America’s Debt Dependence Makes It An Easy Economic Target

Posted on September 13, 2018 by Reid Mukai

By Brandon Smith

There is a classic denial tactic that many people use when confronted with negative facts about a subject they have a personal attachment to; I would call it “deferral denial” — or a psychological postponing of reality.

For example, point out the fundamentals on the U.S. economy such as the fact that unemployment is not below 4% as official numbers suggest, but actually closer to 20% when you factor in U-6 measurements including the record 96 million people not counted because they have run out of unemployment benefits. Or point out that true consumer inflation in the U.S. is not around 3% as the Federal Reserve and the Bureau of Labor Statistics claims, but closer to 10% according to the way CPI used to be calculated before the government started rigging the numbers. For a large part of the public including a lot of economic analysts, there is perhaps a momentary acceptance of the danger, but then an immediate deferral — “Well, maybe things will get worse down the road, 10 or 20 years from now, but it’s not that bad today…”

This is cognitive dissonance at its finest. The economy is in steep decline now, but the mind in denial says “it could be worse,” and this is how you get entire populations caught completely off guard by a financial crash. They could have easily seen the signs, but they desperately wanted to believe that all bad things happen in some illusory future, not today.

There is also another denial tactic I see often in the world of politics and economics, which is what I call “paying it backward.” This is what people do when they have a biased attachment to a person or institution and refuse to see the terrible implications of their actions. For example, when we point out that someone like Donald Trump makes destructive decisions, such as the continued support of Israel and Saudi Arabia in Syria and Yemen, or the reinstatement of funding for the White Helmets in Syria who are tied to ISIS, Trump supporters will often say “Well what about Obama?”

This is a game of shifting accountability. Is one person worse than the other? Possibly. I say give it time and make notes. However, the negative decisions of one politician we don’t like do not diminish the negative decisions of another politician we might like. They should BOTH be held accountable.

The same goes for countries and economies. When an analyst points out that U.S. debt is at historic highs and is utterly unsustainable, people in denial will say “but what about China or Europe?” One does not negate the other and, of course, there are differences that make the situation in the U.S. far more tenuous.

Primarily I am talking about America’s endless dependency on the world reserve status of the U.S. dollar and, beyond that, the steady expansion of debt at low interest rates for the past decade.

The Federal Reserve, once the No. 1 buyer of U.S. debt, has essentially declared it is cutting off support and has begun dumping assets from its balance sheet. The only assets the Fed seems to be maintaining are Mortgage Backed Securities (MBS). All others are being cut, including Treasuries. The American economy is inexorably attached to the idea of our Treasury debt as a safe investment, with our national debt spiking above $21 trillion and many trillions more owed to entitlement programs depending on how you calculate the expenditures, there is a vital need for steady foreign investment in U.S. debt.

But what happens when investment in U.S. debt becomes politically unsavory? Consider the current escalation of the trade war; Many pro-dollar talking heads and cheerleaders have argued in the past that no nation has the guts to dump dollar denominated assets and risk the wrath of American “economic might.” But, already we have seen Russia dump half its U.S. Treasury holdings in a single month and the trade war has only just begun.

Is Russia’s action a sign of things to come? Will other nations like China follow the same strategy? We will have to wait and see, but I believe this is the inevitable outcome of the trade war if it drags on for the rest of the year.

America’s dependent nature, feeding off of foreign investment to support its debts, is a disaster waiting to happen. The concept of economic “recovery” is laughable until this issue is addressed. And, entering into a trade war while ignoring this blaring weakness is foolish, to say the least.

Beyond the issue of government (taxpayer) debt, let’s not forget about American corporations and consumers. U.S. corporate debt as a percentage of gross domestic product is at historic highs not seen since the housing bubble of 2008 or the dot-com bubble of 2001. There is a distinct difference, though, that makes today’s bubble far more insidious. After years of near-zero interest rates, corporations have become addicted to cheap debt. So much so that they have been borrowing nonstop to support their own stock prices through stock buyback manipulation. But now the Fed is raising interest rates and has committed to expanded hikes in the future.

So, what will corporations do as the cheap debt dries up? Thus far, they are spending the majority of their Trump tax cut still trying to artificially prop up stock process. When this money runs out (and I believe it will much faster than the mainstream thinks), the existing debt of these companies will cost much more to finance, and future borrowing at the same pace will become impossible. This is a threat that is developing now, not in some far-off future.

Eventually, corporations will have to make deep spending cuts rather than borrow. This means mass layoffs, store closures and potential cuts to pensions. And, of course, no more stock buybacks, meaning a market crash will ensue.

What about the U.S. consumer? U.S. consumer debt is set to reach new highs by the end of the year; around $4 trillion by official estimates. While discussion continues about the alleged “labor shortage” in the U.S., one thing is clear — the jobs that do exist do NOT pay wages that keep up with true inflation. When we see spikes in retail sales in the U.S. and this is applauded as economy recovery, very few mainstream analysts point out that higher retail sales are merely tracking higher inflation.

That is to say, consumers are spending more money on less stuff. Again, this is unsustainable, which is why consumer debt is exploding. Dependency on credit cards and loans is being used by the public to offset much higher costs. But as the Fed raises interest rates, this too will end. Higher Fed rates translate to higher credit rates as well as higher mortgage rates (indirectly). With higher interest payments comes a large drop in overall spending.

As you can see, there are at least two forces at work here that will end all talk of U.S. recovery and which undermine any notion of economic strength — the first is the trade war, which I believe is a massive distraction designed to draw attention away from the actions of international banks and central banks. The second is the Federal Reserve, which has addicted the country to cheap fiat and is now flushing the drugs. We cannot delude ourselves into thinking that this trend will remain slow or that it will not develop into a crash in the near term. We also cannot simply deflect to other countries like China or those in Europe as if their problems are somehow worse and therefore ours are not a concern.

The fact that the health of the US economy is inexorably reliant on the continued foreign demand for the dollar and Treasury debt means any reduction of the dollar’s world reserve status or petro-status, or any decline in treasury purchases, will directly affect the carefully crafted image of America as a stable system. Without a sudden and aggressive resurgence of domestic production and innovation America has no safety net in the event that our debt addiction is used against us.

The argument that the central bank can jump in at any time to monetize that debt and reduce the danger is also delusional. This assumes first and foremost that the Fed WANTS to reduce the danger. I believe they want the danger to increase, not decrease. Debt monetization also has the added bonus of causing even more inflation as foreign investors dump their dollar denominated assets back into the US. Monetization is a poison, not a cure.

The crisis is here, now. Seeing and accepting it allows us to prepare accordingly. Denying it as inconsequential sets people up as victims of their own bias and ignorance.

National (In)Security In the United States of Inequality

Posted on September 12, 2018 by Reid Mukai

By Rajan Menon

Source: Unz Review

So effectively has the Beltway establishment captured the concept of national security that, for most of us, it automatically conjures up images of terrorist groups, cyber warriors, or “rogue states.” To ward off such foes, the United States maintains a historically unprecedented constellation of military bases abroad and, since 9/11, has waged wars in Afghanistan, Iraq, Syria, Libya, and elsewhere that have gobbled up nearly $4.8 trillion. The 2018 Pentagon budget already totals $647 billion — four times what China, second in global military spending, shells out and more than the next 12 countries combined, seven of them American allies. For good measure, Donald Trump has added an additional $200 billion to projected defense expenditures through 2019.

Yet to hear the hawks tell it, the United States has never been less secure. So much for bang for the buck.

For millions of Americans, however, the greatest threat to their day-to-day security isn’t terrorism or North Korea, Iran, Russia, or China. It’s internal — and economic. That’s particularly true for the 12.7% of Americans (43.1 million of them) classified as poor by the government’s criteria: an income below $12,140 for a one-person household, $16,460 for a family of two, and so on… until you get to the princely sum of $42,380 for a family of eight.

Savings aren’t much help either: a third of Americans have no savings at all and another third have less than $1,000 in the bank. Little wonder that families struggling to cover the cost of food alone increased from 11% (36 million) in 2007 to 14% (48 million) in 2014.

The Working Poor

Unemployment can certainly contribute to being poor, but millions of Americans endure poverty when they have full-time jobs or even hold down more than one job. The latest figures from the Bureau of Labor Statistics show that there are 8.6 million“working poor,” defined by the government as people who live below the poverty line despite being employed at least 27 weeks a year. Their economic insecurity doesn’t register in our society, partly because working and being poor don’t seem to go together in the minds of many Americans — and unemployment has fallen reasonably steadily. After approaching 10% in 2009, it’s now at only 4%.

Help from the government? Bill Clinton’s 1996 welfare “reform” program , concocted in partnership with congressional Republicans, imposed time limits on government assistance, while tightening eligibility criteria for it. So, as Kathryn Edin and Luke Shaefer show in their disturbing book, $2.00 a Day: Living on Almost Nothing in America, many who desperately need help don’t even bother to apply. And things will only get worse in the age of Trump. His 2019 budget includes deep cuts in a raftof anti-poverty programs.

Anyone seeking a visceral sense of the hardships such Americans endure should read Barbara Ehrenreich’s 2001 book Nickel and Dimed: On (Not) Getting By in America. It’s a gripping account of what she learned when, posing as a “homemaker” with no special skills, she worked for two years in various low-wage jobs, relying solely on her earnings to support herself. The book brims with stories about people who had jobs but, out of necessity, slept in rent-by-the-week fleabag motels, flophouses, or even in their cars, subsisting on vending machine snacks for lunch, hot dogs and instant noodles for dinner , and forgoing basic dental care or health checkups. Those who managed to get permanent housing would choose poor, low-rent neighborhoods close to work because they often couldn’t afford a car. To maintain even such a barebones lifestyle, many worked more than one job.

Though politicians prattle on about how times have changed for the better, Ehrenreich’s book still provides a remarkably accurate picture of America’s working poor. Over the past decade the proportion of people who exhausted their monthly paychecks just to pay for life’s essentials actually increased from 31% to 38%. In 2013, 71% of the families that had children and used food pantries run by Feeding America, the largest private organization helping the hungry, included at least one person who had worked during the previous year. And in America’s big cities, chiefly because of a widening gap between rent and wages, thousands of working poor remain homeless, sleeping in shelters, on the streets, or in their vehicles, sometimes along with their families. In New York City, no outlier when it comes to homelessness among the working poor, in a third of the families with children that use homeless shelters at least one adult held a job.

The Wages of Poverty

The working poor cluster in certain occupations. They are salespeople in retail stores, servers or preparers of fast food, custodial staff, hotel workers, and caregivers for children or the elderly. Many make less than $10 an hour and lack any leverage, union or otherwise, to press for raises. In fact, the percentage of unionized workers in such jobs remains in the single digits — and in retail and food preparation, it’s under 4.5%. That’s hardly surprising, given that private sector union membership has fallen by 50% since 1983 to only 6.7% of the workforce.

Low-wage employers like it that way and — Walmart being the poster child for this — work diligently to make it ever harder for employees to join unions. As a result, they rarely find themselves under any real pressure to increase wages, which, adjusted for inflation, have stood still or even decreased since the late 1970s. When employment is “at-will,” workers may be fired or the terms of their work amended on the whim of a company and without the slightest explanation. Walmart announced this year that it would hike its hourly wage to $11 and that’s welcome news. But this had nothing to do with collective bargaining; it was a response to the drop in the unemployment rate, cash flows from the Trump tax cut for corporations (which saved Walmart as much as $2 billion), an increase in minimum wages in a number of states, and pay increases by an arch competitor, Target. It was also accompanied by the shutdown of 63 of Walmart’s Sam’s Club stores, which meant layoffs for 10,000 workers. In short, the balance of power almost always favors the employer, seldom the employee.

As a result, though the United States has a per-capita income of $59,500 and is among the wealthiest countries in the world, 12.7% of Americans (that’s 43.1 million people), officially are impoverished. And that’s generally considered a significant undercount. The Census Bureau establishes the poverty rate by figuring out an annual no-frills family food budget, multiplying it by three, adjusting it for household size, and pegging it to the Consumer Price Index. That, many economists believe, is a woefully inadequate way of estimating poverty. Food prices haven’t risen dramatically over the past 20 years, but the cost of other necessities like medical care (especially if you lack insurance) and housing have: 10.5% and 11.8% respectively between 2013 and 2017 compared to an only 5.5% increase for food.

Include housing and medical expenses in the equation and you get the Supplementary Poverty Measure (SPM), published by the Census Bureau since 2011. It reveals that a larger number of Americans are poor: 14% or 45 million in 2016.

Dismal Data

For a fuller picture of American (in)security, however, it’s necessary to delve deeper into the relevant data, starting with hourly wages, which are the way more than 58%of adult workers are paid. The good news: only 1.8 million, or 2.3% of them, subsist at or below minimum wage. The not-so-good news: one-third of all workers earn less than $12 an hour and 42% earn less than $15. That’s $24,960 and $31,200 a year. Imagine raising a family on such incomes, figuring in the cost of food, rent, childcare, car payments (since a car is often a necessity simply to get to a job in a country with inadequate public transportation), and medical costs.

The problem facing the working poor isn’t just low wages, but the widening gap between wages and rising prices. The government has increased the hourly federal minimum wage more than 20 times since it was set at 25 cents under the 1938 Fair Labor Standards Act. Between 2007 and 2009 it rose to $7.25, but over the past decade that sum lost nearly 10% of its purchasing power to inflation, which means that, in 2018, someone would have to work 41 additional days to make the equivalent of the 2009 minimum wage.

Workers in the lowest 20% have lost the most ground, their inflation-adjusted wages falling by nearly 1% between 1979 and 2016, compared to a 24.7% increase for the top 20%. This can’t be explained by lackluster productivity since, between 1985 and 2015, it outstripped pay raises, often substantially, in every economic sector except mining.

Yes, states can mandate higher minimum wages and 29 have, but 21 have not, leaving many low-wage workers struggling to cover the costs of two essentials in particular: health care and housing.

Even when it comes to jobs that offer health insurance, employers have been shifting ever more of its cost onto their workers through higher deductibles and out-of-pocket expenses, as well as by requiring them to cover more of the premiums. The percentage of workers who paid at least 10% of their earnings to cover such costs — not counting premiums — doubled between 2003 and 2014.

This helps explain why, according to the Bureau of Labor Statistics, only 11% of workers in the bottom 10% of wage earners even enrolled in workplace healthcare plans in 2016 (compared to 72% in the top 10%). As a restaurant server who makes $2.13 an hour before tips — and whose husband earns $9 an hour at Walmart — put it, after paying the rent, “it’s either put food in the house or buy insurance.”

The Affordable Care Act, or ACA (aka Obamacare), provided subsidies to help people with low incomes cover the cost of insurance premiums, but workers with employer-supplied healthcare, no matter how low their wages, weren’t covered by it. Now, of course, President Trump, congressional Republicans, and a Supreme Court in which right-wing justices are going to be even more influential will be intent on poleaxing the ACA.

It’s housing, though, that takes the biggest bite out of the paychecks of low-wage workers. The majority of them are renters. Ownership remains for many a pipe dream. According to a Harvard study, between 2001 and 2016, renters who made $30,000-$50,000 a year and paid more than a third of their earnings to landlords (the threshold for qualifying as “rent burdened”) increased from 37% to 50%. For those making only $15,000, that figure rose to 83%.

In other words, in an ever more unequal America, the number of low-income workers struggling to pay their rent has surged. As the Harvard analysis shows, this is, in part, because the number of affluent renters (with incomes of $100,000 or more) has leapt and, in city after city, they’re driving the demand for, and building of, new rental units. As a result, the high-end share of new rental construction soared from a third to nearly two-thirds of all units between 2001 and 2016. Not surprisingly, new low-income rental units dropped from two-fifths to one-fifth of the total and, as the pressure on renters rose, so did rents for even those modest dwellings. On top of that, in places like New York City, where demand from the wealthy shapes the housing market, landlords have found ways — some within the law, others not — to get rid of low-income tenants.

Public housing and housing vouchers are supposed to make housing affordable to low-income households, but the supply of public housing hasn’t remotely matched demand. Consequently, waiting lists are long and people in need languish for years before getting a shot — if they ever do. Only a quarter of those who qualify for such assistance receive it. As for those vouchers, getting them is hard to begin with because of the massive mismatch between available funding for the program and the demand for the help it provides. And then come the other challenges: finding landlords willing to accept vouchers or rentals that are reasonably close to work and not in neighborhoods euphemistically labelled “distressed.”

The bottom line: more than 75% of “at-risk” renters (those for whom the cost of rent exceeds 30% or more of their earnings) do not receive assistance from the government. The real “risk” for them is becoming homeless, which means relying on shelters or family and friends willing to take them in.

President Trump’s proposed budget cuts will make life even harder for low-income workers seeking affordable housing. His 2019 budget proposal slashes $6.8 billion(14.2%) from the resources of the Department of Housing and Urban Development’s (HUD) by, among other things, scrapping housing vouchers and assistance to low-income families struggling to pay heating bills. The president also seeks to slash funds for the upkeep of public housing by nearly 50%. In addition, the deficits that his rich-come-first tax “reform” bill is virtually guaranteed to produce will undoubtedly set the stage for yet more cuts in the future. In other words, in what’s becoming the United States of Inequality, the very phrases “low-income workers” and “affordable housing” have ceased to go together.

None of this seems to have troubled HUD Secretary Ben Carson who happily ordered a $31,000 dining room set for his office suite at the taxpayers’ expense, even as he visited new public housing units to make sure that they weren’t too comfortable (lest the poor settle in for long stays). Carson has declared that it’s time to stop believing the problems of this society can be fixed merely by having the government throw extra money at them — unless, apparently, the dining room accoutrements of superbureaucrats aren’t up to snuff.

Money Talks

The levels of poverty and economic inequality that prevail in America are not intrinsic to either capitalism or globalization. Most other wealthy market economies in the 36-nation Organization for Economic Cooperation and Development (OECD) have done far better than the United States in reducing them without sacrificing innovation or creating government-run economies.

Take the poverty gap, which the OECD defines as the difference between a country’s official poverty line and the average income of those who fall below it. The United States has the second largest poverty gap among wealthy countries; only Italy does worse.

Child poverty? In the World Economic Forum’s ranking of 41 countries — from best to worst — the U.S. placed 35th. Child poverty has declined in the United States since 2010, but a Columbia University report estimates that 19% of American kids (13.7 million) nevertheless lived in families with incomes below the official poverty line in 2016. If you add in the number of kids in low-income households, that number increases to 41%.

As for infant mortality, according to the government’s own Centers for Disease Control, the U.S., with 6.1 deaths per 1,000 live births, has the absolute worst record among wealthy countries. (Finland and Japan do best with 2.3.)

And when it comes to the distribution of wealth, among the OECD countries only Turkey, Chile, and Mexico do worse than the U.S.

It’s time to rethink the American national security state with its annual trillion-dollar budget. For tens of millions of Americans, the source of deep workaday insecurity isn’t the standard roster of foreign enemies, but an ever-more entrenched system of inequality, still growing, that stacks the political deck against the least well-off Americans. They lack the bucks to hire big-time lobbyists. They can’t write lavish checks to candidates running for public office or fund PACs. They have no way of manipulating the myriad influence-generating networks that the elite uses to shape taxation and spending policies. They are up against a system in which money truly does talk — and that’s the voice they don’t have. Welcome to the United States of Inequality.

Rajan Menon, a TomDispatch regular, is the Anne and Bernard Spitzer Professor of International Relations at the Powell School, City College of New York, and Senior Research Fellow at Columbia University’s Saltzman Institute of War and Peace Studies. He is the author, most recently, of The Conceit of Humanitarian Intervention

The Suicidal Empire

Posted on August 27, 2018 by Reid Mukai

By Dmitry Orlov

Source: Club Orlov

There are a lot of behaviors being exhibited by those in positions of power in the US that seem disparate and odd. We watch Trump who is imposing sanctions on country after country, dreaming of eradicating his country’s structural trade deficit with the rest of the world. We watch pretty much all of US Congress falling over each other in their attempt to impose the harshest possible sanctions on Russia. People in Turkey, a key NATO country, are literally burning US dollars and smashing iPhones in a fit of pique. Confronted with a new suite of Russian and Chinese weapons systems that largely neutralize the ability of the US to dominate the world militarily, the US is setting new records in the size of its already outrageously bloated yet manifestly ineffectual defense spending. As a backdrop to this military contractor feeding frenzy, the Taliban are making steady gains in Afghanistan, now control over half the territory, and are getting ready to stamp “null and void,” in a repeat of Vietnam, on America’s longest war. A lengthening list of countries are set to ignore or compensate for US sanctions, especially sanctions against Iranian oil exports. In a signal moment, Russia’s finance minister has recently pronounced the US dollar “unreliable.” Meanwhile, US debt keeps galloping upwards, with its largest buyer being reported as a mysterious, possibly entirely nonexistent “Other.”

Although these may seem like manifestations of many different trends in the world, I believe that a case can be made that these are all one thing: the US—the world’s imperial overlord—standing on a ledge and threatening to jump, while its imperial vassals—too many to mention—are standing down below and shouting “Please, don’t jump!” To be sure, most of them would be perfectly happy to watch the overlord plummet and jelly up the sidewalk. But here is the key point: if this were to happen today, it would cause unacceptable levels of political and economic collateral damage around the world. Does this mean that the US is indispensable? No, of course not, nobody is. But dispensing with it will take time and energy, and while that process runs its course the rest of the world is forced to keep it on life support no matter how counterproductive, stupid and demeaning that feels.

What the world needs to do, as quickly as possible, is to dismantle the imperial center, which is in Washington politically and militarily and in New York and London financially, while somehow salvaging the principle of empire. “What?!” you might exclaim, “Isn’t imperialism evil.” Well, sure it is, whatever, but empires make possible efficient, specialized production and efficient, unhindered trade over large distances. Empires do all sorts of evil things—up to and including genocide—but they also provide a level playing field and a method for preventing petty grievances from escalating into tribal conflicts.

The Roman Empire, then Byzantium, then the Tatar/Mongol Golden Horde, then the Ottoman Sublime Porte all provided these two essential services—unhindered trade and security—in exchange for some amount of constant rapine and plunder and a few memorable incidents of genocide. The Tatar/Mongol Empire was by far the most streamlined: it simply demanded “yarlyk”—tribute—and smashed anyone who attempted to rise above a level at which they were easy to smash. The American empire is a bit more nuanced: it uses the US dollar as a weapon for periodically expropriating savings from around the world by exporting inflation while annihilating anyone who tries to wiggle out from under the US dollar system.

All empires follow a certain trajectory. Over time they become corrupt, decadent and enfeebled, and then they collapse. When they collapse, there are two ways to go. One is to slog through a millennium-long dark age—as Western Europe did after the Western Roman Empire collapsed. Another is for a different empire, or a cooperating set of empires, to take over, as happened after the Ottoman Empire collapsed. You may think that a third way exists: of small nations cooperating sweetly and collaborating successfully on international infrastructure projects that serve the common good. Such a scheme may be possible, but I tend to take a jaundiced view of our simian natures.

We come equipped with MonkeyBrain 2.0, which has some very useful built-in functions for imperialism, along with some ancillary support for nationalism and organized religion. These we can rely on; everything else would be either a repeat of a failed experiment or an untested innovation. Sure, let’s innovate, but innovation takes time and resources, and those are the exact two things that are currently lacking. What we have in permanent surplus is revolutionaries: if they have their way, look out for a Reign of Terror, followed by the rise of a Bonaparte. That’s what happens every time.

Lest you think that the US isn’t an empire—a collapsing one—consider the following. The US defense budget is larger than that of the next ten countries combined, yet the US can’t prevail even in militarily puny Afghanistan. (That’s because much of its defense budget is trivially stolen.) The US has something like a thousand military bases, essentially garrisoning the entire planet, but to unknown effect. It claims the entire planet as its dominion: no matter where you go, you still have to pay US income taxes and are still subject to US laws. It controls and manipulates governments in numerous countries around the world, always aiming to turn them into satrapies governed from the US embassy compound, but with results that range from unprofitable to embarrassing to lethal. It is now failing at virtually all of these things, threatening the entire planet with its untimely demise.

What we are observing, at every level, is a sort of blackmail: “Do as we say, or no more empire for you!” The US dollar will vanish, international trade will stop and a dark age will descend, forcing everyone to toil in the dirt for a millennium while mired in futile, interminable conflicts with neighboring tribes. None of the old methods of maintaining imperial dominance are working; all that remains is the threat of falling down and leaving a huge mess for the rest of the world to deal with. The rest of the world is now tasked with rapidly creating a situation where the US empire can be dealt a coup de grâce safely, without causing any collateral damage—and that’s a huge task, so everyone is forced to play for time.

There is a lot of military posturing and there are political provocations happening all the time, but these are sideshows that are becoming an unaffordable luxury: there is nothing to be won through these methods and plenty to be lost. Essentially, all the arguments are over money. There is a lot of money to be lost. The total trade surplus of the BRICS countries with the West (US+EU, essentially) is over a trillion dollars a year. SCO—another grouping of non-Western countries—comes up with almost the same numbers. That’s the amount of products these countries produce for which they currently have no internal market. Should the West evaporate overnight, nobody will buy these products. Russia alone had a 2017 trade surplus of $116 billion, and in 2018 so far it grew by 28.5%. China alone, in its trade just with the US, generated $275 billion in surplus. Throw in another $16 billion for its trade with the EU.

Those are big numbers, but they are nowhere near enough if the project is to build a turnkey global empire to replace US+EU in a timely manner. Also, there are no takers. Russia is rather happy to have shed its former Soviet dependents and is currently invested in building a multilateral, international system of governance based on international institutions such as SCO, BRICS and EAEU. Numerous other countries are very interested in joining together in such organizations: most recently, Turkey has expressed interest in turning BRICS into BRICTS. Essentially, all of the post-colonial nations around the world are now forced to trade away some measure of their recently won independence, essentially snatching defeat from the jaws of victory. The job vacancy of Supreme Global Overlord is unlikely to attract any qualified candidates.

What everyone seems to want is a humble, low-budget, cooperative global empire, without all of the corruption and with a lot less life-threatening militarism. It will take time to build, and the resources to build it can only come from one place: from gradually bleeding US+EU dry. In order to do this, the wheels of international commerce must continue to spin. But this is exactly what all of the new tariffs and sanctions, the saber-rattling and the political provocations, are attempting to prevent: a ship laden with soya is now doing circles in the Pacific off the coast of China; steel I-beams are rusting at the dock in Turkey…

But it is doubtful that these attempts will work. The EU has been too slow in recognizing just how pernicious its dependence on Washington has become, and will take even more time to find ways to free itself, but the process has clearly started. For its part, Washington runs on money, and since its current antics will tend to make money grow scarce even faster than it otherwise would, those who stand to lose the most will make the Washingtonians feel their pain and will force a change of course. As a result, everyone will be pushing in the same direction: toward a slow, steady, controllable imperial collapse. All we can hope for is that the rest of the world manages to come together and build at least the scaffolding of a functional imperial replacement in time to avoid collapsing into a new post-imperial dark age.

US Intelligence Community as a Collapse Driver

Posted on August 3, 2018 by Reid Mukai

By Dmitry Orlov

Source: Club Orlov

In today’s United States, the term “espionage” doesn’t get too much use outside of some specific contexts. There is still sporadic talk of industrial espionage, but with regard to Americans’ own efforts to understand the world beyond their borders, they prefer the term “intelligence.” This may be an intelligent choice, or not, depending on how you look at things.

First of all, US “intelligence” is only vaguely related to the game of espionage as it has been traditionally played, and as it is still being played by countries such as Russia and China. Espionage involves collecting and validating strategically vital information and conveying it to just the pertinent decision-makers on your side while keeping the fact that you are collecting and validating it hidden from everyone else.

In eras past, a spy, if discovered, would try to bite down on a cyanide capsule; these days torture is considered ungentlemanly, and spies that get caught patiently wait to be exchanged in a spy swap. An unwritten, commonsense rule about spy swaps is that they are done quietly and that those released are never interfered with again because doing so would complicate negotiating future spy swaps. In recent years, the US intelligence agencies have decided that torturing prisoners is a good idea, but they have mostly been torturing innocent bystanders, not professional spies, sometimes forcing them to invent things, such as “Al Qaeda.” There was no such thing before US intelligence popularized it as a brand among Islamic terrorists.

Most recently, British “special services,” which are a sort of Mini-Me to the to the Dr. Evil that is the US intelligence apparatus, saw it fit to interfere with one of their own spies, Sergei Skripal, a double agent whom they sprung from a Russian jail in a spy swap. They poisoned him using an exotic chemical and then tried to pin the blame on Russia based on no evidence. There are unlikely to be any more British spy swaps with Russia, and British spies working in Russia should probably be issued good old-fashioned cyanide capsules (since that supposedly super-powerful Novichok stuff the British keep at their “secret” lab in Porton Down doesn’t work right and is only fatal 20% of the time).

There is another unwritten, commonsense rule about spying in general: whatever happens, it needs to be kept out of the courts, because the discovery process of any trial would force the prosecution to divulge sources and methods, making them part of the public record. An alternative is to hold secret tribunals, but since these cannot be independently verified to be following due process and rules of evidence, they don’t add much value.

A different standard applies to traitors; here, sending them through the courts is acceptable and serves a high moral purpose, since here the source is the person on trial and the method—treason—can be divulged without harm. But this logic does not apply to proper, professional spies who are simply doing their jobs, even if they turn out to be double agents. In fact, when counterintelligence discovers a spy, the professional thing to do is to try to recruit him as a double agent or, failing that, to try to use the spy as a channel for injecting disinformation.

Americans have been doing their best to break this rule. Recently, special counsel Robert Mueller indicted a dozen Russian operatives working in Russia for hacking into the DNC mail server and sending the emails to Wikileaks. Meanwhile, said server is nowhere to be found (it’s been misplaced) while the time stamps on the files that were published on Wikileaks show that they were obtained by copying to a thumb drive rather than sending them over the internet. Thus, this was a leak, not a hack, and couldn’t have been done by anyone working remotely from Russia.

Furthermore, it is an exercise in futility for a US official to indict Russian citizens in Russia. They will never stand trial in a US court because of the following clause in the Russian Constitution: “61.1 A citizen of the Russian Federation may not be deported out of Russia or extradited to another state.” Mueller may summon a panel of constitutional scholars to interpret this sentence, or he can just read it and weep. Yes, the Americans are doing their best to break the unwritten rule against dragging spies through the courts, but their best is nowhere near good enough.

That said, there is no reason to believe that the Russian spies couldn’t have hacked into the DNC mail server. It was probably running Microsoft Windows, and that operating system has more holes in it than a building in downtown Raqqa, Syria after the Americans got done bombing that city to rubble, lots of civilians included. When questioned about this alleged hacking by Fox News, Putin (who had worked as a spy in his previous career) had trouble keeping a straight face and clearly enjoyed the moment. He pointed out that the hacked/leaked emails showed a clear pattern of wrongdoing: DNC officials conspired to steal the electoral victory in the Democratic Primary from Bernie Sanders, and after this information had been leaked they were forced to resign. If the Russian hack did happen, then it was the Russians working to save American democracy from itself. So, where’s the gratitude? Where’s the love? Oh, and why are the DNC perps not in jail?

Since there exists an agreement between the US and Russia to cooperate on criminal investigations, Putin offered to question the spies indicted by Mueller. He even offered to have Mueller sit in on the proceedings. But in return he wanted to question US officials who may have aided and abetted a convicted felon by the name of William Browder, who is due to begin serving a nine-year sentence in Russia any time now and who, by the way, donated copious amounts of his ill-gotten money to the Hillary Clinton election campaign. In response, the US Senate passed a resolution to forbid Russians from questioning US officials. And instead of issuing a valid request to have the twelve Russian spies interviewed, at least one US official made the startlingly inane request to have them come to the US instead. Again, which part of 61.1 don’t they understand?

The logic of US officials may be hard to follow, but only if we adhere to the traditional definitions of espionage and counterespionage—“intelligence” in US parlance—which is to provide validated information for the purpose of making informed decisions on best ways of defending the country. But it all makes perfect sense if we disabuse ourselves of such quaint notions and accept the reality of what we can actually observe: the purpose of US “intelligence” is not to come up with or to work with facts but to simply “make shit up.”

The “intelligence” the US intelligence agencies provide can be anything but; in fact, the stupider it is the better, because its purpose is allow unintelligent people to make unintelligent decisions. In fact, they consider facts harmful—be they about Syrian chemical weapons, or conspiring to steal the primary from Bernie Sanders, or Iraqi weapons of mass destruction, or the whereabouts of Osama Bin Laden—because facts require accuracy and rigor while they prefer to dwell in the realm of pure fantasy and whimsy. In this, their actual objective is easily discernible.

The objective of US intelligence is to suck all remaining wealth out of the US and its allies and pocket as much of it as possible while pretending to defend it from phantom aggressors by squandering nonexistent (borrowed) financial resources on ineffective and overpriced military operations and weapons systems. Where the aggressors are not phantom, they are specially organized for the purpose of having someone to fight: “moderate” terrorists and so on. One major advancement in their state of the art has been in moving from real false flag operations, à la 9/11, to fake false flag operations, à la fake East Gouta chemical attack in Syria (since fully discredited). The Russian election meddling story is perhaps the final step in this evolution: no New York skyscrapers or Syrian children were harmed in the process of concocting this fake narrative, and it can be kept alive seemingly forever purely through the furious effort of numerous flapping lips. It is now a pure confidence scam. If you are less then impressed with their invented narratives, then you are a conspiracy theorist or, in the latest revision, a traitor.

Trump was recently questioned as to whether he trusted US intelligence. He waffled. A light-hearted answer would have been:

“What sort of idiot are you to ask me such a stupid question? Of course they are lying! They were caught lying more than once, and therefore they can never be trusted again. In order to claim that they are not currently lying, you have to determine when it was that they stopped lying, and that they haven’t lied since. And that, based on the information that is available, is an impossible task.”

A more serious, matter-of-fact answer would have been:

“The US intelligence agencies made an outrageous claim: that I colluded with Russia to rig the outcome of the 2016 presidential election. The burden of proof is on them. They are yet to prove their case in a court of law, which is the only place where the matter can legitimately be settled, if it can be settled at all. Until that happens, we must treat their claim as conspiracy theory, not as fact.”

And a hardcore, deadpan answer would have been:

“The US intelligence services swore an oath to uphold the US Constitution, according to which I am their Commander in Chief. They report to me, not I to them. They must be loyal to me, not I to them. If they are disloyal to me, then that is sufficient reason for their dismissal.”

But no such reality-based, down-to-earth dialogue seems possible. All that we hear are fake answers to fake questions, and the outcome is a series of faulty decisions. Based on fake intelligence, the US has spent almost all of this century embroiled in very expensive and ultimately futile conflicts. Thanks to their efforts, Iran, Iraq and Syria have now formed a continuous crescent of religiously and geopolitically aligned states friendly toward Russia while in Afghanistan the Taliban is resurgent and battling ISIS—an organization that came together thanks to American efforts in Iraq and Syria.

The total cost of wars so far this century for the US is reported to be $4,575,610,429,593. Divided by the 138,313,155 Americans who file tax returns (whether they actually pay any tax is too subtle a question), it works out to just over $33,000 per taxpayer. If you pay taxes in the US, that’s your bill so far for the various US intelligence “oopsies.”

The 16 US intelligence agencies have a combined budget of $66.8 billion, and that seems like a lot until you realize how supremely efficient they are: their “mistakes” have cost the country close to 70 times their budget. At a staffing level of over 200,000 employees, each of them has cost the US taxpayer close to $23 million, on average. That number is totally out of the ballpark! The energy sector has the highest earnings per employee, at around $1.8 million per. Valero Energy stands out at $7.6 million per. At $23 million per, the US intelligence community has been doing three times better than Valero. Hats off! This makes the US intelligence community by far the best, most efficient collapse driver imaginable.

There are two possible hypotheses for why this is so.

First, we might venture to guess that these 200,000 people are grossly incompetent and that the fiascos they precipitate are accidental. But it is hard to imagine a situation where grossly incompetent people nevertheless manage to funnel $23 million apiece, on average, toward an assortment of futile undertakings of their choosing. It is even harder to imagine that such incompetents would be allowed to blunder along decade after decade without being called out for their mistakes.

Another hypothesis, and a far more plausible one, is that the US intelligence community has been doing a wonderful job of bankrupting the country and driving it toward financial, economic and political collapse by forcing it to engage in an endless series of expensive and futile conflicts—the largest single continuous act of grand larceny the world has ever known. How that can possibly be an intelligent thing to do to your own country, for any conceivable definition of “intelligence,” I will leave for you to work out for yourself. While you are at it, you might also want to come up with an improved definition of “treason”: something better than “a skeptical attitude toward preposterous, unproven claims made by those known to be perpetual liars.”

25 Families Own $1.1 Trillion Between Them as the Global Wealth Inequality Gap Grows

Posted on July 24, 2018 by Reid Mukai

Using data from their list Forbes has produced a list of the top 25 richest families in the world. Together they are worth over $1.1 trillion, or the entire GDP of Indonesia.

By Rosa Tressell and Dr. Leon Tressell

Source: SouthFront

Once a family-owned business Forbes is well known for producing their annual list of the world’s richest billionaires. Launched in 1982 the original list ranked the top 400 Americans by net worth. Only 13 billionaires were included in that list, and their combined worth was the equivalent of 2.8% of GDP. In an era where “Greed is Good”, the list became wildly popular, by 2000 the combined net worth of the top 400 equated to 12.2% of US GDP. So prestigious became the list that an ex-employee of Forbes has claimed that Donald J Trump inflated his personal wealth to be included.

This year more than 2,200 billionaires made the Forbes list with a combined value of $9.1 trillion, or half the GDP of the US. Amazon CEO, Jeff Bezos, topped the list this year as his fortune rose to £112 billion making him the first centi-billionaire. His wealth is now equal to that of 2.3 million Americans. This has allowed him to dethrone Bill Gates, founder of Microsoft, worth just $90 billion.

Using data from their list Forbes has produced a list of the top 25 richest families in the world. Together they are worth over $1.1 trillion, or the entire GDP of Indonesia. The richest clan is the Walton family who own the ubiquitous Walmart chain in America. They have a total family wealth of £152 billion and several family members are on the list of billionaires as individuals. The Koch Brothers, of Koch Industries, are ranked second with £98.7 billion. The third spot, with $90 billion to their name, is taken by another American family, the Mars family, known for their various sweet treats.

In comparison to the billionaires list this list is a measure of families who have inherited and grown their wealth over generations. The billionaires list is dominated by Americans in certain fields; technology, finance, entertainment and sport. It lauds entrepreneurism and promotes the self-made man (and small handful of women). The family fortunes list on the other hand reveals a more historical route for making money. Whilst Jeff Bezos has shot to the top of the list based largely on the astonishingly over valued share price of Amazon stock, the family fortunes are centered on the production and purveyance of goods.

Many of the families on the list started making their fortunes in the late nineteenth century. These are: Cargill Industries (agricultural conglomerate); Boehringer Ingelhelm (pharmaceuticals); Cox Enterprises (communications); Hyatt Hotels (hotels); SC Johnson (household goods); Roche (pharmaceuticals); and the Hearst Corporation (media). Meanwhile the Van Damme/De Spoelberch/De Mevius family (ranked fourth with a fortune of $54.1 billion) have been brewing quality Belgian beer, like Stella Artois, dating back centuries.

The production and purveyance of quality high end goods as a means to fortune is evident as BMW (the Quandt family), Chanel (the Wertheimer family) and Hermes (the Dumas family) find these families all ranked in the top ten.

Reliance Industries is the fist non-Western entry. A Mumbai-based energy conglomerate, it was founded by Dhirubhai Ambani in 1957 and is now worth $43.4 billion. It was his ambition to be the world’s richest man. However, following his untimely death there was a very public and acrimonious dispute between his two sons revolving around the inheritance. The widow eventually brokered a settlement and the family fortune goes on, but it does show how easily a family fortune can be dissipated.

In addition to Walmart there are two other families that have made their fortunes in retail. The Albrecht Brothers who founded Aldi are ranked 11^th with a $38.8 billion fortune followed at twelfth by the Mulliez family who founded Auchan, France’s equivalent of Walmart. At thirteenth spot, with a fortune of £34 billion, is the Kwok family. They started in business as a grocery wholesaler but they really made their money when they moved into Hong Kong real estate in the 1970s. Similarly the Lee family from South Korea began as grocery exporters but have made their fortune as the worlds largest producers of smart phones with their company Samsung.

There is some methodology to the list that requires explanation. Bloomberg’s categorisation of family wealth is based on reliable, sourced documentation. They add up family members assets, including stakes in public and private companies, real estate, art and cash, and takes into account debts. It excludes first-generation fortunes and those in the hands of a single heir. It also excludes those who have derived their fortune from the state. This explains why there are no Chinese families on the list and only three from the Asian region. As newly found wealth is handed down this looks set to change.

The Forbes list also excludes members of royal families and dictators who derive their fortunes entirely as a result of their position of power. Nor do they value those holding fortunes in trust for their nations. So, despite being worth untold billions, families like the royal family of Brunei or the British monarchs are absent. Quantifying this wealth is difficult. For example, Buckingham Palace alone would be valued in excess of $5 billion, however there would certainly be conflict with Parliament if the Queen wanted to sell it!

Many billionaires positively don’t want to be on the list. They don’t want the publicity for their families with the increased risk of kidnapping, being hit up for money, questions from the tax man or even from law enforcement. Kenichi Shinoda, current Kingpin of the Yakuza, is rumoured to be worth billions but is known to keep a low financial profile. There is also plenty of Western media speculation that the President of Russia, Vladimir Putin, is actually the world’s richest man. The Bush family have amassed a vast fortune, and there are allegations that much of it has been amassed behind the political scenes in various CIA backed gun and drug running operations.

Calculations of wealth, for individuals or families, can be obfuscated by the numerous off shore arrangements that exist today. Historically, many of the world’s largest landowners are not officially registered as a result of having held title to the land for centuries. In addition trusts, foundations and “charities” allows for the ownership and management of assets in a more private manner. Wealthy families pay professionals a healthy wage to minimise their exposure to the taxman – especially avoidance of inheritance tax.

Absent from the list are the giant banking families, the Rockefellers, the Morgans and the Rothschilds; famed for being on every conspiracy theory list as powers behind the scene. The report says that their fortunes are too diffuse and diversified to correctly value. Other families suspected of wielding their riches for their own political and social agendas include the DuPonts, the Astors, the Bundys and the Freemans, to name a few. Families that like to keep their immense fortunes and their activities confidential.

To have such wealth is naturally to have much power. Certain families, like the Bushes and the Kennedys used their cash to enter politics. The Koch Brothers have already pledged $400 million to the Republicans for the 2018 mid-term elections and their support was seen as instrumental in securing Donald J Trump’s election victory. The Walmart Family Foundation is one of America’s largest political donors, and is described as a “heavy hitter” from the Centre of Responsive Politics. Economic advantage is translated into legislative favours via lobbying and campaign donations. For example, one Arkansas Congresswoman who supported the repeal of an estate tax received $83,650 from the Walton Family Foundation and now works for them as a lobbyist. This exemplifies the corrupt relationship between economic and democratic inequality and is indicative of a system where the majority feel their voice is irrelevant.

Capitalism is built on an idea that a rising tide lifts all ships. We are supposed to look up to these rich families as examples of our betters. Underlying the lists that Forbes assembles is a worshiping of the rich. Underpinning the American dream is that its possible for anyone or any family to make it (onto the list). However, even Scrooge McDuck must be envious of the enormous fortunes of these families. As the wealth inequality gap grows within countries, especially the Western nations, there is the risk that the social fabric is coming apart at the seams. When 40% of Americans have less then $500 in savings the material basis for living the Dream is seriously compromised. Indeed, this could all turn just as easily into anger as people see that the six individual Walmart heirs alone have more wealth than the bottom 30% of the US population, and they ask themselves is this fair?

This report confirms accelerating trends towards further wealth disparity. Reports by Oxfam have shown a gaping chasm of global inequality. In 2017 3.7 billion people saw no increase in their wealth, whilst 82% of the wealth created went to the top 1%.

According to the World Inequality Report 2018:

If established trends in wealth inequality were to continue, the top 0.1% alone will own more wealth than the global middle class by 2050.

Donald Trump’s ambition to be included on the list displays his naked ambition for money, power and success. In his school of market economics, of dog eat dog, this trend is only the logic of the market. It is seen as aspirational by those at the top and by magazines like Forbes. However, even the 1% at Davos earlier this year had wealth inequality on the agenda. As the social fabric tears, political and social instability will increase. The Brexit vote, driven by the anger of the dispossessed English working class, for example, has turned the UK’s traditional stability on its head. Anger is brewing below the surface everywhere and the probability of social and political uprisings throughout the globe are increasing.

What’s Wrong with the Economy: 9 Toxic Dynamics

Posted on July 17, 2018 by Reid Mukai

By Charles Hugh Smith

Source: Of Two Minds

These nine dynamics are mutually reinforcing.

Beneath the surface signals of an eternally rising stock market and expanding GDP, we all sense something is deeply, systemically wrong with the U.S. economy. These nine structural dynamics generate secondary dynamics, all of which are toxic to social mobility, sustainable prosperity, accountability and democracy:

1. The financialization of the economy, which transformed services, credit, risk and labor into commodities that could be traded globally. Financialization generates enormously asymmetric returns: those with access to low-cost credit, global markets and expertise in finance collect the lion’s share of gains in income and wealth.

2. The technological transformation of the economy, which has placed a substantial scarcity premium on specific tech/managerial/communication skills and devalued ordinary labor and capital. As a result, the majority of gains in wealth and income flow to those with the scarce skills and forms of capital, leaving little for ordinary labor and capital.

3. The end of cheap fossil fuels. The fracking boom/bubble has obscured the long-term secular trend: the depletion of cheap-to-access and process oil. As many analysts have observed (Nate Hagens, Gail Tverberg, Richard Heinberg, Chris Martenson et al.), the global economy only grows if energy and credit are both cheap.

4. Globalization, which transformed the developing world into the environmental dumping ground of the wealthy nations and enabled the owners of capital to offshore waste and labor.

5. The destructive consequences of “growth at any cost” are piling up. “Growth” is the one constant of all existing political-economic systems, and none of the current Modes of Production (i.e. the structures that organize production, consumption, the economy and society) recognize that “growth” is not sustainable.

The first two dynamics drive three other dynamics that have hollowed out the productive economy:

6. The dominance of debt-funded speculation as the means of “getting ahead” as opposed to producing products and services of intrinsic value that serve the core needs of communities.

7. The economy’s gains in income and wealth are concentrated in the very top of the wealth-power pyramid: the top 5%–entrepreneurs, professionals and technocrats, etc., and within this class, most of the gains go to the top 1/10th of 1% –the existing owners of wealth, and financiers/speculators with access to cheap credit.

The net result is the bottom 95% have few opportunities to “get ahead” outside of gambling in the asset bubbles du jour: the stock and housing market. While the average middle class household may be able to borrow enough to speculate in the housing bubble, two factors limit the odds of success for ordinary investors/gamblers:

A. The gains in housing are concentrated in specific markets; outside these hot markets, gains are modest.

B. Asset bubbles eventually pop, leaving those still owning the assets with losses. The risks are thus intrinsic and high. The average investor/gambler lacks the experience needed to recognize the bubble has stopped expanding and exit the market before ll the other speculators rush for the narrowing exit.

8. The devaluation of ordinary labor and capital means the bottom 60% of the economy that lacks the requisite skills with a scarcity premium in the Emerging Economy have lost easy access to the ladder of social mobility.

9. The concentration of wealth and power in the hands of the self-serving few corrupts the economy and democracy. The U.S. economy is dominated by insider and elite rackets, skims, scams and cartels/quasi-monopolies, all of which corrupt the economy by creating perverse incentives for exploitation and gaming the system to benefit the few at the expense of the many.

This corruption in service of maximizing private/personal gains at the expense of the system itself also corrupts the mechanisms of governance, which are now little more than cloaking devices that protect insiders and elites from scrutiny and consequences.

The 20% above the bottom 60% may appear to have some access to social/economic mobility, but this is largely an artifact of the bubble economy since 2009. Once the bubble deflates, the illusion of social mobility for the “middle class” between the bottom 60% and the upper 20% vanishes.

The “upper middle class” between the bottom 80% and the top 5% is being squeezed by the over-production of elites, i.e. the over-abundance of those with college degrees and the relative scarcity of secure jobs within the top 5%. As a result, credential inflation is rampant, with Masters Degrees replacing Bachelors Degrees as the default for a white-collar job, and PhDs replacing Masters diplomas as the new default for positions that lack security and upward mobility.

In other words, the number of people who qualify for and desire a slot in the elite class (top 5%) far exceeds the number of slots available. As Peter Turchin has explained, this competition generates social disorder at the top of economic heap as the top 20% fight over the few positions open in the top 5%. The disgruntled, frustrated losers far outnumber the relatively few winners.

These nine dynamics are mutually reinforcing, meaning that each dynamic strengthens one or more of the others, reinforcing each other so the sum of the nine is far more powerful than a mere addition might suggest.

The New Aristocracy (the top 9.9%) (The Atlantic)

Dismantling A Society: How Empires Feed Off the Republic

Posted on July 9, 2018 by Reid Mukai

By RS Anthion

Source: CounterPunch

“It is patently ridiculous for the United Nations to examine poverty in America.”

-Nikki Haley (1)

Nikki Haley released a ferocious rebuke of a UN report detailing poverty in the United States. As if she could will away or dismiss its findings simply by how angry she denounced it. The life expectancy in the United States sits at 78.6 years (2) whilst Cubans can expect to live to 79.5 according to the World Health Organisation(3). Cuba is of course a country that has been economically embargoed by the United States for over half a century. Nikki Haleys ferocious retort comes amid a United Nations report examining poverty in the United States. 40 million Americans live in poverty, 18.5 million americans live in extreme poverty and 5.3million live in “third world conditions of absolute poverty” (4).

“The Special Rapporteur wasted the UN’s time and resources, deflecting attention from the world’s worst human rights abusers and focusing instead on the wealthiest and freestcountry in the world.”

-Nikki Haley.

It probably needs repeating that the United States imprisons more people (both total and as a percentage of their population) than anywhere else on the planet. Americans are 5 percent of the population whilst having 25 percent of the worlds prisoners. This doublespeak has become the norm. The US ambassador can say straight faced the US is the “freest country in the world” whilst having the highest percentage of its population in prison. Significantly higher than Russia, China or Iran.(7)

This is a myth of American empire, that freedom only exists in the United States. And if freedom exists elsewhere then the US is the “freest”.

The UN report does indeed paint a bleak picture for the average man or woman in the US and it’s no surprise that Nikki Haley has reacted with such venom at this UN report.

Because this strikes at the heart of one of the other ‘myths of American empire’. That each successive generation will live better than the previous one which fuelled the idea of ‘American exceptionalism’. That their form of government and ideology was something to be celebrated and even lifted up as the ‘messianic nation’ (ie. exported across the globe). But the precise definition of a nation in decline is when the generation after you lives worse than the previous generation. So the US ruling elite, a ruling class that has been doing victory laps since Reagan in removing workers rights/protections and labour laws, is caught in a dichotomy. A contradiction where they still try to propagandise their population into the messianic nation worthy of justifying imperialism (“bringing democracy” or “humanitarian intervention”) whilst the working class of the United States slips further into poverty.

“The United States is a land of stark contrasts. It is one of the world’s wealthiest societies, a global leader in many areas, and a land of unsurpassed technological and other forms of innovation. Its corporations are global trendsetters, its civil society is vibrant and sophisticated and its higher education system leads the world. But its immense wealth and expertise stand in shocking contrast with the conditions in which vast numbers of its citizens live. About 40 million live in poverty, 18.5 million in extreme poverty, and 5.3 million live in Third World conditions of absolute poverty.4 It has the highest youth poverty rate in the Organization for Economic Cooperation and Development (OECD), and the highest infant mortality rates among comparable OECD States. Its citizens live shorter and sicker lives compared to those living in all other rich democracies, eradicable tropical diseases are increasingly prevalent, and it has the world’s highest incarceration rate, one of the lowest levels of voter registrations in among OECD countries and

the highest obesity levels in the developed world. 5. The United States has the highest rate of income inequality among Western countries.5 The $1.5 trillion in tax cuts in December 2017 overwhelmingly benefited the wealthy and worsened inequality. The consequences of neglecting poverty and promoting inequality are clear. The United States has one of the highest poverty and inequality levels among the OECD countries, and the Stanford Center on Inequality and Poverty ranks it 18th out of 21 wealthy countries in terms of labour markets, poverty rates, safety nets, wealth inequality and economic mobility. But in 2018 the United States had over 25 per cent of the world’s 2,208 billionaires. 6 There is thus a dramatic contrast between the immense wealth of the few and the squalor and deprivation in which vast numbers of Americans exist. For almost five decades the overall policy response has been neglectful at best, but the policies pursued over the past year seem deliberately designed to remove basic protections from the poorest, punish those who are not in employment and make even basic health care into a privilege to be earned rather than a right of citizenship. 6. The visit of the Special Rapporteur coincided with the dramatic change of direction in relevant United States policies. The new policies: (a) provide unprecedentedly high tax breaks and financial windfalls to the very wealthy and the largest corporations; (b) pay for these partly by reducing welfare benefits for the poor; © undertake a radical programme of financial, environmental, health and safety deregulation that eliminates protections mainly benefiting the middle classes and the poor; (d) seek to add over 20 million poor and middle class persons to the ranks of those without health insurance; (e) restrict eligibility for many welfare benefits while increasing the obstacles required to be overcome by those eligible; (f) dramatically increase spending on defence, while rejecting requested improvements in key veterans’ benefits; (g) do not provide adequate additional funding to address an opioid crisis that is decimating parts of the country; and (h) make no effort to tackle the structural racism that keeps a large percentage of non-Whites 7 in poverty and near poverty”

Ultimately the empire “feeds off the republic” (to quote Michael Parenti). So when the US has spent an estimated either $3.6 trillion (based on a Brown University study) or $5.6 trillion (according to the associated press) on war in Afghanistan, Iraq, Pakistan and Syria(5). This money isn’t plucked from thin air. US tax payers have to pay that back and is the source of Americans increased poverty. The $2 trillion discrepancy between the associated press and the Brown university study is testament to the open corruption in military contracts. The money has been funnelled through so many private contractors looking to milk the tax payers for all their worth there’s a 2 trillion margin of error when estimating what has actually been spent.

Eisenhowers A Chance For Peace speech in 1953 seems more relevant than ever.

“Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed.
This world in arms is not spending money alone. It is spending the sweat of its laborers, the genius of its scientists, the hopes of its children. The cost of one modern heavy bomber is this: a modern brick school in more than 30 cities. It is two electric power plants, each serving a town of 60,000 population. It is two fine, fully equipped hospitals. It is some fifty miles of concrete pavement. We pay for a single fighter with a half-million bushels of wheat. We pay for a single destroyer with new homes that could have housed more than 8,000 people. . . . This is not a way of life at all, in any true sense. Under the cloud of threatening war, it is humanity hanging from a cross of iron.”

The United States is currently at war with 7 different nations (Iraq, Syria, Afghanistan, Pakistan, Yemen, Somalia and Libya) all the while leaving it’s citizens to the ravages of the free market: whether that’s the burgeoning opiod crisis, the children drinking lead contaminated water or the 40 million Americans in poverty.

Alexander Zinoviev berating Gorbachev and Yeltsin on TV in 1990. His errily prophetic vision of Russia came true. When capitalism was restored to Russia under Yeltsin in the 90s Russia experienced what economists would later call the “Russian Cross” whereby the death rate shot up and the birth rate slowed to a crawl (creating a cross on a graph). The return of capitalism meant a death spiral of every social ill; alcoholism, domestic abuse, drug abuse and homelessness. The return of orthodox Christianity to fill the power void. The wholesale sell off of public services that had once been owned by the collective people to the fortune 500.

The brilliant thinker and Soviet dissident who later came to regret being a tool for western interest spoke in a brilliantly prophetic interview in 1999 in which he asserted the end of communism in the east meant the end of democracy in the west. That the glue for any kind of pluralism in media/politics etc. came from the united front against communism to the east. Since the fall of communism he asserts a kind of democratic totalitarianism has arisen. And who can argue it hasn’t? Voter turnout is worse each year as people realise no party in a First Past the Post system will represent their interests. Princeton University long released a peer review paper that the United States is an oligarchy. That the average person in the US has little to no effect on the policies and laws that are ratified by the courts. That’s perhaps why 54 percent of citizens in democracies believe their voice doesn’t have an impact on political decisions, and 64 percent think their government doesn’t act in their interest.

“Q: Don’t you think that people can have their own opinions, and that they can vote and thus express themselves?

ANSWER. First of all, even now people don’t vote that often, and they will vote even less in the future. With regard to public opinion in the West it is shaped by the media. Suffice it to recall the universal approval of the war in Kosovo. Remember the Spanish war! Volunteers from all over the world traveled to that country to fight on one side or the other. Remember the war in Vietnam. But these days, people are so well shepherded that they react only the way that the purveyors of propaganda want them to.

Q: So, the role of Gorbachev was not positive?

A: I look at things from a slightly different angle. Contrary to common belief, Soviet communism did not collapse because of internal reasons. Its collapse is certainly the greatest victory in the history of the West. An unheard of victory which, let me say it again, can establish a unitary power monopoly on a planetary scale. The end of communism also signalized the end of democracy. The modern epoch is not only post-communist, it is also post-democratic! Today we are witnessing the establishment of democratic totalitarianism, or, if you will, totalitarian democracy.

Q: Does not it all sound a little absurd?

A: Not at all. Democracy requires pluralism and pluralism implies an existence of at least two more or less equal forces which oppose each other and at the same time influence each other. During the Cold War there was world democracy, global pluralism, with two opposing systems: capitalist and communist, plus other countries with an amorphous system which belonged to neither. Soviet totalitarianism was sensitive to Western criticism. In turn, the Soviet Union influenced the West, in particular through the latter’s own communist parties. Today we live in a world dominated by one single force, one ideology and one pro-globalization party. All of this together began to take shape during the Cold War, when superstructures gradually appeared in various forms: commercial, banking, political and media organizations. Despite their different fields of activity, what they had in common was essentially their transnational scope. With the collapse of communism they began to rule the world. Thus, Western countries ended up in the dominant position, but at the same time they are now in a subordinate position as they gradually lose their sovereignty to what I call the supra-society. The planet-wide supra-society consists of commercial and non-commercial organizations whose influence extends far beyond individual states. Like other countries, the Western countries are subordinated to these supranational structures. This is despite the fact that the sovereignty of states was also an integral part of pluralism and hence of democracy on a global scale. Today’s ruling supra-power suppresses sovereign states. The European integration unfolding in front of our very eyes is also leading to the disappearance of pluralism within this new conglomerate in favor of supranational power.

Q: But do not you think that France and Germany remain democracies?

A: Western countries got to know true democracy during the Cold War. Political parties had genuine ideological differences and different political programs. The media also differed from each other. All this had an impact on the lives of ordinary people contributing to the growth of their wealth. Now this has come to an end. A democratic and prosperous capitalism with socially oriented laws and job security was in many ways thanks to a fear of communism. After the fall of communism in Eastern Europe, a massive attack on the social rights of citizens was launched in the West. Today the socialists who are in power in most European countries are pursuing policies of dismantling the social security system, destroying everything that was socialist in the capitalist countries. There is no longer a political force in the West capable of protecting ordinary citizens. The existence of political parties is a mere formality. They will differ less and less as time goes on. The war in the Balkans was anything but democratic. Nevertheless, the war was perpetrated by the socialists who historically have been against these kinds of ventures. Environmentalists, who are in power in some countries, welcomed the environmental catastrophe caused by the NATO bombings. They even dared to claim that bombs containing depleted uranium are not dangerous for the environment, even though soldiers loading them wear special protective overalls. Thus, democracy is gradually disappearing from the social structure of the West. Totalitarianism is spreading everywhere because the supranational structure imposes its laws on individual states. This undemocratic superstructure gives orders, imposes sanctions, organizes embargos, drops bombs, causes hunger. Even Clinton obeys it. Financial totalitarianism has subjugated political power. Emotions and compassion are alien to cold financial totalitarianism. Compared with financial dictatorship, political dictatorship is humane. Resistance was possible inside the most brutal dictatorships. Rebellion against banks is impossible.

Q: What about a revolution?

A: Democratic totalitarianism and financial dictatorship rule out the possibility of social revolution.

Q: Why?

A: Because they combine omnipotent military power with a financial stranglehold. All revolutions received support from outside. From now on this is impossible because there are no sovereign states, nor will there be. Moreover, at the lowest level the working class has been replaced with the unemployed class. What do the unemployed want? Jobs. Therefore, they are in a less advantageous position than the working class of the past.

Q: Would it be correct to say that the intensifying radicalization in the West will leads to its own destruction?

A: Nazism was destroyed during total war. The Soviet system was young and strong. It would have continued to thrive, had it not been destroyed by outside forces. Social systems do not destroy themselves. They can only be destroyed by an external force. It’s like a ball rolling on a surface: only the presence of an external obstacle could break its movement. I can prove it like a theorem. Today, we are dominated by a country with enormous economic and military superiority. The new emerging world order is drawn to unipolarity. If the supranational government manages to achieve this by eliminating all external enemies, then a unified social system can survive until the end of time. Only a person can die from their illness. But a group of people, even a small group, would try to survive through reproduction. Now imagine a social system comprising billions of people! Its capacity to anticipate and prevent self-destructive phenomena will be limitless. In the foreseeable future, the process of erasing differences across the world cannot be stopped, since democratic totalitarianism is the last phase of the development of Western society, which began with the Renaissance.” (6)

In a world where capitalist-liberalism is disintegrating right before our eyes; where ‘human rights’ are justified in bombing the poorest people on earth, that “humanitarian intervention” is used straight faced by world leaders and their sycophantic media cheerleaders in the mainstream media and a world where most of humanity only has debt peonage and decreased living standards to look forward to.

It certainly does look like humanity has been nailed to an iron cross.

The world is in desperate need of a liberating ideology, in which true media and political pluralism can thrive instead of the circus currently on offer. One where we’re not in thrall to capital or beholden to the fortune 500 who rule every aspect of our lives.

Notes.

(1) http://thehill.com/policy/international/un-treaties/393659-nikki-haley-ridiculous-for-un-to-analyze-poverty-in-america

(2) https://edition.cnn.com/2017/12/21/health/us-life-expectancy-study/index.html?no-st=1529923969

(3) http://www.who.int/countries/cub/en/

(4) United Nations Generaly Assembly, 4 May 2018 http://undocs.org/A/HRC/38/33/ADD.1

(5) http://www.newsweek.com/trump-says-us-spent-7-trillion-middle-east-mistake-iraq-cost-88-billion-804215

(6) https://russia-insider.com/en/history/russian-thinker-1999the-end-communism-russai-signalized-end-democracy-west-alexander

(7)https://www.washingtonpost.com/news/fact-checker/wp/2015/07/07/yes-u-s-locks-people-up-at-a-higher-rate-than-any-other-country/?utm_term=.ab39c81fabff

Another Reason Young Americans Don’t Revolt Against Being Screwed

Posted on July 5, 2018 by Reid Mukai

By Bruce E. Levine

Source: CounterPunch

“8 Reasons Young Americans Don’t Fight Back: How the US Crushed Youth Resistance” was originally published in 2011, then republished on several Internet sites, and has become one of my most viewed articles. The eight reasons include: student-loan debt; various pacifying effects of standard schooling; the psychopathologizing and medicating of noncompliance; surveillance; television; and fundamentalist religion and fundamentalist consumerism. Over the last seven years, many young people have told me that they appreciate that article, but they have urged me to detail a hugely important pacifying source which I had not included.

First, to be clear, not all young people are completely broken. The general state of acquiescence by young people was recently interrupted by their short-lived burst of dissent in the form of large rallies for gun control, in reaction to fears of being murdered in their classrooms. But that was an exception to the general rule of resignation to eating shit.

A longer period of dissent occurred during Occupy, in which many young people protested against their financial subjugation by the 1%. However, one lesson that young people learned from Occupy is that their rulers only pay lip service to democracy—and so mere dissent has little impact. Young people today are correct to recognize the impotence of mere dissent if it is unaccompanied by a withdrawal of cooperation with the ruling class’s capacity to turn a profit. But because young people have been broken in so many ways, decreasing numbers of them have the individual strength, class consciousness, and group cohesiveness that is required to move beyond dissent to the kind of constructive disobedience (for example, a labor strike) that can create greater justice for them.

It’s not that young people in the United States are ignorant of the reality that they are being financially screwed; they know they have been screwed, they expect to be screwed even worse, and most of them passively accept this reality.

Young people are not ignorant of their increasingly crippling student-loan debt. At last look, 70% of college students graduate with significant debt; the average student-loan debt at $37,172, and the average monthly payment at $393 (and this doesn’t include their credit card debt). Add this to the reality that many young people with student-loan debt never even graduate college; and even among those who do graduate, many of them find only low-paying jobs.

The majority of young people feel so beaten down that they have also passively accepted that they will get screwed out of Social Security benefits. A 2015 Gallup poll asked “Do you think the Social Security system will be able to pay you a benefit when you retire?” Among those 18 to 29 years of age, 64% said no. Yet, most are resigned to having money deducted from their paychecks for benefits that they believe they will never receive.

Since my 2011 article was published, many millennials have informed me that they are being broken by something that I hadn’t originally included: the Internet, which many of them tell me is the most important aspect of their lives. From these young people, I have learned how the Internet creates fears, lowers self-esteem, and divides them—all of which weakens their capacity to resist injustices.

Fear is a great way to break people, and the Internet—similar to other areas that I had previously detailed—creates fear. Facebook, Twitter, Instagram, Tumblr, Snapchat, and other so-called “social media” create the fear of permanent shame and shunning. Millennials repeatedly see how a single error in judgment on social media will not be forgotten and can haunt forever—and destroy lives. While many young students voice concern about a shooting in their school, my experience is that they are more viscerally terrified of something being posted on social media by them or about them that can damage their attractiveness to their peers or to future employers. For young people, denial over their life being ruined on social media is impossible—most never unplug from it.

The Internet heightens a fear-based consciousness. People have different private fears and, as George Orwell detailed, their greatest fears can be exploited to break them. For many young people, their greatest fear is being “doxxed”—having private information about them published on the Internet so as to hurt them. For other young people, their greatest fear is “FoMo”—the fear of missing out—which is intensified on social media where they are constantly bombarded with images of others doing “cool” stuff. One young woman recently told me, “You don’t know how crazy we are. I saw a party on Instagram that looked really cool, and I had FoMo over it, even though I know the guy who posted it always makes parties look cooler than they really are.”

Many young people tell me that the constant barrage of their peers’ self-promotions on social media makes them feel inferior; and low self-esteem—like fear—debilitates the strength to resist. One young man recently explained to me that millennials are always aware of their “digital selves” which can be measured in metrics such as “likes”; and that comparing themselves to others routinely results in low self-esteem. Of course, some young people do attempt rebellion, but effective rebellion, they tell me, requires completely extricating from social media, which would be an extremely radical action.

Not only does the Internet create fear and low self-esteem but also divides, which of course allows the 1% to more easily conquer the 99%. The Gilded Age robber barron Jay Gould reportedly bragged, “I can hire one half of the working class to kill the other half.” Millenials have educated me on the various divides among the 99% that have been created and perpetuated on the Internet.

Every millennial young man tells be about the Internet war between “social justice warriors” and “red pillers.” Young people who care about justice for historically oppressed groups (such as women, people of color, and LGBT folks) are mocked as social justice warriors by those who call themselves red pillers who feel that, today, white males are the oppressed group. In an Internet world absent of face-to-face contact, there is only mutual venom. Absent is a mutual grasping that each side is in the 99%, that each side cares about injustice, and that the financial hell for all of them has been created by the 1%—not by each other.

Screen addiction subverts the in-person contact necessary for face-to-face dialogue and solidarity, and the Internet is even more addictive than television, as young people are virtually never away from their smart phones, laptops, or other screens. Walk into any coffee shop, and you’ll often see many young people in close proximity with one another but locked into their own screens and not looking at each other.

Several of my millennial young male informants tell me that they are afraid to risk face-to-face contact, afraid to be seen as violating a woman’s privacy, afraid to be viewed as a creep. I joked with one young guy, “Are you afraid that if you walk over to some pretty young woman in a coffee shop and tell her that you like her shoes, then you’ll be accused of ‘rape-staring’ and have your life ruined on the Internet, and end up being falsely labeled all over the Internet as a sex offender?” The young man laughed and said, “I know that you are exaggerating, but that’s the kind of shit that many of us millennial guys think about, as we have become pathetic.”

Having young men and young women in the 99% being afraid of one another may be even more of a coup for the 1% than their historical successes at getting ethnic and racial groups to hate one another. With this fear and hate among the 99%, it is impossible to have the solidarity and strength necessary to effectively revolt in an organized way against the 1%.

The Internet technology need not necessarily be a pacifying force as, for example, the Internet was effectively utilized during the Arab spring to foment rebellion and organize resistance. Similarly, some of the other pacifying forces that I originally detailed need not be pacifying. Teachers could inspire resistance against illegitimate authorities rather than indoctrinate compliance to any and all authorities. And my fellow mental health professionals could embrace liberation psychology rather than pathologize and medicate rebellion.

My experience is that young people, in general, are becoming increasingly pained and weakened by multiple oppressive forces, and older people who give a damn about them can help. The 1% will always attempt to seize powerful technologies and institutions to pacify all of us—especially young people. To manage these technologies and institutions, the 1% needs technocrats, administrators, and guards; thus, what would help is what Howard Zinn called a “revolt of the guards.” However, if technicians, teachers, mental health professionals, and other guards never even admit to ourselves our societal role—as guards who maintain the status quo—then we guards will never consider a revolt. Many older people are guards, and they can choose to revolt and help young people gain the strength necessary to resist injustices.

Bruce E. Levine, a practicing clinical psychologist often at odds with the mainstream of his profession, writes and speaks about how society, culture, politics and psychology intersect. His most recent book is Resisting Illegitimate Authority: A Thinking Person’s Guide to Being an Anti-Authoritarian―Strategies, Tools, and Models(AK Press, September, 2018). His Web site is brucelevine.net

	You Don’t Have To Wa… on You Don’t Have To Wait For Hal…
	ALL OUT WAR ON THE L… on ALL OUT WAR ON THE LIFE F…
	Pacific.scoop.co.nz… on Killing the Biosphere to Fast-…
	Reid Mukai on Saturday Matinee: Wizards
	Lara/Trace on Saturday Matinee: Wizards

After the Crash

Dispatches From a Long Recovery (Est. 10/2024)

Tag Archives: financial crisis

The Suicidal Empire