Andreas Feininger Production B-17 heavy bomber at Boeing plant, Seattle Dec 1942
Because of Pax Americana. Long expose by Stockman.
After the Berlin Wall fell in November 1989 and the death of the Soviet Union was confirmed two years later when Boris Yeltsin courageously stood down the red army tanks in front of Moscow’s White House, a dark era in human history came to an end. The world had descended into what had been a 77-year global war, incepting with the mobilization of the armies of old Europe in August 1914. If you want to count bodies, 150 million were killed by all the depredations which germinated in the Great War, its foolish aftermath at Versailles, and the march of history into the world war and cold war which followed inexorably thereupon. To wit, upwards of 8% of the human race was wiped-out during that span.
The toll encompassed the madness of trench warfare during 1914-1918; the murderous regimes of Soviet and Nazi totalitarianism that rose from the ashes of the Great War and Versailles; and then the carnage of WWII and all the lesser (unnecessary) wars and invasions of the Cold War including Korea and Vietnam. I have elaborated more fully on this proposition in “The Epochal Consequences Of Woodrow Wilson’s War“, but the seminal point cannot be gainsaid. The end of the cold war meant world peace was finally at hand, yet 25 years later there is still no peace because Imperial Washington confounds it.
In fact, the War Party entrenched in the nation’s capital is dedicated to economic interests and ideological perversions that guarantee perpetual war; they ensure endless waste on armaments and the inestimable death and human suffering that stems from 21st century high tech warfare and the terrorist blowback it inherently generates among those upon which the War Party inflicts its violent hegemony. So there was a virulent threat to peace still lurking on the Potomac after the 77-year war ended. The great general and president, Dwight Eisenhower, had called it the “military-industrial complex” in his farewell address, but that memorable phrase had been abbreviated by his speechwriters, who deleted the word “congressional” in a gesture of comity to the legislative branch.
So restore Ike’s deleted reference to the pork barrels and Sunday afternoon warriors of Capitol Hill and toss in the legions of beltway busybodies that constituted the civilian branches of the cold war armada (CIA, State, AID etc.) and the circle would have been complete. It constituted the most awesome machine of warfare and imperial hegemony since the Roman legions bestrode most of the civilized world. In a word, the real threat to peace circa 1990 was that Pax Americana would not go away quietly in the night.
With numbers like those, statements like these are ludicrous: “The government has been struggling to reach its economic growth target of around 7% this year..”
Profits at China’s state firms dipped 9.5% in the first 11 months of 2015 from a year earlier, after a 9.8% drop in the first 10 months, the Ministry of Finance said on Friday. Combined profits of state-owned enterprises totaled 2.04 trillion yuan ($315.18 billion) in the January-November period, the ministry said in a statement on its website. “The downward pressure on economic operations remains relatively big, although there are signs of warming up in some indicators,” the ministry said.
Excluding financial firms, combined revenues of state-owned firms fell 6.1% in the first 11 months from a year earlier to 40.66 trillion yuan, the ministry said. Companies in transportation, chemical and power sectors reported a rise in profit in the January-November period, while firms in oil, petrochemicals and building materials saw a drop in earnings. Firms in steel, coal and non-ferrous metal sectors continued to suffer losses. The government has been struggling to reach its economic growth target of around 7% this year, which would be the weakest pace in a quarter of a century.
A foreign policy success is not the same as a financial success.
The China-backed Asian Infrastructure Investment Bank (AIIB) has been formally established and is expected to be operational early next year, the official Xinhua news agency said on Friday. The bank’s establishment came after 17 funding members of the AIIB, which account for just over 50% of its share capital, ratified an agreement on the bank, state television quoted Finance Minister Lou Jiwei as saying. The bank will hold its opening ceremony in mid-January and formally elect its president, state television said. The bank will initially focus on financing projects in power, transportation, and urban infrastructure in Asia, the television quoted the bank’s president-elect, Jin Liqun, as saying. First proposed by President Xi Jinping less than two years ago, the bank has become one of China’s biggest foreign policy successes. Despite the opposition of Washington, major U.S. allies such as Australia, Britain, Germany, Italy, the Philippines and South Korea have joined.
You ain’t seen nothing yet. On January 1, all previous bets are off.
Bankruptcies among oil and gas companies have reached quarterly levels last seen in the Great Recession, according to the Federal Reserve Bank of Dallas. At least nine U.S. oil and gas companies that accounted for more than $2 billion in debt have filed for bankruptcy in the fourth quarter, the bank said Wednesday in its energy economic update for the final three months of the year. “Lower oil prices have taken a significant financial toll on U.S. oil and gas producers, in part because many face higher costs of production than their international counterparts do,” according to the note written by Navi Dhaliwal, a research assistant, and Martin Stuermer, a research economist. “If bankruptcies continue at this rate, more may follow in 2016.” Since peaking in October 2014, U.S. oil and gas employment has fallen by 70,000 jobs, the analysts wrote in the report.
Bit confusing at the start on differences between people’s QE and basic income. And the entire topic already confuses people with all the varying definitions. But it’s good to get the discussion going. And Steve’s Modern Debt Jubilee is still the most sensible thing out there.
In this special Winter Why Not? episode of the Keiser Report, Max Keiser and Stacy Herbert talk to Professor Steve Keen about solutions to our unpayable debts, including: basic income, a People’s Quantitative Easing and a global debt jubilee. Professor Keen explains why a modern debt jubilee could please both debtors and creditors, savers and spenders.
Deals with deals that are almost a decade old.
Commerzbank has sued four banks in the United States, claiming that they failed to properly monitor billions of dollars in toxic mortgage-backed securities acquired by the German lender before the 2008 financial crisis. Bank of New York Mellon and units of Deutsche Bank, Wells Fargo and HSBC were named in the lawsuits filed on Wednesday and Thursday in Manhattan federal court. BNY Mellon was the trustee for over $1 billion in mortgage-backed securities bought by Commerzbank and $1.3 billion of investments tied to a collateralized debt obligation, Millstone II CDO, court documents showed. BNY Mellon “abandoned its obligations to protect the rights of investors” and did nothing to protect the collateral underlying the CDO, Commerzbank said, noting that it suffered $750 million in losses. Commerzbank made similar claims involving mortgage-backed securities of $640 million in the Deutsche Bank case; $290 million for Wells Fargo; and $204 million for HSBC.
The number of people selling up and moving out of London rose by two-thirds in 2015, figures showed on Saturday, as homeowners cashed in on the capital’s high house prices or escaped to more affordable parts of the country. More Londoners bought homes outside the capital than at any point since 2007, according to the property firm Hamptons International, purchasing 63,000 properties during the year. Almost nine out of 10 bought elsewhere in the south of England, but the Midlands saw a 165% increase in the number of Londoners moving into the area. Throughout 2014 house price growth in London outstripped that in other parts of the country, and although it has been less rapid this year, the gap between prices in the capital and outside is wider than ever. Johnny Morris, head of research at Hamptons International, said homeowners were taking advantage of this.
“As the gap between prices in London and the south-east has grown, so has the temptation for Londoners to cash in on record house prices and move out of the capital,” he said. “With expectations of future house price growth in London easing, many have chosen 2015 to make their move out of London.” High costs in London where, according to the Office for National Statistics, the average price of a home is now above half a million pounds, have also forced first-time buyers and those looking for more space to move out. The Hamptons research, based on figures from the UK’s largest estate agency, Countrywide, which it owns, found that the number of people moving out to buy their first home was up by 70%, or 11,000, over 2014’s figure. The most recent data from Nationwide building society on first-time buyer affordability shows that relative to earnings a home in London is at a record 9.6 times average pay.
“Austerity is so powerful today because it feeds off of itself. It makes people uncertain about their lives, their debts, and their jobs. They become afraid. It’s a strong disciplinary mechanism.”
Orsola Costantini, Senior Economist at the Institute for New Economic Thinking, is the author of a new paper, “The Cyclically Adjusted Budget: History and Exegesis of a Fateful Estimate,” which exposes the fascinating — and disturbing — history of how a budget approach cloaked in a scientific and technical aura became a tool to manipulate public opinion and serve the interests of the powerful. In the following conversation, she reveals how austerity has been sold to the public through a process that damages the lives of ordinary people, consolidates knowledge and power at the top, and compromises democracy. As economic inequality reaches new heights and austerity programs are debated around the world (most recently, in Spain and Portugal), understanding how a lie becomes political and economic “truth” has never been more critical.
Lynn Parramore: Your recent work deals with something called the “cyclically adjusted budget.” What is it and what does it mean in the lives of ordinary people?
Orsola Costantini: The Cyclically Adjusted Budget (CAB) is a statistical estimate that aids government officials when they decide what to spend money on and how much they’re going to tax you. It is mostly federal governments that use it, but also international institutions like the IMF. Economists will tell you this tool is imprecise. Yet national and international institutions still rely on it to justify important decisions about government spending and taxation. But there’s something the experts aren’t telling you: the cyclically adjusted budget can be easily maneuvered depending on which way the political winds are blowing. And it appears technical and obscure enough so that regular people tend to look at it as objective and undisputable. That’s where the trouble comes in.
Politicians and government officials using the CAB can limit the range of political choices that appear viable to a community. Policymakers can avoid the hassle of taking political responsibility for these choices, too. We had to do it! The budget says so! Look at what happened all over Europe in 2008: It’s one thing to say to students in the streets that their education and economic wellbeing are not a priority for the government while saving banks is. It’s quite another to say that politics has nothing to do with it and the economy requires taking certain actions, sometimes painful.
LP: You indicate that this approach to budgeting was invented as a way of making the New Deal acceptable to the business community. How did that work? Over time, who has benefitted from it? Who has lost?
OC: Back in the 1940s, workers were fighting for their rights, class struggle was heating up, and soldiers would soon be returning from the fronts. At that point, a new business organization, the Committee for Economic Development (CED), came together. Led by Beardsley Ruml and other influential business figures, the CED played a crucial role in developing a conservative approach to Keynesian economics that helped make policies that would help put all Americans to work acceptable to the business community.
The idea was that more consumers would translate into more profits — which is good for business. After all, the economic experts and budget technicians said so, not just the politicians. And the business leaders were told that economic growth and price stability would go along with this, which they liked.
But things changed progressively over the 1970s and early 1980s. Firms went global. They became financialized. The balance of power between workers and owners started to shift more towards the owners, the capitalists. People were told they needed to sacrifice, to accept cuts to social spending and fewer rights and benefits on the job — all in the name of economic science and capitalism. The CAB was turned into a tool for preventing excessive spending — or justifying selected cuts. Middle class folks were afraid that inflation would erode their savings, so they were more keen to approve draconian measures to cut wages and reduce public budgets. People on the lower rungs of the economic ladder felt the pain first. But eventually the middle class fell on the wrong side of the fence, too. Most of them became relatively poorer. I suppose this shows the limits of democracy when information, knowledge, and ultimately power are unequally distributed.
LP: You’re really talking about birth of austerity and the way lies about public spending and budgets have been sold to the public. Why is austerity such a powerful idea and why do politicians still win elections promoting it?
OC: Austerity is so powerful today because it feeds off of itself. It makes people uncertain about their lives, their debts, and their jobs. They become afraid. It’s a strong disciplinary mechanism. People stop joining forces and the political status quo gets locked down. Even the name of this tool, the “cyclically adjusted budget,” carries an aura of respect. It diverts our attention. We don’t question it. It creates a barrier between the individual and the political realm: it undermines democratic participation itself. This obscure theory validates, with its authority, a big economic mistake that sounds like common sense but is actually snake oil — the notion that the federal government budget is like a household budget. Actually, it isn’t. Your household doesn’t collect taxes. It doesn’t print money. It works very differently, yet the nonsense that it should behave exactly like a household budget gets repeated by politicians and policymakers who really just want to squeeze ordinary people.
Beijing has closed down thousands of companies. But how long can it do that for?
Beijing issued an alert for severe air pollution Friday, warning children and the elderly to avoid outdoor activities as limited visibility from the thick smog forced the airport to cancel 227 departures. Officials in the capital raised their air pollution alert to orange, the second-highest on the city’s four-grade scale. The concentration of PM2.5 – the particles that pose the greatest health risks – was 503 micrograms per cubic meter near Tiananmen Square at 2 p.m. after reaching 647 in the morning, according to the municipal air-monitoring website. The World Health Organization recommends PM2.5 exposure of no more than 25 over 24-hours.
Beijing Capital International Airport, the world’s second-busiest by passengers, reported the cancellations on its website Friday and said another 12 departures were delayed as of 4 p.m. local time because of poor visibility. The canceled flights accounted for about 12% of scheduled departures Friday, according to the site. The chronic air pollution has renewed calls for the government to make better forecasts and act faster to help clear the skies over the city of 21.5 million. Beijing this year has imposed two red alerts, the highest on the scale, prompting measures including school closures, traffic restrictions and factory operation limits. The latest ended Tuesday. Smog also blanketed China’s eastern and central regions Friday.
PM2.5 levels were as high as 260 micrograms per cubic meter in Zibo and 322 in Jinan of Shandong province, data from the China National Environment Monitoring Center showed. The readings were 277 in Wuhan and 255 in Huanggang of Hubei province. Shanghai issued a yellow alert for air pollution, the third-highest of four levels. Children and the elderly were warned to avoid outdoor activities, with the Shanghai Environmental Monitoring Center reporting PM2.5 levels of 154 micrograms per cubic meter as of 2 p.m. About 50 cities in northern and eastern China have issued air pollution alerts, the China Daily reported on Friday. Smog across the eastern, northern and central parts of the country will weaken or disperse from north to south from Saturday, the China Meteorological Administration said.
If “Only God’s mercy can free humanity from the many forms of evil..”, are we off the hook?
Pope Francis has praised the generosity of countries which have accepted Syrian refugees and condemned the “monstrous evil” which has forced increasing numbers of people to flee their homes in the Middle East. Delivering his Christmas Day homily at St Peter’s in Rome amid heavy security, the pontiff said he was praying for an end to human suffering in a world afflicted by war, poverty and extremist attacks. Francis referred to “brutal acts of terrorism” in Paris in November as well as conflicts in Africa, the Middle East and Ukraine. “Only God’s mercy can free humanity from the many forms of evil, at times monstrous evil, which selfishness spawns in our midst,” he told worshippers gathered in St Peter’s Square.
Thousands of people underwent airport-style security screening as they entered St Peter’s Square. Police armed with machine guns discreetly patrolled the area. Security around the Vatican has stepped up since the terrorist attacks in Paris last month. At the end of a year in which more than a million people have sought sanctuary in Europe, Francis asked God to “repay all those, both individuals and states, who generously work to provide assistance and welcome to the numerous migrants and refugees”. The pope called for “encouragement … to all those fleeing extreme poverty or war, travelling all too often in inhumane conditions and not infrequently at the risk of their lives”. He praised those who are helping migrants “to build a dignified future for themselves and for their dear ones, and to be integrated in the societies which receive them”.
“..the responsibility to offer refuge is ours until the least of us have shelter.”
As your social media contacts must have reminded you by now, Christmas truly is the story of a Middle Eastern family seeking refuge. Recent forensic research suggests that Jesus looked very much like the men that so many in the predominantly Christian Western world are frightened to let into their countries. Even in photos of the refugees, there are striking echoes of biblical iconography. “Whatever you did for one of the least of these brothers and sisters of mine, you did for me,” Jesus says in Matthew’s gospel. “Whatever you did not do for one of the least of these, you did not do for me.” This is at the very core of Christian values: love your neighbor as yourself—and as your god.
And yet Westerners are, by and large, keeping refugees at bay, bargaining their quotas down, as if the world’s 2.2 billion Christians had never been taught the story of Joseph and Mary being refused accommodation because they were poor strangers. Perhaps instead we can show mercy for mothers breastfeeding their children on a cold beach, for men who nearly drown trying to swim to shore, for children who have no choice but to follow their parents in chasing a future—any future, anywhere. These people are the real-life versions of the icons that Christians have come to associate with the passion of god as a human. Let us recognize them as such. Let us acknowledge, once and for all, that being a refugee—of war, poverty, or discrimination—is a sheer function of luck, and we did nothing to deserve our better fate. Whenever and wherever humanity is suffering, we are involved, and the responsibility to offer refuge is ours until the least of us have shelter.
Contradictory reports in the media. Some say everyone swam, or that Ceuta is an island.
Two migrants drowned and 12 others were injured Friday when they tried to enter into the tiny Spanish territory of Ceuta in North Africa by swimming from Morocco or scaling a barbed-wire fence, officials in both nations said. Just before 4:00 am (0300 GMT) a group of over 300 migrants tried to get into the Spanish city which borders Morocco and is located across the Strait of Gibraltar from mainland Spain, the Spanish government authority in Ceuta said in a statement. Moroccan forces intercepted over 120 migrants but 182 others managed to get into Ceuta by climbing over the fence or swimming into the territory, it said. “Three of them needed to be reanimated by Spanish police officers who rescued them from the sea.”
Twelve migrants were taken to hospital by the Red Cross to be treated for various injuries, it added. Two people were recovering from near-drowning, one had an open leg fracture and the rest had deep cuts, some requiring stitches, the Red Cross said. Morocco recovered two bodies in the waters near the border post, local officials told Moroccan state news service MAP. The would-be migrants threw stones and used sticks against police, injuring several officers, they added. The Spanish Red Cross said it gave clothes and shoes to the migrants before they were taken to a temporary detention centre in Ceuta. It published photos of Red Cross volunteers helping and feeding migrants, many of them covered in blankets.
Ceuta along with Melilla to the east are two Spanish territories on the northern coast of Morocco that together form the European Union’s only land borders with Africa. Spain fortified fences in the two territories last year in response to a rise in the number of migrants trying to jump over the barriers from neighbouring Morocco. Last year 15 migrants drowned in the Mediterranean after dozens tried to enter Ceuta by swimming from a nearby beach. Human rights groups and migrants said the Spanish police tried to keep them from crossing into Spanish territory by firing rubber bullets and spraying them with tear gas. Madrid has since said that its guards are now banned from using rubber bullets to repel migrants.