Ian Welsh

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

Know Your Enemies

An enemy is someone who means you harm and has the means to inflict it.

A friend is someone who has wants to do good for you, and has the means to bestow it.

I once wrote primarily to predict and to change the world.

I now write to help a few people, those who listen.

So, listen, because other than understanding climate change is written in, won’t be stopped (can’t at this point, minus geo-engineering), this is the most important message I have for you.

You must know who wants to harm you and has the means.

Let’s start here:

“If America’s distribution of income had remained the same as it was in the 3 decades following the second world war… A low-income American earning $35K this year would be earning $61K. A college-educated worker now earning $72K would be earning $120K.

Everyone responsible for this is your enemy, unless you’re in somewhere between the top 4% to top 10%.

How much money, how much good, has the end of the post-war economic order inflicted on you? Adding in interest (because you wouldn’t be in debt, but have investments) it’s over a million dollar for almost everyone. You’d have a home and probably have the mortgage paid off if you don’t. You wouldn’t be drowning in student debt if young (especially since that order kept college costs down.)


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So the people who are responsible have robbed you of a million or more dollars, and a good, prosperous life. These people had names. It started with with intellectuals like Milton Friedman and the oligarchs who funded economics departments to overturn the economic orthodoxy the old order ran on. It moved onto politicians, executive and CEOs. Margaret Thatcher, and Reagan; then Blair and Clinton, who made their victory complete. Thatcher understood that it was Blair who made her victorious, until Labour accepted “There Is No Alternative” they could have simply undone almost everything she did. Clinton, cutting welfare and smashing blacks and poor people in the face with punitive jail sentences, was Reagan’s heir more than George Bush Sr. ever was.(Biden, of course, was there for all of it and supported almost every shitty piece of it. Enemy. If you can’t manage “enemy, but perhaps not as bad an enemy as Trump, you can’t think.”)

This piece isn’t primarily about ideas and the influence of intellectuals and academics, but I do want to give another nod to Milton Friedman. Please remember, always, that in politics and economics ideas do usually come before action, despite everyone telling you otherwise.

1970, Baby! The sound you hear, to paraphrase Ross Perot, is your jobs going down the drain to every low wage countries around the world.

Now, here’s another fact: wage theft is almost equal to ALL other theft combined, except (get this) it isn’t considered a crime. That’s right, when your boss steals from you, it’s a civil/regulatory matter! 

Who’s the enemy?

Now, when it comes to dying, if you live in America or Britain or most of Europe, who is most likely to get you killed?

That dastardly Putin, twirling his metaphorical mustache and cackling about how much he hates the West, “muahahahahahaha, I hate democracy,” he cackles, or your own elites?  Did Putin send you or your children to war in Iraq or Afghanistan? Did he bungle your Covid response.

Did Putin do this?

It is very rare, unless you are an Iraqi, say, that the leadership of any country save your own is more dangerous to you than your own. On those rare occasions when they are, it’s because a great power is fucking you up (yes, sometimes that’s Putin, but not if you’re American or a member of the EU.)

Your enemies are you own elites. They are the people who price drugs so high you can’t afford them, fuck up a pandemic response so your parents and grandparents die, or send you to war. They are the ones who create economic policies which funnel money to the rich and impoverish you, and if you don’t think being poor isn’t bad for you, you ain’t ever been poor, that’s for certain.

So, when you prioritize the people to be wary of, to be scared of, and to hurt or harm if you ever can, remember, a wise person knows who their enemies are.

Be a wise person.

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Week-end Wrap – Political Economy – November 22, 2020

by Tony Wikrent

China Emerges Victorious in Trump’s Trade War

China scores victory as 15 Asian nations sign world’s biggest free-trade deal

[South China Morning Post, via Naked Capitalism 11-16-20]

The Regional Comprehensive Economic Partnership accounts for about one-third of the world’s population and economy, but does not include the United States

East Asia Decouples from the United States: Trade War, COVID-19, and East Asia’s New Trade Blocs (PDF)

Petersen Institute for International Economics, via Naked Capitalism 11-20-20]

Lambert Strether: As Michael Pettis points out, the RCEP members are all net exporters. So who buys the goods?

KT Chong commented in the Weekend Wrap on Ian Welsh last week:

America has not yet realized: [with] the signing of the RCEP, China has effectively prevailed in — i.e., “won” — the open trade and economic war with the US.

With RCEP and the entire Asia Pacific as its economic and free trade sphere, China has maneuvered into an economic and strategic position in which it will have very little to fear from being decoupled or even sanctioned by the US. Now America and its Western allies will no longer be able to defeat China through trade, decoupling, sanctions or any economics means. With RCEP, China’s economic future is secured…. This will be the longest-lasting legacy of the Trump administration: starting and then losing the trade and economic war with China, in just three years, and now China’s rise to economic supremacy is all but certain.

RCEP set to supercharge the New Silk Roads

Pepe Escobar [Asia Times, via Naked Capitalism 11-16-20]

China looms as Biden’s biggest foreign policy challenge. Here’s where he stands

[CNN, via Naked Capitalism 11-16-20]

The Elements of the China Challenge (PDF) Policy Planning Staff, Office of the Secretary of State

[via Axios, via Naked Capitalism 11-20-20]

The Pandemic

“Lawsuit: Tyson managers bet money on how many workers would contract COVID-19”

[Iowa Capital Dispatch, via Naked Capitalism Water Cooler 11-19-20]

The lawsuit was recently amended and includes a number of new allegations against the company and plant officials. Among them:

  • In mid-April, around the time Black Hawk County Sherriff Tony Thompson visited the plant and reported the working conditions there “shook [him] to the core,” plant manager Tom Hart organized a cash-buy-in, winner-take-all, betting pool for supervisors and managers to wager how many plant employees would test positive for COVID-19.

Open Thread

As usual, use the comments to discuss topics unrelated to recent posts.

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“Intellectual Property” Law Set To Kill Millions By Slowing Covid-19 Vaccine Access

Jonas Salk, who refused to patent the polio vaccine

Worldwide deaths from Covid-19 sit at 1.39 million, though that’s certainly an understatement, especially when one adds in people who died of other causes who wouldn’t have if Covid-19 wasn’t soaking up resources. (I recently read of a man dying of a perforated gallbladder in the US who wouldn’t have pre-Covid.)

We have vaccines coming out in the new year, and they are good vaccines, with 90%+ success rates and few bad reactions, so far as the current data indicates.

But the current timeline is that there won’t be enough vaccine until 2024 to vaccinate everyone.

There’s a way to speed it up, however. Release the information on how to manufacture the drugs so that any facility which has the ability to make them can.

The US, UK and EU, among others, are opposing that idea.

That’s going to kill a LOT of people and destroy a lot of businesses, throw a lot of people on the street, etc, etc.


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There’s no reason why every company with an effective vaccine shouldn’t make money, we can simply pool some money up and give it to them. That’s fair, that’s reasonable, that doesn’t destroy the economy and massive numbers of lives in poor countries.

I note, by the way, that China, which has three vaccines in late development is OK with this. They’re the bad guys, we’re constantly told, but in this case they’re doing the right thing, the moral thing. It’s the “good” guys who aren’t.

If you’re in the 1st world, don’ t worry, your government will make sure you’re taken care of. But in the developed world this could drag on for two more years than necessary.

I note, also, that in macro-economic terms this is stupid. Full vaccination allows full opening of borders and a return to trade, tourism and so on. Dragging the process out so that the economy can’t return to full power will cost far more money than any amount which can be earned by squeezing poor countries for as much money as possible.

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And Here I Had Some Faint Hope for Biden

After the election, Senate minority leader Schumer noted that Biden, using an administrative order, could wipe $50K worth of student debt off every student loan debtor. Coming from someone so senior, this seemed like a serious proposal. It was hard to believe Biden would do something like that (after all, the bankruptcy bill that made discharging student loans in bankruptcy was his baby), BUT he does need a win and Schumer isn’t exactly a radical left-winger.

So I held out some small hope Biden might actually do it; something wide-based which would make a huge difference in people’s lives. Something BIG and GOOD.

But Biden is a means-testing, caviling centrist to his core, apparently unable to even conceive of broad based popular actions:

President-elect Joe Biden affirmed his support for erasing some student debt “immediately.” The provision calls for the federal government to pay off up to $10,000 in private, nonfederal student loans for “economically distressed” borrowers.

Sigh.

This is okayish, and it will help some people, but no one is going to be singing Biden’s praises to the heavens. He was offered an easy win, with party centrist support, and he refused to do it.

It’s good politics, it’s good economics (it frees up a ton of demand), and it’s morally the right thing to do.


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But, and this is important, Biden almost certainly doesn’t believe that. He believes in the sanctity of debts, that the government should knee-break (errr, “enforce”) for private lenders, and that only the most desperate or the richest Americans should get help from the government.

This is how he has acted throughout his career. This is what he thinks is right, and proper, so it is what he is doing. The idea, pushed by many liberals, that he could be pressured to implement or champion left-wing policies once he was elected was always ludicrous. Even more ludicrous were the comparisons with FDR. FDR was already a left-winger when he became President; as governor of New York, he had run the most aggressive relief program in the US.

When FDR said “Make me do it” what he meant was that he already wanted to do it, but needed public pressure and support. It was his way of saying “Make a lot of noise and demands, I want you to.”

Biden doesn’t want to do left wing populism. He never has during his career and he’s not going to change.

Again, that doesn’t mean he won’t be better on some things (Iran, national parks, Covid), just that he’s not going to govern the way progressives want. In Biden’s case, you truly WILL have to make him do things, like gays forced Obama to support them by both donation-striking and getting in his and his wife’s personal space, and making their lives uncomfortable.

Since most progressives aren’t willing to do that (gays remember AIDS and know their rights and power are a matter of life and death), very little will be gotten from Biden that is good. He is going to have a ton of pressure on him from the right, as well, and in his career he has shown much more willingness to give the right what it wants than the left. This, again, is because he actually believes the right is legitimate and that the left isn’t.

It’s going to be a long few years, though, given his frailty, we may wind up talking about President Harris.

Take care of yourselves, and don’t expect big help from the new administration.

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How to Protect Yourself from Doomscrolling & Bad News

This is an excerpt from a section in my upcoming book, Construction of Reality on how to change one’s personal reality. I hope it will help some readers deal with the current media barrage.


Emotional Performance

We discussed this before, how when objects we identify with, whether people, material objects (holy books, flags, your car), or ideas (the Bill of Rights, the Prophet’s words) are treated in ways we see as bad or good, we have an emotional reaction.

Thousands of miles away, perfect strangers are hurt, or do something we like, and we react. A flag is burned, a Koran desecrated, a bombing goes off, and we have emotions.

We have those emotions in large part because we believe we SHOULD have them. We believe that to not have them makes us bad people. “What sort of person isn’t upset when a bomb goes off in the London Subway/someone burns a flag/a dog is hurt?” etc.

We react because to not react, in our minds, makes us a bad person. It makes us not of the tribe. Remember, the tribe is whoever we share an identity with. In the distant past, that might have included ancestors and Gods and stories about our tribe. Today it is our ideology, our religion, our race, our nation, and so on.

But the mechanism is the same.


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And if a tribe’s identity was attacked, its beliefs attacked, that means the tribe was attacked, and if you didn’t react emotionally, other members of the tribe will notice that and they’ll distrust you. And if they distrusted you, that near the state of nature, well, that might go badly for you.

So these sorts of reactions are built deep into the human psyche. To not react to violations of the tribe’s identity, ideology, or to the harm of fellow tribe members is dangerous to you.

But that near the state of nature, the tribe could be under a hundred people. Maybe a thousand or two in extended tribal groups.

Not millions or billions of people.

Outrages, harm, and good events, came when they came, and were immediate; in your presence or in the presence of the person telling you about them.

They weren’t coming at you in an incessant drumbeat, from people you don’t know, about people you don’t know, all day long, from an endless well. In a world of seven billion people plus with instant communication, there’s always an outrage or atrocity.

These endless pinpricks jerk us around, never allowing us to relax, and our identities and ideology are constantly reinforced by atrocity and tragedy.

Identities and ideologies, I remind you, that are not intrinsic to you, and generally not chosen.

So to start dis-identifying, you need to break yourself of this sort of emotional performance.

Read the following and return to it often.

Feeling bad about a situation you are not in and which you can do nothing about, hurts you and doesn’t help anyone else.

If you are angry at a terrorist attack a thousand miles away — or a war, or poverty, or anything — that anger is bad for you. It kicks adrenaline into your body, keeps you in a state of arousal (not the good type, sorry) and causes stress.

And it isn’t helping anyone else.

So don’t do it. Start breaking the cycle. Make it a rule that if you can’t do anything about a situation, you won’t get upset about it, won’t worry about it, and so on. Do whatever you’re going to do, then stop reacting to it. Or decide you’re going to do something, and once the decision is made, don’t think about it until the time comes.

“Tomorrow, I’ll take some food to the food bank.”

Great, do that tomorrow, meanwhile stop feeling bad.

This is moral. This is ethical. Hurting yourself and helping no one is bad. It is immoral. So don’t do it.

This doesn’t mean don’t be empathic when you’re with a mate who’s suffering (or even with a stranger), but put it down when you leave. Help, but don’t carry the emotion with you.

This is the right thing to do practically and morally.

Break this bond. At first, it will seem impossible, but if you practice each time such situations come up, you will eventually find yourself calmer and calmer and less reactive.

You will also be more effective, because you will no longer believe that “thoughts and feelings,” absent action, do anything for people who aren’t in your presence.

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This is a reprint: It was originally published Nov 8, 2018, but I think people need it again & there are a lot of new readers.

Our Society Is Built on Lying and Breaking Faith

Came across a long story about a man’s military career. Basically, he was a West Point graduate and refused to lie: He wouldn’t sign forms that he knew were wrong. He lasted four years in the military, because almost everything he had to sign was a lie, and he wouldn’t do it.

This is worth a long quote:

Readers may regard the anecdotes above as mildly interesting, but trivial because rifle serial numbers and vehicle status are not that important in the grand scheme of things. They would be more impressed if I had refused to sign a document covering up an atrocity or something like that.

In corrupt organizations, whether it be Enron, the NY Police Department during the time that Frank Serpico was an officer, the Mafia, or the U.S. military, newcomers are tested before they are “trusted.” As Al Pacino said over and over in The Recruit, “Everything’s a test.”

Relatively new NYPD officers like Serpico, also played by Al Pacino, were invited to accept small bribes to show they were “one of us” before they were permitted knowledge about bigger stuff. Mafia wannabes are required to commit crimes confirmed by Mafia guys before they are allowed into the inner circle.

This has two purposes:

• to identify and screen out any “boy scouts” or undercover agents who are squeamish about corruption

• to get something on everyone so no one can later change his mind and snitch

Signing false documents is a court martial offense. It violates the Uniform Code of Military Justice. If you sign a false document, you both gain entry to the “club” and you put yourself in a position where you cannot get out because if you ever go over to the media or authorities, they can trot out the false documents they know you signed to discredit and court martial you.

He goes on to talk of applying to be a real-estate salesman. They wouldn’t hire him because he had a rental property himself, had money in the bank, and no dependents. In other words, he didn’t need the money and therefore couldn’t be coerced by his boss.

A vast amount of life is like this. In my old corporate career, I remember being in a legal compliance meeting (the most junior person there). There was a discussion of a law, and the senior VP wanted us to simply track possible violations, not stop and report them. I read out the key section of the law and said “I don’t see how that law can be read as “just keep a spreadsheet.” He insisted. I said, “Of course, you’re the Senior VP. Just write a directive telling us to do that and sign it.”


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We obeyed the law. But I was never invited to another such compliance meeting. Of particular note is that I was the only person who stood up, even though there were half a dozen people in the meeting, many senior to me, and I know some agreed with me. But they had careers, families, and were already compromised. In fact, of course, I protected them: They are the people who would have taken the blame, not the VP, if a regulator ever actually called us on it, because no way was that VP putting his John Henry on the directive.

This sort of thing goes all through modern life. We compromise (and I haven’t always stood up, though I’m pretty stiff-necked). Often it isn’t illegal, per se. It’s lying to employees (yeah, they actually probably are going to lose their jobs, but we can’t tell them that yet.) It’s hurting employees to make a number on a spreadsheet you know doesn’t actually matter, but senior management wants that number and standing up to senior management is a bad idea, you have to just give them what they want all the time so they think you’re a go-getter.

Of course, in many cases the best way to give senior management what they want is to lie. Move those numbers from one quarter to another; count future income now, or income that’s probably going to happen as for sure. If all that doesn’t work and it’s not something they can know without knowing more about operations than they ever do, just lie to them.

Sometimes this happens pro-actively, sometimes it’s a response to management who won’t listen. “I don’t care that it can’t be done, make it happens.” OK, buddy, if you won’t listen, I’ll just change the numbers.”

These things are rife. On Wall Street in the 00’s, everyone knew that whole classes of mortgages were based on lies. They were actualy called “liar’s loans.” It was common knowledge. Everyone knew that there was housing bubble (except a lot of economists, who are great at lying to themselves) and there they were  telling clients that real-estate is a sure thing. Goldman Sachs was telling their clients everything was fine while they placed a huge bet on the other side.

The entire economy, and most of politics runs on lies (Obama lied about everything of importance to progressives, to their faces. Trump of course, doesn’t tell the truth, and probably doesn’t know the truth. But no one cares because he’s just more extreme about what is normal.)

You make these compromises, over and over again, and they kill your soul. You must believe that this is okay, that it’s how things are done, that it doesn’t make you a bad person.

But it does. It makes you a bad person. Doesn’t make you nothing but bad, you, like Joe Biden, probably love your son or family or dog or something.

A society where you must lie, repeatedly, to get power, where you must do evil over and over again to get power (or even a decent living) will be shit, and the more the virus of dishonesty and meanness spreads, the more shit it will be.

This is why the one thing I try to do as a writer is always tell the truth as I know or believe it to be. Might be wrong, but I’m not lying when I say something. The only time I ever didn’t tell the truth as I knew it was for about two weeks around Obama’s victory period when I made the mistake of trying to influence his incoming administration by offering the sugar plum vision of how popular he could be if he was the next FDR. It was wrong to do, a moral failing and mistake, and I’ve never forgotten it.

You lie and you compromise yourself. It’s that simple. I was lucky, I could walk back, admit the wrong (I’ve written about this before), and continue on. But the more you do it, the harder it is, and, in many cases, if you’ve done serious wrong-doing, you’re compromised for life.

I don’t know an easy way out of this. The fact is that we have created a self-perpetuating hell. I do know that a lot of it comes down to fear; that the more we make the good life something only some people can have, with the price always being compromising yourself (don’t kid yourself, not one percent of corporations actually don’t require managers to compromise themselves in multiple ways), well, people crumble. They’ve got that dog or son to look after or they’re ambitious and hey, everyone does it, so if the price is lying and fucking every worker who reports to them, they do it.

So the first step, because people are weak and scared, is to create a society where everyone’s needs are met at a decent level; where losing your job doesn’t mean plunging into poverty. This is something almost no one has done, in Canada you certainly don’t want to be poor, it’s ass, let alone in the US where it means life in Hell, and then probably an early and degraded death.

Faced with a life of misery or an end to their integrity, most people will lose their integrity. When that’s almost everyone with any power, well, your society will be hell.

And those are the societies most of us live in. (Remember all the oil companies and tobacco companies lying? Yeah.)

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I Suffered, Therefore So Must Others

I want to expand on this idea, ably put my Amal El-Mohtar here:

This idea seems right: the first is better than the second.

But the actual correct stance is:

This bad thing never happened to me BUT I can imagine how horrible it would be, so I want to make sure it doesn’t happen to other people.

None of us, no matter how bad our lives are, have experienced all the horrible things that can happen. Conservatives are notorious for being terrible except about one thing, you dig and it’s “My child got esophagal cancer so now I champion that,” OR “Someone I care about was shot with an assault rifle so now I’m against that.”

Imaginative empathy allows us to imagine being a blood diamond slave in the Congo, or there during a school shooting, or suffering from grinding poverty even if we’ve had good lives. It allows us to be disgusted and horrified by people cleaning out sewers by hand (Indians euphemistically call this “manual scavenging”) or what it’s like to suffer from anti-black racism or caste oppression. We don’t need to have suffered something either to say, “Others should suck it up,” or “Others shouldn’t have to go through what I did.”

This isn’t a call to removing all risk and stress from life. Not all unpleasant events are bad. The general rule, now well-supported by various studies, is that short term stress is good, and chronic stress is bad.

When I went to school, we had exam hell week: one before Christmas, one at the end of the year. The final exam week usually determined 50 percent of our marks.


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This arrangement made for “good stress:” it was short-term and made you learn how to take high-impact tests. I’ve never feared a test since then: I assume I can pass any academic test, if given enough time to study, and my idea of enough time is a lot less than most people’s.

We don’t want to protect people from good stress — from short term challenges that teach them what they can do.

Chronic stress or traumatic stress, however, we do want to avoid. No one is improved by rape (prison administrators take note). No one is improved by being poor for years or even months on end. No one is improved by chronic hunger or fear.

The larger questions are why some people are unable to employ imaginative empathy: Why they must experience hell first-hand to realize “Oh! Hell is bad!” and why some can’t extrapolate this to “All hells are bad.”

Life is better with happy, healthy people. Heaven and Hell are both other people: if you’re surrounded by happy, loving people, odds are you’ll be happy. If you don’t start that way, you’ll almost certainly wind up that way. We shouldn’t want our fellow citizens to be subject to damaging long-term stress of traumatic events simply because we have to live with them.

The exception, alas, is that some people can’t learn that something is bad if it doesn’t happen to them. Their depraved indifference is a danger to everyone around them and a challenge to ethics. The people who need to be poor or spend time disabled or seriously sick are the people who think it’s no big deal. Some people, it seems, can only learn that “Hell is bad” if they or perhaps someone they love, spends time in Hell.

El-Mohtar’s tweet, of course, was about the possibility of Biden using an executive order to forgive $50k of student debt.

The good way to do it would be to get rid of the bankruptcy bill Biden pushed that made it impossible for student loans to be discharged in bankruptcy, which would sort the situation out fast (it is NEVER a good idea to make it so that creditors do not have to worry about non payment. NEVER.)

But Biden probably won’t have control of Congress, and this is better than doing nothing, even if some people who have paid off student loans feel it is “unfair.” It was unfair they had usurious loans, but just because they suffered doesn’t mean others should.

The best solution, of course, would be to go back to 60s-style universities where tuition is either cheap or non-existent. The cost is a lot less than any of the repeated bailouts of rich people and could be made even lower by doing something about university admin bloat (that’s an entire other article I may write one day) and a more complete solution would be to do something about credential inflation: Most jobs don’t need a degree and the idea that they do today is absurd.

But what Biden can do is forgive $50K with an admin order and he should. It’s a good thing he can do, and if it doesn’t relieve the suffering of people in the past, well, hopefully you are, at least, the sort of person who doesn’t want others to suffer like you did.

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