Saturday, June 30, 2018

The Economics Novice

Weekend reading. There are only three entries. Easy read.

Ed Zimmer is an engineer and has only recently encountered economics.
But I had now picked up an interest in macroeconomics — and started seriously reading many of the economists' blogs and papers. But the more I read, the more disillusioned I became. Having no previous introduction to economics, I initially assumed economists were scientists (and that was reinforced by the math I was seeing). But as I read their blogs and papers and worked through many of their mathematical models, I came to realize they're not scientists at all — but philosophers. A model reflecting reality simply CANNOT be built from variables that cannot be precisely defined and accurately measured — so their models are essentially useless. They may give insights (for readers to test with their own logic), but any notion that they're offering "truths" is just simplistic.
And to compound that weakness, most economists' papers share the academic weakness of trying more to disprove other economists' work than offer viable solutions to real-world problems. So much of what is found in today's economics textbooks and blogs is simply false — the real-world truth often being the exact opposite of what is written. Economics is not that complicated — little more than the disiplined logic every human is capable of.

So that's how this site has become The Economic Novice. It gives me a platform to lay out my solutions (admittedly novice, but hopefully clear and logical) to societal problems resulting from technological change. I'm doing this as a webpage (rather than a blog) simply because I don't want arguments mucking up the presentation. I'll point to this site as applicable in others' Comments sections and that's where arguments will occur. If anyone wants to argue via email, you'll find me at
The Economics Novice

Briahna Gray — There’s an Easy Answer to Why Alexandria Ocasio-Cortez Won: Socialism

Ocasio-Cortez’s socialist message is not an incidental part of a larger demographic story. And her socialism shouldn’t be treated as a virus opportunistically riding the vector of her Latina form. Socialism is inextricable from Ocasio-Cortez’s success because it’s the secret behind her ability to do what the Democratic party has long failed to do — articulate a holistic progressive vision for America.
Socialism is a framework that supports a belief that a country in which everyone can live with dignity is not the stuff of fantasies, of “ponies” — nor is it the selfish dream of a “privileged” populous who want something for nothing. It’s a socialist conception of the world which emboldens Ocasio-Cortez to aver, on a popular late night show, that “in a modern, moral and wealthy society, no person in America should be too poor to live.”
Socialism reveals that capitalism — a system which privileges markets over community — is not a natural truth, but a political choice to which there are alternatives. It shows that Jeff Bezos’s wealth cannot be understood as unrelated to the plight of Amazon’s workers, but is a consequence of their hardships. It reveals one man’s merit to be another woman’s wage theft, and challenges society to value humans outside of our ability to toil. It’s what sets up Ocasio-Cortez to talk about human dignity as non-negotiable. Where Nancy Pelosi quips, “we’re capitalists, and that’s just the way it is,” socialism says that’s not good enough....
Ocasio-Cortez put it best: “At the end of the day, I’m a candidate that doesn’t take corporate money, that champions Medicare for all, a federal jobs guarantee, the abolishment of ICE, and a green New Deal. But I approach those issues with the lenses of the community that I live in. And that is not as easy to say as ‘identity politics.'”
The Intercept
There’s an Easy Answer to Why Alexandria Ocasio-Cortez Won: Socialism
Briahna Gray

William Craddick — CIA Teams Up With Defense Industry To Undermine Korea Negotiations

In a new development that will shock no one, factions within the CIA attempted for the second time in just over a month to undermine President Donald Trump’s peace overtures towards North Korea by leaking information calculated to decrease confidence in Kim Jong Un’s willingness to earnestly negotiate.
On June 29, 2018, NBC News released a report quoting anonymous CIA officials who claimed that North Korea was increasing nuclear production at “secret sites” without providing any actual evidence for such claims. The report’s credibility is further weakened by the fact that it also cited reports from a think tank which has strong connections to the defense industry and other private special interests.
In disseminating their report, the CIA used NBC reporter Ken Dilanian as an outlet for leaks. As Disobedient Mediapreviously reported, Dilanian was outed by the Intercept in 2014 as a CIA asset. In the aftermath of the disclosure, Dilanian’s previous employers at the Tribune Washington and Los Angeles Times disavowed the disgraced journalist. In at least one instance, the CIA’s instructions to Dilanian appears to have led to significant changes in a story that was eventually published in the Los Angeles Times.
Since that time, Dilanian has persisted in pushing articles written by former CIA officials who continue to perpetuate the “Trump-Russia” collusion narrative without any regard to facts, such as Steven Hall’s Washington Post article titled: “I was in the CIA. We wouldn’t trust a country whose leader did what Trump did.”…
Are people still falling for this stuff?

Pepe Escobar — How the Iran sanctions drama intersects with OPEC-plus

The bottom line is that despite the agreement in Vienna, the price of oil, in the short-term, is bound to go up. Analyses by BNP Paribas, among others, are adamant that supply problems with Venezuela and Libya, plus the proverbial “uncertainty” about the sanctions on Iran, lead to “oil fundamentals still…favorable for oil prices to rise over the next six months despite the OPEC+ decision.”...
Considering that in realpolitik terms Riyadh simply is not allowed any “decision” in oil policy without clearing it first with the US, what remains to be seen is how Washington will react to the new, long-term Riyadh-Moscow entente cordiale. As far as oil geopolitics goes, this is in fact the major game-changer....
The OPEC-plus-Iran puzzle is far from solved. Only one thing is certain; the future spells out brutal, covert resource wars.
Asia Times
How the Iran sanctions drama intersects with OPEC-plus
Pepe Escobar

Simon Wren-Lewis — Could the US become a democratic dictatorship?

Simon Wren-Lewis wanders into political theory.

Mainly Macro
Could the US become a democratic dictatorship?
Simon Wren-Lewis | Emeritus Professor of Economics, Oxford University

See also

On-air real-time censoring reporting about the recently released UK torture report.

Craig Murray Blog
The Unsubtle Art of Non-Verbal CommunicationCraig Murray, formerly British ambassador to Uzbekistan and Rector of the University of Dundee

Alex Tabarrok — Why Sexism and Racism Never Diminish–Even When Everyone Becomes Less Sexist and Racist

Stephen Pinker makes a similar point in The Better Angels of Our Nature: Why Violence Has Declined (2011).

Research suggests that as frequency declines, perceptions change but not in the way that might be expected. As frequency declines, the boundaries of concepts expand relatively rather than registering the absolute decline, as a measuring instrument would do. So it can appear relatively that the phenomenon is reaming the same or even increasing, when it is actually decreasing.

While racism, sexism, and violence are actually moderating — there are no longer any lynchings in the US, for example — it appears to many that things are getting worse.

This is not to diminish these on-going social problems that still plague many individuals, but some progress is being made socially and that cultural change has been reflect in law.

"You've come a long way, baby." But there is still a long slot to go, especially globally, especially where progress has been very uneven or non-existent.

Liberalism has had an effect.

Marginal Revolution
Why Sexism and Racism Never Diminish–Even When Everyone Becomes Less Sexist and Racist
Alex Tabarrok | Bartley J. Madden Chair in Economics at the Mercatus Center and Professor of Economics at George Mason University, and a research fellow with the Mercatus Center

Friday, June 29, 2018

RUSSIALINK: “Trump-Putin meeting will benefit both countries, strengthen global security – John Bolton” – Interfax

John Bolton reports on his meeting with Russian officials in preparation for the Trump-Putin summit in July to be held in Finland.

Johnson's Russia List
RUSSIALINK: “Trump-Putin meeting will benefit both countries, strengthen global security – John Bolton” – Interfax

See also

Sic Semper Tyrannis
"Inside the tent peeing out" - LBJ
Col. W. Patrick Lang, US Army (ret.)
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
See also

The Duran
‘Captured by the Kremlin,’ John Bolton labeled Russian operative by Fake News media
Seraphism Hanisch

Jack Matlock Musings II … The “Intellience Community,” “Russian Interference,” and Due Diligence

Former Ambassador Matlock calls BS.
The report states that it represents the findings of three intelligence agencies: CIA, FBI, and NSA, but even that is misleading in that it implies that there was a consensus of relevant analysts in these three agencies. In fact, the report was prepared by a group of analysts from the three agencies personally selected by James Clapper, then Director of National Intelligence (DNI). Clapper told the Senate in testimony May 8, 2017, that it was prepared by “two dozen or so analysts—hand-picked, seasoned experts from each of the contributing agencies.” If you can hand-pick the analysts, you can hand-pick the conclusions. The analysts selected would have understood what Director Clapper wanted since he made no secret of his views. Why would they endanger their careers by not delivering?
What should have struck any congressperson or reporter was that the procedure Clapper followed was the same as that used in 2003 to produce the report falsely claiming that Saddam Hussein had retained stocks of weapons of mass destruction. That should be worrisome enough to inspire questions, but that is not the only anomaly.…
Matlock agrees with other retired intel professionals that this was fixed intelligence and explains why he arrived at this conclusion.
Musings II … The “Intellience Community,” “Russian Interference,” and Due Diligence
Jack Matlock | U.S. Ambassador to the Soviet Union from 1987 to 1991 and retired career US foreign service officer

See also his previous, which was formerly linked to here at MNE.


Brittany Shoot — Firework Facts: Americans Incinerate $1 Billion in July Fourth Fireworks Every Year

In an ironic economic twist, a whopping 99% of consumer fireworks are imported from China. Undeterred by their origin, Americans spend more than $1 billion on fireworks each year, according to the American Pyrotechnics Association. By weight, that makes for roughly 268 million pounds of fireworks — or roughly a pound of pyrotechnics for every American man, woman and child.…
Interesting factoid.

Firework Facts: Americans Incinerate $1 Billion in July Fourth Fireworks Every Year
Brittany Shoot

Patrick Porter — Donald Trump hasn’t changed America’s grand global strategy – and he won’t

The bottom line about this presidency so far is that even though candidate Trump threatened to govern as an “isolationist”, President Trump is doing no such thing. For all that he threatened to tear up alliances, wind up nation-building wars, and tolerate or even encourage nuclear proliferation, his administration is fundamentally doubling down on “primacy” – the idea that the US should secure a position of global dominance. And as a brief tour through theatres long classed as critical power centres by American governments reveals, the same old pattern is holding....
The upshot is that Trump has not altered the general architecture of America’s power position. Change is possible, but only through the combination of shocks severe enough to challenge the status quo, and only with a president willing to bear the costs of overhauling it. Until then, the fundamental principle of American primacy is here to stay. Trump has not deviated from America’s commitment to primacy. Rather, in brazen terms, he offers primacy without euphemism.
Judging by increases in military spending, I'd say that DJT is doubling down on global dominance.
The Conversation
Donald Trump hasn’t changed America’s grand global strategy – and he won’t
Patrick Porter | Professor of International Security and Strategy, University of Birmingham

Tom Watson says Labour's antisemitism crisis 'worse' now

 Deputy Leader 'ashamed' of party's response to Jew hate

One by one, Labour Party members could end up getting expelled from the British Labour Party if they ever mention they disprove of Israel's policies. Freedom of speech is being curtailed. Tom Watson says he's glad that Ken Livingstone left the Labour Party. But this which hunt  is really a ploy to remove Jeremy Corbyn as party leader. Just about any self respecting lefty would disapprove of Israel's policies towards the Palestinians, so this is an assault on the majority British Labour Party members. They are not antisemitic, and many Jews in the Labour Party agree with them. KV

At last week's JLM AGM in Westminster, Ivor Caplin was confirmed as the group's new chair - replacing Jeremy Newmark who resigned earlier this year.
In his first speech in the role, Mr Caplin, a former Labour MP and defence minister in Tony Blair's government, said: "Far too often we are seeing antisemitism dressed up by some as comment on Israel - it is not and it has to stop."
Singling out notorious Labour MP Chris Williamson, Mr Caplin said: "I am really disappointed the Chief Whip has not withdrawn the Whip from him yet."
The Jerusalem Chronicle

Times Headline: Fears Over Prospect of Peace

Gee, peace with Putin, what's Trump playing at, surely war is better - with thousands of troops lined up at Russia's border? Surely we are better off wasting our money and resources on military expenditure? Peace, of all things, with the risk of billions of lives perishing removed. The liberals are not happy! Trump is a badass!

Photograph source - The Off-Guardian.

Lawrence Mishel — Social Security data confirm same old pattern: Self-employment headcount has risen but economic impact remains small

One indication of the growth of self-employment activity has been the rise in the number of people filing Schedule C income and self-employment earnings in their annual tax filings. This growth has been cited to illustrate the escalation of self-employment and to suggest that Bureau of Labor Statistics (BLS) measures of self-employment are missing an important phenomenon. Tracking headcounts of tax filings, however, does not adequately reflect trends in the economic impact of self-employment since, as this analysis shows, most of the growth is activity for supplementary incomes....
Gig economy.

Economic Policy Institute
Social Security data confirm same old pattern: Self-employment headcount has risen but economic impact remains small
Lawrence Mishel | distinguished fellow at the Economic Policy Institute

Renegade Inc. - Looting Libya

Renegade Inc. say they were there on the ground during the Libyan revolution and the people there generally believed the Western lies that they wanted to liberate them when really what they were after were their resources. Now Libya is a failed state overrun with jihadists fighting for control of Libya's resources. Many thousands have died and millions more driven into poverty, while the West takes no interest and neither does the media.

One bit of good news, and I hope he's right, is that Dr Matthew Alford says we have never been anywhere near nuclear war because the West is so powerful: the West just likes to create enemies to keep military spending up. Well, Paul Craig Roberts had me hiding under the bed last year. 

If you have time the embedded video is excellent, where in the second half they talk about how the CIA and the FBI have altered thousands of scripts for films and shows to portray US interventionism in other counties as a good thing. Kevin KV

One of the biggest Western foreign policy adventures in recent years is something that is underreported in the media. So-called ‘intervention’ in Libya has created a failed state that is riven with extremists all vying for power. So we ask: was this really an epic foreign policy mistake? Or was destroying Libya just another day at the office for politicians, shortsighted bureaucrats, and vulture corporates who continually try to enforce global economic supremacy.

Libya was apparently former President Barack Obama’s biggest regret. This is what his then Secretary of State, Hillary Clinton said about the then Libyan leader Muammar Gaddafi:

“We came, we saw, he died”.

Renegade Inc. - Looting Libya

Judith Abramson - Knesset committee: Shocking photographs reveal Israeli medical experiments conducted on Jewish Yemenite children

For years, testimonies have been heard but up until now, no evidence has been published to confirm them. On Wednesday, the Knesset Special Committee on the Disappearance of Children from Yemen, the East and the Balkans were shown photographs that seem to attest to medical experiments that were conducted on Yemenite children during Israel’s early years. In one of the photographs, naked children are seen with scribbles marking where their internal organs are located.
This made new feel Ill yesterday when i read it, so much so I wouldn't put it out here. But the original article I read on Live leak was taken down by the author, so today I did a new search for it and as this came up from an Israeli newspaper written by an Israeli  journalist about the Knesset Committee probe, so I think it is okay to put out here because it can't be considered anti semetic, that's how bad things have got.   KV  
Jerusalem Online
Judith Abramson - Knesset committee: Shocking photographs reveal Israeli medical experiments conducted on Jewish Yemenite children

Thursday, June 28, 2018

Prakash Loungani — Links

From a new paper by Antonio Fatas:
“This paper studies the negative loop created by the interaction between pessimistic estimates of potential output and the effects of fiscal policy during the 2008-2014 period in Europe. The crisis of 2008 created an overly pessimistic view on potential output among policy makers that led to a large adjustment in fiscal policy during the years that followed. Contractionary fiscal policy, via hysteresis effects, caused a reduction in potential output that not only validated the original pessimistic forecasts, but also led to a second round of fiscal consolidation. This succession of contractionary fiscal policies was likely self-defeating for many European countries. The negative effects on GDP caused more damage to the sustainability of debt than the benefits of the budgetary adjustments. The paper concludes by discussing alternative frameworks for fiscal policy that could potentially avoid this negative loop in future crises.”
The Unassuming Economist
Fiscal Policy and the Shifting Goalposts
Prakash Loungani | Advisor and Senior Personnel & Budget Manager in the IMF’s Independent Evaluation Office

See also

From a new IMF working paper:
“This paper contributes to the open economy local fiscal multiplier literature by estimating regional output and employment responses to federal expenditure shocks in the European Union. In particular, similarly to the literature on foreign aid and growth, I use shocks to the supply of federal transfers (European Commission commitments) of structural fund spending by subnational region as instruments for annual realized expenditure in a panel from 2000-2013. I find a large, contemporaneous multiplier of 1.7 which translates into a cumulative multiplier of 4 three years after the shock. Furthermore, using a novel dataset on bilateral trade between EU regions, I find evidence of demand-driven spillovers up to three years after a shock.”


From a new IMF policy paper:
“This paper reviews the experience with the fiscal space assessment framework that was piloted during 2017–18. In 2016, staff proposed an operational definition of fiscal space and a new four-stage framework for its assessment. These were discussed informally by the Board in June, and a Board paper “Assessing Fiscal Space: An Initial Consistent Set of Considerations”incorporating Directors’ views was published in December. Fiscal space was narrowly defined as the room for undertaking discretionary fiscal policy relative to existing plans without endangering market access and debt sustainability. The framework was developed in response to the need to provide a more systematic approach to assessing fiscal space in the Fund’s surveillance. It was designed as a tool to inform the availability of fiscal space over a 3 to 4 year horizon for discretionary action, as opposed to the optimality of its use. Indeed, it was stressed that the availability of space does not necessarily mean that it should be used or should not be further expanded. The framework was piloted in the Article IV consultations of 34 advanced economies and emerging markets, comprising almost 80 percent of global GDP in PPP terms.”
Assessing Fiscal Space: An Update and Stocktaking

Joshua Bateman — Why China is spending billions to develop an army of robots to turbocharge its economy

  • Chinese President Xi Jinping has called for a robot revolution in manufacturing to boost productivity.
  • Wages in China are rising, and it's becoming harder to compete with cheap labor.
  • An aging population in China also necessitates automation. The working-age population, people age 15 to 64, could drop to 800 million by 2050 from 998 million today.
  • Chinese robotic growth is forecast to exceed 20 percent annually through 2020.
Interesting article to read in full.

China's socialist ideology commits the elite to dealing with inequality in a way that capitalist ideology doesn't. It will be interesting to see how this plays out as it develops. I suspect that China will recognize that it is a demand problem long before the West does.

CNBC — The Edge
Why China is spending billions to develop an army of robots to turbocharge its economy
Joshua Bateman, CNBC contributor

Bill Mitchell— The BIS should be defunded and then dissolved

On June 24, 2018, the Bank of International Settlements (BIS) released their – Annual Economic Report 2018 – which contains their latest analysis of the global economy including the risks they think the current growth process faces. It is full of myth and like previous statements from the BIS it only serves to perpetuate the policy mentalities that caused the global financial crisis. These multilateral organisations (including the BIS, IMF, World Bank, OECD etc) have become the harbingers of the neoliberal ideology. In doing so, they have breached their original charter. They should be dissolved and replaced with new institutions within a revised international framework. We sketched that framework in our current book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017).
Bill Mitchell – billy blog
The BIS should be defunded and then dissolved
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

See also
"The powers of financial capitalism had (a) far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent meetings and conferences. The apex of the systems was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world's central banks which were themselves private corporations. Each central bank... sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world."   
Carroll Quigley, Tragedy and Hope: A History of the World in Our Time. New York: The Macmillan Company, 1966, VII, page 324.

Carroll Quigley (1910-1977), Professor of History at Georgetown University School of Foreign Relations, member of the Council on Foreign Relations (CFR), and mentor to Bill Clinton. Quigley was writing from the vantage of an insider.

This quote begins a section of the chapter on the BIS. Quigley asserts that historically the BIS was an extension of banker control of international finance. The BIS, IMF, World Bank, and other influential international institutions were created by a Western elite as a mechanism of global financial and economic dominance. The East and Global South is now pushing back on this. This is one of the issues in demands for multilateralism and multipolarism.

Tragedy and Hope and other Quigley works are available at and also at his site.

Manlio Dinucci - Neocolonialism and “Migrants Crisis”

John Haidt says the working class mainly vote conservative  but one of the reasons for this is to much immigration which the working class blame on the liberals. But mass immigration  has really been the policy of the right wing neoliberals as businesses wanted cheaper labour to compete with the third world. Also, immigration pushed up demand for housing which was good for landlords and bankers as the value of rents and mortgages rose. Immigration just pushes up GDP. In the end people love money more then their county.

I have a lot of sympathy for the working class, and middle class, who don't want to see their culture change overnight. People don't like change and for good reason: for millennia nothing changed very much, hunter gatherers just learnt how to live from their parents, and if change come about it meant something had gone wrong, like a famine, drought, or war, etc. I'm a liberal who prides himself on anti-racism, but do I want to see my country become like another country overnight, hell no, I want to see other counties becoming more like my country with tollerant, diverse, liberal views. The socialists and liberal need  to cotton  onto what excessive immigration means because if they don't  they are liable to stay out of power forever.

Read below and see how neoliberal capitalism drives people around the world into poverty, which makes many of them want to immigrate to the West to get a better life leaving their families and friends behind, which can be heart breaking for them and their families. Kevin KV

From the United States to Europe, the “migrants crisis” arouses internal and international polemics about the policies to be applied to migratory flows.
Everywhere, however, they are represented according to a cliché that overturns reality: that of “rich countries” forced to suffer the increasing pressure of migration from “poor countries”.
The underlying cause is hidden: the economic system that in the world allows a small minority to accumulate wealth at the expense of the growing majority, impoverishing it and thus provoking forced emigration.
With regard to migration flows to the United States, the case of Mexico is emblematic. Its agricultural production collapsed when, with the NAFTA (the North American “free” trade agreement), the US and Canada flooded the Mexican market with cheap agricultural products thanks to their own state subsidies.
Millions of peasants were left without work, swelling the labor force recruited in the maquiladoras: thousands of industrial plants along the border line in the Mexican territory, owned or controlled mostly by US companies, in which wages are very low and union rights inexistent. In a country where around half of the population lives in poverty, the mass of those seeking to enter the United States has increased.

Tyler Durden: Zero Hedge - Obama Armed Jihadists in Syria: Bombshell Interview with Former Deputy National Security Adviser Ben Rhodes

Someone finally asked Obama administration officials to own up to the rise of ISIS and arming jihadists in Syria.


Mahdi Haden, of the Intercept, nailed Ben Rhodes, Obama's National security adviser, down about Obama's arming and funding if ISIS and other terrorist groups fighting in Syria. Ben Rhodes, backed into a corner, finally admitted it but said the U.S. wasn't as bad as the others, meaning  Saudi Arabia and Qatar, etc, as if that makes it okay.  Anyway, none of ever mainstream media picked up on the story, and one media outlet even ran a story about the conspiracy theory that the U.S. government backs the Jihadist terrorists. I might try to get this out in the Guardian CiF  but I bet they remove it. The MSM isn't interested in tell news. KV

In a wide ranging interview titled “Confronting the Consequences of Obama’s Foreign Policy” The Intercept’s Mehdi Hasan put the question to Ben Rhodes, who served as longtime deputy national security adviser at the White House under Obama and is now promoting his newly published book, The World As It Is: Inside the Obama White House.
Rhodes has been described as being so trusted and close to Obama that he was “in the room” for almost every foreign policy decision of significance that Obama made during his eight years in office. While the Intercept interview is worth listening to in full, it’s the segment on Syria that caught our attention.
In spite of Rhodes trying to dance around the issue, he sheepishly answers in the affirmative when Mehdi Hasan asks the following question about supporting jihadists in Syria:
Did you intervene too much in Syria? Because the CIA spent hundreds of millions of dollars funding and arming anti-Assad rebels, a lot of those arms, as you know, ended up in the hands of jihadist groups, some even in the hands of ISIS.
Your critics would say you exacerbated that proxy war in Syria; you prolonged the conflict in Syria; you ended up bolstering jihadists.
Rhodes initially rambles about his book and “second guessing” Syria policy in avoidance of the question. But Hasan pulls him back with the following: “Oh, come on, but you were coordinating a lot of their arms.” 
The two spar over Hasan’s charge of “bolstering jihadists” in the following key section of the interview, at the end of which Rhodes reluctantly answers “yeah…” — but while trying to pass ultimate blame onto US allies Turkey, Qatar, and Saudi Arabia (similar to what Vice President Biden did in a 2014 speech):
MH: Oh, come on, but you were coordinating a lot of their arms. You know, the U.S. was heavily involved in that war with the Saudis and the Qataris and the Turks.
BR: Well, I was going to say: Turkey, Qatar, Saudi.
MH: You were in there as well.
BR: Yeah, but, the fact of the matter is that once it kind of devolved into kind of a sectarian-based civil war with different sides fighting for their perceived survival, I think we, the ability to bring that type of situation to close, and part of what I wrestled with in the book is the limits of our ability to pull a lever and make killing like that stop once it’s underway.
To our knowledge this is the only time a major media organization has directly asked a high ranking foreign policy adviser from the Obama administration to own up to the years long White House support to jihadists in Syria.
Though the interview was published Friday, its significance went without notice or comment in the mainstream media over the weekend (perhaps predictably). Instead, what did circulate was a Newsweek article mocking “conspiracy theories” surrounding the rapid rise of ISIS, including the following:
President Donald Trump has done little to dispel the myth of direct American support for ISIS since he took office. On the campaign trail in 2016, Trump claimed—without providing any evidence—that President Obama and then-Secretary of State Hillary Clinton co-founded the group and that ISIS “honors” the former president.
Of course, the truth is a bit more nuanced than that, as Trump himself elsewhere seemed to acknowledge, and which ultimately led to the president reportedly shutting down the CIA’s covert Syrian regime change program in the summer of 2017 while complaining to aides about the shocking brutality of the CIA-trained “rebels”.OH

Wednesday, June 27, 2018

McKinsey Five Fifty — The Coming Boom?

The global economy could be on the cusp of a productivity boom—and big opportunities for companies.

However, capturing the productivity potential of advanced economies may require a focus on promoting both demand and digital diffusion in addition to more traditional supply-side approaches.
McKinsey Five Fifty — A quick briefing in five—or a fifty-minute deeper dive

Dr Michael Gregger - The Effects of Cell Phones & Bluetooth on Nerve Function

What impact might cell phone and Bluetooth radiation have on the inner ear?

Cell phones can damage your hearing but Bluetooth is safe.

Lars P. Syll — The main reason why almost all econometric models are wrong

Since econometrics doesn’t content itself with only making optimal predictions, but also aspires to explain things in terms of causes and effects, econometricians need loads of assumptions — most important of these are additivity and linearity. Important, simply because if they are not true, your model is invalid and descriptively incorrect. And when the model is wrong — well, then it’s wrong....
Simplifying assumptions versus oversimplification.

Lars P. Syll’s Blog
The main reason why almost all econometric models are wrong
Lars P. Syll | Professor, Malmo University

Brian Romanchuk — Primer: The Kalecki Profit Equation (Part I)

The Kalecki profit equation -- named after the economist Michal Kalecki -- describes how aggregated profits are determined by national accounting identities. (Note that Jerome Levy came up with a similar approach earlier; the equation is sometimes referred to as the Kalecki-Levy profit equation.) The results are perhaps not obvious if we look at profits from a bottom up perspective. From the perspective of business cycle analysis, the key point to note is that net investment is a source of profits. Meanwhile, since firms invest in order to grow profits, we get a self-reinforcing feedback loop. From a policy perspective, we see that governmental deficits also add to profits, which implies that increasing deficits add to profits in a recession, helping put a floor under activity....
Bond Economics
Primer: The Kalecki Profit Equation (Part I)
Brian Romanchuk

Bill Mitchell — We can do something about neoliberalism

It is Wednesday, so just a (relatively) short blog post today. I am using the time today to further scope out the material and logic for my next book with Thomas Fazi, which we hope to publish sometime in 2019. I will provide more details on that project soon but it is intended to be the followup to our current book – Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World (Pluto Books, 2017). So, today, a bit of that sort of flavour. In 1977, the Young European Federalists, which has long campaigned for European integration, released its Manifesto, which coined the term “democratic deficit”. While they intended it to be a concept to advance their pan-European intentions, the idea resonates strongly in the current climate and can be used to support a return to grass roots democracy aimed at reclaiming the nation state from the neoliberals and the progressive pretenders who have become infested with neoliberal ideas. In the last week, we have seen two notable events. First, the entrenchment of the colonial status of Greece under the watchful eye and collaboration of so-called ‘socialists’. Second, the magnificent success in today’s New York Democratic Primary election by a truly progressive candidate. These events are diametrically opposed. The former tells you what is wrong with traditional progressive political parties. The latter tells us that we can do something about it.
Bill Mitchell – billy blog
We can do something about neoliberalism
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia

Jonathan Haidt - Why working-class people vote conservative

Why do working class people vote conservative, asks John Haidt, when it is not in their economic interest? Well, I don't agree with all of John Haidt 's conclusions because he says nothing about propaganda, but he does raise some interesting and disturbing points.

Why working-class people vote conservative

Across the world, blue-collar voters ally themselves with the political right – even when it appears to be against their own interests. Is this because such parties often serve up a broader, more satisfying moral menu than the left?

Why on Earth would a working-class person ever vote  candidate? This question has obsessed the American left since Ronald Reagan first captured the votes of so many union members, farmers, urban Catholics and other relatively powerless people – the so-called "Reagan Democrats". Isn't the Republican party the party of big business? Don't the Democrats stand up for the little guy, and try to redistribute the wealth downwards?
Many commentators on the left have embraced some version of the duping hypothesis: the Republican party dupes people into voting against their economic interests by triggering outrage on cultural issues. "Vote for us and we'll protect the American flag!" say the Republicans. "We'll make English the official language of the United States! And most importantly, we'll prevent gay people from threatening your marriage when they … marry! Along the way we'll cut taxes on the rich, cut benefits for the poor, and allow industries to dump their waste into your drinking water, but never mind that. Only we can protect you from gay, Spanish-speaking flag burners.

Paul Craig Roberts - How Long Can The Federal Reserve Stave Off the Inevitable?

I decided to reproduce this in full as every paragraph seemed pertinent and I kind if felt most people here would read it all to why end anyway.  Do Americans know how they have been conned, and yet a significant amount of them still vote for the neoliberal system? KV

How Long Can The Federal Reserve Stave Off the Inevitable?
Paul Craig Roberts
When are America’s global corporations and Wall Street going to sit down with President Trump and explain to him that his trade war is not with China but with them? The biggest chunk of America’s trade deficit with China is the offshored production of America’s global corporations. When the corporations bring the products that they produce in China to the US consumer market, the products are classified as imports from China.
Six years ago when I was writing The Failure of Laissez Faire Capitalism, I concluded on the evidence that half of US imports from China consist of the offshored production of US corporations. Offshoring is a substantial benefit to US corporations because of much lower labor and compliance costs. Profits, executive bonuses, and shareholders’ capital gains receive a large boost from offshoring. The costs of these benefits for a few fall on the many—the former American employees who formerly had a middle class income and expectations for their children.
In my book, I cited evidence that during the first decade of the 21st century “the US lost 54,621 factories, and manufacturing employment fell by 5 million employees. Over the decade, the number of larger factories (those employing 1,000 or more employees) declined by 40 percent. US factories employing 500-1,000 workers declined by 44 percent; those employing between 250-500 workers declined by 37 percent, and those employing between 100-250 workers shrunk by 30 percent. These losses are net of new start-ups. Not all the losses are due to offshoring. Some are the result of business failures” (p. 100).
In other words, to put it in the most simple and clear terms, millions of Americans lost their middle class jobs not because China played unfairly, but because American corporations betrayed the American people and exported their jobs. “Making America great again” means dealing with these corporations, not with China. When Trump learns this, assuming anyone will tell him, will he back off China and take on the American global corporations?
The loss of middle class jobs has had a dire effect on the hopes and expectations of Americans, on the American economy, on the finances of cities and states and, thereby, on their ability to meet pension obligations and provide public services, and on the tax base for Social Security and Medicare, thus threatening these important elements of the American consensus. In short, the greedy corporate elite have benefitted themselves at enormous cost to the American people and to the economic and social stability of the United States.
The job loss from offshoring also has had a huge and dire impact on Federal Reserve policy. With the decline in income growth, the US economy stalled. The Federal Reserve under Alan Greenspan substituted an expansion in consumer credit for the missing growth in consumer income in order to maintain aggregate consumer demand. Instead of wage increases, Greenspan relied on an increase in consumer debt to fuel the economy.
The credit expansion and consequent rise in real estate prices, together with the deregulation of the banking system, especially the repeal of the Glass-Steagall Act, produced the real estate bubble and the fraud and mortgage-backed derivatives that gave us the 2007-08 financial crash.
The Federal Reserve responded to the crash not by bailing out consumer debt but by bailing out the debt of its only constituency—the big banks. The Federal Reserve let little banks fail and be bought up by the big ones, thus further increasing financial concentration. The multi-trillion dollar increase in the Federal Reserve’s balance sheet was entirely for the benefit of a handful of large banks. Never before in history had an agency of the US government acted so decisively in behalf only of the ownership class.
The way the Federal Reserve saved the irresponsible large banks, which should have failed and have been broken up, was to raise the prices of troubled assets on the banks’ books by lowering interest rates. To be clear, interest rates and bond prices move in opposite directions. When interest rates are lowered by the Federal Reserve, which it achieves by purchasing debt instruments, the prices of bonds rise. As the various debt risks move together, lower interest rates raise the prices of all debt instruments, even troubled ones. Raising the prices of debt instruments produced solvent balance sheets for the big banks.
To achieve its aim, the Federal Reserve had to lower the interest rates to zero, which even the low reported inflation reduced to negative interest rates. These low rates had disastrous consequences. On the one hand low interest rates caused all sorts of speculations. On the other low interest rates deprived retirees of interest income on their retirement savings, forcing them to draw down capital, thus reducing accumulated wealth among the 90 percent. The under-reported inflation rate also denied retirees Social Security cost-of-living adjustments, forcing them to spend retirement capital.
The low interest rates also encouraged corporate boards to borrow money in order to buy back the corporation’s stock, thus raising its price and, thereby, the bonuses and stock options of executives and board members and the capital gains of shareholders. In other words, corporations indebted themselves for the short-term benefit of executives and owners. Companies that refused to participate in this scam were threatened by Wall Street with takeovers.
Consequently today the combination of offshoring and Federal Reserve policy has left us a situation in which every aspect of the economy is indebted—consumers, government at all levels, and businesses. A recent Federal Reserve study concluded that Americans are so indebted and so poor that 41 percent of the American population cannot raise $400 without borrowing from family and friends or selling personal possessions.
A country whose population is this indebted has no consumer market. Without a consumer market there is no economic growth, other than the false orchestrated figures produced by the US government by under counting the inflation rate and the unemployment rate.
Without economic growth, consumers, businesses, state, local, and federal governments cannot service their debts and meet their obligations.
The Federal Reserve has learned that it can keep afloat the Ponzi scheme that is the US economy by printing money with which to support financial asset prices. The alleged rises in interest rates by the Federal Reserve are not real interest rates rises. Even the under-reported inflation rate is higher than the interest rate increases, with the result that the real interest rate falls.
It is no secret that the Federal Reserve controls the price of bonds by openly buying and selling US Treasuries. Since 1987 the Federal Reserve can also support the price of US equities. If the stock market tries to sell off, before much damage can be done the Federal Reserve steps in and purchases S&P futures, thus driving up stock prices. In recent years, when corrections begin they are quickly interrupted and the fall is arrested.
As a member of the Plunge Protection Team known officially as the Working Group on Financial Markets, the Federal Reserve has an open mandate to prevent another 1987 “Black Monday.” In my opinion, the Federal Reserve would interpret this mandate as authority to directly intervene. However, just as the Fed can use the big banks as agents for its control over the price of gold, it can use the Wall Street banks dark pools to manipulate the equity markets. In this way the manipulation can be disguised as banks making trades for clients. The Plunge Protection Team consists of the Federal Reserve, the Treasury, the SEC, and the Commodity Futures Trading Corporation. As Washington’s international power comes from the US dollar as world reserve currency, protecting the value of the dollar is essential to American power. Foreign inflows into US equities are part of the dollar’s strength. Thus, the Plunge Protection Team seeks to prevent a market crash that would cause flight from US dollar assets.
Normally so much money creation by the Federal Reserve, especially in conjunction with such a high debt level of the US government and also state and local governments, consumers, and businesses, would cause a falling US dollar exchange rate. Why hasn’t this happened?
For three reasons. One is that the central banks of the other three reserve currencies—the Japanese central bank, the European central bank, and the Bank of England—also print money. Their Quantitative Easing, which still continues, offsets the dollars created by the Federal Reserve and keeps the US dollar from depreciating.
A second reason is that when suspicion of the dollar’s worth sends up the gold price, the Federal Reserve or its bullion banks short gold futures with naked contracts. This drives down the gold price. There are numerous columns on my website by myself and Dave Kranzler proving this to be the case. There is no doubt about it.
The third reason is that money managers, individuals, pension funds, everyone and all the rest had rather make money than not. Therefore, they go along with the Ponzi scheme. The people who did not benefit from the Ponzi scheme of the past decade are those who understood it was a Ponzi scheme but did not realize the corruption that has beset the Federal Reserve and the central bank’s ability and willingness to continue to feed the Ponzi scheme.
As I have explained previously, the Ponzi scheme falls apart when it becomes impossible to continue to support the dollar as burdened as the dollar is by debt levels and abundance of dollars that could be dumped on the exchange markets.
This is why Washington is determined to retain its hegemony. It is Washington’s hegemony over Japan, Europe, and the UK that protects the American Ponzi scheme. The moment one of these central banks ceases to support the dollar, the others would follow, and the Ponzi scheme would unravel. If the prices of US debt and stocks were reduced to their real values, the United States would no longer have a place in the ranks of world powers.
The implication is that war, and not economic reform, is America’s most likely future.
In a subsequent column I hope to explain why neither US political party has the awareness and capability to deal with real problems.

Tuesday, June 26, 2018

Gordon M. Hahn — Russia, the West, and Recent Geoeconomics in Europe’s Gas Wars

Gordon M. Hahn explains why he concludes that Russia is poised to win the gas wars at this point, while the US is in a weak position.

Russian and Eurasian Politics
Russia, the West, and Recent Geoeconomics in Europe’s Gas WarsGordon M. Hahn, analyst and Advisory Board member at Geostrategic Forecasting Corporation, member of the Executive Advisory Board at the American Institute of Geostrategy, a contributing expert for Russia Direct, a senior researcher at the Center for Terrorism and Intelligence Studies, Akribis Group, and; and an analyst and consultant for Russia – Other Points of View

Bill Mitchell — The Meseberg Declaration – don’t hold your breath waiting

France and Germany signed an agreement last week (June 19, 2018) – the so-called Meseberg Declaration – which saw Europhiles shouting out that Germany has finally bowed to pressure from Emmanuel Macron and agreed to reforms of the Eurozone. Commentators applauded the ‘momentum’ that the ‘Declaration’ introduced to the European integration debate, although they admitted the shifts were slower than a snail might achieve on a bad day. Soon after the ‘Declaration’ was released the revolt of the so-called Hanseatic League of nations broadened as three more Member States joined the rebellion. The 12 rebel states (see below) have told France and Germany in no uncertain terms that many of the key propositions in the Meseberg document – particularly to create a Eurozone budget capacity – will not be acceptable. The ridiculous part of this is that the Germans have only signalled European-level budget changes that would actually cut the current fiscal capacity. So not only are the Europhiles wrong on the importance and substance of the ‘Meseberg Declaration’, but the 12 rebel states have signalled that many elements of the minimal agreement that the French and German came to last week are unacceptable. This is the EU reform process we are talking about. Don’t hold your breath waiting for anything to happen.
Meanwhile the approval ratings of both Macron and Merkel are tanking.

Bill Mitchell – billy blog
The Meseberg Declaration – don’t hold your breath waiting
Bill Mitchell | Professor in Economics and Director of the Centre of Full Employment and Equity (CofFEE), at University of Newcastle, NSW, Australia
Jimmy Dore says how the so called left are criticizing Trump for not being tough enough on Assad, in fact, they want America to go for all out war with Syria. Tucker Carlson says how the U.S. Is allowing terrorist groups like, ISIS, Al-Nursa, and ABC, whatever the other groups call themselves next, to fight the war against Assad. The Democrats are pretending to be outraged with 'Assad's brutality' while the US ally, Suadi Arabia, is bombing and starving millions of Yemanis. In fact, Crown Prince Mohamed Bin Salmon gets to dine with the Queen.

 Tucker Carlson says when the media, the Military -industrial complex, and both sides of the house all agree threes something wrong. He says a bill should be passed that the U.S should not be allowed to destroy another country without rebuilding the last one, and that every senator should be made to visit the destroyed country.