Thursday, October 19, 2017

Publius Tacitus — America, Desperately Seeking An Enemy

Sone who has been around the block tells like it is.

Sic Semper Tyrannis
America, Desperately Seeking An Enemy
Publius Tacitus

RussiaFeed — Vladimir Putin mentor’s daughter, ‘Russia’s Paris Hilton’ to run for president

Russian jet setter, TV personality, glossy magazine editor and all-around It-girl-turned opposition figure Ksenia Sobchak, 35, has officially announced her decision to run for the presidency in the 2018 election.

Running as an independent, Sobchak generally has a love-hate relationship with the Russian audience. Having been on the country’s pop culture scene for many years, she has hosted one of the most popular reality TV shows, is a frequent guest at international VIP celebrity parties, has modeled for Playboy and is now editor-in-chief of L’Officiel Russia.
In a recent interview with Glamour Russia, Sobchak called being president “a top level art project,” adding that she thinks her career in showbiz would help in her political bid.
Sobchak also hosts an interview show on the Dozhd (Rain) TV channel, and in 2012 joined the opposition movement, having taken part in the Bolotnaya Square protests in central Moscow.
Ksenia’s late father, Anatoly Sobchak, was a famous Russian politician, the first democratically elected mayor of St. Petersburg in the 1990s. Vladimir Putin joined Sobchak’s team in 1990, and worked closely with the politician, who is widely considered to be his mentor....

Bryan McDonald —20,000 Nazis March in Kiev. The Western Media Somehow Fails to Notice.

"So, we had a major Nazi gathering in a European capital and the only English language sources that show up in a Google News search are from RT, Sputnik, The Nation and a half-hearted seven-sentence ‘report’ by US state broadcaster RFE/RL, which meekly describes them as mere 'nationalists.'  That means there is nothing from CNN, the Guardian, the New York Times, Washington Post or the BBC, among the usual suspects who make every little protest in Russia headline news....
The silence is deafening.

Bryan McDonald

Reuters — U.S. envoy Haley: Russia interference in elections is 'warfare'

Ratcheting up.
“When a country can come interfere in another country’s elections that is warfare. It really is, because you’re making sure that the democracy shifts from what the people want,” she said. “This is their new weapon of choice and we have to get in front of it.”
Either Haley is a moron, or the level of hypocrisy is incredible, or maybe some combination.

Where has the US not interfered with elections, tried to influence them, or overturn their outcome or alt least tried to do, sometimes though a coup?

U.S. envoy Haley: Russia interference in elections is 'warfare'

Taking a page from HRC's playbook. Actually, it is SOP for the defeated in banana republics to cry fraud. HRC is the first to do it in a developed country like the US, and after she accused DJT of planning to do this when she beat him, calling it unpatriotic.

Leaders of Venezuela's bruised opposition to travel abroad to denounce 'voting fraud'
Alexandra Ulmer, Corina Pons

Michael Hudson: Socialism, Land and Banking: 2017 Compared to 1917

Socialism a century ago seemed to be the wave of the future. There were various schools of socialism, but the common ideal was to guarantee support for basic needs, and for state ownership to free society from landlords, predatory banking and monopolies. In the West these hopes are now much further away than they seemed in 1917. Land and natural resources, basic infrastructure monopolies, health care and pensions have been increasingly privatized and financialized.
Instead of Germany and other advanced industrial nations leading the way as expected, Russia’s October 1917 Revolution made the greatest leap. But the failures of Stalinism became an argument against Marxism – guilt-by-association with Soviet bureaucracy. European parties calling themselves socialist or “labour” since the 1980s have supported neoliberal policies that are the opposite of socialist policy. Russia itself has chosen neoliberalism.
Few socialist parties or theorists have dealt with the rise of the Finance, Insurance and Real Estate (FIRE) sector that now accounts for most increase in wealth. Instead of evolving into socialism, Western capitalism is being overcome by predatory finance and rent extraction imposing debt deflation and austerity on industry as well as on labor.
Failure of Western economies to recover from the 2008 crisis is leading to a revival of Marxist advocacy. The alternative to socialist reform is stagnation and a relapse into neofeudal financial and monopoly privileges....
Neoliberalism is not working. Socialist resurgence, or something else?

Useful background and history lesson.

Michael Hudson at some of his best.

Naked Capitalism
Socialism, Land and Banking: 2017 Compared to 1917
Michael Hudson | President of The Institute for the Study of Long-Term Economic Trends (ISLET), and Distinguished Research Professor of Economics at the University of Missouri, Kansas City
Crossposted at Vineyard of the Saker and SouthFront

CIA Urges Trump to Delay Release of 3,000 Never-Before-Seen Documents on Assassination of John F. Kenned

More than 3,000 never-before-seen documents from the FBI, CIA, and Justice Department on the assassination of John F. Kennedy are scheduled be released, with many experts fearing that such a large release of secret JFK assassination documents will spur “a new generation of conspiracy theories.”
According to Roger Stone, the CIA is urging President Donald Trump to delay disclosing some of the files for another 25 years.
Roger Stone said in a post on his website…
“They must reflect badly on the CIA even though virtually everyone involved is long dead.”

Nicaraguan President Daniel Ortega at 80% Approval Rating: Poll

The ruling Sandinista National Liberation Front is ahead in polls for the upcoming municipal elections.
President Daniel Ortega has an almost 80 percent approval rating among Nicaraguans and his party is ahead in polls for the Nov. 5 elections that will elect mayors across the country, according to a recent survey.
Some 77.5 percent say that President Ortega has led Nicaragua correctly, while 77.8 percent said the Sandinista National Liberation Front government gives them hope, according to a recent poll by Consultora M&R published Wednesday.
The poll also showed that 78.6 percent of the people believe the current government works for the benefit of the population.
The report added that 71.5 percent consider the government “democratic” and “that it complies with the laws” and 79.1 percent said that it brings “unity and reconciliation” to the Central American nation.
According to the poll, the ruling Sandinistas have a 57.5 percent approval, while the opposition parties received 6.3 percent. Another 36.2 percent declared themselves independent.
The poll also asked citizens to outline life priorities. Health received the number one spot, with 91 percent, followed by work with 76.8 percent, housing at 70.1 percent, and economic welfare with 60 percent.
The poll was conducted from Sept. 28 through Oct. 11 in 15 departments and two autonomous regions of Nicaragua, with a margin of error of 2.5 percent and 95 percent reliability.

Jason Smith — In the right frame, economies radically simplify

More thoughts on economic methodology. First a framework is needed and then theories can be constructed and tested in that framework. The simplest frame and most economical theory that explains the data sufficiently to be useful is preferred.

A framework involving complexity is not necessarily better than one that doesn't as long as it gets the job done.

Smith observes that theories constructed within the conventional framework that conventional economists presume is not getting the job of explanation and prediction done very well.

He cautions that this doesn't necessarily mean that a more complex framework is better at explanation (formal theoretical model) and prediction (empirical testing of the model against adequate data).
The dynamic equilibrium frame [of Smith's information transfer economics] not only radically simplifies the description of the data, but radically reduces the information content of the data.... 
This is all to say the dynamic equilibrium model bounds the relevant complexity of macroeconomic models. I've discussed this before here, but that was in the context of a particular effect. The dynamic equilibrium frame bounds the relevant complexity of all possible macroeconomic models. If a model is more complex than the dynamic equilibrium model, then it has to perform better empirically (with a smaller error, or encompass more variables with roughly the same error). More complex models should also reduce to the dynamic equilibrium model in some limit if only because the dynamic equilibrium model describes the data.
This would suggest that the methodological debate in economics is not over, as conventional economists claim.

Information Transfer Economics
In the right frame, economies radically simplify
Jason Smith

Positive Money - Out Of The Darkness (Enhanced Audio)

Martin Wolf says there will be a big financial crash in five years time especially as the US is weakening its financial regulations. He says how the 2008 crash was the worst in history where the economy was only saved by a massive bail out from governments, but the next crash will be even worse.

Ed balls is a classic neoliberal who says that the less government gets involved in the economy the better (except, of course, when bailing out his buddies in the One Percent with their banks).

Thought Fran Boait of Positive Money would be a bit overwhelmed by the two heavyweights, Martin Wolf and Ed Balls,  but she just comes straight out with it and says neoliberalism doesn't work while the rich are still getting richer while everyone else is getting poorer.

Paul Craig Roberts - Markets Fall When Dollar Falls

Quite an interring interview.  The role of central banks is to support the big banks not the economy, says PCR, while the big banks are just gambling rather than investing in businesses. He says how it makes no sense for companies to incur debts in order to buy back their own shares which weakens them. He wonders whether if the central banks can keep the financial system afloat indefinably by printing money. 

Asia Unhedged — PBOC ‘Minsky moment’ comments blown out of proportion

CNBC cobbled together a video using reporting from Reuters, set to a somewhat ominous driving baseline, which began with the words “China’s economy may be in trouble.” The content of the video went on to imply that Zhou Xiaochuan said just that, in stark contrast to the confidence other Chinese leaders are espousing.
In fact, Zhou’s words align with the central leadership’s consistent calls for efforts to reign in financial risks and continue to push for deleveraging. And the rising household debt? It still pales in comparison to what is seen in other countries, Zhou merely said that China should watch this to avoid running into a problem that China still has no need to worry about.

Edward Harrison — Crony capitalism and redistribution

What Ed Harrison call "crony capitalism" is a feature of neoliberalism as government capture that favors special interests. "Crony capitalism" is an egregious example of the underlying assumption that capital formation should be favored over other factors in the interest of growth, based on the further assumption of trickle down. This results in upward distribution and growing inequality of income and wealth, which eventually leads to social dysfunctionality.

Credit Writedowns
Crony capitalism and redistribution
Edward Harrison


Be sure to follow the link in the P.S. in the post below.

The one data you should follow to know if the US expansion is in good shape

David F. Ruccio — Laughter is the best medicine

So what are the problems according to Blanchard and Summers? In their view, “the events of the last ten years have put into question the presumption that economies are self stabilizing, have raised again the issue of whether temporary shocks can have permanent effects, and have shown the importance of non linearities.”
Only mainstream macroeconomists could possibly have thought that capitalism is self stabilizing. The rest of us—who have read Marx and Keynes as well as the work of Robert Clower, Hyman Minsky, and Axel Leijonhufvud—actually knew something about the roots of capitalist instability: the various ways a monetary commodity-producing economy might (but not necessarily) generate imbalances and instabilities based on the normal workings of the system.
Yes, of course, temporary shocks can have permanent effects. How could they not, when tens of millions of people are thrown out of work and, especially in the wake of the most recent crash, inequality has soared to new heights?
And then there are those “non linearities,” the idea that financial crises are characterized by feedback effects such that shocks, even small ones, “are strongly amplified rather than damped as they propagate.” Bank runs are the quintessential example—whether customers demanding their deposits in the first Great Depression or the run on financial institutions (including insurance companies that issued credit default swaps) that occurred in the midst of the second Great Depression. But that’s not all: when corporations, facing a declining profit rate, choose to sell but not purchase, they make individually rational decisions that can have large-scale social ramifications—for workers, indebted households, and other corporations (on both Main Street and Wall Street).
So mainstream macroeconomists appear to be waking up from their slumber and seeing capitalism as it is—and as it has functioned for 150 years or so.
Moreover, the reason that conventional economists are concerned is not economics but politics. Capitalism is not working and the result is social dysfunction that is creating a political backlash against not only politicians but also economists. I suspect that if this were not happening, everything would be just fine. Even so, they are not actually questioning basic assumptions, the adverse consequences of which heterodox economists and political theorists have pointed out from many different angles.

Occasional Links & Commentary
Laughter is the best medicine
David F. Ruccio | Professor of Economics, University of Notre Dame

See also
The real sea change is the third one -- the reconsideration of what recessions really are. Most modern econ theories posit that recessions arrive randomly, instead of as the result of pressures that build up over time. And they assume that recessions are short-lived affairs that go away of their own accord. If these assumptions are wrong, then most of the theories written down in macroeconomics journals over the past several decades -- and most of those being written as we speak -- are of questionable usefulness....
Bloomberg View
Fixing Macroeconomics Will Be Really Hard
Noah Smith, columnist

Áine Cain — Steve Jobs and Jeff Bezos' mentor used a simple test to figure out who is a true leader

According to the late Bill Campbell, who established a reputation as the "coach" of Silicon Valley, only one thing determines whether or not you're a leader: the opinions of those you're supposed to be leading.…

[Former Apple CEO John] Sculley shared one of the best pieces of advice Campbell ever gave him: "Your title makes you a manager. Your people will decide if you're a leader, and it's up to you to live up to that."...
"Basically, how you make that happen is if you believe that leadership is not about putting greatness into people, leadership is about recognizing that there's a greatness in everyone and your job is to create an environment where that greatness can emerge," [Current Intuit CEO Brad] Smith told Business Insider....
How do political leaders stack up? Polls are one indication, but generally polls don't measure intensity.

Business Insider
Steve Jobs and Jeff Bezos' mentor used a simple test to figure out who is a true leader
Áine Cain

Reuters — China's central bank Anticipates a "Minsky moment."

Hyman Minsky goes to China.
China will fend off risks from excessive optimism that could lead to a "Minsky Moment", central bank governor Zhou Xiaochuan said on Thursday, adding that corporate debt levels are relatively high and household debt is rising too quickly.
A Minsky Moment is a sudden collapse of asset prices after a long period of growth, sparked by debt or currency pressures. The theory is named after economist Hyman Minsky....

"If there are too many pro-cyclical factors in the economy, cyclical fluctuations are magnified and there is excessive optimism during the period, accumulating contradictions that could lead to the so-called Minsky Moment," Zhou was speaking on the sidelines of China's 19th Communist Party congress.
"We should focus on preventing a dramatic adjustment," he said. China will control risks from sudden adjustments to asset bubbles and will seriously deal with disguised debt of local government financing vehicles, Zhou said....
China's central bank just warned of a sudden collapse in asset prices

Sarah K. Burris — Former CIA director says it’s ‘implausible’ that Russians didn’t meddle in our election without American help

John Brennan doubles down and insinuates that some connected with Trump colluded with "the Russians" in the "fake news" campaign that purportedly cost HRC the election, since "the Russians" would have need direction about targeting vulnerable states.

Reaching for straws.

Raw Story
Former CIA director says it’s ‘implausible’ that Russians didn’t meddle in our election without American help
Sarah K. Burris

Wednesday, October 18, 2017

Defending and extending the periphery

Defending the periphery of the empire while also attempting to extend it.

U.S. Says Syrian Government Will Never Have Foothold In Raqqa, Acccuses Damascus & Allies Of Hindering Efforts To Liberate City

Netanyahu says Israel won't tolerate Iran presence in Syria

Robert Parry — Blaming Russia for the Internet ‘Sewer’

Even former Clinton political strategist Mark Penn has acknowledged the absurdity of thinking that such piddling amounts could have any impact on a $2.4 billion presidential campaign, plus all the billions of dollars worth of free-media attention to the conventions, debates, etc. Based on what’s known about the Facebook ads, Penn calculated that “the actual electioneering [in battleground states] amounts to about $6,500.”
In a Wall Street Journal op-ed on Monday, Penn added, “I have 40 years of experience in politics, and this Russian ad buy mostly after the election anyway, simply does not add up to a carefully targeted campaign to move voters. It takes tens of millions of dollars to deliver meaningful messages to the contested portion of the electorate.”
When you loose even Mark Penn.…

Consortium News
Blaming Russia for the Internet ‘Sewer’
Robert Parry

David P. Goldman — In China's state-dominated economy, a large part of Chinese leverage is state infrastructure spending masquerading as corporate debt

Finally figuring it out.
The net debt of the non-financial components of the Shenzhen 300 Index is heavily concentrated in a dozen or so companies, all of which contribute to basic energy or transport infrastructure. A full 10% of the net debt of non-industrial SHSZ300 companies is owed by Petrochina alone.
This suggests that a great deal of Chinese corporate indebtedness should be viewed as “public works” investment by the Chinese sovereign. There certainly are aspects of the increase in indebtedness that recall Japan’s dependence on public works spending as a channel for economic stimulus. But the point to take away is that we are NOT looking at a speculative bubble in corporate debt but a heavily-concentrated investment in state-sponsored infrastructure.…
But the company-by-company breakdown of the location of the debt suggests that in China’s state-dominated economy, this distinction blurs the underlying economics: A very large part of Chinese debt is state infrastructure spending masquerading as corporate debt.
That is not the stuff out of which financial crises are made.
While the West waits for China to crater from growing debt, the steamroller rolls on. Somebody better tell these people to get out of the way or they will be crushed.

Asia Times
In China's state-dominated economy, a large part of Chinese leverage is state infrastructure spending masquerading as corporate debt
David P. Goldman

Adam Garrie — Xi Jinping’s 3.5 hour speech before the 19th CPC National Congress is actually a succinct introduction to China’s road-map for the future

Overall, the prognosis for Xi Jinping and his successors being able to deliver on the monumental promises made in today’s speech, seem surprisingly doable. China has shown the world that it can make the difficult happen with speeds that shock many sceptics and with an exactitude that confounds students or previous rising economic giants.
In this sense, it is not at all beyond the scope of reality that a 3.5 hour speech, may shape the next 100 years of Chinese and world history.
Marx and Lenin get the last laugh?

The Duran

Jayati Ghosh — The De-Digitisation of India

Back to business as usual. Nothing accomplished other than a lot of hassle.

The De-Digitisation of India
Jayati Ghosh | Professor of Economics at the Centre for Economic Studies and Planning, School of Social Sciences, at the Jawaharlal Nehru University, in New Delhi

Xinhua — Highlights of Xi's report to 19th CPC National Congress

Socialism with Chinese characteristics has entered a new era.
The CPC has given shape to the Thought on Socialism with Chinese Characteristics for a New Era, a long-term guide to action that the Party must adhere to and develop.
The Thought builds on and further enriches Marxism-Leninism, Mao Zedong Thought, Deng Xiaoping Theory, the Theory of Three Represents, and the Scientific Outlook on Development. It represents the latest achievement in adapting Marxism to the Chinese context....


Xi calls for making China into a country of innovators

Xi Jinping on Wednesday called for making China's interest rates and exchange rates more market-based.

Xi calls for boosting fundamental role of consumption in China's economic growth

Xi pledges 'sweeping victory' in anti-corruption

China's socialist democracy the most effective: Xi

Xi calls for 'putting quality first' in economic development

Xi says achieving national rejuvenation will be 'no walk in the park'

Global Times — New Chinese sex-ed textbook for female students in Shanghai stirs controversy

"Take a look at the history of the human race, women are documented to suffer from discrimination and suppression both in Oriental civilizations and in Western countries. Women have much more difficulty than men in defending their rights in life and marriage."
This is the very first sentence from Radiant Girls, a new sex-ed textbook published by Shanghai Educational Publishing House especially for girls in the fourth or fifth grade of elementary school....
Teaching basic feminism right out of the gate.

New Chinese sex-ed textbook for female students in Shanghai stirs controversy
Global Times


Summary of the Reuters' report.

Russia Insider
Moscow Is Safest Megacity for Women - Reuters
Anatoly Karlin

Trump Impeachment Articles Could Soon Gain Republican Support, House Democrat Claims

Perhaps it's time for Trump to go, but who's going to replace, Mike Spence? Is there anyone who is a safe pair of hands out there, well, the world depends on it? A war with Iran would be an terrible tragedy and the loss of life enormous. Regardless of their leaders the Iranians are world renowned for their friendliness, which has something to do with Iran being a trading route in the past where traders brought goods and custom. 

Democratic Rep. Steve Cohen said Sunday that it's not just members of his own party that are considering articles of impeachment against President Trump. 
"Privately they will tell you, by their words and by their expressions, that they would like to see an end to the Trump administration and don't approve of what he's doing", Cohen said. 
Cohen, who announced his plan following Trump's controversial comments in the wake of the deadly violence at a white nationalist rally in Charlottesville, Virginia, in August, said he is looking to get between seven and 10 co-sponsors before taking impeachment articles to the House. 
"We have a president who is known to be unstable", he told U.S. cable channel MSNBC.

The Cobess News 

 Trump Impeachment Articles Could Soon Gain Republican Support, House Democrat Claims

JP Koning — An example of tax-driven money during the greenback era

Some interesting history.

An example of tax-driven money during the greenback era
JP Koning

Gallup — Trump Presidency Draws Strong Support, Stronger Opposition


Trump Presidency Draws Strong Support, Stronger Opposition
Jim Norman

Mehdi Hasan — In the Age of Trump, Tom Cotton May Be America’s Most Dangerous Senator

You might call Cotton, who is now being touted as the next director of the CIA, the “Trump whisperer.” In fact, according to the Weekly Standard, in a recent meeting with his top national security and foreign policy advisers, “having failed to receive the decertification option from his own team, Trump called Senator Tom Cotton and put him on speakerphone. The president asked Cotton to make the case for decertifying the Iran deal. Cotton took five minutes and walked Trump and his team through the case, emphasizing one point in particular: re-certifying the deal would be declaring that it was in the national security interest of the United States, something Cotton understood that Trump didn’t believe.”
The Weekly Standard report added that Trump “left the phone call” convinced that the decision to decertify was “the right one.”
Got that? The reality TV star who now occupies the Oval Office defied the advice of his own inner circle, including Defense Secretary James Mattis; ignored the pleas of America’s closest allies; and dismissed the evidence offered by the International Atomic Energy Agency that Iran is in compliance with the terms of the deal. Instead, he decided to go with the advice of a 40-year-old freshman senator from Arkansas, who has zero expertise in Middle East diplomacy and none in the field of nuclear proliferation.
Probably not just Tom Cotton. I suspect that Trump had already made up his mind and Cotton was just a cover. But the fact Trump chose Cotton for this is indicative.

The question now is when Mattis, McMaster, Kelly and Tillerson are going to resign before their credibility and reputations are shredded.

The Intercept

TASS — Bank of Russia to start buying gold on Moscow Exchange

"Starting from November 1, 2017, the Bank of Russia will post gold procurement bids during trading sessions of the Moscow Exchange along with gold purchases on the over-the-counter market for purposes of developing the organized market of precious metals and increasing the number of counterparties," the Central Bank said.
Bank of Russia to start buying gold on Moscow Exchange

Joshua Landis — Trump’s Iran Policy Is More about Rollback than Nukes

The renewed US offensive against Iran is not so much about its nuclear capability or even its missile program; it is about Iran rollback and hobbling its economy.
Ever since President Obama signed the Iran agreement, howls of disapproval were heard from both Israel and a number of Gulf States, which were not dismayed so much at the sunset clause on Iran’s nuclear refinement as they were at Iran’s escape from economic sanctions. The real danger, in their eyes, is Iran’s economic break out and potential success. The more money Iran has, the more it can consolidate the success of its Shiite allies in the region: Hezbollah, the Syrian government and the Iraqi government.
President Trump’s latest announcement follows increased U.S. sanctions on both Hezbollah and Syria, as well as increased aid to Syria’s Kurds in their effort to expand territorially. It is the latest in a policy of rollback that has been developing for some time.
It is a policy that both Saudi Arabia and Israel have been pushing on Trump. It is one that also suits his personality as well as the inclinations of his military advisers because it means supporting friends and hurting enemies. It represents the opposite of Obama’s effort at balancing Sunnis and Shiites along with Saudi Arabia and Iran, not to mention his effort to distance the U.S., ever so slightly, from Israel..
Although, the much ballyhooed “land bridge” from Iran to Lebanon through Iraq and Syria cannot be severed by the US army, a high price for building it can be exacted against Iran and its Shiite allies. They can be weakened economically, which is the point of scuttling the Iran deal. The West is also likely to boycott any reconstruction effort in Syria. The new anti-Iran policy will have a profound and far reaching impact on the region. It will ratchet up Sunni-Shiite hostility as well as beggar more countries....
Again, what could go wrong? Professor Landis explains.

Trump’s Iran Policy Is More about Rollback than Nukes
Joshua M. Landis | Associate Professor and Director of the Center for Middle East Studies at the University of Oklahoma

Dirk Ehnts — MMT, Tajikistan and foreign bond investors

One criticism of Modern Monetary Theory (MMT) that I hear very often is that it applies only to the US or the countries with hard currencies that can issue bonds on international bond markets....
econoblog 101
MMT, Tajikistan and foreign bond investors
Dirk Ehnts | Lecturer at Bard College Berlin