In the U.S., there is still a clear agenda to suppress wide political participation. The U.S. is one of the few countries in the world which holds the vote on a working day—and in the winter where much of the East coast is buried under rain and snow. Furthermore, the U.S. requires voter registration, when most democracies don’t. The low voter turnout in the U.S. is by design, and not by default. If the U.S. were to adopt a proportional representation system—which both parties won’t allow because they enjoy holding the exclusive monopoly over political representation—voter turnout would increase. Most world democracies have—at least partially or at some level—adopted proportional representation.Incidentally, the West "lost" the recent election in Iraq, too.
Interesting observation from IMF, makes you wonder about our indigenous economic growth... Quarter of Irish growth due to Apple's iPhone, says IMF https://t.co/yllphgy3VV via @rte
— Gary Twyford (@GTwyford) April 17, 2018
U.S. government borrowing is not sustainable and divisive social policies will ultimately exacerbate tensions that will disrupt American business profitability, Canadian Prime Minister Justin Trudeau said.
Asked in an interview how his government will respond to competitiveness concerns spurred by U.S. tax cuts, Trudeau said Canada is focused on generating long-term economic growth and wouldn’t engage in a “race to the bottom.” “I certainly know that I remain focused on the long term,” Trudeau said Tuesday in an interview with Bloomberg’s Stephanie Flanders, before appearing to conflate the U.S. debt and deficit.
“I mean what’s the U.S. debt approaching now, is it a trillion dollars? I mean, we’re talking about something that is not sustainable.”
Canada's Trudeau says "no Nafta is better than a bad deal," and warns U.S. borrowing is not sustainable https://t.co/6JSTn7YGKQ pic.twitter.com/MXpI1zBtAH
— Bloomberg Markets (@markets) May 30, 2018
A special commission report on foreign meddling in the 2018 presidential election has been unveiled in Russia’s Upper House. The document highlighted the main methods of the elaborate campaign, spearheaded by the US.
The report, presented on Wednesday in Russia’s Upper House (the Senate), was prepared by the Commission for State Sovereignty Protection in cooperation with leading experts and analysts. The publicly available document was presented by the head of the commission, Senator Andrey Klimov.
The document pinned the blame for the meddling in Russia’s election directly on Washington, linking the ongoing surge in hostile activities with the domestic political struggle in the US. Attempts to interfere in internal Russian affairs, however, are not new, as they have been going on since the collapse of the Soviet Union.
The US has been the “main violator of international law” since the founding of the United Nations, and has “interfered more than 120 times in the affairs of 60 countries on all continents.” Washington’s closest allies – the UK, Germany, France, NATO, and European countries – are also to blame, since they either participate directly or support US activities, according to the document.
“We tried to show… the areas in which the subversive work took place. We’ve named 10 such areas. We have concrete examples for all of them based on absolutely reliable facts. It’s not someone’s guess, it’s not ‘highly likely,’ it’s something we can prove anywhere, it is backed up by testimonies, documents and it is, by great margin, not disputed by the other side [the US],” Klimov said at a press conference, which followed the hearings in the Upper House.
The main purpose of the commission’s report, according to Klimov, is to show the public – both Russian, and international – the scale and systematic nature of the efforts to undermine Russia’s “electoral sovereignty.” The ultimate goal of these activities is to force changes of Russia’s political course, destroy its territorial and economic integrity, he said....
The election meddling also included wide-scale cyberattacks on government electronic resources, primarily the Central Election Commission. All in all, roughly one-third of such attacks are conducted from US territory, according to the report.
More discreet methods include stirring dissent by intensifying the activities of foreign-based Russian-language media outlets and “independent” bloggers. The use of modern technology and communication methods apparently yielded some results, since the latest protests, while much smaller than those of 2011-13, increasingly attracted younger and even underage activists into the streets.…
NGOs operating in Russia have enjoyed a steady flow of funding from abroad, which spiked following the failure to discredit the 2012 presidential election. In 2015, for instance, politically active NGOs received 80 billion rubles (around $1.3 billion) from the US alone, the report says.
Although Russia limited the activities of foreign NGOs within the country, requiring them to openly register as ‘foreign agents,’ the flow of funds did not stop. Various ‘grey’ schemes came into use, such as providing large sums in cash or transferring funds to private individuals. In the meantime, Russia-based subsidiaries of foreign NGOs flourished – their funding in 2017 almost doubled compared to 2016.
The total amount of NGO funding greatly surpasses the upper limit for a presidential candidate’s campaign in Russia. The scale is comparable to the entire budget for holding elections in the entire country, according to the report.
Apart from directly financing “civil activists” in Russia, the US and its allies spent money on more covert activities. Ahead of the election, several unsanctioned socio-political surveys were conducted in Russia, which were sponsored by foreign government structures – including the Pentagon – the report stated.…
The recommended measures are not limited to restrictions. The report called for other countries and international organizations to become united in jointly opposing US meddling practices…. The classified version of the report, according to Klimov, contains additional recommendations for countering foreign meddling....RT
Yesterday brought the launch of a new and revised edition of Doing Capitalism in the Innovation Economy by William Janeway. Anybody who read the first (2012) edition will recall the theme of the ‘three player game’ – market innovators, speculators and the state – informed by Keynes and Minsky as well as Janeway’s own experience combining an economics PhD with his experience shaping the world of venture capital investment.
The term refers to how the complicated interactions between government, providers of finance and capitalists drive technological innovation and economic growth. The overlapping institutions create an inherently fragile system, the book argues – and also a contingent one. Things can easily turn out differently....Bingo.
Professor Roger E. A. Farmer has written Prosperity For All: How to Prevent Financial Crises, in which he lays out the case for creating a sovereign wealth fund whose objective is to stabilise financial markets. If we can eliminate financial crises, we can avoid the rise in unemployment that results. Although that is an interesting concept, I was highly skeptical about the idea before I read the book -- and my skepticism remains after reading it. Instead, the discussion of macro theory within the book is why it is of interest.Bond Economics
I decided to write an extended blog post today (Wednesday) because events in Italy are so interesting. My usual short post on a Wednesday will resume next week. George Soros is now saying that “everything that could go wrong has gone wrong” in Europe and a financial collapse is in the wind (Source). I doubt the latter but agree with the former assessment. All the flaws in the original neoliberal design of the Eurozone have been revealed and all the reasons why those flaws were created in the first place remain in place. Nothing has changed since 1977 when the MacDougall Report concluded that the cultural and national differences between the (then) Member States of the European Communities were too great to allow an effective monetary union to be created. That assessment and the earlier work of Pierre Werner in his 1970 Report were ignored as the neoliberals in France and Germany rushed headlong to Maastricht. France thought it would have a chance to dominate and Germany was distracted by unification but still firmly in charge of what would be allowed in the new monetary system and what would not. Now, one of the biggest nations – Italy – is is turmoil as the damage of being part of the Eurozone slowly but surely erodes its capacity to deliver anything remotely like prosperity and its social and political system starts to collapse. Italy must leave the Eurozone – the sooner the better. And, that will bring a reality check for the whole disaster and encourage other nations to push for an orderly dissolution.Stein's Law — "If something cannot go on forever, it will stop." — Herbert Stein
#Germany marches on: German unemployment rate falls to record low of 5.2%. pic.twitter.com/PrF9Llejpd
— Holger Zschaepitz (@Schuldensuehner) May 30, 2018
The rising scholar of taxation and inequality talks to ProMarket about the problems excessive economic power poses for open political systems, how states can tackle profit-shifting, and critics who have dismissed his work on distributional issues as “a French economics.”ProMarket — The blog of the Stigler Center at the University of Chicago Booth School of Business
China will double down to make breakthroughs in core technologies, Chinese President Xi Jinping said on Monday as he urged the country’s top scientists and engineers to build China into a global hi-tech leader.Read "public investment."
"We are hostages to this internal strife in the United States..."
In his final report in a three-part series, Guccifer 2’s West Coast Fingerprint, the Forensicator discovers evidence that at least one operator behind the Guccifer 2.0 persona worked from the West Coast of the United States.
The Forensicator’s earlier findings stated that Guccifer 2.0’s NGP-VAN files were accessed locally on the East Coast, and in another analysis they suggested that a file published by Guccifer 2.0 was created in the Central time zone of the United States.False flag operation?
Each day brings more evidence of a plot involving intelligence and law enforcement officials to destroy Donald Trump using the pretext of Russia. This is not a theory. It is a fact. While many of the specific details about who actually made key decisions remains to be revealed, there is abundant evidence in the public record that exposes the skeletal framework of this plot. To put it bluntly, Trump has been a target of a coup d'etat that has relied of information warfare rather than actual arms. But the objective of the plotter was no different from a traditional coup, such as the one that removed Chilean President Salvador Allende in 1973. In fact, it appears that the CIA has been involved in both efforts.
Let's go through the evidence.….Sic Semper Tyrannis
If these US policies are not sustainable, what then? The primal flaw to the neo-con maximum leverage doctrine is its lack of any easy ladder down which to climb that does not appear to be a national US humiliation. Usually, if pressure doesn’t work, it is assumed that it was because there was not enough of it – for example, Trump attributes the weaknesses to the JCPOA to Obama failing to let the Iranians stew in sanctions for long enough. Obama cut the pressures too early in Trump’s view – and hence got a ‘flawed agreement.’
A deeper point – and one made by the Chinese in respect to North Korea – is that others do not think in the way of President Trump. The radical utilitarianism evident when Trump says that Jong Un will be “safer, happier and richer” if he accepts Trump’s ultimatum reflects precisely the shallow materialism, on which the global political tide has turned. The so-called ‘populist’ call for a return to traditional national values precisely is a rejection of JS Mills type of utilitarian politics. It is, as it were, the wish to return to being human, in a rounder way....Strategic Culture Foundation
As we have been documenting over the last year and beyond, China is rapidly modernizing its military; unveiling a new stealth bomber, an array of guided-weapons, and deploying further from home. Their most recent focus has been on next generation nuclear weapons - as Beijing ramps up blast experiments for nukes comprised of smaller, smarter warheads designed to limit damage by targeting specific targets, according to the South China Morning Post….
China's development of next gen nukes will put them in direct competition with the United States and Russia, sparking concerns by experts over the prospect of a new cold war arms race that has the potential of boiling over into thermonuclear war.…
“The use of small warheads will lead to the use of bigger ones,” Beijing-based naval expert Li Jie told the Post. “If other countries use nuclear weapons on us, we have to retaliate. This is probably why there is research to develop new weapons.”Just a matter of when and who uses nukes first. But that is not necessarily the US, China or Russia. Could be Pakistan, India or Israel, for instance.
Years of neoliberal economic policies imposed by Brussels and by Italian politicians alike have devastated numerous industrial towns and the very fabric of Italian society, reports Attilio Moro....Short backgrounder.
SPIEGEL ONLINE: Have the countries in the southern part of the euro area done enough on their side to fix monetary union?
Constâncio: Yes. The countries hardest hit by the crisis had high budget deficits and high current account deficits at the start of the crisis. So they were importing a lot more than they were exporting. But a great deal has been done since then. In the meantime, all the countries concerned have a primary fiscal surplus, which means that they are reducing their debt bit by bit. And all these countries now have a current account surplus; they are exporting more than they import. That is quite a turnaround.Death of the working class by strangulation to benefit the portfolios of the ownership class.
And the reason why Italians are seething with growing rage aimed squarely at Europe's unelected institutions, is because European Budget Commissioner, German Guenther Oettinger, said the one thing that he should not have: that "the negative development of the markets will lead Italians not to vote much longer for the populists" according to an interview set to be published in Deutsche Welle later in the day.Market "discipline."
While it is nothing but a waste of time, today Italy's premier-designate, Carlo Cottarelli, a former IMF official also known as "Mr. Scissors" for his drastic public debt cutting, was supposed to present the country's scandalous president, Sergio Mattarella with a list of people who make up his technocratic government; instead he left the meeting with the president without an agreement on a cabinet team and Italy staring new elections in just two months.
While it is unclear what led to the failure by Cottarelli, who will again meet Mattarella on Wednesday, the inability to lay out his government would force the president to dissolve parliament, leading to elections within 60 to 70 days. He may have little choice: as Bloomberg notes, pressure among barious Italian lawmakers mounted on Tuesday to hold elections as soon as possible, with Ansa reporting that Cottarelli’s efforts were stalled by the parties demanding a vote on July 29, or a week later, on August 5....
This paper sets out three models of central bank digital currency (CBDC) that differ in the sectors that have access to CBDC. It studies sectoral balance sheet dynamics at the point of an initial CBDC introduction, and of an attempted large-scale run out of bank deposits into CBDC. We find that if the introduction of CBDC follows a set of core principles, bank funding is not necessarily reduced, credit and liquidity provision to the private sector need not contract, and the risk of a system-wide run from bank deposits to CBDC is addressed. The core principles are: (i) CBDC pays an adjustable interest rate. (ii) CBDC and reserves are distinct, and not convertible into each other. (iii) No guaranteed, on-demand convertibility of bank deposits into CBDC at commercial banks (and therefore by implication at the central bank). (iv) The central bank issues CBDC only against eligible securities (principally government securities). The final two principles imply that households and firms can freely trade bank deposits against CBDC in a private market, and that the private market can freely obtain additional CBDC from the central bank, at the posted CBDC interest rate and against eligible securities.Bank of England
Understanding the changing role of central banks and the novel policies they have pursued recently is absolutely essential for analysing many economic, financial and political issues, ranging from financial regulation and crisis, to exchange rate dynamics and regime changes, and QE and prolonged low interest rates. This book features contributions by many of the world’s leading experts on central banking, providing in accessible essays a fascinating review of today’s key policy and research issues for central banks. Luminaries including Stephen Cecchetti, Takatoshi Ito, Anil Kashyap, Mervyn King, Donald Kohn, Otmar Issing, Hyun Shin and William White are joined by Charles Goodhart of the London School of Economics, whose many achievements in the field of central banking are honoured as the inspiration for this book.
The Changing Fortunes of Central Banking discusses the developing role of central banks and the policies they pursue in seeking monetary and financial stabilisation, while also giving suggestions for model strategies. This comprehensive review will appeal to central bankers, financial supervisors, academics and economists working in think tanks.Bruegel
First there was the Great Gatsby curve. Then there was the Proust index. Now, thanks to Neil Irwin, we have the Marx ratio.
Each, in their different way, attempts to capture the ravages of contemporary capitalism. But the Marx ratio is a bit different. It was published in the New York Times. Its aim is to capture one of the underlying determinants of the obscene levels of inequality in the United States today—not class mobility or the number of years of national income growth lost to the global financial crash. And, of course, it takes its name from that ruthless nineteenth-century critic of mainstream economics and capitalism itself....
Putting aside this rich line-up of events, what has caught our attention is the equal proliferation of pieces celebrating Marx’s birthday, for the better or for the worse. From misleading and derogatory articles such as the Rulers of the world: read Karl Marx! published by The Economist to educational short pieces such as Cooper’s It’s time to normalize Karl Marx, it is difficult to not wonder about the reasons behind such opposing views. Similarly, it is difficult to resist the temptation to add a little contribution to the debate. So here we are.…Developing Economics
This is the second in a series of blog posts on financing infrastructure assets.
Although this blog post considers some very technical material its message is simple. Mainstream macroeconomic models that are used to determine policy choices by governments are deeply flawed and the evidence strongly supports a central thrust of Modern Monetary Theory (MMT) – that fiscal policy is powerful and that austerity will kill growth. In that sense, it helps us understand why various nations and blocs (such as the Eurozone) struggled after the onset of the GFC. It also explains why the deliberate attack on Greek prosperity by the Troika was so successful in demolishing any prospect of growth – an outcome that the official dogma resolutely denied as they constructed one vicious bailout after another. It also explains why New Keynesian approaches to macroeconomics are flawed and should be ignored. I was reminded this week by a research paper I had read last year (thanks Adam for the reminder) which presents a devastating critique (though muted in central bank speak) of the mainstream approach to macroeconomic modelling. A research paper from the ECB (May 2017, No 2058) – On the sources of business cycles: implications for DSGE models – provides a categorical critique of DSGE models and a range of other stunts that mainstream economists have tried to introduce to get away from the obvious – economic cycles are demand driven.…Q. Why do Austerians want to restrict domestic demand by limiting domestic worker incomes?
Italy’s establishment has just revealed its truest beliefs and priorities. The context was the two parties that received the most votes in the last election forming a coalition government. The two parties seeking to form a coalition government won a majority of the seats in both houses of Italy’s parliament in the most recent election. The New York Times reported many of the key facts, but missed the key analytics."All's fair in love, war" — and politics, which is war conducted by other means.
The first battle in the war between Brussels and Rome has thus been won by Brussels: I have little doubt that Mattarella was lobbied very strongly by EU figures to block Savona, because he is capable of developing the real weapon that Five Star/Northern League could bring to bear against the euro – the “mini-BOT.” Named in reference to Italy’s “buoni ordinario del tesoro,” which are short-term government bonds, these would be government-issued notes valued at between €1 and €500, which would be issued to people and companies owed tax refunds by the government. These, in turn, would be valid for paying taxes, buying train tickets, getting petrol at government-owned fuel stations, and so on.
These sidestep the euro’s monopoly as legal tender in the eurozone because a vendor does not have to accept these if they are tendered in an exchange. But they can be accepted, perhaps at a discount to face value, and thereby become an alternative means of payment to the euro.
This is a weapon that Greece prepared, but never used, because Yanis Varoufakis, in what he describes in Adults in the Room as “Mea Maxima Culpa” (“my most grievous fault”) decided to leave the decision to Alexis Tsipras. Tsipras demurred, and the result was a Greek tragedy.
An alternative-means-of-payment is a much more cogent weapon in Italy’s hands than it would have been in Greece’s. Italy’s economy is six times larger than Greece’s and average salaries are almost double (though per-capita income has fallen substantially since the global financial crisis); its economy, particularly in the north, is an industrial powerhouse; and its climate supports a huge range of agricultural products. Much more of what Italians need to buy can be purchased from other Italians than was ever feasible for Greece (the only categorical exception is oil). The mini-BOT could really free Italy from the stranglehold of the euro.…Much more. Worth a read.
Brussels will seek to blame the anti-euro rebels, but the real villains of this crisis are the euro itself and the Maastricht Treaty. As the rebel British economist Wynne Godley stated back in 1992 when the Treaty was signed:
“If a country or region has no power to devalue, and if it is not the beneficiary of a system of fiscal equalization, then there is nothing to stop it suffering a process of cumulative and terminal decline leading, in the end, to emigration as the only alternative to poverty or starvation.” (Wynne Godley, ‘Maastricht and All That’ London Review of Books, October 1992)Of course, another option is "populist" revolt. If a genuine left can't rise to the occasion, Mussolini anyone?
The Italian Marxist Antonio Gramsci coined the term “organic crisis” to describe a crisis that differs from ”ordinary” financial, economic, or political crises. An organic crisis is a “comprehensive crisis,” encompassing the totality of a system or order that, for whatever reason, is no longer able to generate societal consensus (in material or ideological terms).
Such a crisis lays bare fundamental contradictions in the system that the ruling classes are unable to resolve. Organic crises are at once economic, political, social, and ideological—in Gramscian terms, they are crises of hegemony—and they usually lead to a rejection of established political parties, economic policies, and value systems. However, they don’t necessarily lead to the swift collapse of the dominant order. Gramsci described these situations as interregna in which “the old is dying and the new cannot yet be born” and during which time “a great variety of morbid symptoms” can appear.American Affairs
Gramsci was talking about Italy in the 1910s. A century later, the country is facing another organic crisis. More specifically, it is a crisis of the post-Maastricht model of Italian capitalism, inaugurated in the early 1990s. This model, I argue, can be described as a peculiar kind of comprador capitalism—a term generally used in the context of the old colonial system to describe a regime in which a country’s ruling classes ally with foreign interests in exchange for a subordinated role within the dominant hierarchy of power.…
The fight for a full employment bill forty years ago offers lessons for supporters of a job guarantee today.…History.
If history is a guide, then these efforts may need to be more powerful than the Civil Rights Movement, which at its height made full employment such a key component of its agenda. If that is daunting, well, it should be. But an appropriate power analysis is vital for the years ahead....Jacobin
But diverse as the activities of the Forum may have been, none of the Forum venues, none of the Forum participants were as important to the success of the event as the four leaders who joined President Vladimir Putin on stage to address the Plenary Session Friday afternoon: President Emmanuel Macron of France, Prime Minister Shinzo Abe of Japan, Chinese Vice President Wang Quishan and IMF General Director Christine Lagarde.….Putin's Russia is not exactly isolated.
As we shall see, Macron uses history as a cloak of personal grandeur; he envisions himself as an historic personage, an agent of History, following in the footsteps of none other than Charles De Gaulle....
It is more than curious that Macron chose to highlight the fact that when his predecessor Charles Charles De Gaulle decided to visit Russia in June 1966 he chose St Petersburg (Leningrad at the time) because of the city’s heroic resistance in the great siege of World War II. Macron announced that he would be visiting the Piskarevo cemetery where more than a million unidentified victims of the siege are buried to lay a wreath of remembrance.
Mention of his following in the footsteps of De Gaulle during this speech in Petersburg aligns perfectly with his mentioning one month ago in Washington De Gaulle’s address to the joint session of Congress in 1967, an honor that had been granted to no other French head of state in the intervening 51 years. It is remarkable that Macron, who started his government career as a Socialist and served under Hollande, has chosen De Gaulle, the iconic figure of the French Center Right, to be his avatar. The common denominator is surely national sovereignty, which De Gaulle went very far to promote....
Merkel on Saturday also reiterated a February coalition proposal to allow municipalities to apply a dissuasive tax on owners of vacant land who leave their plots unused, hoping to speculate on future windfall sales.
External Affairs Minister Sushma Swaraj said India abides only by the sanctions imposed by the United Nations and not that of any individual nation indicating that the country may not be in a hurry to re-consider its economic ties with Iran on account of the fresh sanctions imposed by the US on the Islamic nation.
“India follows only UN sanctions, and not unilateral sanctions by any country,” Swaraj said at a press conference on Monday when asked about India’s response to the US decision of withdrawing from the Iran nuclear deal.
Iranian Foreign Minister Javad Zarif is in New Delhi to discuss the situation following the US rejection of the nuclear accord and to find out about India’s position on the matter. Iran is the third largest supplier of oil to India, after Iraq and Saudi Arabia.Global South and East not going along with Global North and West. The parting of the ways?
Now I learn that they also recruit "confidential sources" to speak to you about the subject of FBI interest WITHOUT bothering to inform you that they are going to tell the FBI what you said about things. Some of these "confidential sources" are employed by the FBI for long periods of time. The American professor now teaching at a UK university who was sent by the FBI to talk to several Trump campaign people was one such. Other "confidential sources" are recruited for a particular case. Sometimes they are recruited from among the existing acquaintances or "friends" of the person targeted by the FBI. In other words if DoJ, the WH, or the Bureau (FBI) want to know what I, or anyone else, really says about a given topic, they can recruit someone I know using pressure, persuasion or money to "rat" me out.
Felix Dzerzhinsky would have been proud of their skills if they had been his men.Just how is this different from the KGB?
At the Defense Intelligence Agency, Lang was the Defense Intelligence Officer (DIO) for the Middle East, South Asia and counter-terrorism, and later, the first Director of the Defense Humint Service. At the DIA, he was a member of the Defense Senior Executive Service. He participated in the drafting of National Intelligence Estimates. From 1992 to 1994, all the U.S. military attachés worldwide reported to him. During that period, he also briefed President George H. W. Bush at the White House, as he had during Operation Desert Storm.
He was also the head of intelligence analysis for the Middle East for seven or eight years at that institution. He was the head of all the Middle East and South Asia analysis in DIA for counter-terrorism for seven years. For his service in the DIA, Lang received the Presidential Rank Award of Distinguished Executive. — Wikipedia
Well, you know, so let’s understand what we’re saying here. We’re saying that as a last resort, we’ll use military force to destroy the regime’s nuclear program, which basically means destroying the regime. Now yes, that will be, that will be difficult. It will be devastating to the region. But 20 years from now, if they keep building nuclear weapons and missiles, they’re going to sell it to somebody who will use it. Iran is different. They have a religious mission. They’re religious zealots. They’re religious Nazis. If they get a nuclear weapon, they’ll use it for religious purposes, to purify the Sunni faith, destroy Israel and come after us. So where does a terrorist get a weapon, a nuclear weapon, that they would actually use? From a regime like North Korea or Iran. So the President has calculated for the good of the world, for the good of the United States, I’m going to take off the table North Korea having nuclear capability to threaten the homeland and the world at large. And if it takes a war to end that nuclear threat, so be it. And the war will be over there. The people dying will be over there, and he doesn’t want to do that. But he’s going to pick regional conflict to secure the homeland [bold mine-DL]. I hope people understand that.
