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Two Party System as Polyarchy and anti-Democratic mechanisms of "first past the post" elections

Version 2.4 (Nov  21, 2016)

The USA looks more and more like a single party state -- it is governed by  Neoliberal party with two factions
 "soft neoliberals" (Democratic Party) and "hard neoliberals"(Republican Party)

News Neoliberal Brainwashing -- Journalism in the Service of the Powerful Few Recommended Books Recommended Links Crisis of legitimacy of neoliberal elite US Presidential Elections of 2016 Democratic Party Neoliberals Monday morning quarterbacking The Deep State Predator state
The Iron Law of Oligarchy Neocons foreign policy is a disaster for the USA Amorality and criminality of neoliberal elite New American Militarism Electoral College Hillary Clinton email scandal: Timeline and summary Hillary "Warmonger" Clinton Demexit Myth about intelligent voter
Neocons Obama: a yet another Neocon Resurgence of neo-fascism as reaction on neoliberalism Media-Military-Industrial Complex Neoliberalism Neoliberalism as Trotskyism for the rich Neocolonialism as Financial Imperialism Pope Francis on danger of neoliberalism Protestant church on danger of neoliberalism
Donald Trump Anti-Russian hysteria in connection emailgate and DNC leak DNC emails leak: switfboating Bernie Sanders and blaming Vladimir Putin National Security State  American Exceptionalism Libertarian Philosophy Nation under attack meme  Audacious Oligarchy and "Democracy for Winners" Pluralism as a myth
Principal-agent problem Corporatist Corruption Paleoconservatism Corporatism Ethno-linguistic Nationalism Non-Interventionism "Clinton Cash" Scandal: Hillary Clinton links to foreign donors and financial industry  Hillary role in Syria bloodbath Hillary Clinton and Obama created ISIS
Bernie Sanders Superdelegates at Democratic National Convention Jeb "Wolfowitz Stooge" Bush US Presidential Elections of 2012  Mayberry Machiavellians Politically Incorrect Humor Skeptic Quotations Humor Etc
"There is one political party in this country, and that is the party of money. It has two branches, the Republicans and the Democrats, the chief difference between which is that the Democrats are better at concealing their scorn for the average man."

-- Gore Vidal

“The Democrats are the foxes, and the Republicans are the wolves – and they both want to devour you.” So what does that make Libertarians? Avian flu viruses?”

-- Leonard Pinkney

The race is no contest when you own both horses. That is why no matter which political party is in power nothing really changes other than the packaging. The puppets who drink at the champagne fountains of the powerful do the bidding of their masters. The people are superfluous to the process.

-- Daniel Estulin

Due to the side an introduction was moved to the separate page Polyarchy, Authoritarianism and Deep State

Summary

I subscribe to Kantian idea of the dignity in human, the idea that everyone is entitled to survival as well as thriving beyond survival. But does everybody is entitled to equal participation in ruling of the state ?  Or  in election of state leaders? Which is what democracy means. Is the democracy possible, if elections use "the first after the post" rule?  Another important question is "democracy for whom". There are always part of society living under the dictatorship and excluded from the democratic process.

My impression is that the Communist Party of the USSR made a grave mistake by not adopting "the first after the post" election system. In reality it would just legitimize the permanent Communist Party rule, as two factions of the CPSU competing for power (let's call them "Democratic Communists" and "Republican Communists") would exclude any real challenge for the one party rule that was practiced in the USSR under so called "one party" system. Which, while providing the same results,  looks more undemocratic then "first after the post" system, and thus  less safe for the rule of oligarchy as it generates resentment of the population.  

The "first after the post" system provides a very effective suppression of any third party, preventing any chance of maturing such a political force.  No less effective the Societ one party rule, but more subtle and more acceptable to the population. Which is all what is needed to continuation of the rule of the oligarchy.  The same is true for the parties themselves. Iron law of olgarchy was actualy discovered by observing the evolution of the party leadership.

Revolutionary situation after 2008 is connected with discreditation of neoliberal ideology

The situation when the current ruling elite (or in less politically correct term oligarchy) experienced difficulties with the continuation of its rule and the existing methods of suppression and indoctrination of the lower part population stop working is called  "revolutionary situation". Some signs of this situation were observable in the USA in 2016 which led to the election of what was essentially an independent candidate -- Donald Trump.  It was clear that there is a widespread feeling that the current system is wrong and unjust. And when the people do not wont to live under the current system, and the ruling oligarchy can't continue to rule using the same methods and its brainwashing/propaganda does not work anymore " a rare moment when "the change we can believe in" becomes possible. Not the con that the king of "bait and switch" maneuver Obama sold to the US lemmings twice, but the "real" change; which can be for the good or bad. Stability of the society has its great value. As Chinese curse state it succinctly "May you live in interesting times".

 In such cases, often the ruling elite decides to unleash a foreign war and use "rally around the flag" effect  to suppress dissent and to restore the control (that's the real meaning of Samuel Johnson quote "Patriotism is the last refuge of a scoundrel"). The pitch level of anti-Russian propaganda in 2016 in neoliberal MSM suggest that some part of the US elite is not totally hostile to this solution even in nuclear age. As John Kenneth Galbraith noted “People of privilege will always risk their complete destruction rather than surrender any material part of their advantage.”

In 2016 we saw an attempt by oligarchy to rig the elections despite growing populism, at all cost. Even by promoting a deeply criminal and candidate with serious health problems. The level of propaganda displayed in 2015-2016 election cycle by neoliberal MSM might well outdo the level achieved by communist propagandists in best days of the USSR.  And that happened because this time there is a slight chance that the election are not about choosing "soft neoliberal" vs. "hard neoliberal" but "soft neoliberal"  vs. (at least partially) "paleoconservative", who rejects the idea of neoliberal globalization and by extension the necessity of fighting constant wars for the expansion of the US led global neoliberal empire.   This heresy is not acceptable in the corridors of Washington deep state, and the hissy fit in neoliberal media and the just of intelligence agencies on an "avanscena" of political process (hackingate") were to be expected.

There is also an interesting question what kind of democracy the competition  of "Democratic Neoliberals" ("soft neoliberal/closet neocons) and "Republican Neoliberals: ("hard core" neoliberal/open neocons) in the USA demonstrates. And not only "democratcy for who" -- it is clera tha thtis is democracy for the top 1% or at best top 20% of population.

Also interesting were the methods of indoctrination of population which were borrowed by the USA neoliberals from the Soviet experience. They use university course in economics in the same (or more correctly slightly more subtle; using mathematics as smoke screen for indoctrination into neoliberal ideology)  way Soviet universities use the course of philosophy. In the USSR the courses of philosophy and political economy were obligatory for all university students and people did read both Marx and Lenin; but there were problem here -- as Marx famously said he was not a Marxist.  The same to a certain extent is true for Lenin, who was essentially a bridge between Marxism and national socialism.  This problem was solved by carefully pre-selecting "classics" works to only a subset that felt in like with Bolshevism.

But deteriorating economy and stagnation make this propaganda less effective, much like happened with neoliberal propganda in the USA in 2016. And people were listening to BBC and Voice of America at night, despite jamming.  Similar things happened inthe USA after 2008. Eventhoroughly brainwashed the USA population, who like member of high demand cult now internalized postulates of neoliberalism like dogmas of some civil religion, started to have doubts.  And like Soviet population resorted to the alternative sources of information (for example Guardian, RT, Asia Times, to name a few).

But still the general level  political education of US votes leave much to be desired and is much lower then it was in the USSR (due to obsessive emphasis on the works of Marxs and Lenin much like modern incarnations of Jesus Christ in Soviet state). Let's honestly ask yourselves  what percentage of US voters can list key proposition of paleoconservative political platform vs neoliberal platform. Or define what the term "neoliberal" means. It is difficult also because the terms "neoliberalism" and "Paleoconservatism" are expunged from MSM. Like Trotsky writings were in the USSR. Assuming that this might well be the key difference between two frontrunner in the last Presidential race, this is really unfortunate.

The myth about intelligent voters

That means the hypothesis that majority of voters under "popular democracy" regime (where all citizens have a right to vote) understand what they are voting for ("informed voters" hypothesis)  is open to review (see Myth about intelligent voter).  Otherwise identity politics would not be so successful in the USA, despite being a primitive variation of classic "divide and conquer" strategy. In any democracy, how can voters make an important decision unless they are well informed?  But what percentage of US votes can be considered well informed?  And taking into account popularity of Fox News what percentage is brainwashed or do not what to think about the issues involved and operate based on emotions and prejudices? And when serious discussion of issues that nation faces are deliberately and systematically replaced by "infotainment" voters became just pawns in the game of factions of elite, which sometimes leaks information to sway public opinion, but do it very selectively. All MSM represent the views of large corporations which own them. No exception are allowed. Important information is suppressed or swiped under the carpet to fifth page in NYT to prevent any meaningful discussion. For example, ask several of your friends if they ever heard about Damascus, AR.

In any case one amazing fact happened during this election: republican voters abandoned Republican brass and flocked to Trump, while Democratic voters abandoned Democratic neoliberals and flocked to Sanders (although DNC managed to fix primaries, and then engaged in anti-Russian hysteria to hide this criminal fact).  See Trump vs. The REAL Nuts for an informed discussion of this phenomenon.

Mr. Trump’s great historical role was to reveal to the Republican Party what half of its own base really thinks about the big issues. The party’s leaders didn’t know! They were shocked, so much that they indulged in sheer denial and made believe it wasn’t happening.

The party’s leaders accept more or less open borders and like big trade deals. Half the base does not! It is longtime GOP doctrine to cut entitlement spending. Half the base doesn’t want to, not right now! Republican leaders have what might be called assertive foreign-policy impulses. When Mr. Trump insulted George W. Bush and nation-building and said he’d opposed the Iraq invasion, the crowds, taking him at his word, cheered. He was, as they say, declaring that he didn’t want to invade the world and invite the world. Not only did half the base cheer him, at least half the remaining half joined in when the primaries ended.

But at the same time the struggle for political equality which is often associative with the word "democracy" is a vital human struggle, even if democracy itself is an unachievable and unrealistic ideal (see The Iron Law of Oligarchy).  In some sense too much talk about Democracy is very suspect and just characterize the speaker as a hypocrite with probably evil intentions, who probably is trying to mask some pretty insidious plans with "democracy promotion" smokescreen.

The same is true for countries.  Especially for those which use  "export of democracy" efforts to mask their imperial ambitions. As in the efforts to expand and sustain the global neoliberal empire led by the USA.  See color revolutions for details.  Actually that makes the USA very similar the USSR with its leaders dream about global Communist empire led from Moscow. Both in the USA and the USSR there was too much talk about democracy, while actually practice was decidedly undemocratic. It was oligarchic rule in both cases. In the USA the situation is further complicated by amazing level of brainwashing of population via MSM, which definitely exceed the level achieved by nomenklatura in Soviet Union outside of "Stalinism" period.  Can you imagine the situation in the USSR when members of the ruling communist party were prohibited to show their affiliation and the words "communist" and "communism" was "discouraged" and their usage is suppressed  in MSM including leading newspapers Pravda and Izvestia (roughly analogical to WaPo and NYT).   That's the situation we have in the USA now.

The term "neoliberalism" is effectively prohibited from usage in major US MSM and all political discussion is forcefully turned into "infotainment" -- the clash of  personalizes. In other words discussion of key issues facing the country (politics in real sense of this word)  was replaced under neoliberal regime by "infotainment" with slick and often psychically beautiful "presstitutes" instead of olitical analysts.   But like was the case in the USSR neoliberal brainwashing gradually lost its effectiveness because it contradicts the reality. and neoliberalism failed to deliver promises of "rising tide lifting all board", or trickle down economy which justified tremendous enrichment of top 0.1%. 

Neoliberalism divides the society in  two classes like in old, good Marxism

Politically neoliberalism. like Marxism in the past, operates with the same two classes: "entrepreneurs" (modern name for capitalists and financial oligarchy) and debt slaves (proletarians under Marxism) who work for them. Under neoliberalism only former considered first class citizens ("one dollar -- one vote"). Debt slaves are second class of citizens and are prevented from political self-organization, which by-and-large deprives them of any form of political participation. In best Roman tradition it is substituted with the participation in political shows ("Bread and circuses") See Empire of Illusion The End of Literacy and the Triumph of Spectacle by Chris Hedges.  In this sense the role of the election is not election of the candidate of people want but legitimizing the candidate the oligarchy pre-selected. . They  helps to provide legitimacy for the ruling elite. 

The two party system invented by the elite of Great Britain proved to be perfect for neoliberal regimes, which practice what Sheldon Wolin called inverted totalitarism. The latter is the regime in which all political power belongs to the financial oligarchy which rules via the deep state mechanisms, and where traditional political institutions including POTUS are downgraded to instruments of providing political legitimacy of the ruling elite. Population is discouraged from political activity. "Go shopping" as famously recommended Bush II to US citizens after 9/11.

But at the same time the struggle for political equality which is often associative with the word "democracy" is a vital human struggle, even if democracy itself is an unachievable and unrealistic ideal (see The Iron Law of Oligarchy).  In some sense too much talk about Democracy is very suspect and just characterize the speaker as a hypocrite with probably evil intentions, who probably is trying to mask some pretty insidious plans with "democracy promotion" smokescreen. The same is true for countries.  Especially for those which use  "export of democracy" efforts to mask their pretty much imperial ambitions. The efforts to expand and sustain the global neoliberal empire led by the USA.  See color revolutions for details.  Actually that makes the USA very similar the USSR with its leaders dream about global Communist empire led from Moscow. Both in the USA and the USSR there was too much talk about democracy, while actually practice was decidedly undemocratic. It was oligarchic rule in both cases. In the USA the situation is further complicated by amazing level of brainwashing of population via MSM, which definitely exceed the level achieve by nomenklatura in Soviet Union. Can you imagine the situation in the USSR when members of the ruling communist party were prohibited to show their affiliation and the words "communist" and "communism" was "discouraged" and their usage is suppressed  in MSM including leading newspapers Pravda and Izvestia (roughly analogical to WaPo and NYT).   That's the situation we have in the USA now.

Corporation as the role model for government under neoliberalism excludes the possibility of democracy

Everything should be organized like corporation under neoliberalism, including government, medicine, education, even military. And everybody is not a citizen but a shareholder  (or more correctly stakeholder), so any conflict should be resolved via discussion of the main stakeholders. Naturally lower 99% are not among them.

The great propaganda mantra of neoliberal governance is "wealth maximization". Which proved to be very seductive for society as a whole in reality is applied very selectively and never to the bottom 60% or 80%, or eve 99% of population.  In essence, it means a form of welfare economics for financial oligarchy while at the same time a useful smokescreen for keeping debt-slaves obedient by removing any remnants of job security mechanisms that were instituted during the New Deal. As the great American jurist and Supreme Court associate justice Louis Brandeis once said: “We can have huge wealth in the hands of a relatively few people or we can have a democracy. But we can’t have both.”

As under neoliberalism extreme wealth is the goal of the social system, there can be no democracy under neoliberalism. And this mean that pretentions of the USA elite that the USA is a bastion of democracy is plain vanilla British ruling elite style hypocrisy.  Brutal suppression of any move to challenge dominance of financial oligarchy (even such feeble as Occupy movement)  shows that all too well.

Like in case of communist regimes before, under neoliberalism we now face a regime completely opposite to democracy: we have complete, forceful atomization of public, acute suppression of any countervailing political forces (similar to the suppression of dissidents in the USSR in its effectiveness and brutality, but done in "velvet gloves" without resort to physical violence). That includes decimation of  labor unions and other forms of self-organization for the lower 80%, or even 99% of population.  Neoliberalism tries to present any individual, any citizen, as a market actor within some abstract market (everything is the market under neoliberalism). Instead of fight for political  and economic equality neoliberalism provides a slick slogan of "wealth maximization" which is in essence a "bait and switch" for redistribution of wealth up to the top 1% (which is the stated goal of neoliberalism aka "casino capitalism"). It was working in tandem with "shareholder value" mantra which is a disguise of looting of the corporations to enrich its top brass via outsize bonuses (IBM is a nice example where such an approach leads) and sending thousands of white-collar workers to the street. Previously it was mainly blue-collar workers that were affected. Times changed. 

The difference between democrats and republicans as (at least partially) the difference in the level of authoritarianism of two factions of the same "Grand neoliberal Party of the USA"

Both Democratic Party and Republican arty in the USA are neoliberal parties. So effectively we have one-party system skillfully masked as duopoly ;-). Communists could use the same trick, by having the part Socialist internationalists worker-peasants party of the USSR and Democratic internationalists peasant-worker party of the USSR, with leaders wet kissing each other behind the curtain as is the case in the USA. In the USA we have Cola/Pepsi duopoly that is sold as the shining example of democracy, although just the rule "the first after the post" prevents democracy from functioning as it eliminates minorities from governance. 

Political atmosphere at the USA since Reagan, when Republican drifted right and Democrats were bought by Wall Street really reminds me the USSR.  But still those parties reflect two different strata of the US population, which according to Marc J. Hetherington and Jonathan D. Weiler book Authoritarianism and Polarization in American Politics in the level of authoritarianism (for example, as measured by F-scale.). Many Republican politicians can be classified as Double High Authoritarians.

If we assume that this is true, the the large part of "verge issues" that so skillfully played in each election, and using which allow the elite to avoid addressing any fundamental issues facing the nation, such as race, gay marriage, illegal immigration, and the use of force to resolve security problems -- reflect differences in individuals' levels of authoritarianism. This makes authoritarianism an especially compelling explanation of contemporary American politics.

Events and strategic political decisions have conspired to make all these considerations more salient. While the authors acknowledge that authoritarianism is not the only factor determining how people vote, it does offer a an important perspective : a large part (at least white Americans) flock to the particular party based on proximity to their own level authoritarianism and corresponding worldview of the party.  In other words  the percentage of authoritarian/non-authoritarian personality in the population allow to predict, at least in part,  voting behavior of the the USA "white block" electorate.


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[Feb 16, 2017] Hatchet job ordered by whom? - The New York Times neocons try to destrory Flynn

Notable quotes:
"... The Washington Post is complicit in a treasonous betrayal of trust by unelected, arrogant and truly dangerous intelligence agents. It is long past due to have a TOTAL house cleaning of these agencies with dire penalties imposed on such malevolent enemies of democracy. If that then includes the Post itself, let the Post clean up its act. ..."
"... The Logan Act (1 Stat. 613, 18 U.S.C. § 953, enacted January 30, 1799) is a United States federal law that details the fine and/or imprisonment of unauthorized citizens who negotiate with foreign governments having a dispute with the United States. ..."
"... This Russian nonsense is not going to fly. Why should anyone believe a word of this story? So what if Flynn discussed sanctions anyway! Who are these traitors in the State Department, and why are they still on the payroll? The majority of the public is not going to buy this nonsense , you are still in denial that you lost the election. ..."
"... This reminds me of Obama getting caught on a hot mic telling the Russian president, "I'll have more flexibility after the election." Signaling that the hardline against Russia would soften if he won reelection. (Clearly a national security issue.) ..."
"... But of course, it's only when the perpetually-outraged left don't like somebody holding different views than them that it becomes a 'dire constitutional crisis.' ..."
"... This is just another Left wing hit job with no real substance, that elevates innuendo and a passing brushed off question to the level of "negotiation". The article uses the requisite obscure language of "officials" who in turn offer little up. This is politics pure and simple. ..."
Feb 16, 2017 | www.nytimes.com
Note how skillfully NYT presstitutes present Russians as the next incarnation of Satan, contact with which is prohibited for Christians.
Who are those nine officials... Looks like Jeff Bezos is just a puppet. Taking on Flynn is a serious game which is far above his head. I do not remember any fuss over Bill Clinton getting Russian money (really outrageous honorarium for the speech) which if you think about it is even more clear violation of Logan act.
Didn't Obama do a similar thing before running for election?

From the start, Michael Flynn, a retired army lieutenant general, was a disturbing choice as President Trump's national security adviser. He is a hothead with extremist views in a critical job that is supposed to build consensus through thoughtful, prudent decision-making. The choice is now growing more unnerving every day.

A conspiracy theorist who has stoked dangerous fears about Islam, Mr. Flynn was fired by the Obama administration as head of the Defense Intelligence Agency and led anti-Hillary Clinton chants of "lock her up" at the 2016 Republican Convention. He raised eyebrows by cultivating a mystifyingly cozy relationship with Russia, which the Pentagon considers a major threat.

Now we have learned that in the weeks before the inauguration, Mr. Flynn discussed American sanctions on Russia, and areas of possible cooperation, with Moscow's ambassador to Washington, Sergey Kislyak. They spoke a day before President Obama imposed sanctions on Russia for hacking the Democrats' computers, probably in an effort to sway the election in Mr. Trump's favor.

Mr. Flynn's underhanded, possibly illegal message was that the Obama administration was Russia's adversary, and that would change under Mr. Trump and that any sanctions could be undone. The result seems to be that Russia decided not to retaliate with its own sanctions.

We know this not from Mr. Flynn or the administration, but from accounts first provided to The Washington Post (aka CIA Pravda) by nine current and former government officials who had access to reports from American intelligence and law enforcement agencies that routinely monitor the communications of Russian diplomats. Bizarrely, Mr. Trump told reporters on Friday afternoon that he was unaware of the Post report, but would "look into that."

jburack, 6:01 AM EST

The Washington Post is complicit in a treasonous betrayal of trust by unelected, arrogant and truly dangerous intelligence agents. It is long past due to have a TOTAL house cleaning of these agencies with dire penalties imposed on such malevolent enemies of democracy. If that then includes the Post itself, let the Post clean up its act.

ausmth, 2/14/2017 8:02 PM EST

Who leaked classified telephone intercepts of a foreign diplomat to the Post? Why isn't that person in jail?

Cecile Pham, 2/14/2017 1:34 PM EST

Flynn would not dare to go ahead with telling Russia not having to worry about sanctions and that the future would be better with Trump without Trump direction.

So Flynn's resignation is just an appeasement. The real story is Trump relationship with Russia.

Mike Mitchell, 8:12 AM EST

As though Flynn is just an idiot who would have never suspected the NSA was listening in on his phone call to ... a Russian Ambassador. Yeah right.

SittingOnThePotty, 2/14/2017 12:29 AM EST

People make reference to the Logan Act and brushing it off as nothing that will be used against Flynn. But the law is on the books, regardless. So I gather now we pick and chose which laws to apply and which not to apply? Am I a bit confused? It was placed as a law for a good reason, just because no one has ever been prosecuted under this law do we dismiss it as "old" and pretend it is not there?

The Logan Act (1 Stat. 613, 18 U.S.C. § 953, enacted January 30, 1799) is a United States federal law that details the fine and/or imprisonment of unauthorized citizens who negotiate with foreign governments having a dispute with the United States. It was intended to prevent the undermining of the government's position.[2]

The Act was passed following George Logan's unauthorized negotiations with France in 1798, and was signed into law by President John Adams on January 30, 1799. The Act was last amended in 1994, and violation of the Logan Act is a felony.

To date, only one person has ever been indicted for violating the act's provisions.[2] However, no person has ever been prosecuted for alleged violations of the act.[2]

Joe Smith, 2/13/2017 3:00 PM EST

Yet ANOTHER fake news story based on "anonymous sources". The media is now nothing more than a means for distributing rumors, dressed up to look like "news" by labeling the rumor mongers as "anonymous sources".

Stan Lippmann , 2/13/2017 2:27 PM EST

This Russian nonsense is not going to fly. Why should anyone believe a word of this story? So what if Flynn discussed sanctions anyway! Who are these traitors in the State Department, and why are they still on the payroll? The majority of the public is not going to buy this nonsense , you are still in denial that you lost the election.

moonshadow168, 2/13/2017 5:45 PM EST

Looks like a preemptive set up so that Obama's historic legacy-building tough-guy sanctions, in response to imaginary "election hacking", will not be touched. If anyone dares question Obama's historic legacy-building tough-guy sanctions, in response to imaginary "election hacking", then they must be "in cahoots" with those darn Russians who "hacked the election".

Meanwhile, President Trump continues to do good work for all Americans.

Scott Cog, 2/13/2017 1:30 PM EST

Americans want to know if kickbacks are/were being offered (by Russians) to Flynn and other Trump-team members in positions to push for rollback of trade sanctions against Russia.

moonshadow168, 2/13/2017 1:34 PM EST

"Americans want to know"... you mean like Bill C's "speaking fees" or "donations" (cough-cough) to the family foundation? LOL!

moonshadow168, 2/13/2017 5:52 PM EST [Edited]

Is that an attempt to get Hillary off the hook?

https://www.nytimes.com/2015/04/24/us/cash-flowed-...

Sure looks like a distraction!

moonshadow168, 2/13/2017 12:16 PM EST

Funny how the words of anonymous Obama administration "current and former U.S. officials", apparently fellow Hillary supporters, are treated as unbiased, indisputable and fact.

Laugh out loud at this, it is revealing: "Those officials were already alarmed by what they saw as a Russian assault on the U.S. election." Just so so you know what planet they are coming from. Hillary lost. You can't blame it on Russia. Get over it.

In addition to not questioning the words of anonymous Obama administration "current and former U.S. officials" there appears to be obvious discrimination and bias against the Trump administration.

Typhon , 2/13/2017 3:02 AM EST

This is going to turn out to be another nothing-burger. All Trump has to do is wait it out for any proof to come up, and if it is just unsubstantiated rumors, then to just write it off as more fake news by frothy Dems ... Regarding Russian "hacking" the election, all Trump has to do is get Brennan and Clapper on the hot seat, and have them talk for hours and hours about John Podesta's Gmail password. Then ask "What else?" only to find that Big Ed at RT TV is a Russian spy!! And so is Tucker Carlson. And probably Mel Gibson too, leading to the conclusion that the Dems are a bunch of loons. Then ask "Who taught you this?" only to find out that Obama ordered an in-depth sabotage of the incoming administration

wesevans, 2/12/2017 9:33 PM EST

Didn't Obama do a similar thing before running for election?

NVCardinalfan , 2/12/2017 3:22 PM EST

Typical Washington Post, running a story without confirmed sources to back up the story. Just speculation as usual.

clewish09, 2/12/2017 11:42 AM EST

Russia hacked the DNC with Iraq's WMDs...

Tyler.Woods99, 2/11/2017 3:20 PM EST

This reminds me of Obama getting caught on a hot mic telling the Russian president, "I'll have more flexibility after the election." Signaling that the hardline against Russia would soften if he won reelection. (Clearly a national security issue.)

But of course, it's only when the perpetually-outraged left don't like somebody holding different views than them that it becomes a 'dire constitutional crisis.'

JungleTrunks, 2/11/2017 11:17 AM EST

Approach the logic of the accusation in reverse, any Russian official meeting an American official will be pressed to finding an opening to discuss sanctions. Any American official knows a Russian diplomat will bring sanctions up and have a deflection to handle it. This doesn't represent a "discussion" on a diplomatic level.

This is just another Left wing hit job with no real substance, that elevates innuendo and a passing brushed off question to the level of "negotiation". The article uses the requisite obscure language of "officials" who in turn offer little up. This is politics pure and simple.

KingMax, 2/11/2017 11:34 AM EST

He spoke with Kislyak the same day the sanctions were announced and then lied about what was discussed (oh, right, suddenly "couldn't remember" because, you know, it was over a month ago). But good job rationalizing his deceit.

JungleTrunks, 2/11/2017 11:50 AM EST

And yours is the typical cry of left wing malcontents that create as much controversy as you can from what signifies nothing. No reporter ha disclosed what actually was said. It's a virtual certainty that expected overtures were made, and typical brush off language was reciprocated. You know nothing but innuendo backed by a desire of extreme prejudice to prosecute any opportunity to defame anyone in the administration, this much is certain, the only certainty frankly.

[Feb 15, 2017] Its Over Folks The Neocons The Deep State Have Neutered The Trump Presidency

Trump wants to tell Russia to do what? ( https://www.rt.com/usa/377346-spicer-russia-return-crimea/ ) ? To return Crimea? Is this what opposition to neocons means in Trumpspeak ???
Notable quotes:
"... "It's Over Folks" The Neocons & The "Deep State" Have Neutered The Trump Presidency ..."
"... For one thing, Flynn dared the unthinkable: he dared to declare that the bloated US intelligence community had to be reformed. Flynn also tried to subordinate the CIA and the Joint Chiefs to the President via the National Security Council. ..."
"... Put differently, Flynn tried to wrestle the ultimate power and authority from the CIA and the Pentagon and subordinate them back to the White House. ..."
"... Ever since Trump made it to the White House, he has taken blow after blow from the Neocon-run Ziomedia, from Congress, from all the Hollywood doubleplusgoodthinking "stars" and even from European politicians. And Trump took each blow without ever fighting back. Nowhere was his famous "you are fired!" to be seen. But I still had hope. I wanted to hope. I felt that it was my duty to hope. ..."
"... It's over, folks, the deep state has won. From now on, Trump will become the proverbial shabbos-goy , the errand boy of the Israel lobby. Hassan Nasrallah was right when he called him 'an idiot '. ..."
"... The Chinese and Iranian will openly laugh. The Russians won't – they will be polite, they will smile, and try to see if some common sense policies can still be salvaged from this disaster. Some might. But any dream of a partnership between Russia and the United States has died tonight. ..."
"... Trump, for all his faults, did favor the US, as a country, over the global Empire. Trump was also acutely aware that 'more of the same' was not an option. He wanted policies commensurate with the actual capabilities of the USA. With Flynn gone and the Neocons back in full control – this is over. Now we are going to be right back to ideology over reality. ..."
"... I am quite sure that nobody today is celebrating in the Kremlin. Putin, Lavrov and the others surely understand exactly what happened. It is as if Khodorkovsy would have succeeded in breaking Putin in 2003. In fact, I have to credit Russian analysts who for several weeks already have been comparing Trump to Yanukovich, who also was elected by a majority of the people and who failed to show the resolve needed to stop the 'color revolution' started against him. But if Trump is the new Yanukovich, will the US become the next Ukraine? ..."
"... Flynn was very much the cornerstone of the hoped-for Trump foreign policy. There was a real chance that he would reign in the huge, bloated and all-powerful three letter agencies and that he would focus US power against the real enemy of the West: the Wahabis. With Flynn gone, this entire conceptual edifice has now come down. We are going to be left with the likes of Mattis and his anti-Iranian statements. Clowns who only impress other clowns. ..."
Feb 14, 2017 | www.zerohedge.com
"It's Over Folks" The Neocons & The "Deep State" Have Neutered The Trump Presidency

Submitted and Authored by The Saker

Less than a month ago I warned that a 'color revolution ' was taking place in the USA . My first element of proof was the so-called "investigation" which the CIA, FBI, NSA and others were conducting against President Trump's candidate to become National Security Advisor, General Flynn. Last night, the plot to get rid of Flynn has finally succeeded and General Flynn had to offer his resignation . Trump accepted it.

Now let's immediately get one thing out of the way: Flynn was hardly a saint or a perfect wise man who would single handedly saved the world. That he was not.

However, what Flynn was is the cornerstone of Trump's national security policy . For one thing, Flynn dared the unthinkable: he dared to declare that the bloated US intelligence community had to be reformed. Flynn also tried to subordinate the CIA and the Joint Chiefs to the President via the National Security Council.

Put differently, Flynn tried to wrestle the ultimate power and authority from the CIA and the Pentagon and subordinate them back to the White House. Flynn also wanted to work with Russia. Not because he was a Russia lover, the notion of a Director of the DIA as a Putin-fan is ridiculous, but Flynn was rational, he understood that Russia was no threat to the USA or to Europe and that Russia had the West had common interests. That is another absolutely unforgivable crimethink in Washington DC.

The Neocon run 'deep state' has now forced Flynn to resign under the idiotic pretext that he had a telephone conversation, on an open, insecure and clearly monitored, line with the Russian ambassador.

And Trump accepted this resignation.

Ever since Trump made it to the White House, he has taken blow after blow from the Neocon-run Ziomedia, from Congress, from all the Hollywood doubleplusgoodthinking "stars" and even from European politicians. And Trump took each blow without ever fighting back. Nowhere was his famous "you are fired!" to be seen. But I still had hope. I wanted to hope. I felt that it was my duty to hope.

But now Trump has betrayed us all.

Remember how Obama showed his true face when he hypocritically denounced his friend and pastor Rev. Jeremiah Wright Jr. ? Today, Trump has shown us his true face. Instead of refusing Flynn's resignation and instead of firing those who dared cook up these ridiculous accusations against Flynn, Trump accepted the resignation. This is not only an act of abject cowardice, it is also an amazingly stupid and self-defeating betrayal because now Trump will be alone, completely alone, facing the likes of Mattis and Pence – hard Cold Warrior types, ideological to the core, folks who want war and simply don't care about reality.

Again, Flynn was not my hero. But he was, by all accounts, Trump's hero. And Trump betrayed him.

The consequences of this will be immense. For one thing, Trump is now clearly broken. It took the 'deep state' only weeks to castrate Trump and to make him bow to the powers that be . Those who would have stood behind Trump will now feel that he will not stand behind them and they will all move back away from him. The Neocons will feel elated by the elimination of their worst enemy and emboldened by this victory they will push on, doubling-down over and over and over again.

It's over, folks, the deep state has won. From now on, Trump will become the proverbial shabbos-goy , the errand boy of the Israel lobby. Hassan Nasrallah was right when he called him 'an idiot '.

The Chinese and Iranian will openly laugh. The Russians won't – they will be polite, they will smile, and try to see if some common sense policies can still be salvaged from this disaster. Some might. But any dream of a partnership between Russia and the United States has died tonight.

The EU leaders will, of course, celebrate. Trump was nowhere the scary bogeyman they feared. Turns out that he is a doormat – very good for the EU.

Where does all this leave us – the millions of anonymous 'deplorables' who try as best we can to resist imperialism, war, violence and injustice?

I think that we were right in our hopes because that is all we had – hopes. No expectations, just hopes. But now we objectively have very little reasons left to hope. For one thing, the Washington 'swamp' will not be drained. If anything, the swamp has triumphed. We can only find some degree of solace in two undeniable facts:

  1. Hillary would have been far worse than any version of a Trump Presidency.
  2. In order to defeat Trump, the US deep state has had to terribly weaken the US and the AngloZionist Empire. Just like Erdogan' purges have left the Turkish military in shambles, the anti-Trump 'color revolution' has inflicted terrible damage on the reputation, authority and even credibility of the USA.

The first one is obvious. So let me clarify the second one. In their hate-filled rage against Trump and the American people (aka "the basket of deplorables") the Neocons have had to show they true face. By their rejection of the outcome of the elections, by their riots, their demonization of Trump, the Neocons have shown two crucial things: first, that the US democracy is a sad joke and that they, the Neocons, are an occupation regime which rules against the will of the American people. In other words, just like Israel, the USA has no legitimacy left. And since, just like Israel, the USA are unable to frighten their enemies, they are basically left with nothing, no legitimacy, no ability to coerce. So yes, the Neocons have won. But their victory is removes the last chance for the US to avoid a collapse.

Trump, for all his faults, did favor the US, as a country, over the global Empire. Trump was also acutely aware that 'more of the same' was not an option. He wanted policies commensurate with the actual capabilities of the USA. With Flynn gone and the Neocons back in full control – this is over. Now we are going to be right back to ideology over reality.

Trump probably could have made America, well, maybe not "great again", but at least stronger, a major world power which could negotiate and use its leverage to get the best deal possible from the others. That's over now. With Trump broken, Russia and China will go right back to their pre-Trump stance: a firm resistance backed by a willingness and capability to confront and defeat the USA at any level.

I am quite sure that nobody today is celebrating in the Kremlin. Putin, Lavrov and the others surely understand exactly what happened. It is as if Khodorkovsy would have succeeded in breaking Putin in 2003. In fact, I have to credit Russian analysts who for several weeks already have been comparing Trump to Yanukovich, who also was elected by a majority of the people and who failed to show the resolve needed to stop the 'color revolution' started against him. But if Trump is the new Yanukovich, will the US become the next Ukraine?

Flynn was very much the cornerstone of the hoped-for Trump foreign policy. There was a real chance that he would reign in the huge, bloated and all-powerful three letter agencies and that he would focus US power against the real enemy of the West: the Wahabis. With Flynn gone, this entire conceptual edifice has now come down. We are going to be left with the likes of Mattis and his anti-Iranian statements. Clowns who only impress other clowns.

Today's Neocon victory is a huge event and it will probably be completely misrepresented by the official media. Ironically, Trump supporters will also try minimize it all. But the reality is that barring a most unlikely last-minute miracle, it's over for Trump and the hopes of millions of people in the USA and the rest of the world who had hoped that the Neocons could be booted out of power by means of a peaceful election. That is clearly not going to happen.

I see very dark clouds on the horizon.

* * *

  • UPDATE1 : Just to stress an important point: the disaster is not so much that Flynn is out but what Trump's caving in to the Neocon tells us about Trump's character (or lack thereof). Ask yourself – after what happened to Flynn, would you stick your neck out for Trump?
  • UPDATE2 : Just as predicted – the Neocons are celebrating and, of course, doubling-down:
  • Son of Captain Nemo , Feb 14, 2017 10:12 PM

    Trump wants to tell Russia to do what? ( https://www.rt.com/usa/377346-spicer-russia-return-crimea/ )

    Here is the REAL United States of America President ( https://www.israelrising.com/bibi-netanyahu-president-trump-see-eye-eye-... ) Booby!!!

    Smell the fetid gas coming out of this "Gluteal Cleft with horns" that owns the U.S. military!

    [Feb 15, 2017] Google, Youtube and net neutarality

    Feb 15, 2017 | www.nakedcapitalism.com
    Eureka Springs , February 15, 2017 at 7:22 am

    Net neutrality has always been confined to the narrowest of meanings to a point of being self-defeating by simply self-kettling ourselves into such limited fights/expectations. I know you coastal and big city elites (that's half snark) will never understand much more empathize or rally with us flyover deplorables who are limited to 10 gigs a month no matter what provider we use, no matter how much we pay. I recently read that most homes with fiber now utilize over a thousand gigs a month that one HD movie can be much more bandwidth than my entire monthly 70 bucks can buy.

    Over twenty years ago the entire U.S. should have established high speed affordable unlimited fiber to every home on the grid and that's where the argument should be today. It covers the neutrality issue and so, so very much more. And it is far more inclusive of many more people who would benefit in so many ways. It's way past time to remove the internet highway system. Separate the content providers, the monitors, data mining, from the public highway system itself. That's where the beginning of neutrality should begin.

    So yes, point out the most egregious hypocrites in the misleadership class, but don't let them all win by keeping us divided and losing within the extremely limited confines of their argument.

    oh , February 15, 2017 at 8:59 am

    Among the many promises that Barry broke was the one to provide hi speed internet. One grifter follows another!
    We the people need to set some discrete goals and protest. Calling or writing to the Congress critters will not work. We need to storm their office on behalf each issue.

    Sally , February 15, 2017 at 2:14 pm

    "Separate the content providers, the monitors, data mining, from the public highway system itself. That's where the beginning of neutrality should begin."

    That is the key point.

    Trump would be an idiot if he allowed the likes of Google/UTube, Facebook, big tech boys to be able to start rigging the content because his campaign relied hugely on the Internet. A lot of his support by-passed the traditional TV/Newspaper media. I heard that Twitter are apparantly using ways and means to make his Twitter acccount only see hostile responses for the first 100 or so responses. Have no idea if that's true but some of these firms are getting very close to utility status.

    Anti trust laws should be wheeled out. They are already on the books.

    likbez , February 15, 2017 at 2:45 pm

    Your comment is awaiting moderation.

    Companies such as Netflix are essentially subsidized by telecom providers. So this is a model that somewhat reminds me of Uber.

    The same is true for Google (especially YouTube part of it) and Facebook. When somebody tries to download 4.7Gb movie that affects other people on the same subnet,

    On the other hand if, for example, popular blogs are forced to pay per gigabyte of consumed bandwidth, that is as close to censorship as we can get. 1000 gigabytes per month that is consumed by a medium site even at $1 per gigabyte is $1000 per month rent. And guess who will be able to afford it.

    There are a lot complex nuances here. For example, everybody who use wireless at home are not in the same group as who are using landlines (fiber or cable) even if they live in metropolitan areas. They are closer to flyover country residents.

    Also as soon as something is not metered some sophisticated forms of abuse emerge. For example, some corporations are abusing public networks by switching to "home office" model which dramatically cuts the required office and parking space. Several corporations built their new headquarters with the assumption that only half of employees are present at any given day (so called hotel model). When employees view some clueless corporate video conference via VPN that affects their neighborhood the same way as heavy Netflix users. Excessive WebEx videoconferences have a similar effect.

    Quanka , February 15, 2017 at 8:08 am

    +1 to Eureka Springs.

    Go back to Bill Clinton's administration when Verizon was a fledgling company and the government gave massive subsidies to the Telecoms to do exactly what Eureka Springs notes: bring fast, reliable internet service across the country. Fast forward to today - those companies took all the subsidies, didn't build out shit for network capacity, and now spend all their money lobbying to give themselves more power and limit net neutrality.

    If there were a microcosm for this whole problem, this is it. Dems give big subsidies to corporate players, dont track the work/take for granted that they "did something" and then get caught flat footed. Now we are all left to battle it out for the scraps. Exactly where we were 20 years ago.

    Watching the Oroville Dam, juxtaposing with all this "infrastructure spending" talk - everyone should be weary b/c we've been here before with Telecoms.

    cocomaan , February 15, 2017 at 9:12 am

    +1 to both of you!

    It reminds me of the land grant system that enabled the railroad industry to thrive.

    Guess what happened to Southern Pacific Railroad Company, who benefited greatly from this government intervention? Later, they turned into Sprint ( S outhern P acific R ailroad I nternal N etworking T elephony)!

    Scott , February 15, 2017 at 9:41 am

    I really wish I could get more worked up about Net Neutrality, but I can't. I'm deeply concerned about the high prices and lack of availability in much of the country, but I find that much of the debate boils down to conflict between Silicon Valley and the Telcos about who controls the internet. Content providers (Facebook, Google, Netflix) want to use the network effects to manipulate public opinion in their favored version of Net Neutrality, which seems to involve universal unmetered broadband, which ISPs must build out to meet demand, shifting costs from the providers to the ISPs, while profits go the other way. Meanwhile the ISPs do the tricks described in the post and overchange customers for poor service. I have little sympathy for either group.

    My general belief is that broadband should be cheap, universal, regulated, and, yes, metered. The latter would encourage high volume users and content providers to change their behavior and technology to use bandwidth more efficiently, which would reduce the size of the infrastructure needed over the long-term. I would also include search neutrality at the same time, but for some reason that doesn't have the same level of support among the technology industry.

    [Feb 15, 2017] Americans arent as attached to democracy as you might think

    Notable quotes:
    "... Statistics can be made to slant any way you intend. ..."
    "... Stupid survey leads to dumber article and fucking ridiculous headline. Standard Guardian opinion I guess. ..."
    "... Seriously can you perhaps stop being so clickbaity? I've already lost the Independent because it went full on lefty Buzzfeed listical "you won't believe what they did to Trump when the lights went out". Don't follow them downwards. ..."
    "... On both side of the Atlantic, we don't have a 'democracy', we have an elected monarchy. The trouble is, this monarchy gets itself elected on the basis of lies, money and suppression. For a few brief years after WWII, there was an attempt to hold executives to account, but neoliberals put paid to all that. Nowadays, it's just as if nothing had changed since Henry VIII's time. ..."
    "... What we gave the ordinary Russian was neo-liberalism and they got screwed by it. Capitalisms greatest trick was to convince the many that it & democracy are the same thing. When actually, on many levels, they are totally at odds with each other. ..."
    Feb 15, 2017 | www.theguardian.com
    Statistics can be made to slant any way you intend. Essentially can be be used as another form of lie and propganada

    Lawrence Douglas

    But, the result changed when the data were narrowed to those who identified themselves as Trump supporters: 51% agreed that Trump should be able to overturn court decisions. 33% disagreed. 16% were not sure.

    It is tempting to attribute this difference between Trump supporters and others simply to the fact that the president's supporters prefer a more authoritarian style of government, prioritize social order, like strong rulers, and worry about maintaining control in a world they perceive to be filled with threats and on the verge of chaos.


    As the PPP's survey reveals, Trump is appealing to a remarkably receptive audience in his attempts to rule by decree – and many are no longer attached to the rule of law and/or democracy. Other studies confirm these findings. One such study found a dramatic decline in the percentage of people who say it is "essential" to live in a democracy.

    When asked to rate on a scale of 1 to 10 how "essential" it is for them "to live in a democracy," 72% of Americans born before World War II check "10," the highest value. But, the millennial generation (those born since 1980) "has grown much more indifferent." Less than 1 in 3 hold a similar belief about the importance of democracy.

    And, the New York Times reports that while 43% of older Americans thought it would be illegitimate for the military to take power if civilian government was incompetent, only 19% of millennials agreed.

    While millennials may be politically liberal in their policy preferences, they have come of age in a time of political paralysis in democratic institutions, declining civility in democratic dialogue, and dramatically increased anxiety about economic security.

    These findings suggest that we can no longer take for granted that our fellow citizens will stand up for the rule of law and democracy. That's why, while President Trump's behavior has riveted the media and the public, our eyes should not only be focused on him but on this larger – and troubling - trend.

    If the rule of law and democracy are to survive in America we will need to address the decline in the public's understanding of, and support for both. While we celebrate the Ninth Circuit's decision on Trump's ban, we also must initiate a national conversation about democracy and the rule of law. Civics education, long derided, needs to be revived.

    Schools, civic groups, and the media must to go back to fundamentals and explain what basic American political values entail and why they are desirable. Defenders of democracy and the rule of law must take their case to the American people and remind them of the Founders' admonition that: "If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself."

    We need to remember that our freedom from an arbitrary or intrusive government depends on the rule of law and a functioning democracy. We need to rehabilitate both – before this crisis of faith worsens.

    Austin Sarat is a professor of jurisprudence and political science at Amherst College

    , greatapedescendant , 11 Feb 2017 11:29

    "There is much to celebrate in the court decision against President Trump's immigration ban. It was a stirring victory for the rule of law and reaffirmation of the independence of the judiciary."

    A stirring victory of the rule of law? Hardly. More like an extraordinary act of politicised justice. And an orchestrated one at that. In my opinion that is, and as I see it at this point in time and from what I am able to discern.

    No. I do not see not see any stirring victories for the rule of law here here. Certainly no courage of truth or justice. Nor, as it happens, do I like this travel ban. Nevertheless, the court's ruling seems to me to be wrong since the constitution gives the president the power to enforce blanket bans against countries believed to pose a threat.

    I cannot see how the ban could justifiably be said to be aimed specifically at Muslims since it does not concern some 90 percent of the world's Muslim population. So it looks very much like a political decision from the 9th Circuit Court – and now San Francisco - in a tug of war between Democrats and Republicans.

    I am somehow reminded of the final "Yes we can" in Obama's farewell speech and of a sore loser – the vindictive Mrs Clinton. Some smooth transfer of power.

    The very fact that expert analysts are already sizing up what will be the Supreme Court's decision in terms of breaking the stalemate between 4 Republicans and 4 Democrats provides a perfect illustration of the politicisation of the judiciary at the highest level. Compatibly with this, Democrats are continuing to block Gorsuch's nomination.

    And compatibly with this the illusion of salutary Rawlsian** apolitical amnesiacs on the part of the judiciary disperses like Scotch mist.

    Somehow I have a clear mental picture of a newspaper editor, no one in particular, sitting back in his chair with a smug smile 'Look how we managed to swing that one', I hear him say. The principal protagonists here, overshadowing the US lawcourts, are the mainstream media. A power never to be underestimated, especially when the choir is singing in full maledictory and mephitic unison.

    **The reference is to A Theory of Justice, the monumental work on philosophy of law by John Rawls. It casts damning light on judicial impartiality by focusing on distorting criteria affecting juries. Worth reading in the context of attacks on the impartiality of the judiciary in US lawcourts taking place right now. And also in the wake of recent attacks on the judiciary in Britain over Brexit.

    , sam0412 imperium3 , 11 Feb 2017 11:53
    This,

    Interesting that Clinton's 52% is regarded as a God-given mandate where as the 52% for Leave is unfair as the voters were "too old/uneducated/outside London"

    In both campaigns if more people my age (26) had actually bothered to vote then the results would probably be very different.

    , Bluthner , 11 Feb 2017 11:34

    Only 53% of those surveyed said that they "trust judges more than President Trump to make the right decisions for the United States."

    But that is an utterly assinine question to ask anyone!

    "Making decisions for the United States" suggests setting policy. The judges Trump is so angry with aren't making policy decisions, they are interpreting the laws that already exist.

    Laws without and independent judiciary are not laws at all, they are just whims of whoever or whatever is in power. Might as well ask people do you prefer to live in a country that follows its laws or do you want to live at the whim of an irrational despot with irresponsible power who can do whatever the hell he pleases.

    This survey is clearly a case of garbage in garbage out. Which is a pity, because the subject is an important one.

    , LithophaneFurcifera Bluthner , 11 Feb 2017 12:03
    In a common law system, like those of Britain and the US, judges do make law. If there is no relevant legislation and no precedent, the judge is required to make new law in order to rule on the case, which will then be cited as precedent by future courts. In a civil law system, like those of continental Europe, judges merely interpret (and generalise, where necessary) the rules set out in statutes and codes, and have less scope to innovate.

    Of course, the recent case over Trump's immigration plans has been based on interpretations of the constitution though, but even interpretations are political (hence why the balance of power between liberals and conservatives on the Supreme Court is considered such a big issue).

    , Veryumble , 11 Feb 2017 11:35
    After nearly 40 years of corporate, lobbyist controlled politics, it's little surprise the younger generation have no faith in democracy. What on earth is the point in voting for two shades of the same shit?
    , YoungMrP , 11 Feb 2017 11:36
    You could argue that the US has never been a democracy. It is a strange democracy that allowed slavery, or the later segregation in the south, or that has systematically overlooked the rust belt taking all the gold for the liberal coasts.

    It seems democracy is simply a way of deciding who the dictator should be. Not unlike the U.K. Either.

    , YoungMrP therebythegrace , 11 Feb 2017 14:15
    If you were black in Alabama in the early 60s I don't think you would have enjoyed any more freedom, respect or control than your Russian counterpart at that time
    , jan oskar Hansen , 11 Feb 2017 11:38
    democracy is, of course, the best form of governance but in practice we see it benefit the wealthy who unhindered can rob
    the poor, only a socialist government can
    usher in a true government to do so it may
    be needed to have an authoritarian regime
    , Cape7441 jan oskar Hansen , 11 Feb 2017 11:55
    True socialism is a form of government which sounds wonderful in theory. In practice it has never successfully worked anywhere in the world. It does not take account of human nature.
    , Captain_Smartypants jan oskar Hansen , 11 Feb 2017 12:00
    Sorry but in the authoritarian nominatively socialist governments of the past the poor were as robbed off the fruit of their labour and their dignity as they are today.
    , BonzoFerret , 11 Feb 2017 11:39
    It's effectively a FPTP system that means you have a choice from only two parties. Even if someone could challenge they'd need to be a billionaire to do so. America is no democracy.
    , Andy Wong Ming Jun therebythegrace , 11 Feb 2017 14:22
    Germany under Adolf Hitler before he started WWII was not a zillion times worse than any of the contemporary powers in Western Europe. Neither was Franco's Spain. Looking in other areas of the globe and further away from the West, what about South Korea under Park Chung Hee? Would you call his dictatorship bad when he brought South Korea up to become one of the Asian 5 Tigers?
    , therebythegrace Andy Wong Ming Jun , 11 Feb 2017 15:14

    Germany under Adolf Hitler before he started WWII was not a zillion times worse than any of the contemporary powers in Western Europe

    Is that supposed to be a joke? If so, it's in very poor taste.

    My parents grew up in Nazi Germany. Yes, it was a zillion times worse. Political opponents were routinely murdered. There was no rule of law. Minorities, gay people etc were imprisoned, tortured, murdered, expelled.

    WTF are on you on about?

    , Metreemewall Andy Wong Ming Jun , 11 Feb 2017 15:50
    Clueless.

    Germany was broke, following their defeat in WWI; people were poor, humiliated,insecure and frightened for the future. In other words, the classic breeding ground for demagogues and extremists.

    After WWII, the Allies had learned their lesson and made sure that Germany should, for everyone's security, be helped to prosper.

    , Wehadonebutitbroke Andy Wong Ming Jun , 11 Feb 2017 16:05
    what about South Korea under Park Chung Hee? Would you call his dictatorship bad when he brought South Korea up to become one of the Asian 5 Tigers?

    The Friemanite right adored him and many of his equally repressive and dictatorial successors (just as they did Pinochet, Suharto (deemed by Transparency International to be the most corrupt leader in modern history to boot) and endless South American juntas etc).

    Every one else saw him for what he was - an authoritarian who had political opponents tortured and killed and who banned any form of protest.

    , John Favre praxismakesperfec , 11 Feb 2017 16:11

    And is it particularly surprising that Trump voters tend towards anti democratic authoritarianism?

    My dad and two of my brothers voted for Trump. Like most Americans, they detest authoritarian governments. I sincerely doubt you know any Trump voters - let alone ones who favor authoritarianism.

    , fauteuilpolitique , 11 Feb 2017 11:42
    How to misdirect readers with a BUT :

    In a cross-section of Americans, only 53% of those surveyed said that they "trust judges more than President Trump to make the right decisions for the United States." 38% said they trusted Donald Trump more than our country's judges, and 9% were undecided.

    But , the result changed when the data were narrowed to those who identified themselves as Trump supporters: 51% agreed that Trump should be able to overturn court decisions. 33% disagreed. 16% were not sure.

    The results are significantly the same, the But implies something different.

    , Paul B tenthenemy , 11 Feb 2017 13:32
    besides, the results are *not* significantly the same. Fauteuil's first sentence suggests that 53% (more than a Brexit majority, hence Will of the People) of Americans support the judiciary over the presidency. In contrast, a majority of Trump supporters, not unnaturally, take the opposite view.
    , sewollef , 11 Feb 2017 11:45
    Statistics can be made to slant any way you intend.

    So let's break this down: 51% of Trump supporters think he can do what he pleases. 51% means one quarter of those who voted in the US general election.

    If we estimate that only two-thirds of the electorate voted, that means in reality, probably less than 16% of total potential voters think this way.

    Not so dramatic now is it?

    , bananacannon , 11 Feb 2017 11:45
    Stupid survey leads to dumber article and fucking ridiculous headline. Standard Guardian opinion I guess.

    Seriously can you perhaps stop being so clickbaity? I've already lost the Independent because it went full on lefty Buzzfeed listical "you won't believe what they did to Trump when the lights went out". Don't follow them downwards.

    , Jympton , 11 Feb 2017 11:45
    On both side of the Atlantic, we don't have a 'democracy', we have an elected monarchy. The trouble is, this monarchy gets itself elected on the basis of lies, money and suppression. For a few brief years after WWII, there was an attempt to hold executives to account, but neoliberals put paid to all that. Nowadays, it's just as if nothing had changed since Henry VIII's time.
    , therebythegrace , 11 Feb 2017 11:46
    Sad that a new, stupid generation have to learn the truth of Churchill's dictum that 'Democracy is the worst form of government, except for all the others'.

    Sincerely hope for all of us that they don't have to learn this the hard way.

    I say this speaking as someone whose parents fled Nazi Germany, and who also spent time with relatives in the former East Germany prior to the wall coming down. Life under a dictatorship, whether of the right or left, is no picnic.

    , wikiwakiwik olderiamthelessiknow , 11 Feb 2017 12:32
    'Democracy is the worst form of government, except for all the others'.

    But is it democracy's fault when the option as to which kind of government we can choose is so narrow? Scary as it may sound, I think that the majority of young people would swap democracy just for some stability & safety. But what they fail to realize is that it's not democracy that's at the fault - but our form of capitalism. Look what happened in Russian when the wall came down & the free market rushed in & totally screwed over the ordinary Russian. Putin was, to some extent, a reaction to this. His strong man image was something they thought would help them. What we gave the ordinary Russian was neo-liberalism and they got screwed by it. Capitalisms greatest trick was to convince the many that it & democracy are the same thing. When actually, on many levels, they are totally at odds with each other.

    , NadaZero , 11 Feb 2017 11:47
    "Democracy is a great word, whose history, I suppose, remains unwritten, because that history has yet to be enacted." --Walt Whitman
    , EpicHawk , 11 Feb 2017 11:47
    Laws aren't final, they evolve with the needs of society. While I support this decidion I find all of this a bit silly and typical of that strange world.. "this is the law, therefor blabla.." I don't get why people even decide to study it in university. Most law students are like : "Yeah I don't know what to pick. Lets do Law, it'll give me a good job". Empty stuff really..
    , Brexit_to_Democracy , 11 Feb 2017 11:47
    Can someone please explain how the court has over ruled the executive order? From what I understand it's because it would harm some Americans - but does that mean using the same logic courts can undo tax increases, spending cuts, changes in abortion law? Or if the travel ban was instead passed by congress it would then be beyond the remit of judges?
    , Brexit_to_Democracy Brexit_to_Democracy , 11 Feb 2017 11:51
    And guns!! Surely judges could determine the second amendment can lead to a lot of harm?!
    , referendum Brexit_to_Democracy , 11 Feb 2017 12:21
    One example given was schools. Banning students from state universities, or professors, by preventing them from entering the country, was damaging to the schools capacity to earn money ( in tuition fees) and provide state education. Then there was the example of forcibly separating families.

    But this part of the ruling does not exist on it's own, it goes together with another part of the ruling, which was that there was no good reason for this action, since the Government had failed to provide that any person from any of these countries was a threat - which was the reason given in the executive order. For this and other reasons the Executive order was deemed to be not legally enforceable.

    Another problem is that this was an executive order, just a piece of paper signed by Trump, and the President does not have sole authority to make laws, there is also the judiciary and legislative branches - the courts and congress. If the travel ban had been passed by congress then the courts would probably have not been able to overturn it. In this game of stone scissors paper, the executive doesn't beat the other two - it needs one of them to rubber-stamp the decision if challenged. The argument that a presidential order should be all powerful and must be obeyed regardless of whether it was legal or not, was deemed by the judges to be anti constutional and thrown out of court.

    The other examples you give of tax increases or spending cuts or abortion might indeed cause harm, but providing they are not anti-constitutional, and they get through congress, and are not illegal, the harm wouldn't be taken into account.

    , Treflesg , 11 Feb 2017 11:48
    I would not have voted for Trump. I would not have voted for quite a few American Presidents before him either.
    But the hyperbole about Trump is being overdone.
    The USA is one of the oldest democracies on earth, and, one of only ten nations that have lasted as democracies for more than a century.
    By overstating Trump's impact, you are not helping.
    , mondopinion Treflesg , 11 Feb 2017 12:12
    It is actually a kind of hysteria. I remember Senator McCarthy's communist hysteria, and also the marijuana hysteria which swept through schools when I was a child in the 1950s.
    , Tongariro1 , 11 Feb 2017 11:48
    I'm a little surprised that there seems to be less debate in the USA about the electoral college for the presidency than I thought likely. Of course, the electoral college is a completely redundant if it never leads to a different result from a straightforward popular vote. As I understand it, the electoral college is designed to ensure that smaller states have a voice greater than their population size alone would deliver.

    But in a nationwide poll, on a binary issue, such as the election of the president or Brexit, I would have thought that each vote should count equally. SNP supporters might differ in this view, as would presumably US Democratic Party supporters.

    , unclestinky , 11 Feb 2017 11:48
    The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.- H. L. Mencken.

    Working so far.

    , MightyBuccaneer , 11 Feb 2017 11:49

    Public support for the rule of law and democracy can no longer be taken for granted.


    "no longer"?

    There was a mysterious absence of support for the rule of law when Obama used drones to extrajudicially assassinate American citizens.

    , MightyBuccaneer , 11 Feb 2017 11:51

    Only 53% of those surveyed said that they "trust judges more than President Trump to make the right decisions for the United States." In this cross-section of Americans, 38% said they trusted Donald Trump more than our country's judges. 9% were undecided.

    This means absolutely nothing regarding whether people support democracy and the rule of law.

    Were the results about Obama, the very same result would probably be interpreted as racism by the liberal media.

    , innnn , 11 Feb 2017 11:51
    Another poll from Public Polling Policy says that by a margin of 51/23 Trump supporters agree that the Bowling Green massacre shows that Trump's travel ban is a good idea.

    That's shows what you're up against and also why both Kellyanne Conway and Sean Spicer 'misspeak' so often.

    , cidcid , 11 Feb 2017 11:51

    A new national survey suggests that we can no longer take for granted that our fellow citizens will stand up for the rule of law and democracy

    Dear Austin, let me educate you a bit about the basics. The rule of law and democracy cannot both exist simultaneously in one society. The former has never been an American tradition. Read Tocqueville.

    The rule of law is characteristic of a totalitarian state where it is enforced by civil servant. The basic principle of such a state were described by Shang Yang 2400 years ago: a civil servant obeys the law, regardless of the will of his superior. Everyone obeys the law from top to bottom.

    In democracy people are judged by courts of jury. Which rule as they like, representing the public opinion, not the written law. Constitution doesn't exist either. Teddy Roosevelt explained when asked if his orders are constitutional: "The constitution was created for the people, not the people for the constitution".

    One nice example: the famous "Affirmative Action". It is obviously inconsistent with the most basic constitutional principle, that people are born equal. But it existed because the public didn't mind.

    , MathiasWeitz , 11 Feb 2017 11:52
    It makes me really wonder if americans (and other nations) are feeling something like a 'weimar' moment, when the germans in 1933 lost trust in their very young democracy after living for years under economic hardship and political pariah.
    There is so much that resembles the nazi-era, this xenophobia, that started with a slow decay of civil rights, the erosion of check and balances without the need to change the constitution.
    When we are heading for the similar kind of fascism like germany eighty years ago, at what point people should be held responsible for making a stand ?
    , MightyBuccaneer , 11 Feb 2017 11:54

    Schools, civic groups, and the media must to go back to fundamentals and explain what basic American political values entail and why they are desirable.

    Agreed. Special emphasis should be placed on accepting the results of elections, there appears to have been a recent surge in undemocratic sentiment on that front.

    , MrHubris MightyBuccaneer , 11 Feb 2017 11:57
    How about special emphasis on debunking lies from people like the cowardly, liar Trump? Share Facebook Twitter
    , therebythegrace MightyBuccaneer , 11 Feb 2017 12:48
    Are you confusing "accepting the results of elections' with 'denying people the right to peacefully protest'?

    If so, I think you are the one who could do with going back to the fundamentals and learning about what democracy entails.

    Share Facebook Twitter
    , eltonbraces MrHubris , 11 Feb 2017 12:50
    Perhaps sweet, caring, sharing Hillary could visit and put them straight.
    , CortoL , 11 Feb 2017 11:54
    Democracy? What democracy? Share Facebook Twitter
    , Streona25 , 11 Feb 2017 11:55
    Can you have a democratic plutocracy?
    , michaelmichael , 11 Feb 2017 11:56
    "Americans aren't as attached to democracy as you might think"

    you only just realised?? Wow

    'Democracy' is just a handy label for when the US wants to bomb another sovereign state

    , ErikFBerger , 11 Feb 2017 11:56
    "... trust judges more than President Trump to make the right decisions for the United States."

    This question is badly worded. It is not judges role to lead the country. The question should have been:

    "Should judges uphold the law to the best of their understanding, even if that means nullifying an order by president Trump?"

    , UnashamedPedant , 11 Feb 2017 11:59
    That link to the Federalist of 1788 on Checks & Balances is wrong. Here is the correct version:
    http://www.constitution.org/fed/federa51.htm
    , ayupmeduck2 , 11 Feb 2017 11:59
    I suspect that it's a change in what the word democracy means to people. Even the older generation are starting to understand that the 'democracies' that we live under in the western world are horribly distorted. Big corporations, even foreign ones, have far more access to the elected executive than the actual voters. Governments dance to the tune of powerful media. Votes don't often count for much at all.

    With this background it's no wonder that the Brexit voters feel drunk with power. For once they voted on something and believe that they will get exactly what they voted for. The final irony is that for most of them they don't realise that they were turkeys voting for Christmas. Brexit could have possibly bought them some benefits, but the Tories seem determined to deny them even that. Once the realise they have been swindled, what then for democracy?

    , sd0001 ayupmeduck2 , 11 Feb 2017 13:31
    People have lost faith in democracy, politics, the judicial system and, yes, economics.

    Voting to remain in the EU, is a vote for the status quo...if you're lucky. They want more government, not less. It is not a 20-50 year project. It is forever, and they will not stay still. It will evolve, and not regress politically.

    The UK government will have to change, and they have the chance. They may not succeed, but I believe they will try, and the pressure from the people will be more direct.

    The EU don't want to change. If it was an economic union and not a political one, then it would be a great organisation.

    Forget the garbage about wars and instability. That comes from economic success, with NATO providing any security until that comes to fruition to the developing countries.

    , FCBarca , 11 Feb 2017 12:00
    No surveys needed to arrive at these conclusions I am afraid, apathy and mistrust of govt has been eroding for decades. US government is a cesspool of corruption and in no small way is aided by the fact that its citizens have given tacit approval for the erosion of their own civil liberties and rights while celebrating the war machine that has increasingly rolled on for more than 3 decades

    The abyss looming for the US, and by extension the world, can be traced back to a populace that abandoned democracy and freely gifted the cronies the mandate to accelerate the erosion.

    Solution? Kill apathy and not only get back involved but remain vigilant to preserve checks & balances

    , Knapping , 11 Feb 2017 12:00
    Forty years ago, democracy was more or less synonymous with prosperity. Given it's now wider spread to many poorer states across the world, as well as the incredible increase in the standard of living in non-democratic countries, principally China, this is no longer the case. I suspect we have not made the case for democracy as an end in itself, nor as a route to distributing prosperity more widely, or as a corollary of 'The Free Market'.
    , J092939 Knapping , 11 Feb 2017 12:13
    This (democracy relates to prosperity) is insightful. Will we all be able to operate democratically when climate issues and exhaustion of resources vs. population force us to manage the decline?
    , timiengels , 11 Feb 2017 12:02
    A thought provoking article. Like many things it comes down to terminology .what, for example is democracy? Are the US or UK systems really democracies when it is clear that laws are enacted in the interests of a narrow group of citizens and corporations who have the power to lobby, especially in the US where bribery has been legalized with respect to lobbying.

    Beyond this, look at US attempts to come up with some sort of climate change plan. All of these flounder on the twin rocks of democracy with its lobbying (we'll never get voted in again) or economic cost to the tax payer (we'll get voted out next time).

    Democracy is always presented in our schools, TVs, books and newspapers as a universal good, when in reality there are good democracies and bad democracies with the US and UK versions actually being on the bad side what with an unelected second chamber of grandees in the UK and the US in a state of perpetual wars of choice.

    Countries are what they do. The US starts wars. The UK follows the US into wars. Most countries whether democratic or not, don't start many wars (Germany hasn't started too many wars since 1939). Many countries that don't start wars are actually controlled by non democratic governments or military juntas .and personally I would prefer non democracies that don't start wars. It's not a difficult concept to grasp.

    The main problems with all forms of government is abuse of power and it goes on in democracies as much as any other type of government. Look at Tony Blair astride the globe hoover-ing up millions instead of being sitting next the Bush in a 6X8 feet cell. When Britain and America fell asleep and accepted total state surveillance as the price they had to pay to stop a handful of terrorist deaths each year, they set themselves up for this power to be abused in the future and badly abused.
    What's the answer? Really it begins at home with lessons in honesty, modesty, selflessness and the like. The reality and the kids are plonked down in front of the TV watching the avarice of the Kardashians there is little hope.

    , uuuuuuu , 11 Feb 2017 12:02
    After the horrors of WWII most people in the developed world understood both, the dangers and merits of democracy. In fact there is a conventional wisdom that it is totalitarian regimes which start wars, never democracies. By and large that may be true, but I don't think it is true in every instance.

    But the major motivation for people is to press their own advantage, even it is to the detriment of somebody else. Even if it is quite evident that it is to the fatal detriment of somebody else. I guess religion describes this as our original sin. If that goal of personal advantage is better secured by a dictatorship then people (e.g. in 1930s Germany) will support that. Democracy is not a value in itself for the majority, but just a means to an end. After all, I suspect many would prefer to be rich in a totalitarian state, rather than poor in a democracy (especially those people who have never lived under a totalitarian regime).

    What people like Trump do is to legitimise this drive/desire/greed as something positive (greed is good, greed works), when all of our upbringing has told us otherwise. Otherwise we could just take to killing our siblings to acquire their larger bedrooms.

    I suspect the horrors of WWII have to be repeated to re-learn that lesson.

    , Peter55 , 11 Feb 2017 12:03
    oh well who cares. let the US rip itself apart from the inside, we all knew it was gonna happen sooner or later.

    there will be no need for a terrorist attack to destroy the US ,they manage that fine on their own. a 50/50 split in the population over values and believes? Regardless of who's right and who's wrong. Its so damaging that by the end of Trump Pax America will be history.

    US cant even keep control in their own backyard atm, thousands are killed within their own boarders every year by their own people, most average people will never get enough paid to sustain a adequate living condition, they struggle heavily with race and race related problems. They struggle heavily with females and female right.
    But most importantly they are not united, americans hate americans now. Many americans hate their fellow americans more than they hate outside enemies. And thats a fact. How can a society like that survive?

    The US will eat itself and Trump will probably earn a billion on it, he is after all a business man. He does what suits him best. But did anyone actually expect something els?

    , baxterb , 11 Feb 2017 12:03
    Make them afraid, then exploit that fear like there's no tomorrow. Heartening that people don't fall for it though.
    , Bluejil , 11 Feb 2017 12:04
    It does correlate with research that says one third of US residents believe you must be Christian to be American ( http://www.pewglobal.org/2017/02/01/what-it-takes-to-truly-be-one-of-us /). Jesus makes the laws.

    Take it a step further and apparently the word of Jesus is that you pull the ladder up after you and you look to the demagogue giving false praise to fantastical notions and mocking democracy.

    , Fred Ducleaux Bluejil , 11 Feb 2017 12:17
    There is much confusion between "Christian" America and America's Judeo-Christian Heritage. Books have been written.

    The heritage is what gave America, and Europe, Liberal Democracy and freedoms understood as "self-evident." That is, embedded and safe from lawyers and politicians. You do not need to be a "Christian" to enjoy the freedomos the heritage gives to all.

    , nottaken Fred Ducleaux , 11 Feb 2017 15:57
    "self-evident" is a strong clue that the constitution was informed more by man-centred Enlightenment than by residual Judeo-Christian Heritage.
    The majority of the framers were Atheists or Deists; any reference to God was part of the necessary legitimizing and marketing process. Since then it has been a process of Christianity (read: Protestantism) being merged with the civic religion, to the point where they are indistinguishable. Both have been mightily degraded in the process.

    More recently, corporate America's propaganda campaign to merge Christianity with Capitalism, fronted by Rev. J Fifield, was hugely successful, and has brought us to the present pass.

    , mikedow , 11 Feb 2017 12:04
    Sitting politicians create the laws the judges interpret.

    That seems to be a necessary reminder.

    Share Facebook Twitter
    , AgainstDarkness , 11 Feb 2017 12:05
    "While millennials may be politically liberal in their policy preferences... "

    They are not politically liberal. They might be vaguely called "socially liberal", supporting the causes prescribed to them by a new "progressivism" in the name of ill-defined tolerance, diversity etc.

    None of the above implies an understanding of liberal democracy.

    There have been many strains of the "left" in the past that would be classified as "liberal" under current American terminology but were totally undemocratic. That was why the term "democratic left" was invented to separate left-wing people that really believe in democracy.

    The modern "progressive identarian" is not a liberal.

    , Fred Ducleaux , 11 Feb 2017 12:08
    If you are a Green Card holder and leave the US you can incure tax liability for up to 10 years. Taxation without representation.

    But........the most flagrant departure from Democracy is giving the lawyers the final say on what is, or is not, the law. The legislature can pass whatever bills they may like but if the lawyers say it is offensive or phobic it will be struck down. The "Supreme" Court is the ultimate power in the USA and none are elected by the people and none can be removed by the people. The only way they go is in a box.

    Sad to say, Tony Blair (surprise surprise!) created the same undemocratic monster in our country and even labelled it the same way: "Supreme." Unelected, unaccountable and as politically motivated as its US counterpart.

    , Jack Taylor Fred Ducleaux , 11 Feb 2017 12:20
    By lawyers I guess you mean judges?
    , snavep Fred Ducleaux , 11 Feb 2017 12:22
    No the SC in the US can decide a law is contrary to the constitution.
    Can you give a single example where the UK SC has 'struck down' any legislation? They have declared govt decisions contrary to existing law including common law. You do seem to have a habit of coming on here making stuff up.
    , lochinverboy , 11 Feb 2017 12:08
    In the context of first past the post, democracy is a total con. If you examine those democracies with FPTP you wintness the most right wing governments on the planet that use this system. PR as is used across Europe prevents these extremes and all votes count. Do you think the Tories OR Labour will rush to change to this? No chance. Lastly, here and in the US, you have a choice of two broadly similar parties who serve the rich and powerful who have engineered democracy largely by contolling the press, to suit their own ends. By definition therefore, democracy here and in the US is a caricature of what was originally intended for the people and not fit for purpose.
    , Graz100 lochinverboy , 11 Feb 2017 12:20
    I support the introduction of PR, but it is a mistake to assume that any kind of voting system or institution will stop the collapse of democracy/ democratic institutions Economic and social strife will tend to overcome all safeguards when the public starts to feel desperate. A good example and warning from history is the rise of the Nazi party in pre WW2 Germany. Trump and the republicans have yet to destroy democracy and I see no suggestion that T will refuse to stand fro reelection.
    , Zojo lochinverboy , 11 Feb 2017 12:32
    I agree that the reason democracy has lost its lustre is because both her and in the US we are offered no real choice. In terms of economic policy, the "There is No Alternative" party always wins. Unsurprisingly, people start to believe that there IS no alternative, and therefore the choice on offer is not genuine. They then either lose interest in voting altogether, or look for more extreme offerings which seem to be truly different.
    , brightheart , 11 Feb 2017 12:14
    Bringing up the 'law and order' issues combined with blaming it on immigrants is typical of far right regimes that want to undermine democratic values and move towards dictatorship.
    , IanPitch , 11 Feb 2017 12:19 Guardian Pick
    By casting aspersions on the judiciary, Trump is echoing past dictators. First, he questions their independence and then, when another terrorist incident occurs (whether white or non-white) he can say 'I told you so, this atrocity is all the judge's fault'. America has truly entered a new dark age. Let's pray that good men and women will continue to uphold and defend the Constitution and the rule of law... Share
    , politicsblogsuk IanPitch , 11 Feb 2017 12:33
    An independent judiciary and a free press are considered the pillars or cornerstones of a properly functioning democracy.

    Once you undermine them or the public's trust in them, it is much easier to move the political centre of gravity towards fascism.

    So, why is Trump attacking the judiciary and fee press?

    , mondopinion politicsblogsuk , 11 Feb 2017 13:08
    I for one no longer think the mainstream 'free press' is balanced or impartial.
    , AgeingAlbion , 11 Feb 2017 12:23
    Democracy has been in decline in the west for some time now, and it isn't just the right or the left which has abandoned it. Nearly every western country has a bill of rights (either a strong version eg the US which can strike down legislation or a weaker one eg the U.K. where the courts award damages for breaches and make declarations of incompatibility). The EU has pros and cons but no one could pretend it is democratic. The UK still has the House of Lords. The Canadian academic James Allen has written a good book on it - how elites have now decided they know best.

    We need to be wary of this endless erosion of majority rule. Tin pot dictators the world over have always had an excuse for ignoring the majority. Latin American military Juntas always explained that they had to have power to ensure security. Human rights lawyers say they are needdd to uphold the ever evolving concept of human rights. The Church used to insist it should have power to enforce God's rule. The Fijian army in 1987 made an openly racist coup (attracting minimal opprobrium and next to no action from the international community). Even those who think there are sound reasons to ignore the majority have to admit they're not in great historical company

    , Philip J Sparrow AgeingAlbion , 11 Feb 2017 12:40
    "those who think there are sound reasons to ignore the majority"

    People like Socrates/Plato, John Stuart Mill, John Adams, Abraham Lincoln, James Madison, Alexis de Tocqueville...

    , emmasdad AgeingAlbion , 11 Feb 2017 12:49

    The EU has pros and cons but no one could pretend it is democratic.

    The EU is not a state; it is 28 member states acting collaboratively in a number of specified policy areas. As such, the appropriate comparison is not between the EU and a state but between the EU and other collective bodies through which states cooperate with one-another such as the UN or NATO. In terms of giving representation to ordinary citizens of its member states, I would say the EU compares extremely favourably.

    Moreover, the only two bodies in the EU that are able to enact legislation (and can only do so through the agreement of both bodies) are the EU Parliament, which is directly elected by the citizens of the member states and the Council, which consists of members of the Governments of the member states, which, in turn, have been put in place by the citizens of the member states through whichever electoral system is employed in each member state. We don't need to 'pretend' that the EU is democratic; it's system of governance IS democratic in the same way that the governance structures of western democracies are democratic.

    , Vintage59 emmasdad , 11 Feb 2017 15:01
    To put that more succinctly, no one can pretend the EU is democratic but many will still argue that it is if it fits their purposes.

    Amusing.

    , Gilbert3 , 11 Feb 2017 12:23
    Fewer people believe in the importance of democracy because we're several generations on from almost having lost it. In the same vein we're more likely to have a major war than we were 40/50 years ago because none of the major world leaders have experience of one. It's cyclic. We become complacent and smug until it happens again.
    , Gilbert3 , 11 Feb 2017 12:23
    Fewer people believe in the importance of democracy because we're several generations on from almost having lost it. In the same vein we're more likely to have a major war than we were 40/50 years ago because none of the major world leaders have experience of one. It's cyclic. We become complacent and smug until it happens again.
    , Andy Wong Ming Jun Gilbert3 , 11 Feb 2017 14:28
    History is a cycle. In this respect I agree with Steve Bannon. He's not nuts, he's just someone who knows how to read the winds very well like a wolf.
    , theshining , 11 Feb 2017 12:35
    "It was a stirring victory for the rule of law and reaffirmation of the independence of the judiciary."
    It most certainly was NOT anything of the kind. It was an act of judicial arrogance and a deliberate attempt to undermine the long upheld power of the President to take actions that HE considers required for the safety of the nation. What the ruling basically did was substitute judicial preferences for Presidential preferences no matter that the Constitution was clearly not supportive of this usurpation of power. you can review LOTS of legal opinions that state precisely this. An horrendously POLITICAL decision that will come back to haunt the courts.
    A defense of 'democracy' that begins with a defense of an arbitrary and demonstrably BAD court ruling is pretty much fatally flawed from the jump.
    Democracy works for as long as the fracture points in society are papered over with a commonality of basic interests. When that is not the case, democracy cannot endure. The US (and others will follow) is fracturing into pieces that simply don't like each other for VERY fundamental reasons, including the definition of a Nation State and what it means.
    Democracy works when things go well. It cannot work when it all falls apart. Oh and it also of course fails when the majority have a vested interest in getting stuff 'free', and can vote to have their demands enacted no matter the consequences.
    LOTS of places are not democracies. It really isn't the future. Too many fault lines coming up.
    , kristinezkochanski , 11 Feb 2017 12:35
    Only 53% of those surveyed said that they "trust judges more than President Trump to make the right decisions for the United States."

    One of the reasons why I am very sceptical of opinion polls or surveys is that they often ask the wrong questions. It is not for judges to make decisions about what is best for the country which this question clearly implies. Their job is to judge what complies with the law.

    Judges do not make political decisions about what is right for the United States any more than they do about what is right for the UK. It is this lack of understanding which leads to them being called enemies of the people.

    , ennCarey , 11 Feb 2017 12:38
    Here is the great George Carlin summing it all up in just 3 minutes and 14 seconds.

    It's called the American dream because you have to be asleep to believe it - George Carlin

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

    , dv420uk , 11 Feb 2017 12:38
    It all boils down to education. Democracy can't work when you have so many people prepared to believe and base their vote on 'fake news' (a nicer way to say lie).

    Governments in a democracy need to make having a well educated public a priority. Provide a high standard education for all the population up to secondary school level for free (or at a rate affordable to everyone) and you greatly diminish the chances of another Trump/Brexit.

    , therebythegrace dv420uk , 11 Feb 2017 12:52
    And that's why both the Tories and the Republicans have placed so much effort in undermining our education systems.

    They do not want an educated populace who are capable of critical thinking.

    , CyrusA dv420uk , 11 Feb 2017 12:59
    And hopefully diminish the chances of more "moderate" alternatives bringing the Population to its knees? Was Thatcher more "moderate" than Trump or did the Me Generation that she created usher in May and Trump.
    , Budanevey , 11 Feb 2017 12:39
    One person's victory is another's defeat. Politicians and voters are divided on judicial appointments to the Supreme Court, and the 4-4 split in the current court illustrates that the rule of law is simply another reflection of politics.

    I think the Ninth Court made a big mistake. Why? Because playing politics with the law can have serious unintended consequences. American Presidents have been resorting to shock and awe against Muslims because they can't use tough domestic security measures to protect Americans at home for fear of US judges taking an uncompromising view of constitutional rights. Trump's predecessors have not only resorted to foreign military action, but they have taken risks with extra-legal measures like Rendition, Secret Prisons, Torture and Drone attacks.

    The Ninth Court may uphold the constitutional rights of people coming from war zones to attend universities in Washington State, but the real world consequence of their hostility to domestic security measures will be to corner existing and future presidents in to bombing suspected terrorists abroad, making the world infinitely less safe with regime-changing wars.

    , SkiSpy Budanevey , 11 Feb 2017 12:45
    They have a hostility to unlawful, unconstitutional presidential edicts. That's a good thing. Share Facebook Twitter
    , Budanevey SkiSpy , 11 Feb 2017 12:55
    Congress gave the President the power to exclude people from the US on national security grounds. The University of Maryland maintains the Global Terrorism Database which lists more than 150,000 attacks since it began.

    96% of current terrorism killing more than 7000 people each year is claimed by jihadis. President Trump first mentioned his proposed temporary ban after the murders in San Bernardino.

    I don't think its unreasonable to restrict people coming from these war zones when they've been murdering people elsewhere, including Paris, Brussels, Berlin etc. It seems that US judges can't be persuaded that the right to life is more important than the temporary inconvenience of not being able to attend universities in Washington State unless and until such people murder Americans on American soil. I wouldn't call that 'constitutional'. It's offensive stupidity and irresponsible.

    How man

    , Joe Soap Budanevey , 11 Feb 2017 13:17
    If Americans were so concerned about the right to life they would do something about their almost non-existent gun laws. Terrorists don't have to kill Americans since Americans are doing such a good job of it on their own.
    , brap123 , 11 Feb 2017 12:40
    Americans are waking up to the fact that the elite and establishment don't care about the them. The media lies, the courts are trying to let in terrorists. TRump is the only one who is fighting for the people. Trump is fighting for truth, Trump is fighting for our safety, even though the establishment is desperate to make us less safe (my guesss do the 1% can profit somehow). Fake news by the media is only continue to push this

    Trump is fighting for Americans, we need to unite behind him. He will never let us down, and never lie to us.

    , c23e , 11 Feb 2017 12:40
    It's funny how Americans use Christianity as a weapon and are always quoting an eye for an eye etc instead of love your neighbour. If you are a Christian then surely you should realise that the old testament which is The Torah is all about revenge and anger whereas the New Testament is all about forgiveness and love and if the two come from the same God then that God has a spilt personality!

    Also looking at history if you remember that Islam is 600 years younger than Christianity ask yourself what were Christians doing 600 years ago and you will see a lot of it was the same as what Jihardis are doing today - torture, beheadings and killing of those seen as apostates in the name of religion.

    And remember American was founded by those seeking religious freedom despite the fact they oppressed the religions of the Native Americans and then went on to break more than 400 treaties with the Native Americans over the years.

    Even the declaration of independence was signed mainly by slave owners ( which is surely anti-christian) and apartheid reigned in the US until Martin Luther King.

    Land of the free and home of the brave is some king of joke played on the people but only noted by historians.

    , PureReason2017 , 11 Feb 2017 12:44
    To an important degree extensive, well-understood and articulately defended democracy only "matters" if you ascribe a large role to the [nation/federal] state - if you think it should spend very large amounts of money, address all manner of social problems, and regulate everything people do to reduce risk and enforce equality/diversity. If you believe in a minimal state (as most of the US founders did) then a much clearer and less pressing kind of democracy for national affairs is fully adequate. It is at the local level - in the states and counties, the towns and cities - that regular and engaged democracy is essential. And this report does not look at that at all. It is only bothered about who gets to drive forward the all-powerful state. If Pres Trump - and it is a very big if - wants to reduce the role of the state, then the significance of his actions through that state become clearer and more capable of control.
    , Paul B PureReason2017 , 11 Feb 2017 13:00
    surely the problem is that so much of what happens in a modern democracy cannot be carried out at a local level. You cannot have a local level internet. You cannot decide where your highways and trains are going to go purely at the local level. You cannot, in most cases, feed and clothe and support your population at the local level and any form of trade requires agreements that take place at a much higher level.
    , Junkets , 11 Feb 2017 12:46
    It's a very interesting phenomenon. The 'attraction' of Trump is that he's a loose cannon and doesn't seem to have that much control over a lot of what he says. The remarks about Putin and America's own predilection for killing people - which caused him to be called anti-American for actually speaking the truth - is a case in point. He is the precise opposite of your usual buttoned up on-message politician and that, quite frankly, is refreshing. He is precisely where our democracy itself has led to. Because of its reliance on professional politicians who say one thing and mean another, his tendency to blabber and say just what's on his mind, must be perceived as a virtue. Where this will lead, I have no idea, but he is definitely opening up new unexplored territory and what we might find in it is anyone's guess. As the old Chinese curse goes, "May you live in interesting times."
    , Junkets Junkets , 11 Feb 2017 12:57
    For those thinking of impeaching Trump, think what the alternative will be. Pence. Now that guy really is scary - scarier even than Bannon.

    [Feb 12, 2017] How to Use rsync to Synchronize Files Between Servers Linux Server Training 101

    Feb 12, 2017 | www.youtube.com
    soundtraining.net

    Keith Pawson 2 years ago

    Great demonstration and very easy to follow Don! Just a note to anyone who might come across this and start using it in production based systems is that you certainly would not want to be rsyncing with root accounts. In addition you would use key based auth with SSH as an additional layer of security. Just my 2cents ;-) curtis shaw 11 months ago Best rsync tutorial on the web. Thanks.

    [Feb 12, 2017] The neocon godfather Leo Strauss would be proud as king of bait and switch Obama promoting lying to people telling them what they want to hear, then doing whatever the hell you want after getting elected as an official Democratic Party policy

    Notable quotes:
    "... Obama: "[O]ne of the issues that Democrats have to be clear on is that given population distribution across the country, we have to compete everywhere, we have to show up everywhere." Throwing Clinton under the bus ..."
    "... I yelled at the radio after hearing this, because he means just showing up, telling people what they want to hear, then doing whatever the hell you want after getting elected. Not one word about actually meeting peoples needs. EFF OBAMA and the DEMOCRATIC PARTY!! ..."
    "... If you didn't read this (linked yesterday), you should consider both reading and sharing far and wide. The entire system is designed to be anti-representative. Don't just get/stay mad, quit expecting a bunch of gangsters to function democratically. Get out of their box. ..."
    Feb 12, 2017 | www.nakedcapitalism.com
    mk , November 16, 2016 at 7:55 am

    Where the Democrats went wrong CNBC.

    Obama: "[O]ne of the issues that Democrats have to be clear on is that given population distribution across the country, we have to compete everywhere, we have to show up everywhere." Throwing Clinton under the bus
    ~~~~~~~~~~~~~~~~~~
    I yelled at the radio after hearing this, because he means just showing up, telling people what they want to hear, then doing whatever the hell you want after getting elected. Not one word about actually meeting peoples needs. EFF OBAMA and the DEMOCRATIC PARTY!!

    Eureka Springs , November 16, 2016 at 8:21 am

    If you didn't read this (linked yesterday), you should consider both reading and sharing far and wide. The entire system is designed to be anti-representative. Don't just get/stay mad, quit expecting a bunch of gangsters to function democratically. Get out of their box.

    [Feb 12, 2017] Reply

    Feb 12, 2017 | onclick="TPConnect.blogside.reply('6a00d83451b33869e201b8d25ed1c1970c'); return false;" href="javascript:void 0">
    Friday, February 10, 2017 at 11:12 AM Peter K. said in reply to sanjait... Many of us were warning that Hillary's $275 billion in infrastructure over 5 years wasn't enough.

    Now we have Trump.

    Thanks a lot.
    Reply Friday, February 10, 2017 at 12:09 PM pgl said in reply to Peter K.... I'm disappointed that you did not add your insight of the decade - calling him a stupid little troll. For the record - I don't like yuan. He actually writes reasoned comments rather calling people "stupid little trolls". Snicker. T here is no liberals in the USA per se. Most are in reality neoliberals and as such are the part of the right, if we define right as those who want to increase the power of capital vs. labor.

    Reply Friday, February 10, 2017 at 01:07 PM Yikes said in reply to Peter K.... This is actually a good point. If only Hillary had made extravagant unkeepable promises she could have duped more people like you into voting for her. Reply Friday, February 10, 2017 at 01:58 PM ilsm said in reply to Yikes... The DNC and HRC thought they had the needed number of dupes, PeterK was not needed! Reply Friday, February 10, 2017 at 04:55 PM libezkova said in reply to Yikes... No. the train left the station. Obama was a sellout who used to speak right things and did completely opposite to please his sponsors.

    Now the majority of the people do not believe anything coming from two major parties. The proper term is alienated. That's why Trump. Reply Saturday, February 11, 2017 at 06:02 AM libezkova said in reply to sanjait... Sanjait,

    The problem with your views is that there is no liberals in the USA per se. Most are in reality neoliberals and as such are the part of the right, if we define right as those who want to increase the power of capital vs. labor.

    This flavor of democracy for top 1% the they promote (one dollar one vote) should be property called "oligarchy" or at best "polyarchy" (the power of the top 10%).

    The rest (aka "Debt slaves") are second class citizens and are prevented from political self-organization, which by-and-large deprives them of any form of political participation. In best Roman tradition it is substituted with the participation in political shows ("Bread and circuses"). In a way US election is the ultimate form of "bait and switch" maneuvers of the ruling elite.

    The two party system invented by the elite of Great Britain proved to be perfect for neoliberal regimes, which practice what Sheldon Wolin called inverted totalitarism. The latter is the regime in which all political power belongs to the financial oligarchy which rules via the deep state mechanisms, and where traditional political institutions including POTUS are downgraded to instruments of providing political legitimacy of the ruling elite. Population is discouraged from political activity. "Go shopping" as famously recommended Bush II to US citizens after 9/11. Reply Sunday, February 12, 2017 at 11:30 AM

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

    Feb 12, 2017 | www.zerohedge.com

    Submitted by Alexander Mercouris via TheDuran.com,

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

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

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

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

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

    (bold italics added)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    FAKE NEWS:

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

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

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

    Brought to you from your friends at the CIA.

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

    [Feb 10, 2017] Ilargi The Media – Fake and False and Just Plain Nonsense naked capitalism

    Notable quotes:
    "... By Raúl Ilargi Meijer, editor of Automatic Earth. Originally published at Automatic Earth ..."
    "... British House of Commons Speaker John Bercow can play that game too. He has loudly advertized his refusal to let Trump address UK politicians in the House of Commons and the House of Lords: "An address by a foreign leader to both houses of Parliament is not an automatic right, it is an earned honor.." It's an honor recently gifted to the likes of China President Xi Jinping and the Emir of Kuwait. Fine and upstanding gentlemen in the tradition Britain so likes, nothing like the American President whom he accuses of racism and sexism. ..."
    "... The political/media black hole exists in many other countries too; we are truly entering a whole new phase in both domestic and global affairs. That is what allows for the Trumps and Le Pens of the world to appeal to people; there is nobody else left that people can have any faith in. The system(s) are broken beyond repair, and anyone perceived as belonging to them will be cast aside. Not all at the same time, but all of them nonetheless. ..."
    "... my favorite dump on trump was the times article about the special ops raid in yemen. the obama team planned it, trump pulled the trigger. now we learn the yemen government is against special ops raid. (yemen has a government?) we also learn from the times that obama wouldn't have gone through with the raid because too risky! So saint obama is the good killer, trump the bad killer. it makes you sympathetic to trump. but i think alot of us thought trump would calm down some once in office. calling judiciary names, saying they can't even understand concepts that a "bad high school student" can, is not, what's the word, adult? and you can't ignore the sinister intent behind the muslim ban–it's based on propaganda and fear–it's provenance is neocon. ..."
    "... In complete agreement with you about the dump trump article praising saint obama to the skies because obama allegedly "refused" to OK the special ops raid on Yemen, but Trump did. LIke, THIS time obama "refused" to do it? Why? Speculation is futile, but my speculation is that Obama held off in order to have it fall on Trump. Then Obama could skippity do dah off into the sunset with his burnished halo in tact. ..."
    "... Following Disturbed Voter's comment above – we can usefully distinguish 3 different levels of dishonesty by how hard they are to detect: ..."
    "... Level 1 – the everyday liar/hypocrite whose dishonesty we notice over time by observing that what they do is not consistent with what they say, ..."
    "... Level 2- the regular criminal who hides his honesty from public view, to profit from it, but can be caught by effective law enforcement, and ..."
    "... Level 3- the State Intelligence agency with extreme levels of funding, novel tech. capabilities, secrecy, & ability to ignore or even control law enforcement and large chunks of the public mass media. ..."
    "... It's the Level 3 category that society has become relatively defenseless against. Alternative media carries report after report on how the Iraq War was phony, how the US created al Qaeda and ISIS, how Cheney planned to invade Iraq and 6 other Middle East nations on Sept. 20, 2 ..."
    "... One word that describes our precious country is incompetence. We have gone from being the 'we-can-do-it' nation that put a man on the Moon to the 'hire a Mexican to do it' nation that cannot find its ass with both hands. The fact of our dysfunction and the country's reliance on migrant labor are what gives form to the efforts of Donald Trump. Yet he acts against himself: he is the lazy-man of American politics who requires others to do his heavy lifting. This does not mean physical labor but instead the struggle to become clear in the mind, to craft out of disparate- and contradictory elements a policy outline or philosophy of governing. This is never attempted, it is too difficult, instead there is the recycling of old, bankrupt memes. The candidate's absence of effort leaves a residue of personality: Trump is a blank page upon which others paint in the sketch, an actor who aims to meet (diminished) public expectations and nothing more, sound and fury significant of nothing in particular. ..."
    "... . But our problem is not called Donald Trump. And we need to stop pretending that it is. We are the problem. We allow our governments to tell our armies to bomb and drone innocent people while we watch cooking shows. We have believed, as long as we've been alive, whatever the media feed us, without any critical thought, which we reserve for choosing our next holiday destination ..."
    Feb 10, 2017 | www.nakedcapitalism.com
    Posted on February 9, 2017 by Yves Smith Yves here. In keeping with the spirit of this post, an Emerson College study found that the American public trusts Trump more than the media . And if I interpret him correctly, Ilargi's post has a small off-key note: a tomato is indeed a fruit.

    By Raúl Ilargi Meijer, editor of Automatic Earth. Originally published at Automatic Earth

    Two and a half weeks after the inauguration, and yes it's only been that long, the media still don't seem to have learned a single thing. They help the Trump campaign on an almost hourly basis by parroting whatever things, invariably judged as crazy, he says. One day it's that negative polls are all fake news, the next it's some list of underreported terror events. All of it gets an avalanche of attention provided by the very people who claim to be against Trump, but greatly help his cause by doing so.

    Not a single thing learned. If Trump tweets tomorrow that tomatoes are really fruits and he's going to have someone draw up a law to make them so, or that Lego should be recognized as an official building material in order to have the Danes, too, pay for the wall, it will be on the front page of every paper and the opening item for every TV news show. The crazier he makes them, the more serious they are taken. The echo chamber is so eager to incessantly repeat to itself and all its inhabitants that he's a crazy dude, it's beyond embarrassing.

    And it takes us ever further away, and rapidly too, from any serious discussion about serious issues, the one very thing that the Trump empire desperately calls for. The press should simply ignore the crazy stuff and focus on what's real, but they can't bring themselves to do so for fear of losing ratings and ad revenues. All Trump needs to do, and that's not a joke, is to fart or burp into their echo chamber and they'll all be happy and giddy and all excited and self-satisfied. A spectacle to behold if ever there was one.

    British House of Commons Speaker John Bercow can play that game too. He has loudly advertized his refusal to let Trump address UK politicians in the House of Commons and the House of Lords: "An address by a foreign leader to both houses of Parliament is not an automatic right, it is an earned honor.." It's an honor recently gifted to the likes of China President Xi Jinping and the Emir of Kuwait. Fine and upstanding gentlemen in the tradition Britain so likes, nothing like the American President whom he accuses of racism and sexism.

    The racism part ostensibly is a reaction to Trump's Muslim ban, which, nutty though it is, is not a Muslim ban because most Muslims are not affected by it, and besides, 'Muslim' is not a race. So maybe Bercow would care to explain the 'racism' bit. Has anyone seen the British press pressuring him to do so? Or, alternatively, has anyone seen a thorough analysis of the British role, though its military and its weapons manufacturers, in the premature deaths in the Middle East and North Africa of many thousands of men, women and children belonging to the Muslim 'race'? Not me.

    The 'sexism' accusation refers to Trump's utterances on for instance the Billy Bush tape(s), and by all means let's get the Donald to comment on that. But this comes from a man who speaks as an official representative of the Queen of a country where child sex abuse is a national sport, from politics to churches to football, where literally thousands of children are trying to speak up and testify, after having been silenced, ignored and ridiculed for years, about the unspeakable experiences in their childhood. Surely someone who because of his job description gets to speak in the name of the Queen can be expected to address the behavior of her own subjects before that of strangers.

    Yeah, that Trump guy is a real terrible person. And he should not be allowed to speak to a chamber full of people directly responsible for the death of huge numbers of children in far away sandboxes, for or the abuse of them at home. After all, we're all good Christians and the good book teaches us about "the beam out of thine own eye". So we're good to go.

    What this really tells you is to what extent the political systems in the US and the UK, along with the media that serve them, have turned into a massive void, a vortex, a black hole from which any reflection, criticism or self-awareness can no longer escape. By endlessly and relentlessly pointing to someone, anyone, outside of their own circle of 'righteousness' and political correctness, they have all managed to implant one view of reality in their voters and viewers, while at the same time engaging in the very behavior they accuse the people of that they point to. For profit.

    Child sex abuse has been a staple of British society for a long time, we're talking at least decades. Only now is it starting, but only starting, to be recognized as the vile problem it is. But still many Britons feel entirely justified in demonizing a man who once talked about touching the genitals of grown women. If that did happen against their will, it's repulsive. But still, there's that beam, guys. Read your bible.

    The political/media black hole exists in many other countries too; we are truly entering a whole new phase in both domestic and global affairs. That is what allows for the Trumps and Le Pens of the world to appeal to people; there is nobody else left that people can have any faith in. The system(s) are broken beyond repair, and anyone perceived as belonging to them will be cast aside. Not all at the same time, but all of them nonetheless.

    Whether you call the menu the people have been fed, fake or false or just plain nonsense, it makes no difference. The British House of Commons Speaker may not be such a bad guy inside, he's probably just another victim of the falsehoods, denials and deceit spread 24/7. The difference between them and ordinary citizens is that Her Majesty's representatives in the political field MUST know. They get paid good salaries to represent the Queen's subjects, and looking the other way as children get assaulted and raped does not fit their job description.

    That goes for representatives of the church (i.e. Jesus) just as much of course, and for the execs at the BBC, but about as many of those people are behind bars as there are bankers. For anyone at all at any of these institutions to now speak with great indignation about Trump's alleged racism and sexism is the very core of all of their problems, the very reason why so many turn their backs on them. It shows that the very core or our societies is rotten, and the rot is spreading.

    We are facing a lot of problems, all of us, in many different ways, financially, politically, morally. But our problem is not called Donald Trump. And we need to stop pretending that it is. We are the problem. We allow our governments to tell our armies to bomb and drone innocent people while we watch cooking shows. We have believed, as long as we've been alive, whatever the media feed us, without any critical thought, which we reserve for choosing our next holiday destination.

    The longer this braindead attitude prevails, the worse things will get, and the more Trumps will surface as leaders of their respective countries. And the longer the attitude prevails, the more anger we will spread in those parts of the world that do not belong to our 'chosen' societies. And for that we will have only ourselves to blame. Not Trump.

    Disturbed Voter , February 9, 2017 at 3:14 am

    Citizens and politicians are in a social compact, so it is said. Both sides may have defaulted on the agreement, something the Enlightenment didn't anticipate. In the modern era of triangulation, opposition parties, that used to keep each other relatively honest, no longer do that. In the modern era of media consolidation, opposition newspapers, that used to keep each other relatively honest, no longer do that. Be are being suffocated by de facto bi-partisanship, that is just a shadow play of its former partisanship. The status quo has gone stale.

    geoffrey gray , February 9, 2017 at 3:37 am

    my favorite dump on trump was the times article about the special ops raid in yemen. the obama team planned it, trump pulled the trigger. now we learn the yemen government is against special ops raid. (yemen has a government?) we also learn from the times that obama wouldn't have gone through with the raid because too risky! So saint obama is the good killer, trump the bad killer. it makes you sympathetic to trump. but i think alot of us thought trump would calm down some once in office. calling judiciary names, saying they can't even understand concepts that a "bad high school student" can, is not, what's the word, adult? and you can't ignore the sinister intent behind the muslim ban–it's based on propaganda and fear–it's provenance is neocon.

    RUKidding , February 9, 2017 at 10:43 am

    In complete agreement with you about the dump trump article praising saint obama to the skies because obama allegedly "refused" to OK the special ops raid on Yemen, but Trump did. LIke, THIS time obama "refused" to do it? Why? Speculation is futile, but my speculation is that Obama held off in order to have it fall on Trump. Then Obama could skippity do dah off into the sunset with his burnished halo in tact.

    Gah.

    Agree with the second part of your comment, too. I wish Trump would behave differently. The comment about the judiciary was incredibly wrong and also very stupid. His fervent fans may well clap and cheer for that, but Trump is painting himself into some corners by behaving that way. The Judiciary and lawyers – a powerful group in this nation, for better or worse – simply aren't going to take that laying down. Although I'm sure the judiciary will (mostly) strive for objective impartiality.

    The stupid media would serve themselves, their Oligarch owners, and the nation better if they ignored the bulk of Trump's dumb tweets and focus more closely on what he and his Admin are doing.

    Josh Stern , February 9, 2017 at 3:39 am

    Following Disturbed Voter's comment above – we can usefully distinguish 3 different levels of dishonesty by how hard they are to detect:

    • Level 1 – the everyday liar/hypocrite whose dishonesty we notice over time by observing that what they do is not consistent with what they say,
    • Level 2- the regular criminal who hides his honesty from public view, to profit from it, but can be caught by effective law enforcement, and
    • Level 3- the State Intelligence agency with extreme levels of funding, novel tech. capabilities, secrecy, & ability to ignore or even control law enforcement and large chunks of the public mass media.

    It's the Level 3 category that society has become relatively defenseless against. Alternative media carries report after report on how the Iraq War was phony, how the US created al Qaeda and ISIS, how Cheney planned to invade Iraq and 6 other Middle East nations on Sept. 20, 2001 – not because of any links to US created al Qaeda – and a big chunk of that plan is still being carried out today, 4 Presidential terms later.

    Disturbed Voter , February 9, 2017 at 7:10 am

    While we don't know much about what the intelligence agencies do, by design, we do know a few things. That in the conditions of the early Cold War, and given the mandate against all enemies foreign and domestic (the oath the military takes) that narrative control is a vital weapon. We know that journalists, clergy and even rock stars have been actual agents, so the number of fellow travelers must be considerable. Since the fall of the Soviet Union, it has been necessary, so it was thought by some, to manufacture new enemies on a Vietnam scale. And the exercise and paranoia against domestic enemies has returned to 1960s levels as well. For the old men nostalgic for the 60s, from the neocon side, these last few decades have been sweet.

    Moneta , February 9, 2017 at 7:37 am

    Actually it's the level 1 that leads to level 3.

    Materially, all we really need is to cover and protect our body from the elements and food. Everything else is gravy.

    Psychologically, we need a lot more than what North American society offers most of us today but for some reasons we keep on lying to ourselves thinking that if we had a little more stuff we'd be happier.

    We all have to lie to ourselves thousands of times a day to keep our routines and lifestyles and all these lies make society.

    Jos Oskam , February 9, 2017 at 3:54 am

    Hey Yves, the tomato question does seem to have something to it: "Nix v. Hedden (1893) was a decision by the Supreme Court of the United States that, under U.S. customs regulations, the tomato should be classified as a vegetable rather than a fruit". From Wikipedia: https://en.wikipedia.org/wiki/Nix_v._Hedden .

    Note to Ilargi: re tomatoes, somebody got there before Trump :-)

    Gaylord , February 9, 2017 at 4:24 am

    I think a great number of people in the US and in Europe do not trust the MSM any more, even though they may continue to pay attention as a spectator sport (people do enjoy yelling at their TV sets). Activism is another ball game that is still being played, but in the US it has become nearly futile because of the restrictions and police tactics used to squelch them or shut them down. It can also be impossible to distinguish between genuine protesters, paid participants, and shit-disturbers or agents-provocateurs, which dilutes the message (questionable intent by those who want to promote or discredit the demonstration).

    Having read the comments here and on other independent sites for a long time, I've noticed the tremendous increase in articulate and aware commenters that can see through the tissues of lies from the MSM and take even a lot of the "serious" stuff with a grain of salt, knowing that some things don't change much and people tend to overreact based on shock-value news designed to stir resentment and "us vs. them" divisiveness. This is encouraging because it shows people are wising up, thinking more critically about who is really running the show (it is not Trump by-and-large), and not allowing their views to be manipulated.

    european , February 9, 2017 at 4:57 am

    I think Ukraine was a turning point, as the lying of the media was just way too obvious. That opened a lot of eyes. The reporting on Greece and Merkel/Schäuble's austerity terror was equally bad, but not many people understand that.

    Syria: The Media Coverage on Syria is the Biggest Media Lie of our Time

    KurtisMayfield , February 9, 2017 at 8:10 am

    I believe it was Iraq. When they named the 2003 invasion Operation Iraqi Liberation, or O.I.L. , all the pretense of it being for any legit reason was gone.

    Arizona Slim , February 9, 2017 at 8:35 am

    Ah, yes. The Iraq invasion. Wasn't it supposed to be about our freedom?

    RUKidding , February 9, 2017 at 10:45 am

    We citizens were also supposed to get our Iraqi oil dividend back, which allegedly would pay for that many trillion dollar exercise in futility.

    Guess that got syphoned right up into Dick Cheney's pockets. Ya snooze, ya lose.

    OpenThePodBayDoorsHAL , February 9, 2017 at 3:20 pm

    Huh? Iraq? Did I miss something?
    I heard about some thingy where we wasted trillions of dollars and killed millions of people. But all of the people who thought THAT was a good idea are gone now, hiding their heads in shame and hoping they don't get summoned to a war crimes tribunal. Right?

    polecat , February 9, 2017 at 4:35 pm

    No. They HAVE NO shame !

    BeliTsair , February 9, 2017 at 11:42 am

    I believe it was the Gnadenhutten massacre. The 96 Moravian Lenape, brained with mallets, by Washington's Virginia Militia were probably too busy clawing through their former frozen fields, looking for corn kernels to feed their children, to pose much of a threat as terrorists?

    VietnamVet , February 9, 2017 at 4:23 pm

    Yes, what got to me was the Western instigated coup in Ukraine. I voted for Barrack Obama twice but could not vote for Hillary Clinton. I rationalized that the Iraq Invasion was an isolated crazy GOP debacle. Denial is powerful defense mechanism. If the media lies, America is a not so innocent killer, and the Cold War 2.0 with Russia has reignited; we are screwed. Austerity, scapegoating Russia and the flood of millions of refugees into Europe are proof that this is the awful truth.

    running dog lackey , February 9, 2017 at 4:31 am

    It's about ratings people. The president of NBC himself said it during the campaign when someone asked why he was televising everything the Insane Clown was saying. You all need to watch Network again. Nothing's changed. Which means they brought him up and now they will take him down.

    Tom , February 9, 2017 at 6:03 am

    Ratings are to broadcast or print media as shareholder value is to corporation - the overriding metric that blots out any reponsibility to the commons.

    Chris G , February 9, 2017 at 5:45 am

    "The Speaker may not be such a bad guy inside". Ah, not so. Check out this Pat Lang post,

    http://turcopolier.typepad.com/sic_semper_tyrannis/2017/02/the-mother-of-all-parliaments.html

    and the long trenchant comment by LondonBob including these paras:

    "The Twitter-cheering for John Bercow, the transformation of him into a Love, Actually-style hero of British middle-class probity against a gruff, migrant-banning Yank, could be the most grotesque political spectacle of the year so far. Not because it's virtue-signalling, as claimed by the handful of brave critics who've raised their heads above the online orgy of brown-nosing to wonder if Bercow is really promoting himself rather than parliamentary decency. No, it's worse than that. It's the lowest species of cant, hypocrisy of epic, eye-watering proportions, an effort to erase Bercow's and Parliament's own bloody responsibility for the calamities in the Middle East that Trump is now merely responding to, albeit very badly.

    "Bercow, you see, this supposed hero of the refugees and Middle Eastern migrants temporarily banned from the US, voted for the bombing of Iraq. He green-lighted that horror that did so much to propel the Middle East into the pit of sorrow and savagery it currently finds itself. As his profile on the They Work For You website puts it, 'John Bercow consistently voted for the Iraq War'. On 18 March 2003, he voted against a motion saying the case for war hadn't been made, even though it hadn't. On the same day he voted for the government to 'use all means necessary' to ensure the destruction of Iraq's WMD.

    "As everyone knows now, and as many of us knew back then, Iraq's WMD capacity had been vastly exaggerated by the black propaganda of the New Labour government, by myth and misinformation cynically whipped up to the end of providing Britain's leaders with the thrill of an overseas moral crusade against evil. Bercow voted in favour of these lies. And he voted for the use of 'all means necessary' to tame Saddam's regime. We know what this involved: Britain joined the bombing campaign and courtesy of an ill-thought-through war by Western allies, Iraq was ripped apart and condemned to more than a decade of bloodshed. And refugee crises. Bercow was one of the authors of this calamity, one of the signatories to the Middle East's death warrant, and now we're going to let him posture and preen against Trump's three-month ban on certain Middle Eastern migrants? What is wrong with us?"

    But kudos to kind-hearted Ilargi for willingness to give the benefit of the doubt to one of these preening monsters!

    jackiebass , February 9, 2017 at 6:19 am

    Trump loves any kind of publicity. The media is playing right into his hand by printing all of the garbage he generates.I know many Trump voters and supporters. They all complain that the media is picking on Trump. None of them look seriously at what he says or does. There universal reaction is give him a chance and quit picking on him.The media would be better off focusing on his and congreses policy decisions and how that effect the average person. Turning he's presidency into a big soap opera is actually helping Trump keep his supporters. I have not heard a single Trump voter say they regret voting for Trump.

    Eustache de Saint Pierre , February 9, 2017 at 6:35 am

    Good to see some focus on Britain's version of the Augean stables. In terms of the so called Westminster paedophile ring – the last I heard on this it was that, Ooops .we appear to have lost a substantial amount of vital evidence. I imagine that MI6 have on record most if not all of the disgusting details, which I also imagine are useful assets that can be used to control certain people.

    In my opinion, this is a good explanation from 2015, of the behaviour of the BBC & the Guardian, from journalist Jonathon Cook.

    http://www.jonathan-cook.net/blog/2015-03-03/hsbc-and-the-sham-of-guardians-scott-trust/

    The Trumpening , February 9, 2017 at 7:54 am

    So far Trump has only really accomplished two things: he shut down the TPP and he inspired Lena Dunham to lose some weight. Everything thing else has been more or less noise.

    I've always thought this first two years of Trump's reign will involve him in bringing to heal the establishment GOP (GOPe) Obviously during the confirmation process, Trump has to be on his best behavior. But I don't like the pattern of Trump issuing useless EO's, and then the Democrats going ballistic, and then Trump supporters being satiated by all the Dem whining. That's a recipe for two years of nothing.

    On the Muslim ban, there are two parts to it. The current NeoCon / NeoLib tag-team play is to kill a million Muslims in their nations and then to offer the survivors the weak reach around of letting a million Muslims emigrate to the West. Trump seems to be offering a different deal. The West stops killing Muslims in Muslim nations and in return Muslims stay in Muslim nations and stop coming to the West. We have yet to see if Trump can hold off the temptation to start slaughtering Muslims in their nations like the NeoCons do.

    I get the feeling from Trump's over-the-top reaction to the courts staying his Muslim ban that he actually doesn't want it reinstated. I read on a pro-Trump legal blog that the Justice Department lawyers were super weak in their arguments before the 9th Circuit court, in what should be a super easy case to argue. Activist judges halting the ban means when the inevitable next terrorist attack comes, Trump can blame it on the judges and make some sort of move to purge their power.

    On Iran, Trump has zero leverage and so I do not see how this is going to end well. The only thing we can hope for is this is a bit of Kabuki being regulated by Putin. In the end a US-Russian alliance, as Trump is proposing, means a closer relationship between the US and Iran. Israel will not be pleased.

    My theory on Trump's relationship to Israel is that he is giving them enough rope for them to hang themselves. In Europe particularly the Israeli brand is getting fatally interwoven with the Trump brand. So far the only thing saving Israel is diaspora Jews being able to shame their local populations away from the BDS movement. But the diaspora is 98% anti-Trump. There is currently a huge increase of oxygen being given to the BDS movement, which means it should soon spring back to life.

    Can Trump be allies with Israel and Russia (and Iran)? The only way I can see this happening is a deal where Iran gets to go nuclear and become fully integrated into the global community in exchange for allowing Hezbollah to be wiped out by Israel.

    Trump is at his anti-NeoLiberal best when he is in deep trouble. I was happy when that Access Hollywood tape came out because I knew he would have to double down on Steve Bannon and Stephen Miller and go full-on butch economic nationalist. And it won him the election. Hopefully the seas will get very rough soon and we can all enjoy the spectacle of full combat between Team Trump and the GOPe.

    OpenThePodBayDoorsHAL , February 9, 2017 at 3:31 pm

    I like the "offer the survivors a weak reacharound". Reminds me of Vietnam, where we would napalm a village and then fall over ourselves making sure the burn victims all got Band-Aids

    Fiver , February 9, 2017 at 5:09 pm

    The entire Trump military/security team is wildly anti-Muslim, so the thought they are not going to keep on killing Muslims all over the map is just plain silly.

    Bannon is just plain dangerous. Here's a piece on his favorite books. Not surprisingly, he hates Muslims. Also, he appears to imagine himself a brilliant strategist for the ages who just happens to be the right man for 'The Fourth Turning', one of those ideas and books that purports the existence of an historical pattern based on a cycle of generations, each generation of every group of 4 having its own 'character', taken together claiming to explain a long cycle of great crises and/or turning points of US history. He believes we are now in such a critical period. It's one of those notions that has superficial appeal but quickly falls apart when engaged critically:

    https://www.washingtonpost.com/news/powerpost/paloma/daily-202/2017/02/07/daily-202-five-books-to-understand-stephen-k-bannon/58991fd7e9b69b1406c75c93/

    http://rationalwiki.org/wiki/William_Strauss_and_Neil_Howe

    Bannon is now running stuff via Briebart's network that will make your hair stand on end:

    http://townhall.com/columnists/kurtschlichter/2017/02/06/the-left-hates-you-act-accordingly-n2281602?utm_source=TopBreakingNewsCarousel&utm_medium=story&utm_campaign=BreakingNewsCarousel

    As for Israel, there is not the remotest chance Trump will do something Israel doesn't like – even if he doesn't appoint Elliot Abrams to #2 at State.

    http://www.cnn.com/2017/02/06/politics/elliott-abrams-state-department/

    Here's what Ron Paul thought of that idea:

    http://www.ronpaulinstitute.org/archives/featured-articles/2017/february/07/elliott-abrams-to-state-dept-you-cant-be-serious/

    http://www.cnn.com/2017/02/06/politics/elliott-abrams-state-department/

    Abrams would be an absolute disaster.

    TPP? Globalization? I see no evidence whatever that Trump has any intention of rolling back US-dominated corporate globalization, rather, he wants to create trade flows that are even more wildly skewed in favour of US financial/corporate power internationally even while effectively transferring wealth from the periphery to core of Empire to support some minor job creation – of course in the meantime granting outlandish tax cuts to corporations and the wealthy at large.

    I'm sorry, but Trump et al have played millions and millions of well-meaning Americans like a fiddle.

    UnhingedBecauseLucid , February 9, 2017 at 8:44 am

    The best description of the "Trump Situation" ever written was penned by 'Steve from Virginia' author of the blog Economic Undertow:

    One word that describes our precious country is incompetence. We have gone from being the 'we-can-do-it' nation that put a man on the Moon to the 'hire a Mexican to do it' nation that cannot find its ass with both hands. The fact of our dysfunction and the country's reliance on migrant labor are what gives form to the efforts of Donald Trump. Yet he acts against himself: he is the lazy-man of American politics who requires others to do his heavy lifting. This does not mean physical labor but instead the struggle to become clear in the mind, to craft out of disparate- and contradictory elements a policy outline or philosophy of governing. This is never attempted, it is too difficult, instead there is the recycling of old, bankrupt memes. The candidate's absence of effort leaves a residue of personality: Trump is a blank page upon which others paint in the sketch, an actor who aims to meet (diminished) public expectations and nothing more, sound and fury significant of nothing in particular.

    bbrawley , February 9, 2017 at 9:09 am

    I'm surprised no one seems to see a serious side to the reporting of Trump's antics. Is it not important to keep hammering home that the man is unhinged and that this is something pulling at the social frabric, something crying out to be dealt with? I seriously doubt that we'll be able to address the "real issues" adequately until we find ways come to terms with him not as a buffoon but as a deeply flawed human being.

    Donald , February 9, 2017 at 9:37 am

    Another false note–"Muslim is not a race." True, but being Jewish is not a racial characteristic and yet it is obvious that antisemitism is very similar to racism in its irrationality and hatred. Antisemites a hundred years ago would in some cases point to radicals who were Jewish as their excuse, just as Islamophobes would point to Islamic extremism as theirs. Racists I grew around would point to Idi Amin's Uganda ( yes, I am old) and other African countries with horrible human rights records as proof that American blacks should be grateful to be here.

    This "Islam is not a race" is mainly a tiresome distraction used by bigots and not a prelude to a deeper discussion on the wide varieties of human bigotries. Bigots can use almost any category they wish and concoct pseudo- rational propositions to buttress their hatred. We even have lefties hating blue collar white males as a group for Trump support. We don't have to join the people who use nitpicking phrases not to analyze, but to justify their hatreds. I don't think the writer intends to do this, but he is using a standard Muslim blame cannon phrase.

    After all this, I actually liked the rest of this piece, but that part was nails on a chalkboard to me. I am glad the liberal mainstream is siding with Muslims against Trump. There are some liberals ( Maher, Sam Harris etc..) who have been pushing a Muslim bashing agenda. And yes, as usual the mainstream which is so solicitous of Muslim rights cared little when Obama bombed Muslim countries. But I would rather that liberals be right if hypocritical then consistently wrong.

    Optimader , February 9, 2017 at 10:50 am

    As far as the term Racism, i think https://en.m.wikipedia.org/wiki/Racism oretty well captures contemporary common use.

    You forgot to mention Zionist racism directed toward Palestinians. An equally equivalent contemporary application of the term

    On the subject of Trump i believe his executive order is directed toward travelers from seven countries that the previous Potus identified in an anti-terrorist executive order.
    If I have it correctly, Neither Trump or BHO e orders are directed against muslims or any other religion for thats matter.

    Optimader , February 9, 2017 at 10:56 am

    As well do we need to take a deerpath in the woods debate about the legitimacy of the term race?

    Donald , February 9, 2017 at 12:43 pm

    I agree with you on Zionist racism towards Palestinians.

    On the deep path on the definition of racism, it depends. Given the prevalence of Islamophobia in the US, some of it on the left ( including the kneejerk supporters of Israel), I don't think it is helpful to use the "Islam is not a race" phrase as some sort of rebuttal. Islamophobia is a form of bigotry– whether one wants to nitpick about exactly what form should depend on the circumstances.

    Yves Smith Post author , February 9, 2017 at 1:42 pm

    I do not believe in the corruption of language. Confucius said that the beginning of wisdom is to call things by their proper names.

    Are you by the same sloppy logic going to cal bias against women and gays "racism"?

    Islamophobia is indeed not racist. Arabs, many American and African blacks, Persians (who are not Arabians) and Indonesians among others are followers of Islam.

    We already have perfectly good works, like "bigotry," "bias," and "discrimination".

    Donald , February 9, 2017 at 2:50 pm

    I probably shouldn't have said anything, since the original poster clearly isn't a bigot, but it set me off because in most cases this "Islam is not a race" phrase is used by Islamophibes and they of course do not follow up by pointing out that it is a form of bigotry, like antisemitism. If the poster here only means we should call it bigotry and not racism, I agree.

    But that meme is used a lot and usually by Islamophobes who won't cop to being bigots either. They aren't trying to have a deep conversation about different forms of bigotry. They are trying to argue that it is rational to fear Muslims because Islam is, in their view, an inherently evil ideology. But in practice Islamophobes are not rational or necessarily even consistent. That's why I wrote my comment, pointing out that bigotry in any form is generally not some carefully thought out logical train of thought, but some pseudo- rational set of propositions often garbled together. This is why a Sikh can get beaten up by Islamophobes. It is also why antisemites are often so confused about whether they hate Jews as a religion, as an alleged race, or as some group of scary communist bankers. It's not like racism itself is usually based on a clear understanding of biology.

    So if we are going to push back on Islamophobia as racism, it should be so people see it as like antisemitism, which is what it most closely resembles.

    I have written enough today, so I am going to stop.

    optimader , February 9, 2017 at 3:44 pm

    Re Confucius, George Orwell had his thoughts along those lines. re: intentional corruption of language.

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

    The reality is language evolves, often for the worse making clarity of message a casualty, unless a tedious definition of terms is invoked which can easily end up being a form of deflection from the original point.. ..
    File under :Liberal/Conservative/Neoliberal/Progressive. I find all these Identity Labels can be very loosely applied for reasons other than clarity.

    In the case of the word Race, it is, some would correctly contend, archaic terminology while simultaneously being convenient shorthand for "red meat" identity invectives.

    River , February 9, 2017 at 12:20 pm

    Muslim isn't a race. If the ban had been about Arabs not being allowed in you'd have a point. However, a person from Indonesia is allowed in and that country is almost entirely Muslim.

    Plus, complaining about the US exercising boarder control is ridiculous. That is one the jobs of a nation. No one bat an eye when Japan stated we're not allowing anyone in wrt to any refugee problem. Yet when any Western nation does it, the sky falls and the charges of bigotry come out.

    No one has the right to move to another country.

    Donald , February 9, 2017 at 12:41 pm

    People who live in countries that are bombed by the US or its close allies have the moral right to come here. Yemen, for instance, is bombed by the US and much more heavily by the Saudis with our help and keeping refugees from Yemen out is an extreme form of ugly Americanism. If we don't want the refugees, then we should stop causing or contributing to the chaos and death in the countries which produce the refugees.

    Gorgar Laughed , February 9, 2017 at 1:12 pm

    >People who live in countries that are bombed by the US or its close allies have the moral right to come here.

    And where are these rights enumerated? I don't recognize "moral rights" beyond those associated with copyright (and I am not particularly fond of those, either).

    Donald , February 9, 2017 at 1:17 pm

    So the fact that we are bombing civilians and helping the Saudis plunge Yemen into a famine is something you don't question, just the right of our victims to come here?

    Gorgar Laughed , February 9, 2017 at 1:58 pm

    Not fond of herring, either.

    "Our victims"?

    The legacy of Obama's incompetence in foreign policy does not obligate American citizens to accept - or to foist upon their posterity - changes in the demographic make-up of our populace.

    I'm still interested in learning where you discovered this moral right to move here

    Donald , February 9, 2017 at 2:11 pm

    Not fond of herring either?

    In other words, morality is a matter of preference and your number one moral value in this context is keeping out refugees, people who suffer precisely because of our foreign policy. Demographic balance is somewhere near the top of your own personal list of flavors. Anyway, my notion of moral right involves the crazy idea that if you help destroy a country you have moral obligations to the victims.

    And by the way, Trump is likely to escalate our support for the Saudi war on Yemen.

    OpenThePodBayDoorsHAL , February 9, 2017 at 3:37 pm

    LOL it certainly was a matter of preference for our recently departed Drone-Bomber-In-Chief, and for all of the people who (thought/think) he was a really moral and upstanding kind of guy. Just like our former Secretary of State, who threatened to cut off Sweden if they didn't accept Monsanto poison.
    "You're black!" said the pot to the kettle

    Optimader , February 9, 2017 at 1:22 pm

    "People who live in countries that are bombed by the US or its close allies have the moral right to come here."

    Bullsht.
    The US does have the moral obligation not to bomb countries that have not attacked the US and in that case only in a "just war" context if at all

    Donald , February 9, 2017 at 1:57 pm

    Meaningless. The US frequently bombs innocent people or helps others like the Saudis or the Israelis do so. You say it is wrong, as do I, but apparently there are no consequences allowed in your moral universe which might inconvenience us. We really have no moral obligations at all– we can bomb people and if the survivors wish to come here to escape then we have the right to keep them out according to you. All this boils down to is that we have the strongest military. Your views regarding whether we should bomb someone are nothing more than your own idiosyncratic preference and that is using your own standard. The people who control the military want to use it to bomb other countries, so they do. Might makes Right.

    bob , February 9, 2017 at 2:10 pm

    " Your views regarding whether we should bomb someone are nothing more than your own idiosyncratic preference and that is using your own standard."

    "The US does have the moral obligation not to bomb countries that have not attacked the US and in that case only in a "just war" context if at all"

    Can't read, or don't want to?

    Donald , February 9, 2017 at 2:14 pm

    I read it. So what? If we go ahead and bomb countries anyway, creating refugees, we have no obligation to help them. It is like saying that it was wrong for some Wall Street guys to steal people's money, but if they do, they have no obligation to give it back.

    bob , February 9, 2017 at 2:38 pm

    "I read it. So what? If we go ahead and bomb countries anyway"

    If we go ahead and assume that the earth is flat, why shouldn't "we" all relocate another planet?

    It's just that simple, and your keyboard strawmanning is making all the difference, for "we".

    Ground rules- am I arguing with "Donald" or the Royal We, or a heap of straw that you, pardon We(?), keep producing?

    Donald , February 9, 2017 at 2:56 pm

    The US does bomb countries, so your flat earth analogy doesn't really work here. We aren't discussing hypotheticals. There are real refugees from real policies and Trump is likely to continue them or make them worse. We are directly responsible for the misery of vast numbers of people and the numbers are likely to grow. Set aside the internet squabble we are having, because you are so wrapped up in it you are losing touch with what we are arguing about.

    Anyway, as I just wrote upthread, I have written enough.

    bob , February 9, 2017 at 4:06 pm

    "Anyway, as I just wrote upthread, I have written enough."

    That we'll agree on. Maybe another day you can elucidate on why you bother writing when you could find an airbase and stand on the runway, to stop the bombing.

    Anon , February 9, 2017 at 12:49 pm

    No one has the right to move to another country.

    Even after their homeland has been bombed, invaded, population tortured, social structure crushed?

    River , February 9, 2017 at 1:18 pm

    No they don't have that right. It falls under "that's your problem".

    Now, as harsh as that is I think from a humanitarian view and basic decency another nation should show some compassion and allow them succor. However, nations and the people of those nations are under no obligation to do so.

    Moral rights are meaningless. And yes, I do agree that another nation shouldn't create the refugees to begin with. As I find war to be a tool that is to be used as last resort. What has been occurring in the mid-East has been so far from a last resort that I can't even come up with a decent metaphor or simile.

    But that still doesn't change the fact that people do not have the right to enter another nation if the nation decides to say "No".

    Donald , February 9, 2017 at 1:48 pm

    So if we go ahead and bomb Yemen or help the Saudis bomb Yemen, it really doesn't matter at all. We are responsible for war crimes, but we have zero obligation to help the victims.

    You switch back and forth between talk of morality and the law of the strongest. You say we shouldn't bomb other countries for no good reason, but that is as much a meaningless platitude as you say moral rights are in general. Basically you find it distasteful that we bomb other countries, but what really exercises you is the possibility that some refugees might come here. That will not stand.

    Gorgar Laughed , February 9, 2017 at 2:11 pm

    Have you ever heard of the Melian Dialogue?

    There is a nice little re-enactment of it over at the Youtubes

    Donald , February 9, 2017 at 2:18 pm

    Yep. The strong do what they can and the weak do what they must. Nihilistic, but certainly a viewpoint I expect would be popular with the powerful.

    Gorgar Laughed , February 9, 2017 at 2:54 pm

    You miss the point. Realism is not nihilism.

    The Athenians had no good reason to suppose that the Gods would not favor them.

    There was nothing in their laws or beliefs to suggest otherwise.

    Similarly, there is nothing in our laws that requires us to accept population transfers because this or that President drops bombs in a far away country on people of whom we know nothing.

    Yves Smith Post author , February 9, 2017 at 2:20 pm

    Anon is correct. We can be obligated to bomb other countries by treaty. For instance, we bombed France to oust the Nazis as a result of treaty obligations. It is also correct to say that the US has been flagrantly ignoring what were considered to be international norms (pretty much no one notices here, but Russia has been making a stink on a regular basis in the UN).

    PKMKII , February 9, 2017 at 10:16 am

    Any day since 1/20, you could look at the front page of WaPo, NYT, CNN, etc., and see op-eds about how Trump is very very non-professional, sullying the good name of the office of the President. Denigrating the institution and the very very serious role it plays in American society, nay, the world! And yet the same front page will also cover, in-detail, whatever halfbaked Trump tweet or Spicer's performance-art-as-press-conference has been served up that day. They recognize that it's become a farce, but like someone who can't stop poking the tooth that hurts, they present the farce as being very very important news. The establishment press has become too enamored of the pomp and circumstance, the ceremonial of the White House media operation and their visible, although largely pointless, role in the whole thing. They're too scared of giving that up, lest they lose prominence or, le horror, have to do real reporting. So the Washington press corp prop up their end of the ceremony in the vain hopes of a return to the way things were, in denial of how their function is quickly becoming redundant. If all they're going to do is talk about Trump's latest tweet, we might as well just stop reading their sites and just read his tweets ourselves. Social media can just give us the press releases directly, we don't need the press to act as town criers, screeching out Trump's decree in the town squares.

    flora , February 9, 2017 at 10:24 am

    an aside re Yves intro:

    "Emerson College study found that the American public trusts Trump more than the media. "

    The WaPo's attempt to turn readers away from great sites like NC with their "fake news" story has backfired spectacularly. Thanks to NC and others furious initial pushback, including well crafted letters from NC's atty and the recipients responses published on NC, the term "fake news" has become a joke in the court of public opinion. It's become a subject for comedy skits. This is no small thing. Actually, it's a pretty big thing. McCarthist witch hunts live and die in the court of public opinion, imo. See: Joseph Welch, "Have you no sense of decency sir?"
    https://www.youtube.com/watch?v=K1eA5bUzVjA

    And with that exchange the court of public opinion turned against McCarthy and the witch hunt. Now where was I going with this ?

    john bougearel , February 9, 2017 at 10:51 am

    Ha! How dare ya attack my favorite cooking shows! LOL

    Gorgar Laughed , February 9, 2017 at 12:07 pm

    >After all, we're all good Christians

    Who's "We" Paleface? Bercow's not a Christian.

    And it looks as though we may finally be seeing the worm turn on the kiddie rape: the Rochdale rape gang is now set to be deported to Pakistan.

    Local MP Simon Danczuk: "Foreign-born criminals should not be able to hide behind human rights laws to avoid deportation."

    I suspect this line of thinking is going to be picked up in other countries on the Continent, and sooner rather than later.

    Once we start seeing child sex investigations target the English ruling class, we will know that we are getting somewhere

    Blurtman , February 9, 2017 at 1:03 pm

    Hispanic isn't a race, nor is Latino, but that has not stopped the MSM, bleeding hearts and SJW's from emoting.

    PKMKII , February 9, 2017 at 1:46 pm

    I was a census worker in 2010, and the forms didn't include Hispanic/Latino as a race; rather, it was put as a separate identity category with sub-answers for specific country of ancestral origin. However, 9 times out of 10 Hispanic responds would have me put "Hispanic" in the write-in box for the "Other" race option (the other 10% would have me write-in their ancestral country). The smarties with the degrees can say it's not a race, but if the people say that's their race, who are we to say otherwise?

    Blurtman , February 9, 2017 at 3:25 pm

    Ask Rachel Dolezal. Or perhaps Elizabeth Warren, an undocumented Native American (i.e., Indian). And yes, Pew Research would agree that folks who consider themselves to be Latino consider Latino to be a race. But most are Native American.

    But not anyone can be recognized as Native American in the USA unless they are on a tribal register, which is odd, as the USG seems to subject Native American citizens to a higher level of proof than Native Americans from south of the border.

    Anon y Mouse , February 9, 2017 at 1:32 pm

    " . But our problem is not called Donald Trump. And we need to stop pretending that it is. We are the problem. We allow our governments to tell our armies to bomb and drone innocent people while we watch cooking shows. We have believed, as long as we've been alive, whatever the media feed us, without any critical thought, which we reserve for choosing our next holiday destination." .

    Dear Raul,

    Yes, the media creates distortions in our perceptions. Yes, the orange one plays that terrain like a pro. Yes the British MP is hypocritical. I am with you there.

    "We are the problem." This kind of reasoning may be correct on a cosmic scale but it always seems to run to one of two conclusions. 1) Become a Buddhist and try to improve yourself. 2) Humans are too dumb to survive; wait until nature takes its course and humans kill themselves off playing Russian Roulette.

    I am not sure what your are recommending here. Do we let the orange sacred clown run this imperialist project into the ground? (To be replaced by what?) Or in opposing Trump do we clarify what we do want = i.e. a government that does not torture, a government that does not protect gotcha game mortgage lenders, a government that does not arm the world, a government that does not subsidize old suicidal fossil fuels, a government that is not run by a hysterical 3 AM tweeting 16 year old Marie Antoinette, your issue here .

    I don't know the answer here. The orange bull in the china shop is useful in so far as he reveals certain truths = ex: waterboarding is torture, congressmen are for sale, America has killed a lot of people, etc. If he stops the NeoCon project of invading other countries he might even be a benefit to world peace. But he's also likely to get people killed with his impulsive decisions and his ginning up the rubes.

    Irrational , February 9, 2017 at 2:42 pm

    Not reporting on tweets would free up a lot of time .

    Jeff N , February 9, 2017 at 5:12 pm

    a tomato is a fruit, but you can't use it in "fruit salad" :D

    Waking Up , February 9, 2017 at 5:52 pm

    What this really tells you is to what extent the political systems in the US and the UK, along with the media that serve them, have turned into a massive void, a vortex, a black hole from which any reflection, criticism or self-awareness can no longer escape. By endlessly and relentlessly pointing to someone, anyone, outside of their own circle of 'righteousness' and political correctness, they have all managed to implant one view of reality in their voters and viewers, while at the same time engaging in the very behavior they accuse the people of that they point to. For profit.

    On a recent interview with Donald Trump, Bill O'Reilly stated in regards to Vladimir Putin "But he's a killer". Donald Trump responds with a truth rarely heard in the media today, "There are a lot of killers. Do you think our country is so innocent?"

    I may not be a fan of Donald Trumps, but, how can we put down that level of honesty? Imagine if we actually had an honest nationwide discussion on what we are doing in the rest of the world .

    [Feb 08, 2017] The stunning collapse of the Soviet empire in 1989-91 has often been heralded in the West as a triumph of capitalism and democracy, as though this eventwere obviously a direct result of the policies of the Reagan and Thatcher governments. This self-congratulatory analysis has little relation to measurable facts, circumstances, and internal political dynamics that were the real historical causes of the deterioration of the Soviet empire and ultimately the Soviet state itself

    Notable quotes:
    "... Around 1975, the Soviet Union entered a period of economic stagnation from which it would never emerge. Increasingly, the USSR looked to Europe, primarily West Germany, to provide hard currency financing through massive loans, while the U.S. became a major supplier of grain.[1] Despite moments of anti-Communist grandstanding, the Americans and Western Europeans maintained trade relations with the cash-strapped Soviet Union, which dipped into its Stalin-era gold reserves to increase availability of consumer goods . ..."
    "... Soviet living standards remained poor by Western standards. By 1980, only 9 percent of Soviets had automobiles, which was actually a vast improvement under Brezhnev. Very little was computerized, due to state paranoia about the use of telecommunications for counterrevolutionary purposes. The USSR was able to endure this technological lag because its closed economy protected it from competition, but its ability to maintain military superiority increasingly depended on the ability to keep pace with Western modernization. ..."
    "... It did not need a foreign enemy to "defeat" it, for it was deteriorating from within. ..."
    "... In the Great Game of "chicken," in which we all are mostly passengers in the speeding cars with loony drivers ya-hooing out the windows, I recall the Soviets were the ones to veer off from that head-on collision that might have ended it all earlier than it seems increasingly likely to end anyway. And Russian leadership seems more concerned about the survival of the nation than our own clown-car leadership. ..."
    "... And patently the military-security monkey that's riding our backs is doing a p!ss-poor job of "defending us" in any ordinary sense of the term, and not even a vary good job of playing Imperial Forces. Though of course the net effects of military and political chaos-building and destabilization do blast out a nice open-pit mine for corporate looters to get at the extractables.. ..."
    Feb 08, 2017 | www.nakedcapitalism.com

    February 7, 2017 at 12:22 pm

    An over extended Soviet Empire collapsed in no small part due to its obsession with winning a war, albeit one that thankfully remained 'cold', that it never could.

    A corrupt, nepotistic distant, paranoid elite that instead of dividing its efforts into looking after its own society's well-being, as well a apparently just defending it, opted for near as dammed bankrupting itself attempting to feed an insatiable military machine it could ill afford (and would mostly never use) at its increasingly disaffected, divided, restive people's expense.

    Mind you, they were just dumb Commies.

    JTMcPhee, February 7, 2017 at 3:25 pm

    First, did the Soviet state "bankrupt itself damm near" mostly by trying to feed an "insatiable military machine," or did the wealth of the Soviets get dissipated into other ratholes as well, alongside various external pressures and effects? And what scale applied to each political-decision "allocation"? One view, among a flood of intersecting and competing interpretations, of course:

    The stunning collapse of the Soviet empire in 1989-91 has often been heralded in the West as a triumph of capitalism and democracy, as though this event were obviously a direct result of the policies of the Reagan and Thatcher governments. This self-congratulatory analysis has little relation to measurable facts, circumstances, and internal political dynamics that were the real historical causes of the deterioration of the Soviet empire and ultimately the Soviet state itself. Fiery political speeches and tough diplomatic postures make good theater, but they are ineffective at forcing political transformation in totalitarian nations, as is proven by the persistence of far less powerful Communist regimes in Cuba and east Asia in the face of punishing trade embargos. The key to understanding the reasons for the demise of the Soviet Union is to be found not in the speeches or policies of Western politicians, but in internal Soviet history.

    1. Stagnation in the 1970s

    The Soviet Union was already in decline as a world power well before 1980. Any illusions of global Communist hegemony had evaporated with the collapse of Sino-Soviet relations in the 1960s. As the Nixon administration improved American relations with an increasingly independent China, the Soviets saw a strategic need to scale down the nuclear arms race, which placed enormous strains on its faltering economy. The threat of a nuclear confrontation was reduced considerably by the anti-ballistic missile (ABM) and strategic arms limitation treaties (SALT) contracted with the Nixon administration in 1972. This détente, or easing of tensions, allowed Leonid Brezhnev to focus on domestic economic and social development, while boosting his political popularity.

    Around 1975, the Soviet Union entered a period of economic stagnation from which it would never emerge. Increasingly, the USSR looked to Europe, primarily West Germany, to provide hard currency financing through massive loans, while the U.S. became a major supplier of grain.[1] Despite moments of anti-Communist grandstanding, the Americans and Western Europeans maintained trade relations with the cash-strapped Soviet Union, which dipped into its Stalin-era gold reserves to increase availability of consumer goods .

    Foreign trade and mild economic reforms were not enough to overcome the inefficiencies of the Soviet command economy, which remained technologically backward and full of corruption. Economic planners were frequently unable to diagnose and remedy problems, since they were given false reports by officials who only pretended to be productive.

    Soviet living standards remained poor by Western standards. By 1980, only 9 percent of Soviets had automobiles, which was actually a vast improvement under Brezhnev. Very little was computerized, due to state paranoia about the use of telecommunications for counterrevolutionary purposes. The USSR was able to endure this technological lag because its closed economy protected it from competition, but its ability to maintain military superiority increasingly depended on the ability to keep pace with Western modernization.

    In his radio broadcasts during the late 1970s, Ronald Reagan complained that the capitalist nations propped up the intrinsically flawed Soviet regime, instead of allowing it to naturally collapse from its own inefficiency and inhumanity.[2] In contrast to his later hagiographers, Reagan did not envision defeating the Soviet Union by forceful action, but instead he perceived that the regime would collapse from its own failings once the West removed its financial life support system. It is this early Reagan, far more thoughtful than he is generally credited, who proved to be most astute in diagnosing the state of the USSR. It did not need a foreign enemy to "defeat" it, for it was deteriorating from within.
    http://www.arcaneknowledge.org/histpoli/soviet.htm

    And I recall the Soviet military leadership was largely (no, not exclusively of course, humans being what they are) reacting to the clear and present danger that "the West" presented. Among many other considerations, of course. In the Great Game of "chicken," in which we all are mostly passengers in the speeding cars with loony drivers ya-hooing out the windows, I recall the Soviets were the ones to veer off from that head-on collision that might have ended it all earlier than it seems increasingly likely to end anyway. And Russian leadership seems more concerned about the survival of the nation than our own clown-car leadership.

    Seems to me that all of us ordinary people, many of whom would gladly take advantage of opportunities to do some looting themselves, to "get ahead" in the "rat race," if only those opportunities were presented, have insufficient collective concern about the many systems, living and political-economy, that apparently are collapsing or running out of control. And patently the military-security monkey that's riding our backs is doing a p!ss-poor job of "defending us" in any ordinary sense of the term, and not even a vary good job of playing Imperial Forces. Though of course the net effects of military and political chaos-building and destabilization do blast out a nice open-pit mine for corporate looters to get at the extractables..

    But yeah, the halls of history are full of echoes and shadows and reflections in a glass darkly And I wonder if London bookies are running a line on when history, as recorded and debated and acted out by humans, will REALLY end, thanks to our wonderful unbridled inventiveness and lack of that genetic predisposition to survive as a species that ants and termites and rats and cats and other "lesser creatures" seem to have

    Anon , February 7, 2017 at 12:50 pm

    Commies? That last paragraph sounds like post-WWII history in the US.

    Gman , February 7, 2017 at 2:13 pm

    ;-)

    [Feb 08, 2017] How Universities Are Increasingly Choosing Capitalism Over Education naked capitalism

    Notable quotes:
    "... By Henry Heller, a professor of history at the University of Manitoba, Canada and the author of The Capitalist University. Cross posted from Alternet ..."
    "... The following is an excerpt from the new book ..."
    "... by Henry Heller (Pluto Press, December 2016): ..."
    "... Inside Higher Education ..."
    "... The University, State and Market: The Political Economy of Globalization in the Americas ..."
    "... New Left Review ..."
    "... The Field of Cultural Production: Essays on Art and Literature ..."
    "... Letters from the Deutsch-Französische Jahrbücher ..."
    "... Anti-Communism in Twentieth-Century America ..."
    "... Marxism is still regarded with suspicion in the United States. ..."
    "... As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution. ..."
    Feb 08, 2017 | www.nakedcapitalism.com
    How Universities Are Increasingly Choosing Capitalism Over Education Posted on February 7, 2017 by Yves Smith Yves here. Some further observations. First, the author neglects to mention the role of MBAs in the reorientation of higher education institutions. When I went to school, the administrative layer of universities was lean and not all that well paid. Those roles were typically inhabited by alumni who enjoyed the prestige and being able to hang around the campus. But t he growth of MBAs has meant they've all had to find jobs, and colonizing not-for-profits like universities has helped keep them off the street.

    Second, this post focuses on non-elite universities, but the same general pattern is in play, although the specific outcomes are different. Universities with large endowments are increasingly hedge funds with an educational unit attached.

    By Henry Heller, a professor of history at the University of Manitoba, Canada and the author of The Capitalist University. Cross posted from Alternet

    The following is an excerpt from the new book The Capitalist University: The Transformations of Higher Education in the United States since 1945 by Henry Heller (Pluto Press, December 2016):

    The fact that today there are over 4,000 colleges and universities in the United States represents an unparalleled educational, scientific, and cultural endowment. These institutions occupy a central place in American economic and cultural life. Certification from one of them is critical to the career hopes of most young people in the United States. The research produced in these establishments is likewise crucial to the economic and political future of the American state. Institutions of higher learning are of course of varying quality, with only 600 offering master's degrees and only 260 classified as research institutions. Of these only 87 account for the majority of the 56,000 doctoral degrees granted annually. Moreover, the number of really top-notch institutions based on the quality of their faculty and the size of their endowments is no more than 20 or 30. But still, the existence of thousands of universities and colleges offering humanistic, scientific, and vocational education, to say nothing of religious training, represents a considerable achievement. Moreover, the breakthroughs in research that have taken place during the last two generations in the humanities and social sciences, not to speak of the natural sciences, have been spectacular.

    But the future of these institutions is today imperiled. Except for a relatively few well-endowed universities, most are in serious financial difficulty. A notable reason for this has been the decline in public financial support for higher education since the 1980s, a decline due to a crisis in federal and state finances but also to the triumph of right-wing politics based on continuing austerity toward public institutions. The response of most colleges and universities has been to dramatically increase tuition fees, forcing students to take on heavy debt and putting into question access to higher education for young people from low- and middle-income families. This situation casts a shadow on the implicit post-war contract between families and the state which promised upward mobility for their children based on higher education. This impasse is but part of the general predicament of the majority of the American population, which has seen its income fall and its employment opportunities shrink since the Reagan era. These problems have intensified since the financial collapse of 2008 and the onset of depression or the start of a generalized capitalist crisis.

    Mounting student debt and fading job prospects are reflected in stagnating enrollments in higher education, intensifying the financial difficulties of universities and indeed exacerbating the overall economic malaise.[1] The growing cost of universities has led recently to the emergence of Massive Online Open Courses whose upfront costs to students are nil, which further puts into doubt the future of traditional colleges and universities. These so-called MOOCs, delivered via the internet, hold out the possibility, or embody the threat, of doing away with much of the expensive labor and fixed capital costs embodied in existing university campuses. Clearly the future of higher education hangs in the balance with important implications for both American politics and economic life.

    The deteriorating situation of the universities has its own internal logic as well. In response to the decline in funding, but also to the prevalence of neoliberal ideology, universities-or rather the presidents, administrators, and boards of trustees who control them-are increasingly moving away from their ostensible mission of serving the public good to that of becoming as far as possible like private enterprises. In doing so, most of the teachers in these universities are being reduced to the status of wage labor, and indeed precarious wage labor. The wages of the non-tenured faculty who now constitute the majority of teachers in higher education are low, they have no job security and receive few benefits. Although salaried and historically enjoying a certain autonomy, tenured faculty are losing the vestiges of their independence as well. Similarly, the influence of students in university affairs-a result of concessions made by administrators during the upheavals of the 1960s and 1970s-has effectively been neutered. These changes reflect a decisive shift of power toward university managers whose numbers and remuneration have expanded prodigiously. The objective of these bureaucrats is to transform universities as much as possible to approximate private and profit-making corporations, regarded as models of efficient organization based on the discipline of the market. Indeed, scores of universities, Phoenix University for example, have been created explicitly as for-profit businesses and currently enroll millions of students.

    Modern universities have always had a close relationship with private business, but whereas in the past faculty labor served capital by producing educated managers, highly skilled workers, and new knowledge as a largely free good, strenuous efforts are now underway to transform academic employment into directly productive, i.e., profitable, labor. The knowledge engendered by academic work is accordingly being privatized as a commodity through patenting, licensing, and copyrighting to the immediate benefit of universities and the private businesses to which universities are increasingly linked. Meanwhile, through the imposition of administrative standards laid down in accord with neoliberal principles, faculty are being subjected to unprecedented scrutiny through continuous quantified evaluation of teaching and research in which the ability to generate outside funding has become the ultimate measure of scholarly worth. At the same time, universities have become part of global ranking systems like the Shanghai Index or the Times Higher Education World University Rankings in which their standing in the hierarchy has become all important to their prestige and funding.

    Several intertwined questions emerge from this state of affairs. In the first place, given the rising expense and debt that attendance at university imposes and declining employment prospects especially for young people, will there continue to be a mass market for higher education? Is the model of the university or college traditionally centered on the humanities and the sciences with a commitment to the pursuit of truth compatible with the movement toward converting the universities into quasi- or fully private business corporations? Finally, what are the implications of changes in the neoliberal direction for the future production of objective knowledge, not to speak of critical understanding?

    Universities during the Cold War produced an impressive amount of new positive knowledge, not only in the sciences, engineering, and agriculture but also in the social sciences and humanities. In the case of the humanities and social sciences such knowledge, however real, was largely instrumental or tainted by ideological rationalizations. It was not sufficiently critical in the sense of getting to the root of the matter, especially on questions of social class or on the motives of American foreign policy. Too much of it was used to control and manipulate ordinary people within and without the United States in behalf of the American state and the maintenance of the capitalist order. There were scholars who continued to search for critical understanding even at the height of the Cold War, but they largely labored in obscurity. This state of affairs was disrupted in the 1960s with the sudden burgeoning of Marxist scholarship made possible by the upsurge of campus radicalism attendant on the anti-war, civil rights, and black liberation struggles. But the decline of radicalism in the 1970s saw the onset of postmodernism, neoliberalism, and the cultural turn. Postmodernism represented an unwarranted and untenable skepticism, while neoliberal economics was a crude and overstated scientism. The cultural turn deserves more respect, but whatever intellectual interest there may be in it there is little doubt that the net effect of all three was to delink the humanities and social sciences from the revolutionary politics that marked the 1960s. The ongoing presence in many universities of radicals who took refuge in academe under Nixon and Reagan ensured the survival of Marxist ideas if only in an academic guise. Be that as it may, the crisis in American society and the concomitant crisis of the universities has become extremely grave over the last decade. It is a central contention of this work that, as a result of the crisis, universities will likely prove to be a key location for ideological and class struggle, signaled already by the growing interest in unionization of faculty both tenured and non-tenured, the revival of Marxist scholarship, the Occupy Movement, the growing importance of the Boycott, Divestment, and Sanctions movement, and heightening conflicts over academic freedom and the corporatization of university governance.

    The approach of this work is to examine the recent history of American universities from the perspective of Marxism, a method which can be used to study these institutions critically as part of the capitalist economic and political system. Despite ongoing apologetics that view universities as sites for the pursuit of disinterested truth, we contend that a critical perspective involving an understanding of universities as institutions based on the contradictions of class inequality, the ultimate unity of the disciplines rooted in the master narrative of historical materialism, and a consciousness of history makes more sense as a method of analysis. All the more so, this mode of investigation is justified by the increasing and explicit promotion of academic capitalism by university managers trying to turn universities into for-profit corporations. In response to these policies scholars have in fact begun to move toward the reintegration of political economy with the study of higher education. This represents a turn away from the previous dominance in this field of postmodernism and cultural studies and, indeed, represents a break from the hegemonic outlook of neoliberalism.[2] On the other hand, most of this new scholarship is orientated toward studying the effects of neoliberalism on the contemporary university, whereas the present work takes a longer view. Marxist political economy demands a historical perspective in which the present condition of universities emerged from the crystallization of certain previous trends. It therefore looks at the evolution of the university from the beginning of the twentieth century, sketching its evolution from a preserve of the upper-middle class in which research played almost no role into a site of mass education and burgeoning research, and, by the 1960s, a vital element in the political economy of the United States.

    In contrast to their original commitment to independence with respect to the state up to World War II, most if by no means all universities and colleges defined their post-war goals in terms of the pursuit of the public good and were partially absorbed into the state apparatus by becoming financially dependent on government. But from start to finish twentieth-century higher education also had an intimate and ongoing relationship with private business. In the neoliberal period universities are taking this a step further, aspiring to turn themselves into quasi- or actual business corporations. But this represents the conclusion of a long-evolving process. The encroachment of private business into the university is in fact but part of the penetration of the state by private enterprise and the partial privatization of the state. On the surface this invasion of the public sphere by the market may appear beneficial to private business. We regard it, on the contrary, as a symptom of economic weakness and a weakening of civil society.

    The American system of higher education, with its prestigious private institutions, great public universities, private colleges and junior colleges, was a major achievement of a triumphant American republic. It provided the U.S. state with the intellectual, scientific, and technical means to strengthen significantly its post-1945 power. The current neoliberal phase reflects an America struggling economically and politically to adapt to the growing challenges to its global dominance and to the crisis of capitalism itself. The shift of universities toward the private corporate model is part of this struggle. Capitalism in its strongest periods not only separated the state from the private sector, it kept the private sector at arm's length from the state. The role of the state in ensuring a level playing field and providing support for the market was clearly understood. The current attempt by universities to mimic the private sector is a form of economic and ideological desperation on the part of short-sighted and opportunistic university administrators as well as politicians and businessmen. In our view, this aping of the private sector is misguided, full of contradictions, and ultimately vain if not disastrous. Indeed, it is a symptom of crisis and decline.

    The current overwhelming influence of private business on universities grew out of pre-existing tendencies. There is already an existing corporate nature of university governance both private and public, as well as an influence of business on universities in the first part of the twentieth century. In reaction there developed the concept of academic freedom as well as the establishment of the system of tenure and the development of a rather timid faculty trade unionism. This underscores the importance of private foundations in controlling the development of the curriculum and research in both the sciences and humanities. In their teaching, universities were mainly purveyors of the dominant capitalist ideology. Humanities and social science professors imparted mainly liberal ideology and taught laissez-faire economics which justified the political and economic status quo. The development of specialized departments reinforced the fragmentation of knowledge and discouraged the emergence of a systemic overview and critique of American culture and society. There were, as noted earlier, a few Marxist scholars, some of considerable distinction, who became prominent particularly in the wake of the Depression, the development of the influence of the Communist Party, and the brief period of Soviet-American cooperation during World War II. But the teaching of Marxism was frowned upon and attacked even prior to the Cold War.

    The post-1945 university was a creation of the Cold War. Its expansion, which sprang directly out of war, was based on the idea of education as a vehicle of social mobility, which was seen as an alternative to the equality and democracy promoted by the populism of the New Deal. Its elitist and technocratic style of governance was patterned after that of the large private corporation and the American federal state during the 1950s. Its enormously successful research programs were mainly underwritten by appropriations from the military and the CIA. The CIA itself was largely created by recruiting patriotic faculty from the universities. Much of the research in the social sciences was directed at fighting Soviet and revolutionary influence and advancing American imperialism abroad. Marxist professors and teaching programs were purged from the campuses.

    Dating from medieval times, the curriculum of the universities was based on a common set of subjects including language, philosophy, and natural science premised on the idea of a unitary truth. Although the subject matter changed over the centuries higher education continued to impart the hegemonic ideology of the times. Of course the notion of unitary truth was fraying at the seams by the beginning of the twentieth century with the development of departmental specialization and the increasingly contested nature of truth, especially in the social sciences in the face of growing class struggle in America. However, the notion of the idea of the unity of knowledge as purveyed by the university was still ideologically important as a rationale for the existence of universities. Moreover, as we shall demonstrate, it was remarkable how similarly, despite differences in subject matter and method, the main disciplines in the humanities and social sciences responded to the challenge of Marxism during the Cold War. They all developed paradigms which opposed or offered alternatives to Marxism while rationalizing continued loyalty to liberalism and capitalism. As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution. Indeed, this work will focus on these disciplines because they defended the capitalist status quo at a deeper cultural and intellectual level than the ubiquitous mass media. As Louis Althusser pointed out, the teaching received by students from professors at universities was the strategic focal point for the ideological defense of the dominant class system. That was as true of the United States as it was of France, where institutions of higher learning trained those who would later train or manage labor. Criticizing the recent history of these disciplines is thus an indispensable step to developing an alternative knowledge and indeed culture that will help to undermine liberal capitalist hegemony.[3]

    The approach of this work is to critically analyze these core academic subjects from a perspective informed by Pierre Bourdieu and Karl Marx. Bourdieu points out that the deep involvement of the social sciences (and the humanities) with powerful social interests makes it difficult to free their study from ideological presuppositions and thereby achieve a truly socially and psychologically reflexive understanding.[4] But such reflexive knowledge was precisely what Marx had in mind more than a century earlier. Leaving a Germany still under the thrall of feudalism and absolutism for Paris in 1843, the young Marx wrote to his friend Arnold Ruge that

    reason has always existed, but not always in a reasonable form but, if constructing the future and settling everything for all times are not our affair, it is all the more clear what we have to accomplish at present: I am referring to ruthless criticism of all that exists, ruthless both in the sense of not being afraid of the results it arrives at and in the sense of being just as little afraid of conflict with the powers that be.[5]

    His task as he saw it was to criticize the existing body of knowledge so as to make it as reasonable as possible, i.e., to undermine its illusory and ideological character and substitute knowledge which was both true and helped advance communism. Such a project entailed deconstructing the existing body of knowledge through rational criticism, exposing its ideological foundations and advancing an alternative based on a sense of contradiction, social totality, and a historical and materialist understanding. It is our ambition in surveying and studying the humanities and social sciences in the period after 1945 to pursue our investigation in the same spirit. Indeed, it is our view that a self-reflexive approach to contemporary knowledge, while woefully lacking, is an indispensable complement to the development of a serious ideological critique of the crisis-ridden capitalist society of today.

    Marxism is still regarded with suspicion in the United States. As a matter of fact, anti-Marxism in American universities was not merely a defensive response to McCarthyism as some allege. Anti-communism was bred in the bone of many Americans and was one of the strongest forces that affected U.S. society in the twentieth century, including the faculty members of its universities. An idée fixe rather than an articulated ideology, it was compounded out of deeply embedded albeit parochial notions of Americanism, American exceptionalism and anti-radicalism.[6] The latter was rooted in the bitter resistance of the still large American middle or capitalist class to the industrial unrest which marked the late nineteenth and early twentieth centuries and which had a strong bed of support among the immigrant working class. Nativism then was an important tool in the hands of this class in fighting a militant if ethnically divided working class. Moreover, the anti-intellectual prejudices of American society in general and the provincialism of its universities were ideal terrain for fending off subversive ideas from abroad like Marxism. Later, this anti-communism and hostility to Marxism became the rationale for the extension of American imperialism overseas particularly after 1945. The social origins of the professoriate among the lower middle class, furthermore, and its role as indentured if indirect servants of capital, strengthened its position as inimical to Marxism. Just as careers could be lost for favoring Marxism, smart and adroit academics could make careers by advancing some new intellectual angle in the fight against Marxism. And this was not merely a passing feature of the height of the Cold War: from the 1980s onward, postmodernism, identity politics, and the cultural turn were invoked to disarm the revolutionary Marxist politics that had developed in the 1960s. Whatever possible role identity politics and culture might have in deepening an understanding of class their immediate effect was to undermine a sense of class and strengthen a sense of liberal social inclusiveness while stressing the cultural obstacles to the development of revolutionary class consciousness.

    This overall picture of conformity and repression was, however, offset by the remarkable upsurge of student radicalism that marked the 1960s, challenging the intellectual and social orthodoxies of the Cold War. In reaction to racism and political and social repression at home and the Vietnam War abroad, students rebelled against the oppressive character of university governance and by extension the power structure of American society. Overwhelmingly the ideology through which this revolt was refracted was the foreign and until then largely un-American doctrine of Marxism. Imported into the universities largely by students, Marxism then inspired a new generation of radical and groundbreaking scholarship. Meanwhile it is important to note that the student revolt itself was largely initiated by the southern civil rights movement, an important bastion of which were the historically black colleges of the South. It was from the struggle of racially oppressed black students in the American South as well as the growing understanding of the anti-colonial revolutionaries of Vietnam that the protest movement in American colleges and universities was born. Equally important was the Free Speech Movement at Berkeley. Indeed, it is the contention of this work that the issues raised at Berkeley over democracy in the universities and the free expression of ideas not only shaped the student movement of that time but are still with us, and indeed are central to the future of universities and intellectual life today.

    At the heart of the Berkeley protest lay a rejection of the idea of a university as a hierarchical corporation producing exchange values including the production of trained workers and ideas convertible into commodities. Instead the students asserted the vision of a democratic university which produced knowledge as a use value serving the common good. It is our view that this issue raised at Berkeley in the 1960s anticipated the class conflict that is increasingly coming to the fore over so-called knowledge capitalism. Both within the increasingly corporate neoliberal university and in business at large, the role of knowledge and knowledge workers is becoming a key point of class struggle. This is especially true on university campuses where the proletarianization of both teaching and research staff is in process and where the imposition of neoliberal work rules is increasingly experienced as tyrannical. The skilled work of these knowledge producers, the necessarily interconnected nature of their work, and the fundamentally contradictory notion of trying to privatize and commodify knowledge, have the potential to develop into a fundamental challenge to capitalism.

    Notes:

    1. Paul Fain, "'Nearing the Bottom': Inside Higher Education," Inside Higher Education , May 15, 2014.

    2. Raymond A. Morrow, "Critical Theory and Higher Education: Political Economy and the Cul-de-Sac of the Postmodernist Turn," in The University, State and Market: The Political Economy of Globalization in the Americas , ed. Robert A. Rhoads and Carlos Alberto Torres, Stanford: Stanford University Press, 2006, pp. xvii‒xxxiii.

    3. Perry Anderson, "Components of the National Culture," New Left Review , No. 50, July‒August, 1968, pp. 3–4.

    4. Pierre Bourdieu, The Field of Cultural Production: Essays on Art and Literature , New York: Columbia University Press, 1993, pp. 86–7.

    5. Karl Marx, Letter to Arnold Ruge, Kreuznach, September 1843, Letters from the Deutsch-Französische Jahrbücher , at https://www.marxists.org/archive/marx/works/1843/letters/43_09.htm

    6. Larry Ceplair, Anti-Communism in Twentieth-Century America , Santa Barbara: Clio, 2011, pp. 1–2, 12.

    0 0 30 1 1 This entry was posted in Banana republic , Free markets and their discontents , Guest Post , Politics , Social policy , Social values on February 7, 2017 by Yves Smith . Subscribe to Post Comments 31 comments Jim , February 7, 2017 at 1:57 am

    Capitalism requires that total strangers be on the hook for student loans? And if this is Capitalism then why didn't this trend emerge 100+ years ago? Why now?

    Trout Creek , February 7, 2017 at 3:18 pm

    It is a function of the adaption of NeoLiberalism as a governing principle which you can basically start around the time of Reagan.

    Steve Sewall , February 7, 2017 at 5:09 pm

    Because a) the market for a college degree is vastly bigger today than it was 100+ years ago b) tuitions were affordable so there was no way for high-interest lenders ("total strangers") to game the system as they do today.

    Plus I wonder if the legal system or tax code would have let them get away with anything like what they get away with today.

    schultzzz , February 7, 2017 at 1:58 am

    I agree with everything dude says, but the way he says it is so deathly dull and needlessly technical . . .

    it's a shame that someone so openly critical of the university system and culture nonetheless unquestioningly obeys the tradition of: "serious writing has to turn off 99% of the people that might be otherwise interested in the subject."

    Arizona Slim , February 7, 2017 at 8:57 am

    And here I thought I was the only one

    John Wright , February 7, 2017 at 9:59 am

    Yes, his writing caused this reader to do a MEDGO ("my eyes doth gloss over")

    It was technical in its assertions, but has few metrics to quantify the trends such as inflation adjusted administrative cost or inflation adjusted government college funding now vs then.

    There is a mention that the USA government has touted the "upward mobility" or excess value, AKA "consumer surplus", of a college degree to students and their families for years.

    The US government further encouraged the student loan industry with guarantees and bankruptcy relief de-facto prohibited.

    The current system may illustrate that colleges raised their prices to capture more of this alleged consumer surplus, a surplus that may no longer be there..

    If one looks at the USA's current political/economic/infrastructure condition, and asserts that the leaders and government officials of the USA were trained, overwhelmingly, over the last 40 years, in the USA's system of higher education, perhaps this is an indication USA higher education has not served the general public well for a long time.

    The author mentions this important point "These so-called MOOCs, delivered via the internet, hold out the possibility, or embody the threat, of doing away with much of the expensive labor and fixed capital costs embodied in existing university campuses. Clearly the future of higher education hangs in the balance with important implications for both American politics and economic life."

    Maybe the MOOCs are the low cost future as the 4 year degree loses economic value and the USA moves to a life-long continuous education model?

    Arizona Slim , February 7, 2017 at 11:06 am

    ISTR reading that the completion rate for MOOCs is pretty low. As in, 10% of the students who start the course end up finishing it.

    Pete , February 7, 2017 at 1:58 pm

    And that rate doesn't even mention what scores they achieved. MOOCs are hopeless especially since college is now less about getting an education and more about a statement about a young person's lifestyle or identity.

    http://akinokure.blogspot.com/2015/10/college-as-part-of-lifestyle.html

    JustAnObserver , February 7, 2017 at 2:18 pm

    Now sure about the `now' bit. I maybe a bit cynical but I've always thought, even when I was at one, that colleges/universities major function was as a middle-class finishing school for those unable to afford the real deal in Switzerland.

    julia , February 7, 2017 at 10:31 am

    I do not agree and it is deathly dull and needlessly technical. In fact it remains me off the marxistic education I enjoyed growing up in East Germany.
    Maybe it is time to rethink after school education. Physical Labor should loose its stain of being for loosers and stupid people. A whole lot of professions could be better taught through apprentiships and technical college mix.( many younge people would maybe enjoy being able to start qualified work after only 3 additional years of education).
    And do we really need 12 years of standard school education? There are so many kids that do not function well in school.
    Universities should be for the really eager and talented who want to spend a big part of
    their youth learning.
    I guess we need a lot of new ideas to get away from the old paradigma ( anti- marxist or marxist)

    John Wright , February 7, 2017 at 4:00 pm

    I took a couple of classes at the local junior college in automotive smog testing and machining.

    One of the instructors told me the JC administration viewed this Junior College as having two parts, College Prep + vocational education.

    He suggested the administration looked down on the vocational education portion, saying "But we get the jobs".

    Steve , February 7, 2017 at 4:17 pm

    I don't know how you read other works from academics if you think that this was dull.

    Do you or anyone thinking this was "dull" have any examples of academic essays or books that contain useful knowledge but also consider them "shiny?"

    Personally, I thought this was a very good essay as it explains some things I've been thinking about American higher education and quite a few things about my personal university education at a tier-1 research school.

    Altandmain , February 7, 2017 at 2:10 am

    Basically universities have become a cog in the machine of neoliberalism.

    Rather than anything resembling an institution for the public good, it has taken on the worst aspects of corporate America (and Canada). You can see this in the way they push now for endowment money, the highly paid senior management contrasted with poorly paid adjuncts, and how research is controlled these days. Blue skies research is cut, while most research is geared towards short-term corporate profit, from which they will no doubt milk society with.

    I tremble when I think about what all of this means:
    1. Students won't be getting a good education when they are taught by adjuncts being paid poverty wages.
    2. Corporations will profit in the short run.
    3. The wealthy and corporations due to endowment money have a huge sway.
    4. Blue skies research will fall and over time, US leadership in hard sciences.
    5. The productivity of future workers will be suppressed and with it, their earning potential.
    6. Related to that, inequality will increase dramatically as universities worsen the situation.
    7. There will be many "left behind" students and graduates with high debt, along with bleak job prospects.
    8. State governments, starving for tax money will make further cuts, worsening these trends.
    9. Anything hostile to the corporate state (as the article notes) will be suppressed.
    10. With it, academic freedom and ultimately democracy will be much reduced.

    What it means is decline in US technological power, productivity gains, and with it, declining living standards.

    All of these trends already are happening. They will worsen.

    I'd agree that a more readable version of this should be made for the general public.

    James McFadden , February 7, 2017 at 1:23 pm

    Well said.

    But your description suggests an inevitable bleak dystopic future – a self-fulfilling prophesy. The future is not written – we can help determine its course. It starts with grass roots movement building in your neighborhood and community. And I can't think of a more rewarding task then creating a better future for our children.

    But perhaps my farmer's work ethic, my inclination to side with the underdog and stand up to the bully capitalists, are notions that most Americans no longer possess. Perhaps Cornel West is correct when he states: "The oppressive effect of the prevailing market moralities leads to a form of sleepwalking from womb to tomb, with the majority of citizens content to focus on private careers and be distracted with stimulating amusements. They have given up any real hope of shaping the collective destiny of the nation. Sour cynicism, political apathy, and cultural escapism become the pervasive options."

    However, it is my observation that Trump's election has woken this sleepwalking giant, and that his bizarre behavior continues to energize people to resist. So why not rebel and help bring down the neoliberal fascists. Is there any cause more worthy? And for those who won't try because they don't think they can win, consider the words of Chris Hedges: "I do not fight fascists because I will win. I fight fascists because they are fascists."

    Jason , February 7, 2017 at 2:14 am

    I'm going to complain about your headline. A lot of stuff on this blog is obviously relevant only to the USA, and when it's obvious it doesn't need to be mentioned in the headline. But it's not at all obvious that this topic is only about the USA (or North America, since the author is in Canada?), so maybe you could edit the headline to reflect that it is in fact only about the USA?

    My observation of Australian universities is that they have similar problems, although maybe to a lesser extent. But I doubt the same things happen in all countries. I'd be interested to know more about mainland European universities, and ex-Soviet-bloc universities, and Chinese universities, and Third World universities.

    As for "Universities with large endowments are increasingly hedge funds with an educational unit attached", I think the rich universities in the UK (i.e. the richer residential Oxbridge colleges, if you count them as universities – Oxford and Cambridge Universities themselves are not particularly rich – plus maybe Imperial College?) have very little invested in hedge funds and a lot in property. Can anyone confirm or deny that?

    Colonel Smithers , February 7, 2017 at 4:30 am

    Thank you, Jason.

    In the past two decades, the UK's top universities, often called the Russell Group after the Russell Hotel in Russell Square where they met to form a sort of lobby group, have made money and started hiring rock star academics. I don't know how much these academics teach, but they often pontificate in the media.

    Big business, oligarchs and former alumni (often oligarchs) donate money, allowing them to build up their coffers. Imperial is developing an area of west London.

    Oxbridge colleges own a lot of property. Much of the land between Cambridge and London is owned by Cambridge colleges. This goes back to when they were religious institutions and despite Henry VIII's dissolution of the monasteries.

    London Business School has expanded from its Regent's Park base to Marylebone as the number of students, especially from Asia, grow. I have spoken to students from there and Oxford's Said Business School and know people who have guest lectured there. They were not impressed. Plutonium Kun has written about that below.

    Colonel Smithers , February 7, 2017 at 4:38 am

    Correction: number of students grows :-)

    bmeisen , February 7, 2017 at 12:35 pm

    Oxford and Cambridge are British state universities as I understand it. The Russell Group consists primarily of state institutions that have assumed / been given / been restored to an elite role in the British system of higher education, which is overwhelmingly public. Oxford and Cambridge are at the peak of a relatively flat hierarchy of elite public higher education. Higher ed's role in the constitution of British elites is characterized by 3 features: association with an institutional reputation and thereby access to a network, a financial hurdle, and a meritocratic process of selection. Of these the financial hurdle is the least problematic – tuition is still peanuts compared to that at American elite institutions.

    Things have gotten better – you no longer have to be a male member of the church of England to get in – and the system is more democratic than the French system of elite public higher ed, i.e. the ruling elite in the UK can be penetrated by working people, e.g. Corbyn.

    Winston Smith , February 7, 2017 at 3:07 am

    My son is half Japanese and half American and holds a passport with both countries, he is still in elementary school, but my wife and I are encouraging him to go to school in Japan or to Germany (ancestral home) and seek his fortunes outside of the US as the crapification of the US roller coasters out of control.

    Japanese universities are still affordable compared to the US and it's administrative layer, modestly paid, isn't run by MBAs, corporate hacks and neoliberal apologists and others who would better serve the public by decorating a lamp post somewhere with piano wire tightly wrapped around their necks!

    My niece attended Kyoto University, one of the best schools in Japan and it cost her and her parents about 7500.00 a year. She commuted from Nara City and Finished her degree in just under three years and had a job waiting for her in the middle of her third year.

    Now, I agree that Japanese universities have their fare share of problems and insanity, but the thought of dealing with US universities nauseates my wife and me.

    The only school in the US that I would want my son to attend would be Caltech, if he could ever successfully get accepted. They still do great science there, much of it blue sky research. LIGO is still running!
    https://eands.caltech.edu/random-walk-3/

    * disclaimer, I used to be a Caltech employee.

    Colonel Smithers , February 7, 2017 at 4:35 am

    An increasing number of British students are going to the Netherlands and, to a lesser extent, Germany for courses taught in English and for under EUR2000 per annum. Leiden and Maastricht are particularly favoured. Apparently, some Spanish universities are cottoning on to that market.

    Half a dozen years ago, a clown masquerading as a BBC breakfast news reporter went to have a look and condescend. Her concluding remark was, "The question is are continental universities as good as British ones."

    Arizona Slim , February 7, 2017 at 9:00 am

    I have studied at a Spanish university. The courses were excellent.

    Jake , February 7, 2017 at 8:04 am

    But but Japan has sooooo much government debt and must cut cut cut unless it implodes!

    Out of curiosity, may I ask you to elaborate on what you mean when you say japanese universities have 'their fare share of problems and insanity'?

    schultzzz , February 7, 2017 at 2:40 pm

    re: japanese universities.

    The university system is not set up for education. it's a reward to the conformists who studied 12 hours a day all through jr high/highschool to pass the university entrance exams (which notoriously don't test for any useful knowledge). The idea being that if you waste your whole childhood studying for a phoney test, you won't dare question the system once you're in the workforce, as it would mean admitting your whole childhood was wasted!

    Since college is viewed as a reward, rather than a challenge, there's very little learning going on. it's about developing relationships (and drinking problems) with future members of this elite class.

    So most Japanese corporations wind up having to teach the grads everything on the job anyway.

    A Japanese degree doesn't mean 'i know things' it means 'i have already by age 20 sacrificed so much that i don't dare ever rock the boat', which is exactly how the corporations and govt bureaucracies want it.

    You might say "oh but science! Japanese are good at that!"

    But my wife, a nurse, says that it's considered rude to flunk an incompetent student, providing she/he's respectful of the professor. There are doctors who routinely botch surgeries, but firing them would be rude. These doctors would have flunked out of regular (i.e. non-Japanese) universities.

    End rant!

    PlutoniumKun , February 7, 2017 at 3:55 am

    Having on more than one occasion suffered through management restructuring organised by MBA's which did nothing other than reduce productivity in favour of meaningless metrics and increase the power of managers who had no idea how to actually do the job, I'm increasingly coming to the conclusion that the MBA was a clever invention by an anarchist determined to create a virus to undermine capitalism from within. At least, thats the only possible theory that makes sense to me.

    templar555510 , February 7, 2017 at 2:20 pm

    I agree . Putting it more bluntly the MBA is a clever con to get would-be students to sign up in the belief it'll teach them something that can't be taught – how to make money. I've said this on this blog before – the ability to make money is a knack ; it doesn't matter what the field is it's all akin to someone selling cheap goods on a market stall .

    Colonel Smithers , February 7, 2017 at 4:19 am

    Thank you, Yves, for posting.

    Some observations from the UK:

    Many UK universities are targeting foreign, especially Asian, students for the purpose of profit, not education. Some universities refer to students as clients.

    Some provincial universities are opening campuses in London as foreign students only want to study in London.

    There are many Chinese would be students in London this week. Some universities have open days at the moment. When the youngsters and their parents are not attending such days, they go shopping at Bicester Village, just north of Oxford. It's odd to see commuters arriving from Buckinghamshire at Marylebone for work and Chinese and Arab tourists going shopping in the opposite direction, and the reverse in the evening.

    The targeting of rich Asian students, often not up to academic standard, has led to a secondary school in mid-Buckinghamshire, where selective education prevails at secondary / high school, to take Chinese students for the summer term and house them with well to do (only) local parents. The experiment went well for the "grammar" school, i.e. it made money. As for the families who housed the kids, not so much. There were complaints that the children could speak little or no English, which is not what they expected, so the host families could barely interact with the visitors. The school wants to repeat the programme and expand it to a full year. That is the thin end of a wedge as the school will scale back the numbers of local children admitted and probably expand the programme to the entire phase of secondary / high school. It's like running a boarding school by stealth. The school is now an "academy", so no longer under government control and similar to charter schools, and can do what it wants.

    David Barrera , February 7, 2017 at 6:20 am

    Yves Smith,
    I like your introduction to the article. "Universities with large endowments are increasingly hedge funds with an educational unit attached" A recent and very simple but eye opener interview on the subject-Richard Wolff-http://www.rdwolff.com/rttv_boom_bust_for_profit_schools_are_making_money_but_failing_the_grade

    As Henry Heller mentions Bourdieu, I can not find among his bibliography much on the specific increasing dominance of the "free market" over learning institutions. The Field of Cultural Production focuses mainly on the opposition market/art,cultural field and the rules of art. Some of his other works elaborate very well on the transformed reproduction of social agents with different economic and cultural capital weights. His major works on higher learning are The State Nobility and Academic Discourse, which are about the homologies between the hierarchy of higher learning centers and the market position occupiers which the latter produce. All of it within the French context. The great late Bourdieu certainly denounced the increasing free market ideology presence and dominance on "everything human"(i.e Free Exchange, Against the Tyranny of the Market and elsewhere); yet not much in that regard-to my knowledge-on the centers with the granted power to issue higher learning degrees. I guess my point is that Heller's reference to Bourdieu strikes me as a bit odd here.
    Nevertheless, I like Heller's article. Just as incidental evidence: my town's community college President is a CPA and MBA title holder, the Economics 101 class taught does not deviate the slightest from economic orthodoxy doctrine and I must add that, despite-or because of- a 75% tutoring fee increase in the last eight years, the center has consistently generated a surplus aided by the low wages from the vastly non-tenured teachers.

    Colonel Smithers , February 7, 2017 at 6:38 am

    The students from China, Singapore and the Middle East often live in the upscale areas of London, often at home rather than rent. Parents are often in tow. They also drive big and expensive cars.

    It's amazing to see what is driven and by whom around University, Imperial and King's colleges and the London School of Economics in central London. This was remarked upon by US readers a couple of years ago. Parking is not cheap, either.

    A friend and former colleague was planning to rent at Canary Wharf where he was a contractor. He put his name down and was getting ready to move in. The landlord got in touch to say sorry, a family from Singapore was coming and paying more. Apparently, Singaporeans reserve well in advance, even before the students know their exam results.

    A golf course was put up for sale near home. The local authority tipped off some upscale estate agents / realtors from London. A Chinese buyer has acquired the thirty odd acre property. Without planning (construction) permission, the property is worth Ł1.5m. With planning permission, it's worth Ł1m per acre. A gated community / rural retreat for the Chinese student community is planned. Oxford, London, Shakespeare Country, Clooney Country and Heathrow are an hour or less away.

    Left in Wisconsin , February 7, 2017 at 10:45 am

    My favorite line:
    Marxism is still regarded with suspicion in the United States.

    I love a good Marxist and I know that a totalizing perspective such as Marxism requires a certain amount of generalization, but I found more to criticize in this post than to recommend it. Apparently entire disciplines have agency ( As if on cue, sociology, psychology, literature, political science, and anthropology all took sides by explicitly rejecting Marxism and putting forward viewpoints opposed to it. History itself stressed American exceptionalism, justified U.S. expansionism, minimized class conflict, and warned against revolution. ).

    It is clearly true that the modern university is overly focused on money-making – both the university enterprise itself and the selling of higher ed to students – but, from my long experience with one big Tier One and lesser knowledge of several others, it is wrong to say that the modern university looks to operate as a business. Indeed, the top heaviness of bureaucratic administration in the modern university is not very business-like.

    IMO what declining public funding has done is allow/force the modern university to aim it's giant vacuum sucker in any and every direction. By the way, if Wisconsin is any example, there are enough Chinese students interested in American university degrees to keep it in business for quite a long time.

    But my biggest complaint is with the history. After first laying out an ideal (but not very) historical vision of the utopian university, in contrast with today's money grubber, he later admits that the mid-century university was not all that open to leftism. Then the miracle of the 1960s, which seems to spring from social protest alone. The real story of the 1960s was the huge expansion of higher ed in the U.S., which led to considerable faculty hiring, which allowed a lot of leftists to get hired in the 1960s and early 1970s (often at second or third-tier schools) when they would not have in the 1950s. This was always going to be a one-time event.

    The author also seems to suggest that universities owe it to Marxists to hire them if their analysis is good. This is a weird argument for a Marxist to make, seemingly entirely oblivious to the overall political economy he otherwise emphasizes. It ends up sounding more than a bit self-serving. I'm not sure lecturing in History on the public dime is Marx's idea of praxis.

    cojo , February 7, 2017 at 11:52 am

    The same can be said about administrative costs in medicine. Seems the parasitic infection is everywhere!

    [Feb 08, 2017] Trade and Political Power: The Past and Possible Ways Forward

    Notable quotes:
    "... We are loosing global power not due to military projection but, that military projection is in support of financial projection which is a plague ..."
    Feb 08, 2017 | www.nakedcapitalism.com
    February 7, 2017 by Yves Smith By Arthur MacEwan, professor emeritus of economics at the University of Massachusetts Boston and a co-founder and associate of Dollars & Sense magazine. This is the final part of a three-part series on the era of economic globalization, the distribution of power worldwide, and the current crisis. It was originally published in the January/February issue of Dollars & Sense, commencing the magazine's year-long "Costs of Empire" project. Parts 1 and 2 are available here and here . Cross posted from Triple Crisis

    The rhetoric of free trade, in any case, is simply one of the tools that the U.S. government, its allies, international agencies, and large firms use in shaping the world economy. Economic and political-military power is the foundation for this shaping. Following World War II, when the U.S. accounted for more than a quarter of world output, it had tremendous economic power-as a market, an investment source, and a source of new technology. U.S. firms had little competition in their global operations and were thus able to penetrate markets and control resources over a wide range (outside of the U.S.S.R., the rest of the East Bloc, and China). Along with this economic power, the military power of the United States was immense. In the context of the Cold War and the rise of democratic upsurges and liberation movements in many regions, the role of the U.S. military was welcomed in many countries-especially by elites facing threats (real or imagined) from the Soviet Union, domestic liberation movements, or both.

    This combination of economic and military power, far more than the rhetoric of free trade, allowed the U.S. government to move other governments toward accepting openness in international commerce. The Bretton Woods conference was a starting point in this process; U.S. representatives at the conference were largely able to dictate the conference outcomes. In terms of international commerce, things worked quite well for the United Sates for about 25 years. Then, however, various challenges to the U.S. position emerged. In particular, the war in Indochina and its costs, competition from firms based in Japan and Europe, and the rise of OPEC and increase in energy costs began to disrupt the dominant U.S. role by the early 1970s.

    Still, while the period after the 1970s saw slower economic growth, both in the United States and in several other high-income countries, the United States continued to hold its dominant position. In part, this was due to the Cold War-the Soviet threat, or at least the perceived threat, providing the glue that attached other countries to U.S. leadership. Yet, by the 1990s, the U.S.S.R. was no more, and China was becoming a rising world power.

    In spite of the changes in the world economy, the United States at first appears to have almost the same share of world output in 2016, 24.7%, as it had in the immediate post-World War II period, and is still considerably ahead of any other country. Yet this figure evaluates output in the rest of the world's countries at market exchange rates. When the figures are recalculated, using the real purchasing power of different currencies, the U.S. share drops to 15.6%, behind China's 17.9% of world output. Of course, as China has a much larger population than the United States, even using the purchasing power figures, per person GDP in the U.S. is almost four times greater than in China; it would be almost 7 times greater using the market exchange rates.

    The rise of China has not moved the United States off its pedestal as the world's dominant economic power. Moreover, U.S. military strength remains dominant in world affairs. Yet the challenge is real, even to the point that China has recently created an institution, providing development loans to low-income countries, to be an alternative to the (U.S.-dominated) World Bank. Investment by Chinese firms, too, is spreading worldwide. Then there are the military issues in the South China Sea.

    At the same time, the United States is engaged in seemingly intractable military operations in the Middle East, and has continued to maintain its global military presence as widely as during the Cold War. Having long taken on the role of providing the global police force, for the U.S. government to pull back from these operations would be to accept a decline in U.S. global power. But, further, the extensive and far flung military presence of U.S. forces is necessary to preserve the rules of international commerce that have been established over decades. The rules themselves need protection, regardless of the amount of commerce directly affected. The real threat to "U.S. interests" posed by the Islamic State and like forces in the Middle East, Africa, and parts of East Asia is not their appalling and murderous actions. Instead, their threat lies in their disruption and disregard for the rules of international commerce. From Honduras and Venezuela to Saudi Arabia and Iraq, if U.S. policy were guided by an attempt to protect human rights, the role of U.S. military and diplomatic polices would be very different.

    Continuing to operate on a global level to halt threats to the "rules of the game"-in a world were economic power is shifting away from the United States-this country is threatening itself with imperial overreach. Attempting to preserve its role in global affairs and to maintain its favored terms of global commerce, the U.S. government may be taking on financial and military burdens that it cannot manage. In the Middle East in particular, the costs of military operations during the 21st century have run into the trillions of dollars. Military bases and actions are so widespread as to limit their effectiveness in any one theater of operations.

    The potential danger in this situation is twofold. On the one hand, the costs of these operations and the resulting strain on the U.S. government's budget can weaken the operation of the domestic economy. On the other hand, in the context of the rising challenges to the U.S. role in global affairs and the rising role of other powers, especially China but also Russia, U.S. forces may enter into especially dangerous attempts to regain U.S. power in world affairs-the treacherous practice of revanchism.

    Are There Alternatives?

    Although globalization in the broad sense of a geographic expansion of economic, political, social, and cultural contacts may be an inexorable process, the way in which this expansion takes place is a matter of political choices-and political power . Both economic and political/military expansion are contested terrain. Alternatives are possible.

    The backlash against globalization that appeared in 2016, especially in the U.S. presidential campaign, has had both progressive and reactionary components. The outcome of the election, having had such a reactionary and xenophobic foundation, is unlikely to turn that backlash into positive reforms, which would attenuate economic inequality and insecurity. Indeed, all indications in the period leading up to Trump's inauguration (when this article is being written) suggest that, whatever changes take place in the U.S. economic relations with the rest of the world, those changes will not displace large corporations as the principal beneficiaries of the international system.

    Nonetheless, the Sanders campaign demonstrated the existence of a strong progressive movement against the current form of globalization. If that movement can be sustained, there are several reforms that it could push that would alter the nature of globalization and lay the foundation for a more democratic and larger changes down the road (Sanders' "revolution"). Two examples of changes that would directly alter U.S. international agreements in ways that would reduce inequality and insecurity are:

    Changing international commercial agreements so they include strong labor rights and environmental protections. Goods produced under conditions where workers' basic rights, to organize and to work under reasonable health and safety conditions, are denied would not be given unfettered access to global markets. Goods whose production or use is environmentally destructive would likewise face trade restrictions. (One important "restriction" could include a carbon tax that would raise the cost of transporting goods over long distances.) Effective enforcement procedures would be difficult but possible.

    Establishing effective employment support for people displaced by changes in international commerce. Such support could include, for instance, employment insurance funds and well funded retraining programs. Also, there would need to be provisions for continuing medical care and pensions. Moreover, there is no good reason for such support programs to be limited to workers displaced by international commerce. People who lose their jobs because of environmental regulations (such as coal miners), technological change (like many workers in manufacturing), or just stupid choices by their employers should have the same support.

    Several other particular reforms would also be desirable. Obviously, the elimination of ISDS is important, as is cessation of moves to extend U.S. intellectual property rights. The reforms would also include: global taxation of corporations; taxation of financial transactions; altering the governance the IMF, World Bank, and WTO to reduce their role as instruments of the United States and other high income countries; protections for international migrants and protection of their rights as workers. The list could surely be extended. Changes in international economic relations, however, cannot be separated from political changes. The ability of the United States and its allies to shape economic relations is tied up with military power. Military interventions and the threat of military interventions have long been an essential foundation for U.S. power in the global economy. These interventions and threats are often cloaked in democratic or humanitarian rhetoric. Yet, one need simply look at the Middle East to recognize the importance of the interests of large U.S. firms in bringing about these military actions. (Again, see the box on Smedley Butler.) It will be necessary to build opposition to these military interventions in order to move the world economy in a positive direction- to say nothing of halting the disastrous humanitarian impacts of these interventions.

    No one claims that it would be easy to overcome the power of large corporations in shaping the rules of international commerce in agreements or to reduce (let alone block) the aggressive military practices of the U.S. government. The prospect of a Trump presidency certainly makes the prospect of progressive change on international affairs-or on any other affairs-more difficult. There is, however, nothing inevitable about the way these central aspects of globalization have been organized. There are alternatives that would not undermine the U.S. economy (or other economies). Indeed, these alternatives would strengthen the U.S. economy in terms of improving and sustaining the material well-being of most people.

    The basic issues here are who-which groups in society-are going to determine basic economic policies and by what values those policies will be formulated.

    Gman , February 7, 2017 at 12:22 pm

    An over extended Soviet Empire collapsed in no small part due to its obsession with winning a war, albeit one that thankfully remained 'cold', that it never could.

    A corrupt, nepotistic distant, paranoid elite that instead of dividing its efforts into looking after its own society's well-being, as well a apparently just defending it, opted for near as dammed bankrupting itself attempting to feed an insatiable military machine it could ill afford (and would mostly never use) at its increasingly disaffected, divided, restive people's expense.

    Mind you, they were just dumb Commies.

    JTMcPhee , February 7, 2017 at 3:25 pm

    First, did the Soviet state "bankrupt itself damm near" mostly by trying to feed an "insatiable military machine," or did the wealth of the Soviets get dissipated into other ratholes as well, alongside various external pressures and effects? And what scale applied to each political-decision "allocation"? One view, among a flood of intersecting and competing interpretations, of course:

    The stunning collapse of the Soviet empire in 1989-91 has often been heralded in the West as a triumph of capitalism and democracy, as though this event were obviously a direct result of the policies of the Reagan and Thatcher governments. This self-congratulatory analysis has little relation to measurable facts, circumstances, and internal political dynamics that were the real historical causes of the deterioration of the Soviet empire and ultimately the Soviet state itself. Fiery political speeches and tough diplomatic postures make good theater, but they are ineffective at forcing political transformation in totalitarian nations, as is proven by the persistence of far less powerful Communist regimes in Cuba and east Asia in the face of punishing trade embargos. The key to understanding the reasons for the demise of the Soviet Union is to be found not in the speeches or policies of Western politicians, but in internal Soviet history.

    1. Stagnation in the 1970s

    The Soviet Union was already in decline as a world power well before 1980. Any illusions of global Communist hegemony had evaporated with the collapse of Sino-Soviet relations in the 1960s. As the Nixon administration improved American relations with an increasingly independent China, the Soviets saw a strategic need to scale down the nuclear arms race, which placed enormous strains on its faltering economy. The threat of a nuclear confrontation was reduced considerably by the anti-ballistic missile (ABM) and strategic arms limitation treaties (SALT) contracted with the Nixon administration in 1972. This détente, or easing of tensions, allowed Leonid Brezhnev to focus on domestic economic and social development, while boosting his political popularity.

    Around 1975, the Soviet Union entered a period of economic stagnation from which it would never emerge. Increasingly, the USSR looked to Europe, primarily West Germany, to provide hard currency financing through massive loans, while the U.S. became a major supplier of grain.[1] Despite moments of anti-Communist grandstanding, the Americans and Western Europeans maintained trade relations with the cash-strapped Soviet Union, which dipped into its Stalin-era gold reserves to increase availability of consumer goods .

    Foreign trade and mild economic reforms were not enough to overcome the inefficiencies of the Soviet command economy, which remained technologically backward and full of corruption. Economic planners were frequently unable to diagnose and remedy problems, since they were given false reports by officials who only pretended to be productive. Soviet living standards remained poor by Western standards. By 1980, only 9 percent of Soviets had automobiles, which was actually a vast improvement under Brezhnev. Very little was computerized, due to state paranoia about the use of telecommunications for counterrevolutionary purposes. The USSR was able to endure this technological lag because its closed economy protected it from competition, but its ability to maintain military superiority increasingly depended on the ability to keep pace with Western modernization.

    In his radio broadcasts during the late 1970s, Ronald Reagan complained that the capitalist nations propped up the intrinsically flawed Soviet regime, instead of allowing it to naturally collapse from its own inefficiency and inhumanity.[2] In contrast to his later hagiographers, Reagan did not envision defeating the Soviet Union by forceful action, but instead he perceived that the regime would collapse from its own failings once the West removed its financial life support system. It is this early Reagan, far more thoughtful than he is generally credited, who proved to be most astute in diagnosing the state of the USSR. It did not need a foreign enemy to "defeat" it, for it was deteriorating from within.
    http://www.arcaneknowledge.org/histpoli/soviet.htm

    And I recall the Soviet military leadership was largely (no, not exclusively of course, humans being what they are) reacting to the clear and present danger that "the West" presented. Among many other considerations, of course. In the Great Game of "chicken," in which we all are mostly passengers in the speeding cars with loony drivers ya-hooing out the windows, I recall the Soviets were the ones to veer off from that head-on collision that might have ended it all earlier than it seems increasingly likely to end anyway. And Russian leadership seems more concerned about the survival of the nation than our own clown-car leadership.

    Seems to me that all of us ordinary people, many of whom would gladly take advantage of opportunities to do some looting themselves, to "get ahead" in the "rat race," if only those opportunities were presented, have insufficient collective concern about the many systems, living and political-economy, that apparently are collapsing or running out of control. And patently the military-security monkey that's riding our backs is doing a p!ss-poor job of "defending us" in any ordinary sense of the term, and not even a vary good job of playing Imperial Forces. Though of course the net effects of military and political chaos-building and destabilization do blast out a nice open-pit mine for corporate looters to get at the extractables..

    But yeah, the halls of history are full of echoes and shadows and reflections in a glass darkly And I wonder if London bookies are running a line on when history, as recorded and debated and acted out by humans, will REALLY end, thanks to our wonderful unbridled inventiveness and lack of that genetic predisposition to survive as a species that ants and termites and rats and cats and other "lesser creatures" seem to have

    Anon , February 7, 2017 at 12:50 pm

    Commies? That last paragraph sounds like post-WWII history in the US.

    Gman , February 7, 2017 at 2:13 pm

    ;-)

    jsn , February 7, 2017 at 12:53 pm

    Training people for jobs does not create jobs for them. Training would be an organic function of profitable businesses seeking employees. I'm old enough to remember what that was like.

    The issue is JOBS pure and simple for everyone that wants or needs one.

    Prosperous, secure people make progressive change possible: desperate, insecure people don't. If you want security, make people secure.

    Jonf , February 7, 2017 at 3:52 pm

    Gotta chime in here. You are right on the money here.

    dragoonspires , February 7, 2017 at 4:24 pm

    There's the rub. Because the only way in the future to ensure enough of these jobs may be by using tax money from the well off to at least partially fund the scarce and missing jobs that won't be created otherwise. How willing do you think they will be to see their tax dollars funding progressive causes? We say progressive/they say socialist.

    Until we convince enough people of these ideas and they actually vote (if their vote is still possible as suppression intensifies), this won't likely happen. If you have a better idea on how to create these well paying secure jobs in the face of automation, etc. outside of winning elections the old fashioned way and using policies, I'm open minded and listening.

    Marilyn Delson , February 7, 2017 at 1:05 pm

    Been down this "protections for workers" road before and the TPP (Obama, Clinton). Sorry neolib-neocon globalist oligarchs. Rewording the messaging still has the same shit outcome for the middle class.

    Synoia , February 7, 2017 at 9:48 pm

    The potential danger in this situation is twofold. On the one hand, the costs of these operations and the resulting strain on the U.S. government's budget can weaken the operation of the domestic economy.

    Really? When the US can just issue the dollars to pay the bills? How does this weaken the economy?

    TomDority , February 7, 2017 at 1:17 pm

    "Following World War II, when the U.S. accounted for more than a quarter of world output, it had tremendous economic power -- as a market, an investment source, and a source of new technology. U.S. firms had little competition in their global operations and were thus able to penetrate markets and control resources over a wide range (outside of the U.S.S.R., the rest of the East Bloc, and China)."

    IMHO

    – Of course we did because our investments were in technology, industry and production which was tightly coupled with investment in infrastructure with a "market" much more free from economic rent. Economic rent pushes all production costs up particularly where property prices (farm land, indutrial land and home land use) surge or boom.

    "U.S. government to pull back from these operations would be to accept a decline in U.S. global power."

    IMHO

    We are loosing global power not due to military projection but, that military projection is in support of financial projection which is a plague – responsible for global destitution in all the plenty the planet offers – we are obviously doing something wrong? yes. Further to that, we should not have weaponized finance and unleashed it on ourselves or anybody else. Yes, let us cede all to private interests – look how well that goes..snarc.

    "The potential danger in this situation is twofold. On the one hand, the costs of these operations and the resulting strain on the U.S. government's budget can weaken the operation of the domestic economy. "

    IMHO

    The costs of these (assume military) operations have not put a strain on US government budget but, the biggest strain on the budget is our unjust revenue system and finacialization of our economy where "investment" drives asset appreciation, making everything more expensive for living and working but, in no way involves the employment of labor to produce something worth having .say something like a habitable planet.
    So the real issue is we believe our own hubris to the point of mostly extincting the planet.

    Sorry for the sad rant we need to look at the basis for prosperity and of the opposite, instead we see the results and assume it to be a natural cause when in fact it is not natural.

    Below is a quote from near a hundred years ago

    GETTING SOMETHING FOR NOTHING

    ...The/reat sore spot in our modern commercial life is found on the speculative side. Under present laws, which foster and encourage speculation business life is largely a gamble, and to "get something for nothing" is too often considered the keynote to "success." The great fortunes of today are nearly all speculative fortunes; and the ambitious young man just starting out in life thinks far less of producing or rendering service than he does of "putting it over" on the other
    fellow This may seem a broad statement to some; but thirty years of business life in the heart of American commercial activity convinces me that it is absolutely true. If, however, the speculative incentive in modern commercial life were eliminated, and no man could become rich or successful unless he gave
    "value received" and rendered service for service, then indeed a profound change would have been brought in our whole commercial system, and it
    would be a change which no honest man would regret.-John Moody, Wall Street Publisher, and President of Moody's Investors' Service. Circa 1924

    Left in Wisconsin , February 7, 2017 at 2:14 pm

    Goods produced under conditions where workers' basic rights, to organize and to work under reasonable health and safety conditions, are denied would not be given unfettered access to global markets.

    American goods, too?

    steelhead23 , February 7, 2017 at 8:16 pm

    For policy-makers, decisions made on the basis of power, prestige, and profit are far more palatable than those made on the basis of human rights and the environment. This may seem simple, and the right thing to do morally, but it really is difficult. Your counterparties (let's say, the Saudis) are known to punish minor crimes severely and they routinely abuse foreign workers. So, you want to add a few dinars to the price of oil. "Not so fast," says the sheikh. "You have the largest prison population in the world, so we're adding a tax to the price of wheat," and midwest farmers are up in arms.

    Don't get me wrong. I happen to think that trying to even the playing field and improve the lot of workers and the environment worldwide is a great idea. I just think it would be very hard in reality and would create both domestic and international tensions.

    Dana , February 7, 2017 at 10:47 pm

    In this factual and historical state of affairs, is it necessary to prove in detail that there is no room today for any so-called political neutrality – the neutrality of the trade unions with regard to political parties and political struggles?

    Altandmain , February 7, 2017 at 11:16 pm

    There needs to be a push to reshore manufacturing into the US.

    I don't agree with Trump's other policies, but he's got an important point on this one. The US began to lose its middle class as the worst of the outsourcing happened.

    [Feb 07, 2017] Don't Side With Neoliberalism in Opposing Trump

    Notable quotes:
    "... By Les Leopold, the director of the Labor Institute, who is currently working with unions and community organizations to build the educational infrastructure for a new anti-Wall Street movement. His new book Runaway Inequality: An Activist's Guide to Economic Justice serves as a text for this campaign. All proceeds go to support these educational efforts. Originally published at Alternet ..."
    "... Thin Reed? Authoritarian rule for the oligarchs ..."
    "... Most manufacturing jobs are lost via automation, not outsourcing. ..."
    "... wasn't ..."
    Feb 07, 2017 | www.nakedcapitalism.com
    Posted on February 6, 2017 by Yves Smith Yves here. As reader John Z pointed out, the policy program described in this post is very much in synch with the recommendations Lambert has been making. One small point of divergence is that Leopold reinforces the idea that taxes fund Federal spending. Taxes serve to create incentives, and since income inequality is highly correlated with many bad social outcomes, including more violence and shorter lifespans even for the rich, progressive taxation is key to having a society function well. However, he does get right (as very few do) that the purpose of a transaction tax is to discourage the activity being taxed, rather than raise money (aside from the MMT issue, the tax would shrink the level of transactions in question, making it not very productive in apparent revenue terms).

    By Les Leopold, the director of the Labor Institute, who is currently working with unions and community organizations to build the educational infrastructure for a new anti-Wall Street movement. His new book Runaway Inequality: An Activist's Guide to Economic Justice serves as a text for this campaign. All proceeds go to support these educational efforts. Originally published at Alternet

    During the Bernie Sanders campaign I heard a high-level official give a powerful speech blasting the Trans-Pacific Partnership Act for the harm it would bring to workers, environmentalists and to all who cared about protecting democracy.

    Donald Trump now has signed an executive order pulling out of the TPP negotiations.

    Is this a victory or a defeat for the tens of thousands of progressives who campaigned to kill the TPP?

    On the same day Trump killed the TPP, he met with corporate executives saying he would cut taxes and regulations to spur business development. But he also warned that "a company that wants to fire all of the people in the United States and build some factories someplace else and think the product is going to flow across the border, that is not going to happen." He said he would use "a substantial border tax" to stop those practices.

    Is this a victory or a defeat for workers and unions who for three decades have been begging politicians to stop the outsourcing of decent middle-class jobs?

    Breaking the Spell of Neoliberalism

    Our answers may be clouded by four decades of the neoliberal catechism-tax cuts on the wealthy, Wall Street deregulation, privatization of public services and "free" trade. Politicians, pundits and overpaid economists long ago concluded that such policies will encourage a "better business climate," which in turn will lead to all boats rising. Instead those very same policies led to a massive financial crash, runaway inequality and a revolt against neoliberalism which fueled both the Sanders and Trump insurgencies. (See enough facts to make you nauseous.)

    This ideology is so pervasive that today no one is shocked or surprised to see Democratic governors on TV ads trying to lure business to their states by promising decades of tax holidays. No one gags when politicians lavish enormous tax gifts on corporations-even hedge funds-in order to keep jobs from leaving their states .

    Similarly, we have grown accustomed to the neoliberal notion that we should go deeply into debt in order to gain access to higher education. Free higher education, which was the norm in New York and California until the 1970s, was "unrealistic" until Sanders rekindled the idea.

    More troubling still, elites propagated the idea that public goods should not be free and available to all via progressive taxation. Rather public goods were denigrated and then offered up for privatization. Even civil rights icon Representative John Lewis used the neoliberal framework to attack Bernie Sanders' call for free higher education and universal health care: "I think it's the wrong message to send to any group. There's not anything free in America. We all have to pay for something. Education is not free. Health care is not free. Food is not free. Water is not free. I think it's very misleading to say to the American people, we're going to give you something free."

    Obama/Clinton Didn't, Trump did

    Ironically, while Lewis is defending neoliberalism, Trump actually is attacking two of its foundational elements-free trade and unlimited capital mobility. Not only is Trump violating neoliberal theory, he also is clashing with the most basic way Wall Street cannibalizes us. Without the free movement of capital, assisted by trade deals, financial elites and their corporate partners would not be able to slash labor costs, destroy unions and siphon off wealth into their own pockets.

    In particular, we should be extremely worried about how Trump is approaching the loss of manufacturing jobs. The neoliberal fog should not cause us to miss the obvious: presidents Obama and Clinton did absolutely nothing to stop the hemorrhaging of middle-class manufacturing jobs to low-wage countries. (U.S. manufacturing fell from 20.1 percent of all jobs in 1980 to only 8.8 percent by 2013.) Not only did Obama and Clinton fail to stop even one factory from moving away, but they truly believed that capital mobility and free trade were good for America and the world. In other words they had sipped plenty of the neoliberal Kool-Aid.

    Meanwhile, Trump is all in. He is saying that jobs in the U.S. are more important than the long-run benefits of capital mobility and TPP/NAFTA agreements. If he keeps bashing corporations for moving jobs abroad and if he manages to ignite even a mini U.S. manufacturing jobs boom, Trump could be with us for eight long years.

    But What About the Poor in Other Countries?

    To many progressives, saving American jobs sounds jingoistic and "protectionism" is a bad word. Isn't global trade helping the poor become less so around the world? Isn't it selfish only to protect American jobs? Isn't it more moral to share scarce manufacturing jobs with the poor in Mexico and Asia? After all, even if a plant closes in the Rust Belt, service sector jobs can be found at wages that still are far higher than what the poor can hope for in low-wage countries.

    You can be sure corporations will be playing this tune if Trump tightens the screws on capital mobility.

    These arguments however have little to do with how the world actually functions.

    No, it's not possible to make a credible progressive case for outsourcing your neighbor's job

    What Do We Do?

    The progressive instinct, and rightfully so, is to trash Trump. If he's for it, we must be against it. When it comes to immigration, civil rights, abortion, freedom of the press and many, many other issues, that's a sound strategy.

    But trashing Trump for saving jobs in the U.S. is suicidal.

    In opposing Trump, we must not slip into defending neoliberalism. It's not okay for corporations to pack up and leave. We should have some control over our economic lives and not leave all the crucial decisions to Wall Street and their corporate puppets. Trade deals are bad deals unless they enforce the highest health, safety, environmental and labor standards. And those measures must be enforceable by all the parties. The race to the bottom is real and must stop.

    In the U.S. We Should Be Mobilizing the Following Areas:

    1. Organize the outsourced : We should identify and organize all those at risk from off-shoring. We need to make sure Trump and Congress hear from these actual and potential victims. Trump needs to be reminded each and every day that there are millions of jobs he must protect. At the same time we should be rounding up support for the Sanders bill to stop off-shoring .

    2. Resist: Trump has made it clear to corporate America that in exchange for job creation in the U.S. he will cut their taxes and regulations. We should demand that all tax "reforms" include a new financial speculation tax ( Robin Hood Tax ) on Wall Street to slow down their insatiable greed. Also, we need to fight tooth and nail against any weakening of workplace health, safety and environmental regulations. We have to destroy the Faustian bargain where jobs are protected but the workers and the communities are poisoned.

    3. Connect: More than 3 million people protested against Trump. But it is doubtful that dislocated workers and those facing outsourcing were involved in these marches. That's because the progressive movement has gotten too comfortable with issue silos that often exclude these kinds of working-class issues. That has to change in a hurry. We need to reach out to all workers in danger of off-shoring-blue and white collar alike.

    4. Expand: Many key issues-from having the largest prison population in the world to having one the lowest life-spans-are connected through runaway inequality . Outsourcing is deeply connected to the driving force behind runaway inequality-a rapacious Wall Street and its constant pressure for higher returns. We need to broaden the outsourcing issue to include stock buybacks and the other techniques used by Wall Street to strip-mine our jobs and our communities. It's time for a broad-based common agenda that includes a Robin Hood Tax on Wall Street, free higher education, Medicare for All, an end to outsourcing, fair trade and a guaranteed job at a living wage for all those willing and able.

    5. Educate: In order to build a sustained progressive movement we will need to develop a systematic educational campaign to counter neoliberal ideology. We need reading groups, study groups, formal classes, conferences, articles and more to undermine this pernicious ideology. Some of us are fortunate to be part of new train-the-trainer programs all over the country. We need to expand them so that we can field thousands of educators to carry this message.

    Yes, all of this is very difficult, especially when it seems like a madman is running the country. It is far easier to resist than to tear apart neoliberalism. But we have to try. We need to recapture the job outsourcing issue and rekindle the flames that ignited Occupy Wall Street and the Sanders campaign.

    34 0 191 0 2 Gerard Pierce , February 6, 2017 at 3:28 am

    Les Leopold explained some of his beliefs on the Smirking Chimp. I made a comment to that article that I think should be repeated here ==>

    At the moment, it's hopeless because we do not have a platform.

    Most of the supposed liberals out there cannot defend welfare of any kind, cannot defend Social Security and cannot defend most of what they supposedly stand for in any kind of intelligent way.

    There are circumstances where "welfare" is a moral necessity. There are also circumstances where you tell the claimants to get a job. Sometimes you help them to get that job.

    It's necessary to be able to tell the difference and to be able to explain the difference.

    Too many supposed liberals do not understand how the labor movement became corrupt enough that "right to work" looked good to people who were paying dues and getting little back.

    If you do not understand your own "liberal" beliefs, some uneducated red-state buffoon will make you look like the bad guy

    You not only need to understand your own beliefs, but you need to be able to debate them with other wanna-be liberals until you have a platform that means something.

    flora , February 6, 2017 at 3:41 am

    "we do not have a platform ."

    The Sanders' campaign platform works for me.

    BeliTsari , February 6, 2017 at 6:30 am

    Yep, everything Trump will do to bait Liberal "resistance," they will eagerly fall for. It leaves a LOT of wiggle room for a movement to get between DC's Kleptocrats and Trump's supposed constituency (victims? marks?) about to lose their jobs, homes, equity, retirements & kids to imperialistic wars. If there's a Left in this country, it simply HAS to be more than white kids on TV, in black face masks we need to dodge Trump's trolling and fight unremittingly FOR living wages, job safety, healthcare, upwards mobility & AGAINST a predatory FIRE sector, ALEC kleptocracy & their media's 24/7 reality infomercial. For way too long, the whole good cop/ bad cop scam has been Yuppie liberals vs Oligarch's running dogs, we've tried to live off any chunks that'd trickle down through the maelstrom above our heads, to which we were not invited

    nycTerrierist , February 6, 2017 at 9:17 am

    Same here.

    Katharine , February 6, 2017 at 10:04 am

    +1

    Mel , February 6, 2017 at 12:05 pm

    Quite. No reason Sanders' platform can't be used. There's also a 5-point platform right in plain sight at the end of Leopold's article.
    Some people seem to have this urge to outsource the platform to somebody else - the Democrat Party, or maybe others. No. No need to go elsewhere. There's two platforms right here. Use them.

    b1daly , February 6, 2017 at 5:53 am

    The problem is that economic systems are complex, emergent phenomena. They influenced by culture, chance, ideas, tribal instincts, technology (including financial technology), geography, tradition, the environment, human nature, migration, religion, and on and on.

    This notion that something as complex as human society can be analyzed under an intellectual construct, whether neo-liberalism, socialism, or Rastafarianism defies common sense. Centuries of intense theorizing by some very smart people have led to an understanding of parts of social systems. But, for example, economists disagree profoundly on basic aspects of macroeconomics.

    Neo-liberalism is not even a well defined concept. I don't know of any politician in the US who declare themselves "neo-liberal." Read the Wikipedia article to see just how poorly this concept is defined.

    Among some self-imagined progressives it's become a perjorative term to apply to leaders who they disagree with. IMO, politicians do not govern according to abstract concepts. The honest ones are simply trying to govern, in the context of the society they live in. At times, historically unique situations arise, and political leaders are stumped for solutions. At such a time, some kind of think tank might propose their pet theory to be considered as a factor in making decisions (the "neo-cons" had their chance in the build up to the Iraq war).

    I want Trumps ability to wreak havoc on the economy and civil infrastructure minimized, and him gone as President as soon as possible. This is not going to be easy. If, at the same time, think you can throw in the reform of global economic structures, and succeed, you're delusional.

    FWIW, to the extent that policians like Chuck Shumer or Hilary Clinton are influenced by neo-liberal ideas, it is at the level of ideas. People can change their mind, or have it changed, on things like this. Quickly. In contrast to something like pro-Zionist policies, to which a polician might have a deeper attachment, very resistant to change.

    Outis Philalithopoulos , February 6, 2017 at 11:09 am

    I was a bit confused by this comment.

    The first two paragraphs are making a broad sort of argument, which if taken with its full force seems to mean that any attempt to use theoretical generalizations to understand the world is oversimplifying and therefore questionable.

    The third and fourth paragraphs take issue more specifically with the term "neoliberalism."

    However, the fifth paragraph seems to imply that anti-neoliberalism involves "reform of global economic structures," and therefore maybe isn't as poorly defined as the previous paragraphs would have led one to assume.

    Meanwhile, the sixth paragraph undercuts the fifth. The fifth implies that opposing Trump is so important that we should temporarily abandon any attempt to move the discourse on the overall economic direction of the country or the world. The reason given is that moving said discourse is supposed to be a herculean, nearly impossible task. The sixth paragraph, instead, suggests that Schumer and HRC can have their mind changed "quickly" on these sorts of issues, and so maybe the overall project isn't so infeasible after all.

    Vatch , February 6, 2017 at 11:55 am

    "FWIW, to the extent that policians like Chuck Shumer or Hilary Clinton are influenced by neo-liberal ideas, it is at the level of ideas."

    I'm skeptical about this. Chuck Schumer and Hillary Clinton are influenced by neo-liberal ideas at the level of massive donations to their campaign committees or family foundation.

    jrs , February 6, 2017 at 12:20 pm

    If you just get Trump gone, another Trump or worse will be produced in a decade or so (never mind Pence in the meantime, that we could endure, I'm focusing longer term). An awful system, that makes everyone poor (mass impoverishment), stupid, and exhausted, produces awful results in terms of governance (money in politics does not help of course).

    old flame , February 6, 2017 at 12:46 pm

    I always took neo-liberalism to mean world domination by banks FIRE sector and neoconservatism by the military and their suppliers and also oil which greases the military wheels. Farms fall into the latter I guess for the defense of the "landed gentry". Watched the farm reports lately and they are quite upset by the non-passage of the TPP which would have given them higher price supports. All of it is ruled by multi-nationals' money and clout so there is overlap.

    flora , February 6, 2017 at 2:22 pm

    Don't equate the giant corporate agri-biz sector – Monsanto, ADM, IBP, et al – with small family farms. Factory farms might be for TPP. The small family farm, the independent farmer, not so much.

    see, for example:
    http://www.sraproject.org/2014/11/unfair-trade-ttp-and-ttip-vs-family-farms/

    flora , February 6, 2017 at 2:43 pm

    adding: Wall St speculates in grain and farm/food commodities. Wall St isn't happy with the demise of TTP. This from a few years back, but still relevant.

    " Futures markets traditionally included two kinds of players. On one side were the farmers, the millers, and the warehousemen, market players who have a real, physical stake in wheat .

    "On the other side is the speculator. The speculator neither produces nor consumes corn or soy or wheat, and wouldn't have a place to put the 20 tons of cereal he might buy at any given moment if ever it were delivered. Speculators make money through traditional market behavior, the arbitrage of buying low and selling high. And the physical stakeholders in grain futures have as a general rule welcomed traditional speculators to their market, for their endless stream of buy and sell orders gives the market its liquidity and provides bona fide hedgers a way to manage risk by allowing them to sell and buy just as they pleased.

    "But Goldman's index perverted the symmetry of this system. The structure of the GSCI paid no heed to the centuries-old buy-sell/sell-buy patterns. This newfangled derivative product was "long only," which meant the product was constructed to buy commodities, and only buy. At the bottom of this "long-only" strategy lay an intent to transform an investment in commodities (previously the purview of specialists) into something that looked a great deal like an investment in a stock - the kind of asset class wherein anyone could park their money and let it accrue for decades (along the lines of General Electric or Apple). Once the commodity market had been made to look more like the stock market, bankers could expect new influxes of ready cash. But the long-only strategy possessed a flaw, at least for those of us who eat. The GSCI did not include a mechanism to sell or "short" a commodity. "

    More neoliberalism in action. It doesn't benefit either the small farmer or the person buying groceries.

    flora , February 6, 2017 at 2:46 pm

    oh, link:
    Foreign Policy
    How Goldman Sachs Created the Food Crisis, 2011
    http://foreignpolicy.com/2011/04/27/how-goldman-sachs-created-the-food-crisis/

    Wall St. certainly wants the TTP.

    Brad , February 6, 2017 at 1:20 pm

    Either reality is an unknowable fog, or it isn't. I say its knowable, however complex.

    PH , February 6, 2017 at 6:11 pm

    I agree many people here get caught up in labels. I think there is value in iconoclasm, but ultimately we have to take practical actions if we want to avoid trouble. Or, at least, avoid the worst trouble.

    Many who comment do not seem to take seriously the danger of right wing fanaticism. I am not sure what would convince them.

    Unfortunately, we may find out someday.

    that guy , February 6, 2017 at 7:38 pm

    You might be right. I certainly don't take right wing fanaticism seriously. Moreover I don't think it should be taken seriously, and unless things seriously changed recently, I live in a state that, statistically, has a lot of right wing fanatics.

    They're not organized, they don't have a message that truly appeals, they don't have messengers with mass appeal, there's nothing there anyone can build on. Moreover, anti-immigrant sentiment comes and goes. In the 1840's we were having riots and people were beating Irishmen in the street because the economy sucked. But when things don't suck so bad economically, that evaporates like the morning fog.

    Until right wing fanaticism can look like anything other than some angry guy with too many tattoos shouting angry slogans, or some weird dude who wants to actually create White America that srsly nobody listens to, y'know, until there's some unifying figurehead who can take it further and make it sensible-sounding and mainstream to the folks at home who work a 9-to-5, it's not even worth worrying about. I'm more worried about left wing extremists who show up in huge mobs and cause property damage, personally.

    Altandmain , February 6, 2017 at 10:43 am

    They are liberals, not left wing people.

    By that I mean, they want neoliberal econoimcs with a socially left wing platform. No wonder they hate the left and supported Clinton so much. They want the status quo. Many are safely in the upper middle class, as the comments on the Women's March in Washington DC have revealed. They will never have to deal with the consequences of neoliberalism.

    The Sanders base by contrast wants left wing economics and socially.

    NotTimothyGeithner , February 6, 2017 at 11:45 am

    The neoliberals don't even want left wing social identity progress. They just use it as a tool to capture voters. Team Blue types did jack to advance social issues until they were forced too or were simply bypassed. Obama's "personal endorsement" of gay marriage was covered by his support of state rights.

    Allegorio , February 6, 2017 at 12:14 pm

    Remember "Don't ask, don't tell."? Oh so socially liberal!

    jrs , February 6, 2017 at 12:25 pm

    Is anyone all that safely in the middle class these days? Even if they have a nice middle class job, so much that they don't have to worry about age discrimination as they get older? I don't think so. So much that even if they have a nice plum insurance plan at work, they never have to worry about healthcare for themselves or their loved ones? I'm not so sure

    But sure it's not as immediate a threat, doesn't have the immediacy of say facing immediate eviction for the lack of a rent payment or something.

    Michael Berger , February 6, 2017 at 4:44 am

    What appeals to me most is the recognition here (item 3.) of the same concern for visa holders being locked out of entering the country needing to be shown to the laboring class already in the country.

    For those laborers, seeing a few hundred (or goodness gracious, a few thousand) people protesting another production line being shipped off is better "messaging" than anything our ruling class will ever manage to conceive.

    Seriously, I can think of no better image than social justice warriors standing up for workers desperate enough to vote Trump (or resigned enough to not vote at all).

    There are potential friendships – or allyships if you prefer – to be created that could do wonders for much beyond economic concerns.

    John Rose , February 6, 2017 at 12:41 pm

    This has been my position from the early days of the Tea Party movement when I couldn't understand why the Democratic Party immediately sent organizers to help them with both organization and more importantly consciousness-raising.

    Kramer , February 6, 2017 at 5:12 am

    My problem is that I'm in a Red state. Democrats don't win elections here. I need a political organization that can give me the best possible republican. This would look like America first economics to protect American jobs (there is a huge appetite for this among the Republican voters I talk to.) It would mean accepting conservative social positions. The democratic party might be able to this but it would require one hell of a make over.

    b1daly , February 6, 2017 at 6:08 am

    It would, but it might be doable. A lot of the divide in American politics is around "the culture wars." I think people can adopt new ideas, and ways of looking at things, if they get that "tribal sanction."

    This is just arm chair theorizing, but one of the big hang ups is that cultural difference is interwoven with historical precedents that operated at a more substantive, fundamental level in the society. For example, the theories of white supremacy were used to justify the appalling institution of slavery in the US. At that time, this enabled the dominant culture to benefit at the expense of the exploited.

    But when cultural conditions change, such that economic systems like slavery are no longer operative, the ideas of white supremacy can live on as simply cultural identity.

    For all the problems of our society, we have made progress, and the overt, legal racism that existed just 50 years ago has been minimized. So perhaps people interested in social justice can relax the hyper-vigilant, hyper-accusatory attitudes of political correctness, to make common cause with populations they have common interests with.

    When social justice activists use the label of "racist" as a badge of shame on someone who transgresses whatever social line, it tends to cause hurt feelings. And accusations of reverse racism. Sigh. It could be different.

    Terry Humphrey , February 6, 2017 at 11:07 am

    They divide culturally because the social and economic is too complex to put on a sign.

    Allegorio , February 6, 2017 at 12:27 pm

    The Kulture Wars were specifically designed to put economic and Class issues on the back burner, Divide and Rule. What is the point of Lady Gaga waving her pussy in our faces at the super bowl, but to drive the socially conservative working class into the Republican party. Frankly the issue of who sleeps with who, who marries who and who has a baby, is done , covered by the assertion of privacy protection by the constitution. In any case, economic justice should take precedence. Time to move on from socially divisive issues.

    Booqueefius , February 6, 2017 at 4:22 pm

    Love your line about Lady Gaga. It is as if the powers that be understand completely the "backfire effect" and deploy it consciously to their advantage.

    Steve H. , February 6, 2017 at 8:41 am

    I completely disagree. While party organizations in red states may have little impact on those elected from their state, a hostile takeover of a state party can have real impact in terms of control of the national organization.

    NotTimothyGeithner , February 6, 2017 at 9:49 am

    Democratic Parties in red states especially are interested in keeping their invitations to Inaugural balls and holding Jefferson-Jackson (one would think these would have been renamed by now given how totes woke Team Blue types are, sarc) dinners. Who knows what could happen if they cared about results?

    NotTimothyGeithner , February 6, 2017 at 9:34 am

    I disagree. "Good Democrats" can win. People respect people who fight for their values or seem to fight for those values more than say a Hillary. The messaging of Hillary as a defender for women and children wasn't an accident.

    The problem for the "deplorables" in regards to Team Blue is the neo liberals treat their concerns with contempt and have a recent history of betrayal.

    It might take a while, but Virginia's fifth congressional district is the largest district by area east of the Mississippi. It's bigger than New Jersey and a relatively good Democrat (probably not the most pro choice person) won in 2008 against a Republican who won by huge numbers every years. That win didn't start in early 2008. It started in 2001 with a couple of sacrificial lambs to build operations to register voters, making sure the blue precpincts were registered and to go into the precincts that should be blue believed they can win.

    I believe people will make good choices when presented with options, but putting up a non entity with cash who bemoans partisanship especially those "tax and spend liberals" is why Democrats fail. How did Alan Grayson get into Congress despite running in a district that went for Bush/Cheney twice while an adjacent district that went for Gore and Kerry keeps sending Republicans to Congress? The answer is people respect when they aren't being pondered too, and that is all Clinton Inc knows how to do.

    John Rose , February 6, 2017 at 12:47 pm

    This is probably how it needs to be done, district by district. Was this entirely home-grown or was there outside help from move-on or other groups?

    NotTimothyGeithner , February 6, 2017 at 2:46 pm

    Entirely home grown for all intents and purposes. Lynchburg produced a fair amount of volunteers and money despite not being in the actual district.

    Dean's 50th the strategy didn't come from no where. The Internet existed before Facebook, and people have long memories of Democrats that did organization before 1994 (gee, I wonder who was in charge of Team Blue) and the destruction of the then permanent Democratic majority. People discussed this all over. Admittedly, I didn't entirely buy it until Kaine thumped a well liked Republican in 2005 running up the vote tally in areas where people had been organizing.

    There is a reason why Clinton Inc is despised by otherwise seemingly, sensible Democratic types. The Clintons under perform because they run childish goldilocks campaigns. In 1992, Bill mustered 43% of the vote against 41 and a guy who basically wanted to bring back prohibition.

    Philip Martin , February 6, 2017 at 9:26 pm

    Thanks for bringIng up Dr. Dean's 50 state strategy. What the heck happened to that? I'm convinced that the strategy was a good part of Obama's victory in 2008. In Kansas, the Dems took a seat from the Republicans that year, and won Indiana and North Carolina. Lost Missouri by only 4000 votes. We could compete in these states and others (Arizona, Texas, Georgia) if the state Democratic parties would arouse themselves and do a bit of listening to people in their state.

    ArkansasAngie , February 6, 2017 at 7:01 am

    No more wedgies.

    We are so wedged that we cannot form coalitions.

    The Fallacy of the false dilemma.

    Example we are wedged on refugees. How about we stop bombing Syria so that the urgency of refugees is reduced.

    PH , February 6, 2017 at 7:12 am

    Not sure study groups are the answer. Couldn't hurt, I suppose.

    The article makes it sound like there was nothing but a clash of ideas for 40 years.

    Out of the 70's there was a lot of racism and resentment at the stagflation that got channeled into Reagan. The right wing think tanks started an Amen chorus, abortion wars reached a fever pitch, and Dems started scrambling to try to win elections that they used to win on a FDR platform.

    Then came the bubble of the 90s, and Wall Street Dems looked like geniuses.

    A lot of people were drinking the Koolaid. Not just sold out Dem pols.

    New day now. Lessons have been learned. Unfortunately, many people have learned the wrong lessons, nodding to the siren call of fanatical nationalism and Trump.

    I am not sure what plan the proprietors of this blog favor, but I hope it includes the Dem party because that thin reed is the only thing between us and authoritarian rule for the billionaires.

    Eureka Springs , February 6, 2017 at 8:48 am

    Thin Reed? Authoritarian rule for the oligarchs

    The Dems are the very embodiment of neoliberalism, representatives of oligarchs and soft sellers of authoritarian rule. Far far on the wrong side of the thin reed.

    As the post mentioned – Largest imprisoned, in the world. Lowest life expectancy, for highest expenditures.Allowing millions to be foreclosed upon while further enriching the banksters who rigged the system. That's authoritarian in an extreme and only a few oligarchs benefit. Neoliberalism/Liberalism is authoritarian. Dems are the first to shoot down those who challenge them with so much as polite rhetoric. Feckless as Sanders was he clarified that for anyone who dare look-see, admit it to themselves.

    If Dems were the only party in existence we would be where we are today, if not far worse. Just the way they structure and operate their party is more than enough to prove these points.

    Love the post title but I would wear a t-shirt which say either of these things:

    Don't Side With Neoliberalism in Opposing Trump.

    Don't Side With Democrats in Opposing Trump

    In fact I would prefer the latter.

    PH , February 6, 2017 at 10:51 am

    Why do you prefer Trump and the Republicans?

    Mel , February 6, 2017 at 12:18 pm

    Who said prefer? The thing with siding with the Democrats in opposing Trump is that in four or eight years we're left with nothing but siding with somebody else in opposing the Democrats. How about getting something done, finally? Crazy dream: make the Democrats side with us in opposing Trump.

    tegnost , February 6, 2017 at 9:17 am

    Naked Capitalism is both a reading and study group hey here's a thought, why don't the dems try to include usians, we're not democrats we're americans, after all, and we don't need them if they're going to continue to play the game as they have been playing it, supporting authoritarianism and heaping favors on billionaires. I don't see lessons having been learned, none of the hillary marchers I know can have a cogent , fact based conversation, it's just omg trump, marching is good, globalization o care what will the poor illegal immgrants do, cheap labor is essential, self driving trucks blah blah blah bail out wall st while fraudulent MERS documents are fabricated to steal peoples homes, remember linda green, remember non dischargeable student loans? Have you noticed all those tents under the bridges? The dems ruled for the 10% but it's a big country and a numbers game. You need to get out more. If the dems wanted to win bernie was the ticket. Instead they chose wall st and war then lost like they deserved to lose. In a representative democracy they are supposed to represent us, we're not supposed to represent the dems. They'll be included when they deserve to be, no one owes them allegiance.

    PH , February 6, 2017 at 12:07 pm

    I understand you do not like Dem leaders. But ultimately, the politics are not about them. It is about us.

    How do we protect our kids, our parents, and our friends.

    It involves organizing behind candidates at election time.

    And at this point in time (where we are now) that means organizing through the Dems, through the Repubs, or some third party.

    None of those options are obvious paths to success.

    But we have to pick one, or do nothing.

    jrs , February 6, 2017 at 12:34 pm

    "And at this point in time (where we are now) that means organizing through the Dems, through the Repubs, or some third party."

    Sometimes I figure it may as well be the Repubs (but not of course with their current platform, yea I know people think the Dems is an easier party to take over, but due to LOTE voting I'm not so sure.

    beth , February 6, 2017 at 7:46 pm

    Maybe you can tell me which is better? Cory Booker voted to prevent importation of Canadian drugs to lower the outrageous rx costs. Ted Cruz voted to import drugs so that we are not held hostage to US companies raising drug costs with impunity. Unless the dems are benefiting citizens why should we support them. Bernie's bill would have passed except for 14 dem senators voted to keep drug costs high . Who should we vote for in the next election?

    I hope I am not posting too late. Please delete this if you think I am.

    PH , February 6, 2017 at 9:51 pm

    Booker is a phony. Cruz is a creep. Not much to cheer for in either case.

    I am not suggesting that you owe allegiance to any candidate or party.

    I am suggesting that party politics is an avenue for organizing, and Dem party and traditional coalition is the better avenue for action. Not to do the same things, but to work for peace justice and tolerance.

    Where to target work for change.

    The Repubs are not what some people here imagine. And they will do great harm.

    Ulysses , February 6, 2017 at 7:43 am

    "That thin reed is the only thing between us and authoritarian rule for the billionaires."

    No, that "thin reed" would have continued to obfuscate the existence of authoritarian rule for the billionaires through cynical, insincere manipulation of idpol wedge issues.

    The regime change we are witnessing, here in the U.S., is the cutting out of a layer of cynical, professional grifters between the kleptocrats and the people. In other words authoritarian rule for the billionaires is morphing into direct, in-your-face kleptocracy by and for the billionaires.

    There was an important discussion earlier, here at NC, that I think is relevant to our current situation, sparked by Kalecki's observation that:

    "One of the important functions of fascism, as typified by the Nazi system, was to remove capitalist objections to full employment."

    http://www.nakedcapitalism.com/2012/08/kalecki-on-the-political-obstacles-to-achieving-full-employment.html

    It is understandable that American workers would find a genuine commitment to full employment, after so many decades of neoliberal job outsourcing, exhilarating.

    Yet, smashing unions and "othering" large segments of the population didn't end well for the Germans in the mid-20th century, and there's no reason to believe it would work out any better over here.

    PH , February 6, 2017 at 8:16 am

    Maybe that was a significant aspect of the rise of Nazi rule, but it seems to me a bit reductionist to see the Nazis through such a narrow lense.

    Similarly, I think we should resist the temptation of seeing Trump exclusively through the lenses of our anger at Bluedogs for getting us into this mess. I am angry. And those soulless climbers are still running the show in Congress. I am angry about that too.

    But these are dangerous times. We need to organize. We need to win elections. And we do not have ANY easy path that I can see.

    In my view, we need to channel our energy into primary challenges in the Dem party.

    Gman , February 6, 2017 at 9:53 am

    The US Democratic Party has more than a little in common with the British Labour Party sadly.

    I wouldn't pin your hopes on their resolve to stand up for the average working voter in the face of big money interests.

    Both parties have steadily rendered themselves irrelevant to their erstwhile core voters through a toxic combination of venality, hubris, contempt, obsessive virtue signalling/ political correctness, vacuous ideologies, a reliance on endless empty rhetoric, populism, 'foreign misadventure' and much more besides.

    Their currency, in the eyes of swathes of once loyal voters, has been so devalued under the leaderships of flag of convenience crypto-neoliberal politicians like Blair, Brown, the Clintons and Obama that this is going to be a Herculean task to row back from in order to recentre and reconnect with betrayed, bruised voters.

    Trump might be a crass out and out shameless, populist, self-serving sociopathic assh#le, but unlike those mentioned above, in the eyes of many of those disenfranchised who backed him, some most likely out of desperation, at least he's currently less of a lying hypocrite and, more importantly, he hasn't let them down badly yet.

    Ulysses , February 6, 2017 at 10:56 am

    "Both parties have steadily rendered themselves irrelevant to their erstwhile core voters through a toxic combination of venality, hubris, contempt, obsessive virtue signalling/ political correctness, vacuous ideologies, a reliance on endless empty rhetoric, populism, 'foreign misadventure' and much more besides."

    Very well said!

    Gman , February 6, 2017 at 3:20 pm

    Many, many thanks.

    Steven Greenberg , February 6, 2017 at 8:37 am

    This is not quite right "Trade deals are bad deals unless they enforce the highest health, safety, environmental and labor standards."

    Labor in the underdeveloped countries consider some of this to be the developed countries' trick of preventing the people in the underdeveloped countries from getting jobs. There is some truth to this idea. When we negotiate trade deals, we must remember that in a fair negotiation neither side gets everything it wants, but each side must get enough of what it wants to agree to the terms of the negotiation.

    The trouble with past trade pacts is that only the corporations on both sides of the deal were represented. In the future, labor and environment on both sides must be represented in the negotiations.

    tegnost , February 6, 2017 at 9:25 am

    not quite right, the stateless multinationals play both sides off each other. Globalzation deals like TPP with ISDS clauses are designed to limit sovereignty. We have free trade, you can go anywhere in the world and buy whatever you want to, your "fair negotiation" is a canard and misdirection.

    John Wright , February 6, 2017 at 9:33 am

    One may also refer to USA communities who will accept higher levels of pollution caused by an EPA targeted local industry/plant that provides local jobs where they are in short supply..

    This is very similar to a foreign country accepting higher pollution in trade for jobs for their citizens.

    When someone is desperate to support their family, compromises are made, and the USA has plenty of examples.

    BeliTsari , February 6, 2017 at 10:03 am

    That's kind of representative of the basic problem: before the white working class morphed into The Middle Class during Reagan's Miracle, they'd long since abandoned hell with the lid off, for suburbia (the nation's economy was based upon this; unions, political parties, finance all fed off of upward mobility, basically away from the poor, polluted, neglected, heavily policed industrial areas (bottom feeders like Trump's dad or DNC's slumlord super-delegates hardly invented this). EZ Credit, Bail Bonds, Party Stores, doc-in-a-box, PayCheck Loans sucked-up what the politicians' business associates left behind. As Trump moves on from trolling liberal elites to fomenting race war, mass incarceration, etc, as LBJ, Nixon, Reagan & Clinton did with urban renewal, the war on drugs, welfare reform some of us will scrambling to figure out just how we're not just another part of the problem?

    BeliTsari , February 6, 2017 at 12:15 pm

    PS: The rust belt is a fascinating place just now! http://www.adweek.com/brand-marketing/the-ending-of-84-lumbers-super-bowl-ad-is-a-beautiful-and-provocative-take-on-immigration/

    John Rose , February 6, 2017 at 1:04 pm

    I wish I was still building houses so I could change suppliers.

    jrs , February 6, 2017 at 12:37 pm

    U.S. = 3rd world country.

    digi_owl , February 6, 2017 at 8:47 am

    As best i can tell, the neolibs have hijacked feminism for their own ends

    NotTimothyGeithner , February 6, 2017 at 9:19 am

    "When fascism comes to America, it will be wrapped in the flag and carrying a cross." -Upton Sinclair

    One group of corporate war mongers likes different symbols.

    polecat , February 6, 2017 at 3:17 pm

    A contemporary version of that Sinclair quote could be stated as such :

    "When Neo-fascism comes to America, it will be wrapped in a Lady Gaga p#ssy-gown and carrying a case of birth-control pills . while screaming 'White, Deplorable, F#cker' !!"

    Gaylord , February 6, 2017 at 9:44 am

    Offshore tax sheltered wealth in the trillions must be reigned in, but nobody in a position of leadership is allowed to touch it, only to make token noises about it like Sen. Warren does.

    John Wright , February 6, 2017 at 9:58 am

    It appears that Leopold misses another issue that hits American workers, that being the "insourcing" of foreign workers, either legally (H1-B's) or illegally to the USA.

    American workers are certainly aware that some jobs can be outsourced via computer/phone networks to other countries, but are also aware that neo-libs have been more than willing to also let jobs that require a physical presence in the USA be wage arbitraged down via increasing the domestic labor supply via immigration.

    I don't believe the old assertion that "an immigrant displacing an American worker frees the American to find a better job" gathers much support from American workers/voters, if it ever did.

    Trump tapped into this, and the Democrats will ignore this issue at their peril..

    Neither political party wants to enforce employer sanctions, via mandatory E-Verify, as that would be frowned on by both party's paymasters.

    Sam , February 6, 2017 at 9:59 am

    "Trump actually is attacking two of its foundational elements-free trade and unlimited capital mobility. Not only is Trump violating neoliberal theory, he also is clashing with the most basic way Wall Street cannibalizes us. Without the free movement of capital, assisted by trade deals, financial elites and their corporate partners would not be able to slash labor costs, destroy unions and siphon off wealth into their own pockets."

    Given the ease with which Trump reverses himself, I wouldn't take these utterances seriously.

    Vatch , February 6, 2017 at 10:03 am

    At the same time we should be rounding up support for the Sanders bill to stop off-shoring.

    I couldn't find "Outsourcing Prevention Act" at Congress.gov. It is possible that the bill hasn't been introduced yet? Or maybe it has another name? I found these possibilities:

    H.R.357 – Overseas Outsourcing Accountability Act

    H.R.685 – Bring Jobs Home Act

    S.234 – A bill to provide incentives for businesses to keep jobs in America.

    Carolinian , February 6, 2017 at 10:05 am

    Good article but needs an addendum: don't side with Democrats in opposing Trump. There's a case to be made that Trump himself is really an independent even though he has by necessity stuffed his administration with some GOP trogs. Therefore when Trump does something our side likes he should be praised even though it might diminish the chances of the dearly sought Trumpexit. The US public at large increasingly see themselves as independents rather than supporters of the duopoly and the left–including and perhaps especially Sanders–should stop fooling themselves that they will ever reform the Dems. In fact the thing that might do the most to reform the Dems would be some vibrant third party competition that forces them to protect their left flank.

    PH , February 6, 2017 at 2:24 pm

    Nothing wrong with a third party approach in theory.

    In practice, it would likely take many years. It is not culturally accepted, nor do our voting laws favor third parties.

    I do not think we have that much time.

    joe citizen , February 6, 2017 at 4:05 pm

    But we have enough time to hope the Democratic Party who is completely subservient to corporate interests will suddenly decide to forget about all the money they are making and side with the workers, poor, and the environment? Voting in all new people would take many years, not to mention the party structure that cannot be changed by voting. The majority of registered democrats support neo-liberal candidates. How do you propose this quick change of the democratic party to support traditional leftist policy will take place?

    paul Tioxon , February 6, 2017 at 10:18 am

    Note to self: I will not be bamboozled into self-destructive political adventurism by mindlessly opposing the perfectly legitimate President Trump when ever he happens to do something so swell that helps pay the rent, buys food and keeps a roof over my head. I will stop going to ALL of those protest marches that demands that rowhouse Philadelphia give up their jobs in reparations for neo-colonial and hegemonic neo-liberal bad stuff by sending them to Mexico and the Dominican Republic or even Viet Nam or China. I understand that people in America are people too, and need their jobs and do not have trust funds to live off of when they donate their employment with no hope for a replacement job to prevent a downward spiral into poverty.

    I get it, by not focusing on real pocket book issues and major social programs, like the ones we used to get in the afterglow of post WWII economic expansion, we just left the barn door open for all of the wronged white guys in coal mines, all 57,000 of them nationally, to come out in the full force of democracy in action under our definition of democracy, the electoral college. By not recognizing that the iron law of democracy, where the consent of the majority of people is the deciding principle in American politics, and marching after a political loss instead of going out in front of the coal mines and factories and laying down in front of the trucks hauling jobs away, I am a dope. I promise to fete The President Trump in editorial pages, blog sites, graffitti on walls and other public property when he creates jobs as a result, direct or indirect, of his policies. After all, it is axiomatic that if Trump repeatedly fails to do anything of value for our nation, most of us will suffer. If he puts forth an infrastructure financial package with the Japanese and their global investment bank, I will hail as a partnership in progress.

    After all, if we can fix up the country's faltering highways and bridges and air ports and sea ports, we will modernized America, give people good paying jobs. And that is a good thing. I am all for it. President Trump is supposed to be all for it. So, when the jobs start pouring in with all of the concrete and rebar, I will not protest. I will publicly applaud him. I will however be organizing behind the scenes to crush him like a bug in the next election. I foresee a bidding war in jobs offered to the forgotten and not so forgotten and I expect to come out on top as the highest bidder.

    Left in Wisconsin , February 6, 2017 at 10:31 am

    Les Leopold is a smart guy and always has interesting things to say. But in this case, I think he glosses over the biggest issue: people will not organize into unions if they believe that doing so, or trying to do so, risks making their personal employment situation worse, not better.

    Anti-union activity by employers is now so routine and expected, and protections for workers trying to organize, either from unions or government, are so weak that the vast majority of working people have come to view trying to organize as insane. (Yes, card check will help in a few situations but is not a game changer.) The purported low unemployment rate does nothing to empower working people because (except for the occasional exception that proves the rule) it is still overwhelming the case that one's current job is better than any likely other job one would have to get if one lost it. And irritating your boss is still the likeliest way to get fired, or get your department outsourced, or get your entire workplace shut down.

    And the fact that some public sector workers still have workplaces that make them less likely to get fired or replaced for trying to exercise workplace "rights" just points out how poor things are for most private sector workers, resulting in even less sympathy for those workers.

    What Trump gets is that, in this environment, most working people will support the (anti-tax, anti-regulation) platform their boss supports, rather than the (higher-tax, stronger-regulation) one their boss hates, if the (strong union) platform that is good for them that their boss really, really hates is off the table.

    Platforms and study groups are well and good but we need much more. As said above, we need a new labor movement, in particular one that can organize in the private export-sensitive sector. There is no such thing as a(n even moderately) successful labor movement without strong unions in the private export-sensitive sector. But there is no way to organize workers in this sector without being able to demonstrate why being in a union is likely to materially improve their well-being. But one can't get such a thing without strong government support to ensure trying to organize doesn't in fact risk resulting in losing your job. Chicken-And-Egg problem.

    old flame , February 6, 2017 at 12:20 pm

    Employers have so much power over workers now: right-to -work laws, tax incentives, H1B and undocumented workers, Chamber of Commerce and lobbyists. Probably the only way to have any clout would be to have a National Strike and boycotts which would be tough to organize. I know that employers in an area will collude with other companies to set and limit wages and benefits. I had a friend that I worked with in a factory back in the 70s who was promoted to the office in a secretarial position who told me about meetings our company had with other ones in the community where they discussed and made agreements on labor issues. This was back in the 70s. They were always threatening us about unions and I never had heard anyone talk about joining one or any kind of union activity.

    TG , February 6, 2017 at 10:32 am

    Yes, well said as usual.

    As regards the standard of living in third-world countries, it should by now be apparent that the model of 'development' that uses low wages to attract foreign businesses simply can not – and does not – increase general prosperity. How can it? The model is that low wages ('affordable labor costs') are the engine, therefore the wages need to stay low to keep the multinationals in place.

    Look at the effects of NAFTA: the United States lost a lot of jobs, Mexico gained jobs, but Mexican wages remain low. The NAFTA model is pulling the United States down and not pulling Mexico up. That is now well established. Nobody need feel any guilt about opposing trade agreements like NAFTA.

    Ah, but what about China? Well China is a little different from Mexico – they are more mercantilist. In the long run the established method of creating prosperity is to have a stable or slowly growing population, and slowly but steadily build up endogenous industries and a strong internal market. "Race to the bottom" trade agreements yield exactly what the term suggests.

    PQS , February 6, 2017 at 11:08 am

    Where do I sign up? I'm ready to go. However, I think one aspect of this transformational mission is missing: MONEY.

    The RW has metric tons of billionaires who use their money to propagate their ideologies and build "think tanks" and other institutions to provide the veneer of respectability. I believe it's one of the primary reasons that they've been so successful in pushing their extreme ideas on everybody. They have an ALEC branch in every statehouse writing laws, which I'm sure they don't do for free. They can gerrymander, buy off, and otherwise distort the entire process for little more than walking around money for them.

    I know Sanders nearly won with small donors, so perhaps that could be replicated in this scenario, but long term, I think having some serious money to back up these initiatives is going to make the job actually doable. And there are a few actual billionaires who might be amenable to using their wealth for the greater good. Nick Hanauer comes to mind.

    JEHR , February 6, 2017 at 11:33 am

    During the Depression of the 1930's in the Maritimes, the Antigonish Movement began:

    The Antigonish Movement blended adult education, co-operatives, microfinance and rural community development to help small, resource-based communities around Canada's Maritimes improve their economic and social circumstances. A group of priests and educators, including Father Jimmy Tompkins, Father Moses Coady, Rev. Hugh MacPherson and A.B. MacDonald led this movement from a base at the Extension Department at St. Francis Xavier University (St. F.X.) in Antigonish, Nova Scotia.

    The credit union systems of Nova Scotia, New Brunswick and PEI owe their origins to the Antigonish Movement, which also had an important influence on other provincial systems across Canada. The Coady International Institute at St. F.X. has been instrumental in developing credit unions and in asset-based community development initiatives in developing countries ever since.

    It is noteworthy that the movement began with Adult Education: if people do not understand what has brought them debt and poverty, it will be difficult to counteract them.

    I'm sure that in the US during the Depression, there were many such movements which helped people understand and defeat the Depression.

    Looking back at what succeeded in the past can help towards a better future. Of course, it will have to be adapted for the present problems, but starting with education is a really positive move.

    John Rose , February 6, 2017 at 1:13 pm

    How about online adult education drawing on the talents of charismatic teachers and more local face-to-face seminars to provide the core activists we need.

    Jack , February 6, 2017 at 11:33 am

    Good article which made some good points.
    "The progressive instinct, and rightfully so, is to trash Trump. If he's for it, we must be against it."
    One instance of this is the huge play the immigration fight is getting. I don't agree with how Trump enacted his immigration "reform" but I agree that immigration needs to be curtailed. Significantly curtailed. H1B visas pretty much need to be done away with, and if you are in this country illegally, you need to leave. And any further immigration needs to be reduced. This outcry against immigration reform by the liberals, what many in this country see as a huge problem, is not winning over any hearts and minds in flyover country. It's like when Bill Clinton first got elected and he wasted a lot of time and political capital on the gays i the military issue. Only this time the Dems are not even in office. Still a waste of political capital. In my mind this whole immigration reform paranoia is just another form of identity politics by the Democrats. What progressives need to focus on is campaign finance reform, jobs, health care reform, education, and increasing taxes on the wealthy and corporations. Those issues resonate with everyone, Republicans and Democrats alike. It is why Trump won. Don't fix these problems and immigration will be the least of our worries as a nation. If things get worse in our economy, immigrants and refugees are going to be in a much worse place than they are right now. People who are going hungry and who are sick with no hope on the horizon have to blame someone. And Americans are not known for the high level of intelligence and knowledge of how the world really works. Anyone who looks "different" will be blamed and there will be blood in the streets. I think we are almost to that point now.

    jrs , February 6, 2017 at 12:46 pm

    "This outcry against immigration reform by the liberals, what many in this country see as a huge problem, is not winning over any hearts and minds in flyover country. It's like when Bill Clinton first got elected and he wasted a lot of time and political capital on the gays i the military issue. Only this time the Dems are not even in office. Still a waste of political capital. In my mind this whole immigration reform paranoia is just another form of identity politics by the Democrats."

    The Dims maybe, but that's not why actual people protest, it's mostly because they know illegals are those who serve their food when they order breakfast, are on the train on the way to work, etc.. I know fly-over just doesn't get it, because they don't live among and with illegals as part of their daily life, but it's hard to see them driven out if one does.

    Generalfeldmarschall von Hindenburg , February 6, 2017 at 12:02 pm

    re "But What About the Poor in Other Countries?"

    All the points made in answer to that need to be memorized, because if you're to the left of Andrew Carnegie or Ayn Rand that's what they'll throw at you. 'Americans consume 99% of all fossil fuels and create 98% of all the trash and blah blah!' We're a little sick of it.

    jrs , February 6, 2017 at 12:49 pm

    "Americans consume 99% of all fossil fuels and create 98% of all the trash and blah blah!' We're a little sick of it."

    It's all true of course.

    But yea they rely on left/liberals basic goodness (ok not all liberals have any real goodness (or why don't they oppose the wars more?), most leftists are pretty darn moral though) and they'll use it to enrich themselves, because they are not good at all, but know how to get good people to be subserviant to their own selfish ends.

    Wade Riddick , February 6, 2017 at 12:07 pm

    Most manufacturing jobs are lost via automation, not outsourcing. What do we plan to do about that?

    The cheaper the capital (e.g., low interest rates), the easier it is to substitute capital for labor. Whenever the Fed bails out a bubble via monetization, labor takes another hit.

    Solar's more cost-effective and adding more jobs now than the fossil fuel industry – yet official policy now seems hell-bent on ginning up another oil reserve lending bubble.

    Plenty of inconsistencies abound

    Left in Wisconsin , February 6, 2017 at 12:09 pm

    Most manufacturing jobs are lost via automation, not outsourcing.

    Do you a citation for that? I have looked for actual evidence/proof of this claim and have not been able to locate any.

    Brad , February 6, 2017 at 2:17 pm

    Wade is correct. I've posted a chart of the BLS statistics on long term manufacturing employment in absolute and relative terms on this site. Manufacturing employment's relative share of total employment has fallen in a straight and steady diagonal line from upper right to lower left from its peak in the 1950's to the present. Began long before off-shoring was a thing, and off-shoring doesn't even clearly show as an independent variable. Otherwise we'd see a significant bend in the curve. Instead, significant deviations are conjunctural, connected to recessions.

    The BLS charts can be easily researched by anybody on this site. I don't want to hear conspiracy theories about how BLS has politically rigged the stats for 60 years as lazy substitute for critical approaches to BLS statistical methods. If you want to refute the evidence, that's what is required.

    BTW, as I've also mentioned, there is a "revolutionary left" version of this emphasis on off-shoring over automation/mechanization, "Imperialism in the Twenty-First Century" by John Smith, http://monthlyreview.org/2015/07/01/imperialism-in-the-twenty-first-century/

    It fails to assess the real weight of off-shoring vs automation because Smith doesn't base his analysis on the effects of automation, and then move to assess the effects of off-shoring. Therefore Smith can never present a clear quantification of the effects of off-shoring on employment in a metropolitan country like the US.

    At root Smith's limitations are found in his Andre G. Frank "development of underdevelopment" bias. This cannot conceive of under- or uneven- development in an "already developed" country like the US. But that is precisely, palpably, what has happened. And it is inevitable under capitalist automation once it reaches a tipping point. As I believe it has, where only some 25% of the total available labor force is required to produce everything we (very wastefully) consume now, today.

    As an aside, note that off-shoring is not to include products never produced in the US in the first place, like most of Apples' iProducts. You can't "off-shore" jobs you never worked at, now can you! This represents a different process, the export of *new* capital investment, in this case in a contract relation with Chinese SEZ capitalists, not the transfer of *existing* productive investment overseas. But Smith includes iProducts in his "off-shoring" mix.

    The Smith example shows this is a matter of the basic facts about capitalism, not about left or right politics. That is exactly why people gravitate towards off-shoring as a prime-mover in job loss, precisely because something politically can be done about that. Yet if you somehow forced all US corporations to 100% invest production in the US, you will only greatly accelerate the trend of job loss due to automation, as it will be the only lever they have left. Unless you want to halt all human progress in the productivity that has already freed up 75% of our labor time to do something other than maintain the current standard of living.

    The real political problem we need to confront is that, despite these real productivity gains, capitalism requires that the whole mob of proles be continuously prodded onto the wage labor market, whether their labor is necessary or not. That's the fundamental program of the Congressional snakepit and its Statehouse auxiliaries. The wage labor social relation is the source of the social power of capitalists, and without it they and their system go Poof.

    A good reform proposal would be: a guaranteed *medium* income for all (or alternatively, a guaranteed "job" for all at the same income or greater); a system for equitably circulating the total potential labor pool in and out of the pool of necessary labor. It will require a revolution to achieve such a reform.

    pricklyone , February 6, 2017 at 5:31 pm

    @Brad
    "As an aside, note that off-shoring is not to include products never produced in the US in the first place, like most of Apples' iProducts. You can't "off-shore" jobs you never worked at, now can you! This represents a different process, the export of *new* capital investment, in this case in a contract relation with Chinese SEZ capitalists, not the transfer of *existing* productive investment overseas. But Smith includes iProducts in his "off-shoring" mix."

    Doesn't seem like a different process to those needing work to survive. This is why "economists" are being ridiculed and derided among large swathes of the populace. Distinctions without differences which only serve to fit data into precious formulae, based on preconceived ideals. If I develop a new product in the US, and seek only China manufacture (to save myself the labor cost, and evade the external costs of environment, etc.) the result is the same. "New capital investment " is just a matter of timing. Lucky me, I didn't have to go thru the expense of tearing down an existing facility, or relationship, here first.

    dragoonspires , February 6, 2017 at 6:37 pm

    This seems to me one of the more incisive of the comments. So many are coming at it from the framework of what solutions best get us back to a situation that was better, like one we experienced between the 1950s to the turn of the century. This was a unique period of advantage for the US economically and industry-wise that is unlikely to be repeated, imo, and for awhile seemed to have more easy opportunities for all.

    The progressive platform recognizes how the pillars providing for more equality of opportunity have been battered, and I agree with some of its proposals. But just reversing the tax burden shifts and trying to reinstate more affordable healthcare or education still leaves us with the situation where the need for and nature of work may still be changing radically. I have trouble seeing how a conservative half of the country with extremely powerful propaganda outlets, interest groups, and fountains of money will allow some if any of the ideas proposed in this article (hence Brad's claim that it would require a revolution sways me a good deal).

    I also do not think that Bernie, basically not subjected to any big negative hits in the primary, would have won the general after the right's smear machine was done with him. Even then, the republican congress would have stopped cold any of his more significant proposals.

    Progressives need to get realistic. This agenda will be slow in coming, unless things get so horrible that a true revolution does occur. What that would entail I do not know, but powerful forces are aligned against it. All who spend time theorizing (including me) on keyboards will have to start and sustain the very hard work of getting into the trenches, spreading and fighting for ideas, and most of all, actually winning primaries and elections and helping to get people out to vote. The right wing started doing this methodically over 45 years ago, with patience and persistence.

    Trump/RW domination needs to be stopped asap, by whatever plausible if less than ideal tools we have. Protests are getting attention, and I hope more participation and results will come next. Purity tests of progressive ideals is a cancer that will only doom the cause. It will be hard and maybe slow, but we're going to need more than just the faithful to get this turned around. Bernie was a start, but too many are throwing up their hands just because he lost the primary.

    I plan to keep working to change the democratic party for the better, at a pace that is realistic. Getting a more progressive tax structure again to fund any of these ideas is critical first. I also can't see a guaranteed income without a required work contribution to address the evolving economy, given this country's attitude towards earning one's keep. A sort of advanced CCC to work on massively fixing and improving our crumbling infrastructure and public spaces, fighting forest fires, etc. using these tax funds is one idea. Subsidizing quick as possible job training as new jobs evolve with the radical changes in the economy is another. More support for local small business and entrepreneurs (perhaps funding employees who they need for awhile in startup phase as part of minimum guaranteed income in exchange for work) until they prove to be an ongoing concern is another thought. Even if these ideas are flawed, we need to rethink the paradigm of work with which we grew up.

    Yves Smith , February 6, 2017 at 7:04 pm

    I don't agree. Obama could not only have done a Roosevelt 100 days, he literally could have re-implemented many of his policies. This was a window of opportunity that he ignored and bizarrely, the public at large airbrushes out of its memory.

    I don't at all buy that the US can't afford this. Did you forget we spend ginormous amounts on our military, and that could instead be be redirected to domestic uses? Japan, a less rich country generally considered to be in decline, is vastly more egalitarian than America and scores way above us and every other country in the world on social indicators. Some of that, sadly, may prove out that ethnically mixed societies don't "do" egalitarianism because some groups don't want to cut less advantaged groups in.

    The issue is that the elites (a word used only on sites like Alex Jones before the crisis) are all in for increasing inequality. That means not investing in education for the masses and much heavier policing, since unequal societies are more violent, among other things.

    aab , February 6, 2017 at 7:43 pm

    I also do not think that Bernie, basically not subjected to any big negative hits in the primary, would have won the general after the right's smear machine was done with him.

    Progressives need to get realistic.

    Purity tests of progressive ideals is a cancer that will only doom the cause. It will be hard and maybe slow, but we're going to need more than just the faithful to get this turned around.

    I have pulled these out of your comments, because they are generally used by tribal Democrats to rationalize the party's incompetent, destructive behavior. I am not saying that's why you're doing it. But I'd like to address them.

    I heartily concur with Yves' reply to you, to start.

    Second, you mention in other places than the ones I quoted this idea of doing what's "realistic" and being "realistic." What do you mean by that? The neoliberal Democrats had a quarter of a century to demonstrate that their way worked for the citizens of the United States and the Democratic Party. They failed on both counts. More of strategy and policy that has a proven record of failure would be unwise - do you agree?

    If you do agree, and you want to reform the Democratic Party, as you state above, then your choice is easy: focus your energies on getting rid of all the entrenched neoliberals and corporate-aligned Democrats, both party functionaries and elected officials. No positive change can occur until that task is completed.

    If you do NOT agree that the neoliberal New Democrats must be purged from the party, what is your vision of realistic change, what makes it realistic, and what makes it change?

    Also, you are simply incorrect about Bernie and the general election. All data we have demonstrates strongly that he would have won. There's no smear machine in America better than the Clinton machine plus the major corporate media aligned with it. He was smeared constantly with vile falsehoods - one of which you clearly fell for, which is that he wasn't smeared. He would have held the Democratic states unquestionably, and held the Rust Belt, and thus won the election. Tell me what states you imagine he would have lost to Trump?

    The realistic approach is get rid of the New Democrats utterly and completely. They have failed catastrophically. That will be a hard task, but that doesn't' make it unrealistic. To leave them in place and think the party will win back governing power or do anything good for the average citizen would be unrealistic.

    blucollarAl , February 6, 2017 at 12:29 pm

    Can anyone any longer deceive oneself about the primary meaning and purpose of the Democratic Party? The DP, as it has been redefined and transformed since the Nixon-McGovern election of 1972, is a political vehicle that primarily seeks to represent the interests of mainly urban upper-middle suburban well-educated and well-off professionals, managers, educators, and technologists, along with those other racial/ethnic/social groups that happen to be privileged by elite opinion at any given time.

    If the quixotic Sanders run taught us anything, it is that there is no interest, no room within the DP for critical economic and social argument. Not just radical class-based neo-Marxist criticism but even the kind of economic issue-framing that became a hallmark of the DP in the FDR regime and persisted with sometimes more, other times less strength until the 70's.

    The so-called "resistance" to Trump has only reaffirmed this conclusion. Insofar as it is being led by DP and DP-leaning media and other talking-head pseudo-intelligentsia, it has focused almost entirely on the same social lifestyle and individual empowerment sexual/gender issues that have characterized it over the past 40 years. This inability to think outside of what too often reduces in final analysis to solipsistic "me-isms", for example by framing important political questions like immigration, imperial reach, and deregulation in ways that transcend the usual racial-ethnic-gender identity differences, prevents the DP and its sycophants from suggesting deeper grounds for solidarity-in-opposition. Most readers of NC understand what these deeper grounds are!

    As I wrote another time a few years ago, DP players and pundits, often urban in residence and outlook, and often themselves financially well off, ensconced in high-priced city dwellings, shopping at Whole Foods, frequenting high-end fashion boutiques, attending the best schools on mommy and daddy's dime, often appear more transparently hostile and condescending to what they judge to be the unsophisticated prejudices and religious backwardness of lower, working, and middle class Americans than do the Trumps of the Republican Party. The latter, equally or even more well-heeled than their ersatz opponents, have learned beginning in the Nixon-Colson "silent majority" days, how to project a kind of "rural, small town folksiness", filling their rallies with country music stars and NASCAR heroes, and who know enough to drag out a "social-cultural conservative" every now and then to show that they "hear and care" for the "forgotten American" even if they consistently ignore these very people in the political arena.

    To be sure, the Republicans don't give a rat's ass about these things. Applying the categories of the silent-majority Americans, they are as "amoral" as the Democrat special-interest spokespeople. However, when it is a case of neither party addressing the causes that underlie the real deep-rooted rottenness that has become 21st Century America, the blue collar "ordinary" American will often fall back on the party of lip-service that at least to him or her seems to be listening to the anxieties and resentments felt by them. The irony of course is that neoliberal policies consistently applied will destroy (have destroyed) whatever was real and true about the America they think has been left behind.

    Livius Drusus , February 6, 2017 at 9:57 pm

    Great post. As an example of what you are talking about, I see very little concern from Democrats and liberals about the current Republican efforts to pass a national right to work law, even though this will hurt unions which are supposed to be one of the core elements of the Democratic coalition. Is this surprising? Of course not, given Obama's failure to fight for card check and to give support to the embattled unions in Wisconsin during their fight with Scott Walker. What happened to those comfortable shoes? Did Obama lose them? Unions give the Democrats money and troops during election years and are then kicked to the curb when the Democrats are in power or at most given scraps.

    The upper-middle class professionals and managers who dominate the Democratic Party want to continue the identity politics emphasis with regard to opposition to Trump because they are making out well under neoliberalism and are opposed to anything that would tilt the economy in a direction that is more favorable to ordinary workers because they would lose their relative status. Upper-middle class types don't want to go back to the days of the mid-20th century when doctors and lawyers might have to share a neighborhood with factory workers.

    Elizabeth Burton , February 6, 2017 at 1:14 pm

    To many progressives, saving American jobs sounds jingoistic and "protectionism" is a bad word. Isn't global trade helping the poor become less so around the world? Isn't it selfish only to protect American jobs? Isn't it more moral to share scarce manufacturing jobs with the poor in Mexico and Asia? After all, even if a plant closes in the Rust Belt, service sector jobs can be found at wages that still are far higher than what the poor can hope for in low-wage countries.

    May I just say that as a deplorable member of the poor white working class who is a bone-deep progressive that these are classist views of people who sit in their comfortable middle-class bubbles and pretend there are n't people in this country who are suffering from the very things they are so nobly seeking to protect workers in the third world from suffering?

    If you want to know why otherwise sensible, intelligent people voted for Trump, that paragraph right there is a major example. The content is bad enough, but that an author who has written an excellent overview of the situation would automatically attribute that kind of thinking to "progressives" shows just how insidious the academic mindset is, and why the working class, regardless of race, gender, religion, or sexual preference, automatically shuts out both categories when they stroll in to "educate."

    Tim , February 6, 2017 at 1:58 pm

    The idealism is correct in thought, BUT, if a nation doesn't take care of its own then who will? Nobody.

    If everybody took care of those closest to their sphere of influence the world would be a better place.

    pricklyone , February 6, 2017 at 7:03 pm

    Any attempt to equalize wages in "poorer" countries, would also have to address cost-of-living differences, as well.
    You are not allowed, in "developed" nations, to live a subsistence lifestyle, any longer.
    With higher living standards, comes an obligation to provide citizens with a level of income which can sustain that standard.

    Gman , February 6, 2017 at 6:19 pm

    'Before you judge a man, walk a mile in his shoes.

    after that, who cares?
    He's a mile away and you've got his shoes.'

    ~ Billy Connolly

    *great comment by the way.

    that guy , February 6, 2017 at 8:28 pm

    Thank you. Better-put than I could have done. Might I add to this that I wasn't voting for the president of Uruguay or Mexico or whatever, who could reasonably be expected to look out for those people. I was voting for the next president of the United States, who I should be able to reasonably believe will look out for me, as an American, first and foremost.

    Jeremy Grimm , February 6, 2017 at 4:52 pm

    The recent primaries and Presidential election made clear to me how little the concerns of ordinary people mean to the two national parties. However Trump was and remains something of a wildcard - at least promising actions reflecting the concerns of the hoi polli. He has indeed delivered in short order on several of his promises.

    I have trouble characterizing the opposition and protests against Trump. Are they inspired by the Democratic Party's knee-jerk opposition to anything Trump or Neoliberal opponents to Trump's dismantling of the grand corporate take-over embodied in the TPP or upper-middle "liberals" fuming about one or another of their pet issues of the moment like immigration or climate change - issues which Trump seems determined to throttle. My daughter was tempted to join the women's march because she will sorely miss planned parenthood clinics when their funds are cutoff - they were for her the only place she could find real healthCARE at any price.

    At this point I tend to agree with Bernie Sanders assessment of Trump (ref. today's links - https://www.washingtonpost.com/news/powerpost/wp/2017/02/05/after-trump-moves-to-undo-financial-regulations-sanders-calls-him-a-fraud/ ). I am glad the US seems more cozy with Russia - worried about the US and China and Iran - glad the TPP has been - at least temporarily - dismantled - in short I view Trump as a very mixed blessing whose actions and intents remain opaque. I believe Trump will benefit the obscenely wealthy classes but I'm not sure yet which portions of the obscenely wealthy. I believe there is a power struggle ongoing between different behemoth factions of the uber-rich but the waters they fight in are darkly murky.

    witters , February 6, 2017 at 6:52 pm

    "upper-middle "liberals" fuming about one or another of their pet issues of the moment like immigration or climate change "

    Yeah, climate change an 'issue of the moment'.

    Here is the bedrock of modern political stupdity. A total unconcern for the future of all of us. I don't care where you think you are on the left/right BS, anyone with your view is just another instance of the great problem.

    Scott , February 6, 2017 at 8:07 pm

    I cannot read all the comments & know my own will be but a wisp in the wind. I am grateful to naked capitalism, Yves & Lambert for publishing the best thinking on the subjects.
    "Workers of the World Unite" is about all I can see as the real option to pursue. How to really do that means using all the means of the winners.
    It's seems simply impossible on one hand to be nationalistic, and fair to labor internationally at the same time.
    I keep looking at WWI.
    Workers of the World Unite? How? Fair Trade, Internationally the world is a struggle between the Rich who have inherited wealth & get compound interest, pass on deeds that survive as if a neofeudalism is just ordained.
    Ah hell, I say if you cannot even imagine a utopia you ought not call yourself a human being.
    Purchasing Power Parity & World Government?
    Without private property things get weird & corruption grows from elites getting access to all.
    In my Transcendia Insurodollar I overcome the flaw of Communist theory.
    I have a part of it going. I have a gov. in govs. concept workable as permanently small.
    Time to expand. Doubtful, really really doubtful.
    I do recognize Les is on the right track and has the correct goals. The puzzle is how to really work at the Two Nation Solution of Workers & Power, corporate Power is immense.
    They throw out regulations we know are necessary.
    Force & mind control propaganda are levers at their fingertips.
    Force? 8 have so much wealth the majority divided by language & borders a challenge is seen as doomed.
    I shall imagine.

    VietnamVet , February 6, 2017 at 8:23 pm

    I found myself agreeing with most of the points in the post. We must be clear that Donald Trump is anti-Globalist but to get GOP support and appointees he assimilated their tribal beliefs. If he is stupid or crazy we must say so and explain why. If he is right and does something that benefits American citizens such as ratcheting down the Cold War 2.0 with Russia, we must applaud. I am fairly certain that to spite him and keep the bribes flowing, Democrats will not support the re-branding of "Medicare for All" to "TrumpCare".

    It may be my history or old age; but, I am afraid that the global elite have decided the USA is ripe for a final harvest and have gr

    [Feb 04, 2017] The End of Employees

    Notable quotes:
    "... Start focusing on the predators at the top of the pyramid scheme and then watch how those same culprits and their networks "come to the rescue" in order to capitalize on the "pain and suffering" they help to create. I see a pattern, don't you? ..."
    "... Don't forget student debt. Not only are many recent graduates underemployed or unemployed, they're in the hole tens of thousands. Further incentive not to make any sort of financial commitment. Student debt should be cancelled to promote earlier family formation. ..."
    "... It's almost a negative feedback loop. ..."
    "... Very true. Capitalism only works as long as enough people (or states) are able to take up ever-larger debt, to close the gap (called "profit") between expensive goods and comparatively cheap labour. ..."
    "... Good to point out Gat Gourmet. Almost all outsourced jobs in the beginning of places where I have worked were once part of the company. ..."
    "... Still, it's hard not to notice there could be nothing more convenient to the corporate and governmental powers-that-be than a nonprofit that takes it upon itself to placate, insure, and temper the precarious middle-class. ..."
    "... So which ivy-league management school / guru is most culpable in unleashing the whole lean-mean-outsourcing-machine monster because it's slowly destroying my ability to remain in IT. ..."
    "... "how the big company love of outsourcing means that traditional employment has declined and is expected to fall further." – ..."
    "... Story of my life! I'm still trying to get paid for freelance work that I did in December. This payment delay is wreaking havoc with MY cash flow. ..."
    "... Another area of friction and waste with IT consulting and other contracting, is that an employee of a company simply and efficiently plugs into their existence administrative system (HR, timekeeping, payroll, etc). ..."
    "... I work in engineering at a gigantic multinational vehicle manufacturer and the role of "consultants" has been expanding with time. Rather than consultants being people with specific technical expertise who work on one subsystem component with clear interfaces to other things, it now encapsulates project managers and subsystem / function responsible people who need to have large networks inside the company to be effective. ..."
    "... Considering the huge amount of time it takes to get a new hire up and running to learn the acronyms and processes and the roles of different departments, it's a bit absurd to hire people for such roles under the assumption that they can be quickly swapped out with a consultant from Company B next week. ..."
    "... It's pretty clear that management sees permanent employees on the payroll as a liability and seeks to avoid it as much as possible. ..."
    "... Because they, unlike us, understand class. I can state for a fact that the Big Three auto companies are well aware of how much cheaper health care costs are for them in Canada and how much better off they would be here, cost-wise, with a national health care system where McDonald's and Wal-mart have to pay the same per hour or per employee cost as they do. But it turns out cost isn't everything. Corporate (capitalist) solidarity rules. ..."
    "... Michelle Malkin ..."
    "... “The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction”. ..."
    Feb 04, 2017 | www.nakedcapitalism.com

    The Wall Street Journal has an important new story, The End of Employees , on how the big company love of outsourcing means that traditional employment has declined and is expected to fall further.

    Some key sections of the article:

    Never before have American companies tried so hard to employ so few people. The outsourcing wave that moved apparel-making jobs to China and call-center operations to India is now just as likely to happen inside companies across the U.S. and in almost every industry.

    The men and women who unload shipping containers at Wal-Mart Stores Inc. warehouses are provided by trucking company Schneider National Inc.’s logistics operation, which in turn subcontracts with temporary-staffing agencies. Pfizer Inc. used contractors to perform the majority of its clinical drug trials last year .

    The shift is radically altering what it means to be a company and a worker. More flexibility for companies to shrink the size of their employee base, pay and benefits means less job security for workers. Rising from the mailroom to a corner office is harder now that outsourced jobs are no longer part of the workforce from which star performers are promoted

    For workers, the changes often lead to lower pay and make it surprisingly hard to answer the simple question “Where do you work?” Some economists say the parallel workforce created by the rise of contracting is helping to fuel income inequality between people who do the same jobs.

    No one knows how many Americans work as contractors, because they don’t fit neatly into the job categories tracked by government agencies. Rough estimates by economists range from 3% to 14% of the nation’s workforce, or as many as 20 million people.

    As you can see, the story projects this as an unstoppable trend. The article is mainly full of success stories, which naturally is what companies would want to talk about. The alleged benefits are two-fold: that specialist contractors can do a better job of managing non-core activities because they are specialists and have higher skills and that using outside help keeps companies lean and allows them to be more "agile".

    The idea that companies who use contractors are more flexible is largely a myth . The difficulty of entering into outsourcing relationships gives you an idea of how complex they are. While some services, like cleaning, are likely to be fairly simple to hand off, the larger ones are not. For instance, for IT outsourcing, a major corporation will need to hire a specialist consultant to help define the requirements for the request for proposal and write the document that will be the basis for bidding and negotiation. That takes about six months. The process of getting initial responses, vetting the possible providers in depth, getting to a short list of 2-3 finalists, negotiating finer points with them to see who has the best all-in offer, and then negotiating the final agreement typically takes a year. Oh, and the lawyers often fight with the consultant as to what counts in the deal.

    On the one hand, the old saw of "a contract is only as good at the person who signed it" still holds true. But if a vendor doesn't perform up to the standards required, or the company's requirements change in some way not contemplated in the agreement, it is vasty more difficult to address than if you were handling it internally. And given how complicated contracting is, it's not as if you can fire them.

    So as we've stressed again and again, these arrangements increase risks and rigidity. And companies can mis-identify what is core or not recognize that there are key lower-level skills they've mis-identified. For instance, Pratt & Whitney decided to contract out coordination of deliveries to UPS. Here is the critical part:

    For years, suppliers delivered parts directly to Pratt’s two factories, where materials handlers unpacked the parts and distributed them to production teams. Earl Exum, vice president of global materials and logistics, says Pratt had “a couple hundred” logistics specialists. Some handlers were 20- or 30-year veterans who could “look at a part and know exactly what it is,” he adds .

    Most of the UPS employees had no experience in the field, and assembly kits arrived at factories with damaged or missing parts. Pratt and UPS bosses struggled to get the companies’ computers in sync, including warehouse-management software outsourced by UPS to another firm, according to Pratt..

    The result was $500 million in lost sales in a quarter. Pratt & Whitney tried putting a positive spin on the tale, that all the bugs were worked out by the next quarter. But how long will it take Pratt & Whitney to recover all the deal costs plus the lost profits?

    There's even more risk when the company using contractor doesn't have much leverage over them. As a Wall Street Journal reader, Scott Riney, said in comments:

    Well managed companies make decisions based on sound data and analysis. Badly managed companies follow the trends because they're the trends. A caveat regarding outsourcing is that, as always, you get what you pay for. Also, the vendor relationship needs to be competently managed. There was the time a certain, now bankrupt technology company outsourced production of PBX components to a manufacturer who produced components with duplicate MAC addresses. The contract manufacturer's expertise obviously didn't extend to knowing jack about hardware addressing, and the management of the vendor relationship was incompetent. And what do you do, in a situation like that, if your firm isn't big enough that your phone calls get the vendor's undivided attention? Or if you're on different continents, and nothing can get done quickly?

    We've discussed other outsourcing bombs in past posts, such as when British Airways lost "tens of millions of dollars" when its contractor, Gate Gourmet, fired employees. Baggage handlers and ground crew struck in sympathy, shutting down Heathrow for 24 hours. Like many outsourced operations, Gate Gourmet had once been part of British Airways. And passengers blamed the airline , not the wprkers.

    Now admittedly, there are low-risk, low complexity activities that are being outsourced more, such as medical transcription, where 25% of all medical transcriptionists now work for agencies, up by 1/3 since 2009. The article attributes the change to more hospitals and large practices sending the work outside. But even at its 2009 level, the use of agencies was well established. And you can see that it is the sort of service that smaller doctor's offices would already be hiring on a temp basis, whether through an agency or not, because they would not have enough activity to support having a full-time employee. The story also describes how SAP has all its receptionists as contractors, apparently because someone looked at receptionist pay and concluded some managers were paying too much. So low level clerical jobs are more and more subject to this fad. But managing your own receptionists is hardly going to make a company less flexible.

    Contracting, like other gig economy jobs, increase insecurity and lower growth. I hate to belabor the obvious, but people who don't have a steady paycheck are less likely to make major financial commitments, like getting married and setting up a new household, having kids, or even buying consumer durables. However, one industry likely makes out handsomely: Big Pharma, which no doubt winds up selling more brain-chemistry-altering products for the resulting situationally-induced anxiety and/or depression. The short-sightedness of this development on a societal level is breath-taking, yet overwhelmingly pundits celebrate it and political leaders stay mum.

    With this sort of rot in our collective foundation, the rise of Trump and other "populist" candidates should not come as a surprise.

    I would add this. It was deplorable for Trump to have fired Acting AG Sally Yates after she ordered Justice Department lawyers to stop defending Mr. Trump’s executive order banning new arrivals to the U.S. from seven Muslim-majority countries.

    But Sally Yates was a hero for another reason. Yates was cracking down on systemic abuses by holding top healthcare executives personally accountable for false Medicare and Medicaid claims and illegal physician relationships.

    Now it's personal: Top execs made to pay for companies' false claims
    http://www.modernhealthcare.com/article/20161001/MAGAZINE/310019964/now-its-personal-top-execs-made-to-pay-for-companies-false-claims

    BeliTsari , February 3, 2017 at 6:38 am

    I remember hoping: Well, maybe Obama will actually get some decent folks into the Judiciary bring kids home from Iraq, maybe try for Medicare over 55 (to the advantage of the insurance & Pharma sectors?) But the one thing I'd actually expected him to accomplish was enact https://www.congress.gov/bill/110th-congress/senate-bill/2044 which would get the Kleptocrats a few more years out of the moldering corpse of American Labor (and not hurt multinationals, who'd off-shored, outsourced or speciously re-classified their largely undocumented, 3rd party, contingency/ gig employees decades previously).

    Wage-theft Democrats was a new concept to some of us more easily deluded working class Yankees, reeling from Bush. I think a strong fantasy life's essential nowadays.

    jrs , February 3, 2017 at 3:06 pm

    No kidding on that law, so basic. Why can't we have that law passed? (and other nice things)

    BeliTsari , February 4, 2017 at 3:52 pm

    I imagine that this is among the pesky downsides of living in our YOOJ autocratic neo-Confederate theocratic kleptocracy; wage theft has always been right at the top of both parties' platforms? If they can't hide it, who will they blame it on?

    GlassHammer , February 3, 2017 at 6:52 am

    Decline in family formation and a populace seeking to anesthetize itself are indications of a civilization in decline. Our problem is much bigger than employment.

    Disturbed Voter , February 3, 2017 at 7:02 am

    You can employ deplorables, you can enslave deplorables, you can kill deplorables. The only way that a "return maximizing" system won't choose killing, is if the unit cost of killing is higher than enslavement or employment. I can hope that the bureaucratic effect of increasing costs will work faster on the cost of killing or enslavement. Reducing the cost of employment (regulations) wouldn't hurt.

    BeliTsari , February 3, 2017 at 7:26 am

    We'd guessed this was why Dickens, Niccolò Machiavelli, Frederick Douglass, E. A. Blair & Marx were being burnt by the DeVos Christians. Why teach management for FREE, when the drooling Know Nothings will PAY to send their dead-eyed vipers to seminars or A Beka online curricula?

    redleg , February 3, 2017 at 1:13 pm

    It does hurt workers, contract or not.

    Eliminate environmental protections and the entire industry that investigates, researches, enforces, litigates, and mitigates environmental impacts are likewise eliminated. These are generally highly skilled professions, and has wide ranging impacts from workers all the way to the global ecosystem. Then there are economic ripple effects on top of that.

    If we are going to eliminate an entire career tree, health insurance is a better choice.

    jrs , February 3, 2017 at 3:10 pm

    Not sure what this has to do with the article, but yes people will LOSE jobs to Trump, skilled and socially beneficial jobs like at the EPA.

    For heaven knows what, jobs building useless walls to nowhere I guess, which somehow in Trumps warped mind is a more productive line of work (it won't even work to curtail immigration).

    BeliTsari , February 4, 2017 at 5:36 pm

    Thank you for your astute, pertinent & seldom mentioned comment (which to those of us in QA, is something we've believed central to the issue, not a tangent or unexpected side benefit of our sharecropper corporatocracy).

    We'd noticed contract buy-outs & forced early-retirement in the steel industry, in the 90's, our clients' engineers (scruffy & cantankerous, who'd stand by us if we were right & replace us if we got out of hand) were all replaced by clueless, gullible desk jockeys, devoid of empirically honed judgement eventually, we'd have 2-3 gnarled old timers, amidst crews of neophytes (first they tried very well trained & knowledgeable foreign nationals, then pensioners, let go from the vendors) finally, they tried to 1099 the desperate ones, on the run from skip-chasers, deputies & repo-men.

    They'd try sending us half way across the country, mention nothing, then see what we'd do (once we figured out we'd earned no overtime?)

    We'd be in Indian or Russian owned mills where 80% of the employees were totally undocumented foreign nationals, many of the balance wildly underpaid temps.

    And the good-old-boy management resembled characters outa Harriet Beecher Stowe. Lots of our counterparts were straight back from Afghanistan & Iraq, verifying that most of their gig- economy contingency employment had all been the same, regardless of industry sector: off-shored aircraft, as well as bridge, structural, water, nuclear, inspectors what regulation?

    Dave , February 3, 2017 at 11:49 am

    Leveraging guilt to rationalize the Invitation of the least educated into your nation from the most barbaric failed states and cultures in the world is another sign of civic decay.

    MP , February 3, 2017 at 12:21 pm

    or those with potential who are "educated" and are "victims" of false advertising campaigns I mean propaganda

    Dave , February 3, 2017 at 12:38 pm

    Yup, many of the Taxi and Uber drivers around here arrived and took out private loans to get "educated" and now are deep in debt and are too ashamed to go home.

    MP , February 4, 2017 at 9:26 am

    Start focusing on the predators at the top of the pyramid scheme and then watch how those same culprits and their networks "come to the rescue" in order to capitalize on the "pain and suffering" they help to create. I see a pattern, don't you?

    Barbarians are at the gates but you may be looking in the wrong place. Beware all types of people are "vulnerable" and they will more easily identify with other human beings living under a variety of diminished circumstances. Victim shaming won't be a viable option in the not so distant future.

    JEHR , February 3, 2017 at 2:50 pm

    Dave, I hope you are not including Syria in your "failed states and cultures" description. Syrians are very well educated and will add much to any nation's economy.

    It is not a sign of "civic decay" in the Syrian culture, but a sign of civic decay in a nation that will not accept people from a war zone. An invitation should not be dependent on one's education but on one's need and desire to survive a war zone..

    wilroncanada , February 3, 2017 at 4:42 pm

    Iraqis were also comparatively educated, right up through university, under its autocratic leader. Libyans were, by and large, well educated, or at least getting so, under its autocratic leader. The most poorly educated, probably, are those countries which have been under US or European hegemony for generations: a lot of Central and south America, a lot of Africa, etc. Not to mention the US itself, which has been colonizing its own hinterland for many decades. The same applies to countries like Canada, Australia, etc. particularly in terms of their indigenous populations.

    Felix_47 , February 3, 2017 at 6:20 pm

    How about the worst drought in 900 years, and an exploding population? That had nothing to do with the problem?

    Peter , February 3, 2017 at 7:07 pm

    Don't forget student debt. Not only are many recent graduates underemployed or unemployed, they're in the hole tens of thousands. Further incentive not to make any sort of financial commitment. Student debt should be cancelled to promote earlier family formation.

    thoughtful person , February 3, 2017 at 6:57 am

    This trend matches up with the trends of dropping life expectancy, especially among the lower half of income earners, and with slowing economies globally.

    It's almost a negative feedback loop.

    Politcal implications: the rise of far right politics; if you are a monarchist, or want to create an aristocracy, these trends are probably in your interest.

    Praedor , February 3, 2017 at 8:54 am

    Sure, it is partly psychological but it also has direct connection (by DESIGN) to the fact that such people don't have healthcare, even with Obamacare insurance. The idiots that sing the praises of Obamacare and how millions now have insurance seem to think that means those people have HEALTHCARE to go with it.

    Insurance is theft. Insurance is not even remotely "healthcare". Much of those newly insured have their insurance, thanks to a government subsidy, but STILL lack healthcare because their premiums and deductibles are too high to allow them to see doctors. Thus, they're dying or going to die sooner due to untreated maladies, but at least they paid insurance company CEOs their bonuses with their subsidized insurance payments!

    Bugs Bunny , February 3, 2017 at 9:41 am

    Mutual insurance however is (was) socialist by nature. The true mutuals were crushed out of existence by share for share conversions to private companies that ripped off policy holders and gave a big payday to the C suites and the lawyers. Thanks to inept state insurance commissioners and assemblies for that one.

    d , February 3, 2017 at 1:14 pm

    while having health insurance doesnt mean you have health care, not having it does mean not having health care at all, short of having a life or death condition, as hospitals (for now an way) are only required to stabilize you. they arent required to cure you.

    but then the high deductible insurance is one of those scams that some politicians gave us because they could suggest that the patient (customer) could just shop around for better deals. course that depends on us patients knowing what medical treatment is best for us, and which is the cheapest of those., the former pretty much requires patients to be as knowledgeable as doctors. the latter means we have to know what the treatments cost. could luck with that

    David , February 3, 2017 at 7:14 am

    I would force policy-makers in every advanced western nation to read and reflect on the last paragraph, because it describes a mindset and a series of practices that are now found everywhere in western economies.

    As David Harvey reminds us in his book on the Contradictions of Capitalism, Marx identified long ago that there was a contradiction between holding down employees wages, and still expecting them to have the purchasing power to buy the goods their cheap labour was making.

    This problem has become more acute with time, simply because we buy a lot more "stuff" than they did in the 19th century, and we take a lot longer to pay for it, often on credit. Houses, cars, household goods, even computers, are now significant expenditure decisions, repaid at least over months, if not years and even decades. The social corollary of mass home ownership, after all, is some assurance that you will be employed over the life of the mortgage. Otherwise, not only won't you buy the house, you won't improve or extend it, or even maintain it, so a whole series of other purchases won't get made, and the construction and maintenance industries will have less work. Instead, you'll save money, so removing purchasing power from the economy.

    I assume there are people in large private sector companies clever enough to under stand this, but as always they are focused on how much money they can extract from the system in the next few years. After that, if the system crashes, well, who cares, They're all right.

    susan the other , February 3, 2017 at 12:59 pm

    old tricks. John D. Rockefeller became a zillion times richer after he was forced to divest himself of his majority interest in his various companies.

    And back then it was a simple case of anti-trust. There were no benefits to reclaim as profit or revenue or whatever.

    This won't work in today's world because there really isn't anything left to exploit – but half-baked ideas die hard sometimes.

    Altandmain , February 3, 2017 at 1:43 pm

    There's a quote on this one:

    http://quoteinvestigator.com/2011/11/16/robots-buy-cars/

    Henry Ford II: Walter, how are you going to get those robots to pay your union dues?

    Walter Reuther: Henry, how are you going to get them to buy your cars?

    The Economist Article this one refers to is pretty awful, and totally ignores the wage-productivity gap.

    Here's an interesting article on that:
    https://www.salon.com/2013/05/30/millennials_dont_hate_cars_they_cant_afford_them/

    ThePanopticoin , February 3, 2017 at 4:44 pm

    Very true. Capitalism only works as long as enough people (or states) are able to take up ever-larger debt, to close the gap (called "profit") between expensive goods and comparatively cheap labour. Watching developments in recent years, this very source of profit and thus base of the economic system is, even on a global level, quite limited

    David Barrera , February 4, 2017 at 2:36 am

    Sure. Marx Capital 1 on the crisis of production. Marx capital 2 on the crisis of realization but this constitutes just one undesirable aspect-this one indeed very macro- among the many others which the expansion of the "contracting-subcontracting chain" has brought and will bring about.

    The Wall Street Journal article is-as it is to expect- late, blind to the core problems of workers and incapable to see and understand the true practical raison ( & reasons) d'ĂŞtre of outsourcing. I guess Yves Smith purpose was just to broadly replicate WSJ article

    stukuls , February 3, 2017 at 7:34 am

    Good to point out Gat Gourmet. Almost all outsourced jobs in the beginning of places where I have worked were once part of the company. The entire art department save two management employees were played off and rehired by a new company doing the same work with less benefits.

    Then that company was later disolved. I have seen this many times in the corporate design field now. Usually ends with disaster and he hire of folks some back to full time but most to freelance. So I guess in a way it works out for the company in the end and not for the worker. Amazing the amount of money a company is willing to lose this way then use the same to pay workers better.

    Arizona Slim , February 3, 2017 at 8:18 am

    But-but-but freelancing is SO hip and cool! Just ask the Freelancers Union!

    Arizona Slim , February 3, 2017 at 10:13 am

    Here is the organization's official website:

    https://www.freelancersunion.org/

    And here is a critique, which I agree with:

    http://www.dissentmagazine.org/article/the-i-in-union

    H. Alexander Ivey , February 3, 2017 at 10:45 pm

    An excellent critique, for those who were wondering. The take away paragraph, summing up the actual work done and purpose of, the Freelancers Union:

    Still, it's hard not to notice there could be nothing more convenient to the corporate and governmental powers-that-be than a nonprofit that takes it upon itself to placate, insure, and temper the precarious middle-class.

    As we sixties people use to say: "Right on!"

    Marco , February 3, 2017 at 8:18 am

    So which ivy-league management school / guru is most culpable in unleashing the whole lean-mean-outsourcing-machine monster because it's slowly destroying my ability to remain in IT.

    BeliTsari , February 3, 2017 at 8:40 am

    https://www.jstor.org/stable/40584994?seq=1#page_scan_tab_contents Indentured servitude had pretty strong adherents, before chattel slavery gained ascendancy in the colonies. You might as well credit Pharaoh Khufu?

    Katharine , February 3, 2017 at 9:21 am

    I don't know the answer to your question, but you would have to go back over twenty years to find it. What I find remarkable is that even though everybody affected in the early stages could see what a dumb, destructive idea it was, the MBA types never caught on, even though most of them were not so far up the hierarchy they could not ultimately be affected.

    just_kate , February 3, 2017 at 12:34 pm

    Jack Welch

    Gaylord , February 3, 2017 at 8:39 am

    Contractors need Guilds or Trade Associations that are well organized and legally able to set minimum standards for billing and performance. This is an area where Trade Unions have failed with respect to some professions, and apparently (from what I've heard) the RICO statutes need to be amended to allow for this. It's time to rig the other side to make companies think twice before replacing employees with temp workers or contractors, to keep jobs within the US, and to provide a cushion and a "floor" to those that take the risk of entrepreneurship, preventing a race to the bottom.

    akaPaul LaFargue , February 3, 2017 at 12:10 pm

    Yes! Geographically bound temp unions or hiring halls for all temp workers allied with low-wage worker associations. This is NOT something that established unions want, so who will agitate for it?

    jrs , February 3, 2017 at 3:21 pm

    Something like the I.W.W is what I'd like to see. Yea I know the response is: they are still around? Well not what they were long ago of course, but with the prison strike, yes around and rising.

    Northeaster , February 3, 2017 at 8:40 am

    "how the big company love of outsourcing means that traditional employment has declined and is expected to fall further." –

    This line pissed me off this morning more than most other mornings. I literally just said goodbye to a long-time colleague (Big Pharma) who is being outsourced as of today. The kicker(s):

    1. The job is not high tech
    2. Employee(s) trained their replacement who are H-1B from India
    3. The company is moving the division to India

    Of note, my state (MA) is responsible for over one-quarter of all H-1B's every year. Thankfully a few in the industry are helping get the word out, like Nanex's Eric Hunsader yesterday. The outsourcing, off-shoring, and H-1B abuse has to stop, but not sure The People have the will to hold political office holders accountable enough to truly change this paradigm.

    https://twitter.com/nanexllc/status/827185042761859073

    Northeaster , February 3, 2017 at 9:00 am

    Edit: MA is in the top 10, California is number one:

    https://www.foreignlaborcert.doleta.gov/pdf/PerformanceData/2016/H-1B_Selected_Statistics_FY2016_Q4_updated.pdf

    Vatch , February 3, 2017 at 9:56 am

    Norm Matloff's blog often covers H-1B issues. Here's one of his recent posts:

    https://normsaysno.wordpress.com/2017/01/13/h-1b-reform-proposal-a-great-start-or-a-cruel-ruse/

    Ann , February 3, 2017 at 1:10 pm

    He has an op-ed piece in the Huffington Post today:

    http://www.huffingtonpost.com/entry/trump-h-1b_us_5890d86ce4b0522c7d3d84af

    sgt_doom , February 3, 2017 at 6:54 pm

    Agreed, but I've been saying the exact same thing since 1980, so I've been lobbying and being a volunteer activist against this for many years, and yet I still run into women (not too many men anymore) in their 60s and 70s who believe offshoring of American jobs, and insourcing foreign visa replacement workers is fantastic (truly, we are a dumbed down society today, where they routinely protest on behalf of the financial hegemons).

    Best book on this (and I am no conservative and have never voted r-con) is Michelle Malkin's book (with John Miano), Sold Out!

    This has been going on for a long time, and by design: with every "jobless recovery" one-fifth of the workforce is laid off, and one-half of that one-fifth will never find another job, while one-half of the remainder, will only find lower-paying jobs.

    And each and every time, more jobs are restructured as temporary or contractor type jobs. We've had a lot of "jobless recoveries" to date.

    A recent study from Lawrence Katz and Alan Krueger found that 94% of the new jobs created over the past some years were all part-time, while a study from Rutgers University a year or so ago found that one-third of the new jobs created couldn't be verified as actually existing!

    Nothing particularly new here, as it has been going on for quite some time (another great book is Ron Hira's book, Outsourcing America ).

    Damian , February 3, 2017 at 8:46 am

    In every category of labor – blue and white collar – the press is on to increase the supply and reduce the demand for labor.

    The book ends: The Clintons in 92′ put thru the WTO / NAFTA – shut down 10's of millions of jobs and factories – blue & white collar. Obama did the same, with anticipating Hillary would be elected, put forth the TTP to enable unlimited H1-b for tech workers from off shore. The Neo Liberal Democrats were at the forefront of of this 25 year Plan for labor devaluation (with Republican help).

    The Immigration Policy by government both illegal and legal were at the epicenter of increasing the supply in all categories with various programs while Obama also increased the regulations to wipe out more factories and deliberately reduce demand.

    The solution is eliminate immigration in all forms until the 95 Million are employed and wages rise by the equivalent of what was lost in the past 15 years plus Tariffs to enable a marginal cost compared to imports to allow domestic factories to expand demand.

    Increase the demand and lower the supply of labor will mean potentially a switch will occur from 1099 to W-2 as companies have to secure labor reliability in a short labor market which is squeezed.

    The Millennials sooner or later will figure it out. Identity Politics which enables a greater supply of labor and diversion of attention to intangible values at the expense of tangible values has to be substituted for Labor Only Politics.

    These young people have been duped based on the recent focus of the demonstrations. They don't understand they were screwed deliberately and with great malice by "Going with Her".

    sgt_doom , February 3, 2017 at 6:56 pm

    I've been keeping count over the years, and as close as I can find, over 170,000 production facilities were shipped out of the country. (Or, as David Harvey phrased it: "Identity politics instead of class analysis.")

    Scott , February 3, 2017 at 8:58 am

    One aspect of outsourcing that the article does not hit upon is the impact on company cash flows, which has some importance to large outsourcing initiatives. A company must pay its employees within 6 (it might be 7) days of the end of the pay cycle, which is typically two week. By contrast, when outsourcing, at the end of the month the contractor will provide an invoice, the company will then pay according to its payment cycle. This could be 30, 45, 60, 90, or even 120 days. The contractor still must pay its bills, in essence it's providing a low cost loan to firm (which often has a lower cost of capital). This approach, including the extension of payments has been largely driven by financial/business consultants.

    Arizona Slim , February 3, 2017 at 10:15 am

    Story of my life! I'm still trying to get paid for freelance work that I did in December. This payment delay is wreaking havoc with MY cash flow.

    Scott , February 3, 2017 at 11:25 am

    It can actually get worse – they might not pay you at all, hoping that you'll file a lawsuit, which will be interpreted according to the contract, rather than legislation which covers employment issues. The litigation costs might exceed any payments you'd receive.

    My guess is that this wouldn't happen to an individual working under a 1099 (as word might get around), and very large firms often have leverage (not providing continuing services), but medium-size firms often get held up for months and years (especially once the contract has ended).

    redleg , February 3, 2017 at 10:16 pm

    Or they can go Chapter 7 during that time, where your almost 6 figures in billables gets paid 4 years later as mid- 2 figures.

    Left in Wisconsin , February 3, 2017 at 10:49 am

    Excellent point.

    Another thing the article glosses over is that most outsourcing is simply wage cutting. I have never once seen confirmation of the notion that "specialist" firms provide better services at comparable labor costs than firms can do in-house. The double-bubble is that firms (and public sector employers) often spend more on outsourcing than they would doing the work in house despite the wage savings, which all accrue to the outsourcer of course.

    diogenes , February 3, 2017 at 12:38 pm

    When the airlines went on their deliberate BK spree in the 90's, they outsourced flying to regional carriers. Regional a/c (45-90 seaters) have higher CASM's than the a/c the airlines actually owned. In brief, it is cheaper to transport 100 passengers on a 100 seat a/c than to transport 100 passengers on two 50 seat a/c. That's been a fact since the Wright brothers broke the ground.

    FWIW, SouthWest never went the regional route, never went BK and pays their unionized employees quite well.

    The BK spree was all about breaking labor, not operational efficiencies that would actually save money.

    d , February 3, 2017 at 1:23 pm

    but now it seems the majors are not to happy with the regionals , cause customers cant tell the difference between them, the next problem is that for some reason the regionals cant find pilots. seems that pilots dont want to work for less than 30,000 a year.

    Harris , February 3, 2017 at 4:53 pm

    The FAA increased the number of hours required to be a pilot to 1,500 from 250.

    Yves Smith Post author , February 4, 2017 at 4:45 am

    Yes, but that is a one-time benefit. Once you've shifted the payment cycle, your quarterly reported cash flow will be more or less the same.

    PKMKII , February 3, 2017 at 9:24 am

    Another area of friction and waste with IT consulting and other contracting, is that an employee of a company simply and efficiently plugs into their existence administrative system (HR, timekeeping, payroll, etc).

    With a consultant, there has to be reconciliation between the vendor's records and the company's records, which means work hours burned matching everything up. And that assumes they do match up neatly; If the vendor says "our consultant worked 50 hours this week, pay them as such" and whoever oversees the consultant at the company claims they only approved for 40 hours, now you've got a mess on your hands, could potentially go to the lawyers.

    rusti , February 3, 2017 at 10:03 am

    The idea that companies who use contractors are more flexible is largely a myth. The difficulty of entering into outsourcing relationships gives you an idea of how complex they are. While some services, like cleaning, are likely to be fairly simple to hand off, the larger ones are not.

    I work in engineering at a gigantic multinational vehicle manufacturer and the role of "consultants" has been expanding with time. Rather than consultants being people with specific technical expertise who work on one subsystem component with clear interfaces to other things, it now encapsulates project managers and subsystem / function responsible people who need to have large networks inside the company to be effective.

    Considering the huge amount of time it takes to get a new hire up and running to learn the acronyms and processes and the roles of different departments, it's a bit absurd to hire people for such roles under the assumption that they can be quickly swapped out with a consultant from Company B next week.

    It's pretty clear that management sees permanent employees on the payroll as a liability and seeks to avoid it as much as possible.

    Jim Haygood , February 3, 2017 at 12:24 pm

    " It's pretty clear that management sees permanent employees on the payroll as a liability. "

    No doubt correct. But why is that? Over time, mandates on employers - particularly large employers - just keep escalating. Health care; pensions; overtime; layoff notifications: regulators just keep raising the ante. Employers respond by trying to reduce their profile and present a smaller target to their predators. Staying under 50 employees wins a lot of exemptions from federal regulations.

    Taken to an extreme, some developing countries (Argentina being one example) have European-style labor regulations guaranteeing job security and mandating generous compensation when employees are laid off. With hardscrabble small businesses being in no position to shoulder such risks, the result is that about 40 percent of employment is trabajo en negro , with no benefits or protections whatsoever - a perfect example of unintended consequences.

    Editorial comments such as "these [contracting] arrangements increase risks and rigidity" ignore that government employment regulations also increase risks and rigidity. There's a balance of power. Overreaching, such as Obama's surprise order to vastly increase the number of employees subject to overtime pay, leads to employer pushback in the form of more contracting and outsourcing. Getting whacked out of the blue with a big new liability is unfair.

    diogenes , February 3, 2017 at 12:47 pm

    Actually, the overtime rules were an attempt to restore overtime that GWB took away:

    http://www.nytimes.com/2004/08/23/us/controversial-overtime-rules-take-effect.html?_r=0

    Concur about costs, and health care is the big one. Every other industrialized nation we compete against has national health care. Given that, why doesn't business support Medicare for all and get health costs off their books? Plus it would be a damsite easier to start up a business if one had health care.

    susan the other , February 3, 2017 at 1:16 pm

    Yes. I've never understood why corporations aren't all over this.

    Left in Wisconsin , February 3, 2017 at 8:08 pm

    Because they, unlike us, understand class. I can state for a fact that the Big Three auto companies are well aware of how much cheaper health care costs are for them in Canada and how much better off they would be here, cost-wise, with a national health care system where McDonald's and Wal-mart have to pay the same per hour or per employee cost as they do. But it turns out cost isn't everything. Corporate (capitalist) solidarity rules.

    H. Alexander Ivey , February 3, 2017 at 10:56 pm

    Yes, yes, damn yes!! It's about your class, not your race, not your education, not your gender. As Lambert might say, identity politics (your race, your education, your gender) is used to keep your eye off the prize: economic opportunity and security.

    DH , February 3, 2017 at 2:21 pm

    It is also easier to have part-time workers because they are still covered by health insurance in some sort of national health insurance system. In the US, the part-time workers will have high turnover as they look for full-time jobs to get access to health insurance.

    Workers are also more likely to start their own businesses to provide services since the health insurance is just a fee they pay instead of an astronomical non-group insurance bill. COBRA insurance premiums are ginormous if you need to continue coverage after you leave a company.

    Economists have been decrying the lack of employee mobility and small business formation over the past decade or so. Health insurance is probably a primary reason for this. Obamacare hasn't been around long enough and with enough certainty to change that dynamic yet.

    jrs , February 3, 2017 at 3:37 pm

    It's probably part of it, though I suspect the bad labor market is part of it as well. It's one thing to quit a job to start a business when you think "if it doesn't work out, I can always go back to my old career and easily be hired", another when quitting a good job means one might not land another ever.

    susan the other , February 3, 2017 at 1:24 pm

    haven't seen any more info on Hollande's "Flex – Security" plans to give corporations a way to lay off workers to improve the corporation's revenue. French Labor was having none of it and then Hollande went negative in the polls and was done for. Our contracting out former corporation departments sounds like bad quality control at best. If the state – whatever state you can name – is going to prop up all corporations everywhere because they can no longer successfully compete then something is fundamentally wrong with the system that demands such murderous and mindless competition.

    d , February 3, 2017 at 1:32 pm

    well there also that wage theft rules, that employers don't like. course if you look at work mans comp, you will find that it no longer works to protect employees any more. and maybe that is also why employers are get rid of employees. plus there is all of that needing to manage them. but you still end up having to manage vendors too, and while i suppose you could hire another vendor to manage the vendors (not really sure this will work out well), it still leaves the biggest problem

    since consumers are about 70% of the entire economy (always wonder if this is true. because almost all corporate 'investment' is done because of customer demand), seems like this business fad, will end up with fewer customers (which seems to be the way its working too, as evidenced by the falling sales figures from companies, even Apple), so it like business is like lemmings, going a cliff, because some one else started

    Lune , February 4, 2017 at 3:09 pm

    So are you a proponent of Medicare-for-all? It would be a tremendous benefit to corporations to get out of the healthcare business and also increase employees' willingness to become freelancers and consultants, since they'd never have to worry about healthcare.

    The truth is that citizens expect a certain amount of social welfare and security. This can be provided by 1) individuals themselves, 2) private players e.g. corporations, or 3) public players e.g. govt. Each has downsides. If you expect individuals to provide for themselves, it will less inefficient than having professional managers, and individuals will cut down on other consumption and save more, thereby hurting an economy such as ours which is highly dependent on consumption. This leaves companies and government. If companies lobby against public welfare programs like nationalized health insurance, unemployment insurance, social security, etc., they shouldn't be surprised if government foists those requirements back on them through back-door regulations.

    To be fair to companies, most of the ones engaged in the "real economy" e.g. manufacturing, actually wouldn't mind medicare for all, or some other program that relieves them of the burden of providing healthcare to their employees. But they're being drowned out by the financial economy of Wall St., banking, insurance, etc. who depend on putting more money in the hands of individuals from whom they can extract much higher fees than they ever could from govt or corporate HR depts.

    If companies don't want increased health mandates, for example, their enemy wasn't Obama: it was the private health insurance companies that didn't want a public plan.

    Lune , February 4, 2017 at 3:17 pm

    Sorry, I meant individuals will be less *efficient*.

    Altandmain , February 3, 2017 at 1:45 pm

    Yeah when I worked for one of the big 3 at an assembly plant, I felt that the use of temporary contractors could have very negative implications.

    Most of the staff though were reasonably well paid, although asked to work long hours. I think though that overall, highly paid permanent workers pay for themselves many times over.

    DJG , February 3, 2017 at 10:11 am

    One aspect of the whole fandango that I don't get is how the IRS allows whole departments within a company to be outsourced: If people show up at your plant or office every day to work on your tasks, they are your employee, not a contractor. Is this melting away of the idea of an employee because of lack of enforcement or some change in IRS rules that I am not aware of?

    Basically, if you control a worker's day, and if that worker works regularly for you, the person is your employee. I don't see how companies get away with this sleight of hand–avoiding, at the most basic legal level, who is on staff or not. [Unless the result, as many note above, is to increase class warfare.]

    goldie , February 3, 2017 at 1:35 pm

    The company doesn't get away with it if someone is willing to whistleblow to the IRS and said company fails the IRS 20-Factor Test (IC vs. employee). The nice thing there too, is that the tax burden will be on the company and not the employee. While I don't advocate being a stoolie, if a company wants to screw me over turn-about is fair play. I do the best I can to avoid those kinds of companies in the first place.

    sgt_doom , February 3, 2017 at 7:02 pm

    " One aspect of the whole fandango that I don’t get is how the IRS allows whole departments within a company to be outsourced . . "

    If I understand your question correctly it is because a federal regulation was enacted by congress (I believe one of them was faux-progressive, Jim McDermott, no longer in congress but co-founder of the India Caucus, to replace American workers with foreign visa workers from India) which forbids oversight of the foreign visa program - and yes, they established a federal regulation killing oversight of the program by the government!

    Suggested reading:

    Sold Out, by Michelle Malkin and John Miano

    fooco1 , February 4, 2017 at 2:54 am

    Someone quoted Norm Matloff (a known bigot) above. You are now quoting anchor child Filipino bigot Michelle Malkin of all people ? It's not helping your case.

    The H1-B program is a few hundred thousand legal tax paying people a year. There are 21 million Mexican illegals in this country. What do you think has more downward pressure on wages ? .005% H1-B (yeah, you read that right) of the total immigrant/wage pressure ? It's idiotic and a purely bigoted worldview.

    Yves Smith Post author , February 4, 2017 at 3:08 am

    We are supposed to regard "a few hundred thousand" as bupkis when they are concentrated in one sector?

    The H1-B visa program has has a huge impact on wages in the IT sector and has virtually eliminated entry-level computer science jobs. This is strategically foolhardy, in that the US is not creating the next generation of people capable of running critical infrastructure.

    And the illegal immigrants do pay taxes: sales, gas, and property taxes through their rents. And many actually do pay FICA. The Treasury recognizes that certain Social Security numbers are reused many times, and it's almost certainly for illegal immigrants. In fact, the IRS encourages illegal immigrants to "steal" Social Security numbers:

    http://www.forbes.com/sites/robertwood/2016/04/13/irs-admits-it-encourages-illegals-to-steal-social-security-numbers-for-taxes/

    That article whinges about possible tax credit scamming, but even that estimate is well below what they pay in FICA, $12 billion. And pretty much none of them will draw benefits.

    This is from memory, but I believe they collect over $4 billion from these SSN per year. And most of these jobs are seasonal and/or too low wage for them to pay much in the way of income taxes when they are being paid in cash.

    fooco1 , February 4, 2017 at 7:31 pm

    H1-B is not in one industry, the .005% is spread across entry level jobs in all industries: finance, automotive, insurance, arts, film, automation, etc. The total amount of H1-B is minuscule, vanishingly close to zero in a country of 300+ million and 20+ million illegals.

    You don't seem to be complaining about the tens of millions that used to concentrated in one sector..actual manufacturing. Wonder why ? Here's a hint: that sector used to make computer peripherals, keyboards, mice, terminals, monitors, LCD's, chips, motherboards, pretty much everything in the USA.

    Employees in china, taiwan, etc pay zero USA taxes and they displaced millions of manufacturing jobs. And ironically, you are using an entirely outsourced computer (that actually displaced tens of millions of jobs in the aggregate) to complain about the minuscule .005% H1-B effect. A few hundred thousand entry level coding jobs (which are ridiculously simple and lo-tech, google 13 year olds getting Microsoft certified to see how low down on the value chain this is). You genuinely think writing a few for-loops (I am simplifying a little but you get the idea) is hard ?

    Certainly, way way less capital intensive and way way less barrier to entry than Hi-Tech manufacturing. It's all going to be outsourced much faster than manufacturing was, since there is literally no barrier to entry. And H1-B is a good thing, relatively speaking, compared to full on outsourcing (just like manufacturing was).

    Like I said, the only explanation for these anti H1-B posts is plain old bigotry. No other explanation comes close.

    fooco1 , February 4, 2017 at 8:08 pm

    Might as well finish my train of thought..then I'm outta here.

    There are less H1-B visas this year than refugees , Refugees (not to mention the 20 million illegals) also put downward pressure on wages across all industries, but of course, those are all food servicing/picking/janitorial jobs and who cares about those people right ? (sarcasm for the impaired)

    So, coming back to H1-B's..let's take the logical alternative and ban all H1-B's entirely and deport the ones on H1-B visas. What happens then ?

    1) They can do the job exactly as well remotely (all they need is email/internet/skype).
    2) They get paid even less (but more than zero).
    3) They pay no taxes.
    4) Their output is words..code is the same as prose and math. Good luck banning math/words..if it can be printed on a t-shirt, it ain't bannable. (See the famous bernstein crypto case from the early 90's for a illustration of this).
    5) And finally..there are zero new jobs added for native USA'ians (which would now cost more, given the alternative).

    It makes the situation far worse than it is today. There is fewer local coffee shop selling coffee, fewer rental units getting rented, fewer groceries getting bought, cars being purchased, etc.

    For a easily displaceable and low barrier to entry coding gig, there isn't any easy answer. H1-B's are actually the best solution (or at the very least neutral), not the problem.

    FluffytheObeseCat , February 4, 2017 at 7:22 am

    The H1-B visa program is operated so as to wreck the bargaining power of native born young U.S. workers. Young Americans are increasingly likely to be nonwhite AND from the less valued (not Asian) subgroups of nonwhite. The damage H1-Bs do to our white Baby Boomers is almost incidental at this point; they are aging out of the workforce. And given the intense age bigotry of the IT subculture, they are not a factor within it at all at this point.

    H1-B visas lock our striving, capable working class young people out of upward mobility. Kids who are now graduating from say, San Jose State with skills as good as those of South Asians don't get jobs that they are qualified for, because they are shut out of entry to the business. They are disdained in Silicon Valley because the majority of entry level conduits to employment are now locked up (via social contacts, and "who-you-know" relationships) by men from the subcontinent.

    Your race argument is pernicious and I suspect, promoted in the full the knowledge of this fact. It is a great shame that we are relying on kooks like Malkin to promote obvious truths, but the shame belongs to our morally derelict 'liberal' chattering class, not those who listen to her and her ilk for lack of other sources.

    vegeholic , February 3, 2017 at 10:22 am

    An underappreciated aspect of contracting versus cultivating your own employees is that it hollows out the organization to the point that it may no longer have competence to perform its mission. Having an apparent success at contracting out menial tasks, the temptation is to keep going and begin to contract out core functions. This pleases the accountants but leaves the whole organization dependent on critical talent that has very little institutional loyalty. When an inevitable technical paradigm shift occurs, who can you count on to give you objective and constructive advice?

    Costs of training and cultivating employees are high, and it is tempting to think that these costs can be eliminated by using contractors. It is strictly an apparent, short-term gain which will in due time be revealed as a strategic mistake. Do we have to learn every lesson the hard way?

    Portia , February 3, 2017 at 10:55 am

    yes, and when I read that Pfizer farms out research, I also wondered if retention of the outsource company contract is results-related. could new drug results hinge on a company wanting to keep their Pfizer contract by telling them what they want to hear?

    Ann , February 3, 2017 at 1:06 pm

    Agreed. Every time a company offshores jobs or goes through another round of layoffs, it loses its institutional memory. This is particularly acute in the mainframe IT systems that prop up the TBTFs (yep, they offshored these too). After a while, nobody understands exactly how these systems work and can only get to the bottom of them by reading code, which is a pretty flawed way to learn the business. This has been going on for years and nobody cares.

    sgt_doom , February 3, 2017 at 7:03 pm

    Amen to that, something I've been preaching for over 35 years now!

    wilroncanada , February 3, 2017 at 6:14 pm

    It pleases the accountants, that is, until their jobs too are outsourced. First they came for the janitors

    Denis Drew , February 3, 2017 at 10:35 am

    Centralized bargaining - a.k.a., sector wide labor agreements - is the only strategic answer to contracting out. Done in continental Europe, French Canada, Argentina, Indonesia.

    (Take a vacation from reality with Soma - one gram and I don't give a damn.)

    L , February 3, 2017 at 10:40 am

    The one word I don't see in your excellent writeup is loyalty . Companies, like countries depend to a great extent on social constraints to keep people committed to the group. You cannot monitor all people all the time and doing so causes them to turn against you. But companies staffed with contractors and temps and temps supervising contractors have no loyalty to the company. Ergo no one employee has any reason to go the extra inch or to turn down the chance to sell out for personal gain should the opportunity arise.

    All that imposes real costs that companies conveniently ignore because they are not always realized in share price.

    PhilM , February 3, 2017 at 5:54 pm

    I was going to add the same thought, but use the label "goodwill." It is something that appears on balance sheets in enormous amounts depending on what the accountants think it may represent.

    There is a "goodwill bank" in the labor pool of any given company, and when the balance hits zero, the company will fail, "emigrate" its capital, or go public to the greater fools. Companies are engaged in a savage race to the bottom that is inherent in corporate structure: executives are now playing with somebody else's money, and somebody else's life. If corporate liability were suddenly returned to the days of the partnership, what a change we would see. And those days were not so long ago: Wall Street remembers the 1960s.

    PS What a treat to come here and see informative journalism and commentary instead of the monkey cage.

    oliverks , February 3, 2017 at 11:52 am

    My daughter was recruited and interviewed by Genentech and then sent to work for an organization called PPD. PPD did nothing in this relationship, other than take money from Genentech pocketed about 1/2 of that and then pay her the rest. I really couldn't figure out what the heck the point of this was, other than some long running strategy to ultimately depress salaries of Genentech chemists.

    DH , February 3, 2017 at 2:29 pm

    One of my kids works in a unionized metal foundry (they still exist in the US!). When they need new workers, they bring several in through a temp agency for several months. If they can cut it and are acceptable, then they get pulled into the union or into the plant management team. This allows them to try out several people on a rent-to-own basis, but in the long run they become loyal company employees with very low turnover.

    jrs , February 3, 2017 at 3:45 pm

    Contract-to-hire is not new. The problem from an employee perspective is trying to evaluate when a company is actually serious about hiring if the contractee does a good job, and when it's just empty promises and they have no intent of making full time job offers at all.

    DH , February 3, 2017 at 2:31 pm

    BTW – the Genentech scientists probably get a bunch of benefits like bonuses and stock options, etc. that are not available to the contract workers. They probably have more protections if they are terminated or laid off whereas the contract workers would be done that day. The really good contract workers may get offers to work at the company for the long-run.

    j84ustin , February 3, 2017 at 12:14 pm

    Outsourcing is done in the public realm, too; my first job after grad school was with a major housing authority – except it wasn't for them (despite me having a "housingauthority.org" email address). I worked for a contractor of the housing authority, who paid us shit and treated us like cattle. I lasted three months.

    j84ustin , February 3, 2017 at 12:36 pm

    ***but I was still a W2 employee! silver lining.

    jrs , February 3, 2017 at 3:48 pm

    Oh yes it definitely happens in the public realm, a lot with local government, more and more it seems.

    akaPaul LaFargue , February 3, 2017 at 12:19 pm

    One area not discussed in this post is municipal outsourcing. What this means in practice is the loss of organizational memory . assuming that records are not adequately maintained since the "old-timers" were still around. But with the loss of human memory banks, no new ones (digital?) have taken their place. Further, when consultants are hired for a specific project, when they have completed that project, what they have learned as ancillary knowledge is lost cuz the end-product is all that counts, not the process.

    Dave , February 3, 2017 at 12:57 pm

    i.e. Rip up the entire street to find where the pipe is because the old public works director who was replaced with a bright young woman with a degree before he qualified for his pension, got even and deleted the maps on the software. :-)

    wilroncanada , February 3, 2017 at 6:41 pm

    Didn't Yves mention this loss of institutional memory in reference to fianancial services, or was it banks, and their IT?

    Further to government outsourcing:
    Back a few years my wife and I worked for a school district on the East coast of Canada. The janitorial service had been outsourced a few years previously, with the former head janitor becoming the main contractor, who then hired other cleaning staff to work for him. He/she was already being squeezed to reduce his rates, leading to work not done or his working from 8AM to midnight to save an after-school employee. So–lower employment overall, all at minimum wage, including the main contractor.

    One district had bucked the province-wide trend by keeping its own cleaning staff. Visiting the schools in that district those few years later, one could see the result, in vastly superior level of cleanliness, better co-ordination between admin and teaching staff with cleaners, and much better relations with students as well.

    The staff weren't bosses, the cleaners weren't minions, and the students weren't customers. They were a team.

    Glen , February 3, 2017 at 12:21 pm

    I don't think there will be a change in this because it's too profitable for the CEOs to strip mine the companies assets (knowledgeable employees are an asset) for maximum "shareholder value" (always replace "shareholder value" with "my compensation"). I suppose this will change when all companies are stripped to the bone and go under. But we now call these "too big to fail" and prop them up with taxpayer dollars.

    We need to change incentives. These might help:

    Make corporations really pay taxes so that it makes sense to invest in the company rather than strip it.

    Don't prop up TBTF companies, let them fail so that many small companies can grow.

    Stop all the fraud and corruption. Send corrupt CEOs to jail.

    Medicare for All would be a boon for businesses, especially the smaller and mid-sized ones.

    Herb Kelleher, CEO of Southwest, was once asked where he ranked shareholders vs employees. He replied employees were first (because if the employees are not happy, then the customers are not happy), customers (they pay the bills), and shareholders (they buy and sell shares in seconds). If the company is successful, the shareholders will come. We somehow need to get back to these company values. A successful company starts with the employees.

    Arizona Slim , February 3, 2017 at 2:12 pm

    Thank you, thank you, THANK YOU, Glen!

    JimTan , February 3, 2017 at 12:58 pm

    Wow – good post.

    This is a pretty ugly development in our history. The 'end of employees' is a very accurate description of what is going on in our gig economy related to a specific legal contradiction. In the U.S., we've adopted a vast body of labor laws ( many in response to the Industrial Revolution and Great Depression ) that are primarily designed to protect "employees" from exploitation. Buried deep in our tax law is a second designation for worker called "independent contractor", defined as a self-employed person providing services to other businesses that is exempt from most labor laws on the principle that a self-employed person can't exploit themselves. The key here is labor laws protect 'employees' from 'employer' abuses. Changing a workers classification from employee to ( self-employed ) contractor, will change an employers classification to customer, and remove the workers legal protections from exploitation. Labor law protections include minimum wage and hours, workplace safety and health, wrongful dismissal protections, anti-discrimination protections, employee benefits security, and worker compensation protections. This contradiction is allowing many companies to sidestep centuries of laws enacted to stabilize and and protect our society. Some companies push this power imbalance even further by transferring many of the business costs associated with their revenue to employee contractors ( see Uber ).

    Hopefully when there is enough public outcry, regulators and prosecutors will decide to challenge these interpretations of existing laws and force businesses back in line regardless of their political influence.

    Arizona Slim , February 3, 2017 at 2:09 pm

    Call it what it really is - the frig economy. Because it keeps frigging us over.

    JimTan , February 3, 2017 at 2:24 pm

    Incidentally, the slippery logic that removes labor law protections by classifying a worker as self-employed ( both employer and employee ) might also grant businesses protections from their workers via consumer protection laws against fraud and unfair practices ( when businesses become customers of their now self-employed former employees ).

    vegeholic , February 3, 2017 at 1:44 pm

    As has been stated several times, sometimes government entities are the worst offenders here. Grover Norquist & Co. insisted on shrinking the size of government. The obedient elected officials and managers immediately replaced employees with contractors and could claim that they had indeed reduced the size of government. Unfortunately the budget probably went up since we now have to provide profit for the rent extracting contract vendors.

    redleg , February 3, 2017 at 10:37 pm

    They replaced govt employees with their contractors.
    FIFY
    Dual purpose- Eliminate the government's ability to govern while capturing the tax revenue.

    Democrita , February 3, 2017 at 2:11 pm

    A few years ago I was working for a family of local weekly papers, run on a shoestring (of course) with pathetic salaries for the tiny staff. At one point, they heard about possibly outsourcing design–layout of modular pages–to cheap labor in Romania. But when they ran the numbers .our in-house designers were already cheaper than the Romanians!

    Second point: At my current magazine I am one of just two full-time staffers on the edit side. Our copy-editor/proofreader is paid on an hourly basis, and works off-site. Our designer works on a monthly retainer, off-site. And so on.

    That makes the relationship between us and our workers competitive and antagonistic: They try to do the least amount of work, and we try to pay the least amount of money. So when the publisher wants to be "innovative" or try something different, the designer resists. He doesn't want to spend any more time on us than he normally does. So we don't do anything well, we get by with just good enough.

    Point 3 – institutional knowledge: One of our key competitive advantages has been/is being eroded because there are things we haven't done in two years due to turnover. When I arrived and took up one such project, hugely important to the company's bottom line, no one could tell me how it was done. Everyone who had been involved in it was gone. We've now spent several months reinventing this particular wheel.

    But the publisher doesn't see that as money. He only sees money as money.

    DH , February 3, 2017 at 2:24 pm

    BTW – the financial sector is ripe for this. Automation is taking over many positions and people in active investing is getting slashed big-time. Ironically, places like Vanguard may actually be some of the last bastions of actual employees.

    Detrei , February 3, 2017 at 2:35 pm

    The problem with these short term contract jobs are immense. Employees that don't have a steady income have difficulty getting loans for cars or homes. They certainly have less protection too. Our son worked for SKY TV as a part time employee through a temp agency for 3 years, working 40 hour weeks. But when an unstable full time employee assaulted him, in front or several witnesses, he was the one fired on the spot without explanation. He was a non-person. The temp agency didn't want to get involved for fear of losing their contract. With no union, no rights and little money, there was little he could do. They knew he couldn't afford a lawyer and involving the police wouldn't get his job back. This goes on all the time now. 20 years ago would have been unthinkable. I see a revolution coming, in many countries

    Pelham , February 3, 2017 at 2:39 pm

    Given the long evident fact that our corporate owners and their servants in government will not do a bloody thing to make life better for us, what can we do? As a first step toward any solution, we need to recognize that nothing is possible within the narrow boundaries of our political and economic system.

    Vatch , February 3, 2017 at 3:03 pm

    What you describe as a first step seems a lot like a claim of inevitable failure. Rather than expect failure, I recommend as a first step that we try to block a few of Trump's predatory cabinet nominations. Andrew Puzder, the nominee to head the Labor Department, and Steven Mnuchin, nominated to be the Secretary of the Treasury, seem to be very relevant to the scope of this article. Also Tom Price, nominated to be the Secretary of Health and Human Services. Tell your Senators that you don't want them to be confirmed. It's easy, although you might need to make a few extra phone calls, because the Congressional phone lines are often busy these days.

    https://www.senate.gov/senators/contact/

    Sorry, I know I'm being repetitious. But it's better to do something positive than to bewail our political impotence.

    JEHR , February 3, 2017 at 3:04 pm

    Or everything is possible within Witness–Trump as Pres.!!!!!

    JEHR , February 3, 2017 at 3:03 pm

    I ask, Why can't banks be fully automated? You wouldn't need CEOs and COOs and CFOs in banks because IT can do all those jobs automatically. Then we would find out that we only need ONE bank–the central bank and, voila, the banks no longer can create money by making loans. (I'm sure there is a weak point in this argument!!!) However, I can see something like this happening in the future if only we separate investment banking from commercial banking.

    Sound of the Suburbs , February 3, 2017 at 3:20 pm

    Marx saw capitalism as an endless class struggle between the bourgeoisie and the proletariat.

    He wasn’t far wrong.

    1920s – high inequality, high banker pay, low taxes for the wealthy, robber barons, reckless bankers, globalisation phase (bourgeoisie in the ascendency)

    1970s â€" low inequality, worker and union power, high taxes on the wealthy (proletariat in the ascendency) (probably more true in the UK than the US)

    2000s â€" high inequality, high banker pay, low taxes on the wealthy, robber CEOs, reckless bankers, globalisation phase (bourgeoisie in the ascendency)

    The pendulum swings back and forth and always swings too far in both directions.

    If the human race could take a more sensible, big picture view they might see it as a balance between the supply side (bourgeoisie) and the demand side (proletariat).

    The neoliberal era has been one where a total ignorance of debt has held sway.

    Redistributive capitalism was removed to be replaced with a capitalism where debt based consumption has become the norm. without a single mainstream economist realising the problem.

    The world is maxing out on debt, this system is set to fail due to a lack of demand. The Bourgoisie have been in the ascendency and made their usual mistake.

    “The Marxian capitalist has infinite shrewdness and cunning on everything except matters pertaining to his own ultimate survival. On these, he is not subject to education. He continues wilfully and reliably down the path to his own destruction”.

    Keynes thought income was just as important as profit, income looks after the demand side of the equation and profit looks after the supply side.

    He has the idea of balance.

    Just maximising profit â€" The Bourgeoisie looking after their own short term, self interest with no thought of the longer term.

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

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

    You need to keep the balance.

    Too much capital at the bottom and inflation roars away.

    Too much capital at the top and there is no where sensible to invest and the Bourgeoisie indulge in rampant speculation leading to the inevitable Wall Street Crash, 1929 and 2008.

    Today’s negative yield investments?
    Too much capital at the top, no one wants it and you have to pay people to take it off your hands.

    Sound of the Suburbs , February 3, 2017 at 5:07 pm

    We are actually using 1920s economics, neoclassical economics.

    No wonder everything looks familiar, the Bourgeoisie have no imagination.

    “Stocks have reached what looks like a permanently high plateau.”Irving Fisher 1929.

    In 2007, Ben Bernanke could see no problems ahead.

    Their beliefs were based on an absolute faith in markets based on neoclassical economics which states markets reach stable equilibriums.

    We should actually learn from mistakes, not repeat them.

    1920s levels of inequality â€" what a surprise it’s the same economics.

    We have moved on to the 1930s now:

    1930s/2010s â€" Global recession, currency wars, rising nationalism and extremism

    1940s â€" Global war

    Something to look forward to.

    jerry , February 3, 2017 at 5:24 pm

    "You need to keep the balance." The post war era was balance, that was the middle of the pendulum swing, we have never seen you're next sentence:

    "Too much capital at the bottom and inflation roars away." When? Name one instance outside of extraordinary political situations like weimar germany and zimbabwe where this has occurred?

    Inflation is the boogey man that the elite throw around to scare us into submission. They don't care when its inflation of house prices, they don't care when its inflation of healthcare costs, education costs, etc. etc. But they damn sure start sweating a lot when its the cost of labor that goes up. Shocker.

    Check my article about this very topic (shameless self promotion) : https://marginallyattachedblog.wordpress.com/2017/01/04/inflation-worries-from-trump-fiscal-stimulus/

    FreeMarketApologist , February 3, 2017 at 3:28 pm

    "Gate Gourmet had once been part of British Airways. And passengers blamed the airline."

    You can transfer expenses, you can transfer legal and regulatory liability risk, you can transfer financial risk, but it is virtually impossible to transfer reputational risk. Companies who think they can do so (or ignore the fact) do so at their own peril.

    Barbara , February 3, 2017 at 4:37 pm

    My d-i-l, a research professional, has survived five down-sizings, assuming an additional work load each time. The last time she also got a small promotion (well, you'd think they'd give her something positive after all this). To myself I thought, they're going to wear this woman out till she has nothing left to give and dump her.

    It's worse. The corporation (company is a concept from my early working days) just announced that everyone would have to bid for their projects(jobs). What this means of course is "how much are you willing to give?" not to mention pitting one employee against another.

    Not prescient enough, was I?

    jerry , February 3, 2017 at 5:30 pm

    Love the article.

    I "work" (temp/contract/no benefits) at a large multinational electronics company in cust service and have seen this first hand. In response to a couple years of dropping profits, they outsourced the entire department (couple hundred employees) to the Philippines. They cut full time employees, replace them with temps for half the pay, because people will do it, and we live in desperate times with no bargaining power.

    As someone mentioned, its a negative feedback loop, less demand, less employment, less demand, until the whole world is greece. We won't make it through another world war, the world is too globalized, too connected, too advanced technologically. We need a relatively peaceful populist revolution – which we seem to be seeing the first real signs of – or our species is done for.. and the sad part is I'm not even exaggerating.

    sgt_doom , February 3, 2017 at 7:07 pm

    Best overall reading list on this subject:

    Sold Out by Michelle Malkin

    Outsourcing America by Ron Hira

    America: Who Stole the Dream? by Donald L. Barlett

    One Nation Under Contract by Allison Stanger

    Dick Burkhart , February 4, 2017 at 6:07 pm

    One point you missed is that a company cannot manage, let alone write a contract very well unless it has sufficient expertise on staff. It is not sufficient to hire a consultant unless that arrangement is more or less permanent. Too many things can go wrong, as they often do even with competent staff when projects are complex or innovative.

    [Feb 04, 2017] Why the Maximize Shareholder Value Theory Is Bogus

    Notable quotes:
    "... to the corporation ..."
    "... The 1970s stagflation hit these companies particularly hard, with the result that the whole was worth less than the sum of the parts. This made for an easy formula for takeover artists: buy a conglomerate with as much debt as possible, break it up and sell off the pieces. ..."
    "... But CEOs recognized how the newly-installed leaders of LBO acquisitions got rich through stock awards or option-type compensation. They wanted a piece of the action. ..."
    "... It produces short-termism, underinvestment, and a preoccupation with image management . We wrote in 2005 for the Conference Board Review about how the preoccupation with quarterly earnings led companies to underinvest on a widespread basis . Richard Davies and Andrew Haldane of the Bank of England demonstrated that companies were using unduly high discount rates, which punished long-term investment. Pearlstein provides more confirmation: ..."
    "... Obliquity gives rise to the profit-seeking paradox: the most profitable companies are not the most profit-oriented. ICI and Boeing illustrate how a greater focus on shareholder returns was self-defeating in its own narrow terms. Comparisons of the same companies over time are mirrored in contrasts between different companies in the same industries. In their 2002 book, Built to Last: Successful Habits of Visionary Companies, Jim Collins and Jerry Porras compared outstanding companies with adequate but less remarkable companies with similar operations. ..."
    "... It is our social capital that is now badly depleted. This erosion manifests in the weakened norms of behavior that once restrained the most selfish impulses of economic actors and provided an ethical basis for modern capitalism. ..."
    "... A capitalism in which Wall Street bankers and traders think peddling dangerous loans or worthless securities to unsuspecting customers is just "part of the game," a capitalism in which top executives believe it is economically necessary that they earn 350 times what their front-line workers do, a ..."
    "... I think that you seriously underestimate Trump. Napoleon excelled in an environment where military success was primary; Trump excels in a mediated environment where PR and imagery are primary. IMVHO, there are some eerie parallels between the two men; whether you like them or not, both men could be characterized by: ambition, vision, vindictiveness, and a willingness obliterate traditional social and political boundaries. ..."
    "... Many elite professionals are deeply upset with Trump's win. Yet the ideology that he represents is very much in line with the logic of corporate raiders, many of whom, like him, went to Wharton Business School. And many elite professionals, in particular lawyers and consultants, profited handsomely from the adoption of the buccaneer capitalist view of the world and actively enabled much of its questionable thinking and conduct. ..."
    "... That Wharton Business School model is oblivious to the human needs for: fairness, reciprocity, culture, and the need to penalize duplicity. (I would argue that the Wharton model exalts duplicity, if only to pass it off as some kind of exceptional superpower wielded only by Business Elites.) When you corrode trust, you damage economies. ..."
    "... Trump is the apotheosis of neoliberal economics + junk-bond fueled casino empires in a media environment that worships 'shareholder value' and has lost sight of what genuinely creates sustainable value over the long term. ..."
    "... did Friedman capture the growing political aggressiveness of capital, as capital gradually overcame the Great Fear of the 30s and prepared to mount, as Streeck has argued, a counteroffensive against the constraints of welfare capitalism? Likely all of the above, but in what proportions? ..."
    "... It is that acme of Liberalism, Warren Buffett that created this fad. At a time when corporate dividends were taxed as ordinary income, whereas a stock price bump would be tax deferred - and ultimately taxed at long term capital gains rates - the scheme was merely tax avoidance. Warren Buffett's entire empire is based on this and other tax avoidence schemes. ..."
    "... The maximize shareholder value ideology in practice looks like maximize CEO compensation and to heck with the company's long term prospects. imo. ..."
    "... Considering relationship between share's liquidity and short-termism , any measure which reduces share's liquidity, for example a high tax on short term capital gain, will greatly reduce both short-termism and corporate governance issues as share holders will be forced to assume the risk they were supposed to bear in exchange of supermacy of their interest. ..."
    "... While it has damaged corporate social responsibilities and banks' and corporations' long-term financial stability, actions taken pursuant to the Shareholder Value optimization model have served well many individuals on Wall Street, at private equity firms, CEOs of large publicly traded corporations, hedge funds, networked board members, their academic and professional servicers, and the political elite ..."
    "... Reflecting back on developments like the dotcom bubble of 1999-2000; the underlying causes of the financial collapse of 2007-09; massive debt-leveraged corporate stock buybacks; socially damaging private equity LBOs; the current volumes of opaque OTC derivatives at large financial institutions; repeated episodes of environmental damage caused by firms in extractive industries seeking short-term financial returns; and the license it provides to exert power over legislation and regulation by those who own and control these corporations in a Citizens United legal framework; etc., it is difficult to see much in the way of redeeming social value in this corporate governance model. ..."
    "... Is it simple greed, stupidity, cynicism, groupthink, false consciousness, sociopathy, the 'attractions' of a certain lifestyle, daddy-didn't-love-them-enough or what that leads certain types to behave the ways they do and seek to justify it? ..."
    Feb 04, 2017 | www.nakedcapitalism.com

    From the early days of this website, we've written from time to time about why the "shareholder value" theory of corporate governance was made up by economists and has no legal foundation. It has also proven to be destructive in practice, save for CEO and compensation consultants who have gotten rich from it.

    Further confirmation comes from a must-read article in American Prospect by Steven Pearlstein, When Shareholder Capitalism Came to Town. It recounts how until the early 1990s, corporations had a much broader set of concerns, most importantly, taking care of customers, as well as having a sense of responsibility for their employees and the communities in which they operated. Equity is a residual economic claim. As we wrote in 2013:

    Directors and officers, broadly speaking, have a duty of care and duty of loyalty to the corporation. From that flow more specific obligations under Federal and state law. But notice: those responsibilities are to the corporation , not to shareholders in particular ..Equity holders are at the bottom of the obligation chain. Directors do not have a legal foundation for given them preference over other parties that legitimately have stronger economic interests in the company than shareholders do.

    And even in the early 1980s, common shares were regarded as a speculative instrument. And rightly so, since shares are a weak and ambiguous legal promise: "You have a vote that we the company can dilute whenever we feel like it. And we might pay you dividends if we make enough money and are in the mood."

    However, 1900s raiders who got rich by targeting companies that had gotten fat, defended their storming of the corporate barricades by arguing that their success rested on giving CEOs incentives to operate in a more entrepreneurial manner. In reality, most of the 1980s deals depended on financial engineering rather than operating improvements. Ironically, it was a form of arbitrage that reversed an earlier arb play in the 1960s. Diversified corporations had become popular in the 1960s as a borderline stock market scam. Companies like Teledyne and ITT, that looked like high-fliers and commanded lofty PE multiples, would buy sleepy unrelated businesses with their highly-valued stock. Bizzarely, the stock market would value the earnings of the companies they acquired at the same elevated PE multiples. You can see how easy it would be to build an empire that way.

    The 1970s stagflation hit these companies particularly hard, with the result that the whole was worth less than the sum of the parts. This made for an easy formula for takeover artists: buy a conglomerate with as much debt as possible, break it up and sell off the pieces.

    But CEOs recognized how the newly-installed leaders of LBO acquisitions got rich through stock awards or option-type compensation. They wanted a piece of the action.

    One of their big props to this campaign was the claim that companies existed to promote shareholder value. This had been a minority view in the academic literature in the 1940s and 1950s. Milton Friedman took it up an intellectually incoherent New York Times op-ed in 1970 . Michael Jensen of Harvard Business School and William Meckling of the University of Rochester argued in 1976 that corporate managers needed to have their incentives better aligned with those of shareholders, and the way to do that was to have most of their pay be equity-linked. In the late 1980s, Jensen in a seminal Harvard Business Review article, claimed that executives needed to be paid like entrepreneurs. Jensen has since renounced that view.

    Why The Shareholder Value Theory Has No Legal Foundation

    Why do so many corporate boards treat the shareholder value theory as gospel? Aside from the power of ideology and constant repetition in the business press, Pearlstein, drawing on the research of Cornell law professor Lynn Stout, describes how a key decision has been widely misapplied:

    Let's start with the history. The earliest corporations, in fact, were generally chartered not for private but for public purposes, such as building canals or transit systems. Well into the 1960s, corporations were broadly viewed as owing something in return to the community that provided them with special legal protections and the economic ecosystem in which they could grow and thrive.

    Legally, no statutes require that companies be run to maximize profits or share prices. In most states, corporations can be formed for any lawful purpose. Lynn Stout, a Cornell law professor, has been looking for years for a corporate charter that even mentions maximizing profits or share price. So far, she hasn't found one. Companies that put shareholders at the top of their hierarchy do so by choice, Stout writes, not by law

    For many years, much of the jurisprudence coming out of the Delaware courts-where most big corporations have their legal home-was based around the "business judgment" rule, which held that corporate directors have wide discretion in determining a firm's goals and strategies, even if their decisions reduce profits or share prices. But in 1986, the Delaware Court of Chancery ruled that directors of the cosmetics company Revlon had to put the interests of shareholders first and accept the highest price offered for the company. As Lynn Stout has written, and the Delaware courts subsequently confirmed, the decision was a narrowly drawn exception to the business–judgment rule that only applies once a company has decided to put itself up for sale. But it has been widely-and mistakenly-used ever since as a legal rationale for the primacy of shareholder interests and the legitimacy of share-price maximization.

    How the Shareholder Value Theory Has Been Destructive

    The shareholder value theory has proven to be a bust in practice. Here are some of the reasons:

    It produces short-termism, underinvestment, and a preoccupation with image management . We wrote in 2005 for the Conference Board Review about how the preoccupation with quarterly earnings led companies to underinvest on a widespread basis . Richard Davies and Andrew Haldane of the Bank of England demonstrated that companies were using unduly high discount rates, which punished long-term investment. Pearlstein provides more confirmation:

    A recent study by McKinsey & Company, the blue-chip consulting firm, and Canada's public pension board found alarming levels of short-termism in the corporate executive suite. According to the study, nearly 80 percent of top executives and directors reported feeling the most pressure to demonstrate a strong financial performance over a period of two years or less, with only 7 percent feeling considerable pressure to deliver strong performance over a period of five years or more. It also found that 55 percent of chief financial officers would forgo an attractive investment project today if it would cause the company to even marginally miss its quarterly-earnings target.

    As we've stated before, we've been hearing this sort of thing from McKinsey contacts for more than a decade. And the "55 percent" figure likely understates the amount of short-termism. First, even in a presumably anonymous survey, some CFOs might be loath to admit that. Second, for any project big enough to impact quarterly earnings, the CFO is almost certain not to have the final say. So even if his team approves it, it could be nixed by the CEO out of concern for earnings impact.

    It empirically produces worse results . We've written from time to time about the concept of obliquity, that in a complex system that is affected by interactions with it, it is impossible to map out a simple path to a goal. As a result, other approaches are typically more successful. From a 2007 Financial Times article by John Kay , who later wrote a book about the concept:

    Obliquity gives rise to the profit-seeking paradox: the most profitable companies are not the most profit-oriented. ICI and Boeing illustrate how a greater focus on shareholder returns was self-defeating in its own narrow terms. Comparisons of the same companies over time are mirrored in contrasts between different companies in the same industries. In their 2002 book, Built to Last: Successful Habits of Visionary Companies, Jim Collins and Jerry Porras compared outstanding companies with adequate but less remarkable companies with similar operations.

    Merck and Pfizer was one such comparison. Collins and Porras compared the philosophy of George Merck ("We try never to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been") with that of John McKeen of Pfizer ("So far as humanly possible, we aim to get profit out of everything we do").

    Collins and Porras also paired Hewlett Packard with Texas Instruments, Procter & Gamble with Colgate, Marriott with Howard Johnson, and found the same result in each case: the company that put more emphasis on profit in its declaration of objectives was the less profitable in its financial statements.

    Some more commonly-cited reasons for why a focus on shareholder value hurts performance is that it dampens innovation. Pearlstein describes another, how it demotivates workers:

    Perhaps the most ridiculous aspect of shareholder–über-alles is how at odds it is with every modern theory about managing people. David Langstaff, then–chief executive of TASC, a Virginia–based government-contracting firm, put it this way in a recent speech at a conference hosted by the Aspen Institute and the business school at Northwestern University: "If you are the sole proprietor of a business, do you think that you can motivate your employees for maximum performance by encouraging them simply to make more money for you?" Langstaff asked rhetorically. "That is effectively what an enterprise is saying when it states that its purpose is to maximize profit for its investors."

    And on a societal level, it erodes social capital and trust, which are the foundations for commerce:

    It is our social capital that is now badly depleted. This erosion manifests in the weakened norms of behavior that once restrained the most selfish impulses of economic actors and provided an ethical basis for modern capitalism.

    A capitalism in which Wall Street bankers and traders think peddling dangerous loans or worthless securities to unsuspecting customers is just "part of the game," a capitalism in which top executives believe it is economically necessary that they earn 350 times what their front-line workers do, a capitalism that thinks of employees as expendable inputs, a capitalism in which corporations perceive it as both their fiduciary duty to evade taxes and their constitutional right to use unlimited amounts of corporate funds to purchase control of the political system-that is a capitalism whose trust deficit is every bit as corrosive as budget and trade deficits.

    As economist Luigi Zingales of the University of Chicago concludes in his recent book, A Capitalism for the People, American capitalism has become a victim of its own success. In the years after the demise of communism, "the intellectual hegemony of capitalism, however, led to complacency and extremism: complacency through the degeneration of the system, extremism in the application of its ideological premises," he writes. "'Greed is good' became the norm rather than the frowned-upon exception. Capitalism lost its moral higher ground."

    Many elite professionals are deeply upset with Trump's win. Yet the ideology that he represents is very much in line with the logic of corporate raiders, many of whom, like him, went to Wharton Business School. And many elite professionals, in particular lawyers and consultants, profited handsomely from the adoption of the buccaneer capitalist view of the world and actively enabled much of its questionable thinking and conduct. As CEO pay rose, so to did the pay of top advisers. They couldn't be all that good, after all, if they were in a wildy different income strata.

    So as Lambert has warned, unless we hear a different economic and social vision from The Resistance, which looks troubling to have more failed Democratic party influence behind it than either of us like, the best we are likely to get is a restoration. And if you remember the French Revolution, strongman Napoleon was succeeded by the Bourbon Restoration, which then led to the Second Empire under his nephew. So if we want better outcomes, status quo ante is not good enough.

    I beg to differ. First, you ignore the fact that equity is a residual claim. Everyone else comes first. Every party that holds more senior instruments than equity, along with other parties that have enforceable claims, like the IRS and those with solid contracts that would give them the rights to damages in certain circumstances, have rights that are more enforceable under the law. You can't overturn that via exchange rules.

    Second, Amar Bhide explained in the Harvard Business Review in 1994 why public companies will always have deficient governance. My recap of his main points:

    Disenfranchised shareholders are an inherent feature of liquid stock markets. In 1994, Amar Bhide argued in a Harvard Business Review article that efficient equity markets inevitably led inevitably to deficient corporate governance. Bhide explained that an ambiguous promise like equity is not suitable to be traded on an arm's length basis. Historically, equity investors typically acted like venture capitalists: they knew the owners personally and were involved in the company's affairs. The securities laws of 1933 and 1934 tried to make it safe for distant, transient shareholders to invest by providing for timely, audited financial statements, disclosure of information about top executives and board members, and prohibiting insider trading and other forms of market manipulation.

    But that turns out to be inadequate. No outsider can be told enough to make an informed judement about a company's prospects; critical information, like acquisition and plans for new products, must be kept secret until well advanced because they are competitively sensitive. Boards are protected from liability by directors' and officers' insurance (plus hardly anyone even bothers pursuing board members. For instance, have any Lehman board members been sued?). Moreover, only a comparatively small cohort of people are deemed public-company-board worthy. Their incentives are to make nice in their community and not rock the boat, which means not making life difficult for the CEOs, since a nominating committee (of the current board) is responsible for nominating directors, which means the entire process is incestuous.

    This system has been fairly impervious to outside challenge. Once in a while, a company is so abysmally run that an activist investor will take up a proxy fight. But that dog seldom catches the car; instead, they might get a bad CEO to exit or force a restructuring. The stock trades up and the rabble-rousers take their winnings and depart. More polite efforts, even by large, powerful shareholders, are much less effective. For instance, some major institutional investors met with Goldman to object to the idea that the firm would pay lavish bonuses for 2009. The session appears to have had no impact.

    Josh Stern , February 3, 2017 at 10:22 am

    Main categories of complain about "Maximize Shareholder Value":

    Category 1 – Other things should get more weight alongside shareholder value – e.g. societal responsibility – this is valid, but not our current topic/issue.

    Category 2- Current practices aren't leading to the election of smart, capable BOD members acting primarily for shareholder value in their decision-making including hiring/fire of executives and voting on their proposals. This shown by, among other things, the very high levels of executive compensation relative to profit, the lack of correlation between executive compensation and profit, and the huge severance packages for released executives. This is my topic – what would improve that.

    Your points don't seem to fall in those categories. Seniority of debtto equity is a respected feature of the common business landscape, not normally thought of as a problem. Lack of complete information when voting on corporate actions is also a feature of the corporate setup – representational government. It doesn't stand in the way of the possibility of smart, conscientious executives. Other issues like cronyism, bad BODs, etc. are in the way, poor rules, poor communication, lack of interest by short term stakeholders, etc. are viewed as much more problematic.

    Yves Smith Post author , February 3, 2017 at 7:16 pm

    You are omitting a key point in the post, which is that seeking to maximize shareholder value results in lower returns for shareholders. It is empirically a bad idea.

    There are many views as to why this is so, but the biggest are likely the short-termism and obliquity. Electing more outspoken board members won't solve that.

    My narrower point was addressing why this notion had never been enshrined in any corporate charter: it would be seen as created undue conflicts regarding directors making sure clearly senior obligations are met. Again, under very well settled law, directors and officers have duties of loyalty and care to the corporation, and those take precedence to serving shareholders. Go read any law firm guide to director duties.

    aab , February 3, 2017 at 6:03 am

    One picky point: the analogy to Bonaparte really doesn't hold up. We haven't had our French Revolution yet. And I'm rusty on my nineteenth century French history, but I don't think there's much of a valid comparison between him and Trump anyway. "Strong man" is way too vague. Whatever is going on with Trump, he's not a brilliant military tactician and strategist moving into a power vacuum from inside the existing government.

    Agree about the "Resistance." But I don't see how the corporate Democrats return to power at this point - I mean real, governing power. Whatever comes next, it won't be that.

    I don't know yet whether to hope for oaths on tennis courts or not. That's a really, really last resort, obviously. These people running around punching alt-right Teen Beat cover boys and breaking windows are either fools or something worse.

    Also, it's nice to have data to go with my loathing of this "theory." I feel like we need a different word for this stuff, though. All these intersecting economic beliefs that are not based in facts and are easily repudiated by facts can't really be called theories, can they? They're more like belief systems. They were never really about figuring out something about reality. They were always about manipulating behavior through assertion to get desired outcomes, weren't they?

    readerOfTeaLeaves , February 3, 2017 at 9:02 pm

    I think that you seriously underestimate Trump. Napoleon excelled in an environment where military success was primary; Trump excels in a mediated environment where PR and imagery are primary. IMVHO, there are some eerie parallels between the two men; whether you like them or not, both men could be characterized by: ambition, vision, vindictiveness, and a willingness obliterate traditional social and political boundaries.

    I thought this was particularly brilliant:

    Many elite professionals are deeply upset with Trump's win. Yet the ideology that he represents is very much in line with the logic of corporate raiders, many of whom, like him, went to Wharton Business School. And many elite professionals, in particular lawyers and consultants, profited handsomely from the adoption of the buccaneer capitalist view of the world and actively enabled much of its questionable thinking and conduct.

    That Wharton Business School model is oblivious to the human needs for: fairness, reciprocity, culture, and the need to penalize duplicity. (I would argue that the Wharton model exalts duplicity, if only to pass it off as some kind of exceptional superpower wielded only by Business Elites.) When you corrode trust, you damage economies.

    Trump is the apotheosis of neoliberal economics + junk-bond fueled casino empires in a media environment that worships 'shareholder value' and has lost sight of what genuinely creates sustainable value over the long term.

    Disturbed Voter , February 3, 2017 at 6:56 am

    Isn't this just a side effect of optimization for one variable? And which variable to optimize is a question of governance? Since the invention of quantifiable economy, and the move from haggling to fixed price, particularly since the invention of monetary valuation in place of barter the mathematics becomes relentless to get the last drop of blood out of whatever turnip you are squeezing. And the invention of spreadsheets makes it that much easier to lean toward the quantitative, over the qualitative. We saw a similar process in "value engineering" in automotive engineering in that case to get the last ounce of weight out of the car, in order to optimize mileage, regardless of less quantifiable values.

    Clearpoint , February 3, 2017 at 8:44 am

    Awesome article. Great explanation of how wall street orchestrated casino capitalism controls today's economy, and in a manner that is detrimental to everyone but the casino operators. Milton Friedman's perverse views on "free markets", have turned the economy into a casino, first by destroying the controls on the money supply, and then by destroying corporate governance and responsibility. And we all know who makes all the money in any casino operation.

    David Apgar , February 3, 2017 at 1:09 pm

    Agree, awesome article. And interesting Clearpoint addition that the Street has every incentive to orchestrate volatility, to the detriment of many firms' greatest stakeholders, the neglected employees.

    RBHoughton , February 3, 2017 at 9:15 pm

    Agreed. I have copied it to all those poor chaps I know who are still in harness.

    readerOfTeaLeaves , February 3, 2017 at 9:05 pm

    Oh, I'd include Greenspan in the List of Dishonorables. Friedman had compadres.

    hemeantwell , February 3, 2017 at 9:04 am

    This question is of central importance, I only wish you'd find reason to bring it up more often. It raises another important question, although one that cannot be addressed so neatly: why has the capitalist project tended to turn away from long term commitments to profit-seeking through the production of (material) commodities?

    Was Friedman's short-termist view simply foolish, a mistake that has had very damaging impact but which can be reversed?

    Or, was it an idea that somehow picked up on declining opportunities for profit via sales of commodities, as writers like Amin and Harvey variously argue?

    Or - and the article skips over this - did Friedman capture the growing political aggressiveness of capital, as capital gradually overcame the Great Fear of the 30s and prepared to mount, as Streeck has argued, a counteroffensive against the constraints of welfare capitalism? Likely all of the above, but in what proportions?

    readerOfTeaLeaves , February 3, 2017 at 9:26 pm

    A lot of corporate governance is controlled by legal decisions. These legal decisions are rendered by judges. Future judges are well-socialized into free market views long before they ever hear cases or render judgments. We are seeing this trend continue with the current SCOTUS nomination in the hands of a GOP controlled Congress.

    Some of these people truly believe that 'free markets' can somehow 'improve and perfect' Human Nature. (See also: Ayn Rand, 'John Galt', Alan Greenspan) In other words, it's has more than a whiff of Nietzsche's 'Uber-man' ideology in the mix. It's an ideal system for equating human worth with net worth, and justifying vast inequalities in money and power.

    Thus does the snake swallow its tail. These judges fail to notice there is a large bump somewhere in the snake's body; at some point, it ate the Golden Goose, and is slowly digesting.

    oho , February 3, 2017 at 9:16 am

    index investing/etfs have made things worse. with such a big pool of ownership in passive hands, lots of rubber stamping going on

    John Wright , February 3, 2017 at 9:54 am

    This does not directly mention the "increase shareholder value" action of a company buying its own stock.

    That should be viewed as a red-flag admission from the senior executives that the company doing a share buyback does not see a way to grow its markets, does not see suitable investments for R&D. sees no pressing need to improve corporate infrastructure, sees no reason to train their workers, and can't find suitable acquisitions that would enhance their business.

    Effectively, the management team has scoured the globe searching for the best use of their spare cash, and, surprisingly, determined that one financial security, THEIR own company's stock, was the best use of the corporation's cash.

    A share buyback plan could be viewed as a warning shot indicating that management lacks ideas and is poorly managing the corporation.

    Instead it falls under a "increase shareholder value" tactic.

    flora , February 3, 2017 at 11:39 am

    +1. Used as an attempt to ward off a hostile takeover stock buybacks might be justifiable. Mostly, however, this usually looks like a simple attempt to prop up prices.

    blert , February 4, 2017 at 3:29 pm

    It is that acme of Liberalism, Warren Buffett that created this fad. At a time when corporate dividends were taxed as ordinary income, whereas a stock price bump would be tax deferred - and ultimately taxed at long term capital gains rates - the scheme was merely tax avoidance. Warren Buffett's entire empire is based on this and other tax avoidence schemes.

    Then, coupled with stock options for corporate management, the path was set.

    Josh Stern , February 3, 2017 at 10:39 am

    Common criticisms of "Maximize Shareholder Value: 1) Should give more weight to something else – e.g. societal concerns. 2) Execs – prioritize other things; 3) BOD's prioritize other things, including their personal relationship to execs. Improving corporate governance can, in theory, setup procedures and rules to fix 2) and 3) by making sure BOD's in publicly listed corporations really have the legal power, and by making elections more open, including the selection of the initial selection of BOD candidates. However, this still requires interest from a majority of voting shareholders – it would be better to ask people not interested to not vote at all. (I tried to thread this comment as a reply above but it repeatedly disappeared).

    caloba , February 3, 2017 at 10:56 am

    For a UK example of a company choosing not to maximise shareholder value, the disastrous acquisition of HBOS by Lloyds is instructive. Management claimed to be looking through the (ridiculously underestimated) short-term issues to the resulting long-term competitive advantages which the government assured them (falsely) wouldn't subsequently be challenged.

    Of the c95% acceptances supporting this lunatic deal, some proportion of the institutional shareholders must have been idiots, a few must have feared for the stability of the banking system were the deal rejected, and a great many must also have been HBOS bondholders

    flora , February 3, 2017 at 11:30 am

    "But CEOs recognized how the newly-installed leaders of LBO acquisitions got rich through stock awards or option-type compensation. They wanted a piece of the action. "

    The maximize shareholder value ideology in practice looks like maximize CEO compensation and to heck with the company's long term prospects. imo.

    Great post. Thanks.

    Vedant Desai , February 3, 2017 at 11:59 am

    I doubt that any of the CEOs which have said that they are being pressurized to short-termism are actually willing this stupid concept to be removed considering they are the prime benefactor of this.

    I believe that supermacy of shareholders interest was originally adopted because they were bearing risk. Shares being an illiquid asset were supposed to be a source of income not capital gain. Due to this shareholders were forced to ensure that short-termism is avoided and corporate governance is adequate. Things started to reverse slowly as liquidity of shares increased gradually.

    Presently, when shares can be sold in seconds of owning them, risk a share-holder bear is greatly lower than they beared a century ago. Also , shares are bought for capital gain not income.

    Considering relationship between share's liquidity and short-termism , any measure which reduces share's liquidity, for example a high tax on short term capital gain, will greatly reduce both short-termism and corporate governance issues as share holders will be forced to assume the risk they were supposed to bear in exchange of supermacy of their interest.

    John Wright , February 3, 2017 at 12:08 pm

    HP was mentioned in the above text. I found it interesting to view the old HP Corporate Objectives as published in the HP employee magazine "Measure" in July 1974 See http://www.hp.com/hpinfo/abouthp/histnfacts/publications/measure/pdf/1974_07.pdf ,

    pages 7, 8, 9, 10

    Hewlett-Packard objectives

    1. Profit – Objective: to achieve sufficient profit to finance our company growth and to provide the resources we need to achieve our other objectives

    2. Customers- Objective: To provide products and services of the greatest possible value to our customers, thereby gaining and holding their respect and loyalty.

    3. Fields of Interest- Objective: To enter new fields only when the ideas we have, together with our technical, manufacturing and marketing skills, assure that we can make a needed and profitable contribution to the field.

    4. Growth – Objective: To let our growth be limited only by our profits and our ability to develop and produce technical products that satisfy real customer needs.

    5. Our people: Objective: To help HP people share in the company's success, which they make possible; to provide job security based on their performance; to recognize their individual achievements; and to insure the personal satisfaction that comes from a sense of accomplishment in their work

    6. Management- Objective: To foster initiative and creativity by allowing the individual great freedom of action in attaining well-defined objectives,

    7. Citizenship – Objective: To honor our obligations to society by being an economic, intellectual and social asset to each nation and each community in which we operate.

    *****
    Note, Hewett and Packard, themselves, may have owned 40-50% of the company stock at this time, so they had great control of the company's direction at this time.

    No corporate objective about shareholder value even though they were very large shareholders.

    mle detroit , February 3, 2017 at 2:02 pm

    Yes, but. I remember someone from UMichigan business school (Gary Hamel, I think) speaking to a group of top 2% Ford Motor Co. execs in the late 1980s. He asked, "Come on, guys how many of you were thinking about shareholder value in the shower this morning?" The room laughed, but one pudgy hand in the back went up. It belonged to Edsel Ford.

    susan the other , February 3, 2017 at 2:41 pm

    This takes us back, HP was so honest it almost sounds quaint. And 1974 was just before Reagan's supply side economics stuff in the aftermath of the awful stagflation that hit us after Vietnam.

    According to Paul Craig Roberts, supply side was embraced because it was thought to prevent inflation (wage price spiral) and still provide sufficient jobs and products.

    He goes on to say that supply-side/trickle-down was a reasonable idea but it was hijacked by Wall Street who took it to heart and then used it to justify offshoring jobs to enhance corporate profits, and eventually shareholder value. Because, as PCR puts it, Wall Street forced companies to get lean and competitive and if they didn't nobody invested in them: aka no shareholders if no timely shareholder value. So it was almost an extortion racket. This was accompanied by all the corporate raiders and the real prosperity of the country was quickly retarded and siphoned off. Great post, thanks Yves.

    Expat , February 3, 2017 at 1:48 pm

    I have a rather naive question which I should have asked long ago in my one and only finance class at college. Why does it matter if a share price drops all other things being equal? A company sells shares, effectively handing out "residual claims" against cold, hard cash. If the cash is invested in a business – and assuming the business is at least "break-even" plus the risk-free rate of return- other than investor panic and CEO's getting "refreshed" stock options, why would this matter?

    John Wright , February 3, 2017 at 4:20 pm

    Some reasons are frequently given for preferring a high stock price.

    1. A low share price encourages others to acquire the company
    2. A high price is good when stock is used as currency to buy other companies.
    3. Executive compensation schemes are sometimes tied to stock price.

    But if a company is not selling stock to fund current operations, then the stock price could go to zero with no operational effect. The employees who own stock would not be pleased. However, an apparent artificially low price could help with hiring new employees who may be granted low priced options.

    Occasionally I see someone claiming a company is being killed by short sellers driving the stock price down. I don't see how this could damage the ongoing operations or cash flow EXCEPT if the company is selling stock to fund operations or is trying to make a truly worthwhile acquisition with their stock.

    If a company is doing well and cash flow positive and short sellers drive the stock price down too low, the company should use their cash to buy their shares and squeeze the shorts.

    In the case of Hewlett-Packard there was no official stock price set by the investment community for years, as the company waited a few years before doing an IPO.

    The company was founded in 1939 and IPO'ed eighteen years later in 1957.

    Imagine, operating for 18 years without Wall Street supervision.

    Yves Smith Post author , February 4, 2017 at 4:55 am

    Agreed with your point and John Wright's explanation. The idea that a stock price must be high is dogma that is never questioned. The big reason is for concern re a low stock price is it is seen as the market voting against management and an invitation for raiders to take the company over.

    But otherwise, if a company can raise enough money to fund expansion through its own cash flow (which is the biggest source of investment fund) and debt (the next biggest source), there is no reason to issue more stock (save your point re employee/executive stock options) and hence no reason to care regarding the price.

    skippy , February 3, 2017 at 3:22 pm

    Equity is a form of HPM these days, for C-corps, which can be used as a tool of pleasure [c-suite bonuses et al] or a weapon of destruction [excuse for diminishing labour and the enviroment].

    disheveled . the religion of free markets has become the dominate meme in society and those that benefit the most from it . wellie see history .

    Chuck , February 3, 2017 at 4:28 pm

    I'm struggling with the short termism argument. The cash flows from equity don't have a maturity. Bonds due. If a company sought to maximize bond holder value, they would minimize risk (and R&D) to make sure sufficient funds were available to pay the bond holders. Equity maximization should be longer term focused than the maximization of limited life securities.

    Yves Smith Post author , February 4, 2017 at 4:58 am

    Bonds are simply a promise to pay interest and principal on fixed dates. There is NO value to equity if you don't meet that promise.

    Chauncey Gardiner , February 3, 2017 at 6:02 pm

    While it has damaged corporate social responsibilities and banks' and corporations' long-term financial stability, actions taken pursuant to the Shareholder Value optimization model have served well many individuals on Wall Street, at private equity firms, CEOs of large publicly traded corporations, hedge funds, networked board members, their academic and professional servicers, and the political elite

    Reflecting back on developments like the dotcom bubble of 1999-2000; the underlying causes of the financial collapse of 2007-09; massive debt-leveraged corporate stock buybacks; socially damaging private equity LBOs; the current volumes of opaque OTC derivatives at large financial institutions; repeated episodes of environmental damage caused by firms in extractive industries seeking short-term financial returns; and the license it provides to exert power over legislation and regulation by those who own and control these corporations in a Citizens United legal framework; etc., it is difficult to see much in the way of redeeming social value in this corporate governance model.

    Josh Ster , February 3, 2017 at 6:04 pm

    Topical article highlighting a way to subvert corporate governance: Corrupt US govt. supports secret oil company payments/bribes to corrupt foreign govts., whose autocratic leaders may be major shareholders in the oil company too.

    http://www.telesurtv.net/english/news/US-Senate-Guts-Anti-Corruption-Law-for-Big-Oil-Companies-20170203-0011.html

    Harold , February 4, 2017 at 11:27 am

    Not by usury maybe, but wealth came to Renaissance Italy through use of interest , hitherto prohibited. And advances in book keeping. This wealth financed the great artists mentioned by Pound.

    b1daly , February 4, 2017 at 2:17 am

    Thanks for this post. I always found the notion of "maximizing shareholder value" to be very strange, and counter to common sense. The concept of "stakeholders" always made more sense. For a company to be managed with a focus on the wellbeing of workers, customers, and community, in addition to owners, struck me as being obviously the way it should work. (And sometimes does.)

    The idea that parties who happen to own a share of the company should have their interests served above all is counter intuitive, as employees will almost always have a greater stake in the company than any individual owner, if shares are widely distributed.

    If you think of an sole proprietor who ventures forth to do business who has made clear to all that his interests are paramount in any transaction, I do not envision customers flocking to such an individual.

    The apparent lack of basic decency in corporate/management decisions that we see so often is just hard to reconcile with how most of us intuitively feel about how we see ourselves in the context of our community: most people have a significant level of self interest, but we are always aware of the need to consider the interests of others when we act. Even for something as basic as waiting in line for something.

    Somehow people at the elite levels of, finance for example, feel quite OK about heavily prioritizing their own interest above all.

    As someone not privy to this social realm, I am just mystified about the social dynamics that, if not encourage this, at least consider it a fine way to do business.

    In a small example, from my personal experience, I am a professional user of audio software from Avid. Avid has been losing money year after year. Over the past five years the company as taken actions that have outraged the user base, far more than any other software company I know of. Their forum is over run with vitriolic ranting, from longtime customers. (In fairness, this has abated a bit, as the company has finally been making moves that are sensible, and that meet the needs of the users.)

    There have been several rounds of significant layoffs, and the frontline workers bear the brunt of the customers wrath. Morale has been low.

    In conversation, a previous employee told me he considered management to be white collar criminals, who were looting the company.

    This type of product has a unique feature of having very strong platform lock-in effects. In few other product categories would you see such angry customers continue to buy the products.

    Yet the board has been approving generous compensation increases for C level management, and for themselves for the past few years.

    I'm fascinated from an everyday, social point of view, how the board and management make these decisions. Do they really think they are doing a good job? From the outside, it appears to me that they do it simply because they can, and have little concern for the long term well being of any of the other stakeholdes.

    Does anyone here have insight about the social dynamics that enable this behavior?

    broadsteve , February 4, 2017 at 5:21 am

    This is something I'd welcome some insights on too as I find certain behaviours and attitudes impossible to understand.

    Is it simple greed, stupidity, cynicism, groupthink, false consciousness, sociopathy, the 'attractions' of a certain lifestyle, daddy-didn't-love-them-enough or what that leads certain types to behave the ways they do and seek to justify it? If they acted with a degree of shame or embarrassment, or even full on chutzpah , I'd understand them more, but it's the ordinary types, those who outwardly seem to be of the same species as oneself and otherwise appear to be perfectly normal people that I just don't understand. I can believe almost anything of them, except for the possibility that they actually, genuinely, believe that they are on the right side of things.

    I have similar brain fade when it comes to much of what politicians of the Right have to say on most things. So often, and try as I might, I just can't understand how supposedly sentient beings can honestly believe the drivel they come out with, still less have the brass-neck to stand up in public and display just how effing stupid and cynical they are. Feel much the same about all shades of politician but it's far worse on the Right.

    blert , February 4, 2017 at 3:35 pm

    At bottom, Control Fraud is the issue.

    Word games// rationalizations are used to numb the public - while the crooks loot the collective wealth of the corporation in a systematic way.

    It's the ability of the corporate suite to grant itself stock options - in almost unlimited amounts - that's causing the trouble. They are a looting.

    MUCH would be solved by just taking such grants in equity out of the equation: make them illegal. Period.

    Suddenly, the CEO's desire to juice the price would fade.

    [Feb 04, 2017] Is Inequality a Political Choice?

    Notable quotes:
    "... Cross posted from the Institute for New Economic Thinking website ..."
    "... Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'." ..."
    "... no sh*t, Sherlock ..."
    "... Wealth and Democracy ..."
    "... However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. ..."
    "... early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)? https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html ..."
    "... What socio-econ OU ..."
    "... Cross posted from the Institute for New Economic Thinking website ..."
    "... Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'." ..."
    "... no sh*t, Sherlock ..."
    "... Wealth and Democracy ..."
    "... However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. ..."
    "... early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)? https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html ..."
    "... What socio-econ OUTCOMES have resulted in even PAMPLIN MEDIA GROUP ..."
    "... and the so-called alternative weeklies who only make news hole available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or Booze\Gourmet venture ..."
    "... Mitch Ritter\Paradigm Shifters Lay-Low Studios, Ore-Wa Media Discussion Group ..."
    "... TCOMES have resulted in even PAMPLIN MEDIA GROUP ..."
    "... and the so-called alternative weeklies who only make news hole available for Lifestyle features on the new Wellness Spa, Tattoo Parlor or Booze\Gourmet venture ..."
    "... Mitch Ritter\Paradigm Shifters Lay-Low Studios, Ore-Wa Media Discussion Group ..."
    Feb 04, 2017 | www.nakedcapitalism.com
    Posted on February 4, 2017 by Yves Smith Yves here. Both economists and the press do such a good job of selling the idea that inequality is the fault of those who come out on the short end of the stick that academics need to develop empirical evidence to prove what ought to be intuitively obvious.

    Cross posted from the Institute for New Economic Thinking website

    The fact that most of the fruits of US economic growth have not been shared with the lower-middle and working class is accepted across the political spectrum in America. But that inequality is often treated as a somehow inevitable consequence of globalization and technological change. That view is contradicted by the comparison of income growth and distribution statistics between the US and three others rich countries, France, Norway and the UK - according to new research by Max Roser and Stefan Thewissen of the Institute for New Economic Thinking at Oxford. Writing in Vox on the database they've constructed, Roser and Thewissen note:

    "We compare the evolution of the income an individual needs to be right at the 10th percentile of the income distribution to the evolution of the income of an individual at the 90th percentile. We call these two groups the 'poor' and the 'rich.' We can then look at how much incomes grew for the poor and the rich in absolute terms as well as relative to each other - and thereby assess the extent to which growth was widely shared. We measure income after taxes and transfers, and adjust for differences in prices over time and across countries using inflation and purchasing power information. Our database can be accessed online, with more information on our exact measure and data for other countries."

    The US performs poorly by comparison to these countries, for reasons that may have more to do with structure, institutions and policy. Roser and Thewissen conclude:

    "The differences we have identified across countries and time imply that increased globalization and technological change cannot be blamed as sole causes for rising inequality. Those forces work across borders and should affect all countries. The fact that other developed countries have been able to share the benefits of these market forces suggests that policy choices on the national level play a central role for boosting living standards. Policies can make a difference not just in growth levels, but also in who gets the benefits of that growth."

    8 0 16 3 1 This entry was posted in Banana republic , Free markets and their discontents , Global warming , Guest Post , Income disparity , Politics , Regulations and regulators , The destruction of the middle class on February 4, 2017 by Yves Smith . Subscribe to Post Comments 36 comments Disturbed Voter , February 4, 2017 at 7:03 am

    The intuitively obvious, should be taken as axiomatic. Like two points determine a single line. When you start out from an unequal position (not like at the start of a foot race) it is unclear who to blame, for the one person who crosses the finish line first vs the losers. And much of life is "first across the finish line". Also since in this case, the winner of the last race, gets an advantage on the next starting line the unequal advantage tends to accumulate. Life is unfair. The point is to maintain the status quo, statically and dynamically. Those who have advantages today, continue to have them, as white collar US workers and even blue collar US workers used to. The previous winners continue to win these unequal contests, but the number of happy workers gets fewer and fewer. This is why Trump voters the benefits of inequality are now being shared less equally ;-) The purpose of government is to benefit the status quo. Therefore policy doesn't offer substantive way out. Change will occur but only when the current status quo maintenance system fails. Conclusion: like the game of Musical Chairs there is no change until the music stops, and someone different can't find a chair to sit in. But it is less fun in real life.

    Moneta , February 4, 2017 at 7:16 am

    Funny how kids' games are there to show how luck works in life and how people work around it, yet many never seem to see the link.

    Disturbed Voter , February 4, 2017 at 8:08 am

    Unfortunately many in the current generation are content to play the little pig, in Charlotte's Web. They forget where McDonald's McRib comes from. Again, children's culture is illustrative and simplified.

    MP , February 4, 2017 at 10:14 am

    I wouldn't underestimate "many in the current generation" – especially among those who don't have the "divided baggage" of the generations that preceded them. Due to purposely recirculated historical circumstances aligned with modern "evolution," it may not be as easy for power to continue to "manipulate and control."

    Kris Alman , February 4, 2017 at 2:11 pm

    Speaking of generations
    In 2010, Steve Bannon directed and wrote this film: Generation Zero
    http://generationzeromovie.com/trailers.html

    You can watch the full length movie here:
    http://www.snagfilms.com/films/title/generation_zero

    In this fear-mongering film, conservatives like Gingrich put a spin on the power of the "elite" destroying the middle class in a revisionist approach (although they are quick to point out that both parties are captured by global corporations). The future: austerity, deregulation and 20 years of chaos (with probable war) ahead of us.

    The film revolves around the Strauss-Howe generational theory.
    https://en.wikipedia.org/wiki/Strauss%E2%80%93Howe_generational_theory
    Steve Bannon, Chief Strategist and Senior Counselor to President Trump is a prominent proponent of the theory. As a documentary filmmaker Bannon discussed the details of Strauss-Howe generational theory in Generation Zero. According to historian David Kaiser, who was consulted for the film, Generation Zero "focused on the key aspect of their theory, the idea that every 80 years American history has been marked by a crisis, or 'fourth turning', that destroyed an old order and created a new one". Kaiser said Bannon "is very familiar with Strauss and Howe's theory of crisis, and has been thinking about how to use it to achieve particular goals for quite a while." A February 2017 article from Business Insider titled: Steve Bannon's obsession with a dark theory of history should be worrisome commented "Bannon seems to be trying to bring about the 'Fourth Turning'."

    David Kaiser has distanced himself from Bannon's extreme views.
    http://time.com/4575780/stephen-bannon-fourth-turning/

    When I was first exposed to Strauss and Howe I began thinking how their ideas explained the histories of other countries as well, and during our interview, I mentioned that crises in countries like France in the 1790s and Russia after 1917 had led to reigns of terror. Bannon included those remarks in the final cut of Generation Zero.
    A second, more alarming, interaction did not show up in the film. Bannon had clearly thought a long time both about the domestic potential and the foreign policy implications of Strauss and Howe. More than once during our interview, he pointed out that each of the three preceding crises had involved a great war, and those conflicts had increased in scope from the American Revolution through the Civil War to the Second World War. He expected a new and even bigger war as part of the current crisis, and he did not seem at all fazed by the prospect.
    I did not agree, and said so. But, knowing that the history of international conflict was my own specialty, he repeatedly pressed me to say we could expect a conflict at least as big as the Second World War in the near or medium term. I refused.
    Apocalyptic rhetoric and apocalyptic thinking flourish during crisis periods. This represents perhaps the biggest danger of the Trump presidency, and one that will bear watching from all concerned citizens in the months and years ahead.

    That's why we should all be concerned about Bannon being added to the National Security Council. http://www.cnn.com/2017/01/29/politics/susan-rice-steve-bannon/index.html

    Bannon's Islamaphobia portends a 'global war' between 'the Judeo-Christian west' and 'jihadist Islamic fascism.'
    https://www.theguardian.com/us-news/2017/feb/03/steve-bannon-islamophobia-film-script-muslims-islam

    MP , February 4, 2017 at 3:01 pm

    Thanks for the information. I'm aware of the madman's "movie" and his authoritarian ideology. He and his commander-of-thieves will continue to unravel right before our eyes. Many lives will continue to be severely impacted by these hateful, selfish, abusive throwbacks from "central casting."

    DWD , February 4, 2017 at 10:10 am

    The Race

    Every day there is a race you have to run. For the sake of discussion, let's call it a 100 yard race.

    The participants are called and then evaluated by the judges. Starting points for the race are then determined. If you are particularly comely, you are given an advantage: that is, your starting point is moved up depending on the judges. If you have a personality that people find attractive, you are given further yards. If you happen to have had great success in school, you are awarded so many yards because of your academic record. If you happen to be good looking and personable, the academic success yards are added onto your already determined starting point.

    Then the quality and reputation of your educational institution is evaluated and you are given further yards to determine starting points with certain schools worth a better starting position. And even the type of training at the institution is evaluated and further yards given.

    Finally the judges add your total experiences – including your finishing position in previous races – advanced degrees, and connections and further yards are added.

    So when the gun sounds, the person without the advantages strives as hard as they can but they cannot win the race because some people only have to simply step over the finish line.

    And even more troubling some people are moved behind the starting line because they could not even muster the necessary accomplishments to reach the starting line: drop outs from school, people who have been convicted of crimes and the rest. The worse the offense, the further you are moved behind the starting line.

    Every day this continues and those striving to win – even running faster and harder than their competitors – are simply unable to do so because the rules are such that winning is not even a consideration when the race is rigged.

    Jazz Paw , February 4, 2017 at 4:30 pm

    The factors are certainly at work in inequality. Some of those factors can either be mitigated or compensated for by the individual and/or the social system.

    There are other structural factors that influence inequality. Family connections, inherited wealth, and other forms of social capital that can make advancement easier is one. Savings and investment patterns that can be engaged in to varying degrees depending on just how much surplus income one has is another.

    The social and political system in the US generally favors vigorous competition, private self-dealing, and asymmetric information. Individuals who learn to navigate these factors can prosper, while those who either can't or don't want to can suffer significant disadvantages in outcomes. The influence of these structural factors in any social system influences the degree of income/wealth stratification.

    In my own family, many of the starting social factors are fairly equal among the individuals. Even though my various relatives have not necessarily made "bad" choices in the moral sense, their outcomes have been vastly different. The degree to which they have chosen to engagein income/wealth maximization has generally been a large factor. In that sense, the game is rigged away from living what many consider a humane life.

    David , February 4, 2017 at 7:19 am

    You mean people actually got paid to research and write stuff like this? You simply have to look at the (re)distribution policies of the countries concerned – and there are substantial differences between the three of them, by the way.
    Wouldn't a much more interesting question be "By what mechanism does globalization necessarily increase inequality, and how does it work precisely in a number of contrasted cases"? But then you might get the wrong answer.

    lyman alpha blob , February 4, 2017 at 9:38 am

    No kidding – kind of amazing that people get paid good money to restate the obvious, but using sesquipedalian language just to make it more difficult to understand.

    Inequality is caused by one group not having as much money as another. Money is simply a tool created by human beings. Much like a hammer, human beings could use it to build houses for everyone or to bash others about the head. We humans seem to prefer the latter use.

    Grebo , February 4, 2017 at 1:43 pm

    The people paid to prove the obvious are far outnumbered by those paid to disprove it. We need the former because of the latter.
    On the other hand, there are many cases where the obvious turned out to be wrong when it was looked at carefully. More research needed!

    Knute Rife , February 4, 2017 at 1:49 pm

    We're in a world where politicians get paid to lie about these obvious things and legislate based on those lies, and businesses make their profits off the lies, so I can't get too exercised when someone gets paid to point out the lies.

    Fred Grosso , February 4, 2017 at 7:52 am

    Yes. I decided I wasn't going to be Fred Trump's son.

    Disturbed Voter , February 4, 2017 at 8:06 am

    Bravo. Who can tolerate the virtue signaling of the plutocracy?

    Carla , February 4, 2017 at 10:20 am

    +10

    funemployed , February 4, 2017 at 8:36 am

    "Forces." Really? "Globalization" and "technological change" are things humans do for human reasons. To treat them as "forces" somehow exogenous to human choices is self-evidently fallacious. It's precisely the same logic that says the King is the King cause God likes him best.

    They're not "forces." They are heuristics. And as heuristics, they are pretty lousy unless you parse them quite a bit. Obama's 1 trillion dollar investment in nukes creates "technological change." The destruction of local agricultural techniques and knowledge is "technological change." A kindle is "technological change." Keyword searches readily available to academic researchers was a big "technological change."

    I'm assuming what they mean by "technological change" here is the sort that allows us to collectively make more stuff with less work. God forbid anyone spell that out though. Because "hey, guess what: you have to work more for less because we can now make more stuff with less work," would quickly lead to the violent demise of economists and rich people. (more to say on "globalization" but this post is already way longer than intended.)

    Sound of the Suburbs , February 4, 2017 at 9:21 am

    Redistributive Keynesian capitalism produces the lowest levels of inequality within the developed world from the 1950s to the 1970s.

    1980s – Let's get rid of redistributive Keynesian capitalism.

    Inequality soars.

    What was supposed to happen?

    nowhere , February 4, 2017 at 6:31 pm

    A rising tide of lifting boats

    Pelham , February 4, 2017 at 10:06 am

    Germany should have been included in the study. German manufacturing is far more technologically advanced than manufacturing in the US, yet Germany manages to maintain high employment in that sector, probably because the companies invest in worker training and feel some obligation toward labor.

    There's a structural reason for this, with labor having powerful representation on German corporate boards and smaller companies being owned by families instead of faceless shareholders, with the families' long-term interests naturally more in alignment with those of their employees.

    David , February 4, 2017 at 11:22 am

    Actually, I thought the inclusion of France and the UK was a bit strange, as well. Inequality in both countries has been increasingly massively in recent years. One Thomas Piketty even wrote something on the topic, if I'm not mistaken. Japan would have been a much better example.

    jrs , February 4, 2017 at 12:22 pm

    I think it kind of makes the point, if even a country that isn't exactly known for egalitarianism, like the UK, is doing better than the U.S. it kind of shows how extreme on the scale the U.S. is.

    nowhere , February 4, 2017 at 6:33 pm

    We are exceptional in every way!

    Barni , February 4, 2017 at 1:42 pm

    Contrary to elite owned and serving mass media claims, the trick that created the German economic miracle is no mystery; it was, and IS, their banking system.
    In Germany more than 70% of all banking is done by "municipally owned banks"!!!
    A situation that the elites – masters of the universe -have been working day and night to drastically alter so that their "too big to fail" minion zombie banks can take complete AND total control of the economy, as they have in most of the developed world except North Dakota, Canada (Canada owns the Bank of Canada – the Finance Minister holds all the shares on behalf of all Canadians), and Switzerland (Switzerland has Cantonal {municipally or provincially} owned banks) – all three countries, like the German municipally owned banks, are under attack by the elite serving bureaucrats in the IMF and the U.S. Federal Reserve; all of whom are owned by, and minions of, Wall Street; and most importantly the corporate bought and sold world's university economics departments – co-opted to right agenda faux economic B.S.
    The U.S. Federal Reserve now donates more money to universities worldwide than all of the rest of the donors combined!?! The proviso on these donations is that they only hire economics profs who have been published in one of the 37 journals published by the U.S. Federal Reserve – and we know what kind of right agenda 'fascist' mumbo-jumbo these minion economists are dedicated to serving up in order to get published by the U.S. Fed!!!
    So what you say!! Well here's so what!
    If you are in any other developed country than Germany and you have a great idea/product and require a one million dollar loan to build a factory and set up production – here's what happens to you. Your local banks will never lend you that money, so you have to go to the criminal Big Banks which will also never lend you the money you need, which means you will have to sell your idea/product at pennies on the dollar to one of their huge corporate clients, who will offshore production to a corrupted third world country where workers get paid pennies an hour and unions are considered a criminal enterprise. Leaving you, the creator of the product or service with pennies on the dollar; and leaving your local economy with zero economic growth and no well paid local employment opportunities. The corporate buyer of your technology/product/idea may well just kill your product because it is better than the (inferior) one they are currently making bags of money selling – for which they have just eliminated your innovative and superior competitive product.
    If you are in Germany however the story is far different. In Germany you would go to your local municipally owned bank which is only too happy to give you the one million dollars you need to set up production (locally providing employment and contributing to local economic prosperity).
    This is the basis for the strength of the German economy and the reason for the so called ":German economic miracle?"!
    It is described as a "miracle" not because we have no idea how it happened, rather because the elites who own more than 80% of all corporate shares need to confuse us plebs they want to economically and politically crush!

    Sluggeaux , February 4, 2017 at 11:01 am

    American wealth inequality is a political problem? Well, no sh*t, Sherlock .

    Kevin Phillips wrote about this phenomenon a decade ago in his wonderful book Wealth and Democracy . Between 1920 and 1980, American plutocrats had been placed in fear by the Bolshevik revolution, humbled by the Great Depression, and shamed by the Second World War. Greed was in check. Then they died-off and left their wealth to a new generation more interested in emulating Mick Jagger than Dwight D. Eisenhower. Ronnie Reagan was their Hollywood pal, who cut estate and coupon-clipping taxes so that they could party like rock stars.

    Crass punks like Donald Trump and the Kochs are the scions of inherited wealth and Studio 54. They could never have made it on their own, on their own talents, and it is in their class interest to destroy any sort of meritocracy. They have used materialism and greed to buy the political class.

    Advance , February 4, 2017 at 11:21 am

    Look up Geert Hofstede's work on "power distance," which is the extent to which a nation accepts inequality.

    According to Hofstede, countries have different "tastes" or preferences for inequality. For example, the Middle East, parts of S America, India, and other parts of Asia have a much bigger "taste" for inequality compared to, say, the Scandinavian countries, which have the lowest.

    I would guess that differences in preferences for inequality between countries go back to a nation's history, and maybe other hard-to-pin down forces and factors.

    The US, according to Hofstede's work, is at the middle point, or a little lower, as to taste for inequality. However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences. In other words, we may be getting more inequality than we like.

    By the way, Hofstede assumes that power distance preference is a fairly durable characteristic of a nation.

    UserFriendly , February 4, 2017 at 2:45 pm

    Preference?? Yes, I'm sure the mid east loves inequality, which is why they are known for choosing dictators who quash uprisings as their leaders. And how exactly would I choose egalitarianism here in the US? I can vote for Wall Street and Holly Wood or Wall Street and Exxon Mobil. Which one is the egalitarian one?

    Ignacio , February 4, 2017 at 2:58 pm

    "

    However, reading about the recent Gini index leads me to believe that either our preference for inequality is changing [probably not the case, given Trump], or our history is outrunning our preferences.

    "

    What about "power distance" (extent to which a nation accepts inequality) interactions with "distance to power" extent to which a nation influences the powerful.

    Sam , February 4, 2017 at 12:40 pm

    According to Ha-Joon Chang, markets are political creations.

    So, yes.

    Bernard , February 4, 2017 at 12:45 pm

    "To serve Humans." The cookbook from " the Outer Limits/Twilight Zone" TV series had aliens come to "devour" humans. such a farce!! lol

    when the reality all along has been that's it the Rich who wrote the "Cookbook". Bernay's sauce, once again.

    who would have thunk it! Inequality is the major ingredient.

    Anonymous , February 4, 2017 at 2:17 pm

    I've been reading Robert J. Gordon's book, 'The Rise and Fall of American Growth.' Gordon would say that American labor did well from 1870-1970 because of the innovations that drove the economy increased everyone's productivity and the value of their work. Since 1970, productivity has slowed down. It rose again during the decade of the '90s but mostly for knowledge workers, thanks to the internet, spreadsheets, etcetera, but now has continued to slow. That was a recipe for income inequality, and for wealth inequality as well, since the rise of digital industries has increased property values on the coasts and in select inland cities.

    Slowing productivity also increased wealth inequality by facilitating the decline of interest rates. This helps the haves, since their assets are suddenly more valuable.

    pretzelattack , February 4, 2017 at 3:23 pm

    http://www.huffingtonpost.com/martin-ford/is-american-economic-grow_b_9096698.html

    this guy argues that productivity has been decoupled from compensation, and that has driven the rise of inequality.

    off topic, but the krugman review of the book contained the interesting fact that, during the 1880's, wall street was 7 feet deep in manure in some places.

    UserFriendly , February 4, 2017 at 2:53 pm

    Of course inequality is a political choice. Chosen by the oligarchs who buy the politicians.

    Just like every mainstream economist is choosing to make millions suffer and die every day because excepting MMT would bruise their ego's. That is a choice too.

    Ignacio , February 4, 2017 at 3:01 pm

    I think that inequality is not a political choice directly but a consequence of deregulation or "do nothing" policy. Reducing inequality is a policy choice.

    marblex , February 4, 2017 at 3:32 pm

    To quote the very astute Batman11 from ZH:

    𝐀𝐥𝐥 𝐟𝐨𝐫 𝐨𝐮𝐫𝐬𝐞𝐥𝐯𝐞𝐬, 𝐚𝐧𝐝 𝐧𝐨𝐭𝐡𝐢𝐧𝐠 𝐟𝐨𝐫 𝐨𝐭𝐡𝐞𝐫 𝐩𝐞𝐨𝐩𝐥𝐞 𝐬𝐞𝐞𝐦𝐬, 𝐢𝐧 𝐞𝐯𝐞𝐫𝐲 𝐚𝐠𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝, 𝐭𝐨 𝐡𝐚𝐯𝐞 𝐛𝐞𝐞𝐧 𝐭𝐡𝐞 𝐯𝐢𝐥𝐞 𝐦𝐚𝐱𝐢𝐦 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐚𝐬𝐭𝐞𝐫𝐬 𝐨𝐟 𝐦𝐚𝐧𝐤𝐢𝐧𝐝." 𝐀𝐝𝐚𝐦 𝐒𝐦𝐢𝐭𝐡, 𝐓𝐡𝐞 𝐖𝐞𝐚𝐥𝐭𝐡 𝐨𝐟 𝐍𝐚𝐭𝐢𝐨𝐧𝐬

    𝐌𝐚𝐧𝐤𝐢𝐧𝐝 𝐟𝐢𝐫𝐬𝐭 𝐬𝐭𝐚𝐫𝐭𝐞𝐝 𝐭𝐨 𝐩𝐫𝐨𝐝𝐮𝐜𝐞 𝐚 𝐬𝐮𝐫𝐩𝐥𝐮𝐬 𝐰𝐢𝐭𝐡 𝐞𝐚𝐫𝐥𝐲 𝐚𝐠𝐫𝐢𝐜𝐮𝐥𝐭𝐮𝐫𝐞.

    𝐈𝐭 𝐰𝐚𝐬𝐧'𝐭 𝐥𝐨𝐧𝐠 𝐛𝐞𝐟𝐨𝐫𝐞 𝐭𝐡𝐞 𝐞𝐥𝐢𝐭𝐞𝐬 𝐥𝐞𝐚𝐫𝐧𝐭 𝐡𝐨𝐰 𝐭𝐨 𝐫𝐞𝐚𝐝 𝐭𝐡𝐞 𝐬𝐤𝐢𝐞𝐬, 𝐭𝐡𝐞 𝐬𝐮𝐧 𝐚𝐧𝐝 𝐭𝐡𝐞 𝐬𝐭𝐚𝐫𝐬, 𝐭𝐨 𝐩𝐫𝐞𝐝𝐢𝐜𝐭 𝐭𝐡𝐞 𝐜𝐨𝐦𝐢𝐧𝐠 𝐬𝐞𝐚𝐬𝐨𝐧𝐬 𝐭𝐨 𝐭𝐡𝐞 𝐚𝐦𝐚𝐳𝐞𝐝 𝐦𝐚𝐬𝐬𝐞𝐬 𝐚𝐧𝐝 𝐜𝐨𝐥𝐥𝐞𝐜𝐭 𝐭𝐫𝐢𝐛𝐮𝐭𝐞.

    They soon made the most of the opportunity and removed themselves from any hard work to concentrate on "spiritual matters", i.e. any hocus-pocus they could come up with to elevate them from the masses, e.g. rituals, fertility rights, offering to the gods . etc and to turn the initially small tributes, into extracting all the surplus created by the hard work of the rest.

    The elites became the representatives of the gods
    and they were responsible for the bounty of the earth and the harvests. As long as all the surplus was handed over, all would be well.
    Later they came up with money.

    We pay you to do the work and you give it back to us when you buy things, you live a bare subsistence existence and we take the rest.

    "𝐌𝐨𝐧𝐞𝐲 𝐢𝐬 𝐚 𝐧𝐞𝐰 𝐟𝐨𝐫𝐦 𝐨𝐟 𝐬𝐥𝐚𝐯𝐞𝐫𝐲, 𝐚𝐧𝐝 𝐝𝐢𝐬𝐭𝐢𝐧𝐠𝐮𝐢𝐬𝐡𝐚𝐛𝐥𝐞 𝐟𝐫𝐨𝐦 𝐭𝐡𝐞 𝐨𝐥𝐝 𝐬𝐢𝐦𝐩𝐥𝐲 𝐛𝐲 𝐭𝐡𝐞 𝐟𝐚𝐜𝐭 𝐭𝐡𝐚𝐭 𝐢𝐭 𝐢𝐬 𝐢𝐦𝐩𝐞𝐫𝐬𝐨𝐧𝐚𝐥 – 𝐭𝐡𝐚𝐭 𝐭𝐡𝐞𝐫𝐞 𝐢𝐬 𝐧𝐨 𝐡𝐮𝐦𝐚𝐧 𝐫𝐞𝐥𝐚𝐭𝐢𝐨𝐧 𝐛𝐞𝐭𝐰𝐞𝐞𝐧 𝐦𝐚𝐬𝐭𝐞𝐫 𝐚𝐧𝐝 𝐬𝐥𝐚𝐯𝐞." 𝐋𝐞𝐨 𝐓𝐨𝐥𝐬𝐭𝐨𝐲

    𝐓𝐡𝐞 𝐬𝐮𝐫𝐩𝐥𝐮𝐬 𝐩𝐫𝐨𝐝𝐮𝐜𝐞𝐝 𝐬𝐢𝐧𝐜𝐞 𝐭𝐡𝐞 𝐞𝐚𝐫𝐥𝐢𝐞𝐬𝐭 𝐚𝐠𝐫𝐢𝐜𝐮𝐥𝐭𝐮𝐫𝐚𝐥 𝐜𝐨𝐦𝐦𝐮𝐧𝐢𝐭𝐢𝐞𝐬 𝐰𝐚𝐬 𝐭𝐡𝐮𝐬 𝐞𝐱𝐭𝐫𝐚𝐜𝐭𝐞𝐝 𝐛𝐲 𝐭𝐡𝐞 𝐞𝐥𝐢𝐭𝐞.

    A bare subsistence existence ensured the workers didn't die and could reproduce, why give them anymore? The vile maxim of the masters of mankind.

    Basic capitalism was how it all started in the 18th and 19th Centuries, the poor lived in squalor and the rich lived in luxury, the same as it had always been.

    Only organised labour movements got those at the bottom a larger slice of the pie, basic capitalism gives nothing to the people who do the work apart from a bare subsistence existence.

    The wealthy decided they needed to do away with organised labour movements and the welfare state; it was interfering with the natural order where they extract all the surplus.

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

    Nearly there.

    They need a bit more fine tuning at Davos.

    Some of the world's workers are not living a bare subsistence existence.

    𝐀 𝐛𝐚𝐫𝐞 𝐬𝐮𝐛𝐬𝐢𝐬𝐭𝐞𝐧𝐜𝐞 𝐞𝐱𝐢𝐬𝐭𝐞𝐧𝐜𝐞 𝐞𝐧𝐬𝐮𝐫𝐞𝐬 𝐭𝐡𝐞 𝐰𝐨𝐫𝐤𝐞𝐫𝐬 𝐝𝐨𝐧'𝐭 𝐝𝐢𝐞 𝐚𝐧𝐝 𝐜𝐚𝐧 𝐫𝐞𝐩𝐫𝐨𝐝𝐮𝐜𝐞, 𝐰𝐡𝐲 𝐠𝐢𝐯𝐞 𝐭𝐡𝐞𝐦 𝐚𝐧𝐲𝐦𝐨𝐫𝐞? 𝐓𝐡𝐞 𝐯𝐢𝐥𝐞 𝐦𝐚𝐱𝐢𝐦 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐚𝐬𝐭𝐞𝐫𝐬 𝐨𝐟 𝐦𝐚𝐧𝐤𝐢𝐧𝐝, 𝐜𝐮𝐫𝐫𝐞𝐧𝐭𝐥𝐲 𝐤𝐧𝐨𝐰𝐧 𝐚𝐬 𝐧𝐞𝐨-𝐥𝐢𝐛𝐞𝐫𝐚𝐥𝐢𝐬𝐦.

    𝐁𝐚𝐬𝐢𝐜 𝐜𝐚𝐩𝐢𝐭𝐚𝐥𝐢𝐬𝐦, 𝐬𝐭𝐫𝐢𝐩𝐩𝐞𝐝 𝐨𝐟 𝐚 𝐰𝐞𝐥𝐟𝐚𝐫𝐞 𝐬𝐭𝐚𝐭𝐞 𝐚𝐧𝐝 𝐨𝐫𝐠𝐚𝐧𝐢𝐬𝐞𝐝 𝐥𝐚𝐛𝐨𝐮𝐫 𝐦𝐨𝐯𝐞𝐦𝐞𝐧𝐭𝐬, 𝐰𝐢𝐭𝐡 𝐚 𝐠𝐥𝐨𝐛𝐚𝐥 𝐰𝐨𝐫𝐤𝐟𝐨𝐫𝐜𝐞 𝐞𝐧𝐬𝐮𝐫𝐢𝐧𝐠 𝐚𝐧 𝐞𝐱𝐜𝐞𝐬𝐬 𝐬𝐮𝐩𝐩𝐥𝐲 𝐨𝐟 𝐥𝐚𝐛𝐨𝐮𝐫 𝐝𝐫𝐢𝐯𝐢𝐧𝐠 𝐰𝐚𝐠𝐞𝐬 𝐝𝐨𝐰𝐧 𝐭𝐨 𝐭𝐡𝐞 𝐦𝐢𝐧𝐢𝐦𝐮𝐦.

    𝐏𝐞𝐫𝐟𝐞𝐜𝐭, 𝐢𝐭'𝐬 𝐠𝐨𝐢𝐧𝐠 𝐭𝐨 𝐛𝐞 𝐣𝐮𝐬𝐭 𝐥𝐢𝐤𝐞 𝐭𝐡𝐞 𝐠𝐨𝐨𝐝 𝐨𝐥𝐝 𝐝𝐚𝐲𝐬.

    𝐓𝐡𝐞 𝐢𝐦𝐩𝐨𝐯𝐞𝐫𝐬𝐢𝐡𝐞𝐝 𝐦𝐢𝐝𝐝𝐥𝐞 𝐜𝐥𝐚𝐬𝐬, 𝐡𝐨𝐰 𝐝𝐢𝐝 𝐭𝐡𝐚𝐭 𝐡𝐚𝐩𝐩𝐞𝐧?

    𝐈𝐭 𝐰𝐚𝐬 𝐩𝐚𝐫𝐭 𝐨𝐟 𝐭𝐡𝐞 𝐩𝐥𝐚𝐧.

    Francis Fukuyama talked of the "end of history" and "liberal democracy".

    Liberal democracy was the bringing together of two mutually exclusive ideas.

    Economic liberalism – that enriches the few and impoverishes the many.

    Democracy – that requires the support of the majority.

    Trying to bring two mutually exclusive ideas together just doesn't work.

    The ideas of "Economic Liberalism" came from Milton Freidman and the University of Chicago. It was so radical they first tried it in a military dictatorship in Chile, it wouldn't be compatible with democracy. It took death squads, torture and terror to keep it in place, there was an ethnic cleansing of anyone who still showed signs of any left wing thinking.

    It was tried in a few other places in South America using similar techniques. It then did succeed in a democracy but only by tricking the people into thinking they were voting for something else, severe oppression was needed when they found out what they were getting.

    It brings extreme inequality and widespread poverty everywhere it's tested, they decide it's a system that should be rolled out globally. It's just what they are looking for.

    𝐆𝐨𝐨𝐝 𝐧𝐞𝐰𝐬 𝐢𝐭 𝐰𝐨𝐫𝐤𝐬 𝐚𝐬 𝐩𝐥𝐚𝐧𝐧𝐞𝐝.

    𝟐𝟎𝟏𝟒 – "𝟖𝟓 𝐫𝐢𝐜𝐡𝐞𝐬𝐭 𝐩𝐞𝐨𝐩𝐥𝐞 𝐚𝐬 𝐰𝐞𝐚𝐥𝐭𝐡𝐲 𝐚𝐬 𝐩𝐨𝐨𝐫𝐞𝐬𝐭 𝐡𝐚𝐥𝐟 𝐨𝐟 𝐭𝐡𝐞 𝐰𝐨𝐫𝐥𝐝"

    𝟐𝟎𝟏𝟔 – "𝐑𝐢𝐜𝐡𝐞𝐬𝐭 𝟔𝟐 𝐩𝐞𝐨𝐩𝐥𝐞 𝐚𝐬 𝐰𝐞𝐚𝐥𝐭𝐡𝐲 𝐚𝐬 𝐡𝐚𝐥𝐟 𝐨𝐟 𝐰𝐨𝐫𝐥𝐝'𝐬 𝐩𝐨𝐩𝐮𝐥𝐚𝐭𝐢𝐨𝐧"

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

    𝐓𝐡𝐞 𝐠𝐥𝐨𝐛𝐚𝐥 𝐞𝐥𝐢𝐭𝐞 𝐚𝐫𝐞 𝐮𝐧𝐬𝐮𝐫𝐩𝐚𝐬𝐬𝐞𝐝 𝐢𝐧 𝐥𝐨𝐨𝐤𝐢𝐧𝐠 𝐚𝐟𝐭𝐞𝐫 𝐭𝐡𝐞𝐢𝐫 𝐨𝐰𝐧 𝐢𝐧𝐭𝐞𝐫𝐞𝐬𝐭𝐬.

    𝐖𝐡𝐚𝐭 𝐡𝐚𝐯𝐞 𝐭𝐡𝐨𝐬𝐞 𝐩𝐨𝐩𝐮𝐥𝐢𝐬𝐭𝐬 𝐠𝐨𝐭 𝐭𝐨 𝐜𝐨𝐦𝐩𝐥𝐚𝐢𝐧 𝐚𝐛𝐨𝐮𝐭?

    𝐍𝐚𝐨𝐦𝐢 𝐊𝐥𝐞𝐢𝐧'𝐬 "𝐒𝐡𝐨𝐜𝐤 𝐃𝐨𝐜𝐭𝐫𝐢𝐧𝐞" 𝐜𝐨𝐯𝐞𝐫𝐬 𝐭𝐡𝐢𝐬 𝐢𝐝𝐞𝐨𝐥𝐨𝐠𝐲 𝐢𝐧 𝐚𝐥𝐥 𝐢𝐭𝐬 𝐧𝐚𝐬𝐭𝐢𝐧𝐞𝐬𝐬."
    Post by Batman11@ZH

    Mitch Ritter , February 4, 2017 at 4:14 pm

    Would a for-profit chain of local newspapers whose business model and advertising is built on serving the Portland Business Alliance and Chamber of Commerce interests hire or keep on staff any kind of investigative journalistic team or even an individual columnist\calumnist like recently deceased VILLAGE VOICE early 1980's TRUMP SWAMP WHISTLE-BLOWER WAYNE BARRET (RIP)?
    https://www.nytimes.com/2017/01/19/business/media/wayne-barrett-dead-village-voice-columnist.html

    What socio-econ OU

    Is Inequality a Political Choice? Posted on February 4, 2017 by Yves Smith
    Yves here. Both economists and the press do such a good job of selling the idea that inequality is the fault of those who come out on the short end of the stick that academics need to develop empirical evidence to prove what ought to be intuitively obvious.

    Cross posted from the Institute for New Economic Thinking website

    The fact that most of the fruits of US economic growth have not been shared with the lower-middle and working class is accepted across the political spectrum in America. But that inequality is often treated as a somehow inevitable consequence of globalization and technological change. That view is contradicted by the comparison of income growth and distribution statistics between the US and three others rich countries, France, Norway and the UK - according to new research by Max Roser and Stefan Thewissen of the Institute for New Economic Thinking at Oxford. Writing in Vox on the database they've constructed, Roser and Thewissen note:

    "We compare the evolution of the income an individual needs to be right at the 10th percentile of the income distribution to the evolution of the income of an individual at the 90th percentile. We call these two groups the 'poor' and the 'rich.' We can then look at how much incomes grew for the poor and the rich in absolute terms as well as relative to each other - and thereby assess the extent to which growth was widely shared. We measure income after taxes and transfers, and adjust for differences in prices over time and across countries using inflation and purchasing power information. Our database can be accessed online, with more information on our exact measure and data for other countries."

    The US performs poorly by comparison to these countries, for reasons that may have more to do with structure, institutions and policy. Roser and Thewissen conclude:

    "The differences we have identified across countries and time imply that increased globalization and technological change cannot be blamed as sole causes for rising inequality. Those forces work across borders and should affect all countries. The fact that other developed countries have been able to share the benefits of these market forces suggests that policy choices on the national level play a central role for boosting living standards. Policies can make a