Ian Welsh

The horizon is not so far as we can see, but as far as we can imagine

Week-end Wrap – Political Economy – April 14, 2024

by Tony Wikrent

 

Strategic Political Economy

Heather Cox Richardson Politics Chat: April 9, 2024

[Youtube, April 9, 2024]

[TW: 3:00 Two major things are occurring in USA, and they are closely tied to each other. One is what Trump is doing. The other is what the Republican Party is doing, which since 1981 has operated under the ideology that the way to make the country better is to concentrate wealth at the top of the economy, so the wisest and most business savvy cam invest it most efficiently to create growth and jobs.

5:30 Why the question “Is Trump a fascist?” is not really interesting or useful.

8:00 Even though the Founders were including only white wealthy males like themselves, the Declaration of Independence was radically revolutionary because it rejected the ideology that some people are better than others and should be the rulers. Trump and the people who support him have rejected this bedrock belief of American democracy; they believe some people are better than others, and they have the right to rule. They do not believe in human equality.

Trump is not running to win the popular vote. They realize they are a minority but believe they are correct and morally superior. They believe they are opposing the causes of USA decline.

Corporate leaders are seeking to protect their positions of privilege and the preferential tax treatment they have enjoyed under the Reagan, Bush and Trump tax cuts. They are determined to prevent Biden from upsetting their applecart.

25:30 The Republicans have only a minority of voters supporting them, and they recognize this. In 1986, they began their campaign of suppressing Democratic votes with their “ballot integrity” campaign. Then they began aggressive gerrymandering after the 2010 election which was the first election after the Citizens United decision allowed unlimited amounts of money into politics.

28:00 ? In 2007, Mitch McConnell became Senate leader, and he recognized that they did not have majority support. The clear majority of Americans liked Social Security, clean air and clear water, and business regulation. But, if Republicans could screw up Congress and prevent progressive legislation from being passed, they could pack the courts with people who believed like they did, and they could rewrite the laws by reinterpreting them, without passing any laws.

40:00 ? HCR lists Biden’s accomplishments, and concludes Biden is the most consequential President since LBJ and perhaps FDR. ]

 

If Trump Wins, the GOP Is Ready to Wage War on the Working Class

And Iran Retaliates For the Embassy Attack

It’s on!

Looks like Iran wasn’t a paper tiger wimp who wouldn’t strike back.

Waves of drones right now, as I understand it the idea is to degrade air defenses, then send in the missiles. Some suggestions this will go on for at least three days.

American naval and air assets are helping Israel defend. I wonder if Iran will hit American bases too? Or, perhaps, tell its allies in Iraqi militias to do so, and stop playing around with small drone attacks: really hit them.

To my mind this attack is 100% justified. Embassy immunity is no joke, and Iran really had no choice but to strike, or nowhere would be safe.

Hezbollah is also hitting Northern Israel hard with missile attacks.

There’s some chance of this escalating into a large regional war if Israel counter-strikes, then Iran counter-counter-strikes and so on. Israel wants to draw the US in.

Remember, though, that war games tend to show the US losing a war with Iran. And if it goes that far, they WILL lose their bases in Iraq and the Persian Gulf WILL be shut down. Wouldn’t be surprised if they lose an aircraft carrier if they get stupid and try for too close support, as far as that goes.

Stay tuned. Slight chance this will turn into WWIII–remember, Russia is a close ally of Iran, and China has good ties as well. If Iran starts losing, they will help, especially Russia, who remembers that Iran was one of the only countries to step up and help them in a big way against Ukraine. At the very least, if Israel uses nukes on Iran, Russia is likely to respond, only possibly held back by the presence of Palestinians.

Interesting times to live in!

Update: And Iran apparently also seized a ship near the Straight of Hormuz. A warning that they can, indeed, play Yemen and shut down even more maritime traffic.

Update 2: Israeli air base Nevatem being hit:

You get what you support. If you like my writing, please SUBSCRIBE OR DONATE

Open Thread

Use to discuss topics unrelated to recent posts.

How To Know When The US Deficit Is Actually A Problem

There’s been a lot of hysteria over the ballooning US deficit lately. Is it worth worrying about? Let’s learn how you can tell for yourself, rather than relying on others to tell you.

This is the sort of chart which is going around:

Scary, eh?

So, here’s the debt long term, as a percentage of GDP:

Still pretty scary. US debt it is running higher than WWII debt.

In the short run, most of this is caused by interest payments:

So, what changed? Prime.

If you take a look at these charts you’ll see the rise in rate of increase is mostly due to interest.

Now, when governments who can print money default, it is because people don’t want their money, or the money can’t buy what what they need. US debt is entirely in US dollars. Treasury can mint as many bonds as it likes, and the Federal Reserve can buy them. It is impossible for the US federal government to run out of money, per se.

Rule: Debt is a problem for a government with the power of the printing press when money can’t buy what is needed.

Regular readers will know I am fond of Keynes maxim: “Anything we can do, we can afford.”

The corollary is “Anything we can’t do, we can’t afford.”

It doesn’t matter how much money you have. You can’t build a nuclear bomb in 1900. You can’t build a nuclear bomb if you are Nicaragua. For ages no one but the US and Europe could, effectively, build commercial airliners. You can’t buy what you can’t produce.

In 1945 the US debt did not matter. The US was half the world’s economy, and everything it needed to produce, including oil, it produced itself. It also had the power of taxation: the top marginal rate was 94%.

Rule 2: Money can’t buy what you need when you can’t produce it and those who can produce it won’t sell it to you.

Right now the US cannot produce much of what it needs. It does have a food surplus and can survive on its own domestic food production and it has a surplus of petrochemicals BUT much of the goods it genuinely needs, like basic electronics and production equipment are no longer made in America.

Let’s look at three charts. First the trade deficit in goods and services:

Now, let’s look at the trade balance in services:

So, the US has a trade surplus in services. Crap like intellectual property and management consulting. Stuff people can do without if they must or can ignore if they choose.

Now, trade balance in goods:

The trade balance in goods is what the US doesn’t make itself that it wants or needs. Some of it is crap: you don’t need summer vegetables in the winter. Nice to have, but not needed. But a lot of it is important: those basic electronic and mechanical goods, including production goods which the US no longer makes and in many cases no longer knows how to make.

The overall trade balance doesn’t look so bad, but it is made to look way better than it is by the US trade surplus in services, which are far less important than goods.

When the US can’t make or buy what it needs using US dollars the deficit matters.

That means the key point is when other countries stop taking US dollars as default. When the dollar is no longer the medium of trade. Right now almost everything can be bought in dollars, which the US can print. If and when that changes, the US is up shit creek without a paddle.

But there is another set of issues: domestic ability to pay.

Specifically, when you can’t pay the enforcer class. Cops and military and judges and prosecutors and prison guards and all that security crap.

America is a vastly unequal society, seething with latent unrest. If the people who protect the status quo won’t fire, then the government and the peace is at great risk. We say this during the January 6th insurrection: most of the capital cops were not willing to fire. This was an ideological issue: they were sympathetic to right wing protesters, just as cops tend to protect Nazis and beat down socialists and blacks.

But it can also become a financial issue. You can print as much as you want, but if people can’t buy what they need with it, it’s worthless. See Weimar Germany hyper-inflation. Or you can refuse to pay, because part of the ruling coalition wants too much of the money and won’t give it to others. Most of the policing in the country is local: it is financed by states and municipalities which do not have the power of the printing press and which do not have a great deal of effective taxation ability: people and business can leave the state or the municipality, in addition to the normal elite capture rule.

When the Bolsheviks took over Russia, most of the enforcer class was not being paid, or couldn’t buy what they needed with the money they were being paid. So when push came to shove, they didn’t fight for the government, and many (especially the navy), switched sides.

Likewise, as Lenin observed, ordinary people are genuinely willing to violently revolt when the risk of doing so is less than the risk of not doing so.

The key question, then, is inflation. Unfortunately, in the US and the West in general, actual inflation is impossible to tell thru official stats. You have to judge buy your own grocery bill; your own fuel bill and your own expenses, and those of people you know. Do you and others have excess money to spend?

Inflation spikes when there isn’t enough to go around. It’s that simple. If a country can’t produce what it needs or wants, and others start raising their prices or refusing to sell, inflation becomes a problem.

Even without inflation, decreasing surplus income is a problem. This is why inequality matters: if a large chunk of the population can’t buy what they need, well, Lenin’s maxim comes into play.

China is at risk of deflation (not significant risk, yet, but that’s their danger.) The US and Europe and the Anglosphere are at risk of inflation.

That inflation will happen when others won’t or can’t sell us what we need and we can’t make it or grow it or mine it.

It is at that point where the US deficit will matter.

If you want to know when the US deficit will matter, it’s simple: when China and other countries stop using dollars as the default trade currency. That process is early yet, but underway. It used to be unthinkable to sell oil in anything but dollars: did not happen. Now it does. China and Russia, China and India, and Iran and everyone now trade without dollars. African countries are in the midst of throwing out French and American military bases and do the majority of their trade with China, not America or Europe. They are increasingly trading with Russia, as well, and relying on it for military aid.

Everything those countries need except for some medicine they can get from Russia and China: food, goods, and fuel. China gives them better debt terms and doesn’t interfere in most countries internal politics nearly as much as America does.

This is the actual threat: the West not being able produce what it needs and other countries no longer willing to accept dollars. Track this by watching actual inflation, and observing the process of global de-dollarization.

The deficit and the debt don’t matter much, yet.

But they will.

You get what you support. If you like my writing, please SUBSCRIBE OR DONATE

How To Stop Half-Assing Drug Policy & Actually Reduce Overdoses

Oregon recently ended a law which made drug possession for use a ticketed offense with a fine of no more than $100. The reason claimed is that overdoses have been soaring.

No surprise. The modern drug supply is a mess: in most cases users don’t know what they’re buying and it’s often cut with fentanyl, which is incredibly potent. It doesn’t take much to throw a user into an overdose and kill them. (Black tar heroin is often an exception, if it’s available where you are and you use, use that.)

The dirty supply, plus increasing use due to economic despair and social alienation, are behind increasing drug deaths. You can’t solve that with half-assed decriminalization.

Instead you have to offer a clean supply, which means thru government and government approved and inspected suppliers. That has its own downsides, but it’s the only way to make sure people know exactly what drugs they are taking and in what amount.

When articles are written about legalization, they’re almost never actually about legalization: they’re about de-criminalization: there is no clean supply.

The other problem is that stronger drugs replace weaker when they are criminalized. This is a well known, well studied sociological fact. Pot in the 60s and 70s was FAR less potent than it became over decades of illegality. Fentanyl, though invented legally, is so much more potent than heroin by weight that it’s far easier to smuggle: but also far easier to overdose. (And heroin is more potent than morphine, which is more potent than codeine and so on.)

Treat drug use as a medical issue. Sell it thru pharmacies, over the counter. Keep the information on drug use 100% confidential, so that people are willing to be honest about it, and make it illegal to fire someone for drug use that isn’t effecting their job performance.

If you want to keep some drugs illegal, make them the harder ones: meth and fentanyl, for example. If you offer morphine, codeine and opium, you may find that many people don’t move up the scale. And manufacture properly: I’ve never tried Meth, but I’m told by old timers that before it was made illegal and hard to buy the precursors, it was a lot less harsh: one might go back to that type of meth, or back to older forms of “uppers.”

People will have their drugs one way or the other. If you want to reduce deaths, especially in the current environment, you need to keep the supply clean or you need to go full totalitarian, Maoist style.

Since that isn’t happening, give legalization a shot. Start with simple uppers, codeine and morphine. No weird pills, just clean and simple.

If it doesn’t reduce deaths, well, you can criminalize again. But the current methods aren’t working, and we’ve been trying the “war on some drugs” for almost fifty years now: longer for opiates (which were legal throughout the 19th century.)

Oh, and if you actually want to reduce the number of addicts fix the economy so that ordinary people have good jobs they can live well on. If you insist on running the economy to make people miserable, many of the will reach for drugs.

You get what you support. If you like my writing, please SUBSCRIBE OR DONATE

 

The End Of Zoom & Video Evidence

Back in February, deepfake technology was used to steal $25 million dollars:

A finance worker at a multinational firm was tricked into paying out $25 million to fraudsters using deepfake technology to pose as the company’s chief financial officer in a video conference call, according to Hong Kong police.

The elaborate scam saw the worker duped into attending a video call with what he thought were several other members of staff, but all of whom w

Open AI has tech to clone someone’s voice in instants. They haven’t released it and aren’t going to, but that will only slow the revolution.

I suspect this will mean a return to in-person meetings for any important decisions. Outside of corporations and businesses, this will include you having to physically go to your bank to move or withdraw significant amounts of money.

In court cases it may lead to a return to pre-photography evidentiary standards: do you have a witness and/or physical evidence plus a chain of custody? A picture or a video will mean nothing.

With respect to decision-making an attempt will be made to get around this by using codes and passwords, but that won’t work very well. As the modern world has proved, any password or code that’s on a computer system is not secure.

All of this means, ironically, a partial regression: electronic comms won’t be trustworthy and so will be used less.

Welcome the to the past in the future.

You get what you support. If you like my writing, please SUBSCRIBE OR DONATE

Week-end Wrap – Political Economy – April 7, 2024

by Tony Wikrent

 

Strategic Political Economy

Navies are obsolete, but no one will admit it 

[Crooked Timber, via Naked Capitalism 04-04-2024]

 

Rethinking tanks on the modern battlefield

Stephen Bryen [AsiaTimes 04-02-2024]

…The problem with adding explosive reactive armor (ERA) is that it is heavy. When you already have a 70-ton behemoth, adding another few tons makes its roadworthiness questionable. A key problem for the Leopard and Abrams tanks has been getting stuck in the mud in Ukraine, where they then can be picked off fairly easily….

The US has stopped upgrading the M-1 Abrams tank and canceled the latest modifications. It is clear that, given the new battlefield weapons, even the huge M-1 Abrams is not survivable. A new tank design is needed…. The M1 tank dates back to the period 1972 to 1975, meaning the design is at least 50 years old.

 

Gaza / Palestine / Israel

‘Lavender’: The AI machine directing Israel’s bombing spree in Gaza 

[972, via Naked Capitalism 04-04-2024]

A must-read. Exeptionally nasty.

Two Iranian Generals Killed in Israeli F-35 Strike on Damascus Diplomatic Building: Focus on Air Assassinations Continues 

[Military Watch, via Naked Capitalism 04-04-2024]

US opposes Palestine’s bid to become UN member state 

[Anadolu Agency, via Naked Capitalism 04-04-2024]

Israeli F-16s Provide Close Air Support to Turkish-Sponsored Jihadists in Syria’s Aleppo 

[Military Watch, via Naked Capitalism 04-01-2024]

Austin Calls for ‘Rapid Increase’ of Aid Into Gaza Through All Crossings (press release)

[U.S. Department of Defense, via Naked Capitalism 04-05-2024]

“2,000,000 humanitarian aid meals per day” via the pier.

 

Oligarchy

[X-Twitter, via Naked Capitalism 03-31-2024]

Israel’s Gunning To Lose US Support

When you lose Nancy Pelosi:

Israel went too far. Dems love celebrities and the NGO workers they killed were essentially Democratic party affiliated.

Then there was the attack on the Iranian embassy in Damascus. A blatant violating of centuries old immunity of embassies. This is so bad that…

Through a series of messages exchanged via third parties, the United States and Iran have come to an understanding. Iran assured the Americans it will not target U.S. facilities, and in turn the U.S. says it will not get involved if Iran retaliates against Israel. Israel carried out the attack on the Iranian Embassy in Damascus, without consulting the United States.

We’ll see if the walk gets walked, but this looks bad for Israel. To be fair, Israel once sunk a US warship and got away with it, so I suppose they can be forgiven for thinking there’s nothing the US won’t swallow, but they appear to have misacalculated.

As for Iran, the news is that they will retaliate, and that they will do it directly, not thru proxies. Israelis are paralzyed with fear: GPS has been jammed for days, and store shelves are bare as Israelis stock up.

This is a bad situation. If Iran hits too hard, Israel will hit Iran. If they do that, Iran will retaliate again.

Can you say “escalation spiral?”

And if war breaks out, well Hezbollah and Syria will likely join in. Once that happens, no matter how pissed the US is at Israel, well, they may feel they must intervene. Why? Well…

Nuff said.

Let’s hope this isn’t the start of WWIII, because China and Russia are not likely to let Iran be taken out by the US, and if Iran starts winning conventionally against Israel (and if the US doesn’t intervene, that’s where my money is), well the Israelis have always claimed to be trigger happy with their nukes.

All because some Zionists wanted to steal land and have now decided to commit a genocide.

You get what you support. If you like my writing, please SUBSCRIBE OR DONATE

 

Page 1 of 414

Powered by WordPress & Theme by Anders Norén