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Revolution Revisited

2015 February 13
by Ian Welsh

On Wednesday I posted a video on revolution by Timster.

It turns out Timster is a noted anti-semite.

Mea-culpa.  I was wrong to post it without doing proper due-diligence (aka. about 2 minutes of research) and those who are criticizing me for it are correct to do so.

Let’s discuss, briefly, what I liked about the video.

Education hasn’t worked.  The population is wet wood, they will not light on fire.  The crimes are clear: from Iraq to the financial crisis to austerity to multiple foreign interventions which have made the world worse to an escalating police and surveillance state, the people who run the developed world have proven to be monsters responsible for the death of millions and the impoverishment of hundreds of millions.

This shouldn’t be controversial.  I’m not even sure that it is controversial.  And yet, not only are they still in power in most cases, there is no reasonable prospect of them standing trial for what were, by any reasonable standard of justice and in many cases under the law as it stood at the time, crimes: often crimes of mass murder.

Now I say this as someone who has spent the last 13 years explaining what is wrong, why and often, how to fix it.  But that hasn’t worked.  It simply has not

Given that the crimes of our leadership are well understood, the inertness of the population in doing anything about those crimes is striking.

This leads us to the next question, which is simply this: is revolution ever justified.  The video calls for violent revolution.  Is that ever justified?

When you think on this question ask yourself whether or not, say, the American revolution, was justified.  Or the Haitian slave revolution?  Or whatever you think the hardest case is.  Then ask yourself this, how many people have to die or be impoverished before revolution is justified “here”?

I’m not saying that it is: frankly, I’m not sure it is, because I don’t believe that the non-revolution options have been exhausted, and by exhausted I don’t mean “every corner case hasn’t been tried.”

What I mean goes back to the first point, that citizens can know, now, if they want, about the crimes of their leaders, and still haven’t done much.  (Yes, there are exceptions: right now those exceptions are Greece and Iceland.)

Think back to Occupy.  I’ve got my issues with Occupy, which I won’t go into here, but Occupy got out thousands of people at most.

The left loves Gandhi (and ignores his complete inability to deal with real evil, like Hitler.)  But Gandhian non-violence requires a ton of feet on the ground.  It requires enough people to shut down entire regions of a country.  Hundreds of thousands, minimum.  Millions.  And those people don’t just march, they shut the country down.

Those people do not, in most Western countries, yet exist.  The huge rallies in Spain indicate that may be changing, but that is not yet clear.  What we will see, in Greece and soon in Spain and Italy, is whether peaceful modification of the system thru the ballot box is possible. But the numbers necessary are only beginning to be seen in a few (forgive me, PIIGS) fairly marginal European countries.

I make no predictions on this, I do not know what will come.  We will see.  Syriza is playing a very bad hand, very very well. But Greece is very looted, and even with substantial debt-forgiveness I wonder how well Greece will do, though it will surely do better than under austerity if they do receive that debt-forgiveness.

So, revolution?  Wet wood?  Peaceful change thru the ballot box or non-violent Gandhian protest?

We will see. In the meantime, mea culpa again on posting that video without due diligence.  And when will we be ready to revolt, thru the ballot box, Gandhian resistance, or, indeed violence?

Sneering that there is no runaway inflation misses the point

2015 February 11

A lot of people though that unconventional monetary policy (aka. printing huge amounts of money) would lead to runaway inflation.

They were wrong, and the fact that they were wrong is a cudgel used to beat them.

But the reason they were wrong is important, as I noted last week: they thought that all that money would get to ordinary people rather than virtually all of it going to the rich and corporations.

In retrospect, and perhaps even at the time, naive.  But what the critics are castigating them for is believing in the good faith of policy makers: thinking that those policy makers actually wanted an economy that worked, if not for all people, then for more than the top one, five or ten percent.

They were wrong because they weren’t cynical enough or weren’t realistic enough to realize that developed world elites are so depraved that they are willing to print trillions of dollars to give almost exclusively to people who are already wealthy, in order to ensure they stay wealthy.

Monetary policy, at this point, has no other actual aim in most countries. It is meant to bail out indebted securities firms, to keep the rich rich, and to make them richer. If it happens to do anything else, that’s most likely an unfortunate side effect, since poor governments sell off crown assets cheap; and poor people work for almost nothing.

One can (and did) point out this a short-sighted policy likely to rebound on the rich, but they do not really believe it, nor do they really believe any one else deserves money.  They are the “value creators” and they are worth what they are given.  They, after all, bought up government fair and square.  Now they want a return on their investment.

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2015 February 11
by Ian Welsh

I don’t agree with all of this, but I find it hard to disagree with much of it.


h/t: Vinay Gupta

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This ain’t Wonderland, this is Ferguson, Missouri, antechamber of Hell

2015 February 10
by Ian Welsh

Conditions in the Ferguson city jail:

“They are kept in overcrowded cells; they are denied toothbrushes, toothpaste, and soap; they are subjected to the constant stench of excrement and refuse in their congested cells; they are surrounded by walls smeared with mucus and blood; they are kept in the same clothes for days and weeks without access to laundry or clean underwear; they step on top of other inmates, whose bodies cover nearly the entire uncleaned cell floor, in order to access a single shared toilet that the city does not clean; they develop untreated illnesses and infections in open wounds that spread to other inmates; they endure days and weeks without being allowed to use the moldy shower; their filthy bodies huddle in cold temperatures with a single thin blanket even as they beg guards for warm blankets; they are not given adequate hygiene products for menstruation; they are routinely denied vital medical care and prescription medication, even when their families beg to be allowed to bring medication to the jail; they are provided food so insufficient and lacking in nutrition that inmates lose significant amounts of weight; they suffer from dehydration out of fear of drinking foul-smelling water that comes from an apparatus on top of the toilet; and they must listen to the screams of other inmates languishing from unattended medical issues as they sit in their cells without access to books, legal materials, television, or natural light. Perhaps worst of all, they do not know when they will be allowed to leave.”

Ah, America.  The City on the Hill.

The nature of a corporation and how it changed in the 1980s

2015 February 8

By Matt Stoller

Let’s start with Pfizer, which announced the acquisition of generics maker Hospira for $17B this week. Pfizer isn’t a drug company.  Pfizer is a financial company that happens to own some labs and drug factories.  Pfizer’s business model is to acquire small companies who innovate, lay off their scientists, and ride the patent or other monopolies.  Former employees of acquired companies explain this clearly. So does Pfizer itself.

Pfizer is telling Wall Street that the acquisition will be ‘accretive to earnings’ and it will cut $800M in costs. Laying off scientists.  What this means, in reality, is that large pharma companies are actually innovation destroying machines. How did we get here?

Prior to the 1980s, Americans understood that corporations were private governments of resources and people.  Large corporation consolidations in the 1890s were done under the auspices of rationalizing the economy.  Then antitrust from the 1930s to the 1970s was done to force these private governments to act in the public interest. RCA, GE, Alcoa, Dupont, Xerox, etc – all were forced by antitrust actions to put their patents into the public domain.  The US gov’t structured markets as a way of ensuring that these political entities had checks and balances on their activities.

Antitrust was a Madisonian solution to the monopoly problem of the 1890s-1920s, which was understood as political NOT economic.  This had an incredible effect. Large companies, like Dupont, were forced to spend more on R&D instead of acquiring innovation.  Because they had to compete against smaller firms and they couldn’t acquire (due to merger scrutiny).  Pfizer’s business model, in other words, would have been illegal prior to the 1970s.

Most of the laws that forced this state of affairs are still on the books. The were just reinterpreted by Reagan.  Any President can simply go back to the pre-1981 model through executive action. Every merger is still reviewed by DOJ.

In the 1980s, an intellectual revolution took hold. Corporations were no longer private governments. They became property.  They weren’t political entities, but economic entities pursuing ‘efficiency’. Corporations exist only for shareholder benefit.  This idea was radical. Prior to this, few thought large shareholders were the only stakeholders, or even the most important ones.  Eliminating all other interests – workers, managers, customers, communities, national security, small shareholders – was truly radical.

It was a political fight, but the Reagan conservatives along with Wall Street Dems of the early 1980s won.  Liberal Democrats had focused their energies on important social questions, rather than the nature of the corporation.  The result was Wall Street primacy and a massive merger boom in the 1980s. Layoffs, offshoring, globalization, monopolies, etc.

This idea that these private governments – corporations – exist solely for shareholders has led to a dangerous unbalanced politics.  In which the industrial base, worker rights, small businesses, consumers, don’t matter. Even China’s strategic threat is irrelevant.

This is changing. Net neutrality is the first significant antitrust concept to emerge and take hold since the Reagan revolution.  Because tech companies and citizens intuitively understand but can’t articulate that telecoms are private governments, not just property.

Which brings us back to Pfizer. The ability to create/sell medicine is of deep public interest. Pfizer has a state charter to do this.  That Pfizer instead is full of financial engineers who generate cash by destroying access to medicine is increasingly understood.  Same with hospital monopolies. These should not be run to maximize cash generation over patient well-being. This is a consequence of the Reagan revolution in corporate governance. It is unsustainable. And the ideas behind it are stale and bad.

All it will take to reorganize our culture is relearning that corporations are part of our political system and need to be managed through a Madisonian checks and balances system of ensuring competition and the public interest as mattering.

Antitrust is popular, Zephyr Teachout got huge applause lines on it when she ran a shoestring campaign in NYC.  Net neutralit generated 4 million comments to the FCC. People get it. It’s simple stuff. The liberal lawyer elites aren’t there yet.  But we’re beginning to understand the importance of the government protecting private property from corporate predators.  And Citizens United is opening up a new (or rather old) way to understand how political corporations really are.

And that is why these ideas are coming back. And why our political system feels deadened, but is on the verge of renewal.

(And to make the point another way: In 2008, Pfizer/Wyeth spent $13B on R&D. 2009, Pfizer bought Wyeth. In 2013, the combined company spent $6.55B on R&D. Down 50%.)

Economic mal-distribution and the catastrophes it ends in

2015 February 7
by Ian Welsh

So, the US posted another set of decent (not spectacular, but decent) job gains.  It’s hard to credit this to anything but the price of oil.  I say this because large chunks of the rest of the world are throwing off lousy stats, including China, either the most important economy today or the second most important, depending on how you slice your onions.  And a lot of the non-job US numbers have been atrocious as well.

I’m curious how long this dynamic can go on.  It’s good that oil prices are low (as long as you don’t sell it), but the general collapse of commodity prices and the general reduction in Chinese manufacturing activity looks very bad.

A lot of the world economy is in the hands of various decision-makers.  Those who can print money, public or private, control the economy, and given the lack of mark to market, they are not particularly constrained by “economic reality” if such a thing exists.

The way inflation has pooled in highly specific areas tells the story.  What we have is two things:

  • Vast funnels of money to the rich;
  • vast manipulation of prices to forestall market mechanisms from working (which would wipe out the rich);

This means there is vast mal-distribution of resources, even by the warped standards of pre-financial crisis markets.

Traditionally such mal-distribution comes to an end because those who don’t mal-distribute, or mal-distribute less, defeat those who do.  But the world system is set up to make sure that no one can or will distribute in an effective and efficient matter, by freezing them out from needed resources, and by rewarding elites for cooperating with the current regime. “This might not be good for your country, but it’s good for YOU.”

Since external threats won’t work, and since internally oligopolies and the politically connected are rewarded over socially effective and efficient enterprises, this system can only end when it collapses internally.  That can mean internal collapse of the world system—deals which become so ruinous for too many member countries that they revolt (Greece might, though it hasn’t yet. Venezuela tried and failed.)  Or it means internal collapse, as the inefficiencies become so blatant that countries cannot maintain internal order and cohesision.  You can see this in Mexico, which has buckled under the requirements of maintaining the world order.  I can pretty close to guarantee that Mexico would not be in this state if the policies that pre-dated free trade deals were still in place.

The smarter elites are, thus, doubling down on repression. Whether it’s Canada after the Parliament Hill shooting, France in the aftermath of Charlie Hebdo, America in the aftermath of well, who needs an excuse any more—the developed world is clamping down with draconian near-panopticon surveillance, huge restrictions on previous civil liberties and draconian “justice” for anyone they want to destroy.

I think, personally, that this is a race they’re going to lose.  I’ll write on why, next week.

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The burning of the Jordanian pilot

2015 February 5
by Ian Welsh

I’m with Robb on this.  It’s barbaric and no one should be burned alive.  I also strongly believe in good POW treatment (though, obviously, ISIS is not a party to the Geneva conventions.)

But pilots are more hated than virtually anyone.  They kill and maim (and often burn people to death) and they do it with what seems like complete impunity.  The Afghans used to throw Soviet pilots to the women, and, well, you don’t really want to think about what happened to them.

Pilots aren’t given sidearms to kill the enemy with if they are shot down.  They’re given sidearms to kill themselves.

The Kipling rule applies: always save the last bullet, for yourself.

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The Greek Pivot East and the Future of Greece In Europe

2015 February 3

In my most recent article on Greece and Syriza’s options I pointed out that cutting deals with other pariah nations might be wise.

Practically the first thing Greece did was say that they will not be onside for any more Russian sanctions.

Russia said they would consider, if asked, bailing out Greece.  (This is a way of saying, “go ahead, ask”.) Given Russia’s own reserve problems, one wonders where it would find the money, BUT my guess this is a “if you default” scenario.  Russia won’t pay off European banks for Greece, but if Greece defaults, it will help Greece running. (Not least, most likely, by selling them heavily discounted hydrocarbons, and probably even loaning them the rubles to buy them with.)

That takes care of one of Greek’s main problems: food, oil/gas, and medicine—what they MUST have which they MUST buy from other countries.

A few words on Greece’s negotiations with Europe are also in order.  First, note that the “bailouts” given to Greece mostly weren’t — 89% just went back to lenders.  Worse, the imposed austerity conditions caused an actual collapse in GDP and employment, which means that the cost of the bailouts was far more to the Greek government and economy than the actual amount of money received.

In other words, this was all just a bullshit way of bailing out banks, and as the FT notes, only because bailing them out direct was “embarrassing”.  To avoid embarrassment, millions were impoverished, people set themselves on fire, and Greece was devastated.

This, people, is why I say, and mean, that Merkel is monster.  A disgusting, rotting excuse for a human being, let alone a statesman.  Millions suffered, not just in Greece but in the other peripheral countries, for no good reason.  Austerity is just the voodoo economics of the modern day, but even more devastating.

The deal Greece wants is more than fair to “lenders”.  And I mean “more than fair” literally.  They deserve to be defaulted on, because they didn’t do their due diligence, and all loans since the financial crisis at the very least, should NEVER have been made.

An independent Bloc is desperately needed in the world.  BRICS plus allies, with their own payment system, reserve currency and international trade and settlement system.  Until it exists, countries like Greece will feel (and often be right) that they have no choice but to buckle under to whatever terms the West sets.

Enough.  This suffering is not required in any world which runs on rational economics AND has as its goals the welfare of everyone.  It never was required.  All of the deaths, job losses, homelessness, hunger and so on was optional.  It was chosen because it suited oligarchs and politicians like Merkel.

This is the world you live in. It must be changed.  Since core westerners are unwilling to change it from withing in time to save millions and millions from suffering; it will have to be changed by those it is most severely impoverishing.

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My thought in two compendia

2015 February 2
by Ian Welsh

Oh, there’s more to it than this, but these contain core articles on:

  • Ideology
  • How character is created
  • How leaders are picked and molded
  • How the world economic system works to destroy democracy and create oligarchy
  • How we went from the great post-war liberal era to Gilded Age 2.0
  • How and when violence works
  • What types of economies are viable
  • How change plays out personally for those caught in it
  • What prosperity actually is, and isn’t (less obvious than you think)
  • What a good economy looks like
  • How previous economic solutions have worked, and why and how they’ve failed
  • The role of ethics and morality, and how they interact with economics
  • An explanation of why in terms of happiness or health or meaning, human history is not a march of progress
  • Why, specifically, it seems impossible to get the mass of ordinary Americans to take political action to save their own bacon;
  • and far, far more.

This is a political, economic and philosophical education. I’ll be putting out these compendia in e-book and/or .pdf form in a few months, with additional commentary, a few extra articles, and some proper editing.

But if you want to read them now, you’ll benefit.

The Role of Character and Ideology in Prosperity

Why the Economy Sucks for Most People

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The Venezuela edition of “imports will kill’ya”

2015 January 30
by Ian Welsh

So, the New York Times has an article on how Venezuelan stores are running out of basic goods, because they import so much, and with the drop in oil prices, they don’t have enough hard currency to buy what they need.

Repeat after me for the 100th time, “all resource booms end.”

All of them.  Always.  Gold, oil, rubber: it always ends.  Period.  The question is only when.

Back around 2004, myself and Stirling pointed on the late (and defunct) BOP News that Chavez was screwing up his revolution.  That’s not a way of saying I disapprove of his goals, I very much agree with what he was doing in general terms. But in specific, he was not making his country independent of high oil prices.

What a country needs it must either be able to produce, or have product it knows it can sell to someone who can produce what it needs, and who is a reliable partner. (No Western country is a reliable partner to an actual left wing revolutionary government.)


If you do not, things may go well for a long time, but you are ALWAYS vulnerable to the hegemonic economic state and its allies.  Right now that’s the West.  For a long time, if the West were jerks to you, you could run to the USSR, but right now there is no complete replacement, though China, as leader of the BRICS, is coming on strong.

Note that when the USSR fell, Russian support for Cuba almost entirely went away.

It was a huge shock, but Cuba survived it.

Chavez was a great friend of Castro’s, but he did not learn from Castro.  He did not figure out how his country could survive being cut off from what amounted to essentially it’s only source of support (in his case, oil sales).

Now Venezuelans pay the price.

Learn the lesson.

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