The Strategy of Controlled Chaos
By Manlio Dinucci | Global Research* | April 18, 2019
Everyone against everyone else – this is the media image of chaos which is spreading across the Southern shores of the Mediterranean, from Libya to Syria. It is a situation before which even Washington seems powerless. But in reality, Washington is not the sorcerer’s apprentice unable to control the forces now in motion. It is the central motor of a strategy – the strategy of chaos – which, by demolishing entire States, is provoking a chain reaction of conflicts which can be used in the manner of the ancient method of “divide and rule”.
Emerging victorious from the Cold War in 1991, the USA self-appointed themselves as “the only State with power, reach, and influence in all dimensions – political, economic and military – which are truly global”, and proposed to “prevent any hostile power from dominating any region – Western Europe, Eastern Asia, the territories of the ex-Soviet Union, and South-Western Asia (the Middle East) – whose resources could be enough to generate a world power”.
Since then, the United States, with NATO under their command, have fragmented or destroyed by war, one by one, the states they considered to represent an obstacle to their plan for world domination – Iraq, Yugoslavia, Afghanistan, Libya, Syria and others – while still others are in their sights (among which are Iran and Venezuela).
In the same strategy came the coup d’État in Ukraine under the direction of the USA and NATO, in order to provoke a new Cold War in Europe intended to isolate Russia and reinforce the influence of the United States in Europe.
While we concentrate politico-media attention on the fighting in Libya, we leave in the shadows the increasingly threatening scenario of NATO’s escalation against Russia. The meeting of the 29 Ministers for Foreign Affairs, convened in Washington on 4 April to celebrate the 70th anniversary of the Alliance, reaffirmed, without any proof, that “Russia violated the FNI Treaty by deploying new missiles with a nuclear capacity in Europe”.
One week later, on 11 April, NATO announced that the “update” of the US Aegis “anti-missile defence system”, based at Deveselu in Romania, would be implemented this summer, assuring that it would “not add any offensive capacity to the system”.
On the contrary, this system, installed in Romania and Poland, as well as on board ships, is able to launch not only interceptor missiles, but also nuclear missiles. Moscow issued a warning – if the USA were to deploy nuclear missiles in Europe, Russia would deploy – on its own territory – similar missiles pointed at European bases.
Consequently, NATO’s spending for « defence » has skyrocketed – the military budgets of European allies and those of Canada will rise to 100 billion dollars in 2020.
The Ministers for Foreign Affairs, united in Washington on 4 April, agreed in particular to “face up to Russia’s aggressive actions in the Black Sea”, by establishing “new measures of support for our close partners, Georgia and Ukraine”.
The following day, dozens of warships and fighter-bombers from the United States, Canada, Greece, Holland, Turkey, Romania and Bulgaria began a NATO aero-naval war exercise in the Black Sea at the limit of Russian territorial waters, using the ports of Odessa (Ukraine) and Poti (Georgia).
Simultaneously, more than 50 fighter-bombers from the United States, Germany, the United Kingdom, France, and Holland, taking off from a Dutch airbase and refuelling in flight, practised “offensive aerial missions of attack against earth-based or sea-based objectives”. Italian Eurofighter fighter-bombers were once again sent by NATO to patrol the Baltic region to counter the “threat” of Russian warplanes.
The situation is increasingly tense and can explode (or be exploded) at any moment, dragging us down into a chaos much worse that of Libya.
Manlio Dinucci is a Research Associate of the Centre for Research on Globalization.
* This article was originally published on Il Manifesto. Translated by Pete Kimberley.
Combatting Anti-Semitism: Washington Goes to War for World Jewry
By Philip Giraldi | American Herald Tribune | April 21, 2019
One of the most extraordinary displays of Jewish power in the United States took place in the State Department press briefing room on April 11th though it went virtually unreported in the mainstream media. It involved the introduction to the media of Special Envoy to Monitor and Combat Anti-Semitism Elan S. Carr, who had been sworn in earlier that day by Secretary of State Mike Pompeo. Carr, who will “lead United States policies and projects aimed at countering anti-Semitism throughout the world,” is a former Los Angeles prosecutor, who is, of course, Jewish, and ran for Congress in 2014 declaring that he was a “reliable vote for Israel.” He believes U.S. support for Israel should be “constant, unequivocal and bipartisan.” Carr speaks Hebrew, boasts about his visits to Israel every year and is a protege of GOP casino magnate and mega-donor Sheldon Adelson.
The State Department already has an Office of International Religious Freedom which inter alia seeks to “Promote freedom of religion and conscience throughout the world as a fundamental human right and as a source of stability for all countries” while also “identify[ing] and denounce[ing] regimes that are severe persecutors on the basis of religious belief.” It would seem that the International Religious Freedom office has all the bases covered, but there is apparently the Jewish exception rule that operates across the federal government and even at state levels. Jews, definable both as a religion and an ethnicity, clearly require more protection from government than other groups even though they are the most wealthy and politically powerful segment of the population both in the United States as well as in numerous European and Anglophone countries where they have a significant presence.
Here in America, Jewish organizations already benefit directly and grossly disproportionately as recipients of over 90% of Department of Homeland Security discretionary funds to protect their buildings and offices and such largesse is also the rule in countries like Britain and France. Holocaust education is mandatory in nearly all school districts, presumably to depict both Israel and Jews in a favorable light, and legislation to penalize or even criminalize any criticism of Israel is now in place in a majority of American states. Criticism of Israel is already regarded by the federal government as de facto anti-Semitism and anti-Semitism is itself considered a hate crime, subject to harsh penalties.
The United States is now committed to protecting Jews worldwide, with Carr putting it this way in a comment he made at a meeting of the Conference of Presidents of Major American Jewish Organizations in February, shortly after he was nominated: “My office was created by law and designed to protect the Jewish people throughout the world. Think about that. The world’s greatest power is focused, by law and design, on protecting the Jews.”
One is hard pressed to find in the Constitution of the United States some mention of the “law or design” that mandated protecting one particular ethno-religious group worldwide at taxpayer expense. Nor has there ever been a referendum on the question of whether Jews should be protected by Washington no matter where they live. Indeed, if there is a religious group that is facing extinction it is Christians in the birthplace of the religion in the Middle East, but there is little advocacy on the part of the U.S. government regarding their plight because it is Israel that has been actively engaged in creating unfavorable conditions for Palestinian Christians that eventually lead them to emigrate. It is called ethnic cleansing to make the Jewish state truly and completely Jewish. Ironically, Christians are better protected in neighboring majority Muslim countries Syria, Lebanon and even in Iran.
To be reminded once again just how powerful Jewish interests are in the United States, it is only necessary to examine some of Carr’s remarks. He is, of course, an opponent of the nonviolent Boycott, Divestment and Sanctions (BDS) movement which seeks to apply economic pressure against Israel to persuade it to end its colonization of the Arab West Bank and its ruthless suppression of the Palestinians.
Carr regards it as an “honor” to be sworn in to “fight against anti-Semitism, to the protection of the Jewish people throughout the world, and to the support for the Jewish state.” He intends to do that by “ focus[ing] relentlessly on eradicating this false distinction between anti-Zionism and anti-Semitism.” He elaborated that “… if there is an organized movement to economically strangle the state of Israel, that is anti-Semitic, and the administration has gone on the record for – as being opposed unequivocally to the BDS movement and the idea that somehow there can be movements organized to deny Israel its legitimacy and not to allow Israel to participate in economic commerce in the world – sure, that is. Hatred of the Jewish state is hatred of the Jewish people, and that’s something that’s very clear and that is our policy.”
Carr, responding to a question, also discussed what is now the U.S. government’s accepted definition of anti-Semitism, that “Criticism of the policies of any country, whether it’s the state of Israel or of the United States, is entirely proper and can’t be regarded as being inappropriate. However, as you may know, the International Holocaust Remembrance Alliance definition of anti-Semitism gives as a specific example the application of double standards to the state of Israel. And so if Israel is criticized in a way that no other country in a similar circumstance is criticized, yes, that is anti-Semitism.”
A journalist asked “Having covered the Israeli-Palestinian issues for – like many other people in this room – for a very, very long time, we know that U.S. former President Jimmy Carter did refer to Israel as an apartheid state, that it’s more of a human rights issue, especially with – in terms of policy. And a lot of things that the Trump administration has done – moving the U.S. embassy, recognizing the sovereignty of Israel over the Golan Heights – as not recognized under the international community. Can you tell me why you think Israeli settlements and a boycott, which was reminiscent of sort of South African sanctions issues and divestment, is an anti-Semitic issue specifically and not really one of more of a human rights or two peoples that need to get along?”
Carr responded: “I think any comparison between the state of Israel and apartheid is offensive to its core, and anyone who makes that comparison needs to check their facts. Israel is an exemplar of a democracy with democratic values, where all citizens of Israel not only vote but have representation in the Knesset, including, by the way, in the election we saw just yesterday. And so any notion that the state of Israel, which is a shining example of a democracy and a shining example of an American ally, one of our best allies – any suggestion that the state of Israel in any way, even remotely, reflects apartheid is offensive.”
Elan Carr is living on fantasy island, but he knows perfectly well that within the framework of the United States government he can say all the good things he wants about Israel while simultaneously labeling its critics as evil, even if you have to make things up, which he does when he claims repeatedly that BDS is seeking to “strangle” the Jewish state. He certainly knows perfectly well that hatred of the Jewish state is not hatred of the Jewish people but chooses to ignore the fact that Israel is criticized for how it behaves not because of what religion it claims to represent. If it is uniquely criticized it is because its record of war crimes is unique.
And Carr also should understand but clearly chooses not to, that criticism of Israel is not equatable to anti-Semitism but for the fact that he offers a definition designed to come to that conclusion. And even if it were so, there is that pesky thing called the First Amendment. Israel is no “shining example of democracy,” nor is it an ally of the United States. It is a perfect example of an essentially racist apartheid state, worse than South Africa was before it democratized, and it is also a parasite that has completely corrupted America’s body politic, which is why Carr has the position that he holds.
Finally, the United States has no moral or legal authority to police the world on behalf of international Jewry. It does not need a Special Envoy to Monitor and Combat Anti-Semitism to lead it on a crusade – dare I use that word in this context – to fix the world and make it a more comfortable and enriching experience for people like Elan Carr. American taxpayers should not be required to support this kind of entitlement nonsense, particularly as Israel and worldwide Jewish communities are wealthy and powerful enough to protect themselves without having to bleed the rest of the world by virtue of an unending victim narrative that generates a guilt trip relating to events in Europe seventy years ago. Will Americans ever arrive at a point where Israel and its diaspora helpmates like Carr will just leave the rest of us alone? One can only hope.
What Will It Take To End Anti-Greenhouse Gas Insanity?
By Francis Menton | Manhattan Contrarian | April 15, 2019
It was nearly six years ago, in one of the very early posts on this blog, that I wrote as to the global warming scam, “[E]ven as the cause becomes more and more ridiculous, the advocates just double down again and again.” At the time, world temperatures had failed to rise in accordance with alarmist predictions for about 15 years running, and I still had the naive idea that the politics of this issue ultimately would follow the scientific method; in other words, that the hypothesis of catastrophic human-caused warming would inevitably be forced to face the test of empirical evidence. Over time, empirical evidence would accumulate. As it became more and more clear that the evidence failed to support the hypothesis, the whole thing would gradually fade away. But up to that point, as I reported in that April 2013 post, what was happening was closer to the opposite. Extremely weak or completely negative empirical evidence for the hypothesis only made the advocates more and more extreme in their demands for immediate transformation of the world economy to “save the planet.”
The intervening six years have seen the ongoing accumulation of considerably more evidence, essentially all of it negative to the catastrophic global warming hypothesis, but my faith that actual evidence could resolve the issue has been almost completely shattered. Massive alterations have been made to the world thermometer temperature records by US and UK bureaucrats — almost entirely to reduce early-year temperatures and thereby create an apparent warming trend far greater than exists in the raw data. I have covered this issue extensively in a now-twenty-two part series “The Greatest Scientific Fraud Of All Time.” Meanwhile, every hurricane, tornado, drought, flood, or other damaging act of nature is presented by the progressive press as evidence of human-caused “climate change” — even as the actual occurrences of such events have been definitively shown to have no increasing trend over time. Actual evidence gets massively altered, buried and/or ignored.
And now here we are in 2019, and the demands of the anti-greenhouse gas activists have only become more shrill and strident. Exhibit A is the so-called Green New Deal, a call to end most or all GHG emissions by 2030 at a cost of maybe 100 trillion dollars or so. And we are treated to claims by seemingly serious elected officials that the world will end in 12 years if we do not follow these prescriptions. If mere adverse empirical evidence cannot end this insanity, what can?
Here’s what I think will put this to an end: the actual implementation by some jurisdictions of the activists’ preferred policies, all of which would impose massive costs on the people with no measurable impacts on world temperatures or the climate. The problem with expecting the scientific method to resolve this issue is that very few people have the time or inclination to follow empirical evidence of world temperatures to see if they are rising in accordance with predictions. Even fewer people are willing to get into the nitty gritty to evaluate alterations to the temperature data to see if they are legitimate. But almost everybody will notice immediately when their electricity bill gets tripled.
The process of imposing massive costs on the voting public in the name of saving the planet has been proceeding slowly in many places, and only very recently has this process started to face the beginnings of political blowback. For example, in Germany, the so-called Energiewende began in 2010, and over the ensuing near-decade has gradually brought consumer electricity prices in that country to about triple the US average, with minimal reductions in actual greenhouse gas emissions. Seven plus years into this, in the late-2017 elections, two climate skeptic parties (Free Democrats and Alliance for Germany) went from almost nothing to winning some 24.6% of the seats in the Bundestag. South Australia is an even more complex political situation, but they have also seen fanatic imposition of a “green” energy agenda, with vast increases in “renewable” electricity generation, the closing of coal plants, leading to several massive blackouts, and electricity prices also rising to about triple the US average. This has definitely become a major political issue. And just yesterday in Finland, a climate skeptic party called the Finns Party got 17.5% of the votes and 39 seats in parliamentary elections where the biggest establishment party (Social Democrats) got only 17.7% and 40 seats. Many sources report that the election was dominated by the Finns Party’s rallying cry of “climate hysteria.”
Here in my home city of New York, so far it has been all talk and not much action on the front of “fighting climate change” by forcibly suppressing greenhouse gas emissions. But that may all be about to change. A new omnibus package of “climate” bills has just been introduced in the City Council, seeking to go all in on every ridiculously expensive and completely ineffective policy you can think of, supposedly to “save the planet.” The Huffington Post has a big write-up here. Allegedly this monstrosity is going to come up for a vote as early as a week from today, April 22, aka “Earth Day.”
From the lead sponsor:
“This is about saving New York City,” Councilman Costa Constantinides, the Queens Democrat leading the effort. . . . “This is saving the city as we know it.”
This guy actually has the idea that he can stop bad weather or sea level rise or something by ordering the people of New York City (about 0.1% of the world’s population) to change their energy sources or use less energy or otherwise stop their sinning. How about some specifics?
The heart of the legislation is a measure requiring buildings of over 25,000 square feet ― the biggest source of carbon pollution in the city ― to install new windows, insulation and other retrofits to become more energy efficient. Starting in 2024, the legislation orders landlords to slash emissions 40% by 2030, and double the cuts by 2050.
Well, I have some experience as a building owner, and I can tell you that you can replace all the windows and insulate to your heart’s content, and you are not going to reduce your building’s energy usage by anything close to 40%, let alone 80%. In addition to which, most large buildings have long since made these upgrades. But hey, these are evil landlords, so we can just order them to do it, and it will happen.
And how about some other things we can order evil companies to do:
The full Climate Mobilization Act package goes further. One bill orders the city to complete a study over the next two years on the feasibility of closing all 24 oil- and gas-burning power plants in city limits and replacing them with renewables and batteries. Another establishes a renewable energy loan program. Two more require certain buildings to cover roofs with plants, solar panels, small wind turbines or a mix of the three. The last in this initial bunch tweaks the city’s building code to make it easier to build wind turbines.
These are some things with the real possibility of increasing our costs of electricity by big multiples. You might think I would strenuously oppose the bills, given that I am a designated guinea pig and victim for an experiment that can’t possibly end in anything other than abject failure. But you would be wrong. I say, let them try this nonsense, and the sooner and faster the better. That’s the only way that the inattentive multitudes will finally wake up. And, when electricity bills or gasoline prices or rents multiply by factors of three, or maybe five, then wake up they will. The insane politics of New York City might seem completely impervious to change, but that’s because the limits have not yet been tested. Going down this road could finally lead to a 180 degree reversal. I say, go for it!
Trump, Erdogan seek reset of US-Turkey ties
By M. K. BHADRAKUMAR | Indian Punchline | April 21, 2019
Even as the countdown has begun before the first batch of Russian-made S-400 missiles will arrive in Turkey — expected in coming ten weeks from now — a crisis situation envelops the Turkish-American relationship. No doubt, this crisis, unless resolved in the coming days or weeks, could have profound consequences for the future of the western alliance system as a whole and the geopolitics of Eurasia and the Middle East.
What distinguishes the crisis from the run-of-the-mill spats that keep frequenting the Turkey-US relationship every now and then is that at issue here is Turkey’s vulnerability, if it proceeds with the S-400 deal, to US retribution under the 2017 law known as the Countering America’s Adversaries Through Sanctions Act, or CAATSA, which is directed against Russian arms industry but becomes applicable to third parties that enter into arms deals with Moscow.
If CAATSA sanctions click in, Turkey, which is mired in recession due to the US pressure tactic on its economy, may descend into a free fall of its currency. Incipient signs are already available. Even minor US sanctions could trigger another sharp sell-off in the Turkish lira that deepens the recession. Last year, Turkish lira shed 30 percent of its value, and the currency is down another 10 percent recently, and markets remain on edge.
Simply put, Turkey is so much integrated into the western economies and banking system that any US sanctions would inevitably have a crippling effect. And if there is one message out of Turkey’s recent local elections, it is that the state of the domestic economy could directly impact President Recep Erdogan’s political standing. The point is, despite all the brave chatter about dethroning the dollar, the hard reality is that the US is in a position to “weaponise” the dollar for the foreseeable future and all the King’s men and all the King’s horses — in Moscow and Beijing or Tehran and Caracas or wherever — have to live with that reality.
Besides, in Turkey’s case, a life outside the Western system is simply unthinkable. The Turkish elite are acutely conscious of Ataturk’s legacy that the modernisation of the country demands integration with the West. True, Turkey under President Recep Erdogan is redefining its identity but reclaiming Ottoman legacies in the Muslim Middle East does not and will not mean turning the back on Europe. Paradoxically, Turkey’s strategic autonomy is best preserved by being part of the western alliance system, considering the country’s tough neighbourhood.
No doubt, the stakes are high for Turkey. Unsurprisingly, soon after the visit to Moscow on April 8, Erdogan decided to depute a high-powered team of officials to Washington. The indications are that Erdogan came away from Moscow not quite convinced of the Kremlin’s assiduous wooing of him with an alternative non-western road map for Turkey’s future. At any rate, a team of senior Turkish ministers visited Washington last week for talks aimed at easing the crisis, which included the powerful Finance Minister Berat Albayrak, son-in-law of Erdogan.
The hugely consequential mission of Turkish ministers (which also included Defence Minister Hulusi Akar and Erdogan’s key advisor Ibrahim Kalin) culminated in an unexpected Oval Office meeting for Albayrak with President Donald Trump, with only son-in-law and top aide Jared Kushner and US Treasury Secretary Steven Mnuchin present.
Turkish officials have since exuded optimism that Trump has a “more positive attitude” to Turkey’s pleas than the US Congress where Turkey has almost no cheerleaders.
The catch, however, is that CAATSA, which was legislated in the backdrop of Trump’s alleged “Russia collusion”, has been written precisely with the idea that Trump will have no loopholes to bypass it or dilute the sanctions legislation against Russian arms industry. In fact, for granting a waiver to Turkey in the present case, Trump by law would have to show that the S-400 purchase was not a “significant transaction”, and that it would not endanger the integrity of NATO or adversely affect US military operations.
Again, Trump would also need to show in a letter to congressional committees that the S-400 missile deal would not lead to a “significant negative impact” on US-Turkish cooperation, and that Turkey is taking, or will take, steps over a specific period to reduce its Russian-made defence equipment and weapons. It is a difficult proposition, but doable — provided there is political will.
Trump’s decision to receive Albayrak — it is absolutely unprecedented for POTUS to hold talks with a visiting finance minister — signals that the great dealmaker is on the prowl and would have some formula under his sleeve. Significantly, Trump has not weighed in on Turkey in recent weeks. A senior Turkish official told Reuters that the talks in Washington were “more positive than expected” and the Americans expressed “a softer tone” than they take in public. Another Turkish official added, “There might certainly be some steps to be taken but the search for common ground will continue.”
The Acting US Defense Secretary Patrick Shanahan told reporters on Thursday: “We’re closer” to a final decision on the S-400s after a meeting with his Turkish counterpart. “It’s like: ‘OK, where are we stuck? How do we get unstuck?” he said of the talks, adding he was optimistic and hopeful of visiting Turkey for the formal transfer of F-35 stealth aircraft, which Turkey plans to buy and Washington is threatening to block if Turkey pressed ahead with the S-400 deal with Russia.
Of course, the Turkish-American relationship is littered with several other disputes too — military strategy in the Syrian conflict, Iran sanctions, Turkey’s extradition request to Washington in regard of the Muslim cleric Fetullah Gulen (whom Ankara blames for a failed 2016 military coup) and so on. But the crisis over the S-400 missile deal is the mother of all disputes, since it is directly linked to the viability of the 7-decades old Turkish-American alliance, the Russian strategies in the Black Sea and Eastern Mediterranean, US-Russia tensions and the US’ capacity to influence the Middle East politics as a whole.
What is happening is that after a brinkmanship played out through months at different levels, the crisis over the S-400 affair is reaching a nail-biting finish, with Turkey and the US having reached the edge of the precipice, peering into the abyss and not liking what they see in the darkness and groping for a way to pull back somehow. If they succeed, it will have to be on a “win-win” basis. Read a commentary in the pro-government Turkish daily Sabah entitled This picture gives us hope.
Fun Fictions in Economics
By Dean Baker | CEPR | April 18, 2019
Economists pride themselves on being the serious social science, the one most deserving of status as an actual science. I will let others make the comparative assessment, but there is an awful lot of nonsense that passes as serious analysis within economics. For cheap fun, I thought I would use a nice spring afternoon to highlight some of my favorites.
Myth 1: The Robots Are Taking All the Jobs
The “robots taking the jobs” story gets top place both because it is completely ridiculous and it is widely taken seriously in policy discussions. The story is ridiculous because it is directly contradicted by the data. Robots taking all the jobs is a story of rapid productivity growth. It means that we can produce the same output with fewer workers because the robots are doing work that used to be done by people. That is the definition of productivity growth.
But the productivity data refuse to cooperate with this story. This is not hard to discover. The Bureau of Economic Analysis releases data on productivity every quarter. The data show that productivity growth has been very weak in recent years, averaging just 1.3 percent annually since 2005. This compares to a rate of productivity growth of 3.0 percent in both the period from 1995 to 2005 and the long Golden Age from 1947 to 1973.
The job-killing robots story is sometimes diverted into a scenario that is just around the corner instead of being here today. Of course, we can’t definitely rule out that at some point in the future productivity will accelerate sharply, but it is worth noting that this pickup does not seem to be on the immediate horizon. Investment is not especially high as a share of GDP, averaging 13.4 percent over the last three years. That compares to 14.2 percent from 1999 to 2001, and 14.4 percent from 1980 to 1982, its post-war peak.
Investment is not even especially high in the more narrow categories of computers and information technologies, where we would expect the robots to live. This means that if businesses are about to start a mass displacement of workers with robots, they don’t seem to be spending too much money on the process.
Perhaps the most important point here is that there is no reason to assume that a pickup in productivity growth would be associated with mass unemployment and a collapse of wage income. The 1947 to 1973 Golden Age was a period of rapid wage growth, as were the years from 1995 to 2001, when the stock bubble collapsed and the economy fell into recession.
Bad economic policy can prevent workers from sharing in the benefits of productivity growth (e.g. Peter Peterson-types demanding deficit reduction, thereby reducing output and employment), but it would be crazy to blame robots because Wall Street billionaires are slowing growth and pushing the economy toward recession.
Myth 2: We Are Threatened by a Declining Population
Our policy elite can be very flexible in their thinking. At the same time that many are worried that the robots are taking all the jobs, we also have the opposite threat frequently arising in public debates, that we are running out of workers. The basic story is that the baby boomers are retiring. The generation that followed is smaller. Furthermore, fertility rates among young people are falling to record lows. So, we now face the horrible problem that we are running out of workers just as the rise of robots means we are running out of jobs.
The running out of workers story also involves incredibly sloppy thinking. Yes, a decline in the workforce means that we will have fewer workers to support each retiree. But we have been seeing declining ratios of workers to retirees for the last eight decades. This stems from the problem that people are living longer.
The declining ratio of workers to retirees has not prevented both workers and retirees from seeing rises in living standards for the simple reason that the impact of productivity growth in raising living standards swamps the impact of demographics in lowering living standards. (It’s also worth noting that children have to be supported by workers as well, so the ratio of dependents to workers is actually considerably lower today than at its peak in 1965.)
The declining population story is sometimes turned into a fear of slower growth story. Other things equal, slower workforce growth will mean slower GDP growth. This should bring the obvious response, “who cares?” We should care about rising living standards, in which per capita growth is a factor. There is no obvious benefit in having more rapid growth due to a larger population. In fact, insofar as there are negative externalities not picked up in GDP (e.g. congestion and pollution), we should be happier if the population is growing less rapidly or shrinking.
There is a serious issue here that because of poor family supports, such as the availability of quality daycare and inadequate family leave policy, many people feel they cannot afford to have children. That is a genuine problem, but this is because people should be able to have children, not because society needs their kids.
Myth 3: Technology Is Shifting Income Upwards to the More Skilled
The slightly coherent version of the robots taking our jobs story is that technology is causing an upward redistribution of income to those who have the sophisticated skills needed to master the technology. This is the old “skills-biased technical change” argument that my friends Larry Mishel and Jared Bernstein did a great job decimating two decades ago.
Not only does the data not support the story of an increasingly rapid shift in labor demand to more skilled labor, the logic of the argument skips a key factor. The price commanded by new technologies, and therefore the demand for associated labor, is determined by policy, not the technology.
To be specific, the amount of money that goes to people developing software, artificial intelligence, pharmaceuticals, robots and other areas thought of as being at the technological frontier depends on the length and strength of patent and copyright protection. Shorter and weaker protections (or no protections) would send the price of these items plummeting. It would also mean much less demand for labor in these areas and much lower pay for the highly skilled workers in related occupations.
Arguably we benefit from having stronger and longer patent and copyright protection (I don’t think so), but the fact that these are government policies is not arguable. Insofar as there actually is a shift in income to people with skills in technology-related fields this is a result of policy choices, not the technology itself.
Myth 4: The Government Debt Will Impoverish Our Kids
An evergreen whine from the policy elite is that the government debt is going bankrupt our kids because they will be stuck paying it off. This one is so off the mark that it is difficult to know where to begin.
First of all, the debt involves payments within a generation, not between generations. At some point all of us profligate types will all be dead, so we will not be around to collect the interest on the debt. The rich ones among us will own government bonds, which they will presumably pass on to their kids. So the debt is then not an issue where our children and grandchildren will be paying us interest, but rather they will be paying interest to the children and grandchildren of Bill Gates and his friends.
That might not be a great story for those who are not children of the rich, but it can be fixed with that old-fashioned remedy of taxing the rich. In any case, the question is one of intra-generational distribution, not inter-generational distribution. It’s also worth noting that even with our relatively high debt-to-GDP ratio, the interest burden of the debt is less than 1.0 percent of GDP. That compares to the more than 3.0 percent of GDP that us baby boomer types had to pay in the 1990s when we were young.
The more serious version of the debt impoverishing our kids is that government deficits are pushing up interest rates, which in turn crowds out investment and slows growth. With nominal and real interest rates at extraordinarily low levels over the last decade, it is hard to tell this one with a straight face.
It is also worth noting that we have lost far more productive capacity (potential GDP) due to the austerity demanded by deficit hawks than we ever could have plausibly lost due to the crowding out story. In other words, the policies demanded by the “government debt will impoverish our kids” gang will cause our kids to have much lower real incomes. (The story is even worse when we consider that demands for austerity prevented measures to slow global warming.)
The other aspect missing from the debt story is that government debt is only one way that the government creates commitments for the future. When it grants patent and copyright monopolies it is also directing flows of income, often for decades in the future.
These monopolies are alternative mechanisms for paying for activities. Rather than directly paying for innovation and creative work with public funds, the government threatens to arrest people who violate the monopolies it grants, thereby allowing the monopoly holders to charge prices far above the free market price.
This gap is often quite large. By my calculations, government-granted monopolies cost us close to $370 billion (1.8 percent of GDP) a year in the case of prescription drugs alone and possibly as much as $1 trillion (5.0 percent of GDP) in total. Incredibly, the “government debt will impoverish our kids” gang never talks about the burdens created by patent and copyright monopolies.
Myth 5: Economy Threatening Bubbles Are Difficult to Detect
We saw the tenth anniversary of the Lehman bankruptcy last fall and with it a whole round of papers and conferences dedicated to the problems of the financial crisis. There was virtually no discussion of the housing bubble, the collapse of which was the real cause of the Great Recession.
There is a huge sense in which the focus on financial crises is self-serving for the economics profession. Financial instability can be difficult to anticipate. After all, many financial assets are complex, with new assets constantly being created. In many cases, there is limited data that is publicly available. Who knew that AIG had issued $600 billion worth of credit default swaps against mortgage-backed securities? This gives economists an excuse for missing the Great Recession.
By contrast, the housing bubble, whose crash sank the economy, was easy to see for anyone who pays attention to economic data. We get monthly data from the Commerce Department on residential construction. We also have the quarterly GDP data in which residential construction is a major component. It required some determined ignorance for macroeconomists not to notice the huge jump in this category, which peaked at 6.7 percent of GDP in 2005. That compares to a normal level in the neighborhood of 4.0 percent of GDP.
The unprecedented run-up in house prices was also easy to see with publicly available data. After largely tracking the overall inflation rate in the post-war era, real house prices rose 70 percent from 1996 to 2006. The fact that this increase was associated with virtually no rise in real rents might have seemed peculiar to people who know economics. Also, the fact that the vacancy rate was high and rising might also have suggested that this rise in house prices was not being driven by the fundamentals of the markets.
And, economists also should have known that a collapse of the housing bubble would lead to an end to the consumption driven by the ephemeral wealth created by the bubble. Some guy named Alan Greenspan wrote several papers on this consumption driven by housing wealth.
But rather than own up to having missed the obvious, the economics profession has decided that the problem was a mysterious financial crisis that caught everyone by surprise. Who knows where the next one may lurk?
As a policy matter, this actually has the positive effect of generating more political support for limiting abuses in the financial industry, since we are supposed to be worried that somehow bad practices will, by themselves, lead to another financial crisis and Great Recession. This is good, because finance is an intermediate good, like trucking.
We want the financial sector to be as small and simple as possible, there is no more reason to want a large financial sector than there is to want a trucking industry where goods are shipped back and forth for no reason. The financial industry has been both a major source of waste and inequality over the last four decades.
It would be best if we could rein in the financial sector based on an honest discussion of its role in the economy, but in American politics, no one expects honest discussions. So, we’ll settle for some positive spillover from economists’ efforts to cover their asses.
Myth 6: CEOs Manipulate Share Prices with Buybacks to Maximize Shareholder Value
One of the bizarre stories that passes for wisdom is that CEOs have gotten in the habit of committing large amounts of money to share buybacks in order to maximize shareholder value. Just about every part of this story is hard to square with reality.
First, if the goal is maximizing shareholder value, they are not doing a very good job. Stock returns have been extraordinarily low over the last two decades, averaging less than 5.0 percent annually, after adjusting for inflation, compared to a long-term average of 7.0 percent. It does seem at least a bit odd that when management is supposed to be exceptionally focused on providing returns to shareholders that they are doing such a poor job of it.
Another aspect of this story is that the reason that companies are not investing more is supposed to be that they are paying out so much money to shareholders. Looking at the data, what seems most striking is that there is not much fluctuation, apart from cyclical ups and downs in the share of GDP going to investment.
If investment is determined primarily by investment opportunities, and these tend not to change much, at least for the economy as a whole, then in a period of high profits like the present one, lots of money will be paid out to shareholders, since companies have nothing else to do with it. There is good reason to be unhappy with the rise of corporate profits at the expense of wages, but if companies don’t have good investment opportunities, it’s not obviously bad that they pay the money out to shareholders.
Finally, the focus on buybacks as being especially pernicious seems odd. Is there a reason anyone would be happier if the money was paid out as dividends instead? The switchover to buybacks instead of dividends as the main route for giving money to shareholders, dates from an early 1980s court ruling that approved the practice.
I have heard the complaint that buybacks are worse because top management can manipulate the timing in order to maximize the value of their stock options or planned sales. While that may true, they can also manipulate dividend announcements or statements on earnings.
More importantly, if we think management is manipulating the timing of buybacks, then the victims of the manipulation are shareholders who aren’t in on the joke. That is entirely possible, but then we are not telling a story of maximizing shareholder value. We are telling a story where CEOs and other top management are enriching themselves at the expense of shareholders.
That sets up a dynamic in which shareholders should be allies in cracking down on excessive CEO pay, but I’ll leave that one for another day.
It is safer to be a cop today than 50 years ago
Homeland Security News Wire | April 11, 2019
There is no doubt that policing is a dangerous profession. But is it safer to be a cop today than it was fifty years ago? Yes, according to a study that analyzed police officer deaths (felonious and non-felonious) in the United States from 1970 to 2016.
The study represents one of the most comprehensive assessments of the “dangerousness” of policing to date and provides an important historical context on the ongoing dialogue over a perceived “war on cops” in recent years.
Researchers from Florida Atlantic University, Arizona State University, and the University of Texas at El Paso, found that despite increases in violent crimes, the hazards of policing has dramatically declined since 1970 with a 75 percent drop in police officer line-of-duty deaths. FAU notes that the study also refutes the theory of “war on cops,” following the Ferguson effect and Michael Brown’s death in August 2014, and finds no evidence to support those claims.
“On average, there were slightly more than 1.6 fewer felonious police officer deaths per month after Michael Brown’s death in August 2014 when compared with pre-August 2014,” said Lisa Dario, Ph.D., co-author and an assistant professor in the School of Criminology and Criminal Justice in FAU’s College for Design and Social Inquiry. “This result directly contradicts the hypothesized war on cops, in which an increase in felonious killings after August 2014 is predicted. Our results show the opposite. In the context of nearly 50-year monthly trends, our results show a statistically significant decline in felonious killings of police after Michael Brown’s death.”
Results of the study, published in the Journal of Criminology & Public Policy , show that felonious deaths dropped by more than 80 percent. The only anomaly is 2001 when more than 70 officers were killed during the 9/11 terrorist attack. The rate of non-felonious deaths also declined by 69 percent. Furthermore, the gap between felonious and non-felonious deaths closed over time. Officer deaths peaked in 1974 at 272; in 2016 there were 134 deaths.
Mideast States Join Iraq Summit in Blow to US-Led ‘Arab NATO’ Initiative
Sputnik – April 20, 2019
The summit marks a shift in Iraq’s foreign policy, with the country assuming the role of a mediator in the region as US President Donald Trump has revived the Obama-era concept of an anti-Iranian alliance of Gulf nations.
Iraq is hosting a one-day summit, which brings together the country’s neighbours: Syria, Turkey, Jordan, and Kuwait, as well as two long-time rivals – Saudi Arabia and Iran – in a blow to the US-led “Arab NATO” initiative, Press TV reported.
“This is a positive message to all neighbouring countries and the world that Iraq is determined to regain its health and return to its Arab, regional environment and assume its rightful place in the map of the balance of power”, Bashir Haddad, deputy parliamentary speaker said.
The development comes as US President Donald Trump breathed new life into the Obama-era initiative, “Middle East Strategic Alliance”, commonly referred to as “Arab NATO”, to forge an anti-Iran alliance of Gulf nations.
In 2017, the Trump administration suggested creating an alliance to stop what the US called Tehran’s “malign activities” in the Middle East.
The plan, first proposed by Saudi Arabia in 2017, was promoted by US Secretary of State Mike Pompeo, who even met with Qatari officials last year in a bid to deescalate tensions between Doha and Riyadh to push the idea forward.
Aside from the US and Saudi Arabia, the so-called Middle East Strategic Alliance would hypothetically include the UAE, Oman, Bahrain, Kuwait, Qatar, Jordan and Egypt to counter Iran, deepen defence relations, energy cooperation and deal with regional threats. However, Egypt reportedly dealt the first blow to the proposal last week, having withdrawn from the initiative over concerns of damaging relations with Iran.
Why Boeing and Its Executives Should be Prosecuted for Manslaughter
By Russell Mokhiber | CounterPunch | April 19, 2019
Type the word “manslaughter” into any news search engine and up will come a series of stories of ordinary Americans charged with killing others through criminal negligence or recklessness.
One such case that came up this month involved a Pennsylvania man who plead guilty to manslaughter. The man was accused of texting while driving and as a result killed a 12-year old girl walking on the side of the road. The driver obviously didn’t intend to kill the 12-year old girl. But due to his recklessness, he did. And he will now spend time in jail.
If manslaughter charges can be brought against ordinary American citizens, why not against powerful American corporations and their executives?
Two Boeing 737 Max 8 jets have crashed within five months leaving 346 dead. Early evidence of Boeing’s wrongdoing in the design of the 737 Max 8 and the company’s failure to train pilots to handle its Maneuvering Characteristics Augmentation System (MCAS) warrants a criminal manslaughter prosecution of both the company and the responsible executives.
Boeing CEO Dennis Muilenburg has admitted that “it’s apparent that in both flights, the MCAS activated in response to erroneous angle of attack information.”
And Boeing kept pilots in the dark about potential failure modes that could result in a taxing mental and physical struggle in the cockpit with just seconds to execute correct decisions and maneuvers.
Pilots complained saying that it is “unconscionable” that Boeing, the Federal Aviation Administration and the airlines had pilots flying without adequate training or sufficient documentation about the MCAS system, that the flight manual “is inadequate and almost criminally insufficient.”
Denis Tajer, an American Airlines pilot and spokesperson for the pilots’ union, the Allied Pilots Association, said that the MCAS “was designed in a hideous manner.”
“MCAS was a monster,” Tajer told the Seattle Times last week after a meeting with the Federal Aviation Administration. (FAA).
Jon Weaks, president of the Southwest Airlines Pilots Association, told the Seattle Times that the airline and the pilots “were kept in the dark” about the MCAS.
“We do not like the fact that a new system was put on the aircraft and wasn’t disclosed to anyone or put in the manuals,” Weaks said.
“Boeing will, and should, continue to face scrutiny of the ill-designed MCAS and initial nondisclosure of the new flight control logic,” Weaks wrote last week.
Federal authorities are just in the beginning stages of their criminal investigations. If past corporate criminal investigations are any indication, internal email and memos from conscientious Boeing engineers and executives are sure to emerge further implicating the company and its executives.
But evidence is not enough to successfully bring corporate manslaughter prosecutions. That’s because there is a political economy of corporate criminal prosecutions that favors the powerful. And that’s one reason why we see so many manslaughter prosecutions against ordinary Americans, and so few against powerful corporations and executives.
Boeing is one of the most powerful corporations in the United States. In Washington, Boeing flexes its political muscle with a couple of dozen in-house lobbyists and another twenty or so outside lobbying firms. Boeing spends $15 million a year on lobbying and donated about $4.5 million to congressional candidates and other political committees in the 2018 midterms alone.
Boeing also exerts influence in media circles. Let’s take the case of Meet the Press with Chuck Todd, perhaps the most influential Sunday talk show.
There has not been one mention on Meet the Press of the Lion Air’s Boeing 737 Max 8 crash off the coast of Indonesia that killed all 189 passengers and crew on board since that crash on October 29, 2018 — not one mention in the 26 episodes of Meet the Press since that crash.
There has not been one mention on Meet the Press of the Ethiopian Airlines Boeing 737 Max 8 crash near Addis Ababa killing all 157 passengers and crew on board in the six Meet the Press shows since that March 10, 2019 crash.
The only mention of Boeing during any of those shows is an announcer saying that Boeing is a sponsor of Meet the Press.
(And it’s not as if Meet the Press doesn’t cover disasters. They do. On the March 17, 2019 episode of Meet the Press, the March 15 Christchurch, New Zealand massacre, which killed 50, was a major topic of conversation throughout the show.)
Manslaughter prosecutions in the United States against corporations are rare, and when they happen, they are mostly against small businesses.
Major corporations have been charged with manslaughter for the deaths of workers and consumers. But because of technical legal issues and the power imbalance in the legal system (with corporate defense lawyers often overwhelming state or federal prosecutors) even when cases are brought, these major corporations and their executives usually get off without a conviction. (That’s one reason why there are now calls for Congress to pass a federal corporate homicide law.)
There are exceptions. In 2013, BP was forced to plead guilty to manslaughter in connection with the deaths of 11 workers who died in the 2010 explosion and fire on the Deepwater Horizon rig in the Gulf of Mexico.
Like BP, the Boeing case is an exceptional case.
But industry aligned spokespeople are warning against a rush to criminal prosecution against Boeing. (USA Today recently ran an op-ed titled — Don’t rush into criminal case and don’t make safety a political football.)
There is no need to rush to judgment against Boeing.
Prosecutors should take their time in prosecuting Boeing and responsible Boeing executives for manslaughter. Civil and criminal fines, tort claim settlements, deterrence and rehabilitation are not enough.
Criminal prosecution is society’s strongest signal against anti-social behavior. It says — we believe what you have done is morally wrong and as a result, 346 innocents are dead. Justice must be done.
Prosecute Boeing and the responsible executives for manslaughter. Then let a jury decide on guilt or innocence. It’s the American way.
Russell Mokhiber is the editor of the Corporate Crime Reporter.
BuzzFeed Corrects Trump-Cohen Conspiracy Article After Mueller Report Rips To Shreds
By Tyler Durden | Zero Hedge | April 19, 2019
While MSM journalists spent much of Thursday suggesting that the Mueller report somehow vindicated two years of irresponsible reporting insisting that President Trump colluded with Russia, BuzzFeed quietly corrected an article that was so wrong the Special Counsel’s office issued a rare statement rebuking the report.
Anthony Cormier, Jason Leopold
On January 17, BuzzFeed‘s Jason Leopold and Anthony Cormier dropped an anonymously sourced “bombshell” boldly proclaiming “President Trump Directed His Attorney Michael Cohen To Lie To Congress About The Moscow Tower Project” (spearheaded by Cohen and longtime FBI informant and convicted fraudster Felix Sater — who gave the same BuzzFeed reporters a comprehensive interview last march).
The article claims that Trump instructed Cohen to tell Congress that discussions over the Moscow project ended in January, 2016 when they in fact ended months later.
In an unprecedented move, Mueller’s office immediately disputed the BuzzFeed report right after it published, writing: “BuzzFeed’s description of specific statements to the Special Counsel’s Office, and characterization of documents and testimony obtained by this office, regarding Michael Cohen’s Congressional testimony are not accurate“
BuzzFeed stood by their reporting, saying it “stands by this story 100%.” Leopold and Cormier confidently appeared on CNN that weekend where Cormier insisted “Our reporting is going to be borne out to be accurate.”
Except, it wasn’t
Following the Thursday release of the redacted Mueller report which found that Trump did not direct Cohen to lie, BuzzFeed quietly corrected their story.
BuzzFeed explains
In a Thursday statement, BuzzFeed’s Editor-In-Chief, Ben Smith, explains how “two senior law enforcement sources” provided leaked documents “specifically, pages of notes that were taken during an interview of Cohen by the FBI.”
Our story was based on detailed information from senior law enforcement sources. That reporting included documents — specifically, pages of notes that were taken during an interview of Cohen by the FBI. In those notes, one law enforcement source wrote that “DJT personally asked Cohen to say negotiations ended in January and White House counsel office knew Cohen would give false testimony to Congress. Sanctioned by DJT. Joint lawyer team reviewed letter Cohen sent to SSCI about his testimony about Trump Tower moscow, et al, knowing it contained lies.”
The law enforcement source also wrote: “Cohen told OSC” — the Office of Special Counsel — “he was asked to lie by DJT/DJT Jr., lawyers.”
At the time, the sources asked reporters to keep the information confidential, but with the publication of Mueller’s report they have permitted its release. –BuzzFeed
In short – Cohen told the FBI that Trump directed him to lie, which leaked to BuzzFeed, which presented it as fact, and was immediately rebuked by Mueller.
BuzzFeed isn’t the first outlet to correct an article following the release of the Mueller report. McClatchy issued an editor’s note on anonymously sourced news reports published on April 13 and December 27 of last year claiming that Cohen visited Prague during 2016.
Mueller’s 448-page report debunks this, stating “Cohen had never traveled to Prague and was not concerned about those allegations, which he believed were provably false.”
In response, McClatchy wrote: “EDITOR’S NOTE: Robert Mueller’s report to the attorney general states that Mr. Cohen was not in Prague. It is silent on whether the investigation received evidence that Mr. Cohen’s phone pinged in or near Prague, as McClatchy reported.”
Harvey Weinstein’s Attorney Accused of Sex Trafficking Kids for Jeffery Epstein
By Matt Agorist | The Free Thought Project | April 17, 2019
Alan Dershowitz is a prominent attorney in the United States with a history of representing both accused and convicted wealthy sex offenders. Some of his high-profile cases include defending convicted billionaire pedophile, Jeffery Epstein and accused Hollywood rapist, Harvey Weinstein.
Dershowitz was a member of Epstein’s legal defense team when he was given a sweetheart deal by then U.S. Attorney Alex Acosta—now Trump’s Labor Secretary—and sentenced to just 13 months in work release despite the mountain of evidence against him.
As TFTP has reported, Epstein is a convicted child molester and sexually abused no less than 40 underage girls. Despite this fact, Acosta protected him while serving as a U.S. Attorney in Florida. Dershowitz played a huge role in the deal.
Now, after multiple revelations have come to light, a new victim has gone public in the Epstein case, filing a sworn affidavit in federal court in New York on Tuesday.
Maria Farmer swore to the court that while she was employed by Epstein, she frequently saw “school-age girls’’ wearing uniforms come into the mansion and go upstairs. Farmer also claimed that she and her then-15-year-old sister were sexually assaulted by Epstein and his companion, Ghislaine Maxwell.
Farmer said she reported the abuse to both the FBI and the NYPD when it occurred in 1996, but neither agencies acted.
“To my knowledge, I was the first person to report Maxwell and Epstein to the FBI. It took a significant amount of bravery for me to make that call because I knew how incredibly powerful and influential both Epstein and Maxwell were, particularly in the art community,’’ she wrote, noting that she was an art student at the time.
Farmer’s affidavit is now part of a move to go after the man who defended Epstein and who is also accused of partaking in the child sex trafficking, Alan Dershowitz.
According to the Miami Herald,
Farmer’s affidavit is one of 15 exhibits attached to a defamation complaint filed in federal court in the Southern District of New York by Virginia Roberts Giuffre, one of Epstein’s victims, against Alan Dershowitz, one of Epstein’s most vocal and powerful attorneys.
Giuffre claims in the lawsuit, as she has in past court filings, that Dershowitz, 80, knew about and participated in a sex-trafficking operation involving underage girls and run by Epstein and Maxwell, and that she was forced to have sex with Dershowitz and other prominent, wealthy men when she was underage.
“No sensible person looks forward to litigation,’’ Giuffre said in a statement. “And I know that standing up for myself and others will cause Mr. Dershowitz and Mr. Epstein to redouble their efforts to destroy me and my reputation. But I can no longer sit by and not respond. As my complaint shows, my abusers have sought to conceal their guilt behind a curtain of lies. My complaint calls for the accounting to which I, and their other victims, are entitled.”
Indeed, even the court has found that this case has been engulfed in lies. As TFTP reported, a federal judge made a bombshell ruling which stated that the prosecutors who worked under former Miami U.S. Attorney Acosta broke the law when handling the case.
According to the ruling, the prosecutors acted illegally when they concealed a plea agreement from more than 30 underage victims who had been sexually abused by the New York hedge fund manager.
“Virtually everything in the complaint is false, and I will be able to disprove all of this in a court of law. I have told the truth throughout and I’ll be able to prove it. … I never met her, I never heard of her,’’ Dershowitz said in response to Farmer’s affidavit.
It is quite hard to believe him though, especially considering the fact that as more and more truth keeps coming to the top, those involved keep trying to muddy the waters.
As the Herald points out, “in recent months, Dershowitz has waged a public relations war against Giuffre, her lawyers and the Miami Herald, which published a series of articles about Epstein in November. The series, “Perversion of Justice,” focused on how the former U.S. attorney in Miami, now Labor Secretary Alexander Acosta, brokered a non-prosecution deal giving Epstein federal immunity, despite overwhelming evidence that he had sexually assaulted dozens of girls.”
Those who make a living from defending convicted pedophiles and smearing those who question their motives most assuredly deserve scrutiny. Hopefully, as more and more evidence and pressure continues to mount, we will see some justice for these victims.
