Land of Idols: Lies, Wars, Empire

"The goal has been the 'Third Worldization' of the United States:

• an increasingly underemployed, lower-wage work-force;
• a small but growing moneyed class that pays almost no taxes;
• the privatization or elimination of human services;
• the elimination of public education for low-income people;
• the easing of restrictions against child labor;
• the exporting of industries and jobs to low-wage, free-trade countries;
• the breaking of labor unions;
• and the elimination of occupational safety and environmental controls and regulations."

Michael Parenti, Land of Idols, 1993

Bill Black on the Rule of Predatory Finance Over Argentina

As you know I think that this ruling by the Supreme Court, written by Antonin Scalia, which essentially puts the Argentine people and the other creditors at the mercy of the demands of a few vulture funds, may prove to be a watershed, or perhaps trigger, event in the excesses of crony capitalism and the Empire of the Dollar. 

 

The blowback from this action on foreign assets held in the US, and on US corporate assets held overseas, may be profound.  

 

The BRICs will be having their annual summit in mid-July.   And the US has certainly given them something to think about,  set at least a part of their agenda,  and given them a common cause of concerns, over the past four or five months.   I see no reason for optimism that a ruling elite, grown in-bred and self-absorbed in its hubris, will do anything different in its self-serving policies.

 

If there ever was a time for enlightened leadership to rise to the occasion it is now.  And in looking over the current crop of puffed-up princes and predators, we can see none.

 

Inequality Matters: Why Nations Fail

"To Egyptians, the things that have held them back include an ineffective and corrupt state and a society where they cannot use their talent, ambition, ingenuity, and what education they can get. But they also recognize that the roots of these problems are political.

All the economic impediments they face stem from the way political power in Egypt is exercised and monopolized by a narrow elite. This, they understand, is the first thing that has to change.

Yet, in believing this, the protestors of Tahrir Square have sharply diverged from the conventional wisdom on this topic. When they reason about why a country such as Egypt is poor, most academics and commentators emphasize completely different factors.

Some stress that Egypt’s poverty is determined primarily by its geography, by the fact that the country is mostly a desert and lacks adequate rainfall, and that its soils and climate do not allow productive agriculture. Others instead point to cultural attributes of Egyptians that are supposedly inimical to economic development and prosperity. Egyptians, they argue, lack the same sort of work ethic and cultural traits that have allowed others to prosper, and instead have accepted Islamic beliefs that are inconsistent with economic success.

A third approach, the one dominant among economists and policy pundits, is based on the notion that the rulers of Egypt simply don’t know what is needed to make their country prosperous, and have followed incorrect policies and strategies in the past. If these rulers would only get the right advice from the right advisers, the thinking goes, prosperity would follow. To these academics and pundits, the fact that Egypt has been ruled by narrow elites feathering their nests at the expense of society seems irrelevant to understanding the country’s economic problems.

In this book we’ll argue that the Egyptians in Tahrir Square, not most academics and commentators, have the right idea. In fact, Egypt is poor precisely because it has been ruled by a narrow elite that have organized society for their own benefit at the expense of the vast mass of people. Political power has been narrowly concentrated, and has been used to create great wealth for those who possess it, such as the $70 billion fortune apparently accumulated by ex-president Mubarak. The losers have been the Egyptian people, as they only too well understand.

We’ll show that this interpretation of Egyptian poverty, the people’s interpretation, turns out to provide a general explanation for why poor countries are poor. Whether it is North Korea, Sierra Leone, or Zimbabwe, we’ll show that poor countries are poor for the same reason that Egypt is poor.

Countries such as Great Britain and the United States became rich because their citizens overthrew the elites who controlled power and created a society where political rights were much more broadly distributed, where the government was accountable and responsive to citizens, and where the great mass of people could take advantage of economic opportunities.

We’ll show that to understand why there is such inequality in the world today we have to delve into the past and study the historical dynamics of societies. We’ll see that the reason that Britain is richer than Egypt is because in 1688, Britain (or England, to be exact) had a revolution that transformed the politics and thus the economics of the nation. People fought for and won more political rights, and they used them to expand their economic opportunities. The result was a fundamentally different political and economic trajectory, culminating in the Industrial Revolution.

The Industrial Revolution and the technologies it unleashed didn’t spread to Egypt, as that country was under the control of the Ottoman Empire, which treated Egypt in rather the same way as the Mubarak family later did. Ottoman rule in Egypt was overthrown by Napoleon Bonaparte in 1798, but the country then fell under the control of British colonialism, which had as little interest as the Ottomans in promoting Egypt’s prosperity.

Though the Egyptians shook off the Ottoman and British empires and, in 1952, overthrew their monarchy, these were not revolutions like that of 1688 in England, and rather than fundamentally transforming politics in Egypt, they brought to power another elite as disinterested in achieving prosperity for ordinary Egyptians as the Ottoman and British had been. In consequence, the basic structure of society did not change, and Egypt stayed poor."

Daron Acemoglu and James Robinson, Why Nations Fail

The Banks must be restrained, and the financial system reformed, with balance restored to the economy, before there can be any sustained recovery.

Excerpts of Alleged Letter from Troika to Greece

This appeared today on the web at Zerohedge.  It is a letter purported to be from the Troika to Greece, with the appearance of a set of demands that was leaked by an anonymous source.

If it is legitimate, and that is a big 'if' given the sources, then it is a bit of an eye-opener, perhaps not so much in the terms themselves, but in the level of micro-managing the Troika wishes to impose on a purportedly sovereign people.

As you may recall the Troika are the European Commission (EC), the International Monetary Fund (IMF), and the European Central Bank (ECB).

From what I have read, the 'bailout' is really a bailout of the debt which is owed to the banks of France and Germany among others, incurred by corrupt administrations heavy with insiders and influenced by banks such as Goldman Sachs, much in the manner of Iceland, Ireland, and other peripheral countries.

The track record of the IMF in such proposed 'reforms' is a national devastation.

I do not believe at all that these measures are stable, practical, or given in good faith as a solution. In other words, they will be back for more. The capitulation on such draconian interference is the path to a parasitic existence, in the manner of the most servile type of colonialism.

Greece might well consider a default on the existing external debts, the issuance of a national currency, reforming the financial system, the imposition of immediate capital controls, democratic safeguards against the rise of extreme domestic elements, and self-sufficiency at any and all costs in the spirit of a war time economy of a nation under siege.

Area: Flexibility of labour arrangements

Measure: Increase flexibility of work schedules:

Increase the number of maximum workdays to 6 days per week for all sectors.

Set the minimum daily rest to 11 hours.

Delink the working hours of employees from the opening hours of the establishment.

Eliminate restrictions on minimum/maximum time between morning and afternoon shifts.

Austerity During a Recession Is Economically Insane - A Warning From History

"The German’s and the ECB are not demanding any sacrifices from European elites. They explicitly target the working class and government workers’ wages and oppose any increased taxation of the wealthy. The Berlin Consensus is a road map to ever greater inequality."

Bill Black


"Thank God the US opted for bailouts and not handouts...People in economic distress should suck it up and cope."

Charlie Munger

I will not mince words with this. I see a world on the brink of war, for all the same old reasons. It will take many forms political and financial, at first civil and then regional. If this does not resolve the situation then the conflict will expand and continue by other means.

The elites' price for peace will be a world without borders, or at most three or four spheres of influence, under their direct control and planning.

Appeasement will only serve to inflame their lust for power and dreams of domination.  They see themselves as moving from victory to victory. The tide of reform is being turned aside by special interests, compromise is viewed as ideological impurity, and legitimate protests are met by not by recognition and justice but by indifference and repression. This will not stand.

"The technetronic era involves the gradual appearance of a more controlled society. Such a society would be dominated by an elite, unrestrained by traditional values. Soon it will be possible to assert almost continuous surveillance over every citizen and maintain up-to-date complete files containing even the most personal information about the citizen. These files will be subject to instantaneous retrieval by the authorities...

In the technotronic society the trend would seem to be towards the aggregation of the individual support of millions of uncoordinated citizens, easily within the reach of magnetic and attractive personalities effectively exploiting the latest communications techniques to manipulate emotions and control reason."

Zbigniew Brzezinski, Between Two Ages: America's Role in the Technotronic Era, 1970

In fairness to Brzezinski, the above quotes in context seem more a forecast, and a threat to be feared rather than a prescription to be followed. 

But others do not fear it, and the threats are real, and with much precedent in history.  They have been viewed favorably by any number of groups where the elite get together to discuss their plans and goals.  Their contempt and distrust of the individual, inferior beings unlike themselves at least in their own minds, is perennial.   The infamous Project for the New American Century that was a center for neo-conservative thinking is just one such example.

Stimulus without significant economic reform leads only to bubbles and more of the same conditions that led to the financial crisis in the first place. The answer is growth, but growth that is real and more broadly based.

The greatest impediment to this solution is greed and financial corruption of the financial predator class that has benefited the most from the distortions that they promoted in the last three decades.

Austerity *might* have a chance if it was accompanied by significant financial reform that did not rely on highly regressive wage reductions to bridge the economic gaps. But it is not likely.   

Without reform, austerity is economic tyranny, a form of neo-colonialism that has been promoted until recently by the developed nations on the Third World, which itself is beginning to rebel against the viceroys and puppets of the powerful.   But now it has come home to feed on its own, and the faithful middle class stands aghast, in quiet disbelief.

The propagandists like to frame the question as 'who will pay,' rather than 'how do we stop the stealing, corruption and waste, and resume healthy growth in the real economy?  So as they often do, they entice the professional and middle class to back their plans from fear, until it is too late.

"...propaganda is entirely founded on the exploitation of the weakness of the human heart. It does not address itself to the strong or the heroic. It tells the rich they are going to lose their money. It tells the worker this is a rich man's war. It tells the intellectual and the artist that all he cherished is being destroyed by war. It tells the lover of good things that soon he would have none of them. It says to the Christian believer: 'How can you accept this massacre?' It tells the adventurer - 'a man like you should profit by the misfortunes of your country.'"

Edouard Daladier, 29 January 1940, radio address to the French people

Will the people never learn? Will their leaders set Europe on fire again before they come to their senses and have to be put down?  And how soon afterwards will the UK and the US have their own moments of crisis?

Although we have been fortunately insulated from this in the developed nations in this generation, it is the oldest theme of history, and one to which we seem determined to return.  And despite the delusions of many, there are never any real winners, only heartache and destruction.

"...Overall, European nations showed significant budgetary restraints in the decade leading up to the Great Recession. Most of the periphery did so – Greece is a special case. The Cato Institute, for example, praised Iceland and Ireland as models of restraint. Spain also received praise. The claim that the periphery was “profligate” through large budgetary deficits in the run up to the crisis reverses the facts.

Austerity during a serious recession is economically insane. It is a pro-cyclical policy that makes the recession more severe. A more severe recession is a mass destroyer of wealth and quality of life. It is pure waste.

It is the primary cause of dramatic increases in public deficits and debt. Unemployment reduces tax payments and increases demands for public spending. One cannot decide to end a budgetary deficit during a recession by adopting austerity. Austerity (some combination of cutting government spending and increasing taxes) reduces private and public sector demand.

This means that imposing austerity is likely to deepen the recession and can make the national deficit and debt larger. It is analogous to the medical insanity of bleeding patients to cure them of disease – and then bleeding them more because the prior bleeding make them sicker.

Europeans of the periphery are having austerity imposed on them by German demands – and they are subjected to repeated insults from German and Dutch leaders for failing to balance their budgets because the austerity imposed by Germany deepened their recession and slashed their tax revenues.

Germany’s demands for austerity have thrown the euro zone back into recession – but it has forced the periphery into Great Depression levels of unemployment. German-imposed austerity, the Berlin Consensus, is even more draconian than the Washington Consensus in Latin America. Germany and the ECB are open that they are not simply demanding austerity and massive privatization – they are also demanding dramatic reductions in working class wages throughout the EU.

The German’s and the ECB are not demanding any sacrifices from European elites. They explicitly target the working class and government workers’ wages and oppose any increased taxation of the wealthy. The Berlin Consensus is a road map to ever greater inequality..."

Read the rest here.

The Berlin Consensus is a road map to civil unrest and war.  It is a war which the powerful few think that they can win, and in their arrogant pride they may be willing to attempt it --- again.  The same industrial and financial interest intend to try and tame the madness once again to serve their self-serving ends, no matter which way in which they try to rationalize it.

But they forget that the madness serves none, only itself.

May God have mercy on us.