Debt Rattle Aug 11 2014: Oil, Chaos, Power and Arrogance
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John Vachon General store and post office in Little Creek, Delaware Jul 1938 Boy, what a day so far; hard to keep up. tell me, is it just me, or has t
[See the full post at: Debt Rattle Aug 11 2014: Oil, Chaos, Power and Arrogance]Not too sure the US hasn’t won some wars these last 6 decades or so. Military transports have just been replaced by Coca Cola delivery trucks, and there seems to be a lot of Intel inside Vietnam and other places these days.
And one might also wonder if military victory is less desirable to the power structure, than is keeping the commerce of war flowing, like cash flow, through the rackets. Defeat made up for by volume, as it were?
On the end user cost of oil, a gallon of gas still costs a silver quarter in these parts. Same as always. The dollar, on the other hand is sure cheaper.
” Citizens Income?”
A Central Bankers dream. The cost of living would go up by the equivalent of the unproductive increase in income. Yellen, meet Marx.
And of course, no one would need to pay for the loss in productivity. Money is free, after all.
And if, say, $36 k a year is “equitable” in eliminating poverty, why not $90 k a year? Or, how about cost of living increases of 10% a year, 20% in election years?
All things being equal, I sure hope the price of mandatory Mao Pajamas doesn’t go up, as well.
Ah, the lure of “utopia” right here on earth marches on. It just wasn’t done right, down through time, but modern politicians possess the secret.
I must say I’m ever more impressed with the quality of articles posted here. Today’s debt rattle for instance was informative and timely, delivering essential info that was missing from my overview of Iraq’s situation. So, Iraq has actually lost half its oil revenue to the kurdish nation and the iraqi president is also a kurd, these facts do shed some polarised light on the political situation.
But is PM Maliki staging some sort of coup or not? How can he refuse to resign his post if another PM has been duly appointed today, where’s his authority to challenge the presidents authority over him? Iraq hasn’t had much time to practice its new constitutional format of legitimate power shifts in government, but perhaps deep religious divides in the body politic simply outmatch the ability of any possible constitution to arrange political power shifts fairly and orderly.
Maybe Iraq as a nation does have too many unbridgeable sectarian schisms to maintain a stable civil society outside of oppresive dictatorship, and should therefore be disassembled into separate coherent ethno-religious entities which may govern themselves without complications of interreligious strife. The oil should otherwise give them more than enough to fight about.Its becoming obvious how the US position in arming and supporting the kurds is directly antagonistic to Turkey’s political aims of containing kurdish ambitions in the region.
A kurdish nation as a coherent ethno-cultural entity is emerging rapidly now, able to support itself politically and economically and having a motivated military somewhat able to defend its borders, and now access to the world’s sixth largest oil reserves?
You might say emergent Kurdistan is now more of a nation than Iraq itself, which has mostly become a failed state with standards of living and life expectancy even lower than under Saddam.Malicious US intervention has also successfully destroyed civil society in Libya, which was relatively stable and prosperous under Gadaffi, but has now become another failed state in utter chaos. But I don’t understand how attacking Libya was some kind of resource seizing strategy for western hegemony, as its become more difficult and costly to exploit Libya’s resources than it was before. Maybe it was merely Gadaffi’s plan to trade oil in non-dollars that triggered his US/NATO supported overthrow?
A basic citizen’s income is not as bad an idea as it may seem, it depends on unsaturated aggregate demand whether any given level of such equally distributed income might have fortunate conflationary or disemploymentable effects or not.
A normal wellfare income in developed countries is reasonably apportioned to afford the necessities of living; food, water, clothing, housing and heating costs (although usually this apportionment is not adequately adjusted to real cost of living increases), and one is generally eligible for such wellfare if one happens to become unemployed, which is only fair insofar as government policy is the principal cause of unemployment most everywhere, and therefore falling victim to cyclical or structural unemployment is not entirely the wellfare recipients fault on average. Even if it was all their own fault, it might be better to give the unemployed minimal means for subsistence rather than having them resort to crime to survive. Thus dictates the ethical program of regular wellfare.Regular ways of distributing wellfare by bureacratic allocation do not reach some portion of eligible disenfranchised people, some of whom are most needy but somehow never apply for wellfare although they are eligible. Therefore a standard citizens income, which is automatically distribted to every adult citizen and does not require individual bureacratic intervention to allocate, could reach more people more efficiently, although it would cost much more in taxation to finance than regular wellfare does, which would burden the economy unless it was spent back into circulation with proper multipliers.
A millionare would then also recieve the identical citizens income, which they surely do not need as much, but they would presumably spend it back into the economy at least as efficiently as other income groups might, and higher income groups would have been overly burdened by the required taxation anyway, so they’d only be recieving some of their own taxed income back.
A common mistake indeed is to assume that the state somehow has the capacity to allocate a standard citizens income to everyone without cost, without having to tax more, and one cannot expect to finance such permanent stimulus with deficits. But a standard citizens income may perchance work to stimulate the economy, if the economic activities such a citizens income would be spent on can yield much more production and employment in aggregate than whatever activities were taxed to finance it, but this may also lead into deeper pitfalls of macroeconomic planning, because taxation multipliers are becoming increasingly negative of late, and any citizens income at subsistence levels would require much more taxation.
Mish had a piece re the U.S. supplying Kurds with Russian arms via the CIA (don’t know whether it’s true or not):
“The story in Iraq gets more bizarre by the day. Kurdish territory in Iraq are the only pro-American territory left. Yet the US worries it will splinter off into Kuridistan. Apparently it’s better to have a raging civil war as long as the country stays together in one theoretical piece.
This is where the story gets really bizarre. To avoid the appearance of the US giving arms to the Kurds, instead the US will give the Kurds Russian-made arms via the CIA.
Excuse me for asking, but what about sanctions on Russia?”
Karl Denninger wrote an article entitled “By The Numbers” where he gave the bottom two quintiles a tax credit, bringing their income up to $32,000.00 after tax per year, but he got rid of almost all other programs like HUD, SNAP, Social Security, Medicare and Medicaid, etc.
“Note that I left a hell of a lot of Socialism in the Federal Government due to handing out money to the lowest two quintiles. However, I got rid of all of the government waste and corruption at once in social programs by doing it this way, and as a result what has happened is that the people in the lower economic strata got all the money instead of a quarter of it with the various scam artists in and around the government stealing the rest.
I also broke the Medical Monopolies — everyone can now afford to pay cash for their medical care.
And, I did it while cutting taxes across-the-board by 30% while not only balancing the budget immediately, not in 10 or 20 years in some phantasm of lies and fraud, but also while putting $400 billion a year toward retiring the debt.”
I don’t agree with quite a few things Karl has to say, but he is pretty good with math. Have a look at his figures. He said he’s not advocating it, only that it could be done.
“The crucial date in this renewed conflict is 10 June, 2014 when Isis captured Iraq’s northern capital, Mosul, after three days’ fighting. The Iraqi government had an army with 350,000 soldiers on which $41.6bn (£25bn) had been spent in the three years from 2011, but this force melted away without significant resistance.
Discarded uniforms and equipment were found strewn along the roads leading to Kurdistan and safety. The flight was led by commanding officers, some of whom rapidly changed into civilian clothes as they abandoned their men. Given that Isis may have had as few as 1,300 fighters in its assault on Mosul this was one of the great military debacles in history.”
Would A Citizen’s Income Be Better Than Our Benefits System? (Guardian)
“rich and poor alike would receive the same basic income financed by the phasing out of virtually every tax relief and allowance.”Now that I’ve actually read the article, it seems this particular proposal for a citizen’s income could at least be useful for simplifying the tax structure, perhaps affording greater efficiency in fiscal policy without increasing tax burdens to finance it. People already on benefits wouldn’t recieve a higher income, but some economic groups would presumably profit from a citizen’s income if financed by the phasing out of unnecessary tax reliefs and allowances they didn’t recieve. Such a universal income, if financed by cancelling only unproductive tax reliefs and allowances, may then provide a correctly attuned spending stimulus into the economy, which may eventually increase employment more than the taxation to finance said citizens income destroyed employment initially.
On another topic, the Mosul dam by now is fully rigged with explosives and ready to go. IS(IS) has control of this dam, and they will not abandon this vital strategic location, likely choosing to destroy it rather than lose control over it. Many IS fighters would perish downstream if the dam was deliberately destroyed, but being irrational fanatics and suicidal nihilists, they don’t understand or care. The destruction of said dam and subsequent release of its entire reservoir would likely wipe out the city of Mosul and cause additional casualties of maybe 100,000 people throughout the region due to calamitous after effects.
IS’ position at the dam cannot be directly assaulted with kinetic action which might rupture the aging and brittle dam or trigger its explosive detonation, so US bombardment of IS ground targets too close to the dam’s location is out of the question. Special forces or elite combat units could try and take the dam, but its likely rigged for emergency suicide detonation by entrenced IS troops.In accordance with the laws of war, it may be prudent to evacuate the civilian population in the area if possible, and then use aerial delivery of a potent nerve agent to thoroughly gas all of the dam’s occupying IS troops before they destroy the dam out of desperation. Because of the catastrophic damage certain to be caused by the dams destruction, it could be justifiable (and maybe legal) to use nerve gas against IS to prevent this scenario, but only if its reasonably certain that the dam will otherwise inevitably be destroyed by IS, and that it can afterwards be successfully secured and held against IS attempts to retake it. A large and competent army would be needed to permanently safeguard the dam and surrounding areas. As the kurds alone won’t be enough, no matter how well armed, and Iraq itself does not have a competent army, maybe Turkey could be persuaded to invade Iraq to fight IS, they supposedly can mobilise an army large enough to retake and occupy the entire IS territory.
Otherwise, one might as well begin planning evacuation, mitigation and relief efforts for massive flooding downstream of the dam, inundating much of Iraq, as it seems inevitable IS will choose to blow the Mosul dam at some point, especially when the US airstrikes or kurds get too close, or if IS entirely fails to take Baghdad during next weeks siege.
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