Ian Welsh

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

Week-end Wrap – Political Economy – January 12, 2025

By Tony Wikrent

 

Strategic Political Economy

The Lost Memos That Predicted This Era

David Sirota, January 07, 2025 [The Lever]

THE PLUTONOMY MEMOS: As we welcome in 2025, it’s worth noting that this year is the 20th anniversary of the release of the so-called Plutonomy Memos — a series of Nostradamus-like reports that predicted much of the world we live in today.

The memos written in 2005 and 2006 came from Citigroup, and they effectively admit that Wall Street and its neoliberal political allies were creating a feudal American economy. These documents — which you can find herehere, and here — survive on economist Brad DeLong’s blog and in a few old media mentionsbook references, and tweets but barely exist on the internet (Citigroup reportedly worked to get them memory-holed off the Internet).

“There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take,” the Citigroup analysts wrote. “There are the rest, the ‘non-rich,’ the multitudinous many, but only accounting for surprisingly small bites of the national pie.”

Underscoring the accuracy of these predictions, a new UBS report finds that billionaires’ total wealth has more than doubled over the past ten years to $14 trillion.

In 2005 Citigroup Saw Canada, the U.S. & UK as “Plutonomies” – Economies Where Only the Rich Mattered.

Dougald Lamont, January 09, 2025

Their plan? Figure out how to make even more money from making the rich richer, and the poor poorer. Spoiler: Citigroup flamed out three years later….

Now, if you’re looking for some kind of morality in this tale, you should know Citigroup and its leaders managed to create the conditions for the 2008 Global Financial Crisis. They had lobbied for the 1990s-era repeal of the New Deal Era Glass-Steagal Act, which kept commercial banks and investment banks separate.

The “Plutonomy” is a study in Icarean Hubris. In the Global Financial Crisis, Citigroup crashed and received more in bailout money than it was worth;

“The U.S. Treasury extended a $45-billion credit line, and gave it a guarantee for $300 billion in “trouble assets” junk mortgages whose market price had fallen by 60 to 80 percent. Thic actions saved the bank and its bondholders, but Citigroup stock plunged belov a dollar by March 2009 as its equity value fell by more than 90 percent, to just $20 billion compared to $244 billion in 2006….

“Little of this note should tally with conventional thinking. Indeed, traditional thinking is likely to have issues with most of it. We will posit that: 1) the world is dividing into two blocs – the plutonomies, where economic growth is powered by and largely consumed by the wealthy few, and the rest. Plutonomies have occurred before in sixteenth century Spain, in seventeenth century Holland, the Gilded Age and the Roaring Twenties in the U.S. What are the common drivers of Plutonomy?….

4) In a plutonomy there is no such animal as “the U.S. consumer” or “the UK consumer”, or indeed the “Russian consumer”. There are rich consumers, few in number, but disproportionate in the gigantic slice of income and consumption they take.

There are the rest, the “non-rich”, the multitudinous many, but only accounting for surprisingly small bites of the national pie.

 

Global power shift

Collapsing Empire: RIP ‘Overt Operations’ 

Kit Klarenburg, January 05, 2025 [Global Delinquents]

In recent months, a remarkable development in the Empire’s decline has gone almost entirely unnoticed. The National Endowment for Democracy’s grant database has been removed from the web. Until recently, a searchable interface allowed visitors to view detailed records of Washington-funded NGOs, civil society groups, and media projects in particular countries – covering most of the world – the sums involved, and entities responsible for delivering these initiatives. This resource has now inexplicably vanished, and with it, enormous amounts of incontrovertible, self-incriminating evidence of destructive US skullduggery abroad.

Take for example NED grant records for Georgia, the site of recent repeated colour revolution efforts, at the forefront of which were Endowment-bankrolled organisations. While still accessible via internet archives, they were deleted during the summer. Today, visitors to associated URLs are redirected to a brief entry simply titled “Eurasia”. The accompanying text describes in very broad terms the Endowment’s aims regionally and the total being spent, but the crucial questions of where and on what aren’t clarified….

 

Gaza / Palestine / Israel

The dream of a free Middle East is coming true 

[The Telegraph, via Naked Capitalism 01-06-2025]

Israel built an ‘AI factory’ for war. It unleashed it in Gaza. 

[Washington Post, via Naked Capitalism 01-06-2025]

Chris Hedges: Genocide — The New Normal 

[Consortium News, 01-08-2025]

New York Times rejects Quaker ad for calling Israel’s actions “genocide” 

[American Friends Service Committee, via Naked Capitalism 01-09-2025]

 

Oligarchy

Open Thread

Use to discuss topics unrelated to recent posts.

The Pacific Pallisades Fire

An area larger Manhattan has burned down. In the middle of fucking winter.

I’ve been watching the reaction, and there’s a lot of screeching about DEI and bad fire management and so on and it’s true that California’s fire management isn’t good.

Whatever.

California’s had shit water management forever, and decades of shitty fire management. What’s changing is the climate.

California was paradise because it had a mediterranean climate. That climate is shifting north. California is moving towards a new climate. Like most such changes it’s a fits and starts thing: some years its the old normal, others it’s the new normal. The old vegetation, suited for the old climate, will go, often in fire, sometimes replaced more gently.

So, when building and rebuilding all homes need to be fire proof. The right type of concrete, thick brick, old fashioned masonry, ICF bricks, steel. A fireproof roof. Fireproof windows which don’t shatter under heat. A metal door. No foliage too near the house. You may have to evacuate, but when you come home, the house will still be there. Build to protect your pipes and electrical infrastructure, as well.

This the general rule, folks. The climate is changing. You need to adapt to the new climate wherever you live. If you’re a Californian and you want the old climate, move north, because that’s where the Meditteranan climate is moving.

In addition, expect instability. More extreme weather: California had floods not long ago—your home needs to be fireproof and floodproof. You prepare for fire, flood, wind and power and water outages. If you have money, get your own power and water supplies. (There are now machines which can make water from the air, even in pretty dry places.) If you’re doing the whole food thing, it needs to be done in a climate controlled space, not outdoors, because of the instability.

We aren’t stopping climate change. All indications are that it is accelerating, and we aren’t doing shit all about it. I suspect we are now at the self-reinforcing stage anyway. To stop it we’d actually have to not just stop fueling it but work on reversal, or it will continue.

Politically that isn’t going to happen any time soon enough to matter.

The world is changing. Prepare.

(Haven’t forgotten the Europe piece.)

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Canada 101 For Would Be American Annexers

So, reading various Americans who think annexing Canada would be a good idea, it’s clear most of them know nothing about Canada. Let’s educate them. The basic principles here are “Canadians are not Americans and Canada is not just America with fewer people.”

Canada Has Universal Healthcare

If you’re American you don’t know what this really means. Let me start with myself: if I had been born in America, I’d be dead the past thirty-one years. I needed millions of dollars of healthcare in my 20s at a time when I would have had no insurance if American. Since then I’ve needed serious care twice, in both cases when I’d have no insurance as an American.

I am not alone. There are a lot of Canadians who know they’d be dead, or unable to get healthcare if they were American. So, irrespective of any resistance, American annexing Canada means a lot of people will die.

I imagine some of them will decide that if they’re going to die anyway, strapping on a vest and saying an explosive hello to unwelcome American guests would be a good way to go.

Income Numbers are Deceptive

If you’re American you probably make more money than the equivalent Canadian. Great. Now subtract all hospital and doctor costs from that. I’ve never seen a hospital bill. I walked out after 3 months and no one asked me for one red cent. Your drugs cost way more than ours do, so subtract half the cost of any drugs your taking from your income. Americans have to pay for a lot of things that people in other countries get from government or for lower cost because government allows less gouging.

Canada’s History Is Based On the Idea “We Don’t Want to Be American”

America had its revolution. The people who lost and were most bitter about it? They were called the “United Empire Loyalists” and they fled to what was then called “Upper Canada”. When our founding fathers drew up our constitution, they looked at the US Constitution and said “they made some big mistakes.” They created a very different constitution. As one example, though it’s almost never used, the Federal government has the ability to override ANY decision made by the States. (Our founders were around during your civil war. They took a lesson.)

We raced West so that America wouldn’t claim all of North America. We stretched as far as we could to establish our borders opposition to, and in a race with America.

Canada’s founding principle is “We Are Not Americans.”

Canadian Identity

Not American. That’s what we all agree on. Americans see Canadians as more polite and wimpier Americans, and think everyone wants to be American, because gosh, America is the best. Canada always compares itself to American and asks “are we doing better?” I think that’s often a bad thing, the American bar is on the ground, trying to be better than America is often choosing a very low standard. Still, that’s how it is.

Canadians don’t bluster, but we have more wilderness and rural area than America. Canadians have a lot of guns, and rural and wilderness Canadians are tough and used to roughing it. There are places in Canada where there’s no one, no one, around for fifty miles. You take care of your own problems, or you die. The idea that Canadians are wimps is based on America being a superpower and Canadians being polite. It has little basis in reality outside the major cities, and Canadians in cities aren’t any more effete than Americans in cities (and while fat, less fat than Americans.)

Canada is BIG

Canada has more land than any country but Russia. Most of that land is sparsely inhabited. But, and this is important, so pay attention at the back of the class, almost everything America would want from Canada is out in the boons: oil, minerals, timber, etc…

People say Afghanistan was made for guerilla warfare but those people never thought what it’d be like to fight an insurgency in Canada. Thousands and thousands of miles of roads, railways and pipelines. Widely spread mines and farms and oil wells. Absolutely impossible to defend against some guy with an IED.

Canadians Don’t Want to Be Americans

There won’t be a voluntary annexation. A poll found 82% of Canadians opposed to joining the US and 13% for. If there’s a violent one America will conquer the cities in a couple weeks, then spend thirty years fighting a guerilla war which makes Afghanistan look like the picnic it was because, again, it’s a big country, often very rough and everything worth having is out in the country.

Canadians often like Americans, but most of us don’t want to be Americans and those who do simply emigrate to the US. And, in truth, just as many Americans look down on Canadians, Canadians think Americans are barbarians. Understand that when Canadians were polled on who the greatest Canadian is, the number one choice was Tommy Douglas, the father of Canadian Universal Healthcare.

We aren’t nearly as nice as we like to think we are, and we have plenty of flaws. But one thing the majority of us agree on, “Thank God We’re Not Americans.”

This is perfectly natural. For our entire history and even before Confederation the number one fact of Canadian political life has been the four hundred pound gorilla on the southern border. We’ve always been aware that many Americans wanted to take over Canada or take a big chunk of it. Fifty-four fourty was the slogan. The Canadian border is at the 49th parallel, but many Americans wanted it up at 54.4. Canada is the “not America” nation.

So, once again, for the slow folks:

Canada is not America. Canadians are not embarrassed Americans. Most Canadians don’t want to be Americans and like folks pretty much everywhere, figure that our country, whatever its flaws, is better than our neighbour’s country and that being us is better than being someone else.

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Smart CEOs Suck Up To Trump

So, a very partial list of donors to Trump’s second inauguration includes:

  • Apple’s Tim Cook.
  • Ken Griffon of Citadel.
  • Amazon’s Jeff Bezos.
  • Sam Altman of OpenAI.
  • Zuckerberg of Meta/Facebook.
  • Dara Koroshawi of Uber.
  • General Motors, Ford and Toyota.

Trump imposed a lot of sanctions on China in his first term but somehow Apple avoided most of them. Not coincidentally Tim Cook supposedly talked to Trump every week. I’m sure he spent that time being Trump’s good friend and toady.

I don’t blame him for it, it was his job. Apple sold a ton of phones in China and made most of their gear in China. Trump could have (and can) tear the heart of out of Apple.

The FTC is planning to take Meta to court over anti-trust violations this year. Want to bet they change their minds?

Amazon is nothing but a giant sucking anti-trust violation.

Olds will remember that Microsoft was almost broken up by an anti-trust suit. The government was clearly winning its case in 2000, but when Bush Jr. took power, the government suddenly decided to drop the case. Saved Gates billions and billions.

Trump’s tariff plans are going to hit a lot of companies hard, but some will likely get waivers, as Apple did. Wouldn’t you pay a million dollars, or ten million, to predispose Trump to make sure you get a waiver that will save you billions?

Sure you would.

Wearing kneepads for the President and other important political figures is part of the CEO’s job. And Trump, more than most Presidents requires sycophants and courtiers around him. You make him feel good, he takes care of you.

You tell him he’s wearing the Emperor’s “New Clothes” and that doesn’t end well for you. You steal the limelight from him too often (like Bannon did and Musk seems to be) and that may end badly for you.

Musk, by the way, is in particular trouble. Though most people haven’t caught on yet, Tesla, which is the vast majority of his wealth in terms of over-inflated stock, is in huge trouble. Chinese EV firms produce better cars for half the price. Even domestic firms like GM are now producing cars which are, arguably, better and given how slow Tesla’s model cycle is, it won’t be arguable for much longer. Musk needs government protection and aid, like the 100% tariffs Biden put on Chinese cars. He should be very careful not to irritate Trump and be eager to get down, not just on his knees, but on his belly,. All it would take is Trump providing a waiver for BYD and Musk would be lucky to be worth a hundred billion let alone be the richest man in the world.

Of course if you run a small or medium business, you aren’t going to have a personal relationship with Trump and are a lot less likely to get a business-saving waiver or a rule made especially to help your company. That’s America under imperial Presidency rule.

In the meantime, the kneepads are on, the CEOs are kneeling and Trump’s enjoying himself. Welcome to the second Trump Presidency.

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Canadian PM Trudeau’s Resignation is Perfectly Normal

He ruled for about the normal time for Canadian Prime Ministers. This, from Taibbi, is well-written nonsense:

Canadian Prime Minister and feminist heartthrob Justin Trudeau resigned this morning. His departure completes an unprecedented popularity cliff dive, dropping from 65% to an incredible 16% approval rating over the course of a nine-year reign that men will chuckle over, from now through the end of time. Centuries from now, fathers will sit sons on their knees and tell The Fall of Trudeau as a cautionary tale.

Trudeau had about nine years:

  • Harper had 9 years;
  • Martin had 3;
  • Chretien had 10;
  • Campbell had less than one, but was an unelected caretaker PM; and,
  • Mulroney had 9.

American red-pill nonsense is just that. Trudeau was was a gifted politician who was bad at policy. He resigned because his own caucus wanted him gone, as they think they’re more likely to keep their seats without him.

The Liberals won’t win the next election, the standard pattern in Canadian politics is for the Liberals and Conservatives to alternate. Barring some huge surprise, the Conservatives will rule next. But how much of a majority they have will depend a lot on who the next Liberal leader is.

This is a nothing-burger. Yes, Trudeau could have been a better Prime Minister. He mishandled Covid in the same way as almost every other western leader; let in way too many immigrants, and inflation, especially in rent and food hurt him just like it did every other neo-liberal government of the era.

I despise Trudeau. He’s an empty neoliberal suit coasting on being le dauphin. (Son of Pierre Trudeau, one of Canada’s greatest Prime Ministers.) But he was a gifted politician, and his fall is bog standard for Canadian post-war Prime Ministers. It is entirely normal and has nothing to do with red-pills, cucks, soy, pick-up artists, feminism or any other culture nonsense. All of that is just noise, he may have been attacked on the cultural politics of the day, but he lost because people became worse off under his rule and because his time was, essentially, up. Even a very good Prime Minister finds it hard to hold on for more than two terms in Canadian politics.

He’s not an extraordinary cautionary tale and no one except historians will remember him in fifty years, let alone centuries from now.

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Week-end Wrap – Political Economy – January 05, 2025

By Tony Wikrent

 

Guide for the perplexed – Google is no longer the best search engine

[The Register, via The Big Picture 01-01-2025]

Perplexity offers several advantages over Google as a search engine, making it a compelling alternative for many.

 

Stand Out: How to Prevent Obeying in Advance 

[3 Quarks Daily, via Naked Capitalism 01-03-2025]

 

Wikileaks has just put all its files online. It’s all there!

DefendDemocracy.Press, January 1, 2025

Wikileaks has just put all its files online.

It’s all there: Hillary Clinton’s emails, McCain’s guilt, the Vegas shooting perpetrated by an FBI sniper, Steve Jobs’ letter on HIV, Pedo Podesta, Afghanistan, Syria, Libya, Iran, Israel, the military-financial complex, the mafia/mafias, CIA agents arrested for rape, conspiracies, CIA false-flag attacks, the WHO pandemic, etc…..

 

Strategic Political Economy

How Fascism Came

Chris Hedges, December 29, 2024

For over two decades, I and a handful of others — Sheldon WolinNoam ChomskyChalmers JohnsonBarbara Ehrenreich and Ralph Nader — warned that the expanding social inequality and steady erosion of our democratic institutions, including the media, the Congress, organized laboracademia and the courts, would inevitably lead to an authoritarian or Christian fascist state. My books — “American Fascists: The Christian Right and the War on America” (2007), “Empire of Illusion: The End of Literacy and the Triumph of Spectacle” (2009), “Death of the Liberal Class” (2010), “Days of Destruction, Days of Revolt” (2012), written with Joe Sacco, “Wages of Rebellion” (2015) and “America: The Farewell Tour” (2018) were a succession of impassioned pleas to take the decay seriously. I take no joy in being correct.

“The rage of those abandoned by the economy, the fears and concerns of a beleaguered and insecure middle class, and the numbing isolation that comes with the loss of community, would be the kindling for a dangerous mass movement,” I wrote in “American Fascists” in 2007. “If these dispossessed were not reincorporated into mainstream society, if they eventually lost all hope of finding good, stable jobs and opportunities for themselves and their children — in short, the promise of a brighter future — the specter of American fascism would beset the nation. This despair, this loss of hope, this denial of a future, led the desperate into the arms of those who promised miracles and dreams of apocalyptic glory.”

President-elect Donald Trump does not herald the advent of fascism. He heralds the collapse of the veneer that masked the corruption within the ruling class and their pretense of democracy. He is the symptom, not the disease….

 

The End of New Deal Liberalism, by William Greider, exactly 14 years ago

Tony Wikrent, January 04, 2025 [RealEconomics]

Bill Greider was the former national affairs editor at Rolling Stone, who left us in December 2019. The man was a prophet — from exactly 14 years ago:
The End of New Deal Liberalism
By William Greider
The Nation, January 5, 2011
(reposted by Physicians for a National Health Program)

We have reached a pivotal moment in government and politics, and it feels like the last, groaning spasms of New Deal liberalism. When the party of activist government, faced with an epic crisis, will not use government’s extensive powers to reverse the economic disorders and heal deepening social deterioration, then it must be the end of the line for the governing ideology inherited from Roosevelt, Truman and Johnson.

Political events of the past two years have delivered a more profound and devastating message: American democracy has been conclusively conquered by American capitalism. Government has been disabled or captured by the formidable powers of private enterprise and concentrated wealth. Self-governing rights that representative democracy conferred on citizens are now usurped by the overbearing demands of corporate and financial interests. Collectively, the corporate sector has its arms around both political parties, the financing of political careers, the production of the policy agendas and propaganda of influential think tanks, and control of most major media.

What the capitalist system wants is more—more wealth, more freedom to do whatever it wishes. This has always been its instinct, unless government intervened to stop it. The objective now is to destroy any remaining forms of government interference, except of course for business subsidies and protections….

 

Sanders Lays Out Plan to Fight Oligarchy as Wealth of Top Billionaires Passes $10 Trillion

Jake Johnson, December 31, 2024 [CommonDreams]

Tracking the Signs of Decline in America

If you want to be a decent analyst, let alone a forecaster, you need to know how to find real information. A lot of official statistics are either useless (inflation, unemployment numbers) or misleading.

Russia, with assists from Iran and North Korea and China (in non military goods, though often useful for making military goods) is out producing NATO in war material. If you just look at the GDP of NATO vs. Russia/China/Iran/NK you’d predict that couldn’t happen and you’d be wrong and like a lot of people you’d think Ukraine might or would win the war.

Most people go on and on about how the US still has a bigger economy than China, but China has way more industry and leads in about 80% of technological fields even as the US can barely build ships, is losing its steel industry and is only creative in biotech and infotech. These same people will tell you how well the US economy is doing. China’s shifting its house building to primarily government. Meanwhile:

Eighteen percent last year.

Since 2020 billionaire wealth has doubled.

GDP tells you how much activity in your country is conducted thru money, as opposed to unpaid labor. That tells you much economic activity you can easily tax. That’s all it tells you.

It doesn’t tell you how well off your people are. It doesn’t tell you how healthy they are. It doesn’t tell you (directly) how many tanks you can build, or planes or missiles. It doesn’t tell you if you can feed your population if foreign shipments are disrupted. It doesn’t tell you how many of them have homes and how many of those homes are good. it doesn’t tell you how many people do or don’t have healthcare. It doesn’t tell you how advanced you are technologically. It doesn’t tell you if your flagship airplane company can’t design and build good planes any more.

It also doesn’t tell you that America is doing better than Europe and its other allies because US economic policy is set up to cannibalize their industry. When Germany loses energy-intensive firms, a lot of them move production to the US. Burning down America’s allies to slow America’s decline isn’t a sign of strength.

America’s in decline because its entire political-economy is set up not to be productive or to spread wealth around, but to funnel money to the rich without them having to produce much of anything. China’s stock-market trades sideways, like America’s did in the 50s and 60s. Americans make money on housing and stocks without having to do a thing. Private Equity makes money by buying companies with debt, loading the companies up with that debt and then driving them into bankruptcy, destroying real productive economic activity in exchange for dollars in a declining country.

Real power comes from real production, technology, a healthy and loyal population, and the ability to turn all of that into military power when necessary. America’s military, for years now, has been unable to meet recruiting goals. Its enemies are ahead on missiles and drone, catching up on airplanes and outproducing it massively in ships.

China’s rising. Russia’s rising. America and its allies are in serious decline.

THE END

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