Saturday, June 24, 2017

The only economists who ever created a national economy

A couple months ago, I found online a very useful graphic of the major schools of economic thought. Take a look at it, with this question in mind: Have any of the schools of economic thought shown in the graphic actually resulted in creating a functioning national economy with a large degree of general prosperity and political freedom?

An honest, historically informed answer completely contradicts the libertarian / conservative / neoliberal hero-worship of Adam Smith. The original graphic was posted in April 2014. Four months later, the author posted a revised graphic. Note the major addition in the bottom left corner of the revised graphic: the American School of Alexander Hamilton, Henry C. Carey, and Friedrich List.
It is a very welcome addition, because the American School is the only school of economic thought that has resulted in creating a functioning national economy.

In December 1993, James Fallows rattled the economics profession with an article in The Atlantic, How the World Works:
The more I had heard about List in the preceding five years, from economists in Seoul and Osaka and Tokyo, the more I had wondered why I had virtually never heard of him while studying economics in England and the United States. 
Fallows goes on to describe the historical importance, not of British opium-trade apologist Adam Smith, but of the American School, in guiding the early industrial development of Tokugawa Japan, late imperial China, czarist Russia, Germany, South Korea, and other countries.

In a nutshell, the American School is the only body of economic thought which has actually resulted in national industrial development along with a large degree of general prosperity and political freedom. A partial exception is Marx, but, as Lawrence Goodwyn, the late historian of the American agrarian revolt and populist movement of the late 1800s, pointed out, no system of Marxism has been implemented without the coercive power of a red army behind it.

So why haven�t you ever heard of Henry C. Carey and Friedrich List, two of the most famous economists of the mid-nineteenth-century? They, and the American School, have simply been written out of the economics textbooks. Did you take an economics course in college, and do you still have the textbook around somewhere? Please, look in the index and see how many references there are to Henry Carey. Or to Alexander Hamilton, who, after all, is the person who designed the foundations of the USA economy�which certainly has to rank among the greatest achievements of the past millennium.  Compare what you find with the number of references to Adam Smith, or Milton Friedman.

As part of an inquiry into insurgent political movements, I have been reading a book, The Greenback Era: A Social and Political History of American Finance, 1865-1879, by Irwin Unger (Princeton University Press, 1964), which was awarded the Pulitizer Prize for History in 1965. Near the beginning of the book, Unger provides a dozen or so page summary of Carey and his economic thought. This is what inspired me to post this story, and most of the following material is taken from Unger, who writes that Henry Carey was
...a social thinker who had bent the Jacksonian producer ethic to Whiggish ends�. The essence of the �American School� of political economy that Carey created� was the harmony of all �producing� economic groups in America�agricultural, wage earning, and industrial. He denied the �wages fund� theory of the Classical Economists which pitted laborer against employer, and also questioned the relevance to America of Ricardian rent theory�. 
Carey�s rejection of the �wages fund� theory would be vindicated by Henry Ford�s theory of paying his auto workers enough that they could buy the cars they built, and by the Treaty of Detroit negotiated by Walter Reuther and the United Auto Workers with General Motors in 1950. I would also note something Unger does not: the uniquely American Doctrine of High Wages, which sharply distinguished the USA from European economies through most of the nineteenth century.
Unger continues:
In America, with its abundant land and untapped resources, there was a community of interests among all the producing classes, and it followed that domestic industrial growth�which [Carey] saw as the country�s most pressing need�was not in the interests of manufacturers alone. Like Hamilton before him, Carey argued that a protective tariff would benefit farmers and laborers as well as manufacturers, and confer a general boon on the nation.
Carey�s argument was that excluding foreign manufactures would compel a home market, in which �the anvil and the loom take their place next to the plough and the harrow,� thus producing a market for the bounty of the soil immediately next to where that bounty was produced. And, indeed, by the middle of the nineteenth century, the village blacksmith had become a fixture in every American village and town.

Production of heavy machinery was originally limited to the fall line of the rivers in New England, because that was where reliable water power could be obtained. But by the end of the century, with water power supplanted by steam power, and electricity beginning to become a major power source, almost every large town and city hosted a manufacturer of steam engines, lathes, milling machines, and other machine tools. By the end of the nineteenth century, the manufacture of lathes had spread to:
American Turret Lathe Co., Warren, PA;
Baird Machinery Co., Pittsburgh, PA;
Bardons & Oliver, Cleveland, OH;
Barnes Drill Co., Rockford, IL;
Bradford Machine Tool Co., Cincinnati, OH;
Cairo Machine Works, Cairo, IL;
Elgin Tool Works, Elgin, IL;
Grant Tool Co., Franklin, PA;
Hamilton Machine Tool Co., Hamilton, OH;
Hardinge Brothers,Chicago, IL;
Henley Machine Tool Works, Richmond, IN;
Lodge & Shipley Machine Tool Co., Cincinnati, OH;
Charles A. Mann, Providence, RI;
Milwaukee Machine Tool Co., Milwaukee, WI;
Monarch Machine Co., Sidney, OH;
Niles Tool Works, Hamilton, OH;
San Francisco Tool Co., San Francisco, CA;
Schumacher & Boye, Cincinnati, OH;
Sebastian Lathe Co., Cincinnati, OH;
Shepard Lathe Co., Cincinnati, OH;
Universal Radial Drill Co., Cincinnati, OH;
Von Wyck Machine Tool Co., Cincinnati, OH;
Warner & Swasey Co., Cleveland, OH;
Waterbury Farrel Foundry & Machine Co., Waterbury, CT;
Wight & Powell, Worcester, MA;
Willard Machine & Tool Co., Cincinnati, OH

Planers and shapers were being manufactured by
Cincinnati Planer Co., Cincinnati, OH;
Cincinnati Shaper Co., Cincinnati, OH;
Cleveland Planer Works, Cleveland, OH;
Davis & Egan Machine Tool Co., Cincinnati, OH;
Detrick & Harvey Machine Co., Baltimore, MD;
Durkee & Keefer, Chicago, IL;
Fox Machine Co., Grand Rapids, MI;
Rockford Machine Tool Co., Rockford, IL;
Steptoe Shaper Co., Cincinnati, OH;
Totten & Hogg Iron and Steel Foundry Co., Pittsburgh, PA;
Union Iron Works, San Francisco, CA.

(See the lists of manufacturers in Kenneth L. Cope, Makers of American Machinist's Tools: An Illustrated Directory of Patents, (Astragal Press, 1993); Cope, American Lathe Builders: 1810-1910 (Astragal Press, 2001); Cope, American Planer, Shaper, and Slotter Builders, 1830-1910 (Astragal Press, 2002); Cope, Carriage and Wagon Makers' Machinery and Tools (Astragal Press, 2004); and Cope, American Steam Engine Builders 1800-1900, (Astragal Press, 2006).)

The manufacture of steam engines and boilers was even more dispersed, with a higher proportion located in what were considered the western states in the mid-1800s. A list of manufacturers of farm steam traction engines, 1870-1920, and their locations, would no doubt delight Carey:
Ames Engine Works, Indianapolis, IN;
Atlas Engine Works, Indianapolis, IN;
Aultman Engine and Thresher Co., Canton, OH;
Aultman and Taylor Machinery Co.; Mansfield, OH;
Avery Co., Peoria, IL;
A.D. Baker Co., Swanton, OH;
Banting Manufacturing Co., Toledo, OH;
Best Manufacturing Co., San Leandro, CA;
Fairbanks Steam Shovel Co., Marion, OH;
A.B. Farquhar Co., York, PA;
Ferdinand Machine Co., Ferdinand, IN;
Frick Co., Waynesboro, PA;
Gaar Scott Co., Richmond, IN;
Geiser Co., Waynesboro, PA;
Harrison Machine Works, Belleville, IL;
Heilman Machine Works, Evansville, IN;
Holt Manufacturing Co., Stockton, CA;
Illinois Thresher Co., Sycamore, IL;
Byron Jackson Machine Works, San Francisco, CA;
Keck-Gonnerman Co., Mt. Verson, IN;
O.S. Kelley Manufacturing Co., Iowa City, IA;
Merritt & Kellogg, Battle Creek, Mich.;
Minneapolis Threshing Machine Co., Hopkins, Minn.;
Port Huron Engine and Thresher Co., Port Huron, Mich.;
Reeves and Co., Columbus, OH;
Roberts and Doan, Sacramento, CA;
M. Rumely Co., La Porte, IN;
A.W. Stevens Co., Marinette, Wisc.;
Wood Brothers Thresher Co., Des Moines, Iowa.

(Reynold M. Wik, Steam Power on the American Farm,  University of Pennsylvania Press, 1949, Appendix �Farm Steam Traction Engines Manufactured in the United States and Canada, 1870-1920,� pages 254-255. The complete list runs to 65 companies. Wik compiled another list, �Manufacturers of Portable Farm Steam Traction Engines in the United States and Canada, 1849-1915,� which includes 108 companies.)

Unger notes that Carey�s rejection of Ricardian rent theory meant that the landlord was not necessarily �a grasping villain.� Moreover, Carey�s political economy �contained none of the Jacksonian passion for the economic underdog,� which makes me wonder if Unger had actually read Carey�s Harmony of Interests, and its exquisite denunciations of the immiseration of  Ireland and India caused by the free trade economic policies of British imperial rule. But there was a �social enemy� in Carey�s schema (pages 51 and 52):
The scarcity of capital� made interest high and directed Carey�s fire against the �money lenders.� This assault had a Jacksonian ring, but it was not Agrarian. The money lenders were primarily enemies not of the poor but of �productive� capital. The high cost of borrowing money, Carey wrote before the [Civil] War, �causes a deduction from the profits of the trader, from the rents of houses, from the freight of ships. The owner of money, then, profits at the expense of all other capitalists.� In America, where land was plentiful and financial institutions rudimentary, the money lender was the chief danger to productive endeavor.
This attack on the money lender contains the germ of Carey�s specific financial doctrines. Having rejected the Classicial Economists� free trade dogmas, he also rejected their monetary and capital theories. In words that echo the doctrines of his seventeenth and eighteenth-century mercantilist predecessors, Carey declared money to be a part of "capital" and its scarcity the cause of high interest rates. In the American West, he noted, interest charges were prohibitive "because money�the thing for which alone interest is paid�is scarce.
In the terms of his time, Carey was in favor of �free banking,� which meant an expandable state banking system which could readily add more banks and bank notes when more money was needed. This was in opposition to Andrew Jackson�s and Thomas Hart Benson�s �simple minded bullionism.� It took its name from the Free Banking Act enacted in the state of New York in 1838, which made it possible to incorporate a bank under general incorporation laws, instead of specific charters granted by the state legislature. Carey and other Whigs viewed free banking as a way to prevent the monopolization of money and credit. They were joined in this support of free banking by Democrats who did not accept �the whole package of Jacksonian dogma� many of Jackson�s supporters were closer to the new aggressive thrust of business enterprise than to the bucolic past.� Unger labels this faction �enterpriser-Democrats,� and they would play a significant role after the Civil War in response to the resumption of a hard gold standard in 1874�the focus of Unger�s book. As Unger discusses, Carey would develop into a foremost opponent of resumption. What I think is important to note here, is Carey�s understanding of money and banks, which, again, was quite different than that of Smith, Ricardo, and the British economists.
From this rejection of the Ricardian interest theory flowed Carey's faith in an abundant money stock as a stimulus to the economy. The very essence of prosperity, he believed, was the increase in "societary circulation." In the late 1850's, Carey described the quickening effects of enlarging the coin supply: "The larger the quantity of gold sent to the chief manufacturing centers of the earth the lower will be the rate of interest there�the greater will be the facilities for constructing new roads and mills�and the more rapid those exchanges from hand to hand which constitute commerce and for the making of which money is so absolutely indispensable."
But as early as the 1840's he also recognized the identical effects of a highly developed banking system. Implicitly he accepted the mercantilist concept of banks as long-term lenders to industry, as well as  short-term Ienders to trade. As the wealth of a country grows, coin becomes increasingly less important, and banks and their note deposits take on the function of adding to the circulation. In New England, where banks were plentiful, money was abundant, interest rates low, and general prosperity prevailed. As a good Whig, Carey supported the Bank of the United States against Jacksonian attacks, but he was primarily a free banker and was actually rather suspicious of money monopolies which could restrict circulation. New England, with its virtually free banking, was a model of adequate societary circulation without excess. 
Carey gathered around him a distinguished band of followers, who helped disseminate his neo-mercantilist views. Several of these men�E. Peshine Smith, William Elder, and Stephen Colwell�were trained economists in their own right and before the War helped elaborate the monetary doctrines of the American School. Colwell and Elder, along with Henry Carey Baird, Carey's nephew and intellectual heir, became deeply involved in the postwar financial controversy. But Carey himself was to take the leading role in the postwar years in creating an intellectually respectable soft money philosophy. In February 1865 he began an assault on the doctrines of the bullionists that ended only with his death in 1879 at the age of 86. In the course of these fourteen years he wrote over twenty pamphlets�close to a thousand pages�devoted to the currency question, all reiterating with stubborn insistence the financial ideas which he had developed in his earlier works.
It is largely because of Carey�s influence that most of the businessmen running heavy industry at the beginning of the 1870s would line up against the bankers and financiers in Boston, New York, and Philadelphia on the issue of resumption. How Carey�s influence was spread is an important lesson for political action today, because it is strikingly similar to the lecturing system devised by the Farmers Alliances and the populist movement in the 1870s and 1880s. On pages 54-55, Unger writes:
By 1865 [Carey] had become the chief apologist and unchallenged intellectual spokesman for American heavy industry. His influence was particularly potent among the ironmasters, whose long fight for protection he had come to champion. Carey and Colwell were themselves iron manufacturers, and at the Carey "Vespers"�evenings of talk on economics and politics washed down by good hock�men like ironmaster Joseph Wharton, railroad promoter Thomas A. Scott, manufacturers Robert Patterson and William Sellers, and publisher Henry C. Lea, absorbed the Carey financial philosophy. From Wharton and other Philadelphia iron manufacturers neo-mercantilisrn spread to iron men throughout the country. Daniel Morrell of the Cambria Iron Works and Eber B. Ward, a pioneer western ironmaster, were in close touch with Carey. Morrell, whose iron works at Johnstown were the largest in the country, served two terms in Congress between 1867 and 1871, where he regaled his colleagues with the Carey philosophy. Ward, president of the Iron and Steel Association in the late '60's, was also a disciple and used his great wealth to finance distribution of the Master's monetary writings.
Serving as sounding boards for the Carey coterie were several manufacturers' trade associations. The American Industrial League, launched in 1867, was one of these. The League ostensibly represented all sectors of industry and all sections of the country. Its first president was Peter Cooper, the New York ironmaster and railroad promoter; Ward, a westerner, was a prominent early sponsor.
It is worth stopping here to take special note of Peter Cooper, who was one of the richest, if not the richest, man in USA at this time. Born in 1791, Cooper began his career as an important producer class industrialist in 1821 by buying a glue factory at Kipps Bay in Manhattan. Glue factories often exploded when the glue was heated directly by fire. Cooper solved this problem by inventing a double boiler in which direct fire was used to heat water, and the boiling water was used to heat the glue.

In 1829, Cooper was elected as Councilman of New York, and worked to bring clean water to the city through a long-distance pipe built across the Harlem river. This successful 1835 project was the prototype of New York�s massive water supply system built a few decades later.
Around the same time, Cooper started an business iron in Baltimore. The iron beams Cooper produced were used in the Flatiron Building, the Philadelphia Mint, The Cooper Union, and the US Treasury building.

This was the time when the Baltimore and Ohio Railroad was just getting started, and in 1830 Cooper built and operated the Tom Thumb. This was the first steam locomotive designed and built in America, and it helped convince the company and local citizens that steam locomotives were a practical means of pulling trains. The Baltimore and Ohio Railroad became the first commercially successful railroad in USA.

In 1845, Cooper invented gelatin desert, which we know today as Jell-O.

In 1854, at the age of 65, Peter Cooper began construction of the Cooper Union for the Advancement of Science and Art. He wanted to provide as good an education in engineering and architecture, as The Ecole Polytechnique in Paris, but wanted tuition to be free. He also insisted that Cooper Union welcome progressive thinkers and ideas, and after the Civil War, Clara Barton and Susan B. Anthony had their offices there.

In 1857, Cooper bought control of the North American Telegraph Company, which would eventually become American Telephone and Telegraph, or A T and T. Cooper then played a key role in the design and laying of the first transatlantic cable.

During the Civil War, Peter Cooper was among the first to buy war bonds. More importantly, he supported and promoted the issuance of paper money by the United States Treasury. This broke the stranglehold of the big banks in Boston, New York, and Philadelphia. These currency notes, issued by the national government instead of private banks, became known as Lincoln�s Greenbacks, and made it possible for the Union to pay for winning the war. When these Greenbacks were replaced by the hard money of gold in 1873, farmers and small industrialists around the country suddenly could not get money or credit, and the economy collapsed into a depression. This is the focus of Unger's book.

In 1876, even though he was 85 years old, Peter Cooper, ran for President as the candidate of the new Greenback Party. The policy platform of the insurgent Party called for:
  • a return to flexible fiat paper money,
  • regulation of Interest rates,
  • breaking up industrial and transportation monopolies,
  • protective tariffs to help industrial development,
  • increased government support for the poor and needy,
  • imposing a tax on high incomes,
  • an eight hour work day, and
  • giving women the right to vote.
  • In addition, Cooper revived George Washington's idea that bankers and stock brokers should be excluded from Congress.
Cooper did not win, and millions of people would be forced to suffer through a number of financial crashes and economic depressions. But Cooper and the Greenbackers would be vindicated in the 1930s, when their policies were adopted and implemented by Franklin Roosevelt and the Democratic Party in response to the Great Depression of 1929.

To return to the story of the American Industrial League and how Carey�s ideas were disseminated, Unger notes that there state leagues were created in New York, Ohio, and Michigan, as well as Pennsylvania. In addition, one of the most important USA trade groups, the Iron and Steel Association, became a key Carey organ. Unger writes that Carey was a frequent guest at Association meetings, and the Association�s semi-official publication, The Iron Age, (see picture at the top of this story), featured Carey, Colwell, and Smith, as "special contributors" to Iron Age in the 1860s. In the 1870s, Carey did not write for The Iron Age as often, but �his influence on the paper's editorial policy continued well into the following decade. John Williams, editor of lron Age, was a Carey disciple and treated his mentor's writings as the Bible of the trade and an absolute guide to economic wisdom.�

Monday, June 19, 2017

Summer Sacrilege

Paul Street is rapidly becoming the most interesting contributor to Counterpunch. As the USA stalls out politically over the partisan arguments concerning the legitimacy of the 2016 election, Street is suggesting that reasonable folks rethink the usefulness of all this squabbling. And maybe get back to thinking about the incredibly serious problem of climate change.

So far so good. But the one "blasphemous" thought Street has that I cannot agree with is entitled "Think Capitalogenic, not Anthropogenic Climate Change." Street wants us to believe that the root cause of climate change is, ta da, Capitalism. Well, no. The cause of climate change is too many people burning too many fires. If anything, the "cause" of climate change CAN be ascribed to Industrialization BUT Capitalism and Industrialization are two VERY different things. The confusion between the two pretty well explains why even though socialism can talk a good talk when it comes to environmental problems, it has a dismal track record when it comes to performance.

For example, when I first became concerned about environmental problems, one of the more articulate spokesmen was this guy named Barry Commoner. He had written a book called The Closing Circle. One of his brilliant insights he called the Iron Law of Non-renewable Resources�every barrel of oil (etc.) discovered and extracted only makes the next barrel harder to find and more expensive to recover. Anyone who wants to know why fracking is so expensive need only refer back to this law. But for all his genius, Commoner stumbled because of his willingness to believe that Capitalism and Industrialization were the same thing. He was an avowed Marxist and believed that Socialism would yield far superior results when it came to environmental matters. When the Wall came down and "socialist" industrialization was revealed as the utter catastrophe it was, poor Commoner, for all his genius, was tossed on the ash heap of history. Which is unfortunate, because his Iron Law of Non-renewable Resources is still perfectly valid.

One thing the "left" should keep in mind is that the "capitalism" of stock markets, monetary policy and central banks, and the rest of the activities associated with the movements of money, did NOT cause industrialization in the first place and if the past 40 years are any guide, is the leading cause of de-industrialization. This is MOST unfortunate because for all the rapacious damage that Capitalism has inflicted on industrial activity, it staggers forward in its crippled state because industrialization fills real human needs.

Twelve Blasphemous Thoughts: Some Summer Sacrilege

by PAUL STREET, JUNE 13, 2017

Summer�s here and the time is right for sacrilege in the streets. Here are twelve blasphemous thoughts for the current Russo-phobic season, likely to be a real carbon- and (see below) capital-cooked scorcher.

Wouldn�t That Have Been Russia�s Job?

Forget for now the question of whether the Kremlin intervened to any significant degree against Hillary Clinton in �our great democratic process and elections� last year. I�ve been consistently skeptical about the claim, which continues to be made in the absence of any smoking gun. At the same time, I�ve always harbored the following question in the back of my mind: if the Russian did do what they are accused of, wouldn�t that have been the Russian foreign policy intelligence apparatus doing its very basic job of patriotic national self-defense? Presidential candidate Hillary Clinton and the broader Russo-phobic U.S.-imperial foreign policy establishment she represented seemed Hellbent on provoking a potentially deadly conflict with Russia over Ukraine, Crimea, and/or Syria. Hello?

What Democratic Process and Elections?

The Big Money-run United States is a damn near openly plutocratic oligarchy where the wealthy Few get what they want again and again regardless of majority working class sentiment. There�s a strong body of solid academic research demonstrating what Joe and Jane Six Pack already know about U.S. politics and policy: �money talks, bullshit walks.� You can�t have meaningful �democracy� in a nation where the top tenth of the upper 1 Percent owns more wealth than the bottom 90 percent.

Eighty-six years ago, the great American philosopher John Dewey observed that �politics is the shadow cast on society by big business.� Dewey rightly prophesized that U.S. politics would stay that way for as long as power resided in �business for private profit through private control of banking, land, industry, reinforced by command of the press, press agents, and other means of publicity and propaganda.� Ten years later, the U.S. Supreme Court Justice Louis Brandeis made the very basic and elementary observation that Americans �must make our choice. We may have democracy, or we may have wealth concentrated in the hands of a few, but we can�t have both.� Why all this nonsensical talk about �American democracy�? It�s a childish fantasy.

Uncle Sam Interferes Abroad Like Crazy

Who on Earth is the United States to get enraged about Russia or anyone else�s real or possible interference in other nation�s political processes and elections? Uncle Sam has long and regularly undertaken such interference across the planet. It still does. Just for starters, ask the people of Latin America about U.S. political interference past and present. �We� interfered like crazy in Russian politics during the 1990s and certainly continue to conduct covert political operations there as in countless other sovereign nations. �We� have acted to topple and overthrow dozens of foreign governments since World War Two.

Why shouldn�t other nations try to impact U.S. politics by any means possible? Washington and Wall Street exercise powerful influence on life and politics in other nations whose people never have a say in U.S. policy. The United States� outsized and deadly Superpower role (responsible for many millions of deaths around the world since 1945) means that other nations (Russia is certainly no exception) have a vested interest in the U.S. political process.

Hello Mike Pence?

But let�s ask another unpleasant question. If it were ever shown that the Orange-Tinted Beast treasonously colluded with Russia, do we really want Mike Pence in the White House? Impeachment and removal would put a vicious right-wing Christian white-nationalist zealot (Pence) in the Oval Office and probably speed the passage of the full right wing Republican agenda through Washington. That�s what the Constitution says. It lets Trump use Pence as a kind of deadly insurance policy against removal.

What�s so Great About the Holy Constitution?

This suggests another and truly sacrilegious question: what�s so damn great about the widely fetishized and damn-near deified U.S. Constitution? I won�t elaborate on this as I have recently published a Truthdig report on why we should hold a Constituent Assembly to go beyond that absurdly glorified and hideously anti-democratic charter, which was crafted with expressly classist intent and consequences by the early republic�s propertied masters near the end of the 18th century. Read that essay, titled �Impeach the Constitution,� here. Certainly, it�s absurd to think that a document crafted by wealthy slave-owners, opulent merchants, and other vast property-holders with the explicit purpose of keeping the �wicked� popular majority and its �secret sigh for a more equal distribution� of wealth (James Madison�s lovely phrase) at bay (see my essay if you think I�m lying) can function in meaningful service to popular self-rule in the 21st (or any other) century.

Questions Not Posed to Comey

Speaking of class rule, notice how none of James Comey�s examiners during the nationally televised hearings of the Senate Intelligence Committee last Thursday asked the former FBI Director any of the following questions suggested by Amy Goodman and Dennis Moynihan:
�How far-reaching is the FBI�s surveillance of journalists?�Why did the FBI label nonviolent water protectors at Standing Rock, North Dakota, possible domestic terrorists? What about the FBI�s similar infiltration of Occupy Wall Street and Black Lives Matter?�Regarding the FBI�s illegal COINTELPRO suppression of dissent in the �50s, �60s and �70s, how many of those targeted who are still incarcerated, such as American Indian Movement activist Leonard Peltier, and the many imprisoned former Black Panthers, were imprisoned based on FBI misconduct?�.Finally, where do you think we would be, as a country, if the FBI hadn�t targeted Martin Luther King Jr., with its unrelenting campaign of surveillance, intimidation and harassment, which very likely contributed to the climate of hate that led to his assassination?�
Of course these queries were not posed. Russiagate is following in the footsteps of the Watergate hearings, which focused on Richard Nixon�s cover-up of an amateurish break-in of the headquarters of one of the nation�s leading capitalist parties but ignored the Nixon White House and FBI�s egregious violation of basic civil liberties in the domestic police state war on the New Left and the Black Freedom struggle. The small potatoes Watergate investigation also steered clear of Nixon�s arch-criminal invasion and bombing of Cambodia. See Noam Chomsky

Weapons of Mass Distraction: The Biggest Issue of Our or Any Time is Not a News Story

Here�s a scandalous observation: the news is a constant maddening distraction from the issues and problems that matter most, especially the deepening environmental crisis generated by the profits system. Nothing that Anderson Cooper and the rest of his Trump- and Comey- and Russia-obsessed panels have been jabbering about on CNN these days is remotely significant compared to the chilling (no irony originally intended) fact that atmospheric carbon parts per million (ppm) is now at a shocking 409.21, nearly full 10 points above just four years ago. We are now heading to 500 ppm by 2050. As Steven Newton wrote on Huffington Post almost one year ago:
�That�s only 35 years away. A child born today will barely have moved out of Mom�s basement (at least, judging by some millennials) by the time CO2 reaches 500 ppm. The hundred-point rise between 300 to 400 ppm took about a century; the rise between 400 to 500 ppm will take only about 35 years, and with accelerating rates, the rise to 600 ppm will happen even faster.�
Newton left something out: that is not survivable for the species. As the Australian Earth and paleoclimate scientist, Andrew Gliskon explained seven years ago:
�The consequences of open ended rise in atmospheric CO2 are manifest in the geological record (Frontispiece). The world is in a lag period, when increasing atmospheric energy is expressed by intense hurricanes, increased pressure at mid-latitude high pressure zones and shift of climate zones toward the poles. With ensuing desertification of temperate zones, i.e. southern Europe , southern Australia , southern Africa , the desiccated forests become prey to firestorms�.There is nowhere the 6.5 billion of contemporary humans can go, not even the barren planets into the study of which space agencies have been pouring more funding than governments allocate for environmental mitigation to date. At 460 ppm CO2-equivalent, the climate is tracking close to the upper stability limit of the Antarctic ice sheet, defined at approximately 500 ppm [5,7]. Once transcended, mitigation measures would hardly be able to re-form the cryosphere. According to Joachim Schellnhuber, Director of the Potsdam Climate Impacts Institute and advisor to the German government: �We�re simply talking about the very life support system of this planet.��
�Humans can not argue with the physics and chemistry of the atmosphere. What is needed are urgent measures including: Deep cuts in carbon emissions; Parallel Fast track transformation to non-polluting energy utilities � solar, solar-thermal, wind, tide, geothermal, hot rocks; Global reforestation and re-vegetation campaigns, including application of biochar. The alternative does not bear contemplation.�
As the left philosopher John Sanbonmatsu told me years ago, global warming �is the biggest issue of our or any time.� (Though correspondent Richard Matthews recently reminded me to worry about �the 400 nuke power plants that will melt down as industrial civilization collapses if nuke war doesn�t come first.�).

Please note the deafening silence in the reigning media and politics culture on �the biggest issue of our or any time.� Of all the maddening and insane things about the malignant narcissist Donald Trump, the most dangerous of all and is his climate change-denialist promise to �deregulate energy� � a pledge that amounts to what Noam Chomsky considers a potential �death-knell for the species.�

The corporate media-politics system is deadening the citizenry to the most significant existential threats the species has ever faced. It�s insane.

BDS the USA?

Now that Trump has pulled the world�s top cumulative carbon contributor (USA, USA! being far in the historical lead) out of even the painfully modest and inadequate Paris Climate Accord, I am moved to ask another sacrilegious and not-entirely tongue-in-cheek question: Given U.S. leadership of geocidal climate destruction, the unparalleled and racist U.S. incarceration rate, the mass-murderous U.S. military Empire (which accounts for more than 40 percent of world military spending, eats up more than half of U.S. federal discretionary spending, maintains more than 1000 military installation across more than 100 �sovereign� nations, and has the largest carbon footprint of any institution on Earth), and the extreme inequality and plutocracy prevalent in the U.S�.given all these and other problems (including rampant hedonistic idiocy and indifference), should we now issue a call to the international community for boycotts, divestment, and sanctions (BDS) targeting the United States and its institutions engaged in the destruction of the common good?

Think Capitalogenic, not Anthropogenic Climate Change

Now for some sacrilege on our holy �free market� profits system. We should follow the lead of the brilliant Marxist environmental historian and sociologist Jason Moore and replace the term �anthropogenic global warming� with �capitalogenic global warming.� The currently popular scientific concept of �the Anthropocene� � an era in which Earth systems are now for the first time decisively influenced by human activity � has rich geological validity and holds welcome political relevance in countering the carbon-industrial complex�s denial of humanity�s responsibility for contemporary climate change. Still, we must guard against lapsing into the historically unspecific and class-blind uses of �anthros,� projecting the currently and historically recent age of capital onto the broad 100,000-year swath of human activity on and in nature. As Moore told the left interviewer Sasha Lilley two years ago, �It was not humanity as whole that created �large-scale industry and the massive textile factories of Manchester in the 19th century or Detroit in the last century or Shenzen today. It was capital.� Read those two sentences again and commit them to memory. It is only during a relatively small slice of human history � roughly the last half-millennium - give or take a century or so � that humanity has been socially and institutionally wired from the top down to wreck livable ecology. Moore and other left analysts argue with good reason that it is more appropriate to understand humanity�s Earth-altering assault on livable ecology as �Capitalocene.� After all, it is only during the relatively brief period of history when capitalism has existed and ruled the world system (since 1600 or thereabouts by some academic calculations, earlier and later by others) that human social organization has developed the capacity and inner accumulation- and commodification � and �productivity� � and growth-mad compulsion to transform Earth systems � with profitability and �productivity� dependent upon on the relentless appropriation of �cheap nature� (cheap food, cheap energy, cheap raw materials and cheap human labor power or cheap human nature). Moore maintains that human destruction of livable ecology is best explained by changes that capitalism�s addictive and interrelated pursuits of profit and empire imposed on humanity�s relationships with �the web of life� since �the long sixteenth century� starting in 1450.

One of the great and tragic consequences of contemporary class (capitalist) rule and mass consent manufacture is that most U.S. Americans can now more readily imagine the end of life itself than they can envision the end of the relatively recent and very specific historical phenomenon known as capitalism.

No More Children Until We Fix This

Now for some real blasphemy. I really cannot recommend anyone having children at this juncture. I know that�s a terrible thing to say but we are currently on track for 500 ppm, by 2050 (that�s 33 years away) and 500 ppm is the dissolution of the cryosphere. Antarctica is gone at that level. That�s game over. The �very life support of the system of this planet� is now in epic crisis and the most powerful nation on earth and in history (the U.S.) is also the leading cumulative carbon emission contributor by far and is ruled by a soulless, socio-pathological capitalist class that is shockingly ready to lead the world over the cliff. Talk about �The End of History.� Fukuyama may have been right but not in quite the way he thought. The only thing that can save chances for a decent future worthy of new life is a massive popular upheaval leading to a full conversion from fossil fuels to renewable energy along with giant programs of global re-forestation and re-vegetation.

I see young adults with 1-2-year old babies and toddlers in strollers and car seats and I have three blasphemous thoughts these days: (1) are they aware that those strollers and car seats (posture nightmares) are destroying the structure and development of their child�s backs and necks? (2) did they look at the Earth science before they brought new life into this world? (3) They�d better figure out how to focus their lives on bringing about an eco-socialist revolution if they want their kids to have any shot at a decent life.

Bernie is Who We Said He Was

Let me re-state some especially irritating sacrilege to my �progressive� friends: we �perfectionist� radicals told you so and not just about Obama, but also about Bernie F-35 Sanders. It�s considered rude to gloat about having gotten things right while others didn�t. But I don�t really mean to gloat. I wish instead to instead to suggest that the progressive and liberal left (think The Nation, AlterNet, In These Times and the like) might want to pay more attention to its more serious �hard radical� voices (think Black Agenda Report, Counterpunch, John Pilger) when we issue serious and deeply considered warnings about Democratic Party politicos posing as populist champions of peace, equality, and the common good. I won�t belabor the point about Obama, who Dr. Adolph Reed, Jr. all too easily and accurately identified as a �vacuous to repressive neoliberal� as early as January of 1996. That�s old news though now with the added proof of the Dollar Obomber�s great and highly distasteful post-presidential cash-in (since nothing says �show me the money� like POTUS on your resume).

With Bernie of late, we have gotten yet more evidence that he is in fact the imperialist and sheep-dogging fake-socialist Democratic Party company man that some of us the �hard radical� Left said he was. �Bomber Bernie� (as he was quite properly nicknamed by Vermont peace activists when he jumped on board Bill Clinton�s criminal attack on Serbia in 1999) let his imperialist colors fly regarding Donald Trump�s ridiculous, dog-wagging missile-launch into Syria this last spring. Behold this reflection from Young Turk Michael Tracy last April 11th:
�Sanders� initial statement on the strikes contained nothing that could be reasonably construed as a declaration of opposition�misleadingly, the statement was then excerpted into individual tweets, which falsely gave the impression that Sanders opposed the strikes, when all he had done was signal his �deep concern� as to the potential ramifications of the strikes. That�s a crucial distinction�.�Raising concerns� is not tantamount to an expression of clear, articulable opposition. One can support the Syria strikes, and yet be �concerned� about the second-order effect of them, and the escalated conflict that might result. (See Schumer, Chuck, who rushed to endorse Trump�s attack within hours, only to then follow-up later with expressions of �worry� as to the long-term consequences).�

�Similarly, Sanders expressed �concern� about the potential consequences of Trump�s attack, but not opposition to the act itself. Unlike Schatz, Paul, and Gabbard, he has not rejected on principle the utility of American military force in this circumstance. He merely wants Trump to �explain to the American people� what is to be achieved by the strikes, and to put forward a plan for a �political solution.� Neither of these demands constitutes first-order opposition to the strikes: They are second-order worries. Even Sanders� procedural complaints don�t signify opposition?�?unlike [even] Kaine, he doesn�t declare the strikes �unlawful,� he merely says that �Congress has a responsibility to weigh in,� which virtually no one in that body would disagree with.�

�Then, on Meet the Press this past Sunday, Sanders went further: �We eventually have got to get rid of Assad,� he told Chuck Todd, thereby endorsing the underlying logic of regime change. His only apparent recommendation is that this particular regime change be effectuated multi-laterally, i.e, the US should enlist some Middle Eastern autocrats to help out.� (emphasis added).
How�s was that for Left Resistance, Bernie-style? That�s war socialism for you, as in Kautsky, Karl (who was, however, actually a Marxist and socialist, unlike the New Deal liberal Sanders). One is not a �perfectionist� just because they can�t get behind a politician who claims to a social democrat � even a democratic socialist � but who can�t seem to grasp the elementary moral and practical (fiscal and programmatic) contradiction between (a) calling for progressive policy and (b) backing the giant Pentagon System and the historically unmatched global empire it equips and staffs. If one is a left �perfectionist� because they expect post-Vietnam era progressives to honor the basic anti-imperial wisdom of Dr. Martin Luther King Jr.�s April 4th 1967 �A Time to Break the Silence� speech, then I plead guilty.

It�s true that Bernie recently gave a rousing Chicago speech in which he properly bellowed that �Trump didn�t win the election, the [neoliberal Clinton-Obama � P.S.] Democratic Party lost the election� and that �the current model and the current strategy of the Democratic Party is an absolute failure.� Sanders� criticism of the Democratic party as out-of-touch and elitist resonated with activists at the People�s Summit. Audience members roared their approval when Sanders said that �the Democratic Party needs fundamental change [and to] understand what side it is on. And that cannot be the side of Wall Street, or the fossil fuel industry, or the drug companies.�

I won�t bother to criticize the notion that significant revolutionary change will or even can take place within and through the Democratic Party (it can�t and won�t). That�s an ancient, never-ending progressive fantasy. The main things that struck me were (a) that Sanders� oration indicated no movement left (Dr. King-ward) on U.S. foreign policy (imperialism) and (b) that he repeated the establishment claim that Vladimir Putin has been trying to �destabilize democracy� (listen the speech hyperlinked above from 38:45 to 39:10) in the U.S. What democracy, Bernie?

(There was also this strange and repellent line in Sanders speech: �Even a very conservative Republican president like George W. Bush understood that one of the important functions of a leader in a democratic society is to bring people together, not separate them.� That statement, which must be some kind of reference to Dubya rallying the nation [in nationalistic hatred] after the 9/11 jetliner attacks [the hatred was then exploited for the arch-criminal U.S. invasion of Iraq], is so stupid and reactionary it almost defies belief.)

Something Rotten in the State of Independent Left Media

My final blasphemy: there�s something wrong with what passes for independent �left� media in the U.S. today. In an interview concerning David J. Garrow�s recent epic biography of Barack Obama on Dr. Jared Ball�s show imixwhatilike last week, I told the host the story of my last-minute cancellation at Democracy Now! (DN) in December of 2008. I had been scheduled to discuss my all-too sadly predictive book Barack Obama and the Future of American Politics (Paradigm, June 2008). I was in New York, flown out there with assistance from my publisher to try to warn folks about the fake-progressive and arch-corporatist, Goldman Sachs-staffed, and imperialist Obama presidency to come. The then the call came to my cell phone on the morning of my scheduled interview as I walked out of midtown Manhattan�s Port Authority and started heading down to DN�s headquarters. The spot was off, cancelled. I had trekked out to the Big Apple for�nothing. Amy and Juan had other matters to which to attend. There was no hint of rescheduling or revisiting prior to the Inauguration. A very basic calculation took hold: nice middle-class DN viewers and contributors would have been put off by my all-too subsequently validated evidence- and history-based projections on the Obamanistic betrayals to come.

Ball then related how having �perfectionist� me on to speak candidly and seriously about the limits of candidate Sanders from a left perspective was a factor in his recent dismissal from another leading left media outlet.

DN�s Goodman has given some credence to the dismal dollar-drenched Dems� cynical and distracting Russiagate narrative. So now has The Intercept, founded by the E-Bay and Pay Pal billionaire Pierre Omidyar, who pays the journal�s top and brilliant civil-libertarian writer Glenn Greenwald between $250K and $1 million per year. To his credit, the Rolling Stone�s also brilliant and left-liberal, Trump presidency-predicting writer Matt Taibbi ran away from Omidyar�s �independent journalism� scheme after a brief fling three years ago. But now comes depressing news from the left Canadian writer Joe Emersberger:
�In an op-ed for Rolling Stone, Matt Taibbi called Venezuelan President Nicolas Maduro �the infamous left-wing dictator of Venezuela.� To back up his case, Taibbi cited Julio Borges, president of the National Assembly and a leading opposition figure and Henrique Capriles, the opposition governor of the state of Miranda. Didn�t Taibbi notice a huge contradiction in his piece right there? How does the opposition win major elections in a dictatorship?�It gets worse. Julio Borges, as Taibbi also alludes to in his piece, has been using his position as head to the National Assembly to try to get economic sanctions implemented against Maduro�s government. Borges� predecessor as president of the National Assembly, another opposition leader (Henry Ramos), boasted about having a lot of success scaring away investors � again by using his position as head of the National Assembly which the opposition won control over in December of 2015.�
Good grief. I like Matt Taibbi and have learned a lot about Goldman Sachs and Wall Street�s perversion of America from him, but now even he has lined up with the vicious U.S.-sponsored right-wing assault on Bolivarian Revolution in Venezuela.

Is nothing sacred? more

Sunday, June 11, 2017

Glass-Steagall, now more than ever

For those of us who have watched in absolute horror as the neoliberals have retested their crackpot theories on a country too ignorant to know better, our response is usually some variation on the theme "we know how to do it better because we have already demonstrated that our ideas are pragmatically superior." Paul Roberts is another throwback to the time when industrial "capitalism" created generalized prosperity and rewarded hard work and innovation rather than the scam of the month.

In some ways, it is almost impossible to imagine that something as honest, basic, and necessary as Glass-Steagall needs to be defended. Yet it was repealed, the banking systems blew up, and the taxpayers were put on the hook to save the perpetrators of deregulatory madness. Of course, the original act was put in place to prevent exactly the problems that showed up in the real estate bubble. In a sane world, Glass-Steagall would have been reinstated in 2008. But NOOOOO! The Predators want their bucket shops because it beats the hell out of honest work. And so the USA staggers from one economic crises to another.

Without a New Glass-Steagall America Will Fail


For 66 years the Glass-Steagall act reduced the risks in the banking system. Eight years after the act was repealed, the banking system blew up threatening the international economy. US taxpayers were forced to come up with $750 billion dollars, a sum much larger than the Pentagon�s budget, in order to bail out the banks. This huge sum was insufficient to do the job. The Federal Reserve had to step in and expand its balance sheet by $4 trillion in order to protect the solvency of banks declared �too big to fail.�

The enormous increase in the supply of dollars known as Quantitative Easing inflated financial asset prices instead of the consumer price index. This rise in bond and stock prices is a major cause of the worsening income and wealth distribution in the United States. The economic polarization has undercut the image and reality of the US as a land of opportunity and has introduced political and economic instability into the life of the country.

These are huge costs and for the benefit only of the rich who were already rich.

So, what we can say about the repeal of Glass-Steagall is that it turned a somewhat egalitarian democracy with a large middle class into the One Percent vs. the 99 percent. The repeal resulted in the destruction of the image of the United States as an open prosperous society. The electorate is very much aware of the decline in their economic situation, and this awareness expressed itself in the last presidential election.

Americans know that the nonsense from the US Bureau of Labor Statistics about a 4.3% unemploment rate and an abundance of new jobs is fake news. The BLS gets the low rate of unemployment by not counting the millions of discouraged workers who cannot find employment. If you haven�t looked for a job in the last 4 weeks, you are not considered unemployed. The birth/death model, a purely theoretical construct, accounts for a large percentage of the non-existent new jobs. The jobs are there by assumption. The jobs are not really there. Moreover, the replacement of full time jobs with part time jobs proceeds. Pension and health care benefits that once were a substantial part of the pay package are being terminated.

It makes perfect sense to separate commercial from investment banking. The taxpayer insured deposits of commercial banking should not serve as backing for investment banking�s creation of risky financial instruments, such as subprime and other derivatives. The US government understood that in 1933, but no longer did in 1999. This deterioration in government competence has cost America dearly.

By merging commercial banking with investment banking, the repeal of Glass-Steagall greatly increased the capability of the banking system to create risky financial instruments for which taxpayer backing was available. So, we have the extraordinary situation that the repeal of Glass-Steagall forced the 99 percent to bail out the One Percent.

The repeal of Glass-Steagall has turned the United States into an unstable economic, political, and social system. We have a situation in which millions of Americans who have lost full time employment with benefits to jobs offshoring, whose lower income employment in part time and contract employment leaves them no discretionary income after payment of interest and fees to the financial system (insurance on home and car, health insurance, credit card interest, car payment interest, student loan interest, home mortgage interest, bank charges for insufficient minimum balance, etc.), are on the hook for bailing out financial institutions that make foolish and risky investments.

This is not politically viable unless Congress and the President are going to resign and turn over the governance of America to Wall Street and the Big Banks. A growing cresendo of voices are saying that this has already happened.
So, where is there any democracy when the One Percent can cover their losses at the expense of the 99 Percent, which is what the repeal of Glass-Steagall guarantees?

Not only must Glass-Steagall be restored, but also the large banks must be reduced in size. That any corporation is too big to fail is a contradiction of the justification of capitalism. Capitalism�s justification is that those corporations that misuse resources and make losses go out of business, thus releasing the misused resources to those who can use them profitably.

Capitalism is supposed to benefit society, not be dependent on society to bail it out.

I was present when George Champion, former CEO and Chairman of Chase Manhattan Bank testified before the Senate Banking Committee against national branch banking. Champion said that it would result in the banks becoming too large and that the branches would suck savings out of local communities for investment in traded financial assets. Consequently, local communities would be faced with a dearth of loanable funds, and local businesses would die or not be born from lack of loanable funds.

I covered the story for Business Week. But despite the facts as laid out by the pre-eminent banker of our time, the palms had been greased, and the folly proceeded.

As Assistant Secretary of the US Treasury in the Reagan Administration, I opposed all financial deregulation. Financial deregulation does nothing but open the gates to fraud and sharp dealing. It allows one institution, even one individual, to make a fortune by wrecking the lives of millions.

The American public is not sufficiently sophisticated to understand these matters, but they know when they are hurting. Few in the House and Senate are sufficiently sophisticated to understand these matters, but they do know that to understand them is not conducive to having their palms greased. So how do the elected representatives manage to represent those who vote them into office?

The answer is that they seldom do.

The question before Congress today is whether they will take the country down for the sake of campaign contributions and cushy jobs if they lose their seat, or will they take personal risks in order to save the country.

America cannot survive if excessive risks and financial fraud can be bailed out by taxpayers.

US Representatives Walter Jones and Marcy Kaptur and members of the House and staff on both sides of the aisle, along with former Goldman Sachs executive Nomi Prins and leaders of citizens� groups, have arranged a briefing in the House of Representatives on June 14 about the importance of Glass-Steagall to the economic, political, and social stability of the United States. Let your representative know that you do not want the financial responsibility for the reckless financial practices of the big banks. Let your representative know also that you do not want big banks that dominate the financial arena. Let them know that you want the return of Glass-Steagall.

The effort to reduce the financial risks arising from the commingling of commercial and investment banking by requiring stronger capital positions of financial corporations is futile. The 2007-08 financial crisis required the taxpayers and the printing press and an amount of money that exceeded any realistic capital and liquidity requirements for financial institutions.

If we don�t re-enact Glass-Steagall, the risks taken by financial greed will complete the economic destruction of America.

Congress must serve the people, not Mammon. more

Saturday, June 10, 2017

Dylan's Nobel Lecture in Literature

"The speech is extraordinary and, as one might expect, eloquent. Now that the lecture has been delivered, the Dylan adventure is coming to a close," Sara Danius, the permanent secretary of the Swedish Academy, which awards the prize, wrote in a blog post.

The very idea that the Nobel folks would award their literature prize to a songwriter has been, to put it mildly, controversial. I grew up the child of a Swedish-American mother who spent pretty much all her moral energy in life trying to be respectable. And as the wife of a Lutheran preacher, she had multiple daily opportunities to practice her art. So when I think of an august group like the Nobel Literature committee, I imagine my mother times oh, 100. A group that asks regularly, "What will people think?"

Given the outcome of this little experiment, the Nobel folks will probably retreat to some known safe haven of respectability for a long time to come. Because for the serious fans of respectability, the whole idea has been a fiasco. At first, Dylan didn't even respond to the announcement of a Nobel Prize. The Swedes found this hopelessly rude. The academic writers who would have been thrilled by the honor were quick to point out that the problem was that he wasn't a "real" writer anyway. Finally, Dylan accepted with some polite PR boilerplate but he didn't promise to actually make the awards ceremony. Patti Smith was sent to cover A Hard Rain's Gonna Fall and promptly botched the lyrics. She was immediately forgiven because her rendition was so moving but I am sure the pearl clutchers were left wondering, "what else could go wrong?" Still, Dylan could collect his nearly $1 million prize if he managed to deliver a lecture within 6 months. He just made it. And the speech is remarkable.

Dylan's behavior in all this confusion needs a bit of context. Here's a guy who went to work after only one year of college. He was focused on writing short-form poetry meant to be sung, with the primary singer (himself) hamstrung by a limited range. Many considered his voice laughably unpleasant. He cobbled together a one-man-band kit consisting of a guitar and harmonica and bravely offered his wares to anyone who would listen. His words were so compelling, however, that soon A-list musicians would be covering his work. While all of this is pretty interesting, none of it sounds like the sort of thing that would be found in the CV of a Nobel winner in literature. In fact, I am certain that Dylan suspected it was all a hoax.

So when it came time to write a speech outlining the effects of literature on his work, Dylan looks like he was forced to fall back on material he learned in high school�Moby Dick, the Odyssey, and All Quiet on the Western Front. There are damn few high schools that teach such books anymore and the number of students who actually learn them is probably close to zero. Fortunately, Dylan's father had moved the family to the small mining town of Hibbing Minnesota where he was enrolled in arguably the nicest public high school on the planet. In 1918, the owners of the Hull-Rust-Mahoning mine discovered that downtown Hibbing was sitting on an extremely rich seam of high-grade iron ore. It would have to move. To grease the skids, the town was offered a large cash payment which the mostly immigrant miners decided to spend on a new high school. They would eventually spend over $4 million (an incredible number in the 1920s) on a magnificent structure that still inspires awe. But the high school was to be more than a beautiful building, it was supposed to be a place where even poor children from mining families could get an elite education if they just did their homework. So while Dylan got by on his high school education, what an education it was. (We even know the name of his high school literature teacher, B.J. Rolfzen)

What is noteworthy about Dylan's choices is that in many ways, they are category killers. He says of All Quiet on the Western Front, "After reading it, I never wanted to read another war novel. I never did." This partly explains why the Nobel Committee awarded their prize to a "mere" songwriter�much of what passes for literature these days is irrelevant tripe in the form of academic navel-gazing. Too many categories have been killed long ago. Sometimes I wonder if the same cannot be said for the subject of economics�guys like Veblen and Keynes did some serious category killing in their day. It's hard to point to anyone currently writing who has anything new to add.

The Nobel Prize for Literature is clearly an award Dylan did not need. Even the $million payoff is a rounding error for someone who has sold over 100 million records, and the honor pales next to the dozens of awards for his music. But even though this was probably all just annoying for him, he managed to put together a speech both meaningful and profound. He didn't have to do it but for those of us who appreciate his cultural contributions, I am glad he did.

Sunday, June 4, 2017

The European Left sells out the Greeks

Watching the American Left slide into irrelevancy at best and utter insanity at worst is certainly distressing but it is hardly surprising. The signs of extreme forms of neoliberalism were already abundantly apparent in the Democratic Party in the 1970s when Jimmy Carter, a mostly unknown peanut farmer / nuclear engineer became President of the United States with the help of David Rockefeller and the Council on Foreign Relations / Trilateral Commission. Carter's Vice President, Walter Mondale, was such a drooling stooge of the establishment that in his presidential run in 1984, he managed to lose debates to Reagan�a guy who was already visibly suffering from dementia / Alzheimers. Mondale couldn't really debate Reagan because on the big issues of economics and foreign policy, they agreed. Of course Mondale didn't go quite as far as 1988 corpo-dem candidate Michael Dukakis who declared, "This race isn't about ideology, it's about competence."

Of course, the left actually did have a granola version of what they believed on hand for such an occasion. They may have thrown in the towel on economics, by gum, but they still had the culture wars to win and food to complain about. And in these arenas, it is hard to argue against their success. For me, this was personal. My political roots were in the Farmer-Labor Party. Their goal was to get a better economic arrangement for factory workers and small farmers. In my mind, if you gave up the economic arguments, you pretty much lost the reason for having a political party.

Oddly enough, I pretty much expected the USA Left to sell out their economic principles. Watching the European Left sell out is much harder to understand. When I first encountered Europe's Left it was in 1970. I was pretty much welcomed because of my anti-Vietnam War activism but when the subject changed to economics and social policy, I felt pretty much lost. Everyone I met who called themselves a Lefty was FAR more theoretical than I was or will ever be. The way I saw it, people who had invested so much time and energy developing their complex theoretical positions seemed highly unlikely to abandon them. I returned from that summer of passionate debates in youth hostels determined to get my theoretical ducks in a row.

So I read some Trotsky, a bunch of Gramsci, etc. Basically what I discovered was that even though these authors could inspire something that resembled revolutionary ardor, none seemed to address the issues that so dominated my early political consciousness�interest rates and usury laws, the creation of money, the regulation of "natural" monopolies, etc. So as we can see from today's brilliant take-down of the modern "Left" by one really furious Greek, we have reasons aplenty to be furious over what has happened to that poor little country. Even IF the Left could awaken some old revolutionary ardor, they are theoretically ill-equipped to comment on such issues as IMF structural adjustments in the age of electronic money�and the rest of the horrors visited on the world's poor.

The European Left and the Greek Tragedy


The day Greek workers and employees went on general strike, protesting against a new barrage of so-called �reforms� imposed by the �creditors� in the context of a program that is destroying Greeks and their country, a statement on Greece was issued by the Presidents of the Social Democratic, Green and the �Radical Leftist� Groups in the European Parliament Gianni Pitella, Ska Keller and Gabi Zimmer.

We still hope the Eurodeputies of those three groups will repudiate this unbelievable and shameful statement. For the time being they have not done so. Those three �Leftist� leaders have not found, in their statement, one word of solidarity for the families of tens of thousands of Greeks who have been driven to end lives they could not tolerate any more, as a result of the �reforms� imposed on Greece by the German and other European governments, the EU and the IMF.

They did not find a word of solidarity for the 1.5 million Greeks living in conditions of extreme poverty as a result of the policy endorsed and applied by Frau Merkel, M. Juncker and Mme. Lagarde.

They did not find a word of solidarity for pensioners who now see their pensions being cut by another 30% in the 17th successive pension reduction in seven years, imposed by the creditors and voted by the Greek Parliament in a context of threat and blackmail. On the contrary, they supported the legislation cutting these pensions.

They did not find a word of sympathy for poor Greek cancer patients who will die because they don�t have the money to pay for treatment in a private hospital, at a time when the Greek health system is crumbling under the cuts imposed as a consequence of the reforms imposed by Germany, the EU and the IMF.

But these allegedly Leftist Eurodeputies did find words to urge the Greek government to proceed with continuation of the so-called reforms, imposed through an alliance of German and other European elites with international finance, reforms which have already caused � and keep causing � one of the greatest economic and social catastrophes in the whole history of international capitalism.

One wonders if anybody in Europe needs such a Left and if yes what for.

EU-IMF Reforms in Greece � how to destroy an economy!

It is enough to remember that Greece, as a result of a program supposedly designed to help it, has seen a fall of 27% in its economic output, its GDP. This is more, in relative terms, than the material losses of France or Germany during the First World War. It is more than what we witnessed during the depression of 1929-33 in the USA or the crisis of the Weimar Republic in Germany. Greece is approaching ten years of continuous recession, which is probably an absolute record in history.

The German Finance Minister, Herr Schaeuble, a figure who seems to have escaped from the pages of Marquis de Sade and, unlike M. Juncker or Mme. Lagarde, is unable to hide it, explained these facts at the Davos conference last year by calling the Greek PM, and indirectly all Greeks, �stupid�. He said that his reforms were a great idea, but what was stupid was the way Greeks were implementing them.

I don�t know and I don�t care whether Herr Schaeuble is intelligent or stupid. What I know is that Mr. Shaeuble is a liar.

One day it crossed my mind that, as I am a Greek, most probably I am also stupid. So I decided to ask a German, the head of the �European Task Force� for Greece, Mr. Reichenbach, why there is such a difference in the outcome of the Troika programs for Greece and, for example, Portugal. Mr. Reichenbach responded by saying �We obtained these results in Greece because we subtracted three times more demand from the Greek economy than from the Portuguese economy�.

Indeed. As simple as that. This deep, unprecedented, depression was and is the ineluctable result of the economic measures imposed by the Troika.

A Crime and an Act of War, not a Mistake

The Greek disaster has nothing to do with intelligence or stupidity. Neither was it or is it a mistake because
1) If it was a mistake it would have been corrected long ago.
2) It is difficult to believe that some of the finest economists in the world, very well paid by the IMF, the EU or the German and French governments can make such �mistakes�, that is to say, to destroy a whole European country by accident, as it were, without understanding what they are doing.
3) As we know now from published revelations and internal reviews of the IMF itself, this program was adopted by virtue of a coup d��tat within the IMF itself in 2010, leading to its circumventing of its own rules and statutes. Such a coup d��tat was necessary precisely because the economists were able to predict the outcome, not because they were not able to, and such an outcome was clearly unacceptable even in terms of neoliberal orthodoxy.
For such a coup to happen inside the IMF would be simply impossible without the consent of the German, French and US governments, of the EU Commission and of the Captains of international high finance.

This is why the Greek Reform Program was no mistake but was and remains the premeditated assassination, by economic and political means, of a European nation and its state, for reasons of much wider significance than the significance of the country itself.

If they went so far in Greece and not in the other southern European countries, this was also done on purpose, because if they tried to apply such a program in all southern countries they would run the risk of consolidating an alliance and triggering a revolt of half of Europe. This is why they had to choose just one country as a site for their experiment, using it as a scapegoat for all European ills and a threat or warning, by implication, for all the others. (In this they were successful, if we are to judge from the behavior of Mr. Pitella, who seems not to remember what happened to Italy in the past, as a consequence of its alliance with Germany). All this has been very well explained in past texts of the European Radical Left.

They said in 2010 that they want to help Greece solve its problems. They keep repeating that Greece has received an enormous amount of financial help from its European partners and the IMF. That is true. But what they don�t say is that more than 95% of that money went back to Deutsche Bank, PNB Paribas and other European and US banks.

The Greek bail-out program was truly a bail-out program, but not for Greece. It was a bail-out program for European and US banks, who were able to write off their losses by writing them into the Greek state budget, making the Greek sovereign debt more �unsustainable� and destroying Greece�s productive and social infrastructure.

At the same time Germany and other northern countries made a huge direct, net financial gain out of the destruction of Greece, in terms of the rates paid for their state bonds, not to speak of the profit out of the looting of Greek public and private property and not to speak also of the profit from the postponement, through the destruction of Greece, of the always looming crisis of the European banking sector.

In 2010 they said that Greece had to adopt the bail-out program because it was over-indebted. As a result of those policies the Greek sovereign debt climbed from 115% of the GDP to 185% of GDP and, at the same time, an equally important private debt bubble has been created. Putting aside the theory that the people running the European economy are stupid and don�t know what they are doing, the quite obvious conclusion is again that what the designers of this reform program had in mind is exactly what they achieved. Their objective was to increase Greek sovereign and private debt and then use it, as they have done, to appropriate Greek public and private property and Greek state sovereignty.

This is why the German government persistently refuses serious debate on debt and any serious and definite solution to the problem. It is not so much that Schaeuble does not want Germans �to pay for Greeks�, as Germany and its banks have already made a lot of money, both directly and indirectly, from the destruction of Greece. It is that Berlin wants to keep this weapon in its permanent possession and use it to loot and subjugate Greece.

The IMF also wants to keep it, but it also wants more stability in the whole program and also its gradual transposition from Greece to the whole of Europe. This is why it wants to see some kind of alleviation, but of course not alleviation that will make Greece a sovereign country again. And this is why the �medium-term debt- alleviation measures� currently under negotiation between the IMF and Berlin not only will be insufficient but will also involve neocolonial regulations that will remain in force for many decades.

This situation surrounding Greek debt and the position of the country inside the Eurozone is provoking enormous instability in itself. Only vulture hedge funds want to �invest� in a country when nobody knows what and where it will be tomorrow. 
The term �reforms� is the invention of contemporary Orwells and Goebbels to denote what is clearly a crime and an act of looting and of war, albeit not conventional but political and economic: a �debt war� against the Greek people, Greek democracy and sovereignty.

Now Mr. Schaeuble has imposed on Greece the requirement of obtaining surpluses of 3.5% to 4% per year for many years, something clearly impossible. And he keeps pretending that Greece will be able to pay 100 billion euros, to reimburse its debt, at the beginning of the next decade.

Again it is not a question of intelligence or stupidity. It is a question of lies told not only to Europeans in general, but also to the German citizens themselves, who, sooner or later, will pay the bill for the actions of their leaders, as it has happened twice in the 20th century.

The European policy of the German Right is not to the social advantage of the German popular classes, because the money Germany is making out of Greece, is not fairly distributed to them. But it is also against the national interest of Germany, as it spends all the political capital it has accumulated after 1945 to destroy and subjugate a small European country. Germans can already see the results in the Brexit and in the rise of the French Far Right. But this is only a prelude to the coming crisis.

Now the question arises again. What is the policy of German and the European �Left�? Do they have one? Did they learn something from the collapse of PASOK in Greece, of the Dutch Labour Party or of the French Socialists. Or they are so dependent from Finance, they are ready to commit suicide?

Maybe, instead of accusing European citizens for turning to the Far Right, it would be more useful for leaders of the European Left to look to a mirror?

A coup against European Democracy

Those Greek �reforms�, supported in the above statement by the supposed �Socialists�, �Ecologists� and �Leftists� in the Europarliament, are not a simple, neoliberal experiment, even a very harsh one. Greece has become a terrain for experimentation in �regime change� and even what we might call �country change� in the West. What they are attempting to do is to transform the regime of Western democracy into a mechanism for direct rule by Finance. The external forms of parliamentary democracy are kept intact, but emptied of content.

Every day the Troika is laying down the law in Athens. Its representatives call government officials every day and shout at them for every word or action, even the smallest, which they deem to be running counter to the �reform program�. As for the representatives of the �Greek government�, they cannot even protest, because to do this would be to run the risk of revealing the degree of servitude they have already accepted.

Thousands of pages of legal text (and nobody knows who prepared it, and on whose orders) are introduced to Greece, translated by automatic translation computer programs from English into often incorrect Greek and then voted by a simulacrum of Parliament, under the pressure ultimatums of a maniac German Minister of Finance and IMF economic assassins. All this in opposition to the will of the Greek people, as directly expressed in the referendum of July 5th, 2015 and to the most fundamental provisions of the Greek Constitution and of the Treaties of the EU.

The creditors have usurped even the day-to-day running of the most important business of government by creating a galaxy of �independent authorities�, which are �independent� of the Greek government and the Greek people, but also very much dependent on them.

This is the way things are now run in a member-country of the EU which the Financial Times calls a �Western protectorate�, but others have introduced the perhaps more accurate term of �debt colony� to describe it.

It is not even a straightforward colony. It is a colony subjected to permanent destruction and looting, in the process of being transformed into a variety of slaveeconomy and slave society. More than half of young Greeks do not have a job or the prospect of finding one, in spite of the demolition, in both law and practice, of salaries and of any rights formerly possessed by working persons. Greek parents, and especially mothers, who are probably the most overprotective in all of Europe and until recently loved to keep their children as close as possible to themselves, now have one great dream: to see their offspring emigrate, even if they have to live in Australia, Africa or the Emirates.

Those who emigrate are the best educated and most active, precisely those whom this country needs if it is to survive. Thousands of very well educated (at the expense of the Greek state) doctors and nurses are, for example, now staffing German hospitals, as the Greek health system crumbles under the weight of to the so-called �reforms�.

Once again, there is no mistake. Mr. Strauss-Kahn, at that time head of the IMF, explained to Greek parliamentarians in 2011 that the solution to the problem of unemployment would be for young Greeks to emigrate �temporarily�.

By supporting this kind of �reform�, the statement of the three �Leftists� is endorsing the return of Greece to Medieval social conditions and abolition of democracy in the country where it was invented and named, for the first time in human history.

Is such an outcome in any way useful for German, Italian and other European working people and ordinary citizens?

If Finance succeeds, with the help of European political elites, including so-called Leftists, in imposing such a regime on Greece, it will not try to expand it, sooner or later, first to Southern, then also to Northern Europe?

The Looting of Greece

The statement unfortunately not only supports the economic and social destruction of Greece and the abolition of democracy. It also supports the looting of this country. Its words on free competition coincide with the pressure being placed upon the Greek government to abandon its last resistance to the selling off of all Greek public property, including the selling off of the country�s main electricity producing company, the Public Power Corporation. They speak of competition, but in fact what they want to ensure is that German and not Chinese economic interests should be the owners of the Greek energy company!

Who is really writing such communiques like the one signed by the three Presidents? They themselves do it, their assistants do it or representatives of private interests are doing that?

Now the European Central Bank is excluding Greece from quantitative easing. As a result perfectly healthy and successful Greek enterprises are in the situation of not being able to obtain financing and are in a very disadvantageous position by comparison with their foreign competitors who, with the help of this unfair competition, are conquering the Greek market, or what remains of it.

They have acquired, or they are acquiring, the communications, the airports, albeit only the profitable ones, the tourist industry, the real estate. They are taking over everything, including the private property of Greeks, through exorbitant taxation, imposed by the necessity of serving a unsustainable debt.

You don�t need to be a leftist or a socialist to revolt against the return of relations between European nations to the situation prevailing during the opium wars of British imperialism against China.

To revolt it is enough to have elementary human dignity.

Unfortunately things can get even worse. If these policies continue they will achieve in the long run what Mikis Theodorakis once called �Greece without Greeks�. Many people avoid having children. Young people are emigrating, Greece is in continuous demographic contraction, with its population becoming weaker and weaker in every possible way.

If this process continues Greece will become a country ruled by foreigners, owned by foreigners, inhabited by fewer and fewer old and sick natives. The empire of Finance will have triumphed exactly where the Acropolis still stands as a reminder of the defeated saga of the Athenian democracy, the first, and to the present day not surpassed, effort of human beings to rule themselves.

The IMF and Debt

The three representatives of the �European Left� are also supporting, indirectly but clearly, continuation of the presence of the IMF in Europe in the role of supreme economic governor. I wonder since when exactly such an organization, which, by its activities in the Third and the ex-�Socialist� world, has earned a far worse reputation than, for example, the CIA, and which constitutes nothing other than the collective expression of the will of international finance capital and the United States of America, is the right tool to govern the economy of any European state.

Our three �Leftists� are also supporting some vague �medium- term Greek alleviation scheme� now being discussed between Germany and the IMF. Do they know what it is all about? Because the previous restructuring, known as PSI, turned out to be the first debt restructuring in living memory to go so clearly against the interests of the debtor.

In the context of this PSI they first obliged Greek hospitals, pension funds, universities to write off their state bonds, thus losing the greater part of their property. They then embarked on radical transformation of the legal terms of the Greek sovereign debt, to the disadvantage of Greece, by changing it from debt to private entities to debt to states, introducing British colonial law and the jurisdiction of foreign courts over questions related to debt disputes.

Before the 2011 PSI debt restructuring the Greek debt was denominated in the Greek national currency, so it goes without saying that it would be converted automatically into a Greek currency if Greece had decided to leave the Euro. After 2011 it was denominated in euros. Previously the Greek Parliament and Greek courts were responsible for it. Now, British colonial law is applicable and foreign courts have the jurisdiction to judge the relevant conflicts.

Again, this debt restructuring did not lead to diminution but to increase in the Greek debt as a percentage of GDP.

The creditors introduced, and had the Greek Parliament adopt, measures as suicidal as this by taking advantage of the fact that the two main Greek parties of this time, PASOK and New Democracy were, as has now been amply proved, on the payroll of the German company Siemens and many other firms. Even if they wanted to, Greek politicians could not do anything to resist foreign pressure, because they would immediately run the risk of their bribery being disclosed and prosecuted.

Why did these �Leftist� Europarliamentarians not ask for an international commission to be established to investigate the Greek question as a whole, the origin of the Greek debt, the Goldman Sachs swaps, to ask Mr. Draghi, a veteran of this bank to explain what h knows about all that, the role of the German government and of the Brussels Commission, the connections between business leaders in France and in Germany and the corrupted Greek political class, and many other things that could help European citizens understand what is happening.

Now the empire of Finance has been able to transform its own crisis into an intra-European debt war. European citizens would most probably unite in opposition if they became conscious of what Finance has done and how it is using intra-European antagonisms.

Do these �Leftist� parties have a position on the crux of the matter, the Greek Debt and the neocolonial agreements imposed by Berlin, the EU, the ECB and the IMF on Greece? Or do they not?

The solution to the Greek question

To summarize our own position:

There are three and only three things that all decent economists in the world would agree on:

� the Greek �reform� program was and continue to be a disaster
� the Greek debt is unsustainable
� the Earth is flat and it is rotating around the Sun

You don�t need to be a leftist, a socialist or a communist to understand this. It is enough to read the newspaper of German industrialists, Handelsblatt or the studies of German economic institutes. Careful reading of both would be very useful to anybody wishing to make a government career in Berlin.

The nature of the policies applied in Greece is objective, it does not change because the Greek PM calls himself a �radical Leftist�.

Tsipras will, after all, be judged for the way he prepared, or rather did not prepare, the Greek people to resist the forces attacking them. But whatever Greek governments say or do, it does not alter the responsibilities of the attacking forces: Berlin, Brussels and the IMF.

Anyone who wants to propose a solution to the Greek problem must, first of all, answer these questions. And that includes Grexit supporters, because these problems are the problems which are literally killing Greeks and Greece and they will not disappear if tomorrow Greece leaves the Euro and/or the EU.

For various reasons a great deal of confusion prevails in the discussions about Greece, along with great oversimplification, as the Greek problem is presented mainly or solely as a problem of belonging or not belonging to the eurozone. While very important per se, this discussion obscures the fact that any progressive, democratic solution to the Greek crisis, any solution with the potential to save Greece and curb the offensive of the new European Financial Totalitarianism, has to include three elements irrespective of the currency question:
� the need to revoke the agreements between Greece and the creditors
� the need for very serious alleviation of the Greek sovereign debt or, at minimum, a moratorium on payments until the country makes a firm return to the road of development
� a Marshall Plan to repair the damage done and open new prospects for this country.
These are not socialist or communist policies. They are the policies the United States of America introduced after World War II as a means of dealing with the German question.

They are policies that should be integrated into a serious political program for the whole of the continent (something which the European Left now lacks) and linked to the effort to build a European political subject to complement the national political subjects and struggle for that program. Like it or not, objectively Europeans are living more and more in a single state. But our political and public life is, subjectively, confined to national contexts that are becoming more and more irrelevant. There is an urgent need for this gap to be overcome. A federation of European national-popular leftist movements, able really to act as a European political subject, is more necessary now than at the time of the Zimmerwald conference. more

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