Friday, September 20, 2019

This Is Neoliberalism ▶︎ Hayek and the Mont Pelerin Society I: 1918 - 1939 (Part 3)

An interesting video on the history of neoliberalism.

If you've ever wanted to understand what neoliberalism is, this is the series for you. The story of neoliberalism is a story about the power of ideas. Embedded liberalism was in power, but it was not without resistance. Academics and businessmen who opposed the New Deal and British social democracy were only begrudgingly accepting of the situation at best, or on the warpath against government intervention in the economy at worst. These two factions allied with one another to create an idea so powerful that it would covertly undo their losses to embedded liberalism by supplanting it entirely. This is where the story of neoliberalism begins.

How to reform the economics Ph.D — Tyler Cowen

Along those lines, I have a modest proposal. Eliminate the economics Ph.D, period. Offer everyone three years of graduate economics education, and no more (with a clock reset allowed for pregnancy). Did Smith, Keynes, or Hayek have an economics Ph.D? This way, no one will assume you know what you are talking about, and the underlying message is that economics learning is lifelong.
Adam Smith and Friedrich Hayek were philosophers, and Keynes was a mathematician. Karl Marx, who goes unmentioned even though he influenced the modern world as much as any other, if not more, was also a philosopher. 

All of them influenced economics and also changed the world more profoundly more than any academic economist.  Conversely, Kenneth Boulding was an economist. Dissatisfied with the direction of academic economics, he became a philosopher and co-founded general systems theory.

Ok, these were outliers. Economic training is needed to do the day to day, nitty gritty.

But just what kind of training and how much is needed to do work in economics, including work that is contributory to knowledge? How would that be measured? What are the criteria? Are there hidden assumptions?

Tyler Cowen makes some suggestions but shouldn't something as important as this be studied on the basis of data? And as he points out, it likely applies to other fields as well. Are we sticking to a traditional process in education out of habit even though it could be greatly improved upon, as well as reevaluated for current needs? Have we inadvertently sacralized convention?

Marginal Revolution
How to reform the economics Ph.D
Tyler Cowen | Holbert C. Harris Chair of Economics at George Mason University and serves as chairman and general director of the Mercatus Center

The natural rate of interest is not zero

Title a play on words of the MMT platonistic thesis "the natural rate of interest is zero!".

This is expanded upon in the whitepaper here:

Government taxing and security sales drain (subtract) reserves from the banking system. When the government realizes a budget deficit, there is a net reserve add to the banking system. 
That is, Government deficit spending results in net credits to member bank reserves accounts. If these net credits lead to excess reserve positions, overnight interest rates will be bid down by the member banks with excess reserves to the interest rate paid on reserves by the central bank.

This is NOT happening as witnessed this week...  cue the crickets...

Thursday, September 19, 2019

Links —19 Sep 2019

Zero Hedge
Luongo: Will The Yemen War Be The End Of Saudi Arabia?
Tom Luongo

Sputnik International
Accepting Houthi Responsibility for Saudi Oil Attack Means Admitting Riyadh’s War in Yemen Failed

Sputnik International
Overseas Investors Emerging as New Owners of India's Road Assets

Sputnik International
Chinese PM Notes 'Huge Prospects' for Cooperation With Russia After Talks With Putin

Checkpoint Asia
Russian Navy to Be First to Field Hypersonic Cruise Missiles on Submarines
H. I. Sutton, Forbes

Russia Insider
5 Years of Sanctions Have Been a Huge Stimulus to Russian Economy (Russian TV News)
Transcript of "First Five Years Special Report" by Arseny Molchanov

Fort Russ
U.S. White Paper Says It Will Oppose Russia and “Predatory” BRI in Arctic

Laurie Mcfarlane Tweet - The FT

A few weeks ago the FT came out in favour of state planning and moving towards a worker-led economy. Then, a few weeks later, it backed a caretaker Corbyn government. Now this.
The times they are a changin’

Houthi rebels overturned the chessboard — Pepe Escobar

This was not supposed to happen.

Important article.

Asia Times
Houthi rebels overturned the chessboard
Pepe Escobar

The Financial Times’ Martin Wolf Discovers that Rentier Capitalism and Financialization Increase Inequality and Hurt Growth — Yves Smith

Finally taking on economic rent, and financial rent in particular. This is not capitalism, which is about productive investment based on risk-taking, but rather rentier oligarchy based on expropriation through rent extraction. Rentiers are free riders on the systems. Martin Wolf uses his Financial Times bully pulpit to attack it before the parasites kill the host (ht Michael Hudson).

Naked Capitalism
The Financial Times’ Martin Wolf Discovers that Rentier Capitalism and Financialization Increase Inequality and Hurt Growth
Yves Smith

See also at Naked Capitalism

Two Entrepreneurs Explain Why the Health Insurance Industry Is a Direct Threat to Middle-Class Life
Joe Sanberg, a co-founder of Business for Medicare for All and, which empowers customers to match their banking and spending with their values and Richard Master, a co-founder of Business for Medicare for All. and the CEO and chairman of MCS Industries, the leading supplier of mirrors, picture frames and wall decor in North America. Produced by Economy for All, a project of the Independent Media Institute

Press TV - The UK has lost its measles free status

I've always doubted whether vaccines were dangerous, and felt that not getting vaccinated posed a far greater risk.

The UK has lost its measles free status. Experts are worried and the government is considering making the MMR vaccine obligatory in view of recent breakouts in places like London.

Sorrel Neuxx - What we don't hear about Tibet

While the world moralises over China's occupation, feudalism and abuse in Tibetan culture has been conveniently forgotten

This was written in 2013, so I doubt if you would ever read anything like it today now the Guardian has been taken over by MI5, according to recent reports. The Guardian today regularly puts out anti-Chinese propaganda.

When I was youger, I would regularly go to my local Buddhist centre to practice Buddhism. But its nihilism, along with being dispassionate, losing desire, and snuffing out the flame of life, wasn't for me at the time. But nowadays I have discovered that the Western translations of the ancient Buddhists texts often got it wrong, and that Buddhism is nowhere near as stark as it seems. Quite the opposite, in fact, so I'm now back into it, but in a gentle way without fundamentalism, and within the Quaker movement.

Anyway, one day I came across an article about Tibetan Buddhism and I was stunned. The Tibetan Buddhists were brutal warlords who run an oppressive cast system and had turned most Tibetans into serfs. The Tibetan monks were the aristocracy who engaged in the brutal suppresion of the population, including using torture. The article said how most Tibetans were pleased that the Chinese had came in to end their oppression.

This article from the Guardian says very much the same thing, but it does mention some Chinese brutality as well.

Tibet seems like as a celestial paradise held in chains, but the west's tendency to romanticise the country's Buddhist culture has distorted our view. Popular belief is that under the Dalai Lama, Tibetans lived contentedly in a spiritual non-violent culture, uncorrupted by lust or greed: but in reality society was far more brutal than that vision.
Last December, Ye Xiaowen, head of China's administration for religious affairs, published a piece in the state-run China Daily newspaper that, although propaganda, rings true. "History clearly reveals that the old Tibet was not the Shangri-La that many imagine", he wrote "but a society under a system of feudal serfdom."

Until 1959, when China cracked down on Tibetan rebels and the Dalai Lama fled to northern India, around 98% of the population was enslaved in serfdom. Drepung monastery, on the outskirts of Lhasa, was one of the world's largest landowners with 185 manors, 25,000 serfs, 300 pastures, and 16,000 herdsmen. High-ranking lamas and secular landowners imposed crippling taxes, forced boys into monastic slavery and pilfered most of the country's wealth – torturing disobedient serfs by gouging out their eyes or severing their hamstrings.

The Guardian

Sorrel Neuxx - What we don't hear about Tibet.

Ed Jones - Five reasons why we don’t have a free and independent press in the UK and what we can do about it

Britain's press is controlled by the same networks of people as run everything else. Is it really free?

A really good article saying about how much of our media is controlled by oligarchs. If the truth were known, Corbyn would be well ahead in the polls. For instance, if people knew about what was happening in Yemen and how the Tory Party is complicit in that genocide, how many people would still vote for them? 

MI5 and the CIA routinely influence and pay journalists to put out propaganda, and some intelligence officers go under cover to become journalists. 

The article gives an extensive list of independent news media, many of which I have never heard of before, so I thought I better pin this to my Start Screen. 
“Only 25 per cent of the population earns more than £30,000 a year. Most media commentators (including me) do. For people like me, the country basically works. Politics doesn't affect me. Politics, for me, is about how other people are treated. It's easy inside my echo-chamber to believe that I am the norm, or the middle. Easy to forget that there are voices outside.

“To people in my position, austerity can be read as regrettable but pragmatic. But to my friends and family, who live outside the bubble, it's not regrettable, it's terrifying. It's also not pragmatic. The crackpot, gimcrack ideological nature of austerity becomes more apparent the closer you get to the point of delivery.”

Evans went on to say:“Mr Murdoch was continually sending for my staff without telling me and telling them what the paper should be. He sent for the elderly and academic Mr Hickey, who went in tremulously, to be told by Mr Murdoch, "Your leaders are too long, too complex. You should be attacking the Russians more."”David Yelland, a former editor of The Sun – another Murdoch owned paper – admitted in an interview:

"All Murdoch editors, what they do is this: they go on a journey where they end up agreeing with everything Rupert says but you don't admit to yourself that you're being influenced. Most Murdoch editors wake up in the morning, switch on the radio, hear that something has happened and think: what would Rupert think about this? It's like a mantra inside your head, it's like a prism. You look at the world through Rupert's eyes."

Wednesday, September 18, 2019

Links — 18 Sep 2019

The American Conservative
To End Endless Wars, We Must Give Up Hegemony
Daniel Larison

Reminiscence of the Future
Sic Transit Gloria Mundi. Some News.
Andrei Martyanov

The Nation
Will Russia Be Driven From the West?
Stephen F. Cohen | Professor Emeritus of Russian Studies, History, and Politics at New York University and Princeton University

Trump Makes Another Bad Choice for National Security Advisor
Daniel Larison

Yahoo News
Exclusive: Russia carried out a 'stunning' breach of FBI communications system, escalating the spy game on U.S. soil
Zach Dorfman, Jenna McLaughlin and Sean D. Naylor | Reporters, Yahoo News

GSEs loan sharking

Oh this is just too good....

LOL!!! I guess they "never read the MMT literature!" where they would have learned they only should ask for a basis point above FFR!!!

Two government-backed financial giants, Fannie Mae and the Federal Home Loan Banks, both stepped up their repo lending at higher rates on Tuesday, according to people familiar with the matter. 
The home-loan banks, a network of government-backed lenders, were offering to lend overnight at 4% Tuesday morning, twice the recent going rate.

Government owned and operated sitting on hoards of system Reserve Assets!!!!  LOL!!!!!

Hey maybe they were trying to get a better deal for the taxpayers!!!!  LOL!!!!!  Reduce "the deficit!".... LOL!!!!

Jealous that they don't get the IOR so trying to make it up by asking for double the rate?!?!?!  LOL!!!!

Then think of all the moron lefty losers going all around blaming every world ill on the "neoliberal conspiracy!" operated by all those "greedy banksters!"  LOL!!!!

Can We Afford a Green New Deal? — JW Mason

The correct question is, Can we not afford a GND?
So when we look at the cost of the climate proposals out there against today’s macroeconomic background, the question should not be, are they too expensive? The question should be: Are they expensive enough?
The purpose of policy is meeting policy goals effectively and efficiently. This means getting as close as possible in the design solution to "just right — not too much and not too little."

But in the case of serious challenges overshooting is better than undershooting, even if it "costs" more on spreadsheets and uses more real resources that turn out to be necessary.

The way it is looking, climate change is an existential threat as great as war. No nation can afford to scrimp on defense spending since national security is the highest priority of a government.

J. W. Mason's Blog
Can We Afford a Green New Deal?
JW Mason | Assistant Professor of Economics, John Jay College, City University of New York

Jerome Powell September Fed Speech Transcript: Fed Cuts Rates for 2nd Time in 2019 — Ryan Taylor

Victoria Guida: 25:18 Victoria Guida with Politico. Another money-market question. Banks have been pointing to liquidity rules as having contributed to some of the volatility we’ve seen in repo markets and potentially some capital rules as well. Are you all looking at whether some tweaks to the liquidity coverage ratio might help and also, what is the status of the net stable funding ratio rule? Are you all still planning on putting that out soon?
Jerome Powell: 25:47 I think if we concluded that we needed to raise the level of required reserves for banks to meet the LCR, we’d probably raise the level of reserves rather than lower the LCR. It’s not impossible that we would come to a view that the LCR’s calibrated too high, but that’s not something that we think right now. On the other hand, it might be that more reserves are needed in which case we are in a position to supply them.
Jerome Powell: 26:12 In terms of the net stable funding ratio, I believe we put it out for comment and got comments and I believe we’re looking at finalizing that in the relatively near future.
Victoria Guida: 26:28 Just a follow up, in terms of tweaks to the LCR, there’s also been some talk about potentially giving banks some room in times of stress to maybe dip into their liquidity buffers.
Jerome Powell: 26:40 I think we want banks to use their liquidity buffers in times of stress rather than pull back from the markets and pull back from serving their clients as a general rule....
Jerome Powell September Fed Speech Transcript: Fed Cuts Rates for 2nd Time in 2019
Ryan Taylor

Rick Sanchez - Huge! China ready to dump Boeing

The Trump administration has really upset China, which is now trying to become much more independent.

China will soon be flying more planes than the US and Europe, so it will be a massive loss for Boeing and Airbus if China develops its own planes.

Rick Sanchez says that Boeing is so linked to the US government that it is almost a state owned industry.

China is Boeing’s top client country by far. But now China is getting ready to make their own planes, potentially disrupting the Boeing-Airbus duopoly on global airline manufacturing. RT America’s Michele Greenstein joins Rick Sanchez with the details.

The trouble with capitalism — Chris Dillow

Are the faults of capitalism curable, or are they instead symptoms of a chronic disease? This is the question posed by Martin Wolf:
What we increasingly seem to have…is an unstable rentier capitalism, weakened competition, feeble productivity growth, high inequality and, not coincidentally, an increasingly degraded democracy.
There is much to admire in this piece. But I fear it understates the problem with capitalism....
Falling rate of profit?

Stumbling and Mumbling
The trouble with capitalism
Chris Dillow | Investors Chronicle

Personality, Progress And Promise In Japanese Leadership — Wisdom Tree

At least to this observer, Europe and the U.S. bring to mind the fumbling and growing desperation that Japan went through during the long period of political instability before strongman Abe arrived. To turn modern monetary theory into practice, you need functioning and decisive fiscal coordination and plans that go beyond the expediencies of annual budget cycles or election cycle pork-barreling. No fiscal policy vision, no fiscal dominance... make no mistake! Abe-Aso-Kuroda do know what they want to spend on.
In clearer terms, watch for a boost in fiscal spending if or when global or local economic momentum loses steam. The Bank of Japan will finance the added borrowing requirement if excess savings fail to absorb it.
More evidence that monetary policy is waning and fiscal is waxing. It's likely that this will involve a gradual switch, however, rather than a sudden one, absent a pressing crisis that forces a faster pace of change.

Seeking Alpha
Personality, Progress And Promise In Japanese Leadership
Wisdom Tree

Money From Nothing: Democrats' Socialism for Free — Richard Porter,

This is interesting from the point of view of evolution of MMT criticism.

It's not the same old "printing money" argument but a refurbished one that at least attempts to get what MMT says, even though it fails. I think that it is more likely ill-informed rather than intentional caricature.

But it does indicate that the opposition is realizing that it has to deal with MMT in a way that appears serious rather than back of the hand, just dismissing as "obvious" nonsense.

So I would count this as a sign of progress.

Money From Nothing: Democrats' Socialism for Free
Richard Porter, Illinois’ national committeeman to the RNC

Bill Mitchell — ECB confirms monetary policy has run its course – Part 2

This is Part 2 of my two-part commentary and analysis of the – Monetary policy decisions – by the ECB (September 12, 2019). In Part 1, I discussed the shifts in the deposit rate and the changes to the Targeted longer-term refinancing operations (TLTROs). In Part 2, I am focusing on the decision to introduce a two-tiered deposit rate on excess reserves, which is designed to reduce the costs of the penalty arising from the negative deposit rate regime that the ECB has had in place since June 2014. But the most important aspect of the ECB decision was not the monetary policy changes, which will have relatively minor impacts on the real Eurozone economy. The telling part of the whole episode was Mario Draghi’s comments on fiscal dominance. We are entering a new era where the neoliberal obsession with so-called monetary policy reliance is becoming increasingly discredited and exposed by the evidence base. Fiscal dominance is approaching. And the only body of work that has consistently argued for this approach to macroeconomic policy making has been Modern Monetary Theory (MMT) despite what the mainstream economists who are now starting to realise their reputations are in tatters might say....
Bill Mitchell – billy blog
ECB confirms monetary policy has run its course – Part 2
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

U.S. home construction

More bearish news.... oh... wait a minute...

FT Open Day

FT Open day today where you can read lots of articles for free.

Martin Wolff - why rentier capitalism is damaging liberal democracy

Economies are not delivering for most citizens because of weak competition, feeble productivity growth and tax loopholes

I haven't been able to read a FT article for two weeks, but today the paywall let me in. FT must allow people to read an article for free from time to time. This is an excellent article describing what is wrong with present capitalist system, and it goes over a lot of different areas.

Martin Wolff describes the feedback loop where certain companies can attract the best talent because they can offer the best wages, and then these people help to keep the company ahead by increasing sales, and so the company becomes richer and can attract more of best talent, and so on. But Martin Wolff says how this is a form of monopoly which affects the rest of the economy and other cities. And without enough competition these companies can extract rent.

A 2015 study by Stephen Cecchetti and Enisse Kharroubi for the Bank for International Settlements said “the level of financial development is good only up to a point, after which it becomes a drag on growth, and that a fast-growing financial sector is detrimental to aggregate productivity growth”. When the financial sector grows quickly, they argue, it hires talented people. These then lend against property, because it generates collateral. This is a diversion of talented human resources in unproductive, useless directions.

in unproductive, useless directions.-activities.pdf


Martin Wolff - Martin Wolf: why rentier capitalism is damaging liberal democracy

Frances Coppola - If You Don't Understand Banks, Don't Write About Them

Many economists don't understand how the banking system works, says Frances Coppola, and  go on to write inaccurate books or give ill advice to governments. Here, in this article, she severely criticises a prominent economist for writing such a misinformed book.

One thing MMTers are pretty clued up on is how banking works, and yet many economists - who don't understand how banks work at all - criticise MMT.

The author, a young economist with a first-class degree from Oxford, the famous English university, acknowledges that banks don’t need deposits in order to lend. But she then reintroduces the discredited “money multiplier” explanation of bank lending. Furthermore, she confuses bank reserves with liquid assets, and liquid assets with capital. This confusion exists not just in this paragraph, but throughout the book. How on earth can someone write a book about “financialization” without apparently even a rudimentary understanding of how banks work?

Having to explain all this again has made me realize that the new generation of economists is every bit as ill-informed as the old one. Though this is not surprising. After all, they’ve been taught by them. The “money multiplier” has been shown many times to be an inadequate and misleading explanation of how banks work, yet it still features in many undergraduate economic courses. No university would teach the Ptolemaic system to young astrophysicists, so why are they still teaching its financial equivalent to young economists?


Frances Coppola - f You Don't Understand Banks, Don't Write About Them=true

Tuesday, September 17, 2019

Why is “millennial socialism” on the rise? Because liberalism is failing — Lea Ypi

Should be "neoliberalism" instead of "liberalism."

Good article on the paradoxes of liberalism.

New Statesman
Why is “millennial socialism” on the rise? Because liberalism is failing
Lea Ypi | Professor of Political Theory at the London School of Economics and Political Science

Reserves collapse

Still lingering effects of  "debt ceiling!" now causing a sudden collapse in Reserve Assets as Treasury seeks to quickly increase the General Account to $350b...

Treasury could have done a better job in August post the suspension of the "debt ceiling!" ... by increasing net issuance sooner and more evenly on a weekly basis... instead these morons have delivered EVEN MORE chaos... and have had to do a special repo operation for some institutions that apparently have become deficient in reserve balances they need to operate...

Snip from Mike below documenting yesterday's sudden TGA increase (thus reserve reduction) of $83b...

Idiots running the thing...

Saudi Arabia oil output back to normal

Complete scam...

Bill Mitchell — ECB confirms monetary policy has run its course – Part 1

I will have little time to publish blog posts in the next two weeks. But as I travel around I have to sit in trains, planes and cars and that is when I tend to write when I am away from my desk(s). Today, I am in Maastricht – after travelling by train from Paris. I have two events – one on framing and language and the other on Reclaiming the State and Modern Monetary Theory (MMT) basics. Then I am heading to Berlin for a talk at PIMCO and on Friday I am presenting an MMT workshop at the European Central Bank. Last week, the ECB made its next move, the last one for current President Mario Draghi. It will also lock in Madame Lagarde for a time and represents a rather overt statement about the failure of mainstream macroeconomics. While the mechanics of their various policy decisions are interesting and are worth discussing (albeit briefly) the overall optics were more powerful. The ECB has now joined a host of central bankers around the world in, more or less, admitting that monetary policy has run its course and is being pushed into ever more desperate configurations. At the same time, the corollary is that fiscal policy makers are failing in their responsibility to use policy to avoid stagnation and elevated levels of unemployment. Despite rather significant monetary policy gymnastics, aimed at stimulating economic growth and lifting inflation rates, central bankers have largely failed. They have failed because they are wedded to mainstream theory. Fiscal policy makers are constrained by an austerity-biased ideology and/or voluntary institutional machinery that has been created to stifle fiscal initiative (destructive fiscal rules). The cracks are widening. We are approaching the period of fiscal policy dominance – finally! This is Part 1 of a two-part series on this topic. Part 2 will follow tomorrow....
Let's hope it does take another great depression to learn the lesson, like it did last time.

Interesting that Bill will talking to the ECB. Who woulda thunk it even a short time ago. Seems like the last mile is closing.

Bill Mitchell – billy blog
ECB confirms monetary policy has run its course – Part 1
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Saudis ready to pump more

Saudi stands ready to "pump!".... "money!" not more oil that is...

Recession Fears

looks like "Debt Ceiling!" induced "inversion!" really took its toll on sentiment last month in addition to the usual Trump Derangement Syndrome induced bearishness ... This measure at 10 year high bearishness:

Labor Costs

This is going to take all of Trump's persuasion skills to prevent the Fed from increasing the policy IOR in response to these substantial wage increases he seeks to foment...


Ann Pettifor - The beauty of a Green New Deal is that it would pay for itself

Governments around the world don’t need to raise taxes in order to transform their economies and avert climate disaste

Ann Pettifor hasn't come around to the idea of MMT yet, but it's good news the New Green Deal could pay for itself. 

So where should the money come from? There are fundamentally only two sources of financing. The first is borrowing (credit). This is achieved by applying for a loan, or issuing a bond. The second is existing savings.

To raise the money for a green deal, governments would have to draw on their equivalent of a giant credit card, but would also be able to take advantage of investment by savers. Thankfully, the creation of millions of jobs will generate the income and tax revenues needed to repay any borrowing. As Sanders argues, the whole thing will pay for itself.

The Guardian

Ann Pettifor - The beauty of a Green New Deal is that it would pay for itself

Nick Hanauer - The dirty secret of capitalism — and a new way forward

Nick Hanauer says the mainstream economists have been captured by the oligarchs. He says how the evidence shows that a pure free market suppresses wages and employment so much that the demand falls off and a viscous circle sets in - a lack of demand means underperforming companies, which means companies employ less people and pay them less, which generally decreases the demand for goods and services, and so on. Everyone loses, except the 0.1%, the oligarchs.

There's a curve, and increasing wages sufficiently will push up the demand meaning that the order books become full again.

TEDx video:

Nick Hanauer - The dirty secret of capitalism — and a new way forward

Monday, September 16, 2019

Links — 16 Sep 2019

Government Signs Agreement with Opposition Factions as Guaido Declares Dialogue Over
Paul Dobson

Reminiscence of the Future
And The Trolling Starts.
Andrei Martyanov

The Incredible Belief That Corporate Ownership Does Not Influence Media Content
Alison Rose Levy

‘You became brothers by His grace’: Putin quotes Koran in appeal for peace in Yemen

John Bolton is out, but neocon agenda stays — Aaron Maté

Wilkerson believes Bolton was sacked for “political purposes.” President Donald Trump, Wilkerson says was “doesn’t want people competing with him, and Bolton was competing with him big time.”
My thoughts exactly. When the new started to be about John Bolton rather than Donald Trump it was just a matter of time. If John Bolton had half a brain in his head, he would have realized that. Instead, he thought he was winning.

Of course, that's not the only reason, but it was stepping over the line.

The Grayzone
John Bolton is out, but neocon agenda stays
Drago Bosnic

On the ground, feeling the pulse of Protest Hong Kong — Pepe Escobar

Two years ago, in Hamburg, Special Forces were deployed against black bloc looters. In France, the government routinely unleashes the feared CRS even against relatively peaceful Gilets Jaunes/Yellow Vest protesters – complete with tear gas, water cannons and supported by helicopters, and nobody invokes human rights to complain about it. The CRS deploy flash ball strikes even against the media....
Western media accounts, predictably, focus on the radical fringe, as well as the substantial fifth-columnist contingent. This weekend a few hundred staged a mini-protest in front of the British consulate asking, essentially, to be given asylum. Some of them are holders of British National Overseas (BNO) passports, which are effectively useless, as the provide no working or residency rights in the UK.
Other fifth-columnists spent their weekend waving flags from Britain, Australia, Canada, France, Germany, Japan, Poland, South Korea, Ukraine, US, Taiwan, and last but not least, the Hong Kong colonial flag.…
But what about the rest, the overwhelming plurality? Pepe Escobar fills us in. He used to live there and knows the ground.

I was there on several occasions decades ago when "the pearl of the Orient" was still a British colony. Doesn't sound much different now other than that the money has overflowed to the top owing to the property bubble, and most of the working people are still in pretty bad shape socially, politically and economically.

The Vineyard of the Saker

SCMP - Battles and brawls in Hong Kong’s commercial heart as peaceful protest turns ugly

  • Masked mobs set fire to a railway station exit and beat man unconscious after marchers defy police ban to press the government to answer their demands

  • At least eight wounded, three seriously, in a day of petrol bombs, water cannons, rubber bullets and tear gas

The Hong Kong protestors seem to be deliberately trying to get the police to crack down hard on them, maybe so the US can get on its high-horse to cause more trouble. There some very voilent video scenes here.

Earlier in the day on Gloucester Road in Wan Chai, a middle-aged man said to be a government supporter was kicked, punched and stomped unconscious by protesters. He was sent to Queen Mary Hospital in Pok Fu Lam and his condition later improved from “critical” to “serious”.

South China Morning Posy

Reuters — Putin proposes Russian weapons for Saudi Arabia after oil industry attacks

Putin pokes the US in the eye.

Putin proposes Russian weapons for Saudi Arabia after oil industry attacks

ProMarket — “The World Has Changed”: the New York Times on Luigi Zingales, the “Chicago School,” and the Threat of Tech Monopolies

A New York Times profile summarizes the work done by Luigi Zingales and the Stigler Center on regulating digital platforms and describes it as a necessary evolution in the traditional Chicago approach....
ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
“The World Has Changed”: the New York Times on Luigi Zingales, the “Chicago School,” and the Threat of Tech Monopolies

See also at ProMarket
Presenting: The Stigler Center’s Report on How to Rein in Big Tech


Putin apparently conflicts with the Stavka (Russian General Staff) and Foreign Ministry.

(Xi is facing similar pressure from the PLA (People's Liberation Army) over what it perceives as Western aggression in the South China Sea, Taiwan, and Hong Kong.)

Dances with Bears
John Helmer

TASS — Number of Russian-Chinese student exchanges reaches 90,000

This may seem to be ho-hum news but it is isn't. The US is now trying to limit China's technological advance and one means of doing this is limiting education of Chinese students in American universities. Russia is one of the most technologically advanced nations on earth, in military hardware in particular. Chinese students will be educated there instead of the US. 

Chinese accession to Russian weapons, including the most advanced weapons available for export, is the worst nightmare for US leaders. Worse than that would be China's acquiring not only Russian weapons but also Russian technological expertise.

Number of Russian-Chinese student exchanges reaches 90,000

Zero Hedge — Houthis Say It's Not Over - Saudi Oil "Still Within Range"; Iraq Denies Its Territory Used

While US officials were quick out of the gate to allege an Iranian attack on Saudi Aramco facilities launched from Iraq early Saturday, a theory which the WSJ said was focus of an ongoing US-Saudi investigation, Iraq's government issued a firm denial on Sunday, which followed Iran's own denial that condemned Washington's "maximum lies"....
But crucially the Houthis have defiantly announced it's not over: "The rebel group said its weapons could reach anywhere in Saudi Arabia. Saturday’s strikes were carried out by aircraft equipped with a new type of engine, the Houthi rebel group said," Bloomberg reports.
Whatever the source this is not only a catastrophe for the Saudi leadership that began a war of choice with Yemen, but also the US military-industrial complex whose best weapons acquired in volume still could not counter an asymmetrical attack that cost very little in terms of criteria militaries use to measure investment and return.

Zero Hedge
Houthis Say It's Not Over - Saudi Oil "Still Within Range"; Iraq Denies Its Territory Used
Tyler Durden

See also

Moon of Alabama
Damage At Saudi Oil Plant Points To Well Targeted Swarm Attack

My own view: This is a shot across the bow.

Craig Murray — The Magnitskiy Myth Exploded

The conscientious judges of the European Court of Human Rights published a judgement a fortnight ago which utterly exploded the version of events promulgated by Western governments and media in the case of the late Mr Magnitskiy. Yet I can find no truthful report of the judgement in the mainstream media at all.
The Magnitsky Hoax has been a major card played in imposing sanctions on Russia.

Craig Murray Blog
The Magnitskiy Myth Exploded
Craig Murray, formerly British ambassador to Uzbekistan and Rector of the University of Dundee

Note that the discrepancy in spelling between Magnitskiy and Magnitsky is owing to difference in transliteration from Cyrillic to Roman script, similar to Sergei and Sergey.

Trump oil independence

Looks like Trump isn't buying this latest OPEC scam...

Amazing engineering: Stunning aerial view of Yaxi expressway in SW China

Wow, it's got to be worth going on holiday in China just to travel on this road. Stunning!

Tweet by eva Zheng

The sky road for poverty alleviation - more than half of the $3.3bn Yaxi expressway are tunnels n viaducts thru mountains, it took 5 years to build. By connecting the mountainous region to the south n north of China, it helps millions of Tibetan, Muslim Hui people out of poverty.

Larry Elliott - Labour's tax on City deals would be a big vote winner

Financial sector is rattled by John McDonnell’s support for an FTT that would raise about £7bn a year

When asked at an event last week if he would support a new plan that would raise an estimated £7bn a year for the exchequer, the shadow chancellor, John McDonnell, had a one-word answer: yes. The proposals were unchallengeable, he said.

That’s not true, obviously. Labour’s plans for a financial transaction tax (FTT) were being challenged even as McDonnell spoke. The City has enormous lobbying power and the machine was quickly cranked into gear. The financial sector employs a million people, paid £75bn in tax last year and provides essential products such as pensions, mortgages and insurance, said Stephen Jones, the chief executive of UK Finance, the trade body for the financial sector.

The Guardian 

Larry Elliott - Labour's tax on City deals would be a big vote winner

William Horobin - Thomas Piketty Is Back With a 1,200-Page Guide to Abolishing Billionaires

Thomas Pilketty is getting bold. I think he is right, we do need radical solutions.

One of the reasons the Right online have so much trouble winning arguments with me is that I agree with them about the benefits of markets. I needed a part for my 20 year old lawnmower the other day, so I looked on eBay and found it for about £4.50, including postage. Amazing!

The government can't micro manage the economy, so it's best to let people get on with it themselves. But unfettered markets cause too much inequality which dampens the benefits of the market.

Thomas Piketty’s last blockbuster helped put inequality at the center of economic debates. Now he’s back with an even longer treatise that explains how governments should fix it –- by upending capitalism.

Piketty says his conclusion is that it’s a mistake to see inequality as rooted in nature, or driven by changes in technology. Its real causes are to be found in politics and ideology -- and that makes it easier to challenge.

William Horobin - Thomas Piketty Is Back With a 1,200-Page Guide to Abolishing Billionairestrue

Sunday, September 15, 2019

Links — 15 Sep 2019

Project Syndicate — Say More
Jayati Ghosh Says More...

The Vineyard of the Saker
Russia prevents Israeli airstrikes in Syria
The Saker

Russia Has ‘Oligarchs,’ the US Has ‘Businessmen’ - In 150 NYT, CNN and Fox articles, ‘oligarch’ seems reserved for Slavic billionaires
Alan MacLeod
U.S. And Russia Battle It Out Over This Huge Iraqi Gas Field
Simon Watkins

Craig Murray Blog
The World’s Most Important Political Prisoner
Craig Murray, formerly British ambassador to Uzbekistan and Rector of the University of Dundee

India Punchline
Houthis strike at Saudi Arabia’s throbbing heartM. K. Bhadrakumar | retired diplomat with the Indian Foreign Service

Rule, Britannia! Hong Kong protesters sing ex-colonial sovereign’s anthem (VIDEO)

The Grayzone
Outing of CIA’s Kremlin mole echoes Iraq WMD hoax
Aaron Maté

Center for Southeast Asian Studies

Johnson's Russia List
Gilbert Doctorow: “The ‘opposition’ victory in Moscow”

Global Inequality
Greatest happiness for the greatest number. Or not?
Branko Milanovic | Visiting Presidential Professor at City University of New York Graduate Center and senior scholar at the Luxembourg Income Study (LIS), and formerly lead economist in the World Bank's research department and senior associate at Carnegie Endowment for International Peace

IMF: $15 Trillion Of World's FDI Are "Phantom Capital"

Saudi's full oil supply could take weeks to resume

This is all a complete OPEC scam to get the oil price up in USD terms... let's hope Trump can see right through this ...

Robert Frank - Billionaires hurt economic growth and should be taxed out of existence, says bestselling French economist

Thomas Piketty

"Entrepreneurs will have millions or tens of millions," he said. "But beyond that, those who have hundreds of millions or billions will have to share with shareholders, who could be employees. So no, there won't be billionaires anymore. How can we justify that their existence is necessary for the common good? Contrary to what is often said, their enrichment was obtained thanks to these collective goods, which are the public knowledge, the infrastructures, the laboratories of research."


Billionaires hurt economic growth and should be taxed out of existence, says bestselling French economist

Record number of workers quitting

The qualified/competent are leaving to get a better job/pay and the entry level people are all on drugs and booze so they can't get hired...

This is potentially a VERY "inflationary!" condition if the government starts throwing munnie around at the construction industry...  everybody is going to start bidding up qualified/competent labor...

Situation contained for now but fiscal and monetary have been far from ideal for the last 18 months... Election year might prove different...

Europe alcohol deaths

300k dead from booze 4x US drug ODs... Everybody drunk or on drugs...  causes labor shortages and reduces growth... JG won't help... #RealTerms

Trump has badly misread China’s hand

This guy gets it wrong about printing money and the national debt (another video), but this is very interesting: US companies do very well in China selling a lot of services, which almost counters the trade imbalance.

Donald Trump has been dialing up the tariffs and the rhetoric around the ongoing trade spat with China. Yet Xi Jingping has held a firm line and has been unwilling to fold to increasing pressure from the US. Donald Amstad from Aberdeen Standard Investments believes that Trump may have misread how strong China's hand is by overlooking some key inputs to the trade relationship between the two countries. While most of the focus has been on traded goods Amstad says to get the full picture you also need to take into consideration the value of services and the profits earned by US companies operating in China. As he outlines in this short video Trump may have badly misread China’s hand. “In China there is no political cycle. President Trump has got 15 months to sort this out before he faces re-election. So, time is very much on China’s side.”

Saturday, September 14, 2019

Umar Haque - How Capitalism Made Americans Poor, and Socialism Made Europeans Rich

Capitalism Doesn’t Make Us Rich, and Socialism Doesn’t Make Us Poor — Socialism Makes Us Rich, and Capitalism Makes Us Poor. 

I agree with Umar, social democracy (he calls it socialism) has liberated Europeans. The liberty Ron Paul talks about is the freedom of the few to be able to exploit and enslave the many. 
In Europe, though, the story was very, very different. Socialism, not capitalism, organized the provision of the essentials of life — and both paid people fairly and protected them carefully, in the very jobs of providing things like healthcare, education, finance, retirement, media, transport, and childcare to one another. The result is that people grew richer over time. Their incomes grew into accumulated savings, and their net worth rose. They began to live with a genuine feeling of safety and security and happiness. Europeans were liberated — not immiserated.
Hence, today, most Europeans look at Americans, and can’t bring themselves to imagine — really, can’t quite understand — how someone in a nominally rich country would have to choose between their own chemotherapy or insulin, or their childrens’ healthcare, food, or shelter.

Why the Protestors of Hong Kong Are Destroying the Prosperity of Their Country — Martin Seiff

Martin Sieff is exactly right on this IMHO, recalling his boyhood experience in Belfast as precedent.

The protestors and West believes that Hong Kong is a vital resource for China, but they apparently do not realize that this is no longer so. Hong Kong's contribution to the Chinese economy has shrunk greatly, and China has already been planning to replace it with Shanghai as a financial center, as it use to be, and other centers on the mainland. Reports reveal that Hong Kong is already being abandoned.

China won't relinquish it sovereignty over Hong Kong without a fight, which highly unlikely to happen. But Hong Kong is no longer the "pearl of the Orient" in China's estimation. It has served its purpose and is already in the process of being replaced by truly Chinese financial and business centers at the core. 

In fact, Hong Kong is an uncomfortable reminder of Chinese humiliation during the colonial period. For that reason alone, Hong Kong would eventually be doomed to oblivion in the new China as China regains its traditional position as the "Central Realm," replacing the "upstart" US with a short history and no culture. 

Even Europeans were running around in bear skins, who Romans considered uncivilized barbarians, while China was already an ancient civilization largely unknown to the West. Traditional societies like China now view Western civilization degenerating under the excess of its liberal philosophy, now being pushed its logical conclusion of "anything goes."

Taking the long view, China was in no rush for this break to happen. But the short-term thinking of others has now forced the issue, the "others" being the protestors and their backers.

This is just another step in the process of decolonization that is now going on in the non-West as "liberal globalization" (neoliberalism, neo-imperialism and neocolonialism) is rolled back.

Strategic Culture Foundation
Why the Protestors of Hong Kong Are Destroying the Prosperity of Their Country
Martin Seiff, formerly senior foreign correspondent for The Washington Times and United Press International

The Pivot To Fiscal? — Brian Romanchuk

The final Mario Draghi press conference had him underlining the importance of fiscal policy. Since I am supposed to be working on my slides for my presentation in the panel "MMT: Who is Listening?", one might argue that it looks like a lot of people. However, it is unclear how significant the shift in opinion is from a practical perspective....
Bond Economics
The Pivot To Fiscal?
Brian Romanchuk

Intel update

Spiegel Online (Germany)'If I Happen to Fall out of a Window, You Can Be Sure I Was Pushed'
Martin Knobbe and Jörg Schindler interview Edward Snowden in RussiaSputnik International

Sputnik International
Interview by Ewen MacAskill, video by Laurence Topham

Sputnik International
Permanent Record: Edward Snowden Sounds the Alarm on ‘Greatest Danger’ to Society

Sputnik International
UK Judge Rules Assange Will Remain in Jail Due to 'History of Absconding'

Sputnik International
'With Friends Like Israel, US Doesn’t Need Enemies’: Iran's Zarif Mocks Trump Amid Snooping Claims

Fast Company
I create fake videos. Here’s why people believe even the obvious ones
Christye Sisson

Sputnik International
New Doc Tells How Three Conspirators Created Myth of Marilyn Monroe’s Death

The US Has “Disappeared” More Than 42,000 Migrants. Where’s the Outrage?
Merula Furtado

Lee Camp
Jeff Bezos’ “Ring” Doorbells Give Cops Eyes Everywhere [VIDEO]

Global Research
Post-9/11 Terrorism Watchlist of More Than 1 Million Judged Unconstitutional
Marjorie Cohn

The American Thinker
The Surveillance State: Have Americans Unwittingly Opted In?
Julio Riviera

Zero Hedge
Israeli Attacks On Syria Halted After Russia Threatened To Shoot Down Jets
Tyler Durden

Friday, September 13, 2019

Links — 13 Sep 2019

Checkpoint Asia
The US Massively Underestimates the Trade War Blowback
Robert Berke

Israel accused of planting mysterious spy devices near the White House
Daniel Lippman

Sputnik International
Huawei Developing Its Own Tech Solutions to Offset Sanctions
Prakash Loungani

John HelmerDefend Democracy Press
Only one-third of Americans believe Jeffrey Epstein committed suicide—so why does the New York Times?
David Walsh

Caitlin Johnstone — Rogue Journalist
American Privilege
Caitlin Johnstone

Sputnik International
Robert F Kennedy's Son Claims 'Compelling Evidence' Father Assassinated by CIA Operative

Sputnik International
Russian Central Bank Has No Plans to Stimulate Growth by Printing More Money

Johnson's Russia List
Gilbert Doctorow: “The ‘opposition’ victory in Moscow”

Xinhua Silk Road: Haier to release 20 new models of laundry appliances on European market

And on the lighter side of life.

How Modern Monetary Theory (MMT) Actually Works (w/ Warren Mosler)

Modern Monetary Theory has become a hot topic of discussion. But is it well understood? In this interview with Real Vision’s Ed Harrison, Warren Mosler, the founder of MMT, describes exactly what Modern Monetary Theory is, and how the framework can be utilized. Particularly interesting is Mosler’s ambivalence about the political furor enveloping MMT. He sees the economic framework as more descriptive of monetary operations than prescriptive of policy. Mosler also outlines why MMT’s operational bent made it attractive to finance professionals long before it became a politically-charged debate among academic economists and politicians. Filmed on May 29, 2019 in New York.

No More Economic Malpractice: African-American Faith Leaders Take On The Establishment — Delman Coates

MMT to the rescue.


See also

A generation of economists helped get us into this mess. A new generation can get us out.
Jared Bernstein | Senior Fellow at the Center on Budget and Policy Priorities and former Chief Economist and Economic Adviser to Vice President Joe Biden in the Obama Administration

Rick Sanchez - US drops 40 tons of bombs on ‘ISIS’ island

Erdoğan and Assad were apparently quite close before the conflict. It just goes how stab-in-the-back it is at the top, where no one is your friend. They're all scaly-backs and swamp creatures!

Nearly 80,000 bombs on a single island believed to be holding Islamic State fighters in Iraq. Rick Sanchez shows us the harrowing footage. Then Max Blumenthal, editor of the Grayzone and author of “Management of Savagery,” joins from Damascus, Syria to talk about continuing US military involvement in the country. He explains average Syrians’ resentment toward the US government for its role in the Syrian conflict.

Theft or exploitation?- a review of Stolen by Grace Blakeley — Michael Roberts

I think that there are at least three things going on, first involving property as theft through forcible enclosure of the commons, regardless of whether this is made legal by institutions controlled by the thieves as a veneer. 

Secondly, I believe that the classical view of value as produced by labor is essentially correct, regardless of the controversy over the statement of it, which is largely semantical. These differences led to distinctions that distracted enough from the actual issue to allow the neoclassical identification of value and price and the marginalist theory of value creation implying just deserts based on relative marginal utility, productivity, and contribution. 

The marginalist model assumes relatively free markets in everything, which is unrealistic. The standard retort is "government." Of course, it is true that "government" is a key factor owing to the asymmetrical distribution of power based on institutional arrangements that the ownership class, including the top managerial class, controls.

This veneer of legitimacy enables the extraction of surplus value from workers along the lines that Marx set forth. This was a characteristic of the transition from the agricultural age in which feudalism workers were either slaves or serfs and the beneficiaries were the landlords.  After the transition to the industrial age characterized by the dominance of industrial capital, workers were supposedly "liberated" from unpaid work in the case of slavery or underpaid work in the case of serfs and tenant farmers. Marx attempted to show how surplus value was still expropriated through creation of surplus value in monetary production and its distribution to the owners of the means of production, the capitalist class.

Michael Roberts' post is a short view of UK political scientist and economist Grace Blakeley's new book, Stolen, which focuses on financialization. The so-called profit created through financialization is different from the first two factors, enclosure of the commons and extraction of surplus value.

This third factor is rent extraction after enclosure and the subsequent legal institutionalization of private property and also after the expropriation of surplus value in the monetary production process. The rent extracted by finance is in addition to the former two, redistributing income upward. Michael Hudson is the go-to economist on this subject, and he is a Marxism economist if not a "Marxist," where "Marxist" signifies an ideologue. Similarly with David Graeber, the author of "Debt: The First 5000 Years."

So it is necessary to distinguish all three factors in exploring inequality as apparently excess skewing of distribution toward the top, exceeding reasonable individual contribution given a social environment in which the relationships of elements of the system are as important in analysis as the elements and may be more significant at the macro scale.

This is the basis of economic rent — land and natural resource, rent from real goods production in a monetary production economy,  and financial rent from finance and fintech — and it should be taught in Econ 101 rather than using wildly unrealistic gadgets as teaching tools to promote an ideology that underpins the status quo. The newly published MMT textbook is a good start in this direction, laying down the basics needed for correct analysis of how a modern monetary economy operates in tandem with finance, along with its opportunities, challenges, and limitations and constraints.

Michael Roberts Blog — blogging from a marxist economist
Theft or exploitation?- a review of Stolen by Grace Blakeley
Michael Roberts