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

Week-end Wrap – Political Economy – May 19 2024

by Tony Wikrent


Strategic Political Economy

You Can’t Run Industrial Policy OR A War Economy Under Neoliberalism 

Ian Welsh, May 13, 2024

…Neoliberalism is about unearned profits. This is seen most clearly in the stock market and in real estate…. But this isn’t just true of housing and stock prices, it’s true of almost everything. Profit margins have soared during the neoliberal era. Our companies don’t compete on price or quality, they try to create oligpolies or monopolies so that they can charge more without having to provide significantly more value. The way they took advantage of Covid to raise prices far faster than their costs were rising is instructive.

Simply put, neoliberalism is about unearned money: about capital gains; PE plays where you buy a company with debt, load it with the debt and then dump it; monopolies and oligopolies and getting government to juice asset prices or pay you far more than you deserve for shoddy goods (see mil-industrial complex.)…

For about six years, I’ve heard constant complaints from Chinese that it was no longer possible to buy a home. Their housing market, like ours, was being bought up by investors, pricing out young people.

What was the Chinese response? They crashed their housing market and the government has stepped in….

We can’t compete with this. It’s impossible. Not because it’s impossible in theory, but because we don’t believe in doing such things and to pursue such policies we would have to hurt rich people, a lot, and they own Congress and the Presidency and our politicians in other countries.

China has repeatedly shown that if a policy is good for the majority, but hurts the rich, they’ll do it anyway. We’ve repeatedly shown the opposite.

And you can’t run industrial policy or a war economy if you want fake profits based on not actually producing good new goods at cheap prices. It can’t be done. If an entire society is based around “give me money for the least possible effort”, you’re cooked….

The West is toast. We can’t compete. It’s that simple. To compete we will have to change significantly, and while putting up tariffs isn’t actually a bad idea, it’s not enough alone. Without changing our fundamental governing and economic policies and ideology so that to get rich and stay rich you have to actually make good cheap new products in a way that improves the majority’s lives, we will never be able to compete.

When Your Rulers Ignore Voters But Are Terrified Of Protesters, That Tells You Something 

Caitlin Johnstone [Caitlin’s Newsletter, via Naked Capitalism 05-13-2024]

It’s hard to understand the tyranny of a system that relies on propaganda and manipulation as opposed to overt totalitarianism, in the same way it can be harder to recognize a psychologically abusive relationship than a physically abusive one.



US Oligarchs Started One Civil War — and They Could Do It Again

Thom Hartmann, May 17, 2024 [CommonDreams]

The ideology of the Republican Party and the stranglehold of powerful corporations of our political system overall has transformed America from a democracy into a late-stage oligarchy, and the point of no return is now visible….

Billionaires and civil war? A billionaire-funded Supreme Court Justice flew the American flag upside down outside his house after January 6th in apparent support of Donald Trump‘s attempt to overthrow our government.

Americans for Tax Fairnessreports that 50 billionaire families have, at this early stage, already injected almost a billion dollars into our political system — the overwhelming majority of it going to Republicans and in support of Donald Trump — in an effort to maintain enough control of our political system that their taxes won’t go up. And that total is just what’s reported: it doesn’t count the billions in unknowable dark money that’s sloshing around the system thanks to Citizens United….

The clear result of five corrupt Republicans on the 1978 and 2010 Supreme Courts legalizing political bribery of politicians (and Supreme Court justices) by both corporations and the morbidly rich is that America is now well past the halfway mark of a fatal-to-democracy slide into oligarchy and the strongman autocracy typically associated with it. And the conflict that can follow that….

What we are watching is the final stage of the 40-year neoliberal transition of our nation from a forward-looking and still-evolving democratic republic into a white supremacist ethnostate ruled by a small group of fascist oligarchs.

Some years ago, Trump economic adviser Stephen Moore (before he was Trump’s advisor) was a guest on my radio/TV program. I asked him, “Which is more important, democracy or capitalism?“

Without hesitation, Moore answered, “Capitalism.” He went on to imply this was how the Founders wanted things….

[TW: I hope that regular readers, familiar with my dogged insistence on the need to revive civic republicanism as a philosophy of government, know how completely wrong Moore is. ]


Global power shift

The Dragon-Bear-Hug Signals Unprecedented Expansion of Ties 


[Simplicius the Thinker(s), via Naked Capitalism 05-18-2024]

…Firstly, Putin brought virtually every major figure of the Russian government with him, most notably new Defense Minister Belousov—though Shoigu remained significantly at his side… That’s in addition to Lavrov, Peskov, Shoigu, Belousov, and others.

That is a full house, and represents major deals being formed. The Ukrainian officer agrees:

Such a list of decision-makers from the financial and economic sectors suggests that this delegation is not ordinary but rather an ambitious and serious effort to deepen economic and financial cooperation with China….

…Russia and China are truly shaping up to lead the world together through the adolescence of this century, reshaping the international order into one based on real principles rather than the fraudulently imagined crony “rules based order” trap of the dying Anglo-American Empire….

…Putin is prioritizing the health of the country’s overall economy. In short: Belousov’s job is to make sure that the long-term economic repercussions of the military conflict do not adversely affect the general economy and civilian life.

He emphasizes this point by bringing up the next big ‘bombshell’: Russia’s combined defense and security spending is already approaching 9% of GDP, while that of the Soviet Union’s in the 1980s was north of 13%….

[French economist Jacques Sapiron on new Russian Defense Minister Andrei Belousov:] “

…He joined the presidential administration at the end of 2000 when Putin was elected, and quickly became one of his advisors on the economy and innovation, putting all his skills (Economics and Math) to work in his new role….  He understood (and understands) perfectly that Russia’s survival depended on its economy AND its ability to develop an innovation regime that involved an entire ecosystem as well as a financing system….

‘His appointment to the Ministry of Defense is of considerable importance. It marks the transformation of this ministry into a production, design, research and innovation agency for the armed forces.

“The impact on military-industrial companies will be considerable. They will see their activities streamlined, and above all they will have to be attentive to the link between the short term and the long term through innovation processes.

“This also means that a number of companies from techno-parks and start-ups will be integrated into this process to drive innovation. It is likely that Russia will set up an equivalent of DARPA to ensure civil/military contact….

“…his appointment indicates that the Russian government is looking far beyond the current hostilities, and expects a period of 10 to 20 years of “cold” confrontation with NATO countries.”

The Kharkov offensive and the replacement of Shoigu as Defense Minister 

Gilbert Doctorow [via Naked Capitalism 05-14-2024]

…there have been rumors of corruption in high places at the Ministry and the sudden arrest of Shoigu’s most senior assistant Ivanov a week ago was the tip-off that changes would be coming in the cabinet reshuffle following Putin’s inauguration for his latest term of office. A make-over is all the more timely now that the Defense budget has ballooned out to over $118 billion, representing more than a third of the total state budget.  What is needed at the top is an effective business manager and all indications are that this is precisely what Belousov will be.

But the wider ramifications are that Belousov will be a major force for using state subsidized credits to nullify the detrimental impact of the sky-high 16% prime rate put in place by the austerity minded neo-Liberal director of the Bank of Russia Elvira Nabiullina and Finance Minister Siluanov.  Russia’s outstanding industrial performance in 2023 was due largely to the largess enabling preferential interest rates to certain manufacturers, which had been called for by Nabiullina’s enemies on talk shows like Evening with Vladimir Solovyov. For better or worse, the military industrial complex will be a driver of the Russian economy, guiding strategic investments and achieving what the old Soviet planning apparatus strived to do but never could….

I have spoken about foreign suppliers of fresh produce like Iran and Turkey at this off-season moment. But it must be said that what the Russian consumer sees on the shelves and buys is overwhelmingly made in Russia, which is as it should be in the world’s largest exporter of foodstuffs.  What is locally grown, of course, also includes vegetables.  Iceberg lettuce may be imported but rucola, young beet leaves, leaf lettuce in plastic pots, cherry tomatoes – all of this comes from greenhouses on the outskirts of all major Russian urban centers.  And most of the tinned and frozen food items in the stores are also Russia-sourced.

What is striking in the 7 months since my last visit is how the local food offerings have expanded both horizontally by nomenclature and vertically by quality. By this I mean not only new and exotic foods, but simple traditional staples that were gone from the stores for many decades….

Moreover, it is similar nonsense to believe that these supermarkets would fill their shelves with products just for show value to impress foreign visitors or local shoppers. The products are there because the demand for them is there, and the demand is there because people have money in their pockets to spend.

A month or so ago, President Putin remarked that during 2023 the rise in take home pay and pensions corrected for inflation was over 5%. At a minimum, the sharp increase in retail store offerings confirms a significant rise in spending power, in particular among the lower strata of the population.

Neither you nor I am naïve, and surely the ongoing war is a contributory factor in growing prosperity. If the FT believes that the new Defense Minister will ensure that Russia has both guns and butter, I qualify this by saying that Russia already is in this ‘sweet spot.’  The military supply factories are all operating on a three-shift basis.  Unemployment is at an all-time historic low.

Recruits to the military pocket 6,000 euros at sign-up, if we take into account both the fixed sum from the federal government and the variable regional government contributions. After that, they receive 2,000 euros a month when in the war zone, which amounts to four times or more normal civilian salaries.  And those warriors who destroy a Leopard tank or similar NATO equipment are immediately paid 10,000 euros or more each from the government plus large premiums from patriotic minded companies and businessmen. All of these separate elements add a lot to purchasing power of the general population.

[Turkish Minute, via Naked Capitalism 05-16-2024]
Conor Gallagher, 05/15/2024 [Naked Capitalism]

…The number of issues between Ankara and the West over the past few decades are almost too numerous to count. Here’s just a brief list:

  • Sanctions and more sanctions. The US sanctions Turkish individuals and companies for “aiding Russia,” for “aiding Iran,” and the US is already threatening to slap on more sanctions over Turkish firms’ exports to Russia. A quick search on the US Treasury’s Office of Foreign Assets Control site turns up a whopping 232 sanctioned Turkish individuals or entities.  This is not a great look when Türkiye is going through its worst economic crisis in two decades.
  • Türkiye was snubbed by the EU.
  • Since the 1990s, Ankara asked NATO multiple times to deploy early warning systems and Patriot missiles to Türkiye, but it never came to pass. In 2017 Russia sold Türkiye its S-400 missile defense systems, which are arguably superior to anything the West has. In response the US expelled Türkiye from its F-35 program and sanctioned the country’s defense industry organization and its leaders.
  • Possible US involvement in failed 2016 coup attempt.
  • US proxy forces in Ukraine have reportedly tried to sabotage pipelines between Russia and Türkiye over the past year.
  • Western support of Kurds to the point there exists the possibility of Turkish soldiers coming face to face in the field with American soldiers, who are supporting the YPG in Syria.
  • The US abandoned its largely neutral stance on Türkiye’s relationship with both Greece and Cyprus. Washington is ramping up military aid to Greece, turning a port near the Turkish border into a naval base, and sending weaponry to Cyprus after ending a decades-old ban on arms sales.

This has all taken place despite Türkiye’s status as the second most important member of NATO just based on its geographic position, which includes controlling access to the Black Sea.

In Red Sea, US Navy paying the price of shipbuilding failures 

[Responsible Statescraft, via Naked Capitalism 05-14-2024]

…The Navy is struggling to meet some of its operational requirements in part because it simply doesn’t have all the ships it expected. The current threat to navigation in the Red Sea is precisely the scenario for which the Navy invested so much time and resources building the Littoral Combat Ships. The LCS program was sold to the American people as a “networked, agile, stealthy surface combatant capable of defeating anti-access and asymmetric threats in the littorals.”

The Houthi rebels launching missiles and drones from shore and hijacking commercial shipping in the confined waters of the Red Sea meets the textbook definition of an asymmetric threat in a littoral region. Yet the “little crappy ships,” as they have come to be known, are nowhere to be seen inside the Red Sea. Rather, the Navy has to keep a carrier strike group composed of Ticonderoga-class guided missile cruisers and Arleigh Burke-class destroyers on station longer than anticipated in an attempt to keep an important maritime choke point open.

The Littoral Combat Ship is one of two major shipbuilding failures from the past 20 years. The other is the Zumwalt-class destroyer….

U.S. Air Force Loses Second B-2 Bomber After Accident: Fleet Down to Just 19 Aircraft 

[Military Watch Magazine, via Naked Capitalism 05-12-2024]

Washington no longer rules out US weapons being used to strike Russian soil 

[LeMonde, via Naked Capitalism 05-18-2024]

China Builds World’s First Dedicated Drone Carrier 

[Naval News, via Naked Capitalism 05-16-2024]


Gaza / Palestine / Israel

‘Most Thorough Legal Analysis’ Yet Concludes Israel Committing Genocide in Gaza

Jessica Corbett, May 15, 2024 [CommonDreams]

The University Network for Human Rights on Wednesday released and sent to United Nations offices a 105-page report that it called “the most thorough legal analysis” yet to find “Israel is committing genocide” against Palestinians in the Gaza Strip.

The network partnered with the International Human Rights Clinic at Boston University School of Law, the International Human Rights Clinic at Cornell Law School, the Center for Human Rights at the University of Pretoria, and the Lowenstein Human Rights Project at Yale Law School for the analysis, which draws from “a diverse range of credible sources” and the territory’s history.

“After reviewing the facts established by independent human rights monitors, journalists, and United Nations agencies, we conclude that Israel’s actions in and regarding Gaza since October 7, 2023, violate the Genocide Convention,” the report states. “Israel has committed genocidal acts of killing, causing serious harm to, and inflicting conditions of life calculated to bring about the physical destruction of Palestinians in Gaza, a protected group that forms a substantial part of the Palestinian people.”

Is Israel Committing Genocide? 

Aryeh Neier [The New York Review, June 6, 2024 issue]

[TW: my inbox contained numerous links to this essay. Correspondents think it important because of who Neier is: one of the world’s leading human rights activists who happens to be Jewish. Most of Neier’s essay is a history of the development of human rights organizations and campaigns.]

I have been engaged for six decades in the human rights movement, which has endeavored to restore peace by enforcing International Humanitarian Law…. Like most of my colleagues in the international human rights movement, I use the term “genocide” sparingly. During my fifteen-year tenure at Human Rights Watch (HRW), which I cofounded in 1978, I applied the term to only one of the many great crimes that we monitored: Saddam Hussein’s slaughter of the Iraqi Kurds in 1988….

…In late December, when South Africa brought to the ICJ its accusation that Israel was committing genocide in Gaza, I did not join some of my colleagues in the international human rights movement in their support of the charge…. I thought then, and continue to believe, that Israel had a right to retaliate against Hamas for the murderous rampage it carried out on October 7. I also thought that Israel’s retaliation could include an attempt to incapacitate Hamas so that it could not launch such an attack again….

And yet, even believing this, I am now persuaded that Israel is engaged in genocide against Palestinians in Gaza. What has changed my mind is its sustained policy of obstructing the movement of humanitarian assistance into the territory.

As early as October 9 top Israeli officials declared that they intended to block the delivery of food, water, and electricity, which is essential for purifying water and cooking. Defense Minister Yoav Gallant’s words have become infamous: “I have ordered a complete siege on the Gaza Strip. There will be no electricity, no food, no fuel, everything is closed. We are fighting human animals and we act accordingly.” The statement conveyed the view that has seemed to guide Israel’s approach throughout the conflict: that Gazans are collectively complicit for Hamas’s crimes on October 7.

Since then Israel has restricted the number of vehicles allowed to enter Gaza, reduced the number of entry points, and conducted time-consuming and onerous inspections; destroyed farms and greenhouses; limited the delivery of fuel needed for the transport of food and water within the enclave; killed more than two hundred Palestinian aid workers, many of them employees of the United Nations Relief and Works Agency (UNRWA), the principal aid provider in the blockaded territory before October 7; and persuaded many donors, including the United States, to stop funding UNRWA by claiming that a dozen of the agency’s 13,000 employees in Gaza were involved in the October 7 attack or have other connections to Hamas. (An investigation by former French foreign minister Catherine Colonna, released on April 22, concluded that Israel had provided no evidence to support its allegations and that UNRWA is “irreplaceable and indispensable.”) The air strikes on April 1 that destroyed all three vehicles in a World Central Kitchen convoy, killing six international aid workers and a Palestinian driver and translator, seemed a continuation of these policies. Israel’s explanation that this was the result of a “misidentification” has aroused skepticism. As a result, other humanitarian groups may be deterred from providing aid.

The cumulative effect of these measures is that many Palestinians—especially young children—are starving….

Does Biden Understand Netanyahu’s Aims in Gaza?

Isaac Chotiner, May 13, 2024 [The New Yorker]

[TW: This is a good overview of the US foreign policy establishment’s views on the conflicts in the Middle East, not just the current tragedy between Israel and Palestine. I think what members of that establishment do not accept is the huge role played by religious zealotry in both USA and Israel, which is why I included the links at the end Chotiner’s interview of Ross. Even though Ross mentions the existence of that religious zealotry, I do not think Ross believes it is large a driving force as it is.]

I recently spoke by phone with the ambassador Dennis Ross, a former State Department official who served as President Bill Clinton’s special envoy to the Middle East. Ross—who is currently a fellow at the Washington Institute for Near East Policy—was intimately involved in the Camp David negotiations during the Clinton Administration, and has written several books, including “The Missing Peace.” (Ross and I spoke before Biden’s CNN interview, but after the decision to delay the bombs had already leaked.) During our conversation, which has been edited for length and clarity, we discussed what Benjamin Netanyahu’s war aims really are, why the Biden Administration is so set on a deal between Saudi Arabia and Israel, and how the Israeli public sees the humanitarian situation in Gaza.

What do you think about the Biden Administration’s policy regarding Israel and Gaza almost eight months into the war?

I think the basic approach has been right. You had to be supportive of Israel, given what Hamas did, and given what Hamas is. Hamas has basically built three hundred miles of tunnels underground, and built an underground structure that has come at the expense of developing Gaza on the surface. It had no interest in giving Palestinians any sense of possibility or hope. Everything was governed by preparing and continuing to try to do all it could to destroy Israel.…

…this is an Israeli government that has an extreme right-wing faction. It basically has Messianic nationalists in it, and you have Netanyahu, who’s been trying to manage those within that government on the one hand, and on the other hand trying to adopt a position that preserves the relationship with Biden.

You also have to look at the context in which Israel was operating. The idea of providing humanitarian assistance into Gaza was profoundly unpopular, and not just with the right wing in Israel, because hostages are being held, and no access is given to them….

…I’m still not in favor of withholding military assistance, because Israel’s the only country in the region facing countries that are threatening its existence, and those countries are not going to go away, and they’re not going to stop….

I want to ask you about the Saudi normalization deal, which is a big part of your piece… Are they going to normalize with the region or keep taking over the West Bank? And the idea would be normalization with more of the Arab world in exchange for Israel helping the Palestinians establish a pathway to a state. This just seems like a fantasy to me. Why do you disagree?

Well, one, because the Saudis haven’t walked away from the idea of doing the deal. Clearly, the Biden Administration has not walked away from doing the deal. I was just in Saudi Arabia a week ago. It’s very clear to me that they would still like to do the deal. I do think the price on the Palestinian issue has gone up since October 7th. Even pre-October 7th, I think they wanted to have something on the Palestinian issue to demonstrate that they got something for Palestinians that others didn’t get. That need in their eyes has gone up since October 7th, not down. And mostly because the imagery coming out of Gaza—which is played over and over again on Arab satellite TV, and not just Al Jazeera—has affected the psychology within Saudi Arabia and elsewhere in the region.

They want something more. They want something that is more likely to produce a Palestinian state than anything we’ve seen previously. As I said when I was in Saudi Arabia, you don’t want a Palestinian state that’s led by Hamas. You don’t want a Palestinian state that’s going to be part of the Iranian “axis of resistance.” You don’t want a Palestinian state that has no real institutions and is a failed state….

The approach now has to look at what the realities in the region are. Iran fired more than three hundred cruise missiles and drones in Israel. Iran has activated all of its proxies against the Israelis. The Iranian strategy toward Israel isn’t to drop a nuclear bomb on it. It’s to make it unlivable. So it is in Israel’s interest to actually be part of a coalition.

What we saw on April 14th was that the concept of a regional coalition wasn’t just an abstraction. For the first time in Israel’s history, there were actually countries who contributed to intercepting what was being launched against Israel….

Look, does this Israeli government want a pathway toward a Palestinian state? No way, all right? This Israeli government wants effectively one state, but it’s run by Israel. Hamas wants one state that has no place for Israelis….

Israel has a larger strategic possibility here. It shouldn’t lose sight of that. And the reason we were thinking about that was because you had this unusual circumstance where, for the first time in Israel’s history, there was a major contribution by others directly defending them. That’s not happened before. And so that represented a new development.

[TW: I have always believed that much of the strong USA commitment to Israel is a type of moral response to the Holocaust; perhaps even a guilt assuaging moral response. I have never found persuasive the “left” argument that the USA commitment to Israel is because of big power colonialism, ie, Israel is the US’s unsinkable aircraft carrier in the ME. Actual US military force basing is much more in Arab countries than Israel.

[More importantly, I think the “left” argument actually obscures the highly significant role of religious zealotry – in both USA and Israel. Recall that Israeli prime minister Yitzhak Rabin — a military hero for commanding Israel’s victory in the 1967 Six-Day War. — was assassinated after extreme orthodox rabbis in both USA and Israel declared Rabin din rodef for signing the Oslo Accords and agreeing to give back land in the West Bank in exchange for Palestinian acceptance of Israel’s right to exist.

[Read the linked to Wikipedia entry on rodef — it’s very disturbing:

In recent years, a number of rabbis[who?] have allegedly suggested that various public figures could qualify as rodfim, arguably encouraging one to kill.[citation needed] Perhaps most notoriously, former Israeli Prime Minister Yitzhak Rabin was branded a rodef by some for the Oslo Accord,[4] an agreement for which he was assassinated in 1995. The assassin, Yigal Amir, subsequently justified his actions partly on the basis of din rodef, under the assumption that making concessions to the Palestinian Authority would endanger Jewish lives….

In 2009, Jewish historian Geoffrey Alderman engaged in another controversy when he argued that, according to Jewish religious law, every Palestinian in Gaza who voted for Hamas was a legitimate target. He articulated his position in a debate with rabbi David J. Goldberg in The Guardian’s commentary section.[10] He argues that according to the Halakha, “it is entirely legitimate to kill a rodef – that is to say, one who endangers the life of another – and this is true, incidentally, even if the rodef has not yet actually taken another life”.

Furthermore, he argues that

It seems clear to me from a common-sense reading of this passage [Babylonian Talmud, Tractate Sanhedrin, folio 73a] that the concept of a rodef encompasses those who advocate or incite the murder of Jews. Every Gazan citizen who voted for Hamas must – surely – come within this category, because Hamas as a movement is explicitly committed to the destruction, not simply of Israel, but of the Jewish people.

[In Craig Unger’s 2007 book, The Fall of the House of Bush: The Untold Story of How a Band of True Believers Seized the Executive Branch, Started the Iraq War, and Still Imperils America’s Future (New York: Scribner), Unger details the VERY close ties between USA neoconservatives and the Netanyahu faction in Israel, based entirely on an ideological / theological interpretation of Israel ‘s existence and end times prophecy. See especially pages 149 ff.]

[X-Twitter, via Naked Capitalism 05-16-2024]


United by Faith: Dr. Falwell, Liberty University, and the Evangelizing Spirit Connecting America to Israel

Dr. Kobby Barda [Haifa University, 16 January 2024]

House Democrats Fume Over Unprecedented Israeli Rebuke Of Lawmakers 

[Huffington Post, via Naked Capitalism 05-16-2024]

 Yasmin El-Rifae, May 12, 2024 [The New York Review]
[TW: El-Rifae is co-producer of the Palestine Festival of Literature., and writes for Cairo’s independent Mada Masr newspaper. She provides an excellent short history of relations between Egyptians and Palestinians, with a stark contrast between the Egyptian government and officials, who are fully committed to the USA-backed concordant between Egypt and Israel, and the Egyptian people, who see the concordant as a sell-out, and remain militant in their support for Palestinians. ]

…Built around an oasis between Gaza and Sinai, Rafah is an ancient city that was recently split into two sides: one Egyptian, one Palestinian. The border between the two, like most borders in the region, is colonial in origin: it was drawn in 1906 by the British to divide occupied Egypt from Ottoman Palestine. Since then, the area has seen hardly any periods of lasting stability. After the Nakba, refugees from southern Palestine fled to Gaza, which Egypt administered until 1967, when Israel annexed it along with Sinai, the West Bank, East Jerusalem, and the Golan Heights. Most of the 300,000 people displaced during the war that year went to Jordan and Lebanon; around 13,000 went to Egypt. (Around 75,000 Palestinians already lived in Egyptian cities like Cairo and Alexandria before the Nakba.)

Palestinian refugees in Egypt were not given citizenship rights, a policy that the government justified under the pretext of resisting their permanent displacement. In the 1970s, under President Anwar Sadat, they were banned from attending public schools and working in the public sector. The 1978 Camp David accords and the subsequent peace treaty with Israel set Egypt up as the world’s second largest recipient of US military aid, second only to Israel. That treaty also eventually returned Sinai to Egypt, with strict limits on its military presence in the area.

In the early 1980s, when an Egyptian–Israeli border wall was built in Rafah, it roughly followed the colonial line, separating families in the process; parts of Sinai’s Bedouin population are of Palestinian origin. The Rafah crossing has since been tightly controlled, with periods of total closure after 2007, when Hamas won elections and took control of the territory, in response to which Israel began a blockade on Gaza as a form of collective punishment. Cairo’s increasingly open business dealings with Israel, and its collaboration with Israel in the blockade, have long been a flashpoint of public anger in Egypt, flaring up especially at times of Israeli aggression.

By 2013, when President Abdel Fattah el-Sisi came to power in a military coup against the elected Muslim Brotherhood government, an Islamist insurgency against security forces had begun in the Sinai. Egypt accused Hamas of providing fighters and weapons through the tunnel system underneath the border to groups such as the ISIS-affiliated Sinai Province. Hamas denied the accusation and suppressed ISIS activity within Gaza. As for the tunnels, residents and journalists said they were mostly used to bring goods and people into Gaza, especially during the blockade, when Israel let only a bare minimum of official aid into the territory. But none of that mattered. In 2014 the Egyptian military started to raze the entire Egyptian side of the city of Rafah on the pretext of fighting terrorism, destroying more than three thousand buildings, displacing thousands of people, and ruining valuable agricultural land. It filled the tunnels with sewage, then saltwater….

It is in their economic actions that Egyptians make their solidarity with Palestine most evident: they have boycotted products that have anything to do with Israel or the US. Last October an Israeli McDonald’s franchise sent free meals to the Israeli Defense Forces. The chain’s earnings in the region fell dramatically in the aftermath, to the point where, this April, it announced it would repurchase all of its franchises in Israel. Cairo’s Starbucks branches have been notably empty for months, and local alternatives to Coca Cola products are especially popular at social gatherings.
Howie Klein, May 413 2024  []
[Lindsey Graham]: Why did we drop two bombs— nuclear bombs— on Hiroshima and Nagasaki? To end a war that we couldn’t afford to lose. You don’t understand apparently what Israel is facing. They’re facing three groups. Iran, who has received $80 billion in aid. When Trump left office they were exporting 300 barrels of oil a day. Now they’re at 1.3 million a day. They’ve been enriched by Biden. They’re taking that money to kill all the Jews. So when we were faced with destruction as a nation after Pearl Harbor, fighting the Germans and the Japanese, we decided to end the war by bombing Hiroshima and Nagasaki with nuclear weapons. That was the right decision. Give Israel the bombs they need to end the war they can’t afford to lose and work with them to minimize casualties.

[X-Twitter, via Naked Capitalism 05-14-2024]


The carnage of mainstream neoliberal economics

Your Margin and Your Life 

Steve Keen, via Naked Capitalism 05-15-2024]

Chapter 12 from my forthcoming book Rebuilding Economics from the Top Down

Even I was shocked when I first plotted the data in Figure 56. While the private debt to GDP ratio grew by roughly 40% over the decade of the 1920s, the margin debt component of private debt grew far more quickly, from 1% of GDP in 1918 to 8.5% in 1929. Then it crashed, even more rapidly than it had risen, collapsing to half a percent of GDP in 1931. From then it was quiescent for decades, until a blip during the 1987 stock market bubble and crash, followed by its dramatic rise in the days of the “Greenspan Put”,74F to which the ’87 Crash gave birth.

In ‘Abandonment of Public Education,’ Louisiana to Allow Tax Dollars to Pay for Private Schools

Julia Conley, May 18, 2024 [CommonDreams]

GOP Farm Bill Decried as Pro-Corporate, Anti-Family ‘Waste of Everyone’s Time’

Jessica Corbett, May 17, 2024 [CommonDreams]

Are the Republicans Sneakily Trying to Cut Food Stamps?

Grace Segers, May 17, 2024 [The New Republic]

The House GOP’s farm bill would change how SNAP benefits are evaluated, and Democrats are furious.


Predatory finance

Delinquencies on Office Property Loans at Banks Are at 8 Percent While Office Loans the Banks Sold to Investors Show 31 Percent in Trouble 

Pam Martens and Russ Martens, May 13, 2024 [Wall Street on Parade]


Restoring balance to the economy  

Mercedes-Benz workers in Alabama vote against unionizing in blow to big UAW push 

[CNN, via Naked Capitalism 05-18-2024]

Monopoly Round-Up: Apple Spanked in Antitrust Suit 

Matt Stoller [BIG, via Naked Capitalism 05-13-2024]


David Sirota, May 16, 2024 [The Lever]

Matt Stoller provides a must-read review of how airline lobbyists were just defeated in Congress — and it happened with the help of The Lever. He writes: “Lobbyists got language into an underlying bill that would require passengers to request a refund, the goal being to undercut the convenience of the automatic refund rule… But journalists Katya Schwenk and Freddy Brewster at The Lever reported on the bad language, and then Sen. Elizabeth Warren tweeted out the problem.” And then lawmakers of both parties actually fixed it.


Information age dystopia / surveillance state

I Don’t Want To Spend My One Wild And Precious Life Dealing With Google’s AI Search

[Aftermath, via Naked Capitalism Water Cooler 05-16-2024]

“Google’s AI search has arrived, uninvited, to my browser, and I cannot make it leave. It isn’t just that it serves me crap whenever I enter a question into my search bar, but that I have to wait for all the crap I don’t want in the first place. Let me tell you a story from my day: I was paying invoices, and I wanted to doublecheck that the number of episodes of our podcast, Aftermath Hours, squared with what our producers had billed for. I typed “Aftermath hours spotify” into my browser window, which–depending when I’ve last cleared my history–either autofills the URL for the podcast on Spotify or takes me to Google search results, where our Spotify page is the top result. But now, when I get Google, I have to wait through a nearly three-second pause before AI information about the podcast appears at the top of the page, followed by a link to Spotify and other results. While I appreciate that, in this instance, the AI-generated information about the podcast is correct, this information is not what I’m looking for, and I have to wait three seconds for it to show up just so I can ignore it. These three seconds are wrecking me. I’m not one of those lifehacking types who wants to optimize every bit of their day, but that three second wait is just enough friction that I notice it every time. It’s a small annoyance in the moment, but over the course of a day’s queries–any writer or editor can tell you that the number of weird searches you do adds up–that friction starts to build into a drag. I feel like I’m losing chunks of my one and only life waiting for bullshit I didn’t ask for and don’t want to load onto my screen so I can scroll past it. That’s something I already deal with when visiting the ad-laden websites Google search brings up; I don’t need a preview! It makes the already unpleasant experience of Google search even worse than it already is. Before some stray AI evangelist leaps into the comments to promise the tech will get better, I want to be clear that even if it were instantaneous, I still wouldn’t want it. I didn’t ask for results from the plagiarism machine!”

In DC, a new wave of AI lobbyists gains the upper hand 

[Politico, via Naked Capitalism 05-13-2024]


Collapse of independent news media


[Declassified UK, via Naked Capitalism 05-14-2024]

From PropOrNot to New Lines: How Washington is Weaponizing Media 

Alan MaCleod [MintPress, via Naked Capitalism 05-14-2024]

Cable News Refused to Report Trump’s Bombshell Quid Pro Quo Offer to Big Oil Execs

Olivia Rosane, May 15, 2024 [CommonDreams]

Major cable news networks Fox News Channel, CNN, ABC, CBS, and NBC all failed to cover former President Donald Trump’s promise to Big Oil executives that he would reverse President Joe Biden’s climate regulations if they donated $1 billion to his campaign, according to an analysis published by Media Matters for America late Tuesday.

When the news first broke, Philadelphia Inquirer columnist Will Bunch wrote, “You won’t read a more important story today.” Yet, in the four days after the story broke, it only received 48 minutes of cable airtime—all on MSNBC….

11,000% Return: Trump’s $1 Billion Offer Could Yield $110 Billion Windfall for Big Oil

Jon Queally , May 16, 2024 [CommonDreams]

The Real Entitlement Crisis: Good Reporting Is in Short Supply

Maz Moran, May 16, 2024 [The American Prospect]

The preferred journals of the power elite peddle the myth of pending Social Security catastrophe, which is catastrophically wrong.…

Money is made up. Health care and poverty are not.

The core insight of Modern Monetary Theory is just asking a very empirical question—“Where does money come from?”—finding the answer, and then thinking through the implications of that. Even if one is not persuaded by MMT, good old Keynesian economics (and common sense) shows that the federal government creates and legitimates the currency. Ergo, if the only thing holding the federal government back is that it doesn’t have enough of the special pieces of cotton which it fabricates for itself out of thin air and calls “money” … well, that seems like a solvable problem, no?

That’s not to say that the solution to everything is “just print more money.” MMT itself is very clear that the limiting factor is real resources: If there’s too much cash circulating, and not enough stuff to buy with it, prices rise. But this points to what journalists should be asking if they consider themselves to be economic empiricists, unbridled by political dogmas, and they are actually concerned about the country’s ability to provide health care and a high standard of living to every American: Do we have enough doctors? Enough medicines and medical devices? What about enough housing, food, transportation, public spaces? The national government can find or create the money, but it can’t create real resources by signing a bill.

The ruling class hates the welfare state. They are going to lie to you about it constantly….

[TW: This is a good place — after this simple summary of MMT — to include a link to Matt Taibbi’s May 18, 2024 critique of MMT, Magic Monetary Theory Goes Primetime: “Modern Monetary Theory was interesting back when it was dismissed as a fringe curiosity, but more like terrifying now that it’s being taken seriously.” Taibbi is a good writer. No, Taibbi is a great writer. Which is why it is so painful to see Taibbi assume positions that can most politely be called “obstructionist.”]

How Oil Companies Manipulate Journalists 

[Nation, via Naked Capitalism 05-18-2024]


Climate and environmental crises

2023 Temperatures Were Warmest We’ve Seen For At Least 2,000 Years 

[ars technica, via Naked Capitalism 05-15-2024]

4 Takeaways From Our Homeowners Insurance Investigation 

[New York Times, via Naked Capitalism 05-16-2024]

“Across the country, more intense heat, storms and fires are causing the home insurance market to start to buckle.”

The USDA’s gardening zones shifted. This map shows you what’s changed in vivid detail 

[NPR, via Naked Capitalism 05-16-2024]

Pennsylvania wastewater could meet 40% of US’ lithium needs: Study 

[Interesting Engineering, via Naked Capitalism 05-12-2024] Wastewater from fracking.

Biodiversity loss is biggest driver of infectious disease outbreaks, says study 

[The Guardian, via Naked Capitalism 05-12-2024]


Democrats’ political malpractice


David Sirota, May 9, 2024 [The Lever]

…Another new Federal Reserve report illustrates how the financial crisis — and then the Obama administration’s refusal to help homeowners protect themselves from financial predators — ripped away the American dream from an entire generation.

See graphs.

In Defense of Punching Left. The problem with ‘Solidarity.’ 

Jonathan Chait, New York Magazine, via Naked Capitalism 05-12-2024]

“Don’t punch left” is the core tenet of Solidarity, a new book by Astra Taylor and Leah Hunt-Hendrix. In a laudatory interview with the Washington Post, Hunt-Hendrix said the book was aimed not only at progressives in general but also specifically at liberals who criticize the left, naming me and newsletter author Matthew Yglesias as “falling into the right’s divide-and-conquer strategy.”

Solidarity provides the lengthiest and most serious case I’ve seen for why liberals should withhold criticism of the left. And since the basis of my refusal to take this advice is no longer self-evident to all my readers and colleagues, and appears increasingly deviant to some, their book provides a useful occasion for me to lay out my reasons why liberals should feel free to express criticisms of the left….

The authors of Solidarity both come out of the more left-wing edge of the movement. Hunt-Hendrix, an heir to the Hunt oil fortune, has decided to give a large share of it to groups like the Sunrise Movement and Black Lives Matter and has become an influential figure in the movement. A flattering New Yorker profile last year depicted her at the center of a network of progressive intellectuals, elected officials and activists, all of whom place a high value on her donations but an even higher value on her counsel….

The main reason Taylor and Hunt-Hendrix believe liberals should pipe down is that they have no apparent sense of what liberals believe. Take their description of the Democratic Party’s factional differences: “Democrats are torn between a growing progressive flank pushing to redistribute wealth, tackle climate change, and further racial and gender justice and a corporate wing clinging to the increasingly unequal and failing status quo.” It would surprise any liberal to learn we have no desire to redistribute wealth, tackle climate change, or advance social justice and care only about corporations and the status quo….

[TW: Sigh. With friends like these who needs enemies? I was sorely tempted to leave out this Chait essay. But I think it’s important to know what liberal thought leaders are thinking. I’ve been involved in the Democratic Party for a couple decades, and I have yet to meet a “liberal” with a firmly grounded suspicion and hostility to the power of the rich and corporations. The liberals I have met are reflexively protective of institutions and the status quo. Just the one fact that Hunt-Hendrix is an heir to the Hunt oil fortune sets off alarm bells for me. As one commenter on X posted, “Punch up, not left.”]

[X-Twitter, via Naked Capitalism 05-15-2024]


FDR’s Second Bill Of Rights Is What Electoral Politics Should Be About, Not Who The Greater Evil Is

Howie Klein, May 18, 2024  []


Conservative / Libertarian / (anti)Republican Drive to Civil War

MAGA Rage at Trump’s Trial Just Got Darker and More Dangerous

Greg Sargent, May 17, 2024 [The New Republic]

Republicans aren’t just showing “loyalty to Trump.” They’re saying that Trump is more important than the rule of law.

Yes, That’s Right: American Fascism

Michael Tomasky, May 16, 2024 [The New Republic]

Why waste time debating the extent of Trump’s fascism when we ought to be fighting it instead?

[Introduction to New Republic series on What American Fascism Would Look Like ]

The Liberal Fantasy Is Just That: On the military in a fascist America

Rosa Brooks, May 16, 2024 [The New Republic]

…controlling the military is a major part of Trump’s vision for his second term. While he has expressed only contempt for military personnel naïve enough to believe in selfless service, referring to those who had lost their lives as “losers” and “suckers,” Trump is fond of military pomp and circumstance, and fonder still of power. He has signaled his desire to use the U.S. military to suppress domestic protest and aid in mass roundups, detentions, and deportations of undocumented immigrants, whom he views as “animals.” He reportedly hopes to use missiles and military troops against cartels inside Mexico and has, at times, openly flirted with the idea of using nuclear weapons against North Korea and Iran.

While few of these ideas are likely to garner support from military leaders, no one should count on the military to “save” us from Trump’s efforts to refashion the United States in his own dark, chaotic image… Disappointed during his first term by the failure of those he called “my generals” to offer him blind obedience and adulation, Trump has vowed to make the military knuckle under in a second term.

For the most part, he will have the legal tools to do so. He can request the retirement of flag and general officers who show signs of independence, for instance, and dismiss those who don’t take the hint. And he can make fealty to his agenda a condition of advancement for senior officers. This is already a core plank in the Heritage Foundation’s blueprint for a second Trump presidency, which is widely viewed as having Trump’s stamp of approval….

The End of Civic Compassion: On education in a fascist America

Jason Stanley, May 16, 2024 [The New Republic]

The (anti)Federalist Society Infestation of the Courts

Alito Family’s Upside-Down Flag After Jan. 6 Sparks Call for Justice’s Recusal

Julia Conley, May 17, 2024 [CommonDreams]

Knights-Errant: The Roberts Court and Erroneous Fact-Finding (PDF)

Senator Sheldon Whitehouse [Ohio State Law Journal, via Naked Capitalism 05-18-2024]

“These cases, the false fact-finding undergirding them, the persistence of the erroneous facts, and the policy consequences of the uncorrected errors, together create a new predicament requiring attention by academia, lower courts, and the other branches. This Article proposes theories and actions that wo

This Week on ‘Ask the Supremes’: Do Menendez and Cuellar Have Congressional Immunity?

Harold Meyerson, May 16, 2024 [The American Prospect]

Far Right Billionaires Are Waging a War to Capture State Courts 

[Truthout, via Naked Capitalism 05-18-2024]

The Fifth Circuit Is In For A Beatdown

Kate Riga, May 18, 2024 [Talking Points Memo]

Thursday’s Supreme Court decision validating the constitutional soundness of the Consumer Financial Protection Bureau not only reversed the Fifth Circuit, but did so via one of the appellate court’s brothers-in-ideological-arms, Clarence Thomas.

The argument against the CFPB, targeting its funding structure, was weak enough that only Justices Samuel Alito and Neil Gorsuch had the appetite to embrace it….

While there will inevitably be columns written by people making a lot more money than I am about how this rash of cases represents some great, cloak-swathed pivot to the center, it just doesn’t. The Supreme Court repeatedly overturning the Fifth Circuit is much more about the extremity of the latter than the reasonableness of the former…. don’t let anyone tell you it’s because the Court is getting better — the Fifth is just getting worse.

The CFPB Ruling Strikes a Blow for Governing

David Dayen, May 17, 2024 [The American Prospect]

…The CFPB’s legal odyssey exposed the radical Fifth Circuit and the financial ghouls who brought the case as wildly out of step with the laws and beliefs of the country. The Supreme Court’s 7-2 ruling punctures the credibility of a circuit court that has become the de facto decision-maker for so much of our financial and economic lives, because business interests opportunistically file their cases within that jurisdiction to ensure that their case will come before the ideologues who sit there. Even those rock-ribbed conservatives on the Supreme Court find the Fifth Circuit to be legally deficient, and each bonkers theory that circuit puts forward makes them even more suspect….

If you get your views on politics from certain corners of the internet, you’d have probably concluded that the CFPB was a dead agency from the moment it was established nearly 14 years ago. Nobody in such a corrupt country would allow something that only tried to prevent consumer rip-offs to exist. These are not only the thoughts of political nihilists but Wall Street itself. It’s what they try to implant into the heads of every policymaker, telling them that their impulses to help people will be fought, challenged, and ultimately shredded.

That shouldn’t dull public servants into complacency. There’s work to do in America, and the public—particularly the voting public—won’t tolerate stories about how policy actions are too complicated and too prone to failure to make the attempt. The Day One Agenda series we did five years ago was predicated on the idea that there are real options for governing if those in power decide to take them. We were told John Roberts would strike them all down. He has done so a couple of times, and may yet do so again. But shrinking from action because one rogue branch might not allow Congress or the president to act would be an abdication of the office. And if you take enough shots on goal, you eventually get important ones through….



Open Thread


The Role of Character and Ideology in Prosperity


  1. someofparts

    The idea that Palestinians must be destroyed to expiate anyone’s guilt over the holocaust makes me want to howl with outrage. If punishment for the holocaust must be levied then it should be levied against Germans and Christians. The last people responsible for the Holocaust were Palestinians or Muslims.

    It is just a cheap excuse for attacking people who are defenseless. Reminds me of men who abuse women and just cannot control themselves until they are face to face with a man big enough to kick them around and then suddenly they have all the self control in the world. If the Zionists feel obliged to punish anyone for the Holocaust then either attack Germany or shut up.

  2. Albert de

    MMT only applies to be a country that controls the reserve currency (the US) or is largely self-sufficient. It doesn’t apply to Canada or Mexico as both depend on trade for their prosperity.

  3. Curt Kastens

    But do Canada and Mexico really depend on trade or are they countries that could be largely self sufficient if they were properly governed? Of course one must keep in mind that there is absolutely nothing sustainable about industrial civlization and no country nor the entire planet will be self sufficient with in decades at most. But I bet Mexico and Canada could have been self sufficient for a number of decades. Argentina too.

  4. somecomputerguy

    I would just like to underline Matt Stollers Walmart comment.

    “The spread of Walmart in the 1980s shattered Southern politics, that’s *purely* a trade and antitrust story. The civil rights movement is not why the South went to the right.”

    This is a powerful alternate explanation to white backlash.

    Because it involves economic interest, I think it has to have some role.

  5. Curt Kastens

    I made a response to the comment by Albert de. But it has not shown up yet. When I clicked on the send button rather than seeing the comment with the note that it is awaiting moderation I got a message that said that I had submitted my comment twice. Let me know my comment has disappeared. It was short so I can easily re do it.
    My comment was about how MMT applies to Mexico and Canada.

  6. DMC

    David Camaron:”We cannot cut off arms to Israel now, as it might strengthen Hamas.”

    Me: “Your point being?”

    Also: Jonathon Chait, Jeebus Kliest! I hope this isn’t a trend.

  7. MMT describes how a currency system operates. It applies to every country that has it’s own currency. Canada and Mexico both control and create their own currencies and therefore it applies to them.
    A country not being able to do whatever it wants can’t invalidate MMT because it has nothing to do with it.

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