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The Global Power Elite

Exposing the Giants: The Global Power Elite ICH By Robert J Burrowes August 31, 2018

Developing the tradition charted by C. Wright Mills in his 1956 classic The Power Elite, in his latest book, Professor Peter Phillips starts by reviewing the transition from the nation state power elites described by authors such as Mills to a transnational power elite centralized on the control of global capital.

Thus, in his just-released study Giants: The Global Power Elite, Phillips, a professor of political sociology at Sonoma State University in the USA, identifies the world’s top seventeen asset management firms, such as BlackRock and J.P Morgan Chase, each with more than one trillion dollars of investment capital under management, as the ‘Giants’ of world capitalism. The seventeen firms collectively manage more than $US41.1 trillion in a self-invested network of interlocking capital that spans the globe.

This $41 trillion represents the wealth invested for profit by thousands of millionaires, billionaires and corporations. The seventeen Giants operate in nearly every country in the world and are ‘the central institutions of the financial capital that powers the global economic system’. They invest in anything considered profitable, ranging from ‘agricultural lands on which indigenous farmers are replaced by power elite investors’ to public assets (such as energy and water utilities) to war.

In addition, Phillips identifies the most important networks of the Global Power Elite and the individuals therein. He names 389 individuals (a small number of whom are women and a token number of whom are from countries other than the United States and the wealthier countries of Western Europe) at the core of the policy planning nongovernmental networks that manage, facilitate and defend the continued concentration of global capital. The Global Power Elite perform two key uniting functions, he argues: they provide ideological justifications for their shared interests (promulgated through their corporate media), and define the parameters of action for transnational governmental organizations and capitalist nation-states.

More precisely, Phillips identifies the 199 directors of the seventeen global financial Giants and offers short biographies and public information on their individual net wealth. These individuals are closely interconnected through numerous networks of association including the World Economic Forum, the International Monetary Conference, university affiliations, various policy councils, social clubs, and cultural enterprises. For a taste of one of these clubs, see this account of The Links in New York. As Phillips observes: ‘It is certainly safe to conclude they all know each other personally or know of each other in the shared context of their positions of power.’

The Giants, Phillips documents, invest in each other but also in many hundreds of investment management firms, many of which are near-Giants. This results in tens of trillions of dollars coordinated in a single vast network of global capital controlled by a very small number of people. ‘Their constant objective is to find enough safe investment opportunities for a return on capital that allows for continued growth. Inadequate capital-placement opportunities lead to dangerous speculative investments, buying up of public assets, and permanent war spending.’

Because the directors of these seventeen asset management firms represent the central core of international capital, ‘Individuals can retire or pass away, and other similar people will move into their place, making the overall structure a self-perpetuating network of global capital control. As such, these 199 people share a common goal of maximum return on investments for themselves and their clients, and they may seek to achieve returns by any means necessary – legal or not…. the institutional and structural arrangements within the money management systems of global capital relentlessly seek ways to achieve maximum return on investment, and … the conditions for manipulations – legal or not – are always present.’

Like some researchers before him, Phillips identifies the importance of those transnational institutions that serve a unifying function. The World Bank, International Monetary Fund, G20, G7, World Trade Organization (WTO), World Economic Forum(WEF), Trilateral Commission, Bilderberg Group, Bank for International Settlements, Group of 30 (G30), the Council on Foreign Relationsand the International Monetary Conference serve as institutional mechanisms for consensus building within the transnational capitalist class, and power elite policy formulation and implementation. ‘These international institutions serve the interests of the global financial Giants by supporting policies and regulations that seek to protect the free, unrestricted flow of capital and debt collection worldwide.’

But within this network of transnational institutions, Phillips identifies two very important global elite policy-planning organizations: the Group of Thirty (which has 32 members) [] and the extended executive committee of the Trilateral Commission (which has 55 members) []. These nonprofit corporations, which each have a research and support staff, formulate elite policy and issue instructions for their implementation by the transnational governmental institutions like the G7, G20, IMF, WTO, and World Bank. Elite policies are also implemented following instruction of the relevant agent, including governments, in the context. These agents then do as they are instructed.Thus, these 85 members (because two overlap) of the Group of Thirty and the Trilateral Commission comprise a central group of facilitators of global capitalism, ensuring that ‘global capital remains safe, secure, and growing’.

So, while many of the major international institutions are controlled by nation-state representatives and central bankers (with proportional power exercised by dominant financial supporters such as the United States and European Union countries), Phillips is more concerned with the transnational policy groups that are nongovernmental because these organizations ‘help to unite TCC power elites as a class’ and the individuals involved in these organizations facilitate world capitalism. ‘They serve as policy elites who seek the continued growth of capital in the world.’

Developing this list of 199 directors of the largest money management firms in the world, Phillips argues, is an important step toward understanding how capitalism works globally today. These global power elite directors make the decisions regarding the investment of trillions of dollars. Supposedly in competition, the concentrated wealth they share requires them to cooperate for their greater good by identifying investment opportunities and shared risk agreements, and working collectively for political arrangements that create advantages for their profit-generating system as a whole.

Their fundamental priority is to secure an average return on investment of 3 to 10 percent, or even more. The nature of any investment is less important than what it yields: continuous returns that support growth in the overall market. Hence, capital investment in tobacco products, weapons of war, toxic chemicals, pollution, and other socially destructive goods and services are judged purely by their profitability. Concern for the social and environmental costs of the investment are non-existent. In other words, inflicting death and destruction are fine because they are profitable.

So what is the global elite’s purpose? In a few sentences Phillips characterizes it thus: The elite is largely united in support of the US/NATO military empire that prosecutes a repressive war against resisting groups – typically labeled ‘terrorists’ – around the world. The real purpose of ‘the war on terror’ is defense of transnational globalization, the unimpeded flow of financial capital around the world, dollar hegemony and access to oil; it has nothing to do with repressing terrorism which it generates, perpetuates and finances to provide cover for its real agenda. This is why the United States has a long history of CIA and military interventions around the world ostensibly in defense of ‘national interests’.

An interesting point that emerges for me from reading Phillips thoughtful analysis is that there is a clear distinction between those individuals and families who have wealth and those individuals who have (sometimes significantly) less wealth (which, nevertheless, is still considerable) but, through their positions and connections, wield a great deal of power. As Phillips explains this distinction, ‘the sociology of elites is more important than particular elite individuals and their families’. Just 199 individuals decide how more than $40 trillion will be invested. And this is his central point. Let me briefly elaborate.

There are some really wealthy families in the world, notably including the families Rothschild (France and the United Kingdom), Rockefeller (USA), Goldman-Sachs (USA), Warburgs (Germany), Lehmann (USA), Lazards (France), Kuhn Loebs (USA), Israel Moses Seifs (Italy), Al-Saud (Saudi Arabia), Walton (USA), Koch (USA), Mars (USA), Cargill-MacMillan (USA) and Cox (USA). However, not all of these families overtly seek power to shape the world as they wish.

Similarly, the world’s extremely wealthy individuals such as Jeff Bezos (USA), Bill Gates (USA), Warren Buffett (USA), Bernard Arnault (France), Carlos Slim Helu (Mexico) and Francoise Bettencourt Meyers (France) are not necessarily connected in such a way that they exercise enormous power. In fact, they may have little interest in power as such, despite their obvious interest in wealth.

In essence, some individuals and families are content to simply take advantage of how capitalism and its ancilliary governmental and transnational instruments function while others are more politically engaged in seeking to manipulate major institutions to achieve outcomes that not only maximize their own profit and hence wealth but also shape the world itself.

So if you look at the list of 199 individuals that Phillips identifies at the centre of global capital, it does not include names such as Bezos, Gates, Buffett, Koch, Walton or even Rothschild, Rockefeller or Windsor (the Queen of England) despite their well-known and extraordinary wealth. As an aside, many of these names are also missing from the lists compiled by groups such as Forbes and Bloomberg, but their absence from these lists is for a very different reason given the penchant for many really wealthy individuals and families to avoid certain types of publicity and their power to ensure that they do.

In contrast to the names just listed, in Phillips’ analysis names like Laurence (Larry) Fink (Chairman and CEO of BlackRock), James (Jamie) Dimon (Chairman and CEO of JPMorgan Chase) and John McFarlane (Chairman of Barclays Bank), while not as wealthy as those listed immediately above, wield far more power because of their positions and connections within the global elite network of 199 individuals.

Predictably then, Phillips observes, these three individuals have similar lifestyles and ideological orientations. They believe capitalism is beneficial for the world and while inequality and poverty are important issues, they believe that capital growth will eventually solve these problems. They are relatively non-expressive about environmental issues, but recognize that investment opportunities may change in response to climate ‘modifications’. As millionaires they own multiple homes. They attended elite universities and rose quickly in international finance to reach their current status as giants of the global power elite. ‘The institutions they manage have been shown to engage in illegal collusions with others, but the regulatory fines by governments are essentially seen as just part of doing business.’

In short, as I would characterize this description: They are devoid of a legal or moral framework to guide their actions, whether in relation to business, fellow human beings, war or the environment and climate. They are obviously typical of the elite.

Any apparent concern for people, such as that expressed by Fink and Dimon in response to the racist violence in Charlottesville, USA in August 2017, is simply designed to promote ‘stability’ or more precisely, a stable (that is, profitable) investment and consumer climate.

The lack of concern for people and issues that might concern many of us is also evident from a consideration of the agenda at elite gatherings. Consider the International Monetary Conference. Founded in 1956, it is a private yearly meeting of the top few hundred bankers in the world. The American Bankers Association (ABA) serves as the secretariat for the conference. But, as Phillips notes: ‘Nothing on the agenda seems to address the socioeconomic consequences of investments to determine the impacts on people and the environment.’ A casual perusal of the agenda at any elite gathering reveals that this comment applies equally to any elite forum. See, for example, the agenda of the recent WEF meeting in Davos. Any talk of ‘concern’ is misleading rhetoric.

Hence, in the words of Phillips: The 199 directors of the global Giants are ‘a very select set of people. They all know each other personally or know of each other. At least 69 have attended the annual World Economic Forum, where they often serve on panels or give public presentations. They mostly attended the same elite universities, and interact in upperclass social setting[s] in the major cities of the world. They all are wealthy and have significant stock holdings in one or more of the financial Giants. They are all deeply invested in the importance of maintaining capital growth in the world. Some are sensitive to environmental and social justice issues, but they seem to be unable to link these issues to global capital concentration.’

Of course, the global elite cannot manage the world system alone: the elite requires agents to perform many of the functions necessary to control national societies and the individuals within them. ‘The interests of the Global Power Elite and the TCC are fully recognized by major institutions in society. Governments, intelligence services, policymakers, universities, police forces, military, and corporate media all work in support of their vital interests.’

In other words, to elaborate Phillips’ point and extend it a little, through their economic power, theGiants control all of the instruments through which their policies are implemented. Whether it be governments, national military forces, ‘military contractors’ or mercenaries (with at least $200 billion spent on private security globally, the industry currently employs some fifteen million people worldwide) used both in ‘foreign’ wars but also likely deployed in future for domestic control, key ‘intelligence’ agencies, legal systems and police forces, major nongovernment organizations, or the academic, educational, ‘public relations propaganda’, corporate media, medical, psychiatric and pharmaceutical industries, all instruments are fully responsive to elite control and are designed to misinform, deceive, disempower, intimidate, repress, imprison (in a jail or psychiatric ward), exploit and/or kill (depending on the constituency) the rest of us, as is readily evident.

Defending Elite Power

Phillips observes that the power elite continually worries about rebellion by the ‘unruly exploited masses’ against their structure of concentrated wealth. This is why the US military empire has long played the role of defender of global capitalism. As a result, the United States has more than 800 military bases (with some scholars suggesting 1,000) in 70 countries and territories. In comparison, the United Kingdom, France, and Russia have about 30 foreign bases. In addition, US military forces are now deployed in 70 percent of the world’s nations with US Special Operations Command (SOCOM) having troops in 147 countries, an increase of 80 percent since 2010. These forces conduct counterterrorism strikes regularly, including drone assassinations and kill/capture raids.

‘The US military empire stands on hundreds of years of colonial exploitation and continues to support repressive, exploitative governments that cooperate with global capital’s imperial agenda. Governments that accept external capital investment, whereby a small segment of a country’s elite benefits, do so knowing that capital inevitably requires a return on investment that entails using up resources and people for economic gain. The whole system continues wealth concentration for elites and expanded wretched inequality for the masses….

‘Understanding permanent war as an economic relief valve for surplus capital is a vital part of comprehending capitalism in the world today. War provides investment opportunity for the Giants and TCC elites and a guaranteed return on capital. War also serves a repressive function of keeping the suffering masses of humanity afraid and compliant.’

As Phillips elaborates: This is why defense of global capital is the prime reason that NATO countries now account for 85 percent of the world’s military spending; the United States spends more on the military than the rest of the world combined.

In essence, ‘the Global Power Elite uses NATO and the US military empire for its worldwide security. This is part of an expanding strategy of US military domination around the world, whereby the US/ NATO military empire, advised by the power elite’s Atlantic Council, operates in service to the Transnational Corporate Class for the protection of international capital everywhere in the world’.

This entails ‘further pauperization of the bottom half of the world’s population and an unrelenting downward spiral of wages for 80 percent of the world. The world is facing economic crisis, and the neoliberal solution is to spend less on human needs and more on security.

It is a world of financial institutions run amok, where the answer to economic collapse is to print more money through quantitative easing, flooding the population with trillions of new inflation-producing dollars. It is a world of permanent war, whereby spending for destruction requires further spending to rebuild, a cycle that profits the Giants and global networks of economic power. It is a world of drone killings, extrajudicial assassinations, death, and destruction, at home and abroad.’

Where is this all heading?

So what are the implications of this state of affairs? Phillips responds unequivocally: ‘This concentration of protected wealth leads to a crisis of humanity, whereby poverty, war, starvation, mass alienation, media propaganda, and environmental devastation are reaching a species-level threat. We realize that humankind is in danger of possible extinction’.

He goes on to state that the Global Power Elite is probably the only entity ‘capable of correcting this condition without major civil unrest, war, and chaos’ and elaborates an important aim of his book: to raise awareness of the importance of systemic change and the redistribution of wealth among both the book’s general readers but also the elite, ‘in the hope that they can begin the process of saving humanity.’ The book’s postscript is a ‘A Letter to the Global Power Elite’, co-signed by Phillips and 90 others, beseeching the elite to act accordingly.

‘It is no longer acceptable for you to believe that you can manage capitalism to grow its way out of the gross inequalities we all now face. The environment cannot accept more pollution and waste, and civil unrest is everywhere inevitable at some point. Humanity needs you to step up and insure that trickle-down becomes a river of resources that reaches every child, every family, and all human beings. We urge you to use your power and make the needed changes for humanity’s survival.’

But he also emphasizes that nonviolent social movements, using the Universal Declaration of Human Rights as a moral code, can accelerate the process of redistributing wealth by pressuring the elite into action.


As I read Phillips’ insightful and candid account of elite behavior in this regard, I am reminded, yet again, that the global power elite is extraordinarily violent and utterly insane: content to kill people in vast numbers (whether through starvation or military violence) and destroy the biosphere for profit, with zero sense of humanity’s now limited future.

For this reason I do not share his faith in moral appeals to the elite, as articulated in the letter in his postscript. It is fine to make the appeal but history offers no evidence to suggest that there will be any significant response. The death and destruction inflicted by elites is highly profitable, centuries-old and ongoing.

I would also encourage independent action, in one or more of several ways, by those individuals and communities powerful enough to do so.

If we cannot persuade the global power elite to respond sensibly to that predicament, or nonviolently compel it to do so, humanity’s time on Earth is indeed limited.

New Term for Serfdom

'The Gig Economy' Is the New Term for Serfdom By Chris Hedges March 26, 2018

Corporate capitalism is establishing a neofeudal serfdom in numerous occupations, a condition in which there are no labor laws, no minimum wage, no benefits, no job security and no regulations. Desperate and impoverished workers, forced to endure 16-hour days, are viciously pitted against each other. Uber drivers make about $13.25 an hour. In cities like Detroit this falls to $8.77. Travis Kalanick, the former CEO of Uber and one of the founders, has a net worth of $4.8 billion. Logan Green, the CEO of Lyft, has a net worth of $300 million.

The corporate elites, which have seized control of ruling institutions including the government and destroyed labor unions, are re-establishing the inhumane labor conditions that characterized the 19th and early 20th centuries.

When workers at General Motors carried out a 44-day sit-down strike in 1936, many were living in shacks that lacked heating and indoor plumbing; they could be laid off for weeks without compensation, had no medical or retirement benefits and often were fired without explanation. When they turned 40 their employment could be terminated. The average wage was about $900 a year at a time when the government determined that a family of four needed a minimum of $1,600 to live above the poverty line.

The reign of the all-powerful capitalist class has returned with a vengeance. The job conditions of working men and women, thrust backward, will not improve until they regain the militancy and rebuild the popular organizations that seized power from the capitalists.

The ruling capitalists will be as vicious as they were in the past. Nothing enrages the rich more than having to part with a fraction of their obscene wealth. Consumed by greed, rendered numb to human suffering by a life of hedonism and extravagance, devoid of empathy, incapable of self-criticism or self-sacrifice, surrounded by sycophants and leeches who cater to their wishes, appetites and demands, able to use their wealth to ignore the law and destroy critics and opponents, they are among the most repugnant of the human species.

Don’t be fooled by the elites’ skillful public relations campaigns—we are watching Mark Zuckerberg, whose net worth is $64.1 billion, mount a massive propaganda effort against charges that he and Facebook are focused on exploiting and selling our personal information—or by the fawning news celebrities on corporate media who act as courtiers and apologists for the oligarchs. These people are the enemy.

The corporate architects of the new economy have no intention of halting the assault. They intend to turn everyone into temp workers trapped in demeaning, low-paying, part-time, service-sector jobs without job security or benefits, a reality they plaster over by inventing hip terms like “the gig economy.”

Republican Party long con on America

Thom Hartmann: How the GOP Used a Two Santa Clauses Tactic to Con America for Nearly 40 Years This scam has been killing wages and enriching billionaires for decades.

The Republican Party has been running a long con on America since Reagan’s inauguration, and somehow our nation’s media has missed it – even though it was announced in The Wall Street Journal in the 1970s and the GOP has clung tenaciously to it ever since.

In fact, Republican strategist Jude Wanniski’s 1974 “Two Santa Clauses Theory” has been the main reason why the GOP has succeeded in producing our last two Republican presidents, Bush and Trump (despite losing the popular vote both times). It’s also why Reagan’s economy seemed to be “good.”

Here’s how it works, laid it out in simple summary:

First, when Republicans control the federal government, and particularly the White House, spend money like a drunken sailor and run up the US debt as far and as fast as possible. This produces three results – it stimulates the economy thus making people think that the GOP can produce a good economy, it raises the debt dramatically, and it makes people think that Republicans are the “tax-cut Santa Claus.”

Second, when a Democrat is in the White House, scream about the national debt as loudly and frantically as possible, freaking out about how “our children will have to pay for it!” and “we have to cut spending to solve the crisis!” This will force the Democrats in power to cut their own social safety net programs, thus shooting their welfare-of-the-American-people Santa Claus.

Think back to Ronald Reagan, who more than tripled the US debt from a mere $800 billion to $2.6 trillion in his 8 years. That spending produced a massive stimulus to the economy, and the biggest non-wartime increase in the debt in history. Nary a peep from Republicans about that 218% increase in our debt; they were just fine with it.

And then along came Bill Clinton. The screams and squeals from the GOP about the “unsustainable debt” of nearly $3 trillion were loud, constant, and echoed incessantly by media from CBS to NPR. Newt Gingrich rode the wave of “unsustainable debt” hysteria into power, as the GOP took control of the House for the first time lasting more than a term since 1930, even though the increase in our national debt under Clinton was only about 37%.

The GOP “debt freakout” was so widely and effectively amplified by the media that Clinton himself bought into it and began to cut spending, taking the axe to numerous welfare programs (“It’s the end of welfare as we know it” he famously said, and “The era of big government is over”). Clinton also did something no Republican has 'e in our lifetimes: he supported several balanced budgets and handed a budget surplus to George W. Bush.

When George W. Bush was given the White House by the Supreme Court (Gore won the popular vote by over a half-million votes) he reverted to Reagan’s strategy and again nearly doubled the national debt, adding a trillion in borrowed money to pay for his tax cut for GOP-funding billionaires, and tossing in two unfunded wars for good measure, which also added at least (long term) another $5 to $7 trillion.

There was not a peep about the debt from any high-profile in-the-know Republicans then; in fact, Dick Cheney famously said, essentially ratifying Wanniski’s strategy, “Reagan proved deficits ''t matter. We won the midterms [because of those tax cuts]. This is our due.” Bush and Cheney raised the debt by 86% to over $10 trillion (although the war debt wasn’t put on the books until Obama entered office).

Then comes Democratic President Barack Obama, and suddenly the GOP is hysterical about the debt again. So much so that they convinced a sitting Democratic president to propose a cut to Social Security (the “chained CPI”). Obama nearly shot the Democrats biggest Santa Claus program. And, Republican squeals notwithstanding, Obama only raised the debt by 34%.

Now we’re back to a Republican president, and once again deficits be damned. Between their tax cut and the nearly-trillion dollar spending increase passed on February 8th, in the first year-and-a-month of Trump’s administration they’ve spent more stimulating the economy (and driving up debt by more than $2 trillion, when you include interest) than the entire Obama presidency.

Consider the amazing story of where this strategy came from, and how the GOP has successfully kept their strategy from getting into the news; even generally well-informed writers for media like the Times and the Post – and producers, pundits and reporters for TV news – '’t know the history of what’s been happening right in front of us all for 37 years.

Wanniski was tired of the GOP failing to win elections. And, he reasoned, it was happening because the Democrats had been viewed since the New Deal as the Santa Claus party (taking care of people’s needs and the General Welfare), while the GOP, opposing everything from Social Security to Medicare to unemployment insurance, was widely seen as the party of Scrooge.

The Democrats, he noted, got to play Santa Claus when they passed out Social Security and Unemployment checks – both programs of the New Deal – as well as when their "big government" projects like roads, bridges, and highways were built, giving a healthy union paycheck to construction workers and making our country shine.

Democrats kept raising taxes on businesses and rich people to pay for things, which didn't seem to have much effect at all on working people (wages were steadily going up, in fact), and that added to the perception that the Democrats were a party of Robin Hoods, taking from the rich to fund programs for the poor and the working class.

Americans loved the Democrats back then. And every time Republicans railed against these programs, they lost elections.

Wanniski decided that the GOP had to become a Santa Claus party, too. But because the Republicans hated the idea of helping working people, they had to figure out a way to convince people that they, too, could have the Santa spirit. But what?

“Tax cuts!” said Wanniski.

To make this work, the Republicans would first have to turn the classical world of economics – which had operated on a simple demand-driven equation for seven thousand years – on its head. (Everybody understood that demand – aka “wages” – drove economies because working people spent most of their money in the marketplace, producing demand for factory output and services.)

In 1974 Wanniski invented a new phrase – "supply side economics" – and suggested that the reason economies grew wasn't because people had money and wanted to buy things with it but, instead, because things were available for sale, thus tantalizing people to part with their money.

The more things there were, he said, the faster the economy would grow. And the more money we gave rich people and their corporations (via tax cuts) the more stuff they’d generously produce for us to think about buying.

At a glance, this move by the Republicans seems irrational, cynical and counterproductive. It certainly defies classic understandings of economics. But if you consider Jude Wanniski’s playbook, it makes complete sense.

To help, Arthur Laffer took that equation a step further with his famous napkin scribble. Not only was supply-side a rational concept, Laffer suggested, but as taxes went down, revenue to the government would go up! Neither concept made any sense – and time has proven both to be colossal idiocies – but together they offered the Republican Party a way out of the wilderness.

Ronald Reagan was the first national Republican politician to fully embrace the Two Santa Clauses strategy. He said straight out that if he could cut taxes on rich people and businesses, those tax cuts would cause them to take their surplus money and build factories, and that the more stuff there was supplying the economy the faster it would grow.

There was no way, Wanniski said, that the Democrats could ever win again. They'd be forced into the role of Santa-killers by raising taxes, or anti-Santas by cutting spending. Either one would lose them elections.

When Reagan rolled out Supply Side Economics in the early 80s, dramatically cutting taxes while exploding spending, there was a moment when it seemed to Wanniski and Laffer that all was lost. The budget deficit exploded and the country fell into a deep recession – the worst since the Great Depression – and Republicans nationwide held their collective breath.

But David Stockman came up with a great new theory about what was going on – they were "starving the beast" of government by running up such huge deficits that Democrats would never, ever in the future be able to talk again about national health care or improving Social Security.

And this so pleased Alan Greenspan, the Fed Chairman, that he opened the spigots of the Fed, dropping interest rates and buying government bonds, producing a nice, healthy goose to the economy.

Greenspan further counseled Reagan to dramatically increase taxes on people earning under $37,800 a year by doubling the Social Security (FICA/payroll) tax, and then let the government borrow those newfound hundreds of billions of dollars off-the-books to make the deficit look better than it was.

Reagan, Greenspan, Winniski, and Laffer took the federal budget deficit from under a trillion dollars in 1980 to almost three trillion by 1988, and back then a dollar could buy far more than it buys today. They and George HW Bush ran up more debt in eight years than every president in history, from George Washington to Jimmy Carter, combined.

Surely this would both starve the beast and force the Democrats to make the politically suicidal move of becoming deficit hawks. And that's just how it turned out.

Bill Clinton, who had run on an FDR-like platform of a "New Covenant" with the American people that would strengthen the institutions of the New Deal, strengthen labor, and institute a national health care system, found himself in a box.

A few weeks before his inauguration, Alan Greenspan and Robert Rubin sat him down and told him the facts of life: he was going to have to raise taxes and cut the size of government. Clinton took their advice to heart, raised taxes, balanced the budget, and cut numerous programs, declaring an "end to welfare as we know it" and, in his second inaugural address, an "end to the era of big government."

Clinton was the anti-Santa Claus, and the result was an explosion of Republican wins across the country as Republican politicians campaigned on a platform of supply-side tax cuts and pork-rich spending increases. State after state turned red, and the Republican Party rose to take over, ultimately, every single lever of power in the federal government, from the Supreme Court to the White House.

Looking at the wreckage of the Democratic Party all around Clinton by 1999, Winniski wrote a gloating memo that said, in part: "We of course should be indebted to Art Laffer for all time for his Curve... But as the primary political theoretician of the supply-side camp, I began arguing for the 'Two Santa Claus Theory' in 1974. If the Democrats are going to play Santa Claus by promoting more spending, the Republicans can never beat them by promoting less spending. They have to promise tax cuts..."

In reality, his tax cuts did what they have always 'e over the past 100 years – they initiated a bubble economy that would let the very rich skim the cream off the top just before the ceiling crashed in on working people. Just like today.

The Republicans got what they wanted from Wanniski's work. They held power for thirty years, made themselves trillions of dollars, and cut organized labor's representation in the workplace from around 25 percent when Reagan came into office to around 6 of the non-governmental workforce today.

Over time, and without raising the cap, Social Security will face an easily-solved crisis, and the GOP’s plan is for force Democrats to become the anti-Santa, yet again. If the GOP-controlled Congress continues to refuse to require rich people to pay into Social Security (any income over $128,000 is SS-tax-free), either benefits will be cut or the retirement age will have to be raised to over 70.

The GOP plan is to use this unnecessary, manufactured crisis as an opening to “reform” Social Security - translated: cut and privatize. Thus, forcing Democrats to become the Social Security anti-Santa a different way.

When this happens, Democrats must remember Jude Wanniski, and accept neither the cut to disability payments nor the entree to Social Security “reform.” They must demand the “cap” be raised, as Bernie Sanders proposed and the Democratic Party adopted in its 2016 platform.

And, hopefully, some of our media will begin to call the GOP out on the Two Santa Clauses program. It’s about time that Americans realized the details of the scam that’s been killing wages and enriching billionaires for nearly four decades.

Money Perversion

This Is Your Brain on Money: Why America’s Rich Think Differently Than the Rest of Us Economist Chris Dillow cites research by Cameron Anderson and Sebastien Brion, showing that overconfident individuals are seen by others as more competent. He argues that, “overconfident people are more likely to be promoted. And this could have positive feedback effects. Higher status will itself breed even more overconfidence. (E.g. “I got the job so I must be good.”) And if bosses employ like-minded subordinates, the result could be entire layers of management which are both over-confident and engaged in groupthink.” Many other studies cited.


Do Financial Markets Still Exist? By Paul Craig Roberts, Dave Kranzler, Michael Hudson February 14, 2018

Central banks have learned that they can rig financial asset prices to the delight of everyone in the market.

For many decades the Federal Reserve has rigged the bond market by its purchases. And for about a century, central banks have set interest rates (mainly to stabilize their currency’s exchange rate) with collateral effects on securities prices. It appears that in May 2010, August 2015, January/February 2016, and currently in February 2018 the Fed is rigging the stock market by purchasing S&P equity index futures in order to arrest stock market declines driven by fundamentals, and to push prices back up in keeping with a decade of money creation.

No one should find this a surprising suggestion. The Bank of Japan has a long tradition of propping up the Japanese equity market with large purchases of equities. The European Central Bank purchases corporate as well as government bonds. In 1989 Fed governor Robert Heller said that as the Fed already rigs the bond market with purchases, the Fed can also rig the stock market to stop price declines. That is the reason the Plunge Protection Team (PPT) was created in 1987.

Trump Privatizes America By Michael Hudson and Real News, Posted February 14, 2018

What Trump basically said is that states and cities have to let themselves be robbed blind by the hedge funds and Wall Street.

Hedge Funds

Hedge Funds, the Unacceptable Face of Capitalism: Their Role in Precipitating the Collapse of Financial Markets By Hans Stehling Global Research, February 09, 2018

In 1992, acting virtually alone, an individual hedge fund operator used the international monetary system to bet against the Pound Sterling thereby forcing the United Kingdom government to withdraw from the European Exchange Rate Mechanism. That operator reputedly profited personally by more than £1 billion, without the necessity of getting out of bed. That same financier as well as certain other hedge fund operators, stand accused of meddling in the internal affairs of foreign states i.e. countries external to their own domicile. By their very nature they are, in essence, counter democratic in that they clearly operate to the disadvantage of the majority in order that a handful of gamblers can gain a vast monetary advantage.

So, what are hedge funds? They are essentially highly sophisticated, computerised gambling syndicates that predominantly use borrowed money to bet on the movement of quoted stocks…

Money Laundering

Money Laundering: Is It Really True that Switzerland Is the #1 Most Corrupt Nation, and the U.S. #2? Counter Information By Eric Zuesse, Global Research, February 01, 2018

The Tax Justice Network produces a Financial Secrecy Index, ranking countries for the assistance their legal systems provide, to money-launderers, and to all people who seek to protect corruptly-obtained wealth. The higher the score, the more corrupt the government is. The last time this Index was published, in 2015, Switzerland was rated the world’s most-corrupt country, and Hong Kong was then #2.

But now, in its newly released global rankings, “Financial Secrecy Index — 2018 Results”, though Switzerland still holds its #1 (most-corrupt) spot, the U.S. has become #2, and Hong Kong has now fallen to #4, which is immediately below Cayman Islands (which is #3, and which had been #5 in 2015).


No Fast Track Why wouldn't we want to make sure future trade deals will have a positive impact on the U.S. trade balance, create good, family-wage jobs, and protect the environment and our natural resources?

Fast Track legislation shrouds trade deals in secrecy. It makes it nearly impossible for Congress to fix trade deals that harm our economy and environment. It prevents citizens from providing input to proposals while the deal is being negotiated. It makes you wonder what they're trying to hide.

Best Economies

What happens when you tax the rich and raise the minimum wage? Meet one of USA's best economies By Walter Einenkel Wednesday Feb 25, 2015

When Minnesota Governor Mark Dayton took office in 2011, Minnesota had more than a $6 billion dollar deficit and an unemployment rate of 7%. Today, Minnesota's unemployment rate is now below 4% and they have a budget surplus of over $1.2 billion dollars. How did Mark Dayton do this?

During his first four years in office, Gov. Dayton raised the state income tax from 7.85 to 9.85 percent on individuals earning over $150,000, and on couples earning over $250,000 when filing jointly -- a tax increase of $2.1 billion. He's also agreed to raise Minnesota's minimum wage to $9.50 an hour by 2018, and passed a state law guaranteeing equal pay for women.

Mark Dayton's approach of making people who can afford to pay, pay, helped eliminate the deficit. Raising the minimum wage gave more people money to spend. Businesses like money and they like people who have money to spend.

Between 2011 and 2015, Gov. Dayton added 172,000 new jobs to Minnesota's economy -- that's 165,800 more jobs in Dayton's first term than Pawlenty added in both of his terms combined. Even though Minnesota's top income tax rate is the 4th-highest in the country, it has the 5th-lowest unemployment rate in the country at 3.6 percent. According to 2012-2013 U.S. census figures, Minnesotans had a median income that was $10,000 larger than the U.S. average, and their median income is still $8,000 more than the U.S. average today.

Gov. Dayton didn't accomplish all of these reforms by shrewdly manipulating people -- this article describes Dayton's astonishing lack of charisma and articulateness. He isn't a class warrior driven by a desire to get back at the 1 percent -- Dayton is a billionaire heir to the Target fortune. It wasn't just a majority in the legislature that forced him to do it -- Dayton had to work with a Republican-controlled legislature for his first two years in office. And unlike his Republican neighbor to the east, Gov. Dayton didn't assert his will over an unwilling populace by creating obstacles between the people and the vote -- Dayton actually created an online voter registration system, making it easier than ever for people to register to vote.

Income Inequality

Income Growth and Inequality 1978-2015

Global Inequality Dynamics: New Findings from*


Economic Theories

'J is for Junk Economics': Michael Hudson on TRNN (4/5)


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Kicking Away the Ladder: Developement Strategy in Historical Perspective economics book by Ha-Joon Chang which argues that historically the free trade countries used tariffs and other forms of protectionism to develop their economies before turning to free trade; they are now trying to force free trade on developing nations which really need protectionism at this stage of their development
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"..most economists are intellectual practitioners who adopt basic assumptions they knw are incorrect, and then extrapolate conclusions they declare to be true" (Gabriela Bocagrande, quoted in Editorial. The Nation, 1/16/04, 3).

"The American economy.. is in much deeper trouble than most people realize...

"For several decades, in fact, the federal government has toleratd and even encouraged the dispersal of American production overseas... No other major economy in the world accepts perennial trade deficits.. But American leaders and policy-makers are uniquely dedicated to a faith in "free market" globalization, and they have regularly promised Americans that despite the disruptions, this policy guarantees their long-term prosperity. Present facts make these long-held convictions look like gross illusion... the trade deficit.. Last year it set another new record: $489 billion...

"The U.S. economy, in essence, is being kept afloat by enormous foreign lending... This lopsided arrangement will end when those foreign creditors... Japan, China, and Europe -- decide to stop lending...

"That reckoning could arrive as a sudden thuderclap of financial crisis -- spiking interest rates, swooning stock market and crashing home prices... As foreign capital moves elsewhere and easy credit disappears for consumers, many Americans will experience a major decline in their living standards...

"Now the rest of the world is propping up American consumers... The net inflow of foreign capital to the United States represents a staggering 75 percent of the net outflows from the rest of the world...

"The failure of conventional explanations for trade deficits leads, logically, to an unorthodox conclusion: The source of the deficits (and growing indebtedness) must be embedded in the trading system itself...

"The national ambitions and competitive energies of globalization, at least as currently practiced, persist in developing new productive capacity -- more factories -- faster than they generate rising incomes and adequate demand to absorb the surplus goods. This leads inevitably to falling prices and stiffer pressures for cost reductions. The convenient remedy -- somebody, somewhere has to shut down factories -- has typically begun by closing America's and moving it's high-wage production offshore for cheaper labor.

American production usually goes first because the U.S. government does not resist...

"Through industrial policy and numberous informal barriers, America's European rivals have managed to avoid both trade deficits and the thirty-year stagnation of wages that U.S. industrial workers have suffered. Only in America do the experts believe these consequences have no meaning for overall prosperity. Only in America has the government put the interests of multinationals ahead of citizens.

"A decisive President, one who grasped the gravity of the situation, would start by bringing up a taboo subject -- tariffs -- and inform the world that the United States is prepared to impose a temporary general tariff of 10 or 15 percent on all U.S. imports. Every multinational would have to rethink its industrial strategy, because some of its production might be stranded in the wrong country. Import-dependent retailers like Wal-Mart would be seriously disrupted, too.

"With a general tariff, the practice of wage arbitrage -- shifting high-wage jobs to low-wage nations, then selling the goods to the U.S. market -- would no longer be a free ride" (William Greider. "The Serpent That Ate America's Lunch." The Nation, May 10, 2004: 11-18).

"...another successful Republican frame, the false idea that the "market" is a force of nature... In reality, the market is a social institution with rules and regulating mechanisms that have been put in place by human beings. This reality is hidden by the force-of-nature framing" ("Got Frame?" Texas Observer, 7/30/04: 3).

"It is unclear to me why anyone would believe anything the president says about our fiscal situation. Keep in mind, this is a man who took three Texas oil companies into bankruptcy... Under Bill Clinton, the economy gained an average of 236,000 jobs every month. Under George W. Bush, the economy has lost an average of 66,000 jobs a month" (Molly Ivins. "The Un-Tax and Spend President." Texas Observer, 2/13/04: 14).

"...Franklin Roosevelt argued that the real enemies of enlightened capitalism were "the malefactors of great wealth" -- the "economic royalists" -- from whom capitalism would have to be saved by reform and regulation" (Bill Moyers. "This is Your Story. Pass It On." Texas Observer, 8/13/04: 4-9, 38).

"...the Inter-American Development Bank (IDB)... Latin America's largest lender and creditor... surplus of grandiosity, delusion, and bullshit...

" 1994... was "tasked" by the U.S. Congress with reducing poverty and social inequality while promoting democracy and the rule of law, the Bank has taken great pains to portray itself as an intrument of social peace and justice... did business for 17 years with Augusto Pinochet in Chile and other mass-murdering heads of state throughout the continent...

"...Peru's best-known and most demented economist, Hernando De Soto, long a favorite of the international development set... added a fresh approach to the trouublesome problem of youth unemployment: volunteerism!... If you can't find a job or successfully exploit yourself, you can fill your time by working for free..." (Gabriela Bocagrande. "Scenes From the VIP Room." Texas Observer, 5/7/04: 12-13, 26).

"According to this year's World Economic Forum survey of 101 countries, three of the five most "competitive" are Sweden, Denmark, and Norway. Social Democracies raise living standards. And often they tend to be more competitive. It's a shame that in America even some on the left can't seem to grasp this" (Letters. The Nation, Jan. 10/17, 2005: 2).

"The American economy.. is in much deeper trouble than most people realize...

"For several decades, in fact, the federal government has toleratd and even encouraged the dispersal of American production overseas... No other major economy in the world accepts perennial trade deficits.. But American leaders and policy-makers are uniquely dedicated to a faith in "free market" globalization, and they have regularly promised Americans that despite the disruptions, this policy guarantees their long-term prosperity. Present facts make these long-held convictions look like gross illusion... the trade deficit.. Last year it set another new record: $489 billion...

"The U.S. economy, in essence, is being kept afloat by enormous foreign lending... This lopsided arrangement will end when those foreign creditors... Japan, China, and Europe -- decide to stop lending...

"That reckoning could arrive as a sudden thuderclap of financial crisis -- spiking interest rates, swooning stock market and crashing home prices... As foreign capital moves elsewhere and easy credit disappears for consumers, many Americans will experience a major decline in their living standards...

"Now the rest of the world is propping up American consumers... The net inflow of foreign capital to the United States represents a staggering 75 percent of the net outflows from the rest of the world...

"The failure of conventional explanations for trade deficits leads, logically, to an unorthodox conclusion: The source of the deficits (and growing indebtedness) must be embedded in the trading system itself...

"The national ambitions and competitive energies of globalization, at least as currently practiced, persist in developing new productive capacity -- more factories -- faster than they generate rising incomes and adequate demand to absorb the surplus goods. This leads inevitably to falling prices and stiffer pressures for cost reductions. The convenient remedy -- somebody, somewhere has to shut down factories -- has typically begun by closing America's and moving it's high-wage production offshore for cheaper labor.

American production usually goes first because the U.S. government does not resist...

"Through industrial policy and numberous informal barriers, America's European rivals have managed to avoid both trade deficits and the thirty-year stagnation of wages that U.S. industrial workers have suffered. Only in America do the experts believe these consequences have no meaning for overall prosperity. Only in America has the government put the interests of multinationals ahead of citizens.

"A decisive President, one who grasped the gravity of the situation, would start by bringing up a taboo subject -- tariffs -- and inform the world that the United States is prepared to impose a temporary general tariff of 10 or 15 percent on all U.S. imports. Every multinational would have to rethink its industrial strategy, because some of its production might be stranded in the wrong country. Import-dependent retailers like Wal-Mart would be seriously disrupted, too.

"With a general tariff, the practice of wage arbitrage -- shifting high-wage jobs to low-wage nations, then selling the goods to the U.S. market -- would no longer be a free ride" (William Greider. "The Serpent That Ate America's Lunch." The Nation, May 10, 2004: 11-18).

"Last summer, in the lull of the August media doze, the Bush Administration's doctrine of preventive war took a major leap forward. On August 5, 2004, the White House created the Office of the Coordinator for Reconstruction and Stabilization, headed by former US Ambassador to Ukraine Carlos Pascual. Its mandate is to draw up elaborate "post-conflict" plans for up to twenty-five countries that are not, as of yet, in conflict. According to Pascual, it will also be able to coordinate three full-scale reconstruction operations in different countries "at the same time," each lasting "five to seven years."

"Fittingly, a government devoted to perpetual pre-emptive deconstruction now has a standing office of perpetual pre-emptive reconstruction...

"But if the reconstruction industry is stunningly inept at re-building, that may be because rebuilding is not its primary purpose. According to Guttal, "It's not reconstruction at all--it's about reshaping everything." If anything, the stories of corruption and incompetence serve to mask this deeper scandal: the rise of a predatory form of disaster capitalism that uses the desparation and fear created by catastrophe to engage in radical social and economic engineering. And on this front, the reconstruction industry works so quickly and efficiently that the privatizations and land grabs are usually locked in before the local population knows what hit them...

"The World Bank and the International Monetary Fund have been imposing shock therapy on countries in various states of shock for at least three decades, most notably after Latin America's military coups and the collapse of the Soviet Union. Yet many observers say that today's disaster capitalism really hit its stride with Hurricane Mitch. For a week in October 1998, Mitch parked itself over Central America, swallowing villages whole and killing more than 9,000. Already impoverished countries were desparate for reconstruction aid--and it came, but with strings attached. In the two months after Mitch struck, with the country still knee-deep in rubble, corpses and mud, the Honduran congress initiated what the Financial Times called "speed sell-offs after the storm." It passed laws allowing the privatization of airports, seaports and highways and fast-tracked plans to privatize the state telephone company, the national electric company and parts of the water sector. It overturned land-reform laws and made it easier for foreigners to buy and sell property. It was much the same in neighboring countries...

"Now the bank is using the December 26 tsunami to push through its cookie-cutter policies. The most devastated countries have seen almost no debt relief... Rather than emphasizing the need to help the small fishing communities--more than 80 percent of the wave's victims--the bank is pushing for expansion of the tourism sector and industrial fish farms. As for the damaged public infrastructure, like roads and schools, bank documents recognize that rebuilding them "may strain public finances" and suggest that governments consider privatization (yes, they have only one idea)...

"As in other reconstruction sites, from Haiti to Iraq, tsunami relief has little to do with recovering what was lost...

"In January Condoleezza Rice sparked a small controversy by describing the tsunami as "a wonderful opportunity" that "has paid great dividends for us"... If anything, Rice was understating the case" (Naomi Klein. "The Rise of Disaster Capitalism." The Nation, May 2, 2005: 9-11).

"...many of America's leading economists and political pundits, were convinced that the introduction of a single common currency across the EU would fail. The euro succeeded beyond even the most enthusiastic projection of its supporters and is now stronger than the dollar... and is becoming a rival in world financial circles' (Jeremy Rifkin. The European Dream p. 64)...

"GDP gives a false sense of real economic well-being... The fault with the GDP is that it doesn't discriminate between economic activity that really improves the standard of living of people and economic activity that does not...

"GDP counts every economic activity as good. So if crime rises because of unemployment and poverty, requiring an increase in police protection and enforcement, court costs, prisons costs, and a beefing up of private surveillance and protection, the economic activity it engenders finds its way into the GDP. If a toxic-waste dump needs to be cleaned up, an oil spill contained, or contaminated groundwater purified, again the economic activity adds to the total GDP. If the use of fossil fuels increases, it is added to the GDP, even though it means a depletion of existing stocks of nonrenewable energy. And if the health of millions of Americans deteriorates because of an increase in obesity, cigarette smoking, alcohol consumption, and drug use, the increased costs of health care are, likewise, added to the GDP... The purchase of more missiles, airplanes, tanks, and bombs are all added to the GDP... Here lies the rub. So much of our GDP--and an increasing percentage of it each year--is made up of economic activity that clearly does not improve our well-being...

"The late senator Robert Kennedy... "it does not allow for the health of our families, the quality of their education, or the joy of their play... it measure everything, in short, except that which makes life worthwhile"...

"Even the man who invented the GDP, Simon Kuznets... warned... that "the welfare of a nation" can "scarcely be inferred from a measure of national income"" (Jeremy Rifkin. The European Dream. p. 72-73)...

"Richard Layard is an economist and Labour peer who made his considerable name in employment economics. Now he has written a remarkable book [Happiness: Lessons From a New Science] about happiness that effectively trashes the claim of economics to guide policy for a good society.

"Happiness, not gross domestic product, still less competitiveness, should be the overriding principle of economic policy, Layard maintains, backing up his proposition with some fascinating statistics...

"...another key psychological element that is left out of economists' accounts: the self-fulfilling nature of many assumptions about human behavior...

"Hence the phenomenon of the "supervisor's dilemma", a vicious circle in which tight supervision generates behavior that seems to justify still tighter control. This reflects much of today's management, at least in the US and Britain, where people's levels of trust in one another have halved within the past 40 years--although not in Europe, where levels have stayed much the same.

"What does this mean? The implication is that companies and managers driven by the economic model of human nature are not only engines of individual unhappiness (as is largely borne out by people's worsening experience of work); but through these self-fulfilling assumptions they are reshaping people in their own impoverished image in a way that makes happiness impossible to achieve in the future. This is a frightening prospect, and clearly illustrates why the attitude-shaping role of management is so pivotal...

"... much of today's practice is counterproductive...

"Thus for Layard a happy society is based on old-fashioned virtues such as trust, fairness, and (yes) equality. Although political leaders and managers are wedded to "change" and to "flexibility", "there are huge advantages to inflexibility and predictability, as continental Europeans appreciate"...

"A fulfilling job allowing pride in the work, challenge and autonomy, is its own reward, and the best motivator. Since people care more about losses than gains, repeated reorganizations may produce more harm than good" (Simon Caulkin. "Money can't buy happiness." Guardian Weekly, April 29, 2005: 26).

This is a review of Lawless World: America and the Making and Breaking of Global Rules, by Philippe Sands.

"By far the most important body of international law concersn trade and overseas investment... It is these laws--secretive, hidden from view and above all binding--that have underpinned the neoliberal globalization project. The chapters on trade and investment reveal how biased these rules are in favour of the West, and how they are made and exercised in institutional recesses that are unaccountable, even to cabinets, let alone parliaments, and utterly invisible to the public eye. This is the nexus of corporate, bureaucratic and judicial power...

"He argues, moreover, that international law-making, even in the economic arena, is slowly being prised open and thereby subject to influence by a growing number of actors, including developing countries and NGOs. He recognizes that international law is opaque and largely undemocratic, but believes, perhaps too optimistically, that the processes and institutions are being opened up, albeit slowly.

"The nub of the book, however, concerns the way in which the United States, since the Bush presidency, has decided to opt out of international treaties" (Allen Lane. "A law unto themselves." Guardian Weekly, April 8, 2005: 27).

"...a sweeping new report from the World Bank... to prove that, in general, fairer economies are more successful. Inequality is not only unfair--it also wastes resources and stifles economic progress...

"Giving the poor a fair share in the economy is therefore the best recipe for success...

""We hope this report will change the perception that people often have that the poor are almost charity cases, and the rest of the country generates the growth," he said. "You shouldn't see those people as an ocean of unskilled labour. You should see them as a pool of potentially skilled individuals" (Heather Stewart. "Equality is the best policy." Guardian Weekly, Sep. 30: 31).

"Is there a real solution to the problem of losing jobs overseas? It does not make sense to focus our anger at the Chinese worker: You can't blame somebody for wanting a better job. We should not blame business leaders, either; outsourcing and offshoring are often the rational and necessary choice to compete under our current system of subsidies and trade laws. These people take advantage of outsourcing for the simplest of reasons: because they can...

"One intelligent response to outsourcing would be to stop passing the same trade agreements over and over...

"By end of 2005, it is projected that more than 830,000 American tech jobs will have moved to low-wage countries like India and China...

"Put simply, if your job uses a phone, a computer or a welding torch, outsourcing trade policies will affect you. If you can telecommute, your job can likely be outsourced...

"CAFTA--NAFTA's big brother... we can expect the same results of more lost jobs. And we should ban the billions in public subsidies that go to government contractors who move jobs overseas" (Andy Gussert. "Shoring up trade laws." Progressive Populist, May 1, 2005: 9).

"...the business costs of this [Bush] approach are already becoming evident. For starters, the new wave of anti-Americanism sweeping the planet goes far beyond KFC bombings in South Asia or widespread hostility in the Middle East. In Asia, the South China Morning Post has noted that a "strong growing hostility" toward the United States has complicated Disney's expansion plans in the area. The Bush imperial foreign policy, moreover, is inspiring consumer backlash even among traditional allies...

"...survey of global elites found that "41 percent of Canadian elites were less likely to purchase American products because of Bush Administration policies, compared to 56 percent in the UK, 61 percent in France, 49 percent in Germany and 42 percent in Brazil...

"...sixty-two percent of executives surveyed by Opinion Dynamics Corp. said the war is hurting America's global competitiveness" (Mark Engler. "Bush's Bad Business Empire." The Progressive Populist, Dec. 15, 2005: 2, 8-9).

"The Germans make the cars, the Italians make the clothes, the French make the wine, the British make the pharmaceuticals--and then they all buy and sell from each other...

"That's the theory. According to the UK Interdependence Report, it doesn't quite work out that way.

"Take chocolate-covered biscuits. Each year the UK export 1,145 tonnes of these delicacies to the Germans. The Germans meanwhile export 1,728 tonnes to the UK...

"The NEF says there is a serious side to the statistic showing that the 465 tonnes of gingerbread coming into the country is matched by the 460 tonnes exported. It argues that the environmental impact of "lorries passing in the night" is not included in the price of the goods in the shops, and that much of the trade that is going on is actually ecologically wasteful.

""Shipping vast quatities of identical goods backwards and forwards around the world matter for three big reasons" said Andrew Simms of NEF. "First, it is a towering monument to inefficiency, as wasteful as a job-creation scheme that pays people to shift a pile of rocks from one end of a worksite to another and back again.

""More profoundly, it matters because we face upheaval from potentially irreversible climate change due, in large part, to the burning of fuel, whilst at the same time there is rising conflict over access to dwindling oil supplies. The third reason is that a global economy built on, and blind to, its own fossil fuel dependence simply cannot survive in its current form"" ("Chocolate biscuit paradox." Guardian Weekly, April 21, 2006: 27).

"The United States is running a current account deficit of more than $700 billion a year to fund consumption we can't afford. This is not financially sustainable. Meanwhile, many workers in developing countries work twelve to sixteen hours a day, in dangerous conditions, without the right to form an independent union, at poverty pay, so that multinational corporations can boost their bottom line. That is not politically sustainable...

"... our corporate tax system is insanely inefficient and unfair. American taxpayers currently subsidize the offshoring of their own jobs (at a rate of at least $7 billion a year) through policies that exempt income earned offshore from corporate taxes. Very vew other countries have similar systems, and most have some form of "border adjustable" tax that exempts exports from sales or value-added taxes. Our current system taxes exports, while subsidixzing the offshoring of jobs. We need a complete overhaul of our corporate tax system to address this self-inflicted wound.

"Second, the overvalued dollar is killing our domestic manufacturing sector and exacerbating the problems in tradable services (a category that now covers everything not nailed to the floor). While the high dollar policy serves the Wal-Marts of the corporate world very well, it creates almost insurmountable competitive problems for domestic products...

"Third, the framework of rules in the global trading system (through the WTO and our own domestic agreements) is severely lopsided in favor of multinational corporate interests--leaving workers, small farmers, the environment and the poor ever more vulnerable and weak" (Thea Lee. "A New Domestic and Global Strategy." The Nation, April 17, 2006: 20-21).

"Postwar prosperity was built on a vast cut in the cost of security and the achievement of peace in Europe and much of Asia. The American role in the cold war system was to provide security; for this the dollar's role as anchor of the world trading system was our reward. But now, with Iraq, we are seen worldwide as the leading predator state, promoting war as a solution rather than as the ultimate economic and human horror. For this, many would like to see our privileges revoked.

"Corporate and financial fraud and political corruption form the second great domain of predatory capitalism. DeLay, Frist, and Abramoff are the names in the ews, but the tone is set by the leadership--Cheney of Halliburton and Bush of Harken Energy--a large predator and a small scavenger, specialists in cronyism and expert in nothing else. When predation becomes the dominant business and political form, the foundation of capitalism crumbles. Markets lose legitimacy, investors fly to safety in bonds, and authentic innovation and shared growth both become unnattainable. The solution must be not just a change of parties but a new political class, including a new media not under corrupt control.

"Then there is the predatory attack on unions and labor, in which many economists are complicit. This is far advanced in America and most visible today in Europe, as reflected by the doctrine of flexible labor markets, which claims that the conquest of unemployment requires cutting the pay of the working poor. But there is not history of unemployment ever being conquered this way...

"The way forward is a program for growth and justice built on the needs of the working population and the middle class. To begin with, in the United States, there must be a powerful demolition of the old political order: We need election where all votes are cast and counted. The campaign against voter repression is the essential civil rights struggle of our time, even though most progressives ''t seem to realize it yet. Prevailing will require fundamental reform such as the introduction of nationwide vote-by-mail (the Oregon system)...

"Overseas, crackdowns on tax havens and the arms trade, a stabilizing financial system and an end to the debt peonage of poor countries whould be among the priorities of a new structurre.

"The truths are that egalitarian growth is efficient, that speculation must be regulated, that crime starts at the top and that peace is the primary public good. These truths are poison to predators and are the reason predators have fostered and subsidized an entire cynical intellectual movement devoted to "free" markets made up of a class of professor-courtiers now everywhere in view. Taming predatory capitalism could start with breaking this econo-corporate analytical axis, and reviving the concept of countervailing power, first formulated by JOhn Kenneth Galbraith in 1952" (James K. Galbraith. "Taming Predatory Capitalism." The Nation, April 17, 2006: 23-24).

"President Richard Nixon's decision to end the Bretton Woods agreement in 1971 was a milestone in the erosion of the Western social contract. This decision ushered in a new international monetary system--one in which international payments in dollars would be made by private banks rather than exchanges of gold between the Federal Reserve and other central banks, and the value of the dollar would be determined by supply and demand.

"This new dollar-centric international monetary system has been a powerful force in shaping the global economy and is, to a great extent, responsible for the current pattern of globalization. For the United States, it has meant that US policy-makers have had to hold real US interest rates higher than those of other strong currencies and have had to accept a higher value of the dollar relative to other major currencies. This has not only led to slower US economic growth but has made US goods less competitive vis-a-vis those of other economies. Thus the cost of American dollar hegemony has been the loss of export markets and, along with it, the loss of relatively good jobs in the tradable-goods sector of the economy" (Jane D'Arista. "Reform the Internatinal Financial System." The Nation, April 17, 2006: 27).

"Momentous change is approaching in American politics. Conceivably, the turning point has already arrived, too indistinct to recognize. We are witnessing the demise of the reigning economic ideology. A deep shift of this kind is a very rare event, one that comes along only every thirty or forty years. Economic disorders accumulate that the orthodoxy cannot answer and may even have caused. Eventually, the ideological presumptions are discredited by real-world contradictions.

"The last time this happened was in the 1970s, when economic liberalism foundered and collapsed. Ossified intellectually, unable to adjust to changed circumstances, the liberal order did not know how to deal with economic consequences like inflationaly stagnation. As the long postwar prosperity lost its energy, so did liberal politics.

"Something similar is happening now to the Republicans. Their problem is the under-performing economy, which must borrow to stay afloat and, roughly speaking, lifts only half the boats. The conservative order--inspired two generations ago by Milton Friedman and Friedrich von Hayek and brought to power by Republican ascendancy--pushed government aside so business and capital would be free to generate more lasting prosperity. But their utopian promise was not fulfilled. Instead, the right's principal product... was economic inequality...

"...This very wealthy country has the capacity to insure that all citizens, regardless of status or skills, have the essential needs to pursue secure, self-directed lives. This starts with the right to health, work, livable incomes and open-ended education, and to participate meaningfully in the decisions that govern their lives. The marketplace has no interest in providing these. It is actively destroying them...

"One in six manufacturing jobs has been lost since 2000 (39 percent in communications equipment, 37 percent in semiconductors). These losses are explained as free-market "efficiencies" but mainly represent the global relocation of American production.

"The cumulative effect is an economy that doesn't produce enough to pay for what it wants and needs. The conservative order, notwithstanding its proclaimed values, makes up the difference by borrowing...

"The republicans now find themselves in a corner with no good choices. If Bush withdrew the stimulus of federal deficits, economic growth would collapse. The sensible course would require a massive shift in priorities--moving money and benefits from the wealthy few to the struggling many--but that is ideological heresy and would double-cross the GOP's monied patrons...

"You wouldn't know it from reading the newspapers, but substantial and often overwhelming majorities of Americans have repeatedly endorsed governing concepts that conventional politicians dismiss as radical or unrealistic: Universal healthcare. A job for everyone who wants to work, guaranteed by the government. Secure retirements. Stronger enforcement of environmental laws. Stronger defenses against encroaching corporate power. Union protection for workers against exploitative employers. The list goes on. These widely endorsed goals assume an activist government that nurtures people and society first, ahead of corporations and capital. Imagine a political agenda that set out to give the people what they say they want" (William Greider. "The Future is Now." The Nation, June 26, 2006: 23-26).

"Our gross national product ... if we should judge the United States of America by that – counts air pollution and cigarette advertising, and ambulances to clear our highways of carnage.​" – Robert F. Kennedy

Nowhere to Hide

email from The Daily Cut, September 3, 2018

Smile, you're on camera... Facebook is rating your trustworthiness... Have you "gone dark" yet?

There's nowhere to hide...

Here at The Daily Cut, we've been warning you about the rise of a global Surveillance State (catch up here and here)… and the danger it poses to your personal freedom.

What's happening today in China should serve as a warning.

As you read this, CCTV cameras armed with artificial intelligence and facial recognition technology are trawling through the faces millions of Chinese citizens.

They're searching for folks wanted by the cops. And they're finding them.

As Britain's BBC reported…

Chinese police have used facial recognition technology to locate and arrest a man who was among a crowd of 60,000 concert goers.

The suspect, who has been identified only as Mr. Ao, was attending a concert by pop star Jacky Cheung in Nanchang city last weekend when he was caught.

Police said the 31-year-old was wanted for an "economic crime" - whatever that means.

In Shandong province - about 650 miles north of where Mr. Ao was picked up - police arrested 25 suspects at a beer festival using facial recognition.

In Wuhu, about 400 miles south of Shandong, police caught a fugitive murder suspect when cameras picked him out of a crowd at a street market.

And in the west of the country, the main surveillance targets are Uyghurs - a Muslim ethnic minority the Chinese government is cracking down on.

According to Bloomberg, these facial recognition cameras alert the authorities when Uyghurs venture more than 1,000 feet beyond designated "safe areas."

These cameras also link up with the "social credit" system we've been telling you about…

To catch you up real quick… in dozens of pilot programs across China, the government gives citizens a "social credit" score.

Get caught breaking too many rules, and the feds will dock your score. Get a low enough score, and the feds will put you on a "restricted" list.

No more taking flights and getting on trains. The government will even bar you from staying at certain hotels and sending your kids to certain schools.

It's espionage by algorithm…

In 1944, at the height of Hitler's rule, there were about 16,000 active Gestapo officers policing a population of 66 million. That's about one for every 4,100 people.

For the same level of surveillance in the U.S. today, the feds would need about 80,000 agents. That's more than twice the number of agents the FBI employs today.

That"s why the Deep State has been in bed with Silicon Valley since the start.

As the internet started to gain popularity in the 1990s, it became clear to the intelligence community that Google and other Silicon Valley firms could do what teams of agents sitting at NSA desks could never do…

They could gather and process huge amounts of data to keep track of people and groups in cyberspace. (It's why, as we told you, the NSA seed-funded Google founders Larry Page and Sergey Brin.)

Here's Legacy Research co-founder Bill Bonner. He's been tracking the rise of the Surveillance State in his monthly publication, The Bill Bonner Letter…

Algorithms can now do what used to require squads of spooks, snitches, and sinister agents.

To keep 1.4 billion citizens in line, China's spooks know they can't rely on human-powered surveillance. They need high-tech kits and cutting-edge algorithms to reach their goal of total information awareness.

And that's exactly what the Chinese feds are doing with the more than 170 million high-tech CCTV cameras around the country.

Now, Facebook is scoring its users, too…

If you're a regular reader, you'll know that Facebook is a surveillance company disguised as a social media company.

But did you know that Facebook is also taking a leaf out of China's book and scoring you based on how trustworthy it thinks you are?

Here's The Washington Post with the report…

Facebook has begun to assign its users a reputation score, predicting their trustworthiness on a scale from 0 to 1.

The previously unreported ratings system, which Facebook has developed over the past year, shows that the fight against the gaming of tech systems has evolved to include measuring the credibility of users to help identify malicious actors.

you can probably see where this is going…

Facebook is in the business of monetizing your data.

Right now, its biggest clients are advertisers. They want to know as much about you as possible so they can modify your behavior - to buy something, or vote for someone.

But Facebook could start selling its reputation score to credit rating agencies and insurance companies. It could even sell your reputation score to employers.

That's less of a leap than you may think…

Last year, online recruiter carried out a survey in the U.S. The survey revealed that 70% of employers use social media to screen candidates before hiring.

Instead of snooping around a prospective hire's Facebook profile, why not just buy the reputation score from Facebook?

And who knows, maybe the feds would also be interested to know who's trustworthy and who's not…

It's yet another reason to "go dark"…

When we left off last week, we shared with you four simple steps you can take to shore up your online privacy.

We urge you to take those steps now. Once you do, you'll disappear from the radar of Facebook, Google, and other Silicon Valley snoops.

We'll have more for you on this important story tomorrow. We'll be talking with Bill's fellow co-founder at Legacy Research, Teeka Tiwari, about another corporate threat to your online privacy… and the extra step Teeka takes to make sure his data stays safe.

The World’s First Mass Surveillance System Is Now Online China is building a digital prison

We’re ALL Alex Jones Now From Big Tech to Big Brother... Tech companies are the new secret police

How to Go Dark

Your Guide to “Going Dark” Online The government has you bugged... We're ALL the enemy now... Your guide to "going dark"

Now, most Daily Cut readers live in the U.S. and won't lose much sleep over what's happening in China. But here's the problem...

America is not far behind...

The U.S. government's surveillance and behavior modification efforts are subtler than those of their Chinese counterparts.

But as we told you last week, Silicon Valley tech firms are coming together with the Deep State to create a society with little scope for dissent.

It's why, today, we're sharing with you a practical guide to shoring up your privacy online. It's what Bill Bonner Letter co-author Dan Denning calls "going dark."

Facebook and Google are surveillance companies disguised as web service companies…

They know everything you search for online... every website you've ever visited... every video you've ever watched... every chat message you've sent… and who you've sent it to.

They also know what books you read... what news you read... what you sound like (if you have a "smart speaker" at home)... what you look like (via facial recognition of photos you post and store online)... who your friends are... what you're thinking about buying… where you vacation… if you have (or want to have) children… and your political affiliation. (Did you donate to Bernie Sanders? Are you a member of the NRA?)

They even maintain detailed maps and timelines of where you've been with your digital devices.

One group interested in your whereabouts is the NSA

Most folks will shrug this off…

What's the harm, they'll ask, in submitting to round-the-clock surveillance if it helps the feds catch terrorists and America's enemies?

If you're not doing anything wrong, if you have nothing to hide, then you have nothing to fear, right?

Wrong. Dead wrong.

In today's world, we are ALL the enemy. As Dan put it in the March issue of The Bill Bonner Letter (paid-up subscribers can catch up in full here), "Every single U.S. citizen is now the object of Deep State surveillance."

In fact, Dan believes today's internet is primarily about deploying surveillance against Americans.

It's why Dan recommends "going dark"

Google and Facebook are what Dan calls "self-reporting systems"

For example, if you've got a phone that runs Google's Android operating system, you're constantly broadcasting to the company's servers exactly where you are in the world.

And Facebook is based on you sharing everything you do with everyone else. Not just your friends, but also anyone else that cares to look… including Deep State snoops.

It's why Dan recommends you opt out of these systems now... and stop self-reporting to the authorities, by taking the following four basic steps:

1. Delete your Facebook account

We think we have to be connected all the time. But by staying on the platform, you're sharing massive amounts of personal data about yourself with the world. You can't be a private citizen and be on Facebook. Find out how to permanently pull the plug here.
How do I permanently delete my Facebook account? What happens if I permanently delete my Facebook account?

You won't be able to reactivate your account.

Your profile, photos, posts, videos, and everything else you've added will be permanently deleted. You won't be able to retrieve anything you've added.

You'll no longer be able to use Facebook Messenger.

You won't be able to use Facebook Login for other apps you may have signed up for with your Facebook account, like Spotify or Pinterest. You may need to contact the apps and websites to recover those accounts.

Some information, like messages you sent to friends, may still be visible to them after you delete your account. Copies of messages you have sent are stored in your friends' inboxes.

2. De-Google your life

The way to stop Google – and the NSA – tracking every web search you type and every webpage you visit is to ditch Google search and the Google Chrome web browser. DuckDuckGo won’t track you like Google does. And it offers a decent search service.
DuckDuckGo The search engine that doesn't track you

There’s also the Epic Privacy Browser. It works just like Chrome, except it doesn’t store data on you. You can also try StartPage for a search engine that doesn’t track and store your search queries. Firefox is the least intrusive of your browser options (Safari, Chrome, Internet Explorer).

Epic Privacy Browser The world's only private and secure web browser blocks ads, trackers, fingerprinting, cryptomining, ultrasound signaling and more. Stop 600+ tracking attempts in an average browsing session. Turn on network privacy with our free VPN (servers in 8 countries).

Start Page the world's most private search engine


3. Buy a “dumb” phone

This is the only way to stop broadcasting your exact location 24 hours a day. An unlocked phone with 16MB of memory and a 2 megapixel camera will set you back about $25. You won’t be able to play Candy Crush while you’re standing in line waiting for your caramel latte at Starbucks. But a dumb phone will relieve you of the urge to constantly fiddle with your “smartphone.” Result: more free time and a less cluttered brain.

4. Download an encrypted messenger app

Conversations on WhatsApp (owned by Facebook) are encrypted for the moment. But the feds recently requested that Facebook allow them to spy on peer-to-peer conversations on its messaging app.

WhatsApp has over 1.5 billion users (mostly foreign), making it a prime target for wiretapping by U.S. security services. Skype (owned by Microsoft) isn’t much better.

Wickr, Telegram, and Signal are all much more secure alternatives.

Wickr Securing the World's most Critical Communications

Telegram a new era of messaging

Signal Privacy that fits in your pocket.


Our data is bought and sold as a commodity, which seems at least (if not more) unethical than the NSA looking for known phone numbers of terrorist suspects. The NSA is not interested in my sister's salsa recipe! My numbers and activities will pass through their scanning without a blip. The fact that I am a liberal may register via online petitions or donations, but there is nothing illegal to find.

– Amy D.

You can't be free if you know you're being watched all the time.

People are worried about Google and Facebook censoring content for political reasons.

But the bigger point is that all surveillance leads to censorship in a police state. The state trains you to modify your behavior yourself. You become complaint, placid, docile without being told. And then you'll do exactly what you're told.

That's the core issue with free speech. If we aren't free to speak to assemble, to petition our government for a redress of grievances, or to worship how and where we chose - and yes, to publish unpopular ideas - we're not really free.

It's no coincidence that Ludwig von Mises called his great work Human Action. Being free isn't just about having theoretical rights on a piece of paper. It's about living the life you choose without having to look over your shoulder or ask for permission.

A Surveillance Society - which the tech companies are building and getting rich from - redefines the relationship between the people and the government. Needless to say, it does it in a way that will cost you your freedom. If you value that, you have to stand up for it now while you still can.

- Dan

email from The Daily Cut: How to Escape the Digital Prison, 9.4.18

Welcome to the Panopticon...

In the late 18th century, English philosopher Jeremy Bentham came up with detailed designs for a new type of penitentiary.

He called it the “Panopticon” after the many-eyed Greek god Panoptes.

And it had a unique selling point. It would be cheaper than other designs because it required fewer guards to watch over the inmates.

The Panopticon was made up of a circular tower that formed the hub of a larger circular building. The jail cells were visible from the tower and could be watched over by a single guard.

But the key feature of the Panopticon was that its inmates couldn’t see inside the watchtower.

So they had to be on their best behavior at all times… whether they were being watched or not.

Today, the Panopticon is online…

As we’ve been showing you here at The Daily Cut, that’s a good description of the modern internet.

If you use Google, Facebook, or Twitter, you’re constantly under observation. But how these companies surveil you… and what they do with the data they collect on you… isn’t clear.

They know every detail about you… but you know almost nothing about them.

Take Google Search, which handles 90% of all search queries online.

Google is monitoring and recording everything you type into its search bar (even things you start typing, then delete). But how it sorts the results is shrouded in mystery.

The same goes for Facebook’s News Feed. Facebook is watching and recording every photo, video, link, and update you interact with. But you have no idea on what basis it’s feeding you that information.

Google and Facebook are the watch guards… we all are the prisoners.

And Google and Facebook aren’t the only ones watching…

Last week, I (Chris) caught up with Legacy Research co-founder and world-renowned cryptocurrency expert Teeka Tiwari about the obliteration of online privacy.

I was calling from my office in Lisbon, Portugal… where I spend some of the year. And Teeka was in Puerto Rico – his base since the start of 2018.

To be more precise, Teeka was sitting in his car outside his home with the air conditioning turned up full blast.

In the wake of Hurricane Maria, power is still sporadic. Teeka told me he loses power every day – sometimes for up to 11 hours. So he’s turned his car into a makeshift air-conditioned office.

But it’s what Teeka told me about a new way we’re being watched and monitored online that really grabbed my attention. It’s all to do with a resolution Congress passed

In March, Congress tore up regulations banning your internet service provider (ISP) from hawking your web browsing history to third parties.

We all connect to the web via an ISP. These are mainly Big Cable companies such as AT&T, Verizon, and Comcast that own or lease the telecommunications lines that allow you to get online.

These companies used to need your permission to collect, use, and sell information about your online habits.

But thanks in no small part to the $101 million they’ve donated to members of Congress, they’re now free to sell your personal data to the highest bidder – just as Google and Facebook do. As Teeka explained…

The rule change allows your ISP to look at all of your search history and sell it. Even when you’re surfing the web “privately” – for instance, by using a web browser that doesn’t harvest your data – your ISP is still collecting your personal data and selling it on to third parties.

You have no privacy, even though you think you do. Whatever political causes you support… whatever controversial ideas you read about… somebody somewhere knows about it.

It’s why Teeka has an important addition to your “going dark” action plan

As we told you last Thursday, the first steps to shoring up your privacy online are to: (1) Delete Facebook; (2) De-Google your life; (3) Buy a “dumb” phone; and (4) use an encrypted messaging service.

To combat the ISP snoops, Teeka also recommends you do what he does to stay private online… and use a Virtual Private Network (VPN).

VPNs allow you to communicate over a public network in a private way. Without getting too far into the weeds, they do this by encrypting your data... and by masking the internet address you’re connecting from.

For extra security, Teeka recommends you pay for your VPN using a “privacy coin”

Privacy coins are cryptocurrencies that make your transactions untraceable. (We covered this in the August 23 Daily Cut.) Teeka…

With bitcoin, if somebody – say, the feds – does a forensic deep dive, they can figure out who’s on each end of each transaction. The chances of that happening, unless you’re a criminal, are very low because it’s very expensive to do a forensic analysis. But it’s still possible.

Privacy coins such as Monero (XMR) or Dash (DASH) completely obscure you as the sender. They also obscure the receiver. This allows you to buy a VPN in private. It also allows you to donate to causes that maybe other people would judge you for.

And that’s hugely important. After all, you shouldn’t be judged or discriminated against based upon what political beliefs you hold.

The first step to get your hands on privacy coins is to buy bitcoin or ether. If you’ve never done it before, check out this guide our crypto experts at Palm Beach Research Group put together. It shows you where to buy and store bitcoin.

Step 1: Buy Bitcoin

After you buy bitcoin, you can trade it for Dash on the Kraken exchange or Monero on the Poloniex exchange.

Once you’ve bought your privacy coins, the next step is finding the right VPN...

One top-rated VPN that allows you to pay with Monero and Dash is Nord VPN. It’ll cost you less than $3 a month. And it will keep your ISP – and any other online snoops – from linking you to your data.

NordVPN Advanced security. Internet freedom. Complete privacy.

Tomorrow, a deeper dive into the rise of the crypto economy with Teeka… including the only two questions you need to ask to know where the crypto market is headed over the long term.


Argentina and France – Opponents of IMF versus Yellow Vests – Where Is the Correlation?

By Peter Koenig November 30, 2018 "Information Clearing House"

What do Argentinean protesters have in common with French protesters? – They both strongly dislike their governments, and their leaders (sic).

The protests in Argentina against the upcoming G20 meeting and around the IMF are just a pretext for an overall malaise – which is an understatement – vis-à-vis President Mauricio Macri and his debt-driven austerity program, that has left hundreds of thousands jobless. People who had decent jobs under the Kirchner governments have now joined the ranks of the unemployed and are begging for survival. Macri has driven the poverty rate from about 14%, where it was in November 2015, a months before the Presidential elections, to more than 35% in September 2018 – and all the while increasing tariffs for transportation and basic services such as electricity, gas, water – health care, education – in fact, privatizing such vital public services to the point where only higher middle class and elite can afford them.

That of course, will leave a vast majority of the people uneducated and without basic health care – precisely what neoliberalism wants. Decimating the number of poor people to a minimum needed for useful slavehood and leaving those who vegetate along, struggling for one meal at the time without education, without a job, so they don’t have the time, energy and political savvy to protest against the ruling class.

Greece is an outstanding example. Within less than ten years the once cheerful, happy and economically relatively well-off country was destroyed into misery by foreign imposed debt and austerity programs. – By now, almost all public assets were sold or privatized to pay for the horrendous debt service. Public health services are on a drip, there is a lack of special medication, like for cancer – schools are closed or privatized – pensions cut to unlivable levels, unemployment rampant – all leading to extreme poverty and skyrocketing suicide rates, about which nobody dares speaking.

That’s the making of the west. In the case of Greece even worse. Their European brother and sister countries went along with the loot. In fact, they pushed Greece into her demise, especially Germany, France, the European Central Bank (ECB), and, of course, the entire European Brussels apparatus, led by the unelected European Commission (EC) and, and eventually with the ‘official’ outside hammer, the IMF. Greece had to go.

Is Argentina going to become under Macri the Latin American Greece? Could well be. By now the country is encircled by neoliberal and fascist neighbors, Brazil, Chile Paraguay, Uruguay. Bolivia is a laudable exception. All the others will do what Washington mandates; whatever it takes to support Macri and his IMF-imposed economic killer policies, that – in the end – will sell out the resource-rich country to foreign oligarchs and corporations, to the US and NATO. Yes NATO, unbelievable, but true. NATO is officially in south America, as Colombia by her own choice has become a NATO country.

Surely, after the G20 summit, new austerities will be imposed, because everybody sees there is more to be milked from Argentina. They see what they were able to do to Greece. When common sense would dictate – stop, that’s it, that’s all we can take – there is an opening for even more to be squeezed out of the country. In Argentina there is still a lot of milking to be done. It has just started. If nothing else, the newly Washingtonshoed-in president of Brazil, Jair Bolsonaro, will teach Macri how to do even better for the western money sharks.

In France, the Yellow Vests protests against higher fuel prices and labor reform laws is just a pretext for something much bigger – a growing awakening of the French people, a steadily increasing recognition of how the slippery soft-speaker Emmanuel Macron is stripping France’s populace of most of their civil and social rights, of their labor rights – and ultimately, still to come, of their jobs.

A number of ‘false flags’ from Charlie Hebdo to Bataclan to the Nice’s 14thJuly terror attacks, have helped Macron to put a permanent State of Emergency – basically Martial Law – into the French Constitution. By doing so, he has created a kind of French “Patriot Act”, slice by slice reducing long acquired social rights, transforming them into increased profits for foreign and French corporations and banking giants. Big wonder, Macron is a Rothschild child. He has been put into his position to uphold and expand the Rothschild clan’s banking empire, expanding it way beyond the French borders.

Who are the Yellow Vests – or ‘gilets jaunes’in French? The name refers to the yellow phosphorescent vests that each and every French driver needs to carry in his vehicle for visibility and protection in case of an incident on the highway. The movement started on 10 October, propagated through facebook against the Macron imposed increase of fuel taxes. It then expanded rapidly into a movement of discontent with the continuous loss of purchasing power of the common people through budget cuts and soft but steadily increasing austerity imposed on the French citizenry. That, plus the decay of public services, especially in urban peripheries, has transformed the Yellow Vests movement into a vivid protest against Macron, an outright call for Macron’s resignation.

Hundreds of thousands – cumulatively several millions – of Yellow Vests have demonstrated and blocked at times most of Paris during the past two weeks, to reverse the fuel tax increase and to basically regain their social rights and financial purchasing power, increase salaries to at least keep pace with inflation. Diesel prices have already increased in 2018 alone by 23% and gasoline prices by 15%. These prices should increase further by 2019 according to a Macron imposed law.

Well, as usual, the ruling class – almost always the financial elite – took advantage of the desperate situation – and bingo. Macron is legally in office for 5 years, until 2022. Removing him the ‘democratic way’, through a Parliamentary vote of confidence, is a slim chance, as he has an absolute majority in Parliament, also called the French National Assembly.

Curiously, the European Commission and the ECB are much more generous with France than with Italy, when it comes to adhering to the arbitrary 3% deficit limit. Italy was scolded, called to order and to submit a revised budget, when deputy PM, Matteo Salvini, presented Italy’s 2019 budget with a 2.9% deficit. France, on the other hand, has been running a deficit above 3% for years, but is gently reminded to please look into their finances a bit more carefully. In other words, the EU is treating brothers and sisters with different yard sticks, thus, helping Macron to do whatever he sees fit to push austerity down the French citizens’ throats. And if they protest, well, we see what’s happening now. There is the State of Emergency that allows the most brutal police crack-down, if needed. And Macron may well need it, if he wants his presidency to survive.

The French people, are, however, special. They prompted the French Revolution in 1789, the legacy of which still reverberates in legal systems around the world. French students started 40 years ago, the 1968 student and workers revolt. It began on the premises of “equal rights and liberty” between men and women. It led to strengthening workers unions and eventually to many workers rights and benefits, precisely those that already former President Sarkozy attempted to dismantle and for which Macron was installed to finish the job.

There is a direct relation between what happened in 1968 and what is occurring now. Will the people prevail? – Will France set an example for the rest of Europe? – Mind you – Europe is in the plans to be derailed and robbed similarly and through different means, one of which is a massively increasing influx of so-called refugees or migrants from poor countries bordering Europe. Absorbing millions of homeless souls from western destroyed countries, is a challenge, Europe may not survive. Macron may just be a convenient intermediary.

So, what do the people of Argentina and the people of France have in common? – They both want to get rid of a despotic president, implanted by the western financial elite to steal the socioeconomic coffers of their heritage, and which, if not stopped, may continue a movement throughout the Americas and Europe.

Peter Koenig is an economist and geopolitical analyst. He is also a water resources and environmental specialist. He worked for over 30 years with the World Bank and the World Health Organization around the world in the fields of environment and water. He lectures at universities in the US, Europe and South America. He writes regularly for Global Research; ICH; RT; Sputnik; PressTV; The 21st Century; TeleSUR; The Vineyard of The Saker Blog, the New Eastern Outlook (NEO); and other internet sites.

Email from Daily Reckoning: A New Global Debt Crisis has begun

June 21, 2018. Right on schedule, it’s time for another crisis in emerging markets...

The only issue: whether the new crisis will be contained or whether it will ignite a global financial crisis worse than 2008...

Emerging-markets, EM, debt crises arrive every 15 or 20 years almost like clockwork.

The first crisis in recent decades began in 1982, reached a crescendo in 1985 and was not resolved until late 1989.

That crisis involved mostly Latin American borrowers such as Argentina, Brazil and Chile (the so-called “ABC” debtors) and Mexico.

It was not finally contained until the invention of “Brady bonds,” named after the Bush 41 administration Treasury Secretary Nicholas Brady, who used long-term Treasury debt to collateralize Latin American debt while the borrowers paid interest and bought time to get their houses in order.

I worked at Citibank in the early 1980s, so I was in the trenches for that crisis. The next crisis was confined to Mexico in 1994, but that was quickly followed by a global crisis that started in Thailand in 1997 and spread to Malaysia, Indonesia, South Korea and Russia before landing at a Greenwich, Connecticut, hedge fund called Long Term Capital Management, LTCM.

I know all about that crisis too because I negotiated the bailout of LTCM as their chief counsel. After the Asia-LTCM crisis, the EMs built up what they called “precautionary reserves” so they could withstand a run on their currencies by foreign banks and speculators. That worked.

The EMs sailed through the 2007–08 global financial crisis mostly unscathed. Now, 20 years after the last EM panic, a new EM debt crisis is quickly emerging.

The dollar is up 12.5% in the past four years on the Fed’s index, and that’s bad news for emerging-markets debtors who borrowed in dollars and now have to dig into dwindling foreign exchange reserves to pay back debts that are much more onerous because of the dollar’s strength.

Actually, the Fed’s index understates the problem because it includes the Chinese yuan, where the dollar has been stable, and the euro, where the dollar has weakened until very recently.

When the focus is put on specific EM currencies, the dollar’s appreciation in some cases is 100% or more. Much of this dollar appreciation has been driven by the Federal Reserve’s policy of raising interest rates and tightening monetary conditions with balance sheet reductions.

Meanwhile, Europe and Japan have continued easy-money policies while the U.K., Australia and others have remained neutral. The U.S. looks like the most desirable destination for hot money right now because of interest rate differentials.

A new EM debt crisis has actually already started. Right now, the crisis is mainly centered in Argentina, which has asked for IMF emergency funding. But Venezuela has already defaulted on some external debt as well. Turkey, Ukraine, Chile and South Africa are all highly vulnerable as well.

The only issue now is whether the new crisis will be contained to Argentina and Venezuela or whether contagion will take over and ignite a global financial crisis worse than 2008.

I saw the last two EM crises from a front-row seat, so I know how they proceed. The world has still not recovered from the 2007–08 panic and is not ready for a new crisis. This new crisis could take a year to spread, so it’s not too late for investors to take precautions, but the time to start is now. Individual investors should get ready with increased allocations to cash and gold.

Please send comments to: Professor Colby Glass, PhDc, MLIS, MAc, Prof. Emeritus,