with a truly tangible "invasion." Washington will then have to make a fateful war-or-peace decision. Having already reneged on its commitments to the Minsk Accords, which are the best hope for ending the four-year Ukrainian crisis peacefully, Kiev seems to have an unrelenting impulse to be a tail wagging the dog of war. Certainly, its capacity for provocations and disinformation are second to none, as evidenced again last week by the faked "assassination and resurrection" of the journalist Arkady Babchenko.

  3. The Western, but especially American, years-long demonization of the Kremlin leader, Putin, is also unprecedented. Too obvious to reiterate here, no Soviet leader, at least since Stalin, was ever subjected to such prolonged, baseless, crudely derogatory personal vilification. Whereas Soviet leaders were generally regarded as acceptable negotiating partners for American presidents, including at major summits, Putin has been made to seem to be an illegitimate national leader -- at best "a KGB thug," at worst a murderous "mafia boss."

  4. Still more, demonizing Putin has generated a widespread Russophobic vilification of Russia itself , or what The New York Times and other mainstream-media outlets have taken to calling " Vladimir Putin's Russia ." Yesterday's enemy was Soviet Communism. Today it is increasingly Russia, thereby also delegitimizing Russia as a great power with legitimate national interests. "The Parity Principle," as Cohen termed it during the preceding Cold War -- the principle that both sides had legitimate interests at home and abroad, which was the basis for diplomacy and negotiations, and symbolized by leadership summits -- no longer exists, at least on the American side. Nor does the acknowledgment that both sides were to blame, at least to some extent, for that Cold War. Among influential American observers who at least recognize the reality of the new Cold War , "Putin's Russia" alone is to blame. When there is no recognized parity and shared responsibility, there is little space for diplomacy -- only for increasingly militarized relations, as we are witnessing today.
  5. Meanwhile, most of the Cold War safeguards -- cooperative mechanisms and mutually observed rules of conduct that evolved over decades in order to prevent superpower hot war -- have been vaporized or badly frayed since the Ukrainian crisis in 2014, as the UN General Secretary António Guterres, almost alone, has recognized : "The Cold War is back -- with a vengeance but with a difference. The mechanisms and the safeguards to manage the risks of escalation that existed in the past no longer seem to be present." Trump's recent missile strike on Syria carefully avoided killing any Russians there, but here too Moscow has vowed to retaliate against US launchers or other forces involved if there is a "next time," as, again, there may be. Even the decades-long process of arms control may, we are told by an expert , be coming to an "end." If so, it will mean an unfettered new nuclear-arms race but also the termination of an ongoing diplomatic process that buffered US-Soviet relations during very bad political times. In short, if there are any new Cold War rules of conduct, they are yet to be formulated and mutually accepted. Nor does this semi-anarchy take into account the new warfare technology of cyber-attacks. What are its implications for the secure functioning of existential Russian and American nuclear command-and-control and early-warning systems that guard against an accidental launching of missiles still on high alert?

  6. Russiagate allegations that the American president has been compromised by -- or is even an agent of -- the Kremlin are also without precedent. These allegations have had profoundly dangerous consequences, among them the nonsensical but mantra-like warfare declaration that "Russia attacked America" during the 2016 presidential election; crippling assaults on President Trump every time he speaks with Putin in person or by phone; and making both Trump and Putin so toxic that even most politicians, journalists, and professors who understand the present-day dangers are reluctant to speak out against US contributions to the new Cold War.

  7. Mainstream-media outlets have, of course, played a woeful role in all of this. Unlike in the past, when pro-détente advocates had roughly equal access to mainstream media, today's new Cold War media enforce their orthodox narrative that Russia is solely to blame. They practice not diversity of opinion and reporting but "confirmation bias." Alternative voices (with, yes, alternative or opposing facts) rarely appear any longer in the most influential mainstream newspapers or on television or radio broadcasts. One alarming result is that "disinformation" generated by or pleasing to Washington and its allies has consequences before it can be corrected. The fake Babchenko assassination (allegedly ordered by Putin, of course) was quickly exposed, but not the alleged Skripal assassination attempt in the UK, which led to the largest US expulsion of Russian diplomats in history before London's official version of the story began to fall apart. This too is unprecedented: Cold War without debate, which in turn precludes the frequent rethinking and revising of US policy that characterized the preceding 40-year Cold War -- in effect, an enforced dogmatization of US policy that is both exceedingly dangerous and undemocratic.

  8. Equally unsurprising, and also very much unlike during the 40-year Cold War, there is virtually no significant opposition in the American mainstream to the US role in the new Cold War -- not in the media, not in Congress, not in the two major political parties, not in the universities, not at grassroots levels. This too is unprecedented, dangerous, and contrary to real democracy. Consider only the thunderous silence of scores of large US corporations that have been doing profitable business in post-Soviet Russia for years, from fast-food chains and automobile manufacturers to pharmaceutical and energy giants. And contrast their behavior to that of CEOs of PepsiCo, Control Data, IBM, and other major American corporations seeking entry to the Soviet market in the 1970s and 1980s, when they publicly supported and even funded pro-détente organizations and politicians. How to explain the silence of their counterparts today, who are usually so profit-motivated? Are they too fearful of being labeled "pro-Putin" or possibly "pro-Trump"? If so, will this Cold War continue to unfold with only very rare profiles of courage in any high places? 9. And then there is the widespread escalatory myth that today's Russia, unlike the Soviet Union, is too weak -- its economy too small and fragile, its leader too "isolated in international affairs" -- to wage a sustained Cold War, and that eventually Putin, who is "punching above his weight," as the cliché has it, will capitulate. This too is a dangerous delusion. As Cohen has shown previously , "Putin's Russia" is hardly isolated in world affairs, and is becoming even less so, even in Europe, where at least five governments are tilting away from Washington and Brussels and perhaps from their economic sanctions on Russia. Indeed, despite the sanctions, Russia's energy industry and agricultural exports are flourishing. Geopolitically, Moscow has many military and related advantages in regions where the new Cold War has unfolded. And no state with Russia's modern nuclear and other weapons is "punching above its weight." Above all, the great majority of Russian people have rallied behind Putin because t hey believe their country is under attack by the US-led West . Anyone with a rudimentary knowledge of Russia's history understands it is highly unlikely to capitulate under any circumstances.

  9. Finally (at least as of now), there is the growing war-like "hysteria" often commented on in both Washington and Moscow. It is driven by various factors, but television talk/"news" broadcasts, which are as common in Russia as in the United States, play a major role. Perhaps only an extensive quantitative study could discern which plays a more lamentable role in promoting this frenzy -- MSNBC and CNN or their Russian counterparts. For Cohen, the Russian dark witticism seems apt: "Both are worst" ( Oba khuzhe ). Again, some of this American broadcast extremism existed during the preceding Cold War, but almost always balanced, even offset, by truly informed, wiser opinions, which are now largely excluded.

Is this analysis of the dangers inherent in the new Cold War itself extremist or alarmist? Even SOME usually reticent specialists would seem to agree with Cohen's general assessment. Experts gathered by a centrist Washington think tank thought that on a scale of 1 to 10, there is a 5 to 7 chance of actual war with Russia. A former head of British M16 is reported as saying that "for the first time in living memory, there's a realistic chance of a superpower conflict." And a respected retired Russian general tells the same think tank that any military confrontation "will end up with the use of nuclear weapons between the United States and Russia."

In today's dire circumstances, one Trump-Putin summit cannot eliminate the new Cold War dangers. But US-Soviet summits traditionally served three corollary purposes. They created a kind of security partnership -- not a conspiracy -- that involved each leader's limited political capital at home, which the other should recognize and not heedlessly jeopardize. They sent a clear message to the two leaders' respective national-security bureaucracies, which often did not favor détente-like cooperation, that the "boss" was determined and that they must end their foot-dragging, even sabotage. And summits, with their exalted rituals and intense coverage, usually improved the media-political environment needed to enhance cooperation amid Cold War conflicts. If a Trump-Putin summit achieves even some of those purposes, it might result in a turning away from the precipice that now looms

[Jun 15, 2018] The G7 summit collapses by Alex Lantier

Notable quotes:
"... The United States, the EU and Canada are preparing tariffs impacting untold billions of dollars in goods and threatening tens of millions of jobs worldwide. As the remarks of Trudeau and Trump show, US tariff threats are setting into motion an escalatory spiral of tariffs and counter-tariffs with potentially devastating consequences. ..."
"... The collapse of the G7 talks cannot be explained by the personal peculiarities of Donald Trump. Rather, this historical milestone is an expression of US imperialism's desperate attempts to resolve insoluble contradictions of world capitalism. Not only Trump, but prominent Democrats and large sections of the European media and ruling elite are all recklessly calling for trade war measures against their rivals. ..."
"... Analyzing US imperialist policy in 1928, the year before the eruption of the Great Depression, Leon Trotsky warned: "In the period of crisis, the hegemony of the United States will operate more completely, more openly, and more ruthlessly than in the period of boom. The United States will seek to overcome and extricate herself from her difficulties and maladies primarily at the expense of Europe, regardless of whether this occurs in Asia, Canada, South America, Australia or Europe itself, whether this takes place peacefully or through war." ..."
"... After the Stalinist bureaucracy dissolved the Soviet Union in 1991, lifting the main obstacle to US-led neo-colonial wars, Washington tried to counterbalance its economic weakness by resort to its vast military superiority. ..."
"... Over decades of bloody neo-colonial wars that killed millions in Iraq, Afghanistan, Syria and beyond, the United States has sought to establish a powerful military position in the oil-rich Middle East. These wars placed its forces athwart key trade and energy supply routes of its main economic rivals. ..."
"... Amid growing tensions with the US, all of the European powers are rapidly rearming. ..."
Jun 15, 2018 | www.wsws.org

The summit issued a final communiqué papering over the conflicts, as is usual in G7 summits, condemning protectionism but making a few criticisms of the World Trade Organization in line with US complaints. The US was expected to sign, but Trump, after listening to Canadian Prime Minister Justin Trudeau's post summit press conference while en route to Singapore for a summit with North Korean President Kim Jong-un, fired off a volley of tweets that signaled a comprehensive breakdown of the G7 talks.

After Trudeau said that the communiqué criticized protectionism and that Canada would maintain its $16 billion retaliatory tariffs on US goods, the biggest Canadian tariffs since World War II, Trump hurled invective at Trudeau, warning that he "will not allow other countries" to impose tariffs. He accused what are nominally the closest US allies of having targeted the US for "Trade Abuse for many decades -- and that is long enough."

In another tweet, the US president threatened a major escalation of trade war measures with tariffs on auto imports and announced the breakdown of talks: "Based on Justin's false statements at his news conference and the fact that Canada is charging massive Tariffs to our US farmers, workers and companies, I have instructed our US Reps not to endorse the Communiqué as we look at Tariffs on automobiles flooding the US market!"

This is the first time since G7 summits began in 1975 -- originally as the G5 with the United States, Japan, Germany, Britain and France -- that all the heads of state could not agree on a communiqué.

What is unfolding is a historic collapse of diplomatic and economic relations between the major imperialist powers. For the three quarters of a century since World War II, a broad consensus existed internationally in the ruling class that the trade wars of the 1930s Great Depression played a major role in triggering that war, and that trade wars should be avoided at all costs. This consensus has now broken down.

Explosive conflict and uncertainty dominate the world economy. The United States, the EU and Canada are preparing tariffs impacting untold billions of dollars in goods and threatening tens of millions of jobs worldwide. As the remarks of Trudeau and Trump show, US tariff threats are setting into motion an escalatory spiral of tariffs and counter-tariffs with potentially devastating consequences.

The collapse of the G7 talks cannot be explained by the personal peculiarities of Donald Trump. Rather, this historical milestone is an expression of US imperialism's desperate attempts to resolve insoluble contradictions of world capitalism. Not only Trump, but prominent Democrats and large sections of the European media and ruling elite are all recklessly calling for trade war measures against their rivals.

Analyzing US imperialist policy in 1928, the year before the eruption of the Great Depression, Leon Trotsky warned: "In the period of crisis, the hegemony of the United States will operate more completely, more openly, and more ruthlessly than in the period of boom. The United States will seek to overcome and extricate herself from her difficulties and maladies primarily at the expense of Europe, regardless of whether this occurs in Asia, Canada, South America, Australia or Europe itself, whether this takes place peacefully or through war."

The G7 summits were launched to manage conflicts between the major powers as the industrial and economic dominance established by US imperialism in World War II rapidly eroded, and after Washington ended dollar-gold convertibility in 1971. Still unable to catch up to its European and international competitors, the United States has for decades posted ever-larger trade deficits with rivals in Europe and Asia.

After the Stalinist bureaucracy dissolved the Soviet Union in 1991, lifting the main obstacle to US-led neo-colonial wars, Washington tried to counterbalance its economic weakness by resort to its vast military superiority.

Over decades of bloody neo-colonial wars that killed millions in Iraq, Afghanistan, Syria and beyond, the United States has sought to establish a powerful military position in the oil-rich Middle East. These wars placed its forces athwart key trade and energy supply routes of its main economic rivals.

Trump's election and his denunciations of "trade abuse" of the United States by Europe, Japan and Canada marks a new stage in the crisis of world capitalism. Bitter US-EU divisions are growing not only over trade, but over EU opposition to the US policy of threatening Iran with war by ending the Iranian nuclear deal. After decades of economic crisis and neo-colonial war, the danger is rapidly emerging of a 1930s-style disintegration of the world economy into rival trading blocs and, as in that decade, the eruption of military conflict between them.

... ... ...

The European powers have responded to Trump with stepped-up threats of retaliatory measures. Following the summit, German Foreign Minister Heiko Maas called on the European powers to respond "together" in order to defend their "interests even more offensively."

Historically, trade war has been a precursor to military conflict. Prior to the summit, French President Emmanuel Macron responded angrily to Trump's threatened sanctions, declaring, "This decision is not only unlawful but it is a mistake in many respects. Economic nationalism leads to war. This is exactly what happened in the 1930s."

Amid growing tensions with the US, all of the European powers are rapidly rearming. Just one week before the G7 summit, German Chancellor Angela Merkel signalled her support for Macron's proposal to create a joint European defence force, open to British participation and independent of NATO.

... ... ...

[Jun 12, 2018] Debacle in Quebec by Paul Krugman

Jun 12, 2018 | www.nytimes.com

... ... ...

Then Trump demanded that the other G7 members remove their "ridiculous and unacceptable" tariffs on U.S. goods – which would be hard for them to do, because their actual tariff rates are very low. The European Union, for example, levies an average tariff of only three percent on US goods. Who says so? The U.S. government's own guide to exporters .

True, there are some particular sectors where each country imposes special barriers to trade. Yes, Canada imposes high tariffs on certain dairy products. But it's hard to make the case that these special cases are any worse than, say, the 25 percent tariff the U.S. still imposes on light trucks . The overall picture is that all of the G7 members have very open markets.

So what on earth was Trump even talking about? His trade advisers have repeatedly claimed that value-added taxes, which play an important role in many countries, are a form of unfair trade protection . But this is sheer ignorance: VATs don't convey any competitive advantage – they're just a way of implementing a sales tax -- which is why they're legal under the WTO. And the rest of the world isn't going to change its whole fiscal system because the U.S. president chooses to listen to advisers who don't understand anything.

... ... ...

[Jun 10, 2018] Trump At G-7 Closing Remarks We're The Piggy Bank That Everybody's Robbing

Looks like Trump adopted Victoria Nuland "Fuck the EU" attitude ;-). There might be nasty surprises down the road as this is uncharted territory: destruction of neoliberal globalization.
Trump proved to be a really bad negotiator. he reduced the USA to a schoolyard bully who beats up his gang members because their former victims have grown too big.
As the owner of world reserve currency the USA is able to tax US denominated transactions both via conversion fees and inflation. As long as the USA has dollar as a reserve currency the USA has so called "exorbitant priviledge" : "In the Bretton Woods system put in place in 1944, US dollars were convertible to gold. In France, it was called "America's exorbitant privilege"[219] as it resulted in an "asymmetric financial system" where foreigners "see themselves supporting American living standards and subsidizing American multinationals"."... "De Gaulle openly criticised the United States intervention in Vietnam and the "exorbitant privilege" of the United States dollar. In his later years, his support for the slogan "Vive le Québec libre" and his two vetoes of Britain's entry into the European Economic Community generated considerable controversy." Charles de Gaulle - Wikipedia
Notable quotes:
"... Errrr, that so-called "piggy bank' just happens to; ..."
"... have the world's reserve currency ..."
"... dominates the entire planet militarily since the end of the Cold War ..."
"... dictates "regime change" around the world ..."
"... manipulates and controls the world's entire financial system, from the price of a barrel to every financial transaction in the SWIFT system. ..."
"... And Trump has the ignorance, the arrogance and the audacity to be pleading 'poverty?' ..."
Jun 10, 2018 | www.zerohedge.com

On trade:

"We had productive discussion on having fair and reciprocal" trade and market access.

"We're linked in the great effort to create a more just and prosperous world. And from the standpoint of trade and creating more prosperous countries, I think they are starting to be committed to more fair trade. We as a nation lost $870 billion on trade...I blame our leaders and I congratulate leaders of other countries for taking advantage of our leaders."

"If they retaliate they're making a tremendous mistake because you see we have a tremendous trade imbalance...the numbers are so much against them, we win that war 1000 times out of a 1000."

"We're negotiating very hard, tariffs and barriers...the European Union is brutal to the United States....the gig is up...there's nothing they can say."

"We're like the piggy bank that everybody's robbing."

"I would say the level of relationship is a ten - Angela, Emmanuel and Justin - we have a very good relationship. I won't blame these people, unless they don't smarten up and make the trades fair."

Trump is now making the 20-hour flight to Singapore, where he will attend a historic summit with North Korea leader Kim Jong Un. We'll now keep our eye out for the finalized communique from the group. The US is typically a leader in the crafting of the statement. But this time, it's unclear if the US had any input at all into the statement, as only the leaders from Britain, Canada, France, Germany, Italy and Japan as well as the presidents of the European Commission and European Council remain at the meeting. But regardless of who writes it, the statement will probably be of little consequence, as UBS points out:

Several heads of state will be heading off on a taxpayer-financed "mini-break" in Canada today. In all of its incarnations (over the past four years, we've gone from G-8 to G-6+1) the group hasn't really accomplished much since an initial burst of enthusiasm with the Plaza Accords and Louvre Accords in the 1980s.

And this meeting likely won't be any different.


Simplifiedfrisbee -> ravolla Sat, 06/09/2018 - 11:31 Permalink

Unprepared son of a bitch.

Sack of filth.

Klassenfeind -> Dickweed Wang Sat, 06/09/2018 - 11:43 Permalink

"We're the piggy bank that everybody is robbing." Excuse me?!

Errrr, that so-called "piggy bank' just happens to;

  1. have the world's reserve currency
  2. dominates the entire planet militarily since the end of the Cold War
  3. dictates "regime change" around the world
  4. manipulates and controls the world's entire financial system, from the price of a barrel to every financial transaction in the SWIFT system.

And Trump has the ignorance, the arrogance and the audacity to be pleading 'poverty?'

Who THE FUCK is robbing who here?!?

Escrava Isaura -> helltothenah Sat, 06/09/2018 - 14:51 Permalink

By the way, Trump is right on the tariffs in my view, Europeans should lower their tariffs and not having the US raising it.

Trump: "We're The Piggy Bank That Everybody's Robbing"

Isn't Trump great in catch phrases? Trump's base will now regurgitate it to death.

Now reconcile Trump's remarks with reality:

Professor Werner: Germany is for instance not even allowed to receive delivery of US Treasuries that it may have purchased as a result of the dollars earned through its current account surplus: these Treasuries have to be held in custody by the Federal Reserve Bank of New York, a privately owned bank: A promise on a promise. At the same time, German influence over the pyramid structure of such promises has been declining rapidly since the abolition of the German currency and introduction of the euro, controlled by an unaccountable supranational international agency that cannot be influenced by any democratic assembly in the eurozone. As a result, this structure of one-sided outflows of real goods and services from Germany is likely to persist in the short and medium-term.

To add insult to injury:

Euro-federalists financed by US spy chiefs

The documents show that ACUE financed the European Movement, the most important federalist organisation in the post-war years. In 1958, for example, it provided 53.5 per cent of the movement's funds.

https://www.telegraph.co.uk/news/worldnews/europe/1356047/Euro-federalists-financed-by-US-spy-chiefs.html

bshirley1968 -> Escrava Isaura Sat, 06/09/2018 - 15:00 Permalink

Okay, everyone set your "team" aside for a few minutes and let's look at the facts and reality.

Do you really believe the rest of the world has trade advantages over the US? Well, let's consider major industries.

Agriculture.....maybe, but only sightly. Our farmers are the richest in the workd....by far.

Manufacturers.....probably so....because we gave it away to countries with slave labor. Manufacturers jobs were jobs where people could earn a decent living...and that had to go..can't be cutting into corporate profits with all that high cost labor.

Defense.....need I go here? We spend more than the next 11 countries combined! We sell more as well.

Energy.....we rule thus space because we buy it with worthless printed fiat debt...whenever we want to....and nd if you deny us, we will bomb the hell out of you and take it.

Technology. ....Apple, Microsoft, Intel, Google, Amazon, Oracle, Dell, Cisco.....who can touch that line up....not to mention all the on-line outfits like Facebook and Twitter.

Finance.....the best for last. We control the printing press that prints the dollar the rest of the world needs. We control energy and foreign policy. Don't do what we like and we will cut you off from SWIFT and devalue the hell out of your currency...and then move in for the "regime" change to some one who plays ball the way we like it. 85% of all international trade takes place in dollars everyday. We have the biggest banks, Wall Street, and infest the world with our virus called the dollar so that we can Jeri their chain at will.

Now I ask you....just where the hell is the "trade imbalances"? Sure there are some companies or job sectors that get a raw deal because our politicians give some foreigners unfair trade advantages here and there, but as a whole, we dominate trade by far. The poor in our country lives like kings compared to 5.5 billion of the world's population. Trump knows this.....or he is stupid. He is pandering to his sheeple voting base that are easily duped into believing someone is getting what is their's.

Hey, I am thankful to be an American and enjoy the advantages we have. But I am not going to stick my head up Trump's ass and agree with this bullshit. It is misdirection (corporate America and politicians are the problem here, not foreign countries) and a major distraction. Because all the trade in the world isn't going to pull us out of this debt catastrophe that's coming.

waspwench -> bshirley1968 Sat, 06/09/2018 - 16:47 Permalink

But, if we cut through all the verbiage, we will arrive at the elephant in the room.

American manufacturing jobs have been off-shored to low wage countries and the jobs which have replaced them are, for the most part, minium wage service jobs. A man cannot buy a house, marry and raise a family on a humburger-flippers wage. Even those minimum wage jobs are often unavailable to Americans because millions of illegal aliens have been allowed into the country and they are undercutting wages in the service sector. At the same time, the better paid positions are being given to H-1B visa holders who undercut the American worker (who is not infrequently forced to train his own replacement in order to access his unemployment benefits.)

As the above paragraph demonstrates the oligarchs are being permitted to force down American wages and the fact that we no longer make, but instead import, the things we need, thus exporting our wealth and damaging our own workers is all the same to them. They grow richer and they do not care about our country or our people. If they can make us all into slaves it will suit them perfectly.

We need tariffs to enable our workers to compete against third world wages in countries where the cost-of-living is less. (American wages may be stagnating or declining but our cost-of-living is not declining.) We need to deport illegal aliens and to stop the flow of them over our borders. (Build the wall.) We need to severely limit the H-1B visa programme which is putting qualified Americans out of work. (When I came to the US in 1967 I was permitted entry on the basis that I was coming to do a job for which there were not enough American workers available. Why was that rule ever changed?)

bshirley1968 -> waspwench Sat, 06/09/2018 - 18:45 Permalink

You are making my point. China didn't "off shore" our jobs....our politicians and corporations did. You can't fix that by going after other countries. You fix that by penalizing companies for using slave labor workers from other countries. Tariffs are not going to fix this. They will just raise prices on everyone.

I can't believe you Trumptards can't see this! Once again we will focus on a symptom and ignore the real problem. Boy, Trump and his buddies from NYC and DC have really suffered because of unfair trade practices, right? Why can't you people see that "government is the problem" and misdirection your attention to China, Canada, Germany, Mexico, or whomever is just that....misdirection.

I would tax the shit out of companies like Apple that make everything overseas with slave labor and then ship it in here to sell to Americans at ridiculous prices.

Plenty of down votes but no one has proven that I am wrong on one point.

mkkby -> helltothenah Sat, 06/09/2018 - 17:52 Permalink

The EU countries have free college, health care, day care and just about everything else. All paid for because they have no military spending.

It's all on the backs of the US tax payer. Or the fed, if you prefer.

Trump is working both angles. Forcing them to pay for their own defense. Forcing them to allow US products with no trade disadvantages. Go MAGA and fuck the EU.

[May 28, 2018] Neoliberal globalization is collapsing in various way in different countries

Notable quotes:
"... Back to Turkey. The largest net backstabbing of Turkish economy could be the slowdown of investments from the Gulf, where Erdogan bravely sided with Qatar. Erdogan engineered de facto confiscation of media assets owned by tycoons sympathetic to the opposition, to be purchased by Qataris, now Qatar is to Turkey what Adelson is to Israel. ..."
"... Add the effect of Iran sanctions -- it increased prices of oil and gas, but no associated increase the demand from the Gulf, on the northern shore there is a prospect of tightened belts, on the southern shore anti-Turkish policies, and Qatar alone is too small ..."
May 24, 2018 | www.moonofalabama.org

...Rusal, the dominant aluminum maker in Russia recently was sanctioned by USA, while a while ago it gained control of a large portion of alumina production -- aluminum ore, bauxite, has to be processed into more pure feedstock for smelting factories, called alumina. Now aluminum producers in many areas, notably, Europe, have a shortage of alumina that may lead to mothballing of some smelters; the largest alumina facility in Europe is in Ireland and it is owned by Rusal. Perhaps great for American smelter owners, but there has to be some teeth gnashing in Europe.

Back to Turkey. The largest net backstabbing of Turkish economy could be the slowdown of investments from the Gulf, where Erdogan bravely sided with Qatar. Erdogan engineered de facto confiscation of media assets owned by tycoons sympathetic to the opposition, to be purchased by Qataris, now Qatar is to Turkey what Adelson is to Israel.

Siding with Qatar would eliminate investments from KSA and UAE, and draconian treatment of Saudi princes and other tycoons probably led to their assets being under the control of the Crown Prince.

This is not particularly recent, but financial markets tend to have delayed fuse. Add the effect of Iran sanctions -- it increased prices of oil and gas, but no associated increase the demand from the Gulf, on the northern shore there is a prospect of tightened belts, on the southern shore anti-Turkish policies, and Qatar alone is too small.

Plus Erdogan himself promised to "pay more attention to Turkish central bank", and justifiably or not, that is a very strong sell signal for the currency.

[Apr 30, 2018] Trade Wars US against EU, Neocons against Globalists

Apr 30, 2018 | www.defenddemocracy.press

German Chancellor Angela Merkel, French President Emmanuel Macron and UK Prime Minister Theresa May have agreed in phone talks that the European Union should be ready to defend its trade interests if the United States takes any trade measures against the bloc, the German government said Sunday.

"The chancellor also spoke with the president [Macron] and the prime minister [May] on trade relations with the United States. They agreed that the United States should not take trade-linked measures against the European Union and that, otherwise, the European Union should be ready to defend its interests within the framework of the multilateral trading system," the statement read.

[Apr 29, 2018] Macron The Last Multilateralist by Patrick J. Buchanan

He wants the return of France colonial glory.
Notable quotes:
"... Patrick J. Buchanan is the author of a new book, ..."
"... . To find out more about Patrick Buchanan and read features by other Creators writers and cartoonists, visit the Creators website at www.creators.com. ..."
Apr 27, 2018 | www.theamericanconservative.com

"Together," President Macron instructed President Trump, "we can resist the rise of aggressive nationalisms that deny our history and divide the world."

In an address before Congress on Wednesday, France's Macron denounced "extreme nationalism," invoked the UN, NATO, WTO, and Paris climate accord, and implored Trump's America to come home to the New World Order.

"The United States is the one who invented this multilateralism," Macron went on, "you are the one now who has to help preserve and reinvent it."

His visit was hailed and his views cheered, but on reflection, the ideas of Emmanuel Macron seem to be less about tomorrow than yesterday. For the world he celebrates is receding into history. The America of 2018 is coming to see NATO as having evolved into an endless U.S. commitment to go to war with Russia on behalf of a rich Europe that resolutely refuses to provide for its own defense.

Since the WTO was created in the mid-90s, the U.S. has run $12 trillion in trade deficits, and among the organization's biggest beneficiaries -- the EU. Under the Paris climate accord, environmental restrictions are put upon the United States from which China is exempt. As for the UN, is that sinkhole of anti-Americanism, the General Assembly, really worth the scores of billions we have plunged into it?

"Aggressive nationalism" is a term that might well fit Napoleon Bonaparte, whose Arc de Triomphe sits on the Champs-Elysees. But does it really fit the Hungarians, Poles, Brits, Scots, Catalans, and other indigenous peoples of Europe who are now using democratic methods and means to preserve their national homes?

And the United States would seem an odd place to go about venting on "aggressive nationalisms that deny our history." Did Macron not learn at the Lycee Henri IV in Paris or the Ecole Nationale d'Administration how the Americans acquired all that land? General Washington, at whose Mount Vernon home Macron dined, was a nationalist who fought for six years to sever America's ties to the nation under which he was born. How does Macron think Andrew Jackson acquired Florida from Spain, Sam Houston acquired Texas from Mexico, and Winfield Scott and Zachary Taylor acquired the Southwest? By bartering?

Aggressive nationalism is a good synonym for the Manifest Destiny of a republic that went about relieving Spain of Cuba, Puerto Rico, Guam, and the Philippines. How does Macron think the "New World" was conquered and colonized if not by aggressive British, French, and Spanish nationalists determined to impose their rule upon weaker indigenous tribes? Was it not nationalism that broke up the USSR into 15 nations?

Was not the Zionist movement that resurrected Israel in 1948, and in 1967 captured the West Bank and then annexed East Jerusalem and the Golan Heights, a manifestation of aggressive nationalism?

Macron is an echo of George H.W. Bush who in Kiev in 1991 warned Ukrainians against the "suicidal nationalism" of declaring independence from the Russian Federation. "Aggressive nationalisms divide the world," warns Macron. Well, yes, they do, which is why we have now 194 members of the U.N., rather than the original 50. Is this a problem? "Together," said Macron, "we will build a new, strong multilateralism that defends pluralism and democracy in the face of ill winds."

Macron belongs to a political class that sees open borders and free trade thickening and tightening the ties of dependency, and eventually creating a One Europe whose destiny his crowd will forever control.

But if his idea of pluralism is multiracial, multiethnic, and multicultural nations, with a multilateral EU overlord, he is describing a future that tens of millions of Europeans believe means the deaths of the nations that give meaning to their lives.

And they will not go gently into that good night.

In America, too, millions have come to recognize that there is a method to the seeming madness of open borders. Name of the game: dispossessing the deplorables of the country they love.

With open borders and mass migration of over a million people a year into the USA, almost all of them from third-world countries that vote 70 to 90 percent Democratic, the left is foreclosing the future. They're converting the greatest country of the West into what Teddy Roosevelt called a "polyglot boarding house for the world." And in that boarding house the left will have a lock on the presidency.

With the collaboration of co-conspirators in the media, progressives throw a cloak of altruism over the cynical seizure of permanent power.

For, as the millions of immigrants here legally and illegally register, and the vote is extended to prison inmates, ex-cons, and 16-year-olds, the political complexion of America will come to resemble San Francisco.

End goal: ensure that what happened in 2016, when the nation rose up and threw out a despised establishment, never happens again.

Patrick J. Buchanan is the author of a new book, Nixon's White House Wars: The Battles That Made and Broke a President and Divided America Forever . To find out more about Patrick Buchanan and read features by other Creators writers and cartoonists, visit the Creators website at www.creators.com.

[Apr 29, 2018] Grab the Popcorn Trump Promises to 'Take On' EU in New Trade War - Sputnik International

Notable quotes:
"... In asserting that the EU was primarily formed to divert financial gains from the US, Trump promised that what he termed "disastrous trade deals" would stop, as he was going to personally "take on" the economic European powerhouse, as well as China, the largest economy in Asia and the second largest economy in the world. ..."
Apr 29, 2018 | sputniknews.com

As the US president struggles at home with a legislature and judiciary increasingly unwilling to do his bidding, new bluster and threats of a trade war with other nations appear to have become Trump's rallying cry to the faithful. US President Donald Trump, at a meeting of his followers in Michigan on Saturday, suggested that his administration would do everything within its power to shift what the White House terms Washington DC's trade imbalance with the European Union, and hinted darkly that Americans must prepare for a bumpy and uncomfortable ride, according to RT.

In asserting that the EU was primarily formed to divert financial gains from the US, Trump promised that what he termed "disastrous trade deals" would stop, as he was going to personally "take on" the economic European powerhouse, as well as China, the largest economy in Asia and the second largest economy in the world.

At a carefully curated supporters-only promotional speaking event in Michigan, the strikingly unpopular US leader claimed that EU trade policies existed only "to take advantage of the United States," cited by RT.

The US president warned of tough economic times for residents of the wealthiest country on earth, declaring that, "In short term you may have to take some problems, long term -- you're going to be so happy."

The former reality television producer and hotel magnate did not elaborate on the kind of problems Americans could expect to face.

In keeping with an ongoing talking point repeatedly used by the president, Trump blamed previous US administrations for the issues he describes as problems.

"I don't blame them," the US president declared -- referring to those nations with which he seeks to engage in trade wars -- adding, "I blame past presidents and past leaders of our country."

A May 1 deadline has been implemented for the March 1 Trump ultimatum to various nations -- including China and the EU -- to either curb aluminum and steel exports to the US or face sharply-increased import taxes.

The ultimatum triggered a speedy global backlash alongside threats of retaliation from China, the EU, and most other nations.

At a meeting of EU members in Sofia on Saturday, Belgian Finance Minister Johan Van Overtveldt noted that Trump's strong-arm tactics will backfire, adding that trade wars are a no-win scenario over the long term.

"A trade war is a losing game for everybody," Van Overtveldt observed.

[Apr 29, 2018] Brussels is a real swamp

Apr 29, 2018 | russia-insider.com

Samantha patty donovan 4 years ago ,

Agree, Patty.

The same for the un-elected Mandarins in Brussels. They are a real swamp. Lazy, clueless, overpaid and greedy still. They are powerhungry despite their tremendous lack of any political clout.

Vasalls through blackmail by 3 letter agencies?

The same for german Mrs. Merkel. Being a german citizen, I am ashamed of thus woman and her orwellian ,politics'.

Today, the former CEO of Thyssen-Krupp, Prof. Dr. Dieter Spethmann, a lawyer, called for her urgent removal from the job by publishing an Open Letter in mmnews (a blog).

EVcine Samantha 3 years ago ,

Trust me on this Merkel is mild compared to Cameron, Obama, Harper and Abbott !

teddyfromcd Samantha 2 years ago ,

there is a JUNIOR BRITISH MP -- WHO is assigned to BRUSSELS -- and has appealed to VOTERS for 'brexit" by saying "please put me out of a job"...

[Apr 29, 2018] We Won't Talk With A Gun Pointed To Our Head Europe Braces For Trade War With The US

Apr 29, 2018 | www.zerohedge.com

With just days left until the May 1 deadline when a temporary trade waiver expires and the US steel and aluminum tariffs kick in, and after last-ditch attempts first by Emmanuel Macron and then Angela Merkel to win exemptions for Europe fell on deaf ears, the European Union is warning about the costs of an imminent trade war with the US while bracing for one to erupt in just three days after the White House signaled it will reject the bloc's demand for an unconditional waiver from metals-import tariffs .

"A trade war is a losing game for everybody," Belgian Finance Minister Johan Van Overtveldt told reporters in Sofia where Europe's finance ministers have gathered. " We should stay cool when we're thinking about reactions but the basic point is that nobody wins in a trade war so we try to avoid it at all costs. "

Well, Trump disagrees which is why his administration has given Europe, Canada and other allies an option: accept quotas in exchange for an exemption from the steel and aluminum tariffs that kick on Tuesday, when the temporary waiver expires. "We are asking of everyone: quotas if not tariffs," Commerce Secretary Wilbur Ross said on Friday. This, as Bloomberg points out , puts the EU in the difficult position of either succumbing to U.S. demands that could breach international commerce rules, or face punitive tariffs.

Forcing governments to limit shipments of goods violates World Trade Organization rules, which prohibit so-called voluntary export restraints. The demand is also contrary to the entire trade philosophy of the 28-nation bloc, which is founded on the principle of the free movement of goods.

Adding to the confusion, while WTO rules foresee the possibility of countries taking emergency "safeguard" measures involving import quotas for specific goods, such steps are rare, must be temporary and can be legally challenged. The EU is demanding a permanent, unconditional waiver from the U.S. tariffs.

Meanwhile, amid the impotent EU bluster, so far only South Korea has been formally spared from the duties, after reaching a deal last month to revise its bilateral free-trade agreement with the U.S.

Europe, on the other hand, refuses to reach a compromise, and according to a EU official, "Trump's demands to curb steel and aluminum exports to 90 percent of the level of the previous two years are unacceptable." The question then is whether Europe's retaliatory move would be painful enough to deter Trump and lift the sanctions: the official said the EU's response would depend on the level of the quotas after which the punitive tariffs would kick in; meanwhile the European Commission continues to "stress the bloc's consistent call for an unconditional, permanent exclusion from the American metal levies."

"In the short run it might help them solve their trade balance but in the long run it will worsen trade conditions," Bulgarian Finance Minister Vladislav Goranov said in Sofia. "The tools they're using to make America great again might result in certain mistakes because free world trade has proven to be the best solution for the development of the world so far."

Around the time of his meeting, French President Emmanuel Macron made it clear that the EU is not afraid of an escalating trade war and will not be intimidated, saying " we won't talk about anything while there's a gun pointed at our head. "

He may change his opinion once Trump fires the first bullet.

Adding to Europe's disappointment, during her visit to the White House on Friday, Angela Merkel said she discussed trade disputes with Trump and that she failed to win a public commitment to halt the tariffs.

Meanwhile, Merkel's new bffs over in France are also hunkering down in preparation for a lengthy conflict. French economy minister Bruone Le Maire told his fellow European bureaucrats Sofia during a discussion on taxation: "One thing I learned from my week in the U.S. with President Macron: The Americans will only respect a show of strength."

Coming from the French, that observation is as accurate as it is delightfully ironic.

And now the real question is who has the most to lose from the imminent Transatlantic trade war, and will surrender first.

[Apr 28, 2018] Macron The Last Multilateralist

Notable quotes:
"... "Since the WTO was created in the mid-90s, the U.S. has run $12 trillion in trade deficits, and among the organization's biggest beneficiaries -- the EU." ..."
Apr 28, 2018 | www.theamericanconservative.com

"Together," President Macron instructed President Trump, "we can resist the rise of aggressive nationalisms that deny our history and divide the world."

In an address before Congress on Wednesday, France's Macron denounced "extreme nationalism," invoked the UN, NATO, WTO, and Paris climate accord, and implored Trump's America to come home to the New World Order.

"The United States is the one who invented this multilateralism," Macron went on, "you are the one now who has to help preserve and reinvent it."

His visit was hailed and his views cheered, but on reflection, the ideas of Emmanuel Macron seem to be less about tomorrow than yesterday.

For the world he celebrates is receding into history.

The America of 2018 is coming to see NATO as having evolved into an endless U.S. commitment to go to war with Russia on behalf of a rich Europe that resolutely refuses to provide for its own defense.

Since the WTO was created in the mid-90s, the U.S. has run $12 trillion in trade deficits, and among the organization's biggest beneficiaries -- the EU.

Under the Paris climate accord, environmental restrictions are put upon the United States from which China is exempt.

As for the UN, is that sinkhole of anti-Americanism, the General Assembly, really worth the scores of billions we have plunged into it?

"Aggressive nationalism" is a term that might well fit Napoleon Bonaparte, whose Arc de Triomphe sits on the Champs-Elysees. But does it really fit the Hungarians, Poles, Brits, Scots, Catalans, and other indigenous peoples of Europe who are now using democratic methods and means to preserve their national homes?

And the United States would seem an odd place to go about venting on "aggressive nationalisms that deny our history."

Did Macron not learn at the Lycee Henri IV in Paris or the Ecole Nationale d'Administration how the Americans acquired all that land?

General Washington, at whose Mount Vernon home Macron dined, was a nationalist who fought for six years to sever America's ties to the nation under which he was born.

How does Macron think Andrew Jackson acquired Florida from Spain, Sam Houston acquired Texas from Mexico, and Winfield Scott and Zachary Taylor acquired the Southwest? By bartering?

Aggressive nationalism is a good synonym for the Manifest Destiny of a republic that went about relieving Spain of Cuba, Puerto Rico, Guam, and the Philippines.

How does Macron think the "New World" was conquered and colonized if not by aggressive British, French, and Spanish nationalists determined to impose their rule upon weaker indigenous tribes?

Was it not nationalism that broke up the USSR into 15 nations?

Was not the Zionist movement that resurrected Israel in 1948, and in 1967 captured the West Bank and then annexed East Jerusalem and the Golan Heights, a manifestation of aggressive nationalism?

Macron is an echo of George H.W. Bush who in Kiev in 1991 warned Ukrainians against the "suicidal nationalism" of declaring independence from the Russian Federation.

"Aggressive nationalisms divide the world," warns Macron.

Well, yes, they do, which is why we have now 194 members of the U.N., rather than the original 50. Is this a problem?

"Together," said Macron, "we will build a new, strong multilateralism that defends pluralism and democracy in the face of ill winds."

Macron belongs to a political class that sees open borders and free trade thickening and tightening the ties of dependency, and eventually creating a One Europe whose destiny his crowd will forever control.

But if his idea of pluralism is multiracial, multiethnic, and multicultural nations, with a multilateral EU overlord, he is describing a future that tens of millions of Europeans believe means the deaths of the nations that give meaning to their lives.

And they will not go gently into that good night.

In America, too, millions have come to recognize that there is a method to the seeming madness of open borders. Name of the game: dispossessing the deplorables of the country they love.

With open borders and mass migration of over a million people a year into the USA, almost all of them from third-world countries that vote 70 to 90 percent Democratic, the left is foreclosing the future. They're converting the greatest country of the West into what Teddy Roosevelt called a "polyglot boarding house for the world." And in that boarding house the left will have a lock on the presidency.

With the collaboration of co-conspirators in the media, progressives throw a cloak of altruism over the cynical seizure of permanent power.

For, as the millions of immigrants here legally and illegally register, and the vote is extended to prison inmates, ex-cons, and 16-year-olds, the political complexion of America will come to resemble San Francisco.

End goal: ensure that what happened in 2016, when the nation rose up and threw out a despised establishment, never happens again.

Patrick J. Buchanan is the author of a new book, Nixon's White House Wars: The Battles That Made and Broke a President and Divided America Forever. To find out more about Patrick Buchanan and read features by other Creators writers and cartoonists, visit the Creators website at www.creators.com.

12 Responses to Macron: The Last Multilateralist

georgina davenport April 27, 2018 at 12:29 am

Let's remember, it was nationalism that led German, Japan and Italy into the two world wars. Like everything, nationalism is not absolutely good or absolutely bad.

European nationalism that led them to colonize other weaker countries was not a good thing. Nationalism that led the colonized countries to fight for independence was a good thing.

The current rising of nationalism is not a good thing because it is often bound up with white nationalism, a belief that the non-whites are inferior people undeserving of care and happiness.

While I understand the anxiety of White people for losing their power of dominance, multiculturalism is a future that can't be rolled back no matter how much they long for the past white homogeneity. Because technology that made our world smaller and flatter can't be uninvented.

I agree the West can't absorb all the immigrants who want to find new life in the West. The solution is not to shun the immigrants and pretend they don't exist. The solution is to acknowledge their suffering and their need for a stable home and help them build that at their home countries.

Biologically, it is known that our genes get stronger with more diversity, that community gets weaker with too much in breeding. So is our strength as a people, culturally, philosophically, spiritually and creatively.

Petrus , says: April 27, 2018 at 3:55 am
Another nice notion on the mis/abuse of the world nationalism from Mr. Buchanan. From a Central European perspective, however Macron's alleged multilateralism as presented in Washington is just a pretence peddled for the media – teaming up with Angela Merkel (more specifically, with Germany's economic strength), Macron pretty much insists on reining in the rebellious Visegrad 4 politically, without the slightest interest in reaching a mutually beneficial compromise with them.
Dan Green , says: April 27, 2018 at 8:43 am
If only the deplorable's had come to their senses, and elected Hillary, to carry on Hope and Change, we wouldn't be having all this polarity.
Kurt Gayle , says: April 27, 2018 at 8:49 am
Pat points to Macron's globalist trade babble to Congress answers:

"Since the WTO was created in the mid-90s, the U.S. has run $12 trillion in trade deficits, and among the organization's biggest beneficiaries -- the EU."

President Trump's economic nationalist/fair trade agenda can fix this problem.

KD , says: April 27, 2018 at 9:21 am
It strikes me that both France and Germany have large enough populations, economies and technical know-how to produce effective modern fighting forces. Second, given the size of EU, it is clear that the EU, if it could get its act together, would be capable of projecting force in the world on an equal playing field with the United States.

The European Leaders appeals to Trump to pursue European interests in American foreign policy are simply pathetic. If Europe has foreign interests, they will only be able to protect and insure them if they retake their sovereignty and independence on the world stage.

Europe can, and I suspect Europe will, because their problem is not just Trump and whether he is impeached or re-elected, it is that European interests are being held hostage to the American Electorate, which can and will return a Cowboy to the Presidency long after Trump is gone.

I don't see how, given the developments with the Iran Deal, as well as other frictions, that the NATO alliance can remain standing. None of the above reflections are particularly ideological, and it seems impossible that Merkel and Macron couldn't entertain such thoughts.

Europe can, and inevitably will, declare independence from the Americans, and I see NATO unraveling and a new dawn of European "multilateralism" taking its place.

Emil Bogdan , says: April 27, 2018 at 11:11 am
Nationalism and Multiculturalism cannot coexist separately, they're in tendsion as we all try to balance the scales.

Without the benefit of nationalism, the Koreas would not have done what they just did. My own "ethnic people" are the minority of 1.2 million Hungarians who live in Romania, who have lived there for centuries and will not leave their homeland except many of them do, like my parents did, and many of my other relatives and friends–the number was 1.5 million not too long ago, and I was estimating 1.8, but man, we are dwindling. Only 1.2 million! That shocks me. Nationalism keeps us alive. But if that's all we had, then the Romanians would be totally nationalistic too, and they will forcefully seek to curtail minority rights, language, culture, and slowly choke us out. That's the nationalist philosophy on minorities.

That's your philosophy, and you're saying what will happen here is liberals will slowly turn the country into San Francisco. You make the same error as my friend in another thread. You cannot compare a city and its politics to a province or a country, or to any territory that contains vast farmlands.

Pat, you are saying that it's possible for the entire Byzantine Empire to take on the precise political complexion of the walled city of Constantinople. That city cannot feed itself, it's not a self-contained social or political entity.

The roiling cities of San Francisco/Bay Area and glorious Constantinople are and were completely and totally dependent on the countryside, and thus, on the politics the rurals tend to practice. The rurals need to feel the effects of city politics too.

No city anywhere is self-contained, and most cities are more liberal than their hinterlands, so should we do away with cities?

You can see it as symbiotic or some kind of yin and yang tension, however you prefer. But one is good and the other is evil? I don't buy that.

Emil Bogdan , says: April 27, 2018 at 11:26 am
I'm pretty sure I should say ALL cities are more liberal then the surrounding countrysides which feed them. After all, the city is really just the most commonly known major local market, which the villages eventually form organically. One village in particular stands out, and the neighbors start flocking more and more to its market, some decide to move there and contribute even more to the good energy, and voila, the first city is soon born.

Then it takes on pride, and starts thinking it's superior to the "rubes." It isn't. I was lucky enough to get my foundations in a village, I know its incredible efficiency and _conservative_ values and lifestyle, but trust me, there's plenty of drunkenness and scandal, even among the sainted rubes who raised me.

Keep slapping down the cities, Pat, but don't exaggerate the threat, no self-supporting society on Earth could live the way those freaks live in San Francisco, or Constantinople, that's a fact.

Emil Bogdan , says: April 27, 2018 at 12:12 pm
My apologies, I know I go on a little long sometimes:

I am an American now, and America is my "us," I don't have mixed political allegiances, just cultural ones. I don't live in my original homeland anymore. The choice to leave wasn't mine, though.

If I had a choice to leave my country of origin, the land I was raised in and find familiar–and I have been in America since age twelve, so I do see it as home and very familiar–I would be daunted. Speaking as an average American adult, I know that moving to another English-speaking and equally advanced country is complicated enough for the average American. Imagine uprooting and going to a foreign land whose language you don't know yet, where everything is a lot more expensive. Try getting a job there. Let's say you have no college degree. Try it. I wouldn't want to.

Immigrants are tough as nails, I'm sorry to say. You have no chance against them, actually. You cannot even conceive of the willpower and trials by fire. Most people quite understandably can't fathom it, unless they actually try it or see it with their own eyes.

[Apr 25, 2018] How The Globalism Con Game Leads To A 'New World Order' by Brandon Smith

Notable quotes:
"... The ultimate goal of the new world order as an ideology is total centralization of economic and governmental power into the hands of a select and unaccountable bureaucracy made up of international financiers. This is governance according the the dictates of Plato's Republic; a delusional fantasy world in which benevolent philosopher kings, supposedly smarter and more objective than the rest of us, rule from on high with scientific precision and wisdom. It is a world where administrators become gods. ..."
"... Large corporations receive unfair legal protection under limited liability as well as outright legislative protection from civil consequences (Monsanto is a perfect example of this). They also receive immense taxpayer funded welfare through bailouts and other sources when they fail to manage their business responsibly. All this while small businesses and entrepreneurs are impeded at every turn by taxation and legal obstacles. ..."
"... Only massive corporations supported by governments are able to exploit the advantages of international manufacturing and labor sources in a way that ensures long term success. Meanwhile economic models that promote true decentralization and localism become impractical because real competition is never allowed. The world has not enjoyed free markets in at least a century. What we have today is something entirely different. ..."
"... The fact is, globalist institutions and central banks permeate almost every corner of the world. Nations like Russia and China are just as heavily tied to the IMF and the Bank for International Settlements and international financial centers like Goldman Sachs as any western government. ..."
"... The first inclination of human beings is to discriminate against ideas and people they see as destructive and counter to their prosperity. Globalists therefore have to convince a majority of people that the very tribalism that has fueled our social evolution and some of the greatest ideas in history is actually the source of our eventual doom. ..."
"... As mentioned earlier, globalists cannot have their "new world order" unless they can convince the masses to ask for it. Trying to implement such a system by force alone would end in failure, because revolution is the natural end result of tyranny. Therefore, the new world order has to be introduced as if it had been formed by coincidence or by providence. Any hint that the public is being conned into accepting global centralization would trigger widespread resistance. ..."
"... This is why globalism is always presented in the mainstream media as a natural extension of civilization's higher achievement. Even though it was the dangerous interdependency of globalism that helped fuel the economic crisis of 2008 and continues to escalate that crisis to this day, more globalism is continually promoted as the solution to the problem. It is spoken of with reverence in mainstream economic publications and political discussions. It receives almost religious praise in the halls of academia. Globalism is socioeconomic ambrosia -- the food of deities. It is the fountain of youth. It is a new Eden. ..."
"... Obviously, this adoration for globalism is nonsense. There is no evidence whatsoever that globalism is a positive force for humanity, let alone a natural one. There is far more evidence that globalism is a poisonous ideology that can only ever gain a foothold through trickery and through false flags. ..."
Apr 25, 2018 | www.zerohedge.com

Authored by Brandon Smith via Alt-Market.com,

When globalists speak publicly about a "new world order" they are speaking about something very specific and rather sacred in their little cult of elitism. It is not simply the notion that civilization shifts or changes abruptly on its own; rather, it is their name for a directed and engineered vision - a world built according to their rules, not a world that evolved naturally according to necessity.

There are other names for this engineered vision, including the "global economic reset," or the more general and innocuous term "globalism," but the intention is the same.

The ultimate goal of the new world order as an ideology is total centralization of economic and governmental power into the hands of a select and unaccountable bureaucracy made up of international financiers. This is governance according the the dictates of Plato's Republic; a delusional fantasy world in which benevolent philosopher kings, supposedly smarter and more objective than the rest of us, rule from on high with scientific precision and wisdom. It is a world where administrators become gods.

Such precision and objectivity within human systems is not possible, of course . Human beings are far too susceptible to their own biases and personal desires to be given totalitarian power over others. The results will always be destruction and disaster. Then, add to this the fact that the kinds of people who often pursue such power are predominantly narcissistic sociopaths and psychopaths. If a governmental structure of high level centralization is allowed to form, it opens a door for these mentally and spiritually broken people to play out their twisted motives on a global stage.

It is important to remember that sociopaths are prone to fabricating all kinds of high minded ideals to provide cover for their actions. That is to say, they will adopt a host of seemingly noble causes to rationalize their scramble for power, but in the end these "humanitarians" only care about imposing their will on as many people as possible while feeding off them for as long as time allows.

There are many false promises, misrepresentations and fraudulent conceptions surrounding the narrative of globalism. Some of them are rather clever and subversive and are difficult to pick out in the deliberately created fog. The schemes involved in implementing globalism are designed to confuse the masses with crisis until they end up ASKING for more centralization and less freedom.

Let's examine some of the most common propaganda methods and arguments behind the push for globalization and a "new world order"

Con #1: Globalism Is About "Free Markets"

A common pro-globalism meme is the idea that globalization is not really centralization, but decentralization. This plays primarily to the economic side of global governance, which in my view is the most important because without economic centralization political centralization is not possible.

Free markets according to Adam Smith, a pioneer of the philosophy, are supposed to provide open paths for anyone with superior ideas and ingenuity to pursue those ideas without interference from government or government aided institutions. What we have today under globalism are NOT free markets. Instead, globalism has supplied unfettered power to international corporations which cannot exist without government charter and government financial aid.

The corporate model is completely counter to Adam Smith's original premise of free market trade. Large corporations receive unfair legal protection under limited liability as well as outright legislative protection from civil consequences (Monsanto is a perfect example of this). They also receive immense taxpayer funded welfare through bailouts and other sources when they fail to manage their business responsibly. All this while small businesses and entrepreneurs are impeded at every turn by taxation and legal obstacles.

In terms of international trade being "free trade," this is not really the case either. Only massive corporations supported by governments are able to exploit the advantages of international manufacturing and labor sources in a way that ensures long term success. Meanwhile economic models that promote true decentralization and localism become impractical because real competition is never allowed. The world has not enjoyed free markets in at least a century. What we have today is something entirely different.

Con #2: Globalism Is About A "Multipolar World"

This is a relatively new disinformation tactic that I attribute directly to the success of the liberty movement and alternative economists. As the public becomes more educated on the dangers of economic centralization and more specifically the dangers of central banks, the globalists are attempting to shift the narrative to muddy the waters.

For example, the liberty movement has railed against the existence of the Federal Reserve and fiat dollar hegemony to the point that our information campaign has been breaking into mainstream thought. The problem is that globalism is not about the dollar, U.S. hegemony or the so-called "deep state," which in my view is a distraction from the bigger issue at hand.

The fact is, globalist institutions and central banks permeate almost every corner of the world. Nations like Russia and China are just as heavily tied to the IMF and the Bank for International Settlements and international financial centers like Goldman Sachs as any western government.

Part of the plan for the new world order, as has been openly admitted by globalists and globalist publications, is the decline of the U.S. and the dollar system to make way for one world financial governance through the IMF as well as the Special Drawing Rights basket as a mechanism for the world reserve currency. The globalists WANT a less dominant U.S. and a more involved East, while the East continues to call for more control of the global economy by the IMF. This concept unfortunately flies over the heads of most economists, even in the liberty movement.

So, the great lie being promoted now is that the fall of the U.S. and the dollar is a "good thing" because it will result in "decentralization," a "multi-polar" world order and the "death" of globalism. However, what is really happening is that as the U.S. falls globalist edifices like the IMF and the BIS rise. We are moving from centralization to super-centralization. Globalists have pulled a bait and switch in order to trick the liberty movement into supporting the success of the East (which is actually also globalist controlled) and a philosophy which basically amounts to a re-branding of the new world order as some kind of decentralized paradise.

Con #3: Nationalism Is The Source Of War, And Globalism Will End It

If there's one thing globalists have a love/hate relationship with, it's humanity's natural tribal instincts. On the one hand, they like tribalism because in some cases tribalism can be turned into zealotry, and zealots are easy to exploit and manipulate. Wars between nations (tribes) can be instigated if the tribal instinct is weighted with artificial fears and threats.

On the other hand, tribalism lends itself to natural decentralization of societies because tribalism in its best form is the development of many groups organized around a variety of ideas and principles and projects. This makes the establishment of a "one world ideology" very difficult, if not impossible. The first inclination of human beings is to discriminate against ideas and people they see as destructive and counter to their prosperity. Globalists therefore have to convince a majority of people that the very tribalism that has fueled our social evolution and some of the greatest ideas in history is actually the source of our eventual doom.

Nationalism served the globalists to a point, but now they need to get rid of it entirely. This requires considerable crisis blamed on nationalism and "populist" ideals. Engineered war, whether kinetic or economic, is the best method to scapegoat tribalism. Every tragedy from now on must eventually be attributed to ideas of separation and logical discrimination against negative ideologies. The solution of globalism will then be offered; a one world system in which all separation is deemed "evil."

Con #4: Globalism Is Natural And Inevitable

As mentioned earlier, globalists cannot have their "new world order" unless they can convince the masses to ask for it. Trying to implement such a system by force alone would end in failure, because revolution is the natural end result of tyranny. Therefore, the new world order has to be introduced as if it had been formed by coincidence or by providence. Any hint that the public is being conned into accepting global centralization would trigger widespread resistance.

This is why globalism is always presented in the mainstream media as a natural extension of civilization's higher achievement. Even though it was the dangerous interdependency of globalism that helped fuel the economic crisis of 2008 and continues to escalate that crisis to this day, more globalism is continually promoted as the solution to the problem. It is spoken of with reverence in mainstream economic publications and political discussions. It receives almost religious praise in the halls of academia. Globalism is socioeconomic ambrosia -- the food of deities. It is the fountain of youth. It is a new Eden.

Obviously, this adoration for globalism is nonsense. There is no evidence whatsoever that globalism is a positive force for humanity, let alone a natural one. There is far more evidence that globalism is a poisonous ideology that can only ever gain a foothold through trickery and through false flags.

We live in an era that represents an ultimate crossroads for civilization; a time of great uncertainty. Will we seek truth in the trials we face, and thus the ability to create our own solutions? Or, will we take a seemingly easier road by embracing whatever solutions are handed to us by the establishment? Make no mistake -- the globalists already have a solution prepackaged for us. They have been acclimating and conditioning the public to accept it for decades now. That solution will not bring what it promises. It will not bring peace, but eternal war. It will not bring togetherness, but isolation. It will not bring understanding, but ignorance.

When globalists eventually try to sell us on a full-blown new world order, they will pull out every conceivable image of heaven on Earth, but they will do this only after creating a tangible and ever present hell.

* * *

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[Apr 05, 2018] Resurgence of nationalism put neoliberal globalism

This Guardian pressitute can't even mentions the term neoliberalism, to day noting to accept that neoliberalism now experience a crisis (which actually started in 2008)
Globalization blowback will not totally bury neoliberal globalization, but it puts some limits on transnational corporations racket...
Apr 05, 2018 | www.theguardian.com

Originally from The demise of the nation state By Rana Dasgupta

hat is happening to national politics? Every day in the US, events further exceed the imaginations of absurdist novelists and comedians; politics in the UK still shows few signs of recovery after the " national nervous breakdown " of Brexit. France " narrowly escaped a heart attack " in last year's elections, but the country's leading daily feels this has done little to alter the " accelerated decomposition " of the political system. In neighbouring Spain, El País goes so far as to say that "the rule of law, the democratic system and even the market economy are in doubt"; in Italy, "the collapse of the establishment" in the March elections has even brought talk of a "barbarian arrival", as if Rome were falling once again. In Germany, meanwhile, neo-fascists are preparing to take up their role as official opposition , introducing anxious volatility into the bastion of European stability.

But the convulsions in national politics are not confined to the west. Exhaustion, hopelessness, the dwindling effectiveness of old ways: these are the themes of politics all across the world. This is why energetic authoritarian "solutions" are currently so popular: distraction by war (Russia, Turkey); ethno-religious "purification" (India, Hungary, Myanmar); the magnification of presidential powers and the corresponding abandonment of civil rights and the rule of law (China, Rwanda, Venezuela, Thailand, the Philippines and many more).

What is the relationship between these various upheavals? We tend to regard them as entirely separate – for, in political life, national solipsism is the rule. In each country, the tendency is to blame "our" history, "our" populists, "our" media, "our" institutions, "our" lousy politicians. And this is understandable, since the organs of modern political consciousness – public education and mass media – emerged in the 19th century from a globe-conquering ideology of unique national destinies. When we discuss "politics", we refer to what goes on inside sovereign states; everything else is "foreign affairs" or "international relations" – even in this era of global financial and technological integration. We may buy the same products in every country of the world, we may all use Google and Facebook, but political life, curiously, is made of separate stuff and keeps the antique faith of borders.

Yes, there is awareness that similar varieties of populism are erupting in many countries. Several have noted the parallels in style and substance between leaders such as Donald Trump, Vladimir Putin, Narendra Modi, Viktor Orbán and Recep Tayyip Erdoğan. There is a sense that something is in the air – some coincidence of feeling between places. But this does not get close enough. For there is no coincidence. All countries are today embedded in the same system, which subjects them all to the same pressures: and it is these that are squeezing and warping national political life everywhere. And their effect is quite the opposite – despite the desperate flag-waving – of the oft-remarked " resurgence of the nation state ".

[Apr 05, 2018] The Globalisation: the rise and fall of an idea that swept the world

Apr 05, 2018 | www.theguardian.com

The future of economic globalisation, for which the Davos men and women see themselves as caretakers, had been shaken by a series of political earthquakes. "Globalisation" can mean many things, but what lay in particular doubt was the long-advanced project of increasing free trade in goods across borders. The previous summer, Britain had voted to leave the largest trading bloc in the world. In November, the unexpected victory of Donald Trump , who vowed to withdraw from major trade deals, appeared to jeopardise the trading relationships of the world's richest country. Forthcoming elections in France and Germany suddenly seemed to bear the possibility of anti-globalisation parties garnering better results than ever before. The barbarians weren't at the gates to the ski-lifts yet – but they weren't very far.

In a panel titled Governing Globalisation , the economist Dambisa Moyo , otherwise a well-known supporter of free trade, forthrightly asked the audience to accept that "there have been significant losses" from globalisation. "It is not clear to me that we are going to be able to remedy them under the current infrastructure," she added. Christine Lagarde, the head of the International Monetary Fund, called for a policy hitherto foreign to the World Economic Forum : "more redistribution". After years of hedging or discounting the malign effects of free trade, it was time to face facts: globalisation caused job losses and depressed wages, and the usual Davos proposals – such as instructing affected populations to accept the new reality – weren't going to work. Unless something changed, the political consequences were likely to get worse.

The backlash to globalisation has helped fuel the extraordinary political shifts of the past 18 months. During the close race to become the Democratic party candidate, senator Bernie Sanders relentlessly attacked Hillary Clinton on her support for free trade . On the campaign trail, Donald Trump openly proposed tilting the terms of trade in favour of American industry. "Americanism, not globalism, shall be our creed," he bellowed at the Republican national convention last July. The vote for Brexit was strongest in the regions of the UK devastated by the flight of manufacturing. At Davos in January, British prime minister Theresa May, the leader of the party of capital and inherited wealth, improbably picked up the theme, warning that, for many, "talk of greater globalisation means their jobs being outsourced and wages undercut." Meanwhile, the European far right has been warning against free movement of people as well as goods. Following her qualifying victory in the first round of France's presidential election, Marine Le Pen warned darkly that "the main thing at stake in this election is the rampant globalisation that is endangering our civilisation."

It was only a few decades ago that globalisation was held by many, even by some critics, to be an inevitable, unstoppable force. "Rejecting globalisation," the American journalist George Packer has written, "was like rejecting the sunrise." Globalisation could take place in services, capital and ideas, making it a notoriously imprecise term; but what it meant most often was making it cheaper to trade across borders – something that seemed to many at the time to be an unquestionable good. In practice, this often meant that industry would move from rich countries, where labour was expensive, to poor countries, where labour was cheaper. People in the rich countries would either have to accept lower wages to compete, or lose their jobs. But no matter what, the goods they formerly produced would now be imported, and be even cheaper. And the unemployed could get new, higher-skilled jobs (if they got the requisite training). Mainstream economists and politicians upheld the consensus about the merits of globalisation, with little concern that there might be political consequences.

Back then, economists could calmly chalk up anti-globalisation sentiment to a marginal group of delusional protesters, or disgruntled stragglers still toiling uselessly in "sunset industries". These days, as sizable constituencies have voted in country after country for anti-free-trade policies, or candidates that promise to limit them, the old self-assurance is gone. Millions have rejected, with uncertain results, the punishing logic that globalisation could not be stopped. The backlash has swelled a wave of soul-searching among economists, one that had already begun to roll ashore with the financial crisis. How did they fail to foresee the repercussions?

[Apr 01, 2018] Globalization by Dan Crawford

Mar 30, 2018 | angrybearblog.com
The story of globalization from a US point of view continues. Here AB reader Denis Drew is highlighted at DeLong's website:

Comment of the Day : Dennis Drew : GLOBALIZATION: WHAT DID PAUL KRUGMAN MISS? : "I'm always the first to say that if today's 10 dollars an hour jobs paid 20 dollars an hour

(Walgreen's, Target, fast food less w/much high labor costs) that would solve most social problems caused by loss of manufacturing (to out sourcing or automation). The money's there. Bottom 40% income take about 10% of overall income. "Mid" take about 67.5%. Top 1%, 22.5%. The instrument of moving 10% more from "mid" to the bottom is higher consumer prices arriving with the sudden reappearance of nationwide, high union density (see below for the easy application). The instrument of retrieving the "mid's" lost 10% is Eisenhower level confiscatory taxes for the top 1%.

Jack Kennedy lowered max income tax rate from 92% to 70% to improve incentives (other cuts followed). But with the top 1% wages now 20X (!) what they were in the 60s while per capita only doubled since, there will be all the incentive in the world left over while we relieve them of the burden of stultifying wealth. ;-)

[Apr 01, 2018] On What We Missed About Globalization

Apr 01, 2018 | angrybearblog.com

... ... ...

Brad argues that globalization is as good for the USA as Krugman thought in the 1990s. He has three key arguments. One is that the manufacturing employment which has been off shored is unskilled assembly and such boring jobs are not good jobs. The second is that the problems faced by US manufacturing workers are mostly due to electing Reagan and W Bush and not trade. Finally he notes that local economic decline is not new at all and that trade with South Carolina did it to Massachusetts long before China entered the picture. The third point works against his general argument and is partly personal. I won't discuss it except to note that Brad is right.

I have criticisms of Brad's first two arguments. The first is that the boring easy manufacturing jobs were well paid. They are bad jobs in that thinking of doing them terrifies me even more than work in general terrifies me, but they are (or mostly were) well paid jobs. There are still strong forces that make wages paid to people who work near each other at the same firm similar. As very much noted by Dennis Drew, unions used to be very strong and used that strenth to help all employees of unionized firms (and employess of non-union firms whose managers were afraid of unions). I think that, like Krugman, Brad assumes that wages are based on skills importantly including ones acquired on the job. I think this leaves a lot out.

... ... ...

Kaleberg , April 1, 2018 4:03 pm

An argument no one mentions is about comparative advantage. The US had a comparative advantage in manufacturing. It had the engineers, the technicians, the labor, the venture capital and so on. When transportation costs are low and barriers minimal, comparative advantage is something a nation creates, not some natural attribute. The US sacrificed that comparative advantage on the altar of ideological purity. Manufacturing advantage is an especially useful type of advantage since it can permeate the remaining economy. We sacrificed it, and we have been paying for it. Odds are, we will continue to pay.

likbez , April 1, 2018 6:38 pm

The problem here is that neoliberalism and globalization are two sides of the same coin.

If you reject globalization, you need to reject neoliberalism as a social system. You just can't sit between two chairs (as Trump attempts to do propagating "bastard neoliberalism" -- neoliberal doctrine is still fully applicable within the country, but neoliberal globalization is rejected)

Rejection of neoliberal globalization also implicitly suggests that Reagan "quiet coup" that restored the power of financial oligarchy and subsequent dismantling of the New Deal Capitalism was a disaster for common people in the USA.

While this is true, that's a very tough call. That explains DeLong behavior.

[Mar 30, 2018] The Death Of The Liberal World Order by Leonid Savin

Highly recommended!
Notable quotes:
"... And, quoting his colleague Archon Fung from the Harvard Kennedy School, " American politics is no longer characterized by the rule of the median voter, if it ever was. Instead, in contemporary America the median capitalist rules as both the Democratic and Republican parties adjust their policies to attract monied interests." And finally Mr. Ringen adds, "American politicians are aware of having sunk into a murky bog of moral corruption but are trapped." ..."
"... Trump merely reflects the dysfunctionality and internal contradictions of American politics. He is the American Gorbachev, who kicked off perestroika at the wrong time. ..."
"... Global financial services exercise monopolistic power over national policies, unchecked by any semblance of global political power. Trust is haemorrhaging. The European Union, the greatest ever experiment in super-national democracy, is imploding ..."
"... Probably this is because the Western model of neoliberalism does not provide any real freedom of commerce, speech, or political activity, but rather imposes a regime of submission within a clearly defined framework. ..."
"... america is going through withdraw from 30 years of trickledown crap. the young are realizing that the shithole they inherit does not have to be a shithole, and the old pathetic white old men who run the show will be dead soon. ..."
"... The liberal order is dying because it is led by criminally depraved Predators who have pauperized the labor force and created political strife, though the populists don't pose much threat to the liberal-order Predators. ..."
"... However by shipping the productive Western economies overseas to Asia, the US in particular cannot finance and physically support a military empire or the required R&D to stay competitive on the commercial and military front. ..."
"... So the US Imperialists are being eclipsed by the Sino-Russo Alliance and wants us to believe this is a great tragedy. Meanwhile the same crew of Liberal -neoCon Deep Staters presses on with wars and tensions that are slipping out of control. ..."
Mar 30, 2018 | www.zerohedge.com

Authored Leonid Savin via Oriental Review,

A few days ago the president of the Council on Foreign Relations, Richard Haass, published an article, titled "Liberal World Order, R.I.P." In it, he states that the current threat to the liberal world order is coming not from rogue states, totalitarian regimes, religious fanatics, or obscurantist governments (special terms used by liberals when referring to other nations and countries that have not pursued the Western capitalist path of development), but from its primary architect -- the United States of America.

Haass writes: " Liberalism is in retreat. Democracies are feeling the effects of growing populism. Parties of the political extremes have gained ground in Europe. The vote in the United Kingdom in favor of leaving the EU attested to the loss of elite influence. Even the US is experiencing unprecedented attacks from its own president on the country's media, courts, and law-enforcement institutions. Authoritarian systems, including China, Russia, and Turkey, have become even more top-heavy. Countries such as Hungary and Poland seem uninterested in the fate of their young democracies

"We are seeing the emergence of regional orders. Attempts to build global frameworks are failing."

Haass has previously made alarmist statements , but this time he is employing his rhetoric to point to the global nature of this phenomenon. Although between the lines one can easily read, first of all, a certain degree of arrogance -- the idea that only we liberals and globalists really know how to administer foreign policy -- and second, the motifs of conspiracy.

"Today's other major powers, including the EU, Russia, China, India, and Japan, could be criticized for what they are doing, not doing, or both."

Probably this list could be expanded by adding a number of Latin American countries, plus Egypt, which signs arms deals with North Korea while denying any violation of UN sanctions, and the burgeoning Shiite axis of Iran-Iraq-Syria-Lebanon.

But Haass is crestfallen over the fact that it is Washington itself that is changing the rules of the game and seems completely uninterested in what its allies, partners, and clients in various corners of the world will do.

" America's decision to abandon the role it has played for more than seven decades thus marks a turning point. The liberal world order cannot survive on its own, because others lack either the interest or the means to sustain it. The result will be a world that is less free, less prosperous, and less peaceful, for Americans and others alike."

Richard Haass's colleague at the CFR, Stewart Patrick, quite agrees with the claim that it is the US itself that is burying the liberal world order . However, it's not doing it on its own, but alongside China. If the US had previously been hoping that the process of globalization would gradually transform China (and possibly destroy it, as happened to the Soviet Union earlier), then the Americans must have been quite surprised by how it has actually played out. That country modernized without being Westernized, an idea that had once been endorsed by the leader of the Islamic revolution in Iran, Ayatollah Khomeini.

Now China is expanding its influence in Eurasia in its own way, and this is for the most part welcomed by its partner countries.

But this has been a painful process for the US, as it is steadily and irrevocably undermining its hegemony.

"Its long-term ambition is to dismantle the U.S. alliance system in Asia, replacing it with a more benign (from Beijing's perspective) regional security order in which it enjoys pride of place, and ideally a sphere of influence commensurate with its power.

China's Belt and Road initiative is part and parcel of this effort, offering not only (much-needed) infrastructure investments in neighboring countries but also the promise of greater political influence in Southeast, South, and Central Asia. More aggressively, China continues to advance outrageous jurisdictional claims over almost the entirety of the South China Sea , where it continues its island-building activities, as well as engaging in provocative actions against Japan in the East China Sea," writes Patrick.

And as for the US:

"The United States, for its part, is a weary titan, no longer willing to bear the burdens of global leadership, either economically or geopolitically.

Trump treats alliances as a protection racket, and the world economy as an arena of zero-sum competition. The result is a fraying liberal international order without a champion willing to invest in the system itself. "

One can agree with both authors' assessments of the changed behavior of one sector of the US establishment, but this is about more than just Donald Trump (who is so unpredictable that he has staffed his own team with a member of the very swamp he was preparing to drain) and North American populism. One needs to look much deeper.

In his book, Nation of Devils: Democratic Leadership and the Problem of Obedience , Stein Ringen, a Norwegian statesman with a history of service in international institutions, notes:

"Today, American democratic exceptionalism is defined by a system that is dysfunctional in all the conditions that are needed for settlement and loyalty...

Capitalism has collapsed into crisis in an orgy of deregulation. Money is transgressing into politics and undermining democracy itself ."

And, quoting his colleague Archon Fung from the Harvard Kennedy School, " American politics is no longer characterized by the rule of the median voter, if it ever was. Instead, in contemporary America the median capitalist rules as both the Democratic and Republican parties adjust their policies to attract monied interests." And finally Mr. Ringen adds, "American politicians are aware of having sunk into a murky bog of moral corruption but are trapped."

Trump merely reflects the dysfunctionality and internal contradictions of American politics. He is the American Gorbachev, who kicked off perestroika at the wrong time. Although it must be conceded that if Hillary Clinton had become president, the US collapse would have been far more painful, particularly for the citizens of that country. We would have seen yet more calamitous reforms, a swelling influx of migrants, a further decline in the nation's manufacturing base, and the incitement of new conflicts. Trump is trying to keep the body of US national policy somewhat alive through hospice care, but what's really needed is a major restructuring, including far-reaching political reforms that would allow the country's citizens to feel that they can actually play a role in its destiny.

These developments have spread to many countries in Europe, a continent that, due to its transatlantic involvement, was already vulnerable and susceptible to the current geopolitical turbulence. The emergence of which, by the way, was largely a consequence of that very policy of neoliberalism.

Stein Ringen continues on that score:

"Global financial services exercise monopolistic power over national policies, unchecked by any semblance of global political power. Trust is haemorrhaging. The European Union, the greatest ever experiment in super-national democracy, is imploding "

It is interesting that panic has seized Western Europe and the US -- the home of transatlanticism, although different versions of this recipe for liberalism have been employed in other regions -- suffice it to recall the experience of Singapore or Brazil. But they don't seem as panicked there as in the West.

Probably this is because the Western model of neoliberalism does not provide any real freedom of commerce, speech, or political activity, but rather imposes a regime of submission within a clearly defined framework. Therefore, the destruction of the current system entails the loss of all those dividends previously enjoyed by the liberal political elites of the West that were obtained by speculating in the stock market, from the mechanisms of international foreign-exchange payments (the dollar system), and through the instruments of supranational organizations (the UN, WTO, and World Bank). And, of course, there are the fundamental differences in the cultural varieties of societies.

In his book The Hidden God, Lucien Goldmann draws some interesting conclusions, suggesting that the foundations of Western culture have rationalistic and tragic origins, and that a society immersed in these concepts that have "abolish[ed] both God and the community [soon sees] the disappearance of any external norm which might guide the individual in his life and actions." And because by its very nature liberalism must carry on, in its mechanical fashion, "liberating" the individual from any form of structure (social classes, the Church, family, society, and gender, ultimately liberating man from his very self), in the absence of any standards of deterrence, it is quite logical that the Western world was destined to eventually find itself in crisis. And the surge of populist movements, protectionist measures, and conservative policies of which Haass and other liberal globalists speak are nothing more than examples of those nations' instinct for self-preservation. One need not concoct conspiracy theories about Russia or Putin interfering in the US election (which Donald Trump has also denied, noting only that support was seen for Hillary Clinton, and it is entirely true that a portion of her financial backing did come from Russia). The baseline political decisions being made in the West are in step with the current crisis that is evident on so many levels. It's just that, like always, the Western elites need their ritual whipping boy(although it would be more accurate to call it a human sacrifice). This geopolitical shake-up began in the West as a result of the implicit nature of the very project of the West itself.

But since alternative development scenarios exist, the current system is eroding away. And other political projects are starting to fill the resultant ideological void -- in both form as well as content.

Thus it's fairly likely that the current crisis of liberalism will definitively bury the unipolar Western system of hegemony.

And the budding movements of populism and regional protectionism can serve as the basis for a new, multipolar world order.

J S Bach Fri, 03/30/2018 - 22:48 Permalink

Oh, Wicked Witch of the West Wing, the cleansing fire awaits thy demise! Those meds can only keep you standing for so long. Keep tripping. Keep stumbling. Satan calls you to him. The day approacheth. Tick tock tick tock. 👹😂

beepbop -> TeamDepends Fri, 03/30/2018 - 23:01 Permalink

The Death Of The Liberal World Order

The Re-Birth Of the Neocon World Disorder

Neocons=Bolsheviks=Zionists. Over 100 years of bloodshed and mayhem.

dogsandhoney2 -> J S Bach Fri, 03/30/2018 - 23:05 Permalink

hillery-cfr neoliberalism is a right-wing politic, actually.

HedgeJunkie -> carbonmutant Fri, 03/30/2018 - 23:04 Permalink

Democracy ultimately melts down into chaos. We have a perfectly good US Constitution, why don't we go back to using it as written? That said, I am for anything that makes the elites become common.

curbjob -> carbonmutant Fri, 03/30/2018 - 23:26 Permalink

Democracy is a form of government. Populism is a movement. Populist movements come about when the current form of government is failing ... historically it seems they seldom choose wisely.

Dilluminati Fri, 03/30/2018 - 22:58 Permalink

Ridiculous cunt Hillary thinks after getting REJECTED by the voters in the USA that somehow being asked to "go the fuck away and shut the fuck up" makes her a women's leader. The cocksucker Soros and some of these other non-elected globalist should keep in mind that while everybody has a right to an opinion: it took the Clinton Crime Family and lots of corruption to create the scandals that sets a Clinton Crime Family member aside, and why Soros was given a free pass on election meddling and not others requires congressional investigation and a special prosecutor. And then there is that special kind of legal and ignorant opinion like David Hogg who I just disagree with, making him in my opinion and many fellow NRA members a cocksucker and a cunt. I'd wish shingles on David Hogg, Hillary Clinton, and Soros.

Theos Fri, 03/30/2018 - 23:02 Permalink

bullshit

america is going through withdraw from 30 years of trickledown crap. the young are realizing that the shithole they inherit does not have to be a shithole, and the old pathetic white old men who run the show will be dead soon.

all i see is a bunch of fleeting old people who found facebook 10 years late are temporarily empowered since they can now connect with other equally impotent old people.

Posa Fri, 03/30/2018 - 23:10 Permalink

The usual self-serving swill from the Best and the Brightest of the Predator Class out of the CFR via Haas.

The liberal order aka the New British Empire, was born 70 years ago by firebombing and nuking undefended civilian targets. It proceeded to launch serial genocidal rampages in the Koreas, SE Asia, Latin America until finally burning down a large portion of the Middle East.

The fact that there has not been a catastrophic nuclear war is pure dumb luck. The Deep State came within seconds of engineering a nuclear cataclysm off the waters of Cuba in 1962. When JFK started dismantling the CIA Deep State and ending the Cold War with the USSR, Dulles dispatched a CIA hit-squad to gun down the President. (RFK and Nixon immediately understood the assassination was a CIA-led wet-works operation since they chaired the assassination committees themselves in the past).

The liberal order is dying because it is led by criminally depraved Predators who have pauperized the labor force and created political strife, though the populists don't pose much threat to the liberal-order Predators.

However by shipping the productive Western economies overseas to Asia, the US in particular cannot finance and physically support a military empire or the required R&D to stay competitive on the commercial and military front.

So the US Imperialists are being eclipsed by the Sino-Russo Alliance and wants us to believe this is a great tragedy. Meanwhile the same crew of Liberal -neoCon Deep Staters presses on with wars and tensions that are slipping out of control.

Yen Cross Fri, 03/30/2018 - 23:17 Permalink

I'll pay extra for a ticket to the George Soros funeral. That's like Game-7 at the Libtard world series!

devnickle Fri, 03/30/2018 - 23:22 Permalink

Death to globalism. It is the Satan World Order.

Grandad Grumps Fri, 03/30/2018 - 23:30 Permalink

Liberalism is anything but liberal... and I suppose that is the problem with it. It aims to do to the western world what Mao did to China and Stalin did to Russia. Many people were murdered or imprisoned and people had no rights, just obligations to dictators and their cronies.

I think this world is past the point where any benefit is gained from having "owners of the people", benevolent or otherwise. And we certainly do not benefit from perverted demonic entities even if they come bearing technology. The price is too high.

Populism goes along with essential freedoms for the human race.-

Yogizuna Fri, 03/30/2018 - 23:30 Permalink

As I told the idiotic retards who argued with me on Prodigy fucking 27 years ago, China will not change because of increased trading and the West making them wealthier. In fact, just the opposite. I wonder if they have caught on yet?

SuzerainGreyMole Fri, 03/30/2018 - 23:40 Permalink

One can understand the demise of the West of many levels. Downfall and then Renewal!

... ... ...

[Mar 27, 2018] Globalists Admit Defeat, Russia and China Facilitate Rise of Multipolar World by by Dmitry Kosyrev

Notable quotes:
"... The views and opinions expressed by Dmitry Kosyrev are those of the contributor and do not necessarily reflect those of Sputnik. ..."
Mar 27, 2018 | sputniknews.com

The recent German Marshall Fund's Brussels Forum, which brought together influential American neocons and trans-Atlantic leaders from Europe, marked the failure of the Western-centered globalist idea, Sputnik political observer Dmitry Kosyrev notes, adding that meanwhile, Russia and China continue to facilitate the emergence of a multi-polar world. Globalists have admitted their defeat by recognizing that neither Russia nor China will dance to their tune, Sputnik political observer Dmitry Kosyrev writes .

"It seems that work has begun to revive the half-dead 'liberal world order'," the observer noted. "It will take quite some time, and it is not necessary that the United States will be its epicenter. However, this 'order' will not be global -- goodbye, illusions. It will involve only part of the countries while China, Russia and some other states won't be affected [by the project]."

The observer referred to the 2018 German Marshall Fund's (GMF) Brussels Forum , citing Josh Rogin of The Washington Post. The Brussels Forum is an annual high-level meeting of influential politicians, corporate leaders and scholars from North America and Europe. The event had the eloquent title "Revise, Rebuild, Reboot: Strategies for a Time of Distrust." The organizers of the forum raised the alarm over "a decline in trust, both in domestic and international spheres."

"We lost sight of what it took to create this international order and what an act of defiance of history and even defiance of human nature this order has been. We have the capacity to push back -- we just need to understand the pushback needs to start occurring," Robert Kagan, neoconservative American historian and husband of former US Assistant Secretary of State for European and Eurasian Affairs Victoria Nuland told the forum, as quoted by Rogin.

For his part, Senator Chris Murphy bemoaned the fact that US President Donald Trump is not interested in "projecting liberal values" into other countries, let alone trade liberalization. The White House's recent initiative to introduce additional tariffs on aluminum and steel imports has prompted a wave of criticism from the US' global partners and allies.

Furthermore, the US president made it clear that the US will not support numerous international institutions and withdrew from the United Nations Educational, Scientific and Cultural Organization (UNESCO).

Murphy called upon the defenders of the liberal world order to team up and "build new alliances within their societies."

On the other hand, the transatlantic bloc has seemingly recognized its failure to impose a Western-style political order on Russia and China.

"We can no longer expect that the principles of liberal democracy will expand across the globe," Rogin wrote. "We can no longer assume the United States will carry the bulk of the burden."

Following Trump's win in 2016, The New York Times called Germany's Angela Merkel the last defender of the trans-Atlantic alliance and liberal values.

However, not everything is rosy in the European garden, Kosyrev noted referring to the rise of right-wing forces in Austria, Italy, Hungary, Poland and other EU member states. Although Merkel still remains at the helm of German politics, the right-wing Alternative for Germany (AfD) entered the Bundestag in September 2017 as the third-largest party.

Given all of the above, the rebuilding of the liberal international order will take years, Kosyrev presumed.

According to the political observer, Russia and China could benefit from the inner struggle in the trans-Atlantic camp. On the other hand, he does not exclude that the West will continue its overseas operations to maintain the status quo. To illustrate his point, Kosyrev referred to Syria: While Washington has virtually no leverage to oust Syrian President Bashar al-Assad, it continues its saber-rattling, threatening Damascus with a massive strike.

The failure of globalism means the further rise of a multi-polar order based on the principles of equality and sovereignty with its own norms and regulations, the political observer concluded.

The views and opinions expressed by Dmitry Kosyrev are those of the contributor and do not necessarily reflect those of Sputnik.

[Mar 26, 2018] The Real Reason for Trump's Steel and Aluminum Tariffs by Martin Feldstein

Mar 15, 2018 | www.project-syndicate.org

The Trump administration's proposed tariffs on steel and aluminum imports will target China, but not the way most observers believe. For the US, the most important bilateral trade issue has nothing to do with the Chinese authorities' failure to reduce excess steel capacity, as promised, and stop subsidizing exports.

CAMBRIDGE – Like almost all economists and most policy analysts, I prefer low trade tariffs or no tariffs at all. How, then, can US President Donald Trump's decision to impose substantial tariffs on imports of steel and aluminum be justified? 3

Trump no doubt sees potential political gains in steel- and aluminum-producing districts and in increasing the pressure on Canada and Mexico as his administration renegotiates the North American Free Trade Agreement. The European Union has announced plans to retaliate against US exports, but in the end the EU may negotiate – and agree to reduce current tariffs on US products that exceed US tariffs on European products.

But the real target of the steel and aluminum tariffs is China. The Chinese government has promised for years to reduce excess steel capacity, thereby cutting the surplus output that is sold to the United States at subsidized prices. Chinese policymakers have postponed doing so as a result of domestic pressure to protect China's own steel and aluminum jobs. The US tariffs will balance those domestic pressures and increase the likelihood that China will accelerate the reduction in subsidized excess capacity.

Because the tariffs are being levied under a provision of US trade law that applies to national security, rather than dumping or import surges, it will be possible to exempt imports from military allies in NATO, as well as Japan and South Korea, focusing the tariffs on China and avoiding the risk of a broader trade war. The administration has not yet said that it will focus the tariffs in this way; but, given that they are being introduced with a phase-in period, during which trade partners may seek exemptions, such targeting seems to be the likeliest scenario.

For the US, the most important trade issue with China concerns technology transfers, not Chinese exports of subsidized steel and aluminum. Although such subsidies hurt US producers of steel and aluminum, the resulting low prices also help US firms that use steel and aluminum, as well as US consumers that buy those products. But China unambiguously hurts US interests when it steals technology developed by US firms.

Until a few years ago, the Chinese government was using the Peoples Liberation Army's (PLA) sophisticated cyber skills to infiltrate American companies and steal technology. Chinese officials denied all wrongdoing until President Barack Obama and President Xi Jinping met in California in June 2013. Obama showed Xi detailed proof that the US had obtained through its own cyber espionage. Xi then agreed that the Chinese government would no longer use the PLA or other government agencies to steal US technology. Although it is difficult to know with certainty, it appears that such cyber theft has been reduced dramatically.

The current technology theft takes a different form. American firms that want to do business in China are often required to transfer their technology to Chinese firms as a condition of market entry. These firms "voluntarily" transfer production knowhow because they want access to a market of 1.3 billion people and an economy as large as that of the US.

These firms complain that the requirement of technology transfer is a form of extortion. Moreover, they worry that the Chinese government often delays their market access long enough for domestic firms to use their newly acquired technology to gain market share. 1

The US cannot use traditional remedies for trade disputes or World Trade Organization procedures to stop China's behavior. Nor can the US threaten to take Chinese technology or require Chinese firms to transfer it to American firms, because the Chinese do not have the kind of leading-edge technology that US firms have.

So, what can US policymakers do to help level the playing field?

This brings us back to the proposed tariffs on steel and aluminum. In my view, US negotiators will use the threat of imposing the tariffs on Chinese producers as a way to persuade China's government to abandon the policy of "voluntary" technology transfers. If that happens, and US firms can do business in China without being compelled to pay such a steep competitive price, the threat of tariffs will have been a very successful tool of trade policy.

[Mar 26, 2018] Brexit: UK Capitulates

Notable quotes:
"... The UK is clearly past the point where it could undo Brexit . There was pretty much no way to back out of Brexit, given the ferocious support for it in the tabloids versus the widespread view that a second referendum that showed that opinion had changed was a political necessity for a reversal. Pundits and politicians were cautious about even voicing the idea. ..."
"... The UK still faces high odds of significant dislocations as of Brexit date . All sorts of agreements to which the UK is a party via the EU cease to be operative once the UK become a "third country". These other countries have every reason to take advantage of the UK's week and administratively overextended position. Moreover, these countries can't entertain even discussing interim trade arrangements (new trade deals take years) until they have at least a high concept idea of what the "future relationship" with the EU will look like. Even though it looks likely to be a Canada-type deal, no one wants to waste time negotiating until that is firmed up. ..."
"... On the World Service this morning, the BBC reported from the "cultural front line against Putin". A playwright (perhaps a member of playwrights against Putin) was given half an hour from 5 am to witter on. This is half an hour more than what Brexit will get on the airwaves today. ..."
"... I think the key thing that is driving the politics for the moment is that May has shown an absolute determination to hold on to power at any cost, and she realises that having a transition agreement is central to this. ..."
"... I think you are right that the main political priority now in London is preserving May in her position. ..."
"... -- and I mean no -- ..."
Mar 26, 2018 | www.nakedcapitalism.com

A reader was kind enough to ask for a Brexit update. I hadn't provided one because truth be told, the UK press has gone quiet as the Government knuckled under in the last round of negotiations.

It is a mystery as to why the hard core Brexit faction and the true power brokers, the press barons, have gone quiet after having made such a spectacle of their incompetence and refusal to compromise. Do they not understand what is happening? Has someone done a whip count and realized they didn't have the votes if they tried forcing a crisis, and that the result would probably be a Labour government, a fate they feared far more than a disorderly Brexit?

As we've pointed out repeatedly, the EU has the vastly stronger negotiating position. The UK could stomp and huff and keep demanding its super special cherry picked special cake all it wanted to. That was a fast track to a crash-out Brexit. But it seems out of character for the Glorious Brexit true believers to sober up suddenly.

Some observations:

The transition deal is the much-decried "vassal state ". As we and others pointed out, the only transition arrangement feasible was a standstill with respect to the UK's legal arrangements with the EU, save at most some comparatively minor concessions on pet issues. The UK will remain subject to the authority of the ECJ. The UK will continue to pay into the EU budget. As we'd predicted, the transition period will go only until the end of 2020.

The UK couldn't even get a break on the Common Fisheries Policy. From the Guardian :

For [fisherman Tony] Delahunty's entire career, a lopsided system of quotas has granted up to 84% of the rights to fish some local species, such as English Channel cod, to the French, and left as little as 9% to British boats. Add on a new system that bans fishermen from throwing away unwanted catch and it becomes almost impossible to haul in a net of mixed fish without quickly exhausting more limited quotas of "choke" species such as cod .

Leaving the EU was meant to change all that .Instead, growing numbers of British fishermen feel they have been part of a bait-and-switch exercise – a shiny lure used to help reel in a gullible public. Despite only recently promising full fisheries independence as soon as Brexit day on 29 March 2019, the UK government this week capitulated to Brussels' demand for it to remain part of the common fisheries system until at least 2021, when a transition phase is due to end. Industry lobbyists fear that further cave-ins are now inevitable in the long run as the EU insists on continued access to British waters as the price of a wider post-Brexit trade deal.

The one place where the UK did get a win of sorts was on citizen's rights, where the transition deal did not make commitments, much to the consternation of both EU27 and UK nationals. Curiously, the draft approved by the EU27 last week dropped the section that had discussed citizens' rights. From the Express :

Italy's Minister of Foreign Affairs and International Cooperation, Angelino Alfano, demands EU citizens' rights be protected after Brexit .

The comments from Italy's foreign minister come after the draft Brexit agreement struck between Britain and the EU on Monday was missing "Article 32", which in previous drafts regulated the free movement of British citizens living in Europe after Brexit.

The entire article was missing from the document, which goes straight from Article 31 to Article 33.

MEPs from the Conservatives, Liberal Democrats, Labour, Greens, SNP and Plaid Cymru have written to Brexit Secretary David Davis for clarification about the missing article, while citizens' group British in Europe said the document failed to provide them with "legal certainty".

A copy of the letter sent to Mr Davis seen by the Independent said: "As UK MEPs we are deeply worried about what will happen to British citizens living in EU27 member states once we leave the EU.

This issue has apparently been pushed back to the April round of talks. I have not focused on the possible points of contention here. However, bear in mind that EU citizens could sue if they deem the eventual deal to be too unfavorable. Recall that during the 2015 Greece-Troika negotiations, some parties were advocating that Greece leave the Eurozone. A counterargument was that Greek citizens would be able to sue the Greek government for their loss of EU rights.

The UK is backing into having to accept a sea border as the solution for Ireland. As many have pointed out, there's no other remedy to the various commitments the UK has already made with respect to Ireland, as unpalatable as that solution is to the Unionists and hard core Brexiters. The UK has not put any solutions on the table as the EU keeps working on the "default" option, which was included in the Joint Agreement of December. The DUP sabre-rattled then but was not willing to blow up the negotiations then. It will be even harder for them to derail a deal now when the result would be a chaotic Brexit.

The UK is still trying to escape what appears to be the inevitable outcome. The press of the last 24 hours reports that the UK won't swallow the "backstop" plan that the EU has been refining, even though it accepts the proposition that the agreement needs to have that feature . The UK is back to trying to revive one of its barmy ideas that managed to find its way into the Joint Agreement, that of a new super special customs arrangement.

Politico gives an outline below. This is a non-starter simply because the EU will never accept any arrangement where goods can get into the EU without there being full compliance with EU rules, and that includes having them subject to the jurisdiction of the ECJ and the various relevant Brussels supervisory bodies. Without even hearing further details, the UK's barmy "alignment" notions means that the UK would somehow have a say in these legal and regulatory processes. This cheeky plan would give the UK better rights than any EU27 member. From Politico :

The key issues for debate, according to one senior U.K. official, is how the two sides can deliver "full alignment" and what the territorial scope of that commitment will be -- the U.K. or Northern Ireland.

The starting point of the U.K.'s position will be that "full alignment" should apply to goods and a limited number of services sectors, one U.K. official said.

On the customs issue, the proposal that Northern Ireland is subsumed into the EU's customs territory is a non-starter with London

The alternative would be based on one of the two customs arrangements set out by the government in August last year and reaffirmed by May in her Mansion House speech. They are either a customs partnership -- known as the "hybrid" model internally -- or the "highly streamlined customs arrangement" known by officials as "max-fac" or maximum facilitation.

The hybrid model would mean the U.K. continuing to police its border as if it were the EU's customs border, but then tracking imports to apply different tariffs depending on which market they end up in -- U.K. or EU. Under this scenario, because Northern Ireland and the Republic of Ireland would share an external EU customs border, as they do now, it would remove the need for checks on the land border between the two.

The complexity and unprecedented nature of this solution has led to accusations from the Brussels side that it amounts to "magical thinking."

The "max-fac" model is simpler conceptually but would represent a huge logistical effort for U.K. customs authorities. It would involve the use of technological and legal measures such as electronic pre-notification of goods crossing the border and a "trusted trader" status for exporters and importers, to make customs checks as efficient as possible.

While the U.K. will present both customs arrangements as possible ways of solving this aspect of the Irish border problem, one senior official said that the "hybrid" model was emerging as the preferred option in London.

The UK is already having trouble getting its customs IT upgrade done on time, which happens to be right before Brexit. As we wrote early on, even if the new programs are in place, they won't be able to handle the increased transactions volume resulting from of being outside the EU, and I haven't seen good figures as to what the impact would be of the UK becoming a third country but having its transition deal in place. In other words, even if the "mac-fac" scheme were acceptable to the EU (unlikely), the UK looks unable to pull off getting the needed infrastructure in place. Even for competent shops, large IT projects have a high failure rate. And customs isn't looking like a high capability IT player right now.

So the play for the EU is to let the UK continue to flail about and deliver Ireland "solutions" that are dead on arrival because they violate clearly and consistently stated EU red lines. The UK will then in say September be faced with a Brexit deal that is done save Ireland, and it then have to choose between capitulating (it's hard to come up with any way to improve the optics, but we do have a few months for creative ideas) or plunging into a chaotic Brexit.

The EU27 reaffirmed the EU's red lines in the most unambiguous language possible . F rom their "Guidelines" published March 23 :

6.The approach outlined below reflects the level of rights and obligations compatible with the positions stated by the UK

7. In this context, the European Council reiterates in particular that any agreement with the United Kingdom will have to be based on a balance of rights and obligations, and ensure a level playing field. A non-member of the Union, that does not live up to the same obligations as a member, cannot have the same rights and enjoy the same benefits as a member.

The European Council recalls that the four freedoms are indivisible and that there can be no "cherry picking" through participation in the Single Market based on a sector-by-sector approach, which would undermine the integrity and proper functioning of the Single Market.

The European Council further reiterates that the Union will preserve its autonomy as regards its decision-making, which excludes participation of the United Kingdom as a third-country in the Union Institutions and participation in the decision-making of the Union bodies, offices and agencies. The role of the Court of Justice of the European Union will also be fully respected.

8. As regards the core of the economic relationship, the European Council confirms its readiness to initiate work towards a balanced, ambitious and wide-ranging free trade agreement (FTA) insofar as there are sufficient guarantees for a level playing field. This agreement will be finalised and concluded once the UK is no longer a Member State.

The EU also reaffirmed the obvious, "Nothing is agreed until everything is agreed."

The EU nevertheless has relented in its negotiating tactics . The EU's initial approach was to put the most contentious issues up front: the exit tab, Ireland, freedom of movement. You will notice it has achieved closure only only one of those issues where the EU's initial position had been that they had to be concluded before the two sides would discuss "the future relationship," as in trade. This is the opposite of the approach that professional negotiators use, that of starting with the least contentious issues first to establish a working relationship between both sides and create a sense of momentum, and then tackling the difficult questions later. The EU has now allowed the UK to defer resolving the messy issue of Ireland twice, and it is not clear if any progress has been made on the citizens' rights matter.

The UK is clearly past the point where it could undo Brexit . There was pretty much no way to back out of Brexit, given the ferocious support for it in the tabloids versus the widespread view that a second referendum that showed that opinion had changed was a political necessity for a reversal. Pundits and politicians were cautious about even voicing the idea.

As we've pointed out, coming up with the wording of the referendum question took six months. In the snap elections last year, the Lib Dems set forth the most compact timeline possible for a Brexit referendum redo which presupposed that the phrasing had been settled. That was eight months. And you'd have to have a Parliamentary approval process before and a vote afterwards (Parliament is sovereign; a referendum in and of itself is not sufficient to change course).

Spain has been making noises about Gibraltar but they aren't likely to mean much . I could be proven wrong, but I don't see Spain as able to block a Brexit deal. Article 50 says that only a "qualified majority" vote is required to approve a Brexit agreement. Spain as a lone holdout couldn't keep a deal from being approved. And I don't see who would join Spain over the issue of Gibraltar. In keeping, Spain joined with the rest of the EU27 in approving the latest set of texts.

The UK still faces high odds of significant dislocations as of Brexit date . All sorts of agreements to which the UK is a party via the EU cease to be operative once the UK become a "third country". These other countries have every reason to take advantage of the UK's week and administratively overextended position. Moreover, these countries can't entertain even discussing interim trade arrangements (new trade deals take years) until they have at least a high concept idea of what the "future relationship" with the EU will look like. Even though it looks likely to be a Canada-type deal, no one wants to waste time negotiating until that is firmed up.

Like it or not, May is the ultimate survivor . Politico described the method in her seeming madness :

May has lasted in office longer than many pundits predicted she would because, weak as her grip on power may have been since she lost her parliamentary majority last year, she has timed her surrenders cleverly.

It looks chaotic and undignified, but the prime minister has hunkered down and let pro- and anti-Brexit factions in her party shout the odds in the media day and night, squabble publicly about acceptable terms for a deal, leak against each other and publish Sunday newspaper columns challenging her authority.

Then in the few days before a European summit deadline for the next phase of a deal, she has rammed the only position acceptable to Brussels through her Cabinet and effectively called the hard Brexiteers' bluff.

But what kind of leader marches her country into at worst an abyss and at best a future of lower prosperity, less clout, and no meaningful increase in autonomy? Like it or not, the UK is a small open economy, and its leaders, drunk on Imperial nostalgia, still can's stomach the idea that the UK did better by flexing its muscle within the EU that it can ever do solo.


Which is worse - bankers or terrorists , March 26, 2018 at 5:55 am

I'm curious as to the ramifications of the Northern Ireland sea border. Is reunification possible with the ROI, given that the Unionists have been completely castrated?

I'm a Californian so am not one that is tuned into the history.

PlutoniumKun , March 26, 2018 at 6:29 am

Theoretically, there is no fundamental problem with a NI sea border and NI remaining within the UK. Northern Ireland already has its own Assembly and its own laws (the Assembly is suspended at the moment), so it can, if the EU agreed, stay within the EU (albeit without a separate vote or voice at the table). There are precedents for this, such as the dependant territories of France . It would be constitutionally messy, but if authorized by Parliament in London and in the EU itself, it would likely be legally watertight so far as I am aware.

Hardline Unionists oppose this partly because they are ideologically opposed to the EU anyway (although its highly likely many of their constituents don't agree), but also because they see this as a 'thin end of the wedge' leading to a United Ireland. More thoughtful Unionists realise that a sort of 'foot in both camps' approach might actually be an economic boon to Northern Ireland – it could attract a lot of investment from companies wishing easy access to both the internal UK market and Europe.

Colonel Smithers , March 26, 2018 at 6:26 am

Thank you, Yves.

"The UK press has gone quiet as the Government knuckled under in the last round of negotiations." The MSM, corporate or government (BBC and Channel 4), are under orders to go quiet. In any case, it's easier and more fun to cover the anti-semites and anti-transgender whatever in the Labour Party, Trump's extra-marital goings-on and whatever dastardly plot Putin has come up with.

On my 'phone's news feed yesterday and today, the Corbyn's anti-Semitism is not shifting from the top line. The only change is from where the latest article is sourced.

On the World Service this morning, the BBC reported from the "cultural front line against Putin". A playwright (perhaps a member of playwrights against Putin) was given half an hour from 5 am to witter on. This is half an hour more than what Brexit will get on the airwaves today.

How are things playing out locally, Buckinghamshire in my case? The economy is slowing down. More shops are closing. Some IT contractors report contracts not being renewed and having to look for business outside the UK. East Europeans working in farming, care and social services have been replaced in many, but not all, cases by immigrants from south Asia. An cabbie and restaurateur report the worst festive season and first quarter of the year for many, many years.

At Doncaster races last Saturday, the opening day of the flat season, some bookies were offering odds of Tory victory in 2022, if not an earlier khaki one. It seems that May is a survivor and Corbyn's Labour has peaked. All very depressing.

PlutoniumKun , March 26, 2018 at 6:41 am

I think the key thing that is driving the politics for the moment is that May has shown an absolute determination to hold on to power at any cost, and she realises that having a transition agreement is central to this. I've also been puzzling over the relative acquiescence of the hard Brexiteers – I think they've been told by their paymasters that accepting a lousy transitional deal is the key to a 'clean' and firm Brexit. I believe the phrase Gove was reported as using was that they should 'keep their eye on the prize'. I think, as Yves says, the Tory establishment fears a move against May will precipitate a Corbyn government, so they see it as a strategic necessity to keep her in position, and postpone the main Brexit fallout for later.

Of lesser importance, but also I think a relevant consideration given the strong support given by Merkel, Barnier and Tusk to the Irish PM, Varadkar, is that he is rumoured to be planning a snap election in the autumn. His stance on Brexit has proven popular and he sees the time as ripe to go for an overall majority (he is currently leading a minority government). He is very much an EU establishment favourite, so I don't doubt that some of the motivation is to help his domestic politics by giving him what are perceived as 'wins' over Brexit.

If this is the case, then barring an unexpected event, I think there will be a strong political push on both sides to sign off a transition deal which would be both a complete surrender by the UK, but with sufficient spin by a supportively dim witted UK press will allow her to push the whole Brexit issue politically to one side for a year or two. The Tories will be hoping that this can be sold to the public as a success for long enough for them to work out how to stop Corbyn.

David , March 26, 2018 at 8:22 am

I'm taking the liberty of re-posting a comment I made yesterday on one of the links – a Richard North piece – to which none of the usual Brexit scholars responded (Sunday .). It bears very much on this discussion and echoes a number of points made above.

"Richard North's Brexit article is well informed as one would expect, but I think that, like a lot of other commentators, he's missing something. May is a post-modern politician, ie there is no particular link between what she says and does, and her understanding of its impact on the real world. Only her words and actions actually count, and, whether it's threatening Russia or threatening Brussels, real-world consequences don't form part of the calculation, insofar as they actually exist. Her only concern (and in this she is indeed post-modernist) is with how she is perceived by voters and the media, and as a consequence whether she can hang onto her job. I think May has decided that she will have an agreement at any cost, no matter if she has to surrender on every single issue, and throw Northern Ireland to the wolves. She wants to be seen as the Prime Minister who got us "out of Europe," just as Ted Heath got us in. The content of the final deal is secondary: not that she wouldn't prefer to please the City and the Brexit ultras if she could, but if there's a choice she will sacrifice them for a picture of her shaking hands with Barnier and waving the Union Jack with the other hand. The resulting chaos can then be blamed on a treacherous Europe. Indeed, if May can stick it out until next year, I think she'll keep her job. What a thought." I think many of the hardline Brexiters have the same idea – the political prize is exiting the EU: the damage is a secondary consideration. Any deal, no matter how humiliating, can be spun in the end as a triumph because we will have broken the shackles of Brussels.

I'd add that the EU's emphasis on the priority to give to NI was an each-way bet, as I argued at the time. Either the Tory government collapsed, and something more reasonable took its place, or May gave way on everything else, in the hope of surviving and somehow finding a NI solution later. This has indeed proved to be the case.

Finally, I wouldn't put too much store by the imperial nostalgia argument, not least because few Brexiters were even alive then. The real nostalgia is for an independent Britain capable of playing a role on the world stage, perhaps at the head of a coalition of likeminded nations. The idea of a Commonwealth Free Trade area, for example, was raised in the 1975 EU referendum debate, and has its ultimate origins in the ideas of Mill and others in the 19th century for a kind of British superstate, incorporating Australia, New Zealand, Canada and perhaps South Africa. Its ghost still walks.

Finally, let's not get too carried away with the small size of the British economy. It's the fifth or sixth largest economy in the world, depending on how you calculate it, ahead of Russia, India, Italy and Spain.

PlutoniumKun , March 26, 2018 at 9:12 am

Thanks for that, David.

I think you are right that the main political priority now in London is preserving May in her position. Whether or not she does a good deal (or any other good policy work) has become irrelevant. Its all about survival, and keeping Corbyn at bay.

Michael KILLIAN , March 26, 2018 at 9:30 am

Who are the 'wolves' to whom NI may be thrown? More interesting, who are the strange Tory Brexiteers, not exactly in sync with the needs and expectations of the City of London, big business in Britain, etc? The people for whom an imperial past is still a ghost that walks? A possible answer here:
https://www.lrb.co.uk/v40/n05/william-davies/what-are-they-after

templar555510 , March 26, 2018 at 9:33 am

Thank you David. I agree with your definition of the present Brexit set-up and May herself as post-modernist . The same could be said even more so about Trump . They have in their very different ways taken politics to a place beyond policies and even identities ( it's most recent iteration ) to this very new place where the public ( translation : American people ) simply roll over and get out of bed the next day to whatever is new and move on whether it be bombing in Syria, or Trump and a prostitute . I think the technology of the smart phone and everything that emanates from it is the handmaiden to this change . The speed of daily life as orchestrated by the smart phone has brought us all , whether we like it or not, to this post-modern , everything is a cultural construct , position which is possibly the most terrifying reality the West has ever had to face and yet it barely registers .

vlade , March 26, 2018 at 9:45 am

On your last point – it used to be larger. It would have been inconcievable even 50 years ago that the UK's economy could be compared with Spain's.

The point being that the correlation of physical closeness and trade is about as close as you get in economics to a natural law. The UK is now spurning (wilfully limiting its access to) the closest and the richest markets it has. That will have impact – and no amount of Brexiter's wishful thinking will replace it – if for nothing else, the likelyhood of the UK SMEs suddenly wanting to export to China/India/NZ/whatever is not going to grow with Brexit. Those who wanted and could, already do. The other don't want and are unlikely to want to in a new world.

Olivier , March 26, 2018 at 3:52 pm

Vlade, 50 years ago Africa still started at the Pyrenées, as the saying was in France. It is not that the UK has shrunk so much as that Spain has dramatically improved its position. So, unhelpful comparison. How the UK fared over those 50 years relative to, say, France and Germany or even Italy, would be more instructive.

Marlin , March 26, 2018 at 5:15 pm

In relation to France it stayed roughly the same. But actually the share of British GDP to world GDP is much smaller and international specialisation and globalisation is much increased. For the question if the UK can act as a "big" economy in relation to economic policy the latter is more important.

The Rev Kev , March 26, 2018 at 9:39 am

You watch. About the same time that the British wake to find that the elites have sold them down the river through devastating incompetence and sheer bloodymindedness, they will find that in the transition to Brexit that the government would have voted themselves all sorts of laws that will give them authoritarian powers. And then it will be too late.
It won't matter how bad May is at that point and she might just resign and let somebody else deal with all the fallout over the new regulations at which time she will be kicked upstairs to the House of Lords. Isn't the way that it works in practice? Don't make any preparations, tell the people that they have got it all organized, then when it all hits they start pumping out emergency orders and the like.

Anonymous2 , March 26, 2018 at 10:44 am

It all seems quite curious does it not (curiouser and curiouser?). I wonder if I smell a rat? Forgive me; I have a suspicious nature. I was thinking partly of the role of Gove, which prompted some idle musings.

Gove is reportedly telling people who support Brexit to keep their eyes on the prize, by which he is said to mean letting the clock run down to 29 March 2019 at which time the UK is officially out of the EU. When I read Gove, I tend to think Murdoch, who pulls Gove's strings. Yves quite rightly asks what the press barons are about; that is generally worth knowing when it comes to UK politics. Is Murdoch playing a longer game?

The argument goes that once the UK is out of the EU it will be much harder to get support for it to go back in again as the UK would only be allowed back in without the special privileges it had negotiated for itself over the decades : opt out from Euro, Schengen, various justice issues, the budget rebate. Is this determining Murdoch's approach at the moment – ensure that the UK is outside the EU at almost any cost before proceeding to the next stage, when Ministers will be largely unable to call Brussels in to help them against him and his allies?

Why might Murdoch want to do that? There is talk that May will be ditched once she does a deal. If it is seen as a bad deal then she becomes the scapegoat (and Gove steps in to her shoes?). Post March 2019, it might then be the plan to seek to undercut the effect of any deal struck now by, for example, pulling out of the Good Friday Agreement if that proves to be an obstacle to the trade deals Fox is so keen to sign (is he expecting kickbacks?). At that point the UK might declare that with the demise of the GFA it was no longer constrained by the terms of the Withdrawal Agreement with regards to the Irish Border and with one leap the UK would be free. I have seen cynics suggest that the men of violence in Northern Ireland might be encouraged to go on a bit if a spree to justify claims that the GFA had failed.

I hope I am wrong but as I said I have a suspicious nature and, having watched more of Murdoch's machinations than I have ever wished, know that he is very capable of playing a long game.

PlutoniumKun , March 26, 2018 at 11:06 am

I'm loath to indulge in conspiracy theorising, but when it comes to Brexit (and Northern Ireland) conspiracies are legion and real.

I'm sure in any spiders web Murdoch will be found in the middle of it, and there is certainly something up, thats the only explanation for the low key response of the hard Brexiters. It wouldn't surprise me if he has realised that a tanking UK economy isn't exactly good for his investments (its also worth noting that it seems to have belatedly been realised by the UK media economy that many of them will have to up sticks to Europe if they are to keep broadcasting rights).

My guess is that they 'have a plan' which will involve Gove playing middle man, but actually working for a decisive Brexit doing his duty for the country at some stage to step into Mays shoes. All sorts of behind the scenes promises (mostly jobs, no doubt) have probably been made. I suspect a centre piece of it would be a dramatic repudiation of any deal, supposedly on the UK's terms.

As for Northern Ireland, anything is possible. Several of the Loyalist terrorist groups have been shown over the years to be little more than puppets of the security forces, they will do what they are told. And there have long been rumours that at least one of the fringe Republican groups is so completely infiltrated that they are similarly under control. There have been nearly 50 years of shady assassinations and bombings in NI and the Republic which have the fingerprints of intelligence services, so quite literally, I could believe almost anything could happen if it was in their interest. People who c ould maintain a boys home as the centre of a paedophile ring for political purposes are capable of almost anything.

Clive , March 26, 2018 at 11:56 am

Oh yes, this is a big part of the history of "the troubles". So much of what went on in that conflict was beneficial to the U.K. government. Budget, manpower, little oversight, draconian powers and a lot more besides was enabled merely because of the paramilitary activities. It's not hard to look for well documented examples -- such as the mass warrantless surveillance of all U.K.- Republic telecommunications http://www.lamont.me.uk/capenhurst/original.html by the U.K. security services.

And virtually everyone in the dissident republican movement was under constant monitoring which was put down to "luck" https://www.independent.co.uk/news/how-ira-plotted-to-switch-off-london-1266533.html when schemes were foiled. And even then, there was so much self licking ice creams going on with the RUC effectively knowing about and even setting up IRA hits which were carried out by informants https://en.m.wikipedia.org/wiki/Martin_McGartland .

And, there's more, a lot of provisional activity was just your common or garden organised crime -- protection rackets, kidnapping and bribery.

To say that the troubles were merely to do with republicanism and unionism is like saying US Civil War was only about racism and ignoring the politics and the economics.

David , March 26, 2018 at 12:37 pm

I think that we should remember how much the anti-EU fraternity in politics and the media have had a symbiotic, if not downright parasitic, relationship with the EU itself. Much of their commerce depended on us being members, and so being able to strike poses and make cheap cracks about Europe and Brussels. I have a feeling that reality is starting to dawn, and they are standing to understand that politics will be a great deal more complicated, and probably nastier, after Brexit than even it is now.They'll have to find something else to complain about for easy applause instead of just bashing Brussels.
As for conspiracy theories, well I have the same skepticism about them of most people who've worked in government, and I happen to have been reasonably close to a number of people who had to deal with these issues in the 1970s and 1980s. There was certainly complicity in some cases, and some of the actors involved broke the rules badly , but it's a stretch from that to talk of conspiracies. With what objective? And what objective would such conspiracies have today, and how could they be implemented? The universal refrain among everyone I knew involved in the security forces at the time was Get Us Out of Here.

Anonymous2 , March 26, 2018 at 12:56 pm

To avoid confusion, I was not so much thinking conspiracy as trying to get inside Murdoch's head.

What might his objectives be? Well, the first of course is more power and wealth for himself, but he is not above making mischief.

Clive , March 26, 2018 at 1:02 pm

It'll put a cat amongst the pigeons and no mistake. If I may put in a word from the deplorables who voted Brexit, there's a lot which -- for both the UK and the EU -- was made a whole lot easier because a problem issue could simply be labelled as the British complaining and not understanding The Project.

Take energy. It was probably energy supply as much as Greece and the Ukraine which tipped me over into Brexit. At the behest of the U.K., the European energy industry became, at least in theory, a pan-continental endeavour free from national restrictive practices. Well, a fat lot of good that turned out to be. As exemplified by the recent cold weather snap, UK wholesalers when faced with a shortfall in natural gas supplies spiked the offer price into the stratosphere http://mip-prod-web.azurewebsites.net/PrevailingViewGraph/ViewReport?prevailingViewGraph=ActualPriceGraph&gasDate=2018-03-26 . No -- and I mean no -- EU suppliers made any bids. Now, it's either a Single Market or it isn't. It either looks and acts like it's subject to market forces or it doesn't. The rules are either enforced properly amongst all participants or they aren't. Irony's of irony's, when the U.K. needed an augmented natural gas input to match system demand, the only country to answer their doorbell was Russia. That, and some U.K. big capacity users releasing stocks from storage.

Now, the smell of the nationalist pulling up the drawbridge in energy supply is causing the Commission to try to document how in fact the Single Market sometimes isn't a market at all but just a token gesture and is working on the usual eurofudge http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=uriserv:OJ.L_.2018.032.01.0052.01.ENG&toc=OJ:L:2018:032:TOC (the contortions of which did genuinely have me laughing out loud). There's going to be a lot more of this to come once the U.K. can't be the donkey this kind of tail is routinely pinned on.

And it'll be the same in the U.K. of course. Without the EU ready to play it's role of perpetual bogeyman, we'll have no one to blame but ourselves. And I still cannot, in all honesty, say anything other than bring it on.

(ask me in 5 years if I still think the same..!)

Ape , March 26, 2018 at 1:44 pm

People have avoided the difficulty of reciprocal citizen's rights. How can the UK reciprocate with all the EU countries? Simultaneously? Where UK non-citizen residents can relocate for 30 years to an EU country then relocate back in the same way that a Brit in France can move to Germany for 30 years and then move back under current rules? It's even worse if you consider reciprocity to include the rights of all people outside their citizenship country's right to relocate.

The only obvious solution is to reduce Brits to the same status of any immigrant to a EU country. That means not being able to shift your permanent residency without applying for immigration.

Unless you are blue card eligible that's non-trivial.

[Mar 21, 2018] An insane anti-Putin propaganda campaign in the West helped Russian people to learn their lesson: another Yeltsin or Gorbachev in Russia are now highly unlikely. In fact, the West will regret the day Putin is gone.

Mar 21, 2018 | www.unz.com

yurivku , Next New Comment March 21, 2018 at 12:53 pm GMT

@jilles dykstra

" As far as we all know now are quite hard times to Russia and to the world as a whole. "

Why do we have these hard times ?
Could it be globalisation, western greed, and western aggression ?

Well, probably it can be more clear for those who are attacking and humiliating Russia in all directions? The West-ZUS-UK

But I think it's just an agony of Empire seeing the world order is about to change. And yes it's "western greed" which have a "western aggression" as a consequence.

The "globalisation" actually IS that world order which the West trying to establish. Russia in all times in all its internal structure was a subject of annexation and submission. But we never agreed and never will do it, until alive. The West is too stupid to get that simple thing to know and leave us to live as we are about to.

[Mar 18, 2018] Globalists Or Nationalists Who Owns The Future by Patrick Buchanan

Mar 13, 2018 | Buchanan.org

Robert Bartley, the late editorial page editor of The Wall Street Journal, was a free trade zealot who for decades championed a five-word amendment to the Constitution: "There shall be open borders."

Bartley accepted what the erasure of America's borders and an endless influx or foreign peoples and goods would mean for his country.

Said Bartley, "I think the nation-state is finished."

His vision and ideology had a long pedigree.

This free trade, open borders cult first flowered in 18th-century Britain. The St. Paul of this post-Christian faith was Richard Cobden, who mesmerized elites with the grandeur of his vision and the power of his rhetoric.

In Free Trade Hall in Manchester, Jan. 15, 1846, the crowd was so immense the seats had to be removed. There, Cobden thundered:

"I look farther; I see in the Free Trade principle that which shall act on the moral world as the principle of gravitation in the universe -- drawing men together, thrusting aside the antagonisms of race, and creed, and language, and uniting us in the bonds of eternal peace."

Britain converted to this utopian faith and threw open her markets to the world. Across the Atlantic, however, another system, that would be known as the "American System," had been embraced.

The second bill signed by President Washington was the Tariff Act of 1789. Said the Founding Father of his country in his first address to Congress: "A free people should promote such manufactures as tend to make them independent on others for essential, particularly military supplies."

In his 1791 "Report on Manufactures," Alexander Hamilton wrote, "Every nation ought to endeavor to possess within itself all the essentials of national supply. These comprise the means of subsistence, habitat, clothing and defence."

This was wisdom born of experience.

At Yorktown, Americans had to rely on French muskets and ships to win their independence. They were determined to erect a system that would end our reliance on Europe for the necessities of our national life, and establish new bonds of mutual dependency -- among Americans.

Britain's folly became manifest in World War I, as a self-reliant America stayed out, while selling to an import-dependent England the food, supplies and arms she needed to survive but could not produce.

America's own first major steps toward free trade, open borders and globalism came with JFK's Trade Expansion Act and LBJ's Immigration Act of 1965.

By the end of the Cold War, however, a reaction had set in, and a great awakening begun. U.S. trade deficits in goods were surging into the hundreds of billions, and more than a million legal and illegal immigrants were flooding in yearly, visibly altering the character of the country.

Americans were coming to realize that free trade was gutting the nation's manufacturing base and open borders meant losing the country in which they grew up. And on this earth there is no greater loss.

The new resistance of Western man to the globalist agenda is now everywhere manifest.

We see it in Trump's hostility to NAFTA, his tariffs, his border wall.

We see it in England's declaration of independence from the EU in Brexit. We see it in the political triumphs of Polish, Hungarian and Czech nationalists, in anti-EU parties rising across Europe, in the secessionist movements in Scotland and Catalonia and Ukraine, and in the admiration for Russian nationalist Vladimir Putin.

Europeans have begun to see themselves as indigenous peoples whose Old Continent is mortally imperiled by the hundreds of millions of invaders wading across the Med and desperate come and occupy their homelands.

Who owns the future? Who will decide the fate of the West?

The problem of the internationalists is that the vision they have on offer -- a world of free trade, open borders and global government -- are constructs of the mind that do not engage the heart.

Men will fight for family, faith and country. But how many will lay down their lives for pluralism and diversity?

Who will fight and die for the Eurozone and EU?

On Aug. 4, 1914, the anti-militarist German Social Democrats, the oldest and greatest socialist party in Europe, voted the credits needed for the Kaiser to wage war on France and Russia. With the German army on the march, the German socialists were Germans first.

Patriotism trumps ideology.

In "Present at the Creation," Dean Acheson wrote of the postwar world and institutions born in the years he served FDR and Truman in the Department of State: The U.N., IMF, World Bank, Marshall Plan, and with the split between East and West, NATO.

We are present now at the end of all that.

And our transnational elites have a seemingly insoluble problem.

To rising millions in the West, the open borders and free trade globalism they cherish and champion is not a glorious future, but an existential threat to the sovereignty, independence and identity of the countries they love. And they will not go gentle into that good night.

[Mar 12, 2018] Brussels is turning into Moscow in an ever increasing pace, only the tanks have been replaced by banks

Notable quotes:
"... As of leaving the EU, we have fought long and hard (sometimes each other) to be independent and free. 45 years of communism (with the obligatory internationalism) does not fade out unnoticed. I have written a long essay some two years ago here on SST about 'if it looks like a duck'. ..."
"... human rightsism has turned into a full fledged monotheistic religion, with a credo, an instutionalized church, and a serious hate against unbelievers. All that in the name of tolerance and progress. ..."
Mar 12, 2018 | turcopolier.typepad.com

Balint Somkuti, PhD -> LeaNder... , 12 March 2018 at 03:22 AM

I can't speak for the whole V4 as czechs and slovaks have been sneaky in diplomacy in the last century, and even as V4 members. We Hungarians and our Polish brothers were usually stupid enough to say what we meant (and damn the consequences) and not hide away behind ambigous terms or actions. While I can understand their cautiousness (Sp?), we 'dwa bratinki' usually say yes or no. For the czech/slovaks it is usually abstain, even if everybody knows what their stand is.

As of leaving the EU, we have fought long and hard (sometimes each other) to be independent and free. 45 years of communism (with the obligatory internationalism) does not fade out unnoticed. I have written a long essay some two years ago here on SST about 'if it looks like a duck'.

We have sensors for unsaid intentions becuase of that oppression, and for us (V4) Brussels is turning into Moscow in an ever increasing pace, only the tanks have been replaced by banks, as a late hungarian politician has said. Of course everybody welcomes free money (EU funds), but as

  1. Most of it flows back to german/french/italian/austrian companies anyway
  2. The previously hidden internationalist and centralized agenda is slowly turning into reality, not to mention the intended connection between the two (funds and internationalist policies).

It is more and more seen as Judas Iskariotes' 30 silver pieces. None wants war again in Europe, and none wants to leave the EU unless forced to do it. There has been a more or less functioning proto-EU, the Austro-Hungarian Empire that is. A similar EU, where none really can and should question German French leadership is viable, with the following terms.

  1. Internal policies are handled locally from education, to justice system, from internal affairs to other local issues etc. No human rights meddling in partner countries, no SJW pushing to accept economical migrants to poor countires etc.
  2. ONLY foreign affairs and military affairs are handled centrally, but no typical french meddling in ex colonies or R2P. European army CAN be exclusively used abroad, with all parliaments giving consent (In the age of IT this should not be a problem) or in case of foreign attack against or own soil.
  3. ONLY money to finance the above two are handled centrally. euro can stay, but no pressure to join it. And V4 will definitely want a say in it how it used.
  4. Dismantling of the social justice warrior turned, democratically deficited, internationalist, and non-transparent bureaucracy in Brussels/Strasbourg.
Balint Somkuti, PhD -> Babak Makkinejad... , 12 March 2018 at 03:24 AM
Exactly. I always say to my students, that like it or not, agree or not, human rightsism has turned into a full fledged monotheistic religion, with a credo, an instutionalized church, and a serious hate against unbelievers. All that in the name of tolerance and progress.

[Mar 11, 2018] Washington s Century-long War on Russia by Mike Whitney

Highly recommended!
The crisis of neoliberalism is at the core of current anti-Russian campaign.
Notable quotes:
"... So, as long as Russia remained open to the West's political maneuvering and wholesale thievery, every thing was hunky-dory. But as soon as Vladimir Putin got his bearings (during his second term as President) and started reassembling the broken state, then western elites became very concerned and denounced Putin as an "autocrat" and a "KGB thug." ..."
"... As the Western countries' elites were implementing a policy of political and economic containment of Russia, old threats were growing and new ones were emerging in the world, and the efforts to do away with them have failed. I think that the main reason for that is that the model of "West-centric" globalization, which developed following the dismantling of the bipolar architecture and was aimed at ensuring the prosperity of one-seventh of the world's population at the expense of the rest, proved ineffective. It is becoming more and more obvious that a narrow group of "chosen ones" is unable to ensure the sustainable growth of the global economy on their own and solve such major challenges as poverty, climate change, shortage of food and other vital resources . ..."
"... The American people need to look beyond the propaganda and try to grasp what's really going on. Russia is not Washington's enemy, it's a friend that's trying to nudge the US in adirection that will increase its opportunities for peace and prosperity in the future. Lavrov is simply pointing out that a multipolar world is inevitable as economic power becomes more widespread. This emerging reality means the US will have to modify its behavior, cooperate with other sovereign nations, comply with international law, and seek a peaceful settlement to disputes. It means greater parity between the states, fairer representation in global decision-making, and a narrower gap between the world's winners and losers. ..."
"... Admit it: The imperial model has failed. It's time to move on. ..."
www.nakedcapitalism.com

The United States has launched a three-pronged offensive on Russia. First, it's attacking Russia's economy via sanctions and oil-price manipulation. Second, it's increasing the threats to Russia's national security by arming and training militant proxies in Syria and Ukraine, and by encircling Russia with NATO forces and missile systems. And, third, it's conducting a massive disinformation campaign aimed at convincing the public that Russia is a 'meddling aggressor' that wants to destroy the foundation of American democracy. (Elections)

In response to Washington's hostility, Moscow has made every effort to extend the olive branch. Russia does not want to fight the world's biggest superpower any more than it wants to get bogged down in a bloody and protracted conflict in Syria. What Russia wants is normal, peaceful relations based on respect for each others interests and for international law. What Russia will not tolerate, however, is another Iraq-type scenario where the sovereign rights of a strategically-located state are shunted off so the US can arbitrarily topple the government, decimate the society and plunge the region deeper into chaos. Russia won't allow that, which is why it has put its Airforce at risk in Syria, to defend the foundational principle of state sovereignty upon which the entire edifice of global security rests.

The majority of Americans believe that Russia is the perpetrator of hostilities against the United States, mainly because the media and the political class have faithfully disseminated the spurious claims that Russia meddled in the 2016 elections. But the allegations are ridiculous and without merit. Russia-gate is merely the propaganda component of Washington's Full Spectrum Dominance theory, that is, disinformation is being used to make it appear as though the US is the victim when, in fact, it is the perpetrator of hostilities against Russia. Simply put, the media has turned reality on its head. Washington wants to inflict as much pain as possible on Russia because Russia has frustrated its plan to control critical resources and pipeline corridors in Central Asia and the Middle East. The Trump administration's new National Defense Strategy is quite clear on this point. Russia's opposition to Washington's destabilizing interventions has earned it the top spot on the Pentagon's "emerging rivals" list. Moscow is now Public Enemy#1.

Washington's war on Russia has a long history dating back at least 100 years to the Bolshevik Revolution of 1917. Despite the fact that the US was engaged in a war with Germany at the time (WW1), Washington and its allies sent 150,000 men from 15 nations to intervene on behalf of the "Whites" hoping to staunch the spread of communism into Europe. In the words of British Prime Minister Winston Churchill, the goal was "to strangle the Bolshevik baby in its crib."

According to Vasilis Vourkoutiotis from the University of Ottawa:

" the Allied intervention in the Russian Civil War.. was a failed attempt to eradicate Bolshevism while it was still weak .As early as February 1918 Britain supported intervention in the civil war on behalf of the Whites, and in March it landed troops in Murmansk. They were soon joined by forces from France, Italy, Japan, the United States, and ten other nations. Eventually, more than 150,000 Allied soldiers served in Russia

The scale of the war between the Russian Reds and Whites, however, was such that the Allies soon realized they would have little, if any, direct impact on the course of the Civil War unless they were prepared to intervene on a far grander scale. By the end of April 1919 the French had withdrawn their soldiers .British and American troops saw some action in November 1918 on the Northern Front but this campaign was of limited significance in the outcome of the Civil War. The last British and American soldiers were withdrawn in 1920. The main Allied contributions to the White cause thereafter were supplies and money, mostly from Britain .

The chief purpose of Allied intervention in Soviet Russia was to help the Whites defeat the Reds and destroy Bolshevism." (Allied Intervention in the Russian Revolution", portalus.ru)

The reason we bring up this relatively unknown bit of history is because it helps to put current events into perspective. First, it helps readers to see that Washington has been sticking its nose in Russia's business more than a century. Second, it shows that– while Washington's war on Russia has ebbed and flowed depending on the political situation in Moscow– it has never completely ended. The US has always treated Russia with suspicion, contempt and brutality. During the Cold War, when Russia's global activities put a damper on Washington's depredations around the world, relations remained stretched to the breaking point. But after the Soviet Union collapsed in December, 1991, relations gradually thawed, mainly because the buffoonish Boris Yeltsin opened the country up to a democratization program that allowed the state's most valuable strategic assets to be transferred to voracious oligarchs for pennies on the dollar. The plundering of Russia pleased Washington which is why it sent a number of prominent US economists to Moscow to assist in the transition from communism to a free-market system. These neoliberal miscreants subjected the Russian economy to "shock therapy" which required the auctioning off of state-owned resources and industries even while hyperinflation continued to rage and the minuscule life savings of ordinary working people were wiped out almost over night. The upshot of this Washington-approved looting-spree was a dramatic uptick in extreme poverty which intensified the immiseration of tens of millions of people. Economist Joseph Stiglitz followed events closely in Russia at the time and summed it up like this:

"In Russia, the people were told that capitalism was going to bring new, unprecedented prosperity. In fact, it brought unprecedented poverty, indicated not only by a fall in living standards, not only by falling GDP, but by decreasing life spans and enormous other social indicators showing a deterioration in the quality of life ..

(Due to) the tight monetary policies that were pursued firms didn't have the money to even pay their employees . they didn't have enough money to pay their pensioners, to pay their workers .Then, with the government not having enough revenue, other aspects of life started to deteriorate. They didn't have enough money for hospitals, schools. Russia used to have one of the good school systems in the world; the technical level of education was very high. (But they no longer had) enough money for that. So it just began to affect people in every dimension of their lives .

The number of people in poverty in Russia, for instance, increased from 2 percent to somewhere between 40 and 50 percent, with more than one out of two children living in families below poverty. The market economy was a worse enemy for most of these people than the Communists had said it would be. It brought Gucci bags, Mercedes, the fruits of capitalism to a few .But you had a shrinking (economy). The GDP in Russia fell by 40 percent. In some (parts) of the former Soviet Union, the GDP, the national income, fell by over 70 percent. And with that smaller pie it was more and more unequally divided, so a few people got bigger and bigger slices, and the majority of people wound up with less and less and less . (PBS interview with Joseph Stiglitz, Commanding Heights)

So, as long as Russia remained open to the West's political maneuvering and wholesale thievery, every thing was hunky-dory. But as soon as Vladimir Putin got his bearings (during his second term as President) and started reassembling the broken state, then western elites became very concerned and denounced Putin as an "autocrat" and a "KGB thug." At the same time, Washington continued its maniacal push eastward using its military catspaw, NATO, to achieve its geopolitical ambitions to control vital resources and industries in the most populous and prosperous region of the coming century, Eurasia. After promising Russian President Gorbachev that NATO would never "expand one inch to the east", the US-led military alliance added 13 new countries to its membership, all of them straddling Russia's western flank, all of them located, like Hitler, on Russia's doorstep, all of them posing an existential threat to Russia's survival. NATO forces now routinely conduct provocative military drills just miles from the Russian border while state-of-the-art missile systems surround Russia on all sides. (Imagine Russia conducting similar drills in the Gulf of Mexico or on the Canadian border. How would Washington respond?)

Russian Foreign Minister Sergey Lavrov gave an excellent summary of post Cold War history at a gathering of the Korber Foundation in Berlin in 2017. Brainwashed Americans who foolishly blame Russia for meddling in the 2016 elections, should pay attention to what he said.

LAVROV– "Ever since the fall of the Berlin Wall we have shown our cards, trying to do our best to assert the values of equal partnership in international affairs .Back in the early 1990s, we withdrew our troops from Eastern and Central Europe and the Baltic states and dramatically downsized our military capacity near our western borders

When the cold war era came to an end, Russia was hoping that this would become our common victory – the victory of both the former Communist bloc countries and the West. The dreams of ushering in shared peace and cooperation seemed near to fruition. However, the United States and its allies decided to declare themselves the sole winners, refusing to work together to create the architecture of equal and indivisible security. They made their choice in favor of shifting the dividing lines to our borders – through expanding NATO and then through the implementation of the EU's Eastern Partnership program

As the Western countries' elites were implementing a policy of political and economic containment of Russia, old threats were growing and new ones were emerging in the world, and the efforts to do away with them have failed. I think that the main reason for that is that the model of "West-centric" globalization, which developed following the dismantling of the bipolar architecture and was aimed at ensuring the prosperity of one-seventh of the world's population at the expense of the rest, proved ineffective. It is becoming more and more obvious that a narrow group of "chosen ones" is unable to ensure the sustainable growth of the global economy on their own and solve such major challenges as poverty, climate change, shortage of food and other vital resources .

The latest events are clear evidence that the persistent attempts to form a unipolar world order have failed .The new centers of economic growth and concomitant political influence are assuming responsibility for the state of affairs in their regions. Let me reiterate that the emergence of multipolar world order is a fact and a reality. Seeking to hold back this process and keep the unfairly gained privileged positions is going to lead nowhere. We see increasing examples of nations raising their voice in defense of their right to decide their own destiny ." (Sergey Lavrov, Russian Foreign Minister)

The American people need to look beyond the propaganda and try to grasp what's really going on. Russia is not Washington's enemy, it's a friend that's trying to nudge the US in adirection that will increase its opportunities for peace and prosperity in the future. Lavrov is simply pointing out that a multipolar world is inevitable as economic power becomes more widespread. This emerging reality means the US will have to modify its behavior, cooperate with other sovereign nations, comply with international law, and seek a peaceful settlement to disputes. It means greater parity between the states, fairer representation in global decision-making, and a narrower gap between the world's winners and losers.

Who doesn't want this? Who doesn't want to see an end of the bloody US-led invasions, the countless drone assassinations, the vast destruction of ancient civilizations, and the senseless slaughter of innocent men, women and children? Who doesn't want to see Washington's wings clipped so the bloodletting stops and the millions of refugees and internally displaced can return to their homes?

Lavrov offers a vision of the future that all peace-loving people should welcome with open arms.

Admit it: The imperial model has failed. It's time to move on.

[Mar 01, 2018] What is the vision, what is the historic goal our elites offer to inspire and enlist our people?

Notable quotes:
"... The globalists envision the earth as a plantation with oligarchs (stateless corporate monopolists) as planters, former national governments as overseers and the people of earth as niggers. ..."
Mar 01, 2018 | www.unz.com

WorkingClass , February 27, 2018 at 12:24 pm GMT

what is the vision, what is the historic goal our elites offer to inspire and enlist our people?

The globalists envision the earth as a plantation with oligarchs (stateless corporate monopolists) as planters, former national governments as overseers and the people of earth as niggers.

[Feb 15, 2018] Some people think major cities are controlled by the Globalists.

Feb 15, 2018 | www.moonofalabama.org

Trump lost in large cities.
May lost in major cities, the Anti-Brexit folks won instead.
The globalists have their tight grip on virtually every major city in the world.
They want megacities, logistic cities etc. in the world.

The globalists have had enough with America. (Trump wasn't happy so he wants to make it great again) The globalists made their money through capitalism, now they need Bitnation, blockchain (as a state, govt, you can no longer own citizens and print money because they'll be the citizens of Bitnation and they'll mine their own money) there will be home-made gold soon, they want middlemen eliminated, they sell you products without owning any stores (Amazon, Alibaba) they can transport you a-b without owning any vehicles (Uber) they control the media without employing any correspondents (facebook, youtube, twitter, instagram etc.) they don't need any banknotes (Trump=dollar), they want AI, they want Human 2.0, (first one was created by God and the new one will be fathered by the globalists) they want transhumanism, IOT, they want robots and female/male robots and marriage with robots, they want to produce economy and technology but they are not interested in the hearts and minds of the human beings, when you are thirsty they'll give you filtered seawater, hungry? they'll give you GMO food, the Chinese had sweatshops but now they have workshops manufacturing electronics, nothing has changed for them really, now they have 1 belt 1 road via logistic cities, trains to Tibilisi, then to the world's largest airport in Istanbul, people need peace and tranquility but the globalists have sold you the idea of 'happiness', they want LGBT, children with 2-3 mothers, Trump hates Obama's toilets, they want covert ops and proxies (Katie Perry has 60 million followers mostly fake and why is that? Because she's rigged for a future suicide bombing case, she'll say "I have seen a UFO" or "I made millions out of BTC" or whatever role is assigned to her) but Trump is conventional, he wants the US armed forces mobilized and wants them to face the country A-B-C straightforward like in the olden days, he has the soldiers and oil barons with him, a war cabinet... And the story goes on and on...

We are in 21st century.

Trump = Guns+Oil, KKK, Evangelists (Zionist Christians)...
The real America however belongs to = Finance capital + Technology = Globalists

We have to take all those above to see what's going on around us.

IMHO

Posted by: ConfusedPundit | Feb 13, 2018 5:41:15 PM | 64

[Feb 07, 2018] When the rest of the world's wages go up to six dollar per hour and the USA come down to six dollar per hour, globalization will end

Notable quotes:
"... Things "should" be made locally. There's no reason, especially with declining energy resources, that a toaster should be shipped from thousands of miles away by boat, plane, truck, rail. That's simply ridiculous, never mind causing a ton of extra pollution. We end up working at McDonald's or Target, but, yay, we just saved $5.00 on our toaster. ..."
"... I don't know how you know about the so-called safety net. I know because I had to use it while undergoing treatment for 2 types of stage 4 breast cancer the past 4 years. It is NOT what people think. It beats the already vulnerable into the ground -- -- this is not placating -- -- it is psychological breaking of human minds until they submit. The paperwork is like undergoing a tax audit -- - every 6 months. "Technicians" decide one's "benefits" which vary between "technicians". ..."
"... Food stamps can be $195 during one period and then $35 the next. The technicians/system takes no responsibility for the chaos and stress they bring into their victims' lives. It is literally crazy making. BTW: I am white, a member of Phi Beta Kappa, have a masters' degree, formerly owned my own business and while married lived within the top 10%. ..."
"... In addition, most of those on so-called social programs are children, the elderly, chronically ill, veterans. You are correct that the middle class is falling into poverty but you are not understanding what poverty actually looks like when the gov holds out its beneficial hand. It is nothing short of cruelty. ..."
Feb 07, 2018 | consortiumnews.com
Cold N. Holefield , February 5, 2018 at 4:09 pm

Yes, but increasingly there is no "working class" in America due to outsourcing and automation.

I hear that Trump wants to reverse all of that and put children to work in forward-to-the-past factories (versus back-to-the-future) and mines working 12 hours a day 7 days a week as part of his Make America Great Again initiative.

With all the deregulation, I can't wait to start smoking on airplanes again. Those were great times. Flying bombs with fifty or more lit fuses in the form of a cigarette you can smoke. The good old days.

backwardsevolution , February 5, 2018 at 5:50 pm

Cold N. Holefield -- it's like Ross Perot said re NAFTA and globalization: "When the rest of the world's wages go up to $6.00/hour and our's come down to $6.00/hour, globalization will end." That's what's happening, isn't it? Our wages are being held down, due in large part to low-skilled labor and H-1B's flooding into the country, and wages in Asia are rising. I remember Ross Perot standing right beside Bill Clinton when he said this, and I also remember the sly smile on Bill Clinton's face. He knew.

Our technology was handed to China on a silver platter by the greedy U.S. multinationals, technology that was developed by Western universities and taxpayer dollars, technology that would have taken decades for China to develop on their own.

Trump is trying desperately to bring some of these jobs back. That's why he handed them huge corporate tax breaks and cut some regulations.

Things "should" be made locally. There's no reason, especially with declining energy resources, that a toaster should be shipped from thousands of miles away by boat, plane, truck, rail. That's simply ridiculous, never mind causing a ton of extra pollution. We end up working at McDonald's or Target, but, yay, we just saved $5.00 on our toaster.

Trump is trying to cut back on immigration so that wages can increase, but the Left want to save the whole world, doing themselves in in the process. He wants to bring people in with skills the country can benefit from, but for that he's tarred and feathered.

P.S. I remember sitting behind a drunk on a long flight, and I saw him drop his cigarette. It rolled past me like it knew where it was going, and I couldn't find it. I called the stewardess, and she and I searched for a few anxious seconds until we found it. Yes, the good old days.

Diana Lee , February 6, 2018 at 3:16 pm

I don't know how you know about the so-called safety net. I know because I had to use it while undergoing treatment for 2 types of stage 4 breast cancer the past 4 years. It is NOT what people think. It beats the already vulnerable into the ground -- -- this is not placating -- -- it is psychological breaking of human minds until they submit. The paperwork is like undergoing a tax audit -- - every 6 months. "Technicians" decide one's "benefits" which vary between "technicians".

Food stamps can be $195 during one period and then $35 the next. The technicians/system takes no responsibility for the chaos and stress they bring into their victims' lives. It is literally crazy making. BTW: I am white, a member of Phi Beta Kappa, have a masters' degree, formerly owned my own business and while married lived within the top 10%.

In addition, most of those on so-called social programs are children, the elderly, chronically ill, veterans. You are correct that the middle class is falling into poverty but you are not understanding what poverty actually looks like when the gov holds out its beneficial hand. It is nothing short of cruelty.

backwardsevolution , February 6, 2018 at 4:48 pm

Diana Lee -- I hope you are well now. It breaks my heart what you went through. No, I cannot imagine.

I didn't mean the lower class were living "well" on food stamps and welfare. All I meant was that it helped, and without it all hell would break loose. If you lived in the top 10% at one point, then you would surely notice a difference, but for many who have been raised in this environment, they don't notice at all. It becomes a way of life. And, yes, you are right, it is cruelty. A loss of life.

[Feb 07, 2018] Due to automation, offshoring and transnational communications/internet, the elitists no longer need a large domestic underclass of undocumented workers to artificially lower wages

Feb 07, 2018 | consortiumnews.com

Daniel , February 5, 2018 at 7:11 pm

Due to automation, offshoring and transnational communications/internet, the elitists no longer need a large domestic underclass of undocumented workers to artificially lower wages. That is likely the reason that every Administration since Slick Willy have sought to reduce illegal immigration.

After all, it was the Obama Administration that deported more undocumented immigrants than any other in history, and it was in those years after the 2008 economic crash that saw net migration from Mexico hit zero, or even negative numbers.

What the MSM is telling us is that the Trump Administration is more draconian in carrying out practices that have been US policy for decades. That might even be true.

backwardsevolution , February 6, 2018 at 6:53 pm

Daniel -- " the elitists no longer need a large domestic underclass of undocumented workers to artificially lower wages."

Oh, sure, that's why corporations and the Chambers of Commerce are fighting so hard to keep chain migration, legal and illegal immigration numbers up! Because they don't need them. Yeah, right.

And technology companies are clamoring for more H-1B's so they can pay them less.

Come on, Daniel.

Daniel , February 7, 2018 at 12:22 am

backward,
Please provide evidence that the "Chambers of Commerce are fighting so hard.." Please try to keep your rebuttal to my statement that "elitists no longer need a large domestic underclass of undocumented workers" and not various forms of legal migration. Because I do agree that there is a market for "skilled labor" who are legal. Part off the reason for this labor market is the drop in STEM-educated USAmericans.

Meanwhile, I spent 30 seconds to find proof that what I wrote about net migration was true in 2012 and 2015.
h
http://www.pewhispanic.org/2012/04/23/net-migration-from-mexico-falls-to-zero-and-perhaps-less/

http://www.pewhispanic.org/2015/11/19/more-mexicans-leaving-than-coming-to-the-u-s/h

Cold N. Holefield , February 5, 2018 at 4:16 pm

I'm afraid the population has been so thoroughly incapacitated via a Dumbing Down Education System coupled with 24/7 Media Misinformation and the Stultifying Effects of Social Media that there will be no Revolution. Instead, it looks like it will be a steady capitulation and acquiescence of personal sovereignty all the way to the Gas Chambers and no doubt when or if that time comes, there will be an a nifty Application from Silicon Valley to guide you through your Final Processing.

backwardsevolution , February 5, 2018 at 5:18 pm

Cold N. Holefield -- a "Dumbing Down Education System", but also lots of benefits on the lower end: food stamps, disability, subsidized housing, free cell phones, etc. If these things were removed (no, I'm not saying they should be), things would be completely different. There'd be a riot in a fortnight.

If your stomach is empty, it doesn't really matter how dumbed down you've become, you are going to feel fear and react. That's why they keep the lower end placated.

It is the middle class who is slipping down into the lower class, and these are the people who are getting angry and fearful, mainly for their children. Those people have actually lost something.

[Jan 28, 2018] "Globalism", so called, is the opening of doors in target nations to predatory capitalism, disaster capitalism, the economic part of the John Perkins playbook

Jan 28, 2018 | www.moonofalabama.org

Concerning the discussion on "globalism" - and please excuse me if I've missed prior discussion, I wasn't following that point back in the last thread - this word as used today essentially is referring to neoliberal economic policies, which are the handmaiden of neocon "war & plunder" policies. Both doctrines walk hand in hand. The so-called "free trade agreements" remove barriers not so much against free trade as against corporate regulation - this is the whole point of them. The TPP agreement that Trump withdrew from was the most vile such agreement ever yet proposed.

"Globalism", so called, is the opening of doors in target nations to predatory capitalism, disaster capitalism, the economic part of the John Perkins playbook. As corporatism gains strength in a nation, fascism as Mussolini defined it (i.e. as corporatism) becomes the reality. Maybe the word meant something good once, I don't know. But it stands for everything bad now.

Posted by: Grieved | Jan 27, 2018 8:11:18 PM | 19


Peter AU 1 , Jan 27, 2018 8:22:23 PM | 21

@ Grieved
Globalism is also blogs like this.
Globalism has been turned into a dirty word as it has been used, same as colour revolutions ect, but I suspect it will also help bring down corporate globalism.
For me, in the latter part of my life, it has brought great interest for cultures and people that are different to my own upbringing.
dh , Jan 27, 2018 8:44:45 PM | 23
@21 Nationalism is seen as narrow, regressive and responsible for conflict. It's only acceptable at sporting events. (Turks and Kurds haven't got the message yet.) Globalism is seen as progressive. One world government is supposed to bring peace and prosperity to all. Of course there are all kinds of racial and religious contradictions but the basic choice is looking backwards or forwards.
Peter AU 1 , Jan 27, 2018 9:00:24 PM | 24
dh 23

Nationalism, globalism, sovereignty.
There is a word missing. Sovereignty does not seem to cover it but is the closest I can find.

This is the wikipedia definition of sovereignty.. "Sovereignty is the full right and power of a governing body over itself, without any interference from outside sources or bodies. In political theory, sovereignty is a substantive term designating supreme authority over some polity.[1] It is a basic principle underlying the dominant Westphalian model of state foundation."

Also similar to nationalism.

What is the correct word or term for full sovereignty plus respect for other countries and cultures?


Peter AU 1 , Jan 27, 2018 9:38:22 PM | 28
globalisation - the information highway (apart from road blocks) - a place where a shitkicker from the mad monks anglosphere (oz) can converse or argue with people from all round the world.
bevin , Jan 27, 2018 9:42:05 PM | 29
"Well, with regard to Germany, the EU project was the longest period of peace for the last 200 years. Same for France." somebody writes.

France and Germany have both been at war several times since the EU came into being. Of course being US satraps, under NATO, they haven't fought each other.

As to Germany its existence, as a state, begins in 1870 and, in the past 150 years has gone through several revolutionary changes, such as Anschluss, the Allied Occupation regime and the Bundesrepublik-Democratic Republic interlude.
And then there are the border changes which, over the period are dramatic.
The point is that this cant apology for the EU is cheap and demagogic.
Any defence of the EU has to begin with a justification of its two cardinal objects: Wall St forged neoliberalism and Pentagon directed policies designed to advance US geo-strategy

Grieved , Jan 27, 2018 9:43:14 PM | 30
Seems like a discussion on semantics - rocky ground.

Putin once set up two words to explain a thing. He said that patriotism was love of one's country. Nationalism was hatred of other countries. Great set of concepts, but there's no real consensus of the meaning of those two words, in any group of people you could assemble at random.

Important to agree on concepts and be wary of words when they're not solidly established in a broad and functional consensus.

My apologies. I thought "globalism" as I described it was commonly held ground, but it's not. I respectfully withdraw from the discussion, leaving disaster capitalism as the great enemy, and global fraternity and exchange as the great friend of the ordinary people of the whole world.

The words for all this I leave to others to establish. My apologies again for butting in.

dh , Jan 27, 2018 9:52:41 PM | 32
@30 Nothing to apologize for Grieved. The term 'globalism' means different things to different people. Some see is as paradise on earth ....some see it as a subtle form of hegemony.
les7 , Jan 27, 2018 10:39:47 PM | 38
@33 So many of the terms we use today are profoundly affected by the dilemma that Nietzsche described in his statement (I paraphrase): 'God is dead, we have killed him. And no amount of water can wash the blood from our hands'

This was not a statement of triumph, rather of despair. In the loss of the divine as the source of morality, Nietzsche anticipated that people would invest that authority in other structures - including the state (Nazi-ism, Marxism), the military, economics ('free-market' capitalism) etc.

The loyalists in each of those 'causes' would see all their associated terms positively, just like all adherents of religious systems. Those outside, or those who suffered abuse at their hands, see those terms quite differently.

So Nationalism can be positive (as in pride in the legitimate achievements of your country) or negative (where the people ascribe to the state/nation/race the right to define what is morally right) where the nation has God-like authority to remove from whole classes of people all their rights - even the right to life.

Wikipedia (under types of government) slices and dices your options when it comes to political terms for the ruling elite. Two stand out to me, with the second suffering from an unrecognisable name:

Plutocracy: Rule by the wealthy; a system wherein governance is indebted to, dependent upon or heavily influenced by the desires of the rich

Ochlocracy: Rule by the crowd; a system of governance where mob rule is government by mob or a mass of people, or the intimidation of legitimate authorities. As a pejorative for majoritarianism, it is akin to the Latin phrase mobile vulgus meaning "the fickle crowd", from which the English term "mob" was originally derived in the 1680s. Ochlocratic governments are often a democracy spoiled by demagoguery, "tyranny of the majority" and the rule of passion over reason; such governments can be as oppressive as autocratic tyrants. Ochlocracy is synonymous in meaning and usage to the modern, informal term "mobocracy".

Personally, when it comes to describing the state of affairs in the empire, I lean toward a despotic corporatism as being the best description. Others may prefer militarism over corporatism, but when the two forces (the corporate and the military) unify you get fascism.

Again, this is just how I, at this time, understand it.

Jonathan , Jan 27, 2018 10:42:38 PM | 40
@36 Peter AU 1,

Liberal democracy is not democratic. Let us stop lying, and dispense with the false narrative that granting anyone a term of office in which they can steal from the commons and not be immediately fired or even killed is anything remotely "cratic". It's feudalism, plain and simple, and those who defend it are typically of a class long known to be problematic.

les7 , Jan 27, 2018 10:42:44 PM | 41
the wiki link
https://en.wikipedia.org/wiki/List_of_forms_of_government
james , Jan 28, 2018 12:03:23 AM | 45
interesting conversation on globalism and etc....

i think the big challenge for the world is letting economics trump the environment... until that changes, we're in trouble.. maybe it doesn't have to be an either/or thing... i do think corporate power and the various trade deals (tpp - canada has bought into this with mexico, so tpp is still happening, although the usa is not presently a part of it) are mostly about ignoring local or national laws or trying to over-ride them so that corporations can have all the power.. les7 calls something like this "despotic corporatism", but i mostly think of it as just plain corporatism.. it is all despotic...

well, i feel the same way about the accumulation of ridiculous amounts of wealth in the hands of a few as well.. how can this happen when people are struggling to survive on the planet? do these people have no sense of shame? apparently not! they go about their business accruing wealth oblivious to the pain and suffering they are directly, or indirectly inflicting on others.. then there are those types who realize what they have done and try to make amends by changing their ways and staring foundations - gates foundation and etc. etc... to me, why not just not fuck people over, instead of thinking you have to trample on others to get ahead and that the universe can only be seen as a dog eat dog universe? well, i can't change others, i can only change myself and do what i feel good about and can live with.. thanks for the conversation..

@ 42 john gilberts.. canada continues to go down the wrong road, being sucked into the made in the us bs.. freeland is a warmonger, with undisclosed financial support from soros to continue the war on russia and etc. etc.. i can't believe we are that stupid to have such a women is such a prominent role here in canada... anyone would be better..

nottheonly1 , Jan 28, 2018 1:18:37 AM | 46
Needless to say that there is only one me and I am grateful that b has deleted the fake ones. Although it is known in car design that plagiarism is a form of admiration, in
my case it was the cheap attempt to soil my name. Ironically, the only people that believe that they could succeed with this kind of gas lighting have an IQ that is surpassed by the
shoe size of their little feet.

Allow me to contribute in regards to Nationalism. Having been born in a country that was once ruled by a "National Socialist" party, I needed to find out more about what had caused Nationalism to go rogue and destroy the Nation it emanated from.

Stories by family members did provide some answers, but we're insufficient at best, since no one had seen it coming this way.

Then I discovered the lecture by J. Krishnamurti about Nationalism. My own parents were toddlers when Krishnamurti spoke about Nationalism in Argentina in 1935.

The time spent listening to this speech was the best spent time ever in regards to finding answers. While I have the speech on my computer, I will link here to the Krishnamurti repository where all of his speeches can be found.

Krishnamurti">http://www.jkrishnamurti.org/krishnamurti-teachings/view-text.php?tid=271&chid=4601&w=nationalism">Krishnamurti on Nationalism.

In an extremely ironic and the saddest way, his words about Nationalism were absolutely prophetic. The transition from 'National Identity' to deadly Nationalism is fleeting.

Humanity has not been able to overcome Nationalism and struggles with the concept of 'sovereignty', as it appears to be dependent on Nationalism and not National identity.

Imo, sovereignty can only arise from Interdependence. The acknowledgement of Interdependence at the root of sovereignty will allow for a National identity, that would not resort to Nationalism and its cancerous degeneration into a murderous, inhumane tragedy.

nottheonly1 , Jan 28, 2018 1:27:59 AM | 47
My comment was dismembered. This is the correct link:

Krishnamurti on Nationalism

Auto correct is sabotage...

V. Arnold , Jan 28, 2018 2:00:56 AM | 48
nottheonly1 | Jan 28, 2018 1:27:59 AM | 47

Thanks for the Krishnamurti link.
I've read 7 or 8 of his books.
I've found his teachings to be profound.

[Jan 28, 2018] Trump Makes Nice With Elites He Previously Scorned at Davos Critic's Notebook by Frank Scheck

Notable quotes:
"... We support free trade, but it needs to be fair," he chided. "It needs to be fair and it needs to be reciprocal." He went on to announce his support for "mutually beneficial, bilateral trade agreements with all countries, ..."
Jan 28, 2018 | www.hollywoodreporter.com

The president tries to sell business tycoons and world leaders on his "America First" policy and sounds like a small-town mayor wooing Walmart to open a store in his community.

... ... ...

"I'm here to represent the interests of the American people," he began, ignoring the fact that the majority of the American people don't want him representing their interests. "America hopes for a future in which everyone can prosper," he said, describing the American dream as "a great job, a safe home and a better life for their children." All true, but right now there are also plenty of Americans dreaming of a president who won't embarrass them.

... ... ...

Trump naturally brought his patented "America First" routine to the august gathering, but he was less belligerent about it than usual, almost conciliatory. "As president of the United States I will always put America first," he said. "But America first does not mean America alone," he added, as the audience of business tycoons and international leaders breathed a sigh of relief. Of course, Trump wasn't yet done rebuking them. " We support free trade, but it needs to be fair," he chided. "It needs to be fair and it needs to be reciprocal." He went on to announce his support for "mutually beneficial, bilateral trade agreements with all countries, " even hinting at rejoining TPP. That Donald, he's such a tease.

[Jan 05, 2018] Trump the Eradicator, by Eric Margolis - The Unz Review

Jan 05, 2018 | www.unz.com

Trump's campaign to return manufacturing to America and repatriate profits held overseas makes good business sense. The ravaging of America's once mighty industrial base to boost corporate profits was a crime against the nation by unscrupulous Wall Street bankers and short-sighted, greedy CEO's.

The basis of industrial power is the ability to make products people use. Shockingly, US manufacturing has shrunk to only 14% of GDP. Today, America's primary business has become finance, the largely non-productive act of paper-passing that only benefits a tiny big city parasitic elite.

Trump_vs_deep_state is a natural reaction to the self-destruction of America's industrial base. But the president's mania to wreck international trade agreements and impose tariff barriers will result in diminishing America's economic and political influence around the globe.

Access to America's markets is in certain ways a more powerful political tool than deployment of US forces around the globe. Lessening access to the US markets will inevitably have negative repercussions on US exports.

Trump has been on a rampage to undo almost every positive initiative undertaken by the Obama administration, even though many earned the US applause and respect around the civilized world. The president has made trade agreements a prime target. He has targeted trade pacts involving Mexico, Canada, the EU, Japan, China and a host of other nations by claiming they are unfair to American workers. However, a degree of wage unfairness is the price Washington must pay for bringing lower-cost nations into America's economic orbit.

This month, the Trump administration threatened new restrictions against 120 US trade partners who may now face much higher tariffs on their exports to the US.

Trump is in a hurry because he fears he may not be re-elected. He is trying to eradicate all vestiges of the Obama presidency with the ruthlessness and ferocity of Stalinist officials eradicating every trace of liquidated commissars, even from official photos. America now faces its own era of purges as an uneasy world watches.

[Jan 02, 2018] Who Is the Real Enemy by Philip Giraldi

Highly recommended!
Money quote: "And even given that, I would have to qualify the nature of the threats. Russia and China are best described as adversaries or competitors rather than enemies as they have compelling interests to avoid war, even if Washington is doing its best to turn them hostile. Neither has anything to gain and much to lose by escalating a minor conflict into something that might well start World War 3. Indeed, both have strong incentives to avoid doing so, which makes the actual threat that they represent more speculative than real. And, on the plus side, both can be extremely useful in dealing with international issues where Washington has little or no leverage, to include resolving the North Korea problem and Syria, so the US has considerable benefits to be gained by cultivating their cooperation."
Notable quotes:
"... And even given that, I would have to qualify the nature of the threats. Russia and China are best described as adversaries or competitors rather than enemies as they have compelling interests to avoid war, even if Washington is doing its best to turn them hostile. Neither has anything to gain and much to lose by escalating a minor conflict into something that might well start World War 3. Indeed, both have strong incentives to avoid doing so, which makes the actual threat that they represent more speculative than real. And, on the plus side, both can be extremely useful in dealing with international issues where Washington has little or no leverage, to include resolving the North Korea problem and Syria, so the US has considerable benefits to be gained by cultivating their cooperation. ..."
"... Cohen-Watnick is thirty years old and has little relevant experience for the position he holds, senior director for intelligence on the National Security Council. But his inexperience counts for little as he is good friend of son-in-law Jared Kushner. He has told the New York Times ..."
"... Both Cohen-Watnick and Harvey share the neoconservative belief that the Iranians and their proxies in Syria and Iraq need to be confronted by force, an opportunity described by Foreign Policy ..."
"... What danger to the U.S. or its actual treaty allies an Iranian influenced land corridor would constitute remains a mystery but there is no shortage of Iran haters in the White House. Former senior CIA analyst Paul Pillar sees "unrelenting hostility from the Trump administration" towards Iran and notes "cherry-picking" of the intelligence to make a case for war, similar to what occurred with Iraq in 2002-3. And even though Secretary of Defense James Mattis and National Security Advisor H.R. McMaster have pushed back against the impulsive Cohen-Watnick and Harvey, their objections are tactical as they do not wish to make U.S. forces in the region vulnerable to attacks coming from a new direction. Otherwise they too consider Iran as America's number one active enemy and believe that war is inevitable. Donald Trump has unfortunately also jumped directly into the argument on the side of Saudi Arabia and Israel, both of which would like to see Washington go to war with Tehran on their behalf. ..."
"... You forgot the third significant potential threat from a friendly nation, i.e. Israel. Israel will sabotage any effort to normallize relations with Russia or even Iran. They will resort to false flag operations to start a war with Iran. ..."
"... The problem with this White House, as well as the previous ones, is that none of the so-called experts really understand the Middle East. The US is not interested in having friendly relations with all nations. All her efforts are towards one goal, the world domination. Even if President Trump wanted to normalize relations with Russia, the MSM, the democrats, as well as, his republican opponents will not let him. ..."
"... That is why the constan drumbeat of Russia's meddling in the 2016 election despite the fact that no proof has been given so far. Similarly, the "Iran has nuclear weapons" narrative is constantly repeated, the reports by IAEA and the 17 Intelligence Agencies to the contrary not withstanding. ..."
"... The elevation of Muhammad bin Salman to the Crown Prince position will only make the Middle East situation worse. Israel will be able to manipulate him much more easily than the old guard. ..."
"... The titanic elephant in the room -- that US foreign policy is not governed by "rationality" but by "special interests" seems .missing ..."
"... Trump has no control of most government functions, particularly foreign affairs. The Deep State takes care of that for him. The Deep State has been calling the shots for decades and all Presidents who weren't assassinated have complied. Democracies never work and ours quit long ago. ..."
"... I fully agree that attacking Iran would be yet another disaster but I don't understand why Saudi Arabia is portrayed as an 'enemy', the 'real' one, no less, in alt-media circles like this. I mean let's be honest with ourselves. KSA is the definition of a vassal state. Has been so since the state established established relations with the USA in the 1940s and the status was confirmed during the 1960s under King Faisal. Oil for security. Why pretend that they have any operational clearance from the US? ..."
"... The BIGGEST threat to the USA is from within, as we are nothing more than an occupied colony of Apartheid Israel, paying that bastard state tributes each year in the form of free money and weapons, political backing at the UN, and never tire of fighting her wars of conquest. ..."
"... The also have a choke-hold on Congress, which is always eager to wag their tail and hope their Yid Overlord gives them a treat and not a dressing-down in the Jew MSM, which is a career killer. ..."
"... Israel's current "agreements" and its "kowtowing" to Saudi Arabia speaks VOLUMES. Once again, Israel is about to get others to do their "dirty work" for them. ..."
"... There's no alternative to Saudi royal family rule of the peninsula. Who's there to replace them? Any other group, assuming there might be one somewhere waiting in the wings, would probably be anti-American and not as compliant as the Saudis. They've spent gigantic sums in the endless billions buying military equipment from the US, weapons they can't even fully use, as a way of making themselves indispensable customers. Many other billions of petrodollars find their way westward into our financial systems. They collaborate with the US in various schemes throughout the Muslim world using their intelligence services and money in furtherance of US goals. ..."
"... Mattis still seems stuck with his Iran obsession. Shame I thought he had the intellectual curiosity to adapt. Trump has good instincts, I hope Tillerson comes to the fore, and Bannon stays influential. ..."
"... Iran is US enemy #1 not only because it is against that country smaller than New Jersey with less people (Israel) but also because Iran has been a model for other countries to follow because of its intransigence to US oppression and attacks, financial political and cyber. As the world becomes multi-polar, Iran's repeated wise reactions to the world hegemon have been an inspiration to China and others to go their own way. The US can't stand that. ..."
"... Contrary to the popular view, Wahabism is necessary to keep the local population under control. Particularly the minority Shia population who live along the eastern coast, an area, which incidentally also has the all the oil reserves. USA fully understands this. Which is why they not only tolerated Wahabism, but strongly promoted it during Afghan jihad. The operation was by and large very successful btw. It was only during the '90s when religion became the new ideology for the resistance against the empire across the Muslim world. Zero surprise there because the preceding ideology, radical left wing politics was completely defeated. Iran became the first country in this pattern. The Iranian left was decimated by the Shah, another vassal. So the religious right became the new resistance. ..."
"... And as far as the KSA is considered, Wahabi preachers aren't allowed to attack the USA anyway. If any individual preacher so much as makes a squeak, he will be bent over a barrel. There won't be any "coming down very hard on Saudi Arabia" because USA already owns that country. ..."
"... The British Empire 'made' the House of Saud. Thinking it wise to use Wahhabism to control Shia Islam is like thinking it wise to use blacks to control the criminal tendencies of Mexicans. ..."
Jul 11, 2017 | www.unz.com

It is one of the great ironies that the United States, a land mass protected by two broad oceans while also benefitting from the world's largest economy and most powerful military, persists in viewing itself as a potential victim, vulnerable and surrounded by enemies. In reality, there are only two significant potential threats to the U.S. The first consists of the only two non-friendly countries – Russia and China – that have nuclear weapons and delivery systems that could hit the North American continent and the second is the somewhat more amorphous danger represented by international terrorism.

And even given that, I would have to qualify the nature of the threats. Russia and China are best described as adversaries or competitors rather than enemies as they have compelling interests to avoid war, even if Washington is doing its best to turn them hostile. Neither has anything to gain and much to lose by escalating a minor conflict into something that might well start World War 3. Indeed, both have strong incentives to avoid doing so, which makes the actual threat that they represent more speculative than real. And, on the plus side, both can be extremely useful in dealing with international issues where Washington has little or no leverage, to include resolving the North Korea problem and Syria, so the US has considerable benefits to be gained by cultivating their cooperation.

Also, I would characterize international terrorism as a faux threat at a national level, though one that has been exaggerated through the media and fearmongering to such an extent that it appears much more dangerous than it actually is. It has been observed that more Americans are killed by falling furniture than by terrorists in a year but terrorism has a particularly potency due to its unpredictability and the fear that it creates. Due to that fear, American governments and businesses at all levels have been willing to spend a trillion dollars per annum to defeat what might rationally be regarded as a relatively minor problem.

So if the United States were serious about dealing with or deflecting the actual threats against the American people it could first of all reduce its defense expenditures to make them commensurate with the actual threat before concentrating on three things. First, would be to establish a solid modus vivendi with Russia and China to avoid conflicts of interest that could develop into actual tit-for-tat escalation. That would require an acceptance by Washington of the fact that both Moscow and Beijing have regional spheres of influence that are defined by their interests. You don't have to like the governance of either country, but their national interests have to be appreciated and respected just as the United States has legitimate interests within its own hemisphere that must be respected by Russia and China.

Second, Washington must, unfortunately, continue to spend on the Missile Defense Agency, which supports anti-missile defenses if the search for a modus vivendi for some reason fails. Mutual assured destruction is not a desirable strategic doctrine but being able to intercept incoming missiles while also having some capability to strike back if attacked is a realistic deterrent given the proliferation of nations that have both ballistic missiles and nukes.

Third and finally, there would be a coordinated program aimed at international terrorism based equally on where the terror comes from and on physically preventing the terrorist attacks from taking place. This is the element in national defense that is least clear cut. Dealing with Russia and China involves working with mature regimes that have established diplomatic and military channels. Dealing with terrorist non-state players is completely different as there are generally speaking no such channels.

It should in theory be pretty simple to match threats and interests with actions since there are only a handful that really matter, but apparently it is not so in practice. What is Washington doing? First of all, the White House is deliberately turning its back on restoring a good working relationship with Russia by insisting that Crimea be returned to Kiev, by blaming Moscow for the continued unrest in Donbas, and by attacking Syrian military targets in spite of the fact that Russia is an ally of the legitimate government in Damascus and the United States is an interloper in the conflict. Meanwhile congress and the media are poisoning the waters through their dogged pursuit of Russiagate for political reasons even though nearly a year of investigation has produced no actual evidence of malfeasance on the part of U.S. officials and precious little in terms of Moscow's alleged interference.

Playing tough to the international audience has unfortunately become part of the American Exceptionalism DNA. Upon his arrival in Warsaw last week, Donald Trump doubled down on the Russia-bashing, calling on Moscow to "cease its destabilizing activities in Ukraine and elsewhere and its support for hostile regimes including Syria and Iran." He then recommended that Russia should "join the community of responsible nations in our fight against common enemies and in defense of civilization itself."

The comments in Warsaw were unnecessary, even if the Poles wanted to hear them, and were both highly insulting and ignorant. It was not a good start for Donald's second overseas trip, even though the speech has otherwise been interpreted as a welcome defense of Western civilization and European values. Trump also followed up with a two hour plus discussion with President Vladimir Putin in which the two apparently agreed to differ on the alleged Russian hacking of the American election. The Trump-Putin meeting indicated that restoring some kind of working relationship with Russia is still possible, as it is in everyone's interest to do so.

Fighting terrorism is quite another matter and the United States approach is the reverse of what a rational player would be seeking to accomplish. The U.S. is rightly assisting in the bid to eradicate ISIS in Syria and Iraq but it is simultaneously attacking the most effective fighters against that group, namely the Syrian government armed forces and the Shiite militias being provided by Iran and Hezbollah. Indeed, it is becoming increasingly clear that at least some in the Trump Administration are seeking to use the Syrian engagement as a stepping stone to war with Iran.

As was the case in the months preceding the ill-fated invasion of Iraq in 2003, all buttons are being pushed to vilify Iran. Recent reports suggest that two individuals in the White House in particular have been pressuring the Trump administration's generals to escalate U.S. involvement in Syria to bring about a war with Tehran sooner rather than later. They are Ezra Cohen-Watnick and Derek Harvey, reported to be holdovers from the team brought into the White House by the virulently anti-Iranian former National Security Adviser Michael Flynn.

Cohen-Watnick is thirty years old and has little relevant experience for the position he holds, senior director for intelligence on the National Security Council. But his inexperience counts for little as he is good friend of son-in-law Jared Kushner. He has told the New York Times that "wants to use American spies to help oust the Iranian government," a comment that reflects complete ignorance, both regarding Iran and also concerning spy agency capabilities. His partner in crime Harvey, a former military officer who advised General David Petraeus when he was